Shri Dipak N.Chokshi, Anand V. The Dy.CIT.,Anand Circle, Anand

ITSSA 324/AHD/2011

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 0081 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 23-05-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-04-2014
• Assessment Year: misc
• Appeal Filed On: 07-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEM BER SRI DIPAK N. CHOKSHI, TULSI SHYAM, DR. RAJENDRA MARG, NEAR UNION BANK, VALLABH VIDYANAGAR, 388120 PAN: ABPPC 9772 R (APPELLANT) VS THE DY. COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND (RESPONDENT) REVENUE BY: SRI O.P. VAISHNAV, CIT-D.R. ASSESSEE BY: SRI MUKUND BAKSHI, A.R. DATE OF HEARING : 24-04-2014 DATE OF PRONOUNCEMENT : 23-05-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL AGAINST THE ORDER OF LD. CIT(A)-IV BARODA DATED 04-01-2011. IT(SS)A NO. 324/AHD/2011 ASSESSMENT YEAR: BLOCK PERIOD ( 01-04-1996 TO 11-02-2003) I.T(SS).A NO. 324/AHD/2011 A.Y. BLOCK PERIO D PAGE NO SRI DIPAK N. CHOKSHI VS. DCIT 2 2. THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPE AL:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND IN FACT IN NOT QUASHING THE ORDER OF THE LD. AO AS BEING TIME BARRED AS PER THE PROVISIONS U/S 158BFA(3)(C) OF THE ACT. IT IS, THEREFORE, PRAYED THAT THE SAID ORDER MAY PLEASE BE QUASHED AS HAVING BEEN TIM E-BARRED IN LAW. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AND IN FACT IN CONFIRMING THE ACTION OF THE ID. AO IN L EVYING PENALTY U/S. 158BFA(2) OF THE ACT OF RS. 58,000/- IN COMPLETE D ISREGARD OF LAW AND THE FACTS AND, THUS, SUCH PENALTY IS PRAYED TO BE CANCE LLED. 3. IN THE FIRST GROUND ASSESSEE HAS CHALLENGED ORDE R PASSED BY THE AO ON THE GROUND OF ITS BEING TIME BARRED BY LIMITATIO N U/S. 158BFA(2). LD. CIT(A) HAS DISMISSED THIS GROUND OF THE ASSESSEE TA KEN BEFORE HIM BY OBSERVING AS UNDER:- 2.2. I HAVE CONSIDERED THE MATTER. AS RECORDED IN THE PENALTY ORDER, NOTICE U/S.158BFA(2) WAS ISSUED AND SERVED ON THE APPELLAN T ON 24.2,2005. APPELLANT REQUESTED THE ASSESSING OFFICER TO KEEP T HE PENALTY PROCEEDINGS IN ABEYANCE TILL DISPOSAL OF APPEAL BY CIT(APPEALS). ON RECEIPT OF CIT(A)'S ORDER DATED 16.8.2005 DISMISSIN G ASSESSEE'S APPEAL, ASSESSING OFFICER AGAIN AFFORDED OPPORTUNITY TO THE APPELLANT TO EXPLAIN AS TO WHY PENALTY BE NOT LEVIED. APPELLANT REQUESTED THE ASSESSING OFFICER TO KEEP PENALTY PROCEEDINGS U/S. 158 BFA(2) IN ABEYANC E TILL DISPOSAL OF APPEAL BY ITAT. ACCORDINGLY, ON APPELLANT'S REQUEST , PENALTY PROCEEDINGS WERE KEPT IN ABEYANCE. APPELLANT DID NOT INFORM THE ASSESSING OFFICER ABOUT DISPOSAL OF APPEALS BY ITAT. AS MENTIONED IN PARA 6(VI) OF THE PENALTY ORDER, SINCE ITATS ORDER WAS NOT RECEIVED BY THE CIT, DY, REGISTRAR, ITAT WAS REQUESTED TO SEND CERTIFIED COP Y OF ITAT'S ORDER, WHICH WAS THEN RECEIVED ON 20.7.2009 BY C.I.T.-II, BARODA. PENALTY ORDER WAS PASSED WITHIN SIX MONTHS OF THE DATE OF RECEIPT OF ORDER BY CIT-II, BARODA. LETTER DATED 22.7.2010 BY ASSTT. REGISTRAR , ITAT, AHMEDABAD PROVIDING INFORMATION TO THE APPELLANT UNDER RTI AC T IN RESPONSE TO APPELLANT'S APPLICATION DATED 25.6.2010, COPY OF WH ICH IS FILED BY THE APPELLANT CLEARLY STATES THAT POSTAL RECORD/RECEIPT / ACKNOWLEDGEMENT OF ORDER CLAIMED TO BE ISSUED ON 4.4.2006 IS NOT AVAIL ABLE WITH ITAT. IN VIEW OF THIS, AO'S STAND THAT ITAT'S ORDER WAS RECEIVED FOR THE FIRST TIME ON 20.7.2009 BY THE CIT CONCERNED STANDS CORROBORATED. THE DATE OF RECEIPT OF ITAT'S ORDER BY THE CIT CONCERNED BEING 20.7.200 9, IT IS HELD THAT PENALTY ORDER U/S.158 BFA(2) DATED 8.12.2009 WAS PA SSED WITHIN THE PRESCRIBED STATUTORY TIME LIMIT. GROUND NO. .L OF A PPEAL IS DISMISSED. I.T(SS).A NO. 324/AHD/2011 A.Y. BLOCK PERIO D PAGE NO SRI DIPAK N. CHOKSHI VS. DCIT 3 SINCE THE CATEGORICAL FINDING OF LD. CIT(A) THAT IT ATS ORDER WAS RECEIVED FOR THE FIRST TIME ON 20-07-2009 BY THE CIT CONCERN ED HAS NOT BEEN CONTROVERTED BY THE ASSESSEE BY PLACING ANY MATERIA L ON RECORD TO THE CONTRARY, WE ARE OF THE CONSIDERED OPINION THAT LD. CIT(A) WAS JUSTIFIED IN HOLDING THAT THE PENALTY ORDER U/S. 158BFA(2) DATED 18-12-2009 WAS PASSED WITHIN THE PRESCRIBED STATUTORY TIME LIMIT. THEREFORE, THIS GROUND OF THE ASSESSEE IS DISMISSED. 4. SECOND GROUND RELATES TO LEVYING OF PENALTY U/S. 158BFA(2) OF RS. 58,000/-. 5. THIS PENALTY WAS LEVIED IN RESPECT OF UNDISCLOS ED INCOME OF RS. 95,550/ SUSTAINED BY ITAT IN RESPECT OF UNEXPLAINED JEWELERY FOUND DURING THE SEARCH. AO HELD THAT SINCE THE ASSESSEE COULD NOT EXPLAIN SOURCE OF INVESTMENT IN GOLD ORNAMENTS TO THE EXTENT OF RS. 9 5,550/-, PENALTY U/S. 158BFA(2) WAS LEVIABLE. LD. CIT(A) AFTER TAKING IN TO CONSIDERATION THE SUBMISSION OF THE ASSESSEE WHICH HAS BEEN REPRODUCE D BY HIM IN PARA 3.1 OF HIS ORDER HAS CONFIRMED THIS PENALTY BY OBSERVIN G AS UNDER:- 3.2. I HAVE CAREFULLY CONSIDERED FACTS OF THE CASE AND APPELLANT'S SUBMISSIONS. DURING THE COURSE OF SEARCH, 1576.1 GM S. OF GOLD JEWELLERY WAS FOUND FROM APPELLANT'S POSSESSION, OUT OF WHIC H ASSESSING OFFICER ACCEPTED 935 GMS, AS EXPLAINED ON THE BASIS OF PREL IMINARY STATEMENTS OF APPELLANT AND HIS WIFE, RECORDED U/S.132 (4). THE APPELLANT IN HIS STATEMENT AVERRED THAT THERE WERE 50 TOLAS OF G OLD ORNAMENTS BELONGING TO HIS WIFE AND BOTH DAUGHTERS. HIS WIFE , SMT, RITABEN D. CHOKSHI, IN HER STATEMENT U/S.132(4) SUBMITTED THAT SHE HAD RECEIVED 20 TOLAS OF GOLD ORNAMENTS FROM HER PARENTS AND SOME O F THE GOLD ORNAMENTS BELONGING TO HER DAUGHTER APPROXIMATELY WEIGHING 30 TO 35 TOLAS WERE LYING WITH THEM, BESIDES GOLD ORNAMENTS WERE INHERI TED BY HER HUSBAND FROM HIS FATHER. ASSESSING OFFICER, BY FOLLOWING CB DT'S INSTRUCTION NO.1916, WHICH LAYS DOWN GUIDELINES/NORMS FOR SEIZU RE OF JEWELLERY DURING SEARCH ALLOWED CREDIT FOR ORNAMENTS OF 500 GMS OF W IFE, 100 GMS. OF APPELLANT AND IN ADDITION, FURTHER 35 GMS. AS INHER ITED FROM FATHER BY APPELLANT. BY GIVING DUE WEIGHTAGE TO PRELIMINAR Y STATEMENTS OF I.T(SS).A NO. 324/AHD/2011 A.Y. BLOCK PERIO D PAGE NO SRI DIPAK N. CHOKSHI VS. DCIT 4 APPELLANT AND HIS WIFE, ASSESSING OFFICER ACCEPT ED 300 GMS OF GOLD ORNAMENTS AS BELONGING TO DAUGHTER, SMT. PURVIBEN ALSO. THE ITAT ALLOWED FURTHER CREDIT FOR 250 GMS. IN THE HANDS OF UNMARRIED DAUGHTER AND FURTHER 200 GMS. FOR MARRIED DAUGHTER (BA LANCE OUT OF 500 GMS.) BY FOLLOWING CBDT'S INSTRUCTION NO.1916 . APPELLANT'S CONTENTION THAT ITAT DID NOT TAKE INTO CONSIDERATION AFFIDAVIT OF MARRIED DAUGHTER AND HER MOTHER-IN-LAW IS NOT CORRECT SINCE ITAT REJECTED THIS CLAIM BY OBSERVING THAT NO EVIDENCE WAS BROUGHT ON RECORD BY THE APPELLANT TO PROVE THAT 539.7 GMS, WERE DISCLOSED BY MARRIED DAUGHTER OF THE APPELLANT IN HER WEALTH-TAX OR INCOME T AX RETURN. FURTHER, ASSESSING OFFICER WAS JUSTIFIED IN NOT ACCE PTING THE AFFIDAVITS OF MARRIED DAUGHTER AND MOTHER-IN-LAW FILED AFTER THE SEARCH, WHEN APPELLANT AS WELL AS HIS WIFE, BOTH IN THEIR STATEM ENTS RECORDED U/S.132(4) HAD STATED GOLD ORNAMENTS BELO NGING TO THE DAUGHTER AND LYING WITH THEM AT 30 TO 35 TOLAS ONLY. APPELLANT'S CONTENTION THAT STATEMENTS U/S.132(4) W ERE PLACED UNDUE IMPORTANCE BY THE ASSESSING OFFICER IS NOT CORRECT. ASSESSING OFFICER HAS ONLY CULLED OUT FACTS AS STATED BY APPELLANT AN D HIS WIFE IN THE STATEMENT U/S.132(4). APPELLANT'S FURTHER CONTENTI ON THAT DUE WEIGHTAGE FOR INHERITANCE OF JEWELLERY BY SELF WAS NOT GIVEN BY THE ASSESSING OFFLCER/ITAT IS ALSO NOT CORRECT SINCE ASSESSING OFFICER ALLOWED CREDIT OF 135 GMS. OF GOLD JEWEL LERY IN THE HANDS OF APPELLANT AS AGAINST CLAIM OF 174 GMS,, ONLY ON THE BASIS OF CBDT'S INSTRUCTION NO.1916 AND THE PRELIMINARY STATEMENT U /S.132(4) REGARDING INHERITANCE FROM PARENTS WITHOUT EVEN THERE BEING A NY DOCUMENTARY EVIDENCE. OVERALL, I AM OF THE VIEW THAT AFTER ITAT 'S ORDER, DUE CREDIT STOOD ALLOWED FOR POSSESSION OF JEWELLERY BY ALL TH E FAMILY MEMBERS INCLUDING MARRIED DAUGHTER, INHERITANCE FROM P ARENTS AND IN VIEW OF CBDT'S INSTRUCTION NO,1916. FOR THE BALANCE JEWEL LERY WEIGHING 191.1 GMS,, CONSIDERED TO BE ACQUIRED OU T OF UNDISCLOSED INCOME OF RS.95,550/-, THERE WAS REALLY NO WORTHWHI LE EXPLANATION AND THE SAME WAS RIGHTLY HELD TO BE ACQUIRED OUT OF UNDISCLOSED INCOME. APPELLANT'S CONTENTION IS THAT THE ADDITION WAS MAD E ON ESTIMATE BASIS. HOWEVER, THE ESTIMATE WAS ARRIVED AT BY GIVING BENE FIT OF DOUBT TO THE APPELLANT IN ALL RESPECTS. THE REMAINING JEWELLERY, I.E. 191.1 GMS. WAS WHAT REMAINED UNEXPLAINED EVEN AFTER GIVING CRED IT FOR POSSESSION OF JEWELLERY BY ALL THE FAMILY MEMBERS ON THE BASIS OF APPELLANT AND HIS WIFE'S STATEMENT WITHOUT ANY SUPPORTING D OCUMENTARY EVIDENCE OR DISCLOSURE TO THE DEPARTMENT IN I.T./W.T. RET URNS AND ON THE BASIS OF ID INSTRUCTION NO-1916, WHICH ARE ACTUALLY GUI DELINES FOR SEARCH PARTY FOR SEIZURE PURPOSES ONLY. THE UN DISCLOSED INCOME OF RS. 95,550/- DETERMINED AFTER GIVING EFFECT TO ITAT'S ORDER IS HELD TO BE LIABLE FOR PENALTY U/S.158 BFA(2). APPELLANT'S CON TENTION THAT LEVY OF PENALTY IS NOT AUTOMATIC OR PENALTY PROCEEDINGS ARE INDEPENDENT I.T(SS).A NO. 324/AHD/2011 A.Y. BLOCK PERIO D PAGE NO SRI DIPAK N. CHOKSHI VS. DCIT 5 PROCEEDINGS IS TAKEN CARE OF BY THE FOREGOING DISCU SSION IN THIS ORDER. PENALTY U/S.158 BFA(2) OF RS.58,000/- IS CONFIRMED. 6. BEFORE US LEARNED COUNSEL OF THE ASSESSEE PLACED RELIANCE ON THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND P LACING RELIANCE ON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT V. BECHARBHAI P. PARMAR REPORTED IN 341 ITR 499 SUBMIT TED THAT LEVY OF PENALTY U/S.158BFA(2) IS NOT MANDATORY AND THEREFOR E SINCE JEWELLERY WEIGHING 1576.1 GMS WAS FOUND AT THE TIME OF SEARCH OUT OF WHICH ONLY JEWELLERY WEIGHING TO THE EXTENT OF 191.1 GRAM COUL D NOT BE EXPLAINED BY THE ASSESSEE, PENALTY BE NOT LEVIED SIMPLY BECAUSE THE EXPLANATION OFFERED BY THE ASSESSEE IN RESPECT OF EVEN THIS JEW ELLERY WAS NOT FOUND SATISFACTORY BY THE INCOME TAX AUTHORITIES. IT WAS ALSO SUBMITTED THAT ASSESSEE BEING A RETIRED PERSON A LENIENT VIEW MAY KINDLY BE TAKEN. LD. DR ON THE OTHER HAND SUBMITTED THAT THERE IS NO DIS PUTE ABOUT THE FACT THAT ASSESSEE FAILED TO EXPLAIN THE SOURCE OF UNEXPLAINE D EXPENDITURE IN RESPECT OF JEWELLERY OF 191.1 GMS THOUGH ASSESSEE F OUGHT ITS CASE UP-TO HONBLE ITAT AND THEREFORE PENAL PROVISIONS OF SECT ION 158BFA(2) ARE ATTRACTED TO THE FACTS OF THIS CASE. 7. AFTER HEARING BOTH THE PARITIES AND PERUSING THE RECORD, WE FIND THAT DURING THE COURSE OF SEARCH OF GOLD JEWELLERY WEIGH ING 1576.1 GMS WAS FOUND FROM ASSESSEES POSSESSION OUT WHICH AO ACCEP TED 939 GMS AS EXPLAINED ON THE BASIS OF PRELIMINARY STATEMENT OF ASSESSEE AND HIS WIFE RECORDED AT THE TIME OF SEARCH. MATTER REACHED UPT O HONBLE ITAT AND JEWELLERY WEIGHING 191.1 GMS REMAINED UNEXPLAINED A ND THE SAME WAS CONSIDERED TO BE ACQUIRED OUT OF UNDISCLOSED INCOME OF RS. 95,550/- AND THIS FIGURE WAS ARRIVED AT BY GIVING BENEFIT OF DOU BT TO THE ASSESSEE IN ALL RESPECTS I.E. DUE CREDIT WAS GIVEN FOR POSSESSION O F JEWELLERY OF ALL FAMILY I.T(SS).A NO. 324/AHD/2011 A.Y. BLOCK PERIO D PAGE NO SRI DIPAK N. CHOKSHI VS. DCIT 6 MEMBERS INCLUDING MARRIED DAUGHTER, INHERITANCE OR PARENTS AND IN VIEW OF CBDT INSTRUCTION NO. 1916. IN THE LIGHT OF THESE U NDISPUTED FACTS OF THIS CASE, WE ARE NOT INCLINED TO INTERFERE WITH THE ORD ER PASSED BY LD. CIT(A) IN CONFIRMING THE ACTION OF AO IN LEVYING PENALTY OF R S. 58,000/- U/S. 158BFA(2) AND THE SAME IS HEREBY UPHELD. THIS GROUN D OF ASSESSEES APPEAL IS ALSO DISMISSED. 8. IN THE RESULT, ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/ (N.S. SAINI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 23/05/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,