Shri Joshi Samir Pranubhai, Bhavnagar V. The ACIT.,Circle-1, Bhavnagar

ITSSA 339/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0601 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 26-02-2015
• Assessment Year: misc
• Appeal Filed On: 15-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P VAISHNAV DR
• Keywords: Question of law; Initiation of penalty proceedings; Block assessment
• Section: 132

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ IT(SS)A NO. 339/AHD/2011 / ASSESSMENT YEAR: BLOCK ASSESSMENT 01.04.1990 TO 24. 01.2001 SHRI JOSHI SAMIR PRANUBHAI, C/O. JOSHI UROLOGY & MATERNITY HOSPITAL, NR. HARDIK COMPLEX, VITHTHAL WADI, BHAVNAGAR PAN : ABMPJ 5662 J VS ACIT, CIRCLE-1, BHAVNAGAR / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI TUSHAR HEMANI, AR REVENUE BY : SHRI O.P. VAISHNAV, DR !' # $%&/ // / DATE OF HEARING : 26/02/2015 '( # $%& /DATE OF PRONOUNCEMENT: 13/03/2015 )* )* )* )*/ // / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-XX, AHMEDABAD DATED 13.01.2011 FOR BLOCK ASSESSMENT FOR THE PERIOD FROM 01.04.1990 TO 24.01.2001. 2. THE BRIEF FACTS OF THE CASE, AS CULLED OUT FROM THE RECORDS ARE AS UNDER:- 3. THE ASSESSEE IS AN URO SURGEON AND STATED TO BE OPERATING HIS PROPRIETARY CONCERN KNOWN AS JOSHI UROLOGY HOSPITA L & MATERNITY HOSPITAL. IN THIS CASE, A SEARCH U/S 132 OF THE A CT WAS CARRIED OUT ON 24.01.2001. THEREAFTER, BLOCK RETURN WAS FILED ON 19.11.2002 DECLARING TOTAL IT(SS)A NO. 339/AHD/2011 SHRI JOSHI SAMIR PRANUBHAI VS. ACIT BLOCK ASST: 01.04.90 TO 24.01.01 - 2 - INCOME AT RS.6,43,631/- FOR THE BLOCK PERIOD 01.04. 1990 TO 24.01.2001. THEREAFTER, AN ORDER U/S 158BC(C) OF THE ACT WAS PA SSED AND THE TOTAL UNDISCLOSED INCOME WAS DETERMINED AT RS.22,40,505/- INTER ALIA BY ESTIMATING THE PROFESSIONAL RECEIPTS OF RS.14,33,46 8/-. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, THE MATTER WAS CARR IED BEFORE THE LD. CIT(A) WHO GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGAINS T THE SAID ORDER OF THE LD. CIT(A), THE REVENUE PREFERRED APPEAL BEFORE THE HON BLE TRIBUNAL. THE HONBLE TRIBUNAL VIDE ORDER DATED 13.11.2009 IN IT( SS) NO.101/AHD/2004 PARTLY ALLOWED THE APPEAL OF THE REVENUE. IN RESPEC T OF ADDITION OF RS.14,33,468/-, WHICH WAS MADE BY THE ASSESSING OFF ICER BY ESTIMATING THE PROFESSIONAL RECEIPTS BY MAKING EXTRAPOLATION BY 20 %, THE HONBLE ITAT, AHMEDABAD BENCH RESTORED THE ADDITION OF RS.11,18,4 50/-. THUS, ON THE TOTAL UN-DISCLOSED INCOME PURSUANT TO THE ITAT ORDE R AND THE DISCLOSURE MADE BY THE ASSESSEE; THE DIFFERENCE OF RS.4,92,84 4/- WAS CONSIDERED AS UNDISCLOSED INCOME AND ON THE AFORESAID UNDISCLOSED INCOME, PENALTY OF RS.2,95,706/- WAS LEVIED U/S 158BFA(2) OF THE INCOM E-TAX ACT VIDE ORDER DATED 28.05.2010. 4. AGGRIEVED BY THE PENALTY ORDER OF THE ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO VIDE O RDER DATED 13.01.2011 DISMISSED THE APPEAL OF THE ASSESSEE. AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFOR E US, ON THE FOLLOWING GROUNDS:- 1) THE LEARNED COMMISSIONER OF I. TAX (APPEALS) - XX ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY ORDER IGNORING LEGAL OBJECTIONS REGARDING VALIDITY OF INITIATION OF PENALTY PROCEEDINGS. 2) THE LEARNED COMMISSIONER OF I. TAX (APPEALS) - XX ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY ORDER PURSUANT TO PE NALTY PROCEEDINGS INITIATED WITHOUT RECORDING SEPARATE SATISFACTION B Y ASSESSING ACIT FOR INITIATION OF PENALTY FOR EACH ADDITION WHILE PASSI NG ASSESSMENT ORDER. IT(SS)A NO. 339/AHD/2011 SHRI JOSHI SAMIR PRANUBHAI VS. ACIT BLOCK ASST: 01.04.90 TO 24.01.01 - 3 - 3) THE LEARNED COMMISSIONER OF I. TAX (APPEALS) - XX ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY IMPOSED U/S 158BFA(2 ) WHILE PENALTY PROCEEDINGS WAS INITIATED U/S 271(1) R.W.S. 158BF A(2) OF THE ACT. 4) THE LEARNED COMMISSIONER OF I. TAX (APPEALS) - XX ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS. 295706/- IMPOSED WITHOUT RECORDING SATISFACTION BY THE ACIT THAT THE CASE IS FIT TO LEVY PENALTY. 5) THE LEARNED COMMISSIONER OF I. TAX (APPEALS) - XX ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS. 295706/- IGNORING THE FACTS THAT THE ADDITION MADE IN THE ASSESSMENT ORDER IS DISREGARDE D AND NEW FORMULA HAS BEEN ARRIVED AT BY THE HONORABLE ITAT TO ASCERTAIN TOTAL UNDISCLOSED INCOME. 6) THE LEARNED COMMISSIONER OF I. TAX (APPEALS) - XX ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY OF RS. 295706/- INSTEAD OF RS. 78868/- CONSIDERING CONCEALED INCOME AT RS. 492844/- INSTEA D OF RS. 131447/- 7) THE APPELLANT CRAVE AND RESERVE HIS RIGHT TO ADD, TO MODIFY, TO ALTER AND/OR TO WITHDRAW ANY OR ALL GROUNDS OF APPEALS. 5. BEFORE US, LD. AUTHORIZED REPRESENTATIVE SUBMITT ED THAT THOUGH VARIOUS GROUNDS HAVE BEEN RAISED BUT THE ISSUE IS O NLY WITH RESPECT TO PENALTY U/S 158BFA(2) OF THE ACT. 6. BEFORE US, THE AUTHORIZED REPRESENTATIVE SUBMITT ED THAT ON THE BASIS OF CERTAIN SEIZED MATERIAL FOUND AT THE TIME OF SEA RCH, THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD SUPPRESSED THE PROF ESSIONAL RECEIPTS. THE SUPPRESSION RATE WAS DETERMINED AT 20% AND THE SUPP RESSED PROFESSIONAL RECEIPTS WERE ESTIMATED AT RS.14,33,468/- BY RESORT ING TO EXTRAPOLATION. WHEN THE MATTER CARRIED BEFORE THE TRIBUNAL, THE AD DITION TO THE EXTENT OF RS.11,18,450/- WAS CONFIRMED, BUT; HOWEVER, THE BAS IS OF ADDITION WAS ALTERED BY THE TRIBUNAL. THE LD. AR ALSO POINTED OU T THAT THE TRIBUNAL HAS CATEGORICALLY MENTIONED THAT IT DOES NOT ACCEPT THE WORKING DONE BY THE ASSESSING OFFICER IN ESTIMATING THE PROFESSIONAL RE CEIPTS BY EXTRAPOLATING IT BY 20% SINCE 20% WAS FOUND ONLY IN ONE MONTH. THER EAFTER, HONBLE ITAT IT(SS)A NO. 339/AHD/2011 SHRI JOSHI SAMIR PRANUBHAI VS. ACIT BLOCK ASST: 01.04.90 TO 24.01.01 - 4 - RESORTED AN ALTOGETHER DIFFERENT METHOD, AND AFTER CONSIDERING THE ACTUAL DEPOSITS FOUND IN THE BANK, CONFIRMED THE ADDITION TO THE EXTENT OF RS.11,18,450/-. BEFORE US, LD. AR SUBMITTED THAT W HEN THE ORIGINAL BASIS OF INITIATION OF PENALTY PROCEEDINGS IS ALTERED OR MOD IFIED BY THE APPELLATE AUTHORITY, THE AUTHORITY INITIATING THE PENALTY PRO CEEDINGS HAS NO JURISDICTION THEREAFTER TO PROCEED ON THE BASIS OF FINDINGS OF THE APPELLATE AUTHORITY AND FOR THIS PROPOSITION, RELIANCE WAS PL ACED ON THE DECISIONS IN THE CASES OF CIT VS. ANANDA BAZAR PATRIKA P. LTD. - 116 ITR 416 (CAL), CIT VS. DWARKA PRASAD SUBHAH CHANDRA - 94 ITR 154 (ALL) , CIT VS. SHADIRAM BALMUKAND 84 ITR 183 (ALL) AND THE DECISION OF HO NBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. LAKHDHIR LALJI-85 ITR 77 (GUJ.). THE LD. AR FURTHER SUBMITTED THAT EVEN THE TOTAL DEPOSITS IN T HE BANK ACCOUNTS WERE ESTIMATED TO BE THE INCOME OF THE ASSESSEE AND IT I S A SETTLED LAW THAT NO PENALTY CAN BE LEVIED ON ADDITION WHICH HAS BEEN MA DE ON ESTIMATED BASIS. THE AR FURTHER SUBMITTED THAT THE ORDER OF THE HON BLE ITAT, QUA THE CONCERNED ADDITION, HAS BEEN CHALLENGED BEFORE THE HONBLE GUJARAT HIGH COURT AND SUBSTANTIAL QUESTION OF LAW IN RESPECT OF THE SAME HAS BEEN ADMITTED AND THE ADMISSION OF THE HONBLE GUJARAT H IGH COURT SHOWS THAT THE ISSUE IS DEBATABLE AND THEREFORE ALSO NO PENALT Y IS LEVIABLE BEING THE DEBATABLE ISSUE. THE LD. AR, THUS, SUBMITTED THAT THE PENALTY LEVIED IN THE PRESENT CASE BE DELETED. LD. DEPARTMENTAL REPRESEN TATIVE, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ADDITION ON ACCOUNT OF PR OFESSIONAL RECEIPTS OF RS.14,33,468/- WAS ESTIMATED BY THE ASSESSING OFFIC ER BY MAKING EXTRAPOLATION BY 20%. WHEN THE MATTER WAS CHALLENG ED BEFORE THE TRIBUNAL, WE FIND THAT THE HONBLE TRIBUNAL REJECTE D THE CLAIM OF PEAK AND DID NOT ACCEPT THE WORKING DONE BY THE ASSESSING OF FICER IN ESTIMATING THE IT(SS)A NO. 339/AHD/2011 SHRI JOSHI SAMIR PRANUBHAI VS. ACIT BLOCK ASST: 01.04.90 TO 24.01.01 - 5 - OVERALL PROFESSIONAL RECEIPTS BY EXTRAPOLATING IT B Y 20% BECAUSE 20% WAS ONLY FOUND BY THE ASSESSING OFFICER IN ONE MONTH. W E FURTHER FIND THAT THE HONBLE TRIBUNAL, AFTER CONSIDERING THE ACTUAL RECE IPTS FOUND IN THE BANK ACCOUNT, WORKED OUT THE TOTAL UNDISCLOSED RECEIPTS AND CONFIRMED THE ADDITION TO THE EXTENT OF RS.11,18,450/-. IT IS, TH US, SEEN THAT THE ADDITION WAS CONFIRMED BY REFERRING TO AN ALTOGETHER DIFFERE NT METHOD THAN THAT ADOPTED BY THE ASSESSING OFFICER. IN THE PRESENT CA SE, WE FIND THAT THE PENALTY U/S 158BFA(2) HAS BEEN LEVIED BY THE ASSESS ING OFFICER ON THE AMOUNT OF UN-DISCLOSED INCOME FINALLY DETERMINED BY THE HONBLE TRIBUNAL. WE FIND THAT IN THE CASE OF CIT VS. ANANDA BAZAR PA TRIKA P. LTD. (SUPRA), THE HONBLE KOLKATA HIGH COURT, AFTER REFERRING TO THE DECISIONS OF CIT VS. DWARKA PRASAD SUBHAH CHANDRA (SUPRA), CIT VS. SHADI RAM BALMUKAND (SUPRA) AND CIT VS. LAKHDHIR LALJI (SUPRA), HAS HEL D THAT WHEN THE ORIGINAL BASIS OF INITIATION OF PENALTY PROCEEDINGS IS ALTER ED OR MODIFIED BY THE APPELLATE AUTHORITY, THE AUTHORITY INITIATING THE P ENALTY PROCEEDINGS HAS NO JURISDICTION THEREAFTER TO PROCEED ON THE BASIS OF THE FINDINGS OF THE APPELLATE AUTHORITY. BEFORE US, THE REVENUE HAS NO T BROUGHT ANY CONTRARY BINDING DECISIONS NOR COULD POINT OUT ANY DISTINGUI SHABLE FEATURES OF THE DECISIONS CITED BY LD. AR. CONSIDERING THE AFORESA ID FACTS, WE ARE OF THE VIEW THAT IN THE PRESENT CASE NO PENALTY IS LEVIABL E. WE HOLD ACCORDINGLY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 13 TH MARCH, 2015 AT AHMEDABAD. SD/- SD/- (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER (ANIL CHATURVEDI) ACCOUNTANT MEMBER AHMEDABAD; DATED 13/03/2015 *BIJU T, PS IT(SS)A NO. 339/AHD/2011 SHRI JOSHI SAMIR PRANUBHAI VS. ACIT BLOCK ASST: 01.04.90 TO 24.01.01 - 6 - )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ !- / CONCERNED CIT 4. !- ( ) / THE CIT(A)-XX, AHMEDABAD 5. +01 $ , , / DR, ITAT, AHMEDABAD 6. 12 3' / GUARD FILE. )*! )*! )*! )*! / BY ORDER, //TRUE COPY// 4 44 4/ // / 5 5 5 5 (DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD