The ACIT, Circle-1, Bhavnagar V. Shri Mohsinalai A.Varteji, Bhavnagar

ITSSA 361/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1472 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 11-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 31-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: P B PARMAR WITH TUSHAR HEMAN I
• Keywords: Income from undisclosed sources; Search and seizure
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) IT(SS)A NO: 361/AHD/2012 (ASSESSMENT YEAR: 2009-10) THE A.C.I.T., CIRCLE-1, BHAVNAGAR V/S SHRI MOHSINALI A VARTEJI, 1 ST FLOOR, DAULAT NIWAS, ALKA CINEMA ROAD, OPP HOTEL MAUSAM, BHAVNAGAR 3640001 (APPELLANT) (RESPONDENT) PAN: AAUPV 5358E APPELLANT BY : SHRI ALBINUS TIRKEY, SR. D .R. RESPONDENT BY: SHRI P.B. PARMAR WITH TUSHAR HEMAN I ( )/ ORDER DATE OF HEARING : 11-12-2015 DATE OF PRONOUNCEMENT : 01 -01-2016 PER ANIL CHATURVEDI, ACCOUNTANT MEMBER 1. THIS APPEAL FILED BY THE REVENUE IS AGAINST THE ORD ER OF CIT(A)-I, AHMEDABAD DATED 18.05.2012 FOR A.Y. 2009-10. IT(SS)A NO. 361/AHD/2012 . A.Y.2009-201 0 2 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO BE ENGAGED IN T HE MANUFACTURING TRADING AND EXPORT OF MINERALS. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CARRIED OUT IN THE CASE OF MAHEK AGRO GROUP OF BHAV NAGAR ON 05.02.2009 AND A WARRANT OF AUTHORIZATION U/S. 132 WAS ALSO IS SUED IN THE CASE OF ASSESSEE. ASSESSEE THEREAFTER ELECTRONICALLY FILED HIS RETURN OF INCOME FOR A.Y. 2009-10 ON 29.09.2009 DECLARING TOTAL INCOME O F RS. 1,86,17,561/-. THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) R. W.S. 153B OF THE ACT VIDE ORDER DATED 28.10.2010 AND THE TOTAL INCOME WA S DETERMINED AT RS. 1,86,17,561/- BEING THE SAME AS RETURNED INCOME. TH EREAFTER A.O VIDE ORDER DATED 29.04.2011 CONCLUDED THAT THE DISCLOSURE OF R S. 1,80,98,629/- WHICH WAS INCLUDED IN THE RETURN OF INCOME THAT WAS FILED ON 29.09.2009 FALLS WITHIN THE MEANING OF UNDISCLOSED INCOME AS PER P ROVISIONS OF SECTION 271AAA OF THE ACT AND ACCORDINGLY LEVIED PENALTY OF RS. 18,09,860/- U/S. 271AAA OF THE ACT. AGGRIEVED BY THE ORDER OF A.O. , ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A) WHO DELETED THE PENALTY BY HOLDING AS UNDER:- 6. IT WAS EXPLAINED BY THE ID. AUTHORISED REPRESENT ATIVE THAT THE APPELLANT U/S. 132(4) ON 5/6.2.2009 DISCLOSED INCOME OF RS.7.86 CR ORE ON BEHALF OF THE ENTIRE VARTEJI GROUP. ITEM WISE DISCLOSURE WAS MADE TO THE INVESTIGATION WING IN CONTINUATION OF SEARCH STATEMENT VIDE LETTER DATED 23.3.2009 BY THIS GROUP, WHICH INFORMS THAT UNACCOUNTED INCOME WAS ON ACCOUNT OF I NVESTMENT IN FDRS, JEWELLERY, EXCESS STOCK, PLOTS, RECEIVABLES, AND UN ACCOUNTED SALES. THE BREAKUP OF DISCLOSURE BY VARTEJI GROUP IS GIVEN BELOW, WHIC H HAS BEEN DECLARED IN THE RETURNS OF INCOME: ANVARALI G. VARTEJI RS. 1,28,46,000/- MEHNDI HASSAN A. VARTEJI RS. 1,33,75,000/ - IT(SS)A NO. 361/AHD/2012 . A.Y.2009-201 0 3 MOHSIN ALI A. VARTEJI RS. 1,80,98,629/- ALISAGAR A. VARTEJI RS. 2,40,56,888/- MAHEK AGRO MINERAL PVT. LTD. RS. 1,02,23,483/ - TOTAL RS.786,00,000/- IT IS SEEN THAT IN THE ASSESSMENT OR EVEN IN THE PE NALTY ORDER IT IS NOT STATED BY THE AO THAT THE 'DISCLOSURE' AS MADE IN SEARCH WAS NOT DECLARED IN THE RETURN. OR THAT THE BIFURCATION ITEM WISE OF THE DECLARATION I S IN ANYWAY WRONG, RATHER IN PARA 3 OF THE ASSESSMENT ORDER THE AO HAS ACCEPTED THE B IFURCATION OF RS. 1,80,98,629. THE SEARCH WAS CONDUCTED IN THE PREVIO US YEAR I.E. ON 5/6.2.2009, INCOME DISCLOSED U/S. 132(4) WAS DECLARED IN THE RE TURN FILED ON 29.9.2009, THIS INCOME WAS NOT DISTURBED AND WAS SO ACCEPTED IN THE ASSESSMENT ORDER DATED 18.10.2010. IT APPEARS PENALTY HAS BEEN IMPOSED JUS T BECAUSE A DISCLOSURE WAS MADE DURING SEARCH, BUT THE AO DID NOT FOLLOW THE P ROVISIONS OF SECTION 271 AA, WHERE SUB-SECTION (2) OF SECTION 271AAA BARS THE AO FROM IMPOSING PENALTY WHERE TIME IS AVAILABLE FOR FILING OF RETURN WITH R ESPECT TO INCOME DISCLOSED DURING SEARCH, THE MANNER OF EARNING WHICH HAS BEEN SPECIF IED AND TAXES HAVE BEEN PAID ON SUCH INCOME. ALL THE AFOREMENTIONED CONDITI ONS AVAILABLE U/S. 271AAA TO THE APPELLANT HAVE BEEN FULFILLED INCLUDING THE PAY MENT OF TAXES. IN THIS BACKGROUND, THE PENALTY OF RS. 18,09,860 IS DIRECTE D TO BE DELETED. 4. AGGRIEVED BY THE AFORESAID ORDER OF LD. CIT(A), RE VENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1. THE LD.CIT(A)-!, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY LEVIED U/S 271AAA BY THE ASSESSING OFFICER. 1.2 THE LD.CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT THE ASSESSEE HAD MADE DISCLOSURE IN THE STATEMENT RECORDED U/S 132(4), BU T HE HAD NOT MADE DISCLOSURE PERSON WISE AND ALSO HAD NOT ADMITTED AS TO WHAT IN COME HE HAS DISCLOSED IN HIS CASE SPECIFICALLY. THE ASSESSEE HAS ALSO NOT PAID T HE TAX ON DISCLOSED INCOME AND IN THE RETURN HE HAS REQUESTED TO ADJUST THE TA X PAYABLE FROM THE SEIZED IT(SS)A NO. 361/AHD/2012 . A.Y.2009-201 0 4 FDRS THAT ALSO OF THIRD PARTY. THEREFORE, ON FACTS, THE DECISION OF THE LD. CIT(A) IS NOT ACCEPTABLE. 5. BEFORE US, LD. D.R. SUBMITTED THAT THE SOLITARY IS SUE IN THE APPEAL OF REVENUE IS DELETION OF PENALTY U/S. 271AAA OF THE A CT. HE SUPPORTED THE ORDER OF A.O. ON THE OTHER HAND LD. A.R. REITERATED THE SUBMISSION MADE BEFORE A.O AND LD. CIT(A) AND FURTHER SUBMITTED THA T THE RETURNED INCOME THAT WAS FILED BY THE ASSESSEE WAS ACCEPTED IN TOTO BY THE A.O AND THERE WAS NO DIFFERENCE BETWEEN THE RETURNED INCOME AND AS SESSED INCOME. HE FURTHER SUBMITTED THAT ASSESSEE HAD CUMULATIVELY SA TISFIED ALL THE CONDITIONS PRESCRIBED U/S. 271AAA(2) AND THAT THE ASSESSEE WAS RIGHTLY ELIGIBLE FOR IMMUNITY FROM PENALTY U/S. 271AAA AND THEREFORE LD. CIT(A) HAD RIGHTLY DELETED THE PENALTY. HE THUS SUPPORTED THE ORDER OF LD. CIT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LE VY OF PENALTY U/S. 271AAA OF THE ACT. IT IS AN UNDISPUTED FACT THAT TH E INCOME THAT WAS DISCLOSED U/S. 132(4) WAS DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED ON 29.09.2009 AND THE RETURN OF INCOME FILED BY THE ASSESSEE WAS ACCEPTED IN TOTALITY BY REVENUE AND WAS NOT DISTURB ED. WE FIND THAT LD. CIT(A) WHILE DELETING THE PENALTY HAS GIVEN A FINDI NG THAT ASSESSEE HAS SATISFIED ALL THE PRESCRIBED CONDITIONS IN SECTION 271AAA FOR CLAIMING IMMUNITY AND IN SUCH A SITUATION, SHE DIRECTED THE DELETION OF PENALTY. BEFORE US, REVENUE HAS NOT BROUGHT ANY MATERIAL ON RECORD TO CONTROVERT THE FINDINGS OF LD. CIT(A). IN VIEW OF THE AFORESAI D FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AN D THUS THE GROUND OF REVENUE IS DISMISSED. IT(SS)A NO. 361/AHD/2012 . A.Y.2009-201 0 5 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 01- 01 - 2016. SD/- SD/- (S.S. GODARA) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHM EDABAD