The ITO, Ward-2(1), Bhavnagar V. Mahek Agro Mineral Pvt.Ltd., Bhavnagar

ITSSA 364/AHD/2012

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2094 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-07-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-07-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 03-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIMAL I MEHTA
• Keywords: Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD , BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI N. K. BILLAIYA , ACCOUNTANT MEMBER. IT(SS)A. NO.364/AHD/2012 (ASSESSMENT YEAR:2009-10) I.T.O., WARD-2(1), BHAVNAGAR APPELLANT VS. MAHEK AGRO MINERAL PVT. LTD. 1 ST FLOOR, DAULAT NIWAS, ALKA CINEMA ROAD, OPP. HOTEL MAUSAM, BHAVNAGAR R ESPONDENT PAN: AACFM9198K /BY APPELLANT :SHRI VIMAL I. MEHTA, SR.D.R. /BY RESPONDENT :SHRI TUSHAR HEMANI, A.R. /DATE OF HEARING : 27.07.2016 /DATE OF PRONOUNCEMENT : 27.07.2016 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, IT(SS)A NO.364/AHD/12 A.Y. 09-10 [ITO VS. MAHEK AGRO MINERAL PVT. LTD.] PAGE 2 AHMEDABAD, DATED 18.05.2012 FOR A.Y. 2009-10 ON FOL LOWING GROUNDS:- 1. THE LD. CIT(A)-I, AHMEDABAD HAS ERRED IN LAW AN D 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 FAC T THAT THE ASSESSEE COMPANY HAD MADE DISCLOSURE IN THE STATEMENT RECORDED U/S132(4), BUT HAD NOT MADE DISCLOSURE PERSON WISE AND ALSO HAD NOT ADMITTED AS TO WHAT INCOME IT HAS DISCLOSED IN ITS CASE SPECIFICALLY. THE ASSESSEE COMPANY HAS ALSO NOT PAID THE TAX ON DISCLOSED INCOME AND IN THE RETURN HAS REQUESTED TO ADJUST THE TAX PAYABLE FROM THE SEIZED ASSETS OF DIRECTOR IN THE NATURE OF FDRS THA T ALSO OF THIRD PARTY. THEREFORE, ON FACTS, THE DECI SION OF THE LD.CIT(A) IS NOT ACCEPTABLE. 2. ON THE POINT OF PENALTY LEVIED U/S.271AAA, ASSES SEE MADE A DISCLOSURE ON ACCOUNT OF EXCESS STOCK OF RS.1,02,23,483/- FOUND DURING COURSE OF SEARCH PROC EEDINGS IN THE RETURN OF INCOME. ASSESSING OFFICER LEVIED PENALTY U/S.271AAA OF THE ACT. THESE ITEMS OF INCOME WERE EMERGED FROM THE DOCUMENTS FOUND DURING COURSE OF S EARCH. THEREFORE, DISCLOSURE OF RS.1,02,23,423/- FALLS WIT HIN THE MEANING OF UNDISCLOSED INCOME AS PER THE PROVISIONS OF SECTION 271AAA. PENALTY OF SAID AMOUNT LEVIED, WHI CH WAS DELETED BY CIT(A). 2.1 SAME HAS BEEN OPPOSED ON BEHALF OF REVENUE BEFO RE US INTER ALIA SUBMITTING THAT ASSESSEE COMPANY HAD MAD E DISCLOSURE IN THE STATEMENT RECORDED U/S132(4) OF T HE ACT, BUT HAD NOT MADE DISCLOSURE PERSON-WISE AND ALSO HA D NOT IT(SS)A NO.364/AHD/12 A.Y. 09-10 [ITO VS. MAHEK AGRO MINERAL PVT. LTD.] PAGE 3 ADMITTED AS TO WHAT INCOME IT HAS DISCLOSED IN ITS CASE SPECIFICALLY. ACCORDINGLY, ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHE R HAND, LD. AUTHORIZED REPRESENTATIVE SUPPORTED THE ORDER OF CI T(A) AND STATED THAT SIMILAR ISSUE AROSE IN IT(SS)A NO.361/A HD/2012 FOR A.Y. 2009-10 IN CASE OF ACIT VS. SHRI MOHSINALI A VARTEJI. 2.2 AFTER GOING THROUGH RIVAL SUBMISSIONS AND PERUS ED THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE DISCLOSED U/S.132(4) OF THE ACT INCOME OF RS.7.86 CRORE ON BE HALF OF ENTIRE VARTEJI GROUP. ITEM-WISE DISCLOSURE WAS MAD E IN COURSE OF SEARCH. ACCORDINGLY, UNACCOUNTED INCOME WAS FOUND ON ACCOUNT OF INVESTMENT IN FDRS, JEWELLERY, EXCESS STOCK, PLOTS, RECEIVABLES AND UNACCOUNTED SALES. I N ASSESSMENT OR EVEN IN PENALTY ORDER, IT WAS NOT STA TED BY ASSESSING OFFICER THAT THE DISCLOSURE AS MADE IN SE ARCH WAS NOT DECLARED IN RETURN. PENALTY HAS BEEN JUST IMPO SED BECAUSE A DISCLOSURE WAS MADE DURING COURSE OF SEAR CH. BUT ASSESSING OFFICER DID NOT FOLLOW THE PROVISIONS OF SECTION 271AAA OF THE ACT, WHERE SUB-SECTION (2) OF SECTION 271AAA BARS THE ASSESSING OFFICER FROM IMPOSING PENALTY WH ERE TIME IS AVAILABLE FOR FILING OF RETURN WITH RESPECT TO I NCOME DISCLOSED DURING SEARCH, THE MANNER OF EARNING WHIC H HAS BEEN SPECIFIED AND TAXES HAVE BEEN PAID ON SUCH INC OME. IN THIS BACKGROUND, CIT(A) RIGHTLY DELETED THE PENALTY IMPOSED BY ASSESSING OFFICER OF RS.10,22,348/-. THIS REASO NED IT(SS)A NO.364/AHD/12 A.Y. 09-10 [ITO VS. MAHEK AGRO MINERAL PVT. LTD.] PAGE 4 FINDING OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SI DE. WE UPHOLD THE SAME. 3. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 27 TH DAY OF JULY, 2016. SD/- SD/- (N. K. BILLAIYA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R AHMEDABAD: DATED 27/07/2016 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) ,-./00'(1 '( 123& / DR, ITAT, AHMEDABAD 4/5678 / GUARD FILE. BY ORDER / 1 / 2% '( 123&