Smt. Anisha Maheshkumar Gandhi, Surat V. The Income Tax Officer, Ward-8(1), Surat

ITSSA 373/AHD/2014

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4988 (ITAT-SURAT)
• Duration Of Justice: 4 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 21-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2002-2003
• Appeal Filed On: 17-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business income; Reasonable cause; Valuation report; Revised return
• Section: 271(1)(c)

Judgement Text

IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 1 OF 7 , , IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . . ./ I.T(SS)A.NO.372/AHD/2014 / ASSESSMENT YEAR : 2002-03 SMT. DIPIKA YOGESHKUMAR GANDHI, DIPTI TEXTILES, P-837, NEW GIDC, KATARGAM, SURAT 395 004. [PAN: ABAPG 3796 N] VS. THE INCOME TAX OFFICER, WARD-8(1), SURAT. APPELLANT /RESPONDENT . . ./ I.T(SS).A.NO.373/AHD/2014 / ASSESSMENT YEAR : 2002-03 SMT. ANISHA MAHESHKUMAR GANDHI, SANKET SILK MILLS, P-836-837, NEW GIDC, KATARGAM, SURAT 395 004. [PAN: AAZPG 7807 L] VS. THE INCOME TAX OFFICER, WARD-8(1), SURAT. APPELLANT /RESPONDENT /ASSESSEE BY SHRI H.R.VEPARI CA /REVENUE BY SHRI P.S.CHO U DHARY SR. DR / DATE OF HEARING: 21 . 0 6 .201 9 /PRONOUNCEMENT ON: 15 .0 7 .2019 /O R D E R PER O.P.MEENA, AM: 1. THESE TWO APPEAL FILED BY DIFFERENT ASSESSEES ARE DIRECTED AGAINST SEPARATE ORDERS OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-V, SURAT (IN SHORT THE CIT(A) )DATED 17.09.2014 FOR ASSESSMENT YEAR 2002-03. 2. THE GROUNDS RAISED BY THE ASSESSEE IN IT(SS)A.NO.372/AHD/2014 READ AS UNDER : IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 2 OF 7 (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFORMITY PENALTY U/S.271(1)(C) OF THE ACT. (2) THE APPELLANT SUBMITS THAT PENALTY SHOULD BE DELETED. 3. THE GROUNDS RAISED BY THE ASSESSEE IN IT(SS)A.NO.373/AHD/2014 READ AS UNDER : (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFORMITY PENALTY U/S.271(1)(C) OF THE ACT. (2) THE APPELLANT SUBMITS THAT PENALTY SHOULD BE DELETED. 4. THE ABOVE APPEALS WERE HEARD TOGETHER AS THE FACTS ARE SAME, THEREFORE WE ARE DISCUSSING THE FACTS PERTAINING TO IT(SS)A.NO.373/AHD/2014 FOR A.UY. 2002-03 IN THE CASE OF SMT. ANISHA MAHESHKUMAR GANDHI. THE APPEAL IS DIRECTED AGAINST THE CONFIRMING THE PENALTY U/S.271(1)(C) OF THE ACT BY THE LD.CIT(A). 5. FACTS EMANATING FROM THE ASSESSMENT ORDER AND APPEAL ORDER SHOWS THAT A SEARCH U/S.132 OF THE ACT WAS CARRIED OUT AT THE RESIDENCE OF SHRI SANJAY I. SADADIWALA ON 07.11.2006 AND CONSEQUENT TO THAT THE SURVEY U/S.133A HAD BEEN CARRIED OUT AT 7, BHAKTI VEDANT SOCIETY, HONEY PARK ROAD, SURAT WHERE SOME DOCUMENTS RELATING TO SHRI MAHESHKUMAR A GANDHI AND THEIR FAMILY MEMBERS INCLUDING APPELLANT WERE FOUND, ACCORDINGLY, PROCEEDINGS U/S.153 C WERE INITIATED. IN RESPONSE TO WHICH THE ASSESSEE HAS FILED A REVISED RETURN OF INCOME ON 06.10.2008 DECLARING TOTAL INCOME OF RS.4,16,780/- (INCLUDING DISCLOSED INCOME OF RS.3,30,000/-) AND THE TAX PAID ON RS.94,439/- AS AGAINST THE ORIGINAL RETURN OF INCOME OF RS.86,780/-. THE ASSESSING OFFICER HAS IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 3 OF 7 MADE THE ASSESSMENT ORDER WITH OBSERVATION THAT THE ASSESSEE HAS MADE THE DISCLOSURE OF RS.3.30 LAKHS AGAINST THE PLOT NO.34, MUKTANAND NAGAR SOCIETY, PALAMPURA, SURAT. THE VALUE OF THE BUNGALOW CONSTRUCTED IN THE THREE FLOORS WERE MADE BY THE VALUER AT RS.17,13,400/- IN THE SAME YEAR I.E. FOR A.Y. 2002-03, HENCE THE VALUE OF ONE PLOT COMES TO RS.5,71,133/- WITH THE CONSTRUCTION AMOUNT IN THE CASE OF THE ASSESSEE AS AGAINST WHICH THE ASSESSEE HAS SHOWN AN AMOUNT OF RS.2,41,133/-, HENCE THE DIFFERENCE OF RS.3,30,000/- WAS DISCLOSED BY THE ASSESSEE WAS TREATED AS UNDISCLOSED AND ADDED TO THE TOTAL INCOME IN THE ASSESSMENT YEAR UNDER CONSIDERATION AND PENALTY PROCEEDINGS U/S.271(1)(C) WERE INITIATED AND A SHOW CAUSE NOTICE U/S.274 R.W.S 271(1)(C) WAS ISSUED. IN RESPONSE TO WHICH, IT WAS SUBMITTED THAT THE ASSESSEE HAS RECEIVED THE QUANTUM APPEAL ORDER FROM ITAT DATED 30.04.2009 AND GOT RELIEF OF RS.2,41,133/- AND THE BALANCE AMOUNTING RS.3,30,000/- IS THE DISCLOSED INCOME IN THE REVISED RETURN OF INCOME FILED ON 06.10.2008 ON WHICH TAXES ARE ALSO PAID. THEREFORE, THERE IS NO CONCEALMENT OF INCOME. HOWEVER, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAS WITHOUT ANY REASONABLE CAUSE FAILED TO DISCLOSE THE CORRECT INCOME VOLUNTARILY AND IN GOOD FAITH IN THE ORIGINAL RETURN OF INCOME FOR TAXATION, HENCE THE ASSESSEE CONCEALED PARTICULARS OF INCOME, ACCORDINGLY, THE ASSESSING OFFICER LEVIED A PENALTY OF RS.1,01,970/-. 6. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD.CIT(A). HOWEVER, THE LD.CIT(A) CONFIRMED THE PENALTY LEVIED BY THE IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 4 OF 7 APPEAL BY OBSERVING THAT IT WAS A OBLIGATORY DUTY CAST UPON A PERSON FILING RETURN OF INCOME TO DISCLOSE ALL HIS INCOME DERIVED FROM ANY SOURCE UNDER VARIOUS HEADS AND INDICATE THE INCOME UNDER EACH HEAD WHICH IS CHARGEABLE TO INCOME TAX. SINCE THE INCOME WAS NOT SHOWN IN THE ORIGINAL RETURN, THEREFORE THE INCOME CHARGEABLE TO HAS ESCAPED ASSESSMENT, ACCORDINGLY THE LD.CIT(A) VIEWED THE APPELLANT HAD DELIBERATELY AND INTENTIONAL NOT DISCLOSING THE TRUTH AND CORRECT INCOME WITH AN INTENTION TO EVADE THE TAX, HENCE, THE PENALTY WAS RIGHTLY IMPOSED. 7. BEING AGGRIEVED, THE ASSESSEE FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT THOUGH AN AMOUNT OF RS.3.30 LAKHS WAS DISCLOSED BY THE ASSESSEE DURING THE COURSE OF SURVEY, HOWEVER NO EVIDENCE WAS FOUND OR WAS IN THE POSSESSION OF DEPARTMENT THAT IN ANY WAY WOULD SHOW THAT THE ASSESSEE HAS MADE INVESTMENT INTO LAND. FURTHER, THE ASSESSEE HAS RETRACTED DISCLOSURE BY WAY OF AFFIDAVIT DATED 12.08.2008. FURTHER, THE LAND AT MUKTANAND NAGAR SOCIETY WAS ACQUIRED ON 09.05.1997 ALONG WITH OTHER CO-OWNERS ON WHICH ELECTRICAL CONNECTIONS WERE APPLIED ON 07.02.2000, HENCE THE CONSTRUCTION WAS COMPLETED BEFORE 07.02.2000. THEREFORE, THE AMOUNT IN QUESTION OF LAND INVESTMENT OF RS.3.30 LAKHS IS BASED ON VALUATION REPORT OF MUKTANAND NAGAR SOCIETY WHICH WAS CERTAINLY PRIOR TO 07.02.2007. THEREFORE NOTHING HAS HAPPENED IN A.Y. IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 5 OF 7 2002-03 THAT WOULD NECESSITATE ADDITION AND IN NO CIRCUMSTANCES PENALTY. FURTHER, THERE WAS A REGISTER VALUER REPORT DATED 20.07.0004 AND THE ADDITION HAS BEEN MADE DUE TO DIFFERENCE IN VALUATION IN CONSTRUCTION. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED THE INCOME AS THE VALUATION IS MERE ESTIMATE ONLY. THE LD.COUNSEL FURTHER SUPPORTED HIS VIEW BY CONTENDING THAT NOTICE U/S.274 R.W.S. 271(1)(C) WAS DEFECTIVE AS THE ASSESSING OFFICER HAS FAILED TO STRIKE OFF ONE OF THE LIMBS, HENCE PENALTY IS NOT SUSTAINABLE IN LAW IN THE LAW OF DECISION IN THE CASE OF SSAS EMERALD MEADOWS 242 TAXMANN 180 (SC) AND NEW SORATHIA ENGINEERING COMPANY 282 ITR 642 (GUJ). 8. ON THE OTHER HAND, THE LD.DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE UNDISCLOSED INCOME EMANATES FROM THE INVESTMENT IN LAND WHICH HAS BEEN ACCEPTED BY THE ASSESSE AND ALSO CONFIRMED BY THE ITAT VIDE PARA 4 OF ITS ORDER DATED 30.04.2013. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSESSEE HAS SHOWN UNACCOUNTED BUSINESS INCOME EARNED DURING THE YEAR UNDER CONSIDERATION AND MADE A DISCLOSURE OF RS.3.30 LAKHS, HOWEVER, THE DISCLOSURE WAS RETRACTED BY FILING A LETTER ON 12.08.2008. HOWEVER, THE ASSESSEE HAS SHOWN THIS INCOME IN THE REVISED RETURN OF INCOME FILED ON 06.10.2008. WE FIND THAT THE SAID INCOME SO FILED HAS BEEN ACCEPTED BY THE ASSESSING IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 6 OF 7 OFFICER. ALTHOUGH, CONSIDERING THE DISCLOSED INCOME AS UNDISCLOSED INCOME. HOWEVER, THERE IS NO ADDITION HAS BEEN MADE IN THE REVISED RETURN OF INCOME AND THE DISCLOSURE WAS MADE DUE TO AVOID LITIGATION AND BUY PEACE OF MIND. FURTHER THE QUANTUM OF THIS ADDITION IS MADE BASED ON THE REGISTERED VALUATION REPORT WHICH IS ALSO IN THE NATURE OF ESTIMATE AND NO CONSTRUCTIVE CONCEALMENT HAS BEEN ESTABLISHED. WE FIND THAT THE ASSESSEE HAS DISCLOSED THE AMOUNT IN THE REVISED RETURN OF INCOME WHICH IS BASED ON VALUATION REPORT OF REGISTERED VALUER DATED 20.07.2004. FURTHER, THE CONSTRUCTION OF BUNGALOW WAS COMPLETED BEFORE 07.02.2000. THEREFORE, THE ADDITION OF RS.3.30 LAKHS IS IN FACT DOES NOT PERTAINS TO ASSESSMENT YEAR UNDER CONSIDERATION. WE FURTHER NOTE THAT THERE IS NO FINDING IN THE ASSESSMENT ORDER OR PENALTY ORDER AS TO THE ANY INCRIMINATING MATERIAL EXCEPT DISCLOSURE. THEREFORE, WHERE THE ADDITION IS NOT BASED ON ANY CORROBORATIVE EVIDENCE FOUND DURING THE SEARCH OR SURVEY, PENALTY IS NOT SUSTAINABLE IN LAW. THEREFORE, ON CAREFUL CONSIDERATION OF FACTS AND LAW WE ARE OF THE VIEW THAT THERE IS NOT CONCLUSIVE PROOF OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME, HENCE THE FINDING RECORDED IN THE ASSESSMENT ORDER IS NOT CONCLUSIVE FOR THE IMPOSITION OF PENALTY. THEREFORE, IN SUCH A CASE THE PENALTY IS NOT ATTRACTED UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IN VIEW OF THESE FACTS, THE PENALTY LEVIED BY THE ASSESSING OFFICER IS DIRECTED TO BE DELETED. THE ABOVE GROUNDS ARE ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. IT(SS)A NOS.372 & 373/AHD/2014 FOR A.Y. 2002-03 PAGE 7 OF 7 IT(SS)A NO. 372/AHD/2014 OF SMT.DIPIKA YOGESHKUMAR GANDHI: 11. SINCE THE FACTS OF THE CASE ARE SAME AGAINST THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT, IN THE CASE OF SMT.ANISHA MAHESHKUMAR GANDHI, THEREFORE OUR FINDING GIVEN IN IT(SS)A NO.373/AHD/2014 WOULD MUTATIS MUTANDIS APPLY TO THIS APPEAL ALSO, ACCORDINGLY, THESE GROUNDS APPEAL FILED BY THE ASSESSEE ARE ALLOWED. 12. IN THE RESULT, APPEALS IN ITA(SS)A.NO.372/AHD/2014 AND IT(SS)A.NO.373/AHD/2014 FILED BY ASSESSEES ARE ALLOWED. 13. THE ORDER IS PRONOUNCED BY LISTING THE CASE ON THE NOTICE BOARD UNDER RULE 34(4) OF INCOME TAX APPELLATE TRIBUNAL RULES, 1963. SD/- SD/- (MAHAVIR PRASAD) (O.P.MEENA) ( /JUDICIAL MEMBER) ( /ACCOUNTANT MEMBER) / SURAT, DATED : 15 TH JULY , 2019/ S.GANGADHARA RAO, SR.PS COPY OF ORDER SENT TO- ASSESSEE/AO/PR. CIT/ CIT (A)/ ITAT (DR)/GUARD FILE OF ITAT. BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR, SURAT