ACIT RG 1(1), MUMBAI V. MATHURDAS NANJI THAKKAR, MUMBAI

ITSSA 4/MUM/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0742 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 08-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-04-2015
• Assessment Year: misc
• Appeal Filed On: 01-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY KUMAR BORA
• Keywords: Search and seizure; Loose papers; Block assessment
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER IT (SS) A NO. 04/M/2011 ASSESSMENT YEAR: 01.04.1989 TO 01.11.1999 DCIT - 1(1), ROOM NO.579, AAYAKAR BHAVAN, MU MBAI 400 020. VS. SHRI MAATHURADAS NANJI THAKKAR, DHIRAJ CHAMBERS, 9, HAZARIMAL SOMANI MARG, MUMBAI 400 001. PAN: AALPT 4035E (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : S HRI HARESH P. SHAH , A.R. REVENUE BY : SHRI VIJAY KUMAR BORA , D.R. DATE OF HEARING : 2 9 .04. 201 5 DATE OF PRONOUNCEMENT : 08.05.2015 O R D E R PER VIJAY PAL RAO , JUDICIAL MEMBER: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 2 9. 1 0 .201 0 OF CIT(A) ARISING FROM THE PENALTY ORDER PASSED UNDER SECTION 158BFA(2) OF THE INCOME TAX ACT FOR THE BLOCK PERIOD 01.04.1989 TO 01.11.1999 . A SEARCH AND SEIZURE ACTION WAS CONDUCTED IN THE CASE OF THAKKAR GROUP ON 01.11.99. THE ASSESSEE IS THE DIRECTOR OF M/S. HERMES TRAVEL & CARGO PVT. LTD. BLOCK ASSESSMENT IN THE CASE OF THE ASSESSEE WAS COMPLETED UNDER SECTION 158BC READ WITH SECTIO N 143(3) OF THE ACT ON 29.11.2001 WHEREBY THE ASSESSING OFFICER (AO) HAS ASSESSED UNDISCLOSED INCOME OF RS.2,67,35,152/ - . IT(SS)A NO.04/M/2011 SHRI MAATHURADAS NANJI THAKKAR 2 2. IN THE QUANTUM APPEAL, THE LD. CIT(A) DELETED THE ADDITION MADE BY THE AO ON ACCOUNT OF UNEXPLAINED INCOME/INVESTMENT ASSESSED ON PROTECTIVE BASIS OF RS. 2,55,22,650/ - AND CONFIRMED THE ADDITION TO THE EXTENT OF RS.11,24,395/ - . THOUGH THE DEPARTMENT PREFERRED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A) BEFORE THIS TRIBUNAL BUT COULD NOT SUCCEED AS THIS TRIBUNAL HAS DISMISSED THE APPEAL OF THE DEPARTMENT AND CONFIRMED THE FINDING OF THE LD. CIT(A) IN QUANTUM APPEAL WHEREBY THE ADDITION TO THE TUNE OF RS.11,24,395/ - WAS SUSTAINED. THE AO HAS INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 158BFA(2) AND LEVIED A PENALTY OF RS.7,42,101/ - VIDE ORDER DATED 31.12.07. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS C ANCELLED THE PENALTY LEVIED BY THE AO UNDER SECTION 158BFA(2). 3. WE HAVE HEARD THE LD. D.R. AS WELL AS THE LD. A.R. AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. THE ADDITION WHICH WAS CONFIRMED AND SUSTAINED BY THIS TRIBUNAL IN THE QUANTUM APPEAL A GAINST WHICH THE PENALTY UNDER SECTION 158BFA(2) HAS BEEN LEVIED BY THE AO ARE AS UNDER: I. UNEXPLAINED HOUSEHOLD WITHDRAWALS RS.3,69,770 II. ADDITION ON THE BASIS OF LOOSE PAPERS FILE NO.A/1 RS.1,04,625 III. ADDITION ON THE BASIS OF LOOSE PAPERS F ILE NO.A/5 RS.6,50,000 4. AS IT IS CLEAR FROM THE DETAILS OF THE ADDITION THAT THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED HOUSEHOLD WITHDRAWALS IS PURELY ON ESTIMATION BASIS AND THEREFORE EVEN IF THE SAID ADDITION IS SUSTAINED IT WILL NOT ATTRACT THE LEV Y OF PENALTY UNDER SECTION 158BFA(2) AS THE SAID ADDITION IS NOT BASED ON ANY SEIZED MATERIAL FOUND DURING THE SEARCH. AS REGARDS THE ADDITION BASED ON THE LOOSE PAPERS FOUND DURING THE SEARCH AT THE BUSINESS PREMISES OF M/S. HERMES TRAVEL & CARGO PVT. LT D., THE ASSESSEE EXPLAINED DURING THE BLOCK ASSESSMENT THAT THESE PAPERS BELONGING TO THE PARTNERSHIP CONCERNED AND HAS NO CONNECTION WITH THE ASSESSEE. THE LD. CIT(A) HAS CANCELLED THE PENALTY IN PARA 4.4 OF THE IMPUGNED ORDER AS UNDER: IT(SS)A NO.04/M/2011 SHRI MAATHURADAS NANJI THAKKAR 3 4.4 I HAVE CON SIDERED THE AO'S ORDER AS WELL AS APPELLANT AR'S SUBMISSION. HAVING CONSIDERED BOTH, I AM OF THE CONSIDERED VIEW THAT THE PENALTY LEVIED BY THE AO WAS NOT JUSTIFIED AS THE ADDITIONS WHICH WERE SUSTAINED BY THE CIT(A) ARE MOSTLY BASED ON THE ESTIMATE BASIS. THE HOUSEHOLD EXPENSES WHICH WERE SUSTAINED BY THE CIT(A) OF RS.3,69,770/ - WAS MERELY ON AN ESTIMATE BASIS. THERE WAS NO DOCUMENTS EVIDENCING THE SAME AND IN ADDITION TO THIS EVEN THE ADDITION MADE BY THE AO AND SUSTAINED BY THE CIT(A) OF RS.1,04,625/ - AN D RS.6,50,000/ - ARE ALSO BASED ON LOOSE PAPERS. BUT, HOWEVER, THERE WAS NO CORROBORATIVE EVIDENCE OF DOCUMENTS IN RELATION TO THE SAID LOOSE SHEETS TO SUGGEST THAT THERE WAS UNDISCLOSED OR UNEXPLAINED INCOME. BESIDES THIS, THE AO HAS NOT PROVED ANY SUCH UN DISCLOSED INVESTMENT BY TH E APPELLANT . IN VIEW OF THE SAME I CONSIDER IT PROPER AND APPROPRIATE TO HOLD THAT THERE WAS NO EVIDENCE OR PROOF ESTABLISHED BY THE AO THAT THE APPELLANT HAS CONCEALED ANY PARTICULARS OF HIS INCOME. MERELY THESE ADDITIONS ARE MAD E BY THE AO IN THE BLOCK ASSESSMENT PROCEEDINGS ON ESTIMATE BASIS OR BY DISCLOSURES MADE BY APPELLANT BASED ON LOOSE PAPERS. MERELY BECAUSE OF THIS ADDITIONS WERE UPHELD BY THE CIT(A) WILL NOT BE GROUND FOR IMPOSITION OF PENALTY UNDER SEC. 271(1 )(C) O F THE I.T.ACT, 1961. THERE IS ALSO A BONAFIDE CLAIM OF THE APPELLANT THAT HE DID NOT FILE APPEAL ONLY BECAUSE HE DID NOT LIKE TO PROLONG THE LITIGATION CONSIDERING HIS OLD AGE AND THEREFORE, I HOLD THAT THE AO WAS NOT JUSTIFIED IN IMPOSING THE PENALTY. ACCORDIN GLY, THE PENALTY SO LEVIED IS CANCELLED . 5. HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE LOOSE PAPERS OF WHICH THE ADDITION WAS MADE IN THE BLOCK ASSESSMENT, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE IMPUGNED ORDER OF THE LD. CIT (A). 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 08. 05 . 201 5 . SD/ - SD/ - ( R.C. SHARMA ) ( VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 08. 05 .2015 . * KISHORE , SR. P.S. IT(SS)A NO.04/M/2011 SHRI MAATHURADAS NANJI THAKKAR 4 COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.