The DCIT(OSD)Circle-8, Ahmedabad V. Shivganga Reality Pvt. Ltd., Ahmedabad

ITSSA 489/AHD/2010

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9093 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 13-08-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 06-08-2010
• Assessment Year: misc
• Appeal Filed On: 13-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIJAY RANJAN
• Assessee Lawyers: R K DHANESTA
• Section: 132

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M DY. CIT (OSD), CIRCLE-8, AHMEDABAD. VS. SHIVGANGA REALITY (P) LTD., 4, SEARS TOWER, GULBAI TEKRA, AHMEDABAD. (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI R. K. DHANESTA, DR REVENUEBY:- SHRI VIJAY RANJAN, AR O R D E R PER D. C. AGRAWAL, ACCOUNTANT MEMBER . THE APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A) 10.02.2010 WHEREIN PENALTY OF RS.6,12,000/- LEVIED BY AO U/S 158BFA(2) R.W.S 158BFA(3) OF THE ACT HAS BEEN CANCE LLED. 2. THE ASSESSEE HAS FILED THE CROSS OBJECTION IN SU PPORT OF THE ORDER OF LD. CIT(A) WHO HAS CANCELLED THE PENALTY. 3. DURING THE COURSE OF HEARING BEFORE US, THE LD. AR FOR THE ASSESSEE WITHDREW THE CROSS OBJECTION AND HENCE IT IS REJECT ED. 4. THE FACTS OF THE CASE ARE THAT AFTER THE SEARCH PROCEEDINGS ASSESSEE FILED RETURN OF INCOME DISCLOSING UNDISCLOSED INCOM E OF RS.10 LACS ON THE BASIS OF SEIZED DOCUMENT. THE AO DETERMINED THE UND ISCLOSED INCOME AT IT(SS)A NO.489/AHD/2010 ALONG WITH CO NO.217/AHD/2010 BLOCK PERIOD 01.04.1995 TO 12.07.2001 2 RS.2,16,75,974/- BUT THE LD. CIT(A) REDUCED THE SA ME TO RS.17,40,337/-. THE ASSESSEE AND THE DEPARTMENT WENT INTO APPEAL. T HE TRIBUNAL VIDE THEIR ORDER DATED 12.9.2008 DISMISSED THE DEPARTMEN TAL APPEAL BUT RESTRICTED THE UNDISCLOSED INCOME TO RS.10 LACS AS DISCLOSED BY THE ASSESSEE. THE TRIBUNAL IN THIS REGARD OBSERVED AS U NDER :- COMING TO THE GROUND OF APPEAL AS PRESSED BY THE A SSESSEE BEARING GROUND NO.1.3, WE FIND FORCE IN THE SUBMISSIONS OF THE LD. AR THAT TOTAL SALEABLE AREA WAS 416529 + 38000, THEREFORE, THE AV ERAGE COST WILL WORK OUT TO BE RS.9,53,83,887/- / 454520 I.E. = RS.210 P ER SQ.YD. THE CIT(A) HAS VALUED THE UNSOLD PLOT OF LAND AT THE RATE OF R S.330 PER SQ.YD. WHICH IN OUR OPINION SHOULD HAVE BEEN VALUED AT THE RATE OF RS.210 PER SQ.YD. THE VALUE OF THE UNSOLD PLOT OF LAND THUS WILL WORK OUT TO RS.79,80,000/-. THUS THE VALUE OF THE CLOSING STOCK WILL GET REDUCE D BY RS.45,40,000/- WHICH REDUCE THE PROFIT TO RS.12,61,124/-, 30% THER EOF WILL COME TO RS.3,78,517/-. THUS THE ADDITION OF RS.17,40,337/- WILL STAND REDUCED TO RS.3,78,517/-. THE ASSESSEE SINCE HAS RETURNED THE UNDISCLOSED INCOME AT RS.10,00,000/- THEREFORE, THE ADDITION MADE CANNOT BE BELOW RS.10,00,000/- AND ACCORDINGLY THE AO IS DIRECTED T O REDUCE THE UNDISCLOSED INCOME TO RS.10 LAKHS AND ADDITION TO T HAT EXTENT STANDS SUSTAINED FROM THE SHIPOGRAM SCHEME IN THE CASE OF THE ASSESSEE. THUS, THE GROUND OF THE ASSESSEE IS ALSO PARTLY ALLOWED. THE REST OF THE GROUNDS SINCE NOT PRESSED STAND DISMISSED IN THE APPEAL OF THE ASSESSEE. THE AO WAS, HOWEVER, NOT SATISFIED. THE AO WAS OF T HE VIEW THAT THERE WAS A CLEAR CASE OF CONCEALMENT AS ASSESSEE HAS DIS CLOSED RS.10 LAKHS ON ACCOUNT OF SEARCH. ACCORDING TO HIM RS.10 LAKHS IS CONCEALED INCOME AND, THEREFORE, TAX SOUGHT TO BE EVADED WOULD BE TH E AMOUNT OF PENALTY LEVIABLE. THE LD. CIT(A) CANCELLED THE PENALTY BY H OLDING THAT THE RETURNED UNDISCLOSED INCOME AND ASSESSED UNDISCLOSE D INCOME IS THE SAME. HE IN THIS REGARD OBSERVED AS UNDER :- 2.3 I HAVE CONSIDERED THE FACTS OF THE CASE AND SU BMISSIONS OF THE APPELLANT. I AM INCLINED TO ACCEPT THE CONTENTIONS OF THE APPELLANT BASED ON FACTS, PROVISIONS OF RELEVANT SECTION AND RATIO OF CASE LAWS. THE AO HAS TOTALLY GONE BEYOND ITS JURISDICTION TO APPLY T HE SECTION 158BFA(2) OF THE ACT IN THE CASE OF APPELLANT DESPITE THE CLEAR FINDING OF THE HON. ITAT THAT THOUGH THE UNDISCLOSED INCOME WORKED OUT LESS IN THE CASE OF 3 APPELLANT BUT UNDISCLOSED INCOME RETURNED BY THE AP PELLANT OF RS.10 LACS HAS TO BE ADHERED TO. IT IS THEREFORE TO EQUATE THI S UNDISCLOSED INCOME OF RS.10 LACS WITH THAT OF PENALTY PROVISIONS U/S 2719 1)(C) OF THE ACT ARE ILLOGICAL AND UNWARRANTED. THE SCHEME OF BLOCK ASSE SSMENT IS CODE IN ITSELF AND DEALT ONLY IN THE CASES WHERE ACTION U/S 132 OF THE ACT HAS BEEN TAKEN BY THE REVENUE DEPARTMENT. THE INTRODUCTION O F PROVISION OF 158BFA(2) HAS SPECIFIC PURPOSE OF THE CASES WHERE U NDISCLOSED AS RETURNED BY THE APPELLANT WAS FOUND TO LESS THAN TH AT OF ASSESSED UNDISCLOSED INCOME TO HAVE DIFFERENT EFFECT TO ASSE SSEE TO FILE LESS UNDISCLOSED INCOME. IT IS, THEREFORE, AO IS DIRECTE D TO DELETE THE PENALTY. 5. WE HAVE HEARD THE LD. DR AND THE LD. AR. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF L D. CIT(A). THE REASONS ARE THAT PENALTY UNDER SECTION 158BFA(2) CAN BE LEV IED ON THE DIFFERENCE BETWEEN THE TAX WORKED OUT ON DECLARED UNDISCLOSED INCOME IN THE RETURN AND THE TAX ON ASSESSED UNDISCLOSED INCOME UNDER SE CTION 158BC/158BD. THUS WHERE RETURNED UNDISCLOSED INCOME AND ASSESSED UNDISCLOSED INCOME IS THE SAME THEN TAX ON THE TWO INCOME WOULD ALSO BE THE SAME. SINCE THERE WILL NOT BE ANY DIFFERENCE BETWEEN THE TWO FIGURES, THE QUESTION OF LEVYING PENALTY UNDER SECTION 158BFA(2) WILL NOT ARISE. IN OUR CONSIDERED VIEW THE AO HAS NOT CORRECTLY UNDERS TOOD THE PROVISIONS OF LAW. WE ARE ALSO SURPRISED AS TO WHY THE DEPARTM ENT IS CHOOSING TO FILE APPEAL OF THIS TYPE. THIS IN OUR VIEW IS AVOIDABLE WASTAGE OF RESOURCES. THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMI SSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 13/8/2010. SD/- SD/- (BHAVNESH SAINI) (D.C.AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMBE R AHMEDABAD, DATED : 13/8/2010 4 MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD