Shri Bhanwarlal Sharma, Ahmedabad V. The Dy.CIT.,Cent.Circle-2(2), Ahmedabad

ITSSA 490/AHD/2011

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0597 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 09-01-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 03-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROOP CHAND SR DR
• Keywords: Unexplained investment; Value adopted by valuation officer; Unexplained expenditure; Income from undisclosed sources; Salary income; Wrong claim; Valuation report
• Section: 143(3); 142(1); 6; 132

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.C. GUPTA, VICE PRESIDENT AND AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ IT(SS)A NOS. 489 TO 492/AHD/2011 / ASSESSMENT YEAR: 2000-01, 2001-02, 2002-03 & 2004-0 5 RESPECTIVELY BHANWARLAL SHARMA, B-85, NETAJINAGAR, NR. AMBAJI TEMPLE, MEGHANINAGAR, AHMEDABAD PAN : AJQPS 4134 E VS DCIT, CENTRAL CIRCLE 2(2), AHMEDABAD / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI GAURAV NAHTA, AR REVENUE BY : SHRI ROOP CHAND, SR.DR !' # $%&/ // / DATE OF HEARING : 09/01/2015 '( # $%& /DATE OF PRONOUNCEMENT: 27/03/2015 )* )* )* )*/ // / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER: THESE FOUR APPEALS FILED BY THE ASSESSEE ARE AGAI NST A COMMON ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I II, AHMEDABAD DATED 21.06.2011 FOR ASSESSMENT YEARS 2000-01, 2001-02, 2 002-03 & 2004-05. 2. THE ISSUE INVOLVED IN ALL THE APPEALS IS IDENTI CAL. THESE APPEALS WERE ALSO ARGUED TOGETHER BY BOTH THE PARTIES. HENCE, FO R THE SAKE OF CONVENIENCE ALL THESE APPEALS ARE DISPOSED OF BY THIS CONSOLIDA TED ORDER. IT(SS)A NOS. 489 TO 492/AHD/ 2011 BHANWARLAL SHARMA VS. DCIT AYS 2000-01, 01-02, 02-03 & 04-05 - 2 - 3. AT THE OUTSET, THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED THAT AS THE FACTS AND ISSUES INVOLVED IN ALL THE YEARS UNDER CO NSIDERATION ARE THE SAME EXCEPT DIFFERENCE IN FIGURES, HE IS ARGUING THE APP EAL FOR ASSESSMENT YEAR 2004-05 (IN IT(SS)A NO.492/AHD/2011) AND THE ARGUME NTS MADE FOR THIS YEAR ARE ALSO BE TAKEN AS THE ARGUMENTS FOR THE OTH ER ASSESSMENT YEARS UNDER APPEAL. 4. THE BRIEF FACTS OF THE CASE, AS CULLED OUT FROM THE RECORDS FOR ASSESSMENT YEAR 2004-05 I.E. IT(SS)A NO.492/AHD/201 1, ARE AS UNDER:- 5. THE ASSESSEE IS AN INDIVIDUAL STATED TO BE HAVIN G INCOME FROM SALARY, BUSINESS, OTHER SOURCES AND AGRICULTURAL INCOME. I N THIS CASE, A WARRANT OF AUTHORIZATION U/S 132 WAS SERVED ON 17.10.2003 IN R ELATION TO SEARCH CONDUCTED IN THE GROUP CASES OF ROYAL GROUP AS TH E ASSESSEE IS THE MAIN PERSON OF THIS GROUP. A NOTICE U/S 142(1) WAS ISSU ED ON 25.11.2004 AND THEREAFTER, THE ASSESSEE FILED THE RETURN OF INCOME ON 22.11.2005 DECLARING TOTAL INCOME OF RS.32,46,313/-. THEREAFTER, THE AS SESSMENT WAS FRAMED U/S 143(3) OF THE INCOME-TAX ACT VIDE ORDER DATED 31.03 .2006 AND THE TOTAL INCOME WAS DETERMINED AT RS.49,40,171/- INTER ALIA BY MAKING ADDITION ON ACCOUNT OF NON-AGRICULTURE INCOME, UNEXPLAINED INVE STMENT IN LAND, UNEXPLAINED EXPENDITURE ON DOMESTIC AIR TRAVEL AND HOUSE-HOLD EXPENDITURE. AGAINST THESE ADDITIONS MADE BY THE A SSESSING OFFICER, THE MATTER WAS CARRIED BEFORE THE LD. CIT(A) WHO GRANTE D PARTIAL RELIEF TO THE ASSESSEE. ON THE ADDITION THAT WAS CONFIRMED BY THE LD. CIT(A), PENALTY U/S 271(1)(C) OF RS.3,75,970/- WAS LEVIED BY ASSESSING OFFICER BY ORDER DATED 22.03.2010. AGGRIEVED BY THE AFORESAID ORDER OF TH E ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) W HO GRANTED PARTIAL RELIEF TO THE ASSESSEE. IT(SS)A NOS. 489 TO 492/AHD/ 2011 BHANWARLAL SHARMA VS. DCIT AYS 2000-01, 01-02, 02-03 & 04-05 - 3 - 6. AGGRIEVED BY THE AFORESAID ORDER OF THE LD. CIT( A), THE ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED FOLLOWING GR OUNDS:- 1. THE LD. CIT APPEALS III AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN PASSING APPELLATE ORDER DATED 21.06.2011 FOR AY 200 4-05 IN THE CASE OF APPELLANT BY CONFIRMING PENALTY IN RESPECT OF ADDIT ION MADE AND CONFIRMED OF RS.100463/- OUT OF AGRICULTURAL INCOME , RS.924823/- ON ACCOUNT OF ALLEGED UNACCOUNTED EXPENDITURE ON CONST RUCTION OF HOUSE AND RS.152952/- ALLEGED UNACCOUNTED EXPENSES ON DOMESTI C TOUR EXPENSES. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER AMEND OR W ITHDRAW ANY OF THE GROUNDS OF APPEAL ON OR BEFORE OF THE FINAL HEARING OF APPEAL. 7. BEFORE US, THE LD. AUTHORIZED REPRESENTATIVE SUB MITTED THAT THE ADDITION OF RS.1,00,463/- ON ACCOUNT OF NON-AGRICUL TURE INCOME WAS BASED ON ESTIMATES. HE SUBMITTED THAT THE ASSESSEE HAS S HOWN AGRICULTURAL INCOME TO THE TUNE OF RS.3,34,877/-, AGAINST WHICH THE ASSESSING OFFICER CONSIDERED THE AGRICULTURAL INCOME ATRS.25,000/- ON LY. HOWEVER, IN APPEAL THE LD. CIT(A) GRANTED FURTHER RELIEF AND SUSTAINED THE ADDITION TO THE EXTENT OF RS.1,00,463/- ONLY. HE FURTHER SUBMITTED THAT TH E ADDITION IS ON THE BASIS OF ESTIMATES AND THERE WAS NO EVIDENCE, EITHER OF F ILING OF INACCURATE PARTICULARS OR OF CONCEALING PARTICULARS OF INCOME. WITH RESPECT TO THE UNEXPLAINED INVESTMENT IN PURCHASE OF LAND, HE SUBM ITTED THAT THE ADDITION WAS MADE ON THE BASIS OF THE VALUATION REPORT OF TH E VALUATION OFFICER. THE VALUATION REPORT MAY BE CONSIDERED GOOD FOR MAKING ADDITION BUT CANNOT BE CONSIDERED FOR THE PURPOSE OF LEVYING PENALTY AN D FURTHER WAS NO EVIDENCE FOUND ABOUT INCURRING OF ANY EXPENDITURE W HICH WAS NOT RECORDED. WITH RESPECT TO UNACCOUNTED TOUR EXPENSE S, IT WAS SUBMITTED THAT THE EXPENSES WERE NOT INCURRED BY THE ASSESSEE AND THEREFORE, THE SAME WERE NOT APPEARING IN THE BOOKS OF ACCOUNTS AND FUR THER, THOUGH THE ADDITION WAS MADE, BUT NO PENALTY CAN BE LEVIED ON IT. WITH RESPECT TO THE IT(SS)A NOS. 489 TO 492/AHD/ 2011 BHANWARLAL SHARMA VS. DCIT AYS 2000-01, 01-02, 02-03 & 04-05 - 4 - ADDITION ON ACCOUNT OF UNACCOUNTED HOUSEHOLD EXPENS ES, THE LD. AR SUBMITTED THAT THE ASSESSING OFFICER HAS NOT POINTE D OUT ANY EVIDENCE ABOUT THE INCURRING OF EXPENSES OUT OF UNACCOUNTED INCOME AND THE ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATE. TH E LD. AR FURTHER SUBMITTED THAT THE DISALLOWANCE MADE IN THE ASSESSM ENT ORDER AND CONFIRMED IN THE APPELLATE PROCEEDINGS CANNOT BE TH E BASIS FOR CONCLUDING THAT THE ASSESSEE HAS CONCEALED ANY INCOME OR FURNI SHED INACCURATE PARTICULARS OF INCOME. HE ALSO PLACED RELIANCE ON THE DECISION IN THE CASE OF CIT VS.. GANGA COAL STORAGE (1995) 125 TAXATION 4,5 (AIL.) AND OTHER DECISIONS. 8. LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HA ND, SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE PENALTY HAS BEEN LEVIED ON FOUR COUNTS, VIZ., (I) NON-AGRICULTURAL INCOME, (II) UNEXPLAINED INVESTMEN T IN LAND, (III) UNACCOUNTED TOUR EXPENSES AND (IV) UNACCOUNTED HOUS EHOLD EXPENSES. IN THE CASE OF AGRICULTURE INCOME, WE FIND THAT THE AD DITION HAS BEEN MADE ON THE BASIS OF ESTIMATE. WITH RESPECT OF THE ADDITIO N ON ACCOUNT OF INVESTMENT IN PURCHASE OF LAND, WE FIND THAT THE ADDITION HAS BEEN MADE ON THE BASIS OF VALUATION REPORT. APART FROM VALUATION REPORT, NO O THER EVIDENCE WAS FOUND TO DEMONSTRATE THE INCURRING OF EXPENDITURE THAT HA S NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS. EVEN THE ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES HAS BEEN MADE ON THE BASIS OF ESTIMATE. WITH RESPEC T TO THE UNACCOUNTED TOUR EXPENSES, IT IS THE ASSESSEES SUBMISSION THAT THE SAME WAS NOT INCURRED BY THE ASSESSEE AND THEREFORE, IT HAS NOT BEEN RECORDED IN THE BOOKS OF ACCOUNTS. IT IS A WELL SETTLED LAW THAT PE NALTY PROCEEDINGS ARE IT(SS)A NOS. 489 TO 492/AHD/ 2011 BHANWARLAL SHARMA VS. DCIT AYS 2000-01, 01-02, 02-03 & 04-05 - 5 - DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND THAT T HE PROCEEDINGS FOR IMPOSITION OF PENALTY THOUGH EMANATES FROM PROCEEDI NGS OF ASSESSMENT, IT IS INDEPENDENT AND SEPARATE ASPECT OF PROCEEDINGS A ND, THEREFORE, HOWEVER RELEVANT AND GOOD FINDINGS IN ASSESSMENT PROCEEDING S MAY BE BUT THEY CANNOT BE CONCLUSIVE SO FAR AS PENALTY PROCEEDINGS ARE CONCERNED. IT IS WELL SETTLED THAT THE PARAMETERS OF JUDGING THE JUSTIFIC ATION FOR ADDITION MADE IN THE ASSESSMENT CASE OF THE ASSESSEE IS DIFFERENT FR OM THE PENALTY IMPOSED ON ACCOUNT OF CONCEALMENT OF INCOME OR FILING INACCURA TE PARTICULARS OF INCOME AND THAT CERTAIN DISALLOWANCE/ADDITION COULD LEGALL Y BE MADE IN THE ASSESSMENT PROCEEDINGS ON THE PREPONDERANCE OF PROB ABILITIES, BUT NO PENALTY COULD BE IMPOSED U/S 271(1)(C) OF THE ACT O N THE PREPONDERANCE OF PROBABILITIES AND REVENUE HAS TO PROVE THAT THE CLA IM OF THE EXPENSES OF THE ASSESSEE WAS NOT GENUINE OR WAS INFLATED TO REDUCE ITS TAX LIABILITY. ON THE ISSUE OF PENALTY ON THE ADDITION MADE ON THE BASIS OF VALUATION REPORT, WE FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. JMD ADVISORS (P) LTD, [2010] 124 ITD 223 (DEL.) HAS HEL D THAT THE VALUATION MADE BY DVO IS MERELY AN ESTIMATE WHICH MAY BE MADE BASI S FOR MAKING ADDITION TO THE INCOME BUT CANNOT BE THE BASIS FOR HOLDING THAT THERE WAS CONCEALMENT OF IMPOSING PENALTY U/S 271(1)(C). WIT H RESPECT TO LEVYING PENALTY ON ADDITION MADE ON THE BASIS OF ESTIMATION , WE FURTHER FIND THAT THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE O F SHRI SHAMJIBHAI R VS. ITO, IN ITA NO.1679/AHD/2008, AFTER RELYING ON THE VARIOUS DECISIONS CITED THEREIN, HAS HELD THAT WHEN ADDITION IS MADE ON EST IMATE BASIS AND THERE IS NO EVIDENCE OF ANY WRONG CLAIM, THEN PENALTY FOR CO NCEALMENT CANNOT BE SUSTAINED. CONSIDERING THE FOREGOING AND RELYING O N THE DECISIONS CITED HEREINABOVE AND IN THE ABSENCE OF MATERIAL BEING PR ODUCED BY REVENUE TO SUGGEST THAT THE ASSESSEE HAS IN FACT CLAIMED EXPEN SES OR FILED INACCURATE PARTICULARS OF INCOME TO EVADE THE TAXES, WE ARE OF THE VIEW THAT NO PENALTY IT(SS)A NOS. 489 TO 492/AHD/ 2011 BHANWARLAL SHARMA VS. DCIT AYS 2000-01, 01-02, 02-03 & 04-05 - 6 - U/S 271(1(C) CAN BE LEVIED IN THE PRESENT CASE. W E ACCORDINGLY, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY IN ALL THE FOUR ASSESSMENT YEARS UNDER CONSIDERATION. 10. IN THE RESULT, ALL THE FOUR APPEALS FILED BY TH E ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 27 TH MARCH, 2015 AT AHMEDABAD. SD/- SD/- (G.C. GUPTA) VICE PRESIDEN T (ANIL CHATURVEDI) ACCOUNTANT MEMBER DATED /03/2015 *BIJU T, PS PRONOUNCEMENT OF ORDER UNDER RULE, 34(4) OF ITAT RULES, 1963 IT(SS)A NOS. 489 TO 492/AHD/2011 - ASSESSEE - BHANW ARLAL SHARMA RESULT - ALLOWED SD/- SD/- (SHAILENDRA YADAV) JUDICIAL MEMBER (ANIL CHATURVEDI) ACCOUNTANT MEMBER DATE : 27/03/2015 )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ ! - / CONCERNED CIT 4. !- ( ) / THE CIT(A)-III, AHMEDABAD 5. +01 $ , , / DR, ITAT, AHMEDABAD 6. 12 3' / GUARD FILE. )*! )*! )*! )*! / BY ORDER, //TRUE COPY// 4 44 4/ // / 5 5 5 5 (DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD