Smt. Kundan N.Shah L/h of Late Narendra V.Shah, Valsad V. The Dy.CIT.,Cent.Circle-2, Surat

ITSSA 560/AHD/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8744 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-02-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 16-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRADIP KR MAJUMDAR
• Assessee Lawyers: S N DIVETIA
• Keywords: Income from undisclosed sources; Search and seizure; Loose papers; Bonafide belief
• Section: 143(3); 153A; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD A BENCH BEFORE: SHRI D.K. TYAGI JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCO UNTANT MEMBER LATE SHRI NARENDRA V. SHAH, L/H SMT. KUNDAN N. SHAH (APPELLANT) PAN NO. ACOPS2909Q VS. DCIT, CENTRAL CIRCLE 2, SURAT (RESPONDENT) REVENUE BY : SRI PRADIP KR. MAJUMDAR, SR. D.R. ASSESSEE BY : SRI S.N. DIVETIA, A.R. DATE OF HEARING : 12-02-2013 DATE OF PRONOUNCEMENT : 22-02-2013 / ORDER PER : D.K TYAGI, JUDICIAL MEMBER:- THIS IS THE ASSESSEES APPEAL ARISING OUT FROM THE ORDER OF LD. CIT(A)- II, AHMEDABAD DATED 13/09/2012. 2. THE ASSESSEE HAS TAKEN FOLLOWING EFFECTIVE GROUN D OF APPEAL:- THE HONBLE COMMISSIONER OF INCOME TAX (A)-II, AHM EDABAD [CIT(A)] HAS ERRED IN LAW AND IN FACTS BY CONFIRMIN G THE PENALTY LEVIED U/S 271(1)(C) AMOUNTING TO RS. 17,39,558/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF CATERING SERVICES AND TRADING IN LA ND. A SEARCH AND SEIZURE IT(SS)A NO. 560/AHD/2012 A.Y.:-2007-08 IT(SS)A NO. 560/AHD/2012 A.Y. 2007-08 PAGE NO NARENDA V. SHAH VS. DCIT 2 OPERATION U/S 132 OF THE I.T. ACT WAS CARRIED OUT A T THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 24.09.2008. I N THE COURSE OF SEARCH AND SEIZURE ACTION, AS PER THE ENTRY FOUND IN PAGE NO. 36 OF MATERIAL SEIZED VIDE ANNEXURE BS-1 A LANDED PROPERTY WAS SOLD FOR CONSID ERATION OF RS. 51,03,000/-, WHEREAS AS PER BOOKS AND ACCOUNTS AND DOCUMENTS THE INVOLVED LAND WAS PURCHASED AT PARNERA FOR RS. 4 LAC. ON 13. 02.2007 AND SOLD FOR RS. 5 LACS ON 14-03-2007. ON THE SAME PAGE NO. 36 OF THE SEIZED DOCUMENT AN AMOUNT RS. 5,000/- HAD BEEN DEDUCTED FOR ENTRANCE G ATE AND THE REMAINDER AMOUNT OF RS. 50,98,000/- HAD BEEN ACCEPTED BY THE ASSESSEE BEING UNACCOUNTED INCOME FOR THE YEAR UNDER APPEAL. THE ASSESSEE ADMITTED THE FACTS IN HIS STATEMENT RECORDED U/S 132(4) ON 24.09 .2008 AND DEPOSED THAT THIS TRANSACTION WAS LINKED TO UNACCOUNTED INCOME O N LAND DEVELOPMENT. THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEE DING ADMITTED THAT AN AMOUNT OF RS. 50,98,000/- HAVE BEEN RECEIVED DURING THE YEAR IN AN UNACCOUNTED AND UNDISCLOSED MANNER. FURTHER THE SE IZED MATERIAL IN ANNEXURE BS-1 PAGES NOS. 27 TO 34 AND PAGE NOS. 53 TO 74 REFLECTED THAT THE ASSESSEE HAS NOT FULLY DISCLOSED THE INCOME FROM CA TERING BUSINESS AND SUPPRESSED THE SAME. UPON PREPARATION OF YEAR-WISE RECORD AND COMPILATION OF DETAILS ALONG WITH VERIFICATION OF BOOKS AND ACC OUNTS, THE DETAILS OF SALES NOT RECORDED IN THE BOOKS OF ACCOUNT WERE DETERMINE D AT RS. 19,859/- AS CATERING INCOME NOT FULLY DISCLOSED IN BOOK OF ACCO UNTS. IN VIEW OF THIS, ACCORDING TO ASSESSING OFFICER, THE ASSESSEE FAILE D TO FURNISH TRUE AND CORRECT INCOME TO THE TUNE OF RS. 51,17,859/- THEREBY CONCE ALING THE INCOME ON THIS ACCOUNT. PENALTY PROCEEDING U/S 271(1)(C) OF THE A CT WERE INITIATED AND AFTER TAKING INTO CONSIDERATION THE ASSESSEES REPLY THE PENALTY OF RS. 17,39,558/- WAS IMPOSED. IN APPEAL LD. CIT(A) CONFIRMED THIS A CTION OF THE ASSESSING OFFICER. IT(SS)A NO. 560/AHD/2012 A.Y. 2007-08 PAGE NO NARENDA V. SHAH VS. DCIT 3 4. FURTHER AGGRIEVED, NOW THE ASSESSEE IS IN APPEAL BEFORE US. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF SEARCH AND SEIZURE ACTION IN THE CASE OF ASSESSEE O N 24.09.2008 CERTAIN LOOSE PAPERS AND DOCUMENTS WERE FOUND AND SEIZED BY THE I NCOME TAX AUTHORITIES. BASED ON SEIZED MATERIALS IT WAS REVEALED THAT THE ASSESSEE AND FEW OF HIS CO-OWNERS WERE IN RECEIPT OF CERTAIN INCOME FROM LA ND TRANSACTIONS WHICH HAVE REMAINED TO BE DISCLOSED IN THEIR INCOME TAX R ETURNS. AS A CONSEQUENCE THEREOF, THE ASSESSEE OWNED UP THE ENTIRE INCOME AS HIS INCOME UNDER THE BONAFIDE BELIEF THAT THE SAME IS PERTAINING TO CURR ENT YEAR I.E. ASSESSMENT YEAR 2009-10. ACCORDINGLY, HE DECLARED A SUM OF RS . 1.11 CRORE AS INCOME UNDER 132(4) UNDER THE BONAFIDE BELIEF THAT SINCE T HE TIME LIMIT FOR FILING OF RETURN FOR ASSESSMENT YEAR 2009-10 IS YET TO BE EXP IRED U/S 139(1) OF THE ACT NEITHER ANY PENALTY NOR ANY INTEREST IS LEVIABLE IN HIS CASE. HOWEVER, WHILE FILING OF RETURN U/S 153(A)(A) ASSESSEE BIFURCATED SUCH INCOME INTO DIFFERENT ASSESSMENT YEARS. ACCORDINGLY, A RETURN FOR ASSESS MENT YEAR 2007-08 WAS FILED DECLARING TOTAL INCOME AS RS. 52,41,692/- THE REAFTER THE ASSESSMENT WAS COMPLETED U/S 153A R.W.S. 143(3) ASSESSING THE INCO ME AT RS. 62,61,550/- MAKING MINOR ADDITION OF RS. 19,598/- THEREAFTER PE NALTY OF RS. 17,39,558/- U/S 271(1)(C) OF THE ACT HAD BEEN IMPOSED WHICH HAS BEEN CONFIRMED BY THE LD. CIT(A). LD. COUNSEL FOR THE ASSESSEE FURTHER S UBMITTED THAT SINCE ASSESSEE OFFERED THE ENTIRE INCOME FROM LAND TRANSA CTIONS PART OF WHICH BELONGED TO THE OTHER CO-OWNERS OF THE LAND, A FACT WHICH WAS EXPLAINED AT THE TIME OF SEARCH OPERATION ALSO WHEN STATEMENT OF ASSESSEE WAS RECORDED BY THE INCOME TAX AUTHORITIES, THE PENALTY FOR CON CEALMENT SHOULD HAVE BEEN IMPOSED ONLY TO THE EXTENT OF ASSESSEES SHARE OF I NCOME FOR CONCEALING AND NOT FOR THE ENTIRE AMOUNT DISCLOSED BY THE ASSESSEE AT THE TIME OF SEARCH. IT(SS)A NO. 560/AHD/2012 A.Y. 2007-08 PAGE NO NARENDA V. SHAH VS. DCIT 4 THIS FACT IS ALSO CLEAR FROM THE CONCERNED SEIZED D OCUMENT IN WHICH THE SHARES OF OTHER CO-OWNERS IS ALSO REFLECTED. PENAL TY PROCEEDINGS AND ASSESSMENT PROCEEDINGS BEING DIFFERENT, THE DISCLOS URE AT THE TIME OF SEARCH CAN BE USED FOR MAKING ADDITION BUT THE SAME CAN N OT BE USED FOR PENALIZING THE ASSESSEE U/S. 271(1)(C) OF THE ACT. THE PENALT Y SHOULD BE IMPOSED IN RESPECT OF ASSESSEES SHARE OF THAT INCOME ONLY. S INCE THIS PLEA HAS BEEN TAKEN BY THE ASSESSEE FOR THE FIRST TIME BEFORE US AND THE SAME REQUIRES VERIFICATION AT THE END OF ASSESSING OFFICER FROM S TATEMENT OF ASSESSEE RECORDED AT THE TIME OF SEARCH AND THE SEIZED DOCUM ENT REFERRED TO BY THE ASSESSEE BEFORE US, WE DEEM IT PROPER THAT THE PENA LTY PROCEEDINGS IN THIS CASE BE RESTORED BACK TO THE FILE OF A.O. FOR FRESH ADJUDICATION AS PER LAW AFTER SUCH VERIFICATION. WE HOLD ACCORDINGLY. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) (D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 22/02/2013 A.K. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '#