Shri Sakalchand C.Patel, Ahmedabad V. The ACIT.,Circle-6, Ahmedabad

ITSSA 641/AHD/2010

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7368 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 20-12-2012
• Assessment Year: misc
• Appeal Filed On: 29-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL
• Assessee Lawyers: VARTIK R CHOKSI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH BEFORE SHRI G.C.GUPTA, VICE-PRESIDENT (AZ) AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER IT(SS)A NO.641/AHD/2010 BLOCK PERIOD FROM 1/4/90 TO 28/6/00 SAKALCHAND C PATEL, C/O SUPER MARBLE & STONE INDS. OPP. BHAGWAT VIDHYAPITH, SOLA ROAD, AHMEDABAD [ PAN NO.ACIPP 6315M ] / V/S . ACIT, CIRCLE-6, C.U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD / APPELLANT .. / RESPONDENT /APPELLANT BY SHRI VARTIK R CHOKSI, AR /RESPONDENT BY SHRI SHELLEY JINDAL, CIT-DR / DATE OF HEARING 20-12-2012 / DATE OF PRONOUNCEMENT 31-12-2012 !' !' !' !' / // / ORDER PER A.K. GARODIA, ACCOUNTANT MEMBER:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF COMMISSIONER OF INCOME-TAX (APPEALS)-XVI, AHMEDABAD (CIT(A) FOR S HORT) DATED 17-05-2010 PERTAINING TO BLOCK PERIOD FROM 01-04-1990 TO 28-06 -2000. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE CIT(A) ERRED IN NOT UPHOLDING THE ASSESSEES CLAIM THAT THE IMPU GNED PENALTY ORDER WAS BARRED BY LIMITATION AND HENCE AB INITO VOID AN D HE FURTHER ERRED IN NOT NOTICING THAT THE IMPUGNED PENALTY ORDER TOOK N OTICE OF THE ASSESSEES PLEA OF THE PENALTY ORDER BEING BARRED B Y LIMITATION BUT FAILED TO DEAL WITH THIS ASPECT IN THE IMPUGNED PENALTY OR DER. IT(SS)A NO641./AHD/2010 B.P. 1-4-90 TO 28-6-00 SAKALCHAND C PATEL V. ACIT CIR-6, ABD PAGE 2 2. WITHOUT PREJUDICE, ON THE FACTS AND IN THE CIRCU MSTANCES OF THE CASE, THE CIT(A) ERRED IN HOLDING THAT EVEN ON MERITS PRO VISIONS U/S. 158BFA(2) WERE RIGHTLY INVOKED AND HE FURTHER ERRED IN CONFIRMING THAT PENALTY OF RS.60,000/-. 2. IT WAS SUBMITTED BY LD. AR OF THE ASSESSEE THAT GROUND NO.1 IS NOT PRESSED AND ACCORDINGLY THIS GROUND IS REJECTED AS NOT PRESSED. 3. REGARDING ONLY EFFECTIVE GROUND I.E. GROUND NO.2 , IT WAS SUBMITTED THAT THE ADDITION WAS MADE ON ESTIMATE BASIS AND THEREFO RE PENALTY U/S. 158BFA(2) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) OF RS.60,000/- IS NOT JUSTIFIED. 4. AS AGAINST THIS, IT WAS SUBMITTED BY LD. CIT-DR OF THE REVENUE THAT CASH WAS FOUND AND THE STATEMENT WAS NOT SUBSTANTIA TED AND HENCE, IT IS NOT AN ESTIMATED ADDITION AND THEREFORE, THE PENALTY IS JUSTIFIED AND THE ORDER OF LD. CIT(A) SHOULD BE CONFIRMED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES B ELOW. WE FIND THAT THIS ISSUE WAS DECIDED BY LD. CIT(A) IN PARA-3 AND 3.1 O F HIS ORDER, WHICH ARE REPRODUCED BELOW:- 3. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELL ANT. IN MY VIEW PENALTY U/S. 158BFA[2] IS IMPOSABLE IN RESPECT OF E VERY ADDITION OF UNDISCLOSED INCOME UNLESS THE APPELLANT PROVES THAT HE WAS UNDER THE BONA FIDE BELIEF THAT THE UNDISCLOSED INCOME WAS NO T HIS INCOME THERE WAS SOME TYPOGRAPHICAL ERRORS IN HIS STATEMENT OF U NDISCLOSED INCOME. SECTION 158BFA[2] PRESUPPOSES THAT ON EVERY ADDITIO N U/S. 158BC PENALTY IS LEVIABLE. TO KNOW WHETHER THE APPELLANT HAS BONA FIDE REASON OR NOT, THE APPELLANT IS GIVEN ON OPPORTUNITY OF BE ING HEARD. IF THE ASSESSING OFFICER COMES TO KNOW THAT THE APPELLANT HAS PROVED HIS BONA FIDE THEN ONLY PENALTY U/S. 158BFA[2] IS NOT L EVIABLE. IN ALL OTHER CASES FINE PENALTY IS LEVIABLE. 3.1 IN THIS CASE CASH OF RS.2,50,000/- WAS FOUND AT THE RESIDENCE OF THE APPELLANT. THE SOURCE OF THIS CASH WAS STATED TO BE RS.1,00,000/- AS AGRICULTURAL INCOME, RS.75,000/- BELONGING TO WIFE OF THE APPELLANT, IT(SS)A NO641./AHD/2010 B.P. 1-4-90 TO 28-6-00 SAKALCHAND C PATEL V. ACIT CIR-6, ABD PAGE 3 RS.50,000/- BELONGING TO RENUKABEN, DAUGHTER OF THE APPELLANT & BALANCE OF RS.25,000/- FOR SELF. HOWEVER, DURING TH E APPELLATE (AFTER ITAT) PROCEEDINGS THE APPELLANT COULD PROVE THE SOU RCE OF CASH UPTO RS.1,50,000/- I.E. RS.1,00,000/- AS AGRICULTURAL IN COME AND RS.25,000/- EACH AS SAVING BY THE WIFE AND DAUGHTER OF THE APPE LLANT. THIS LEAVES, BEHIND THE UNDISCLOSED INCOME OF RS.1,00,000/- ON W HICH PENALTY U/S 158BFA[2] IS LEVIABLE UNLESS THE APPELLANT PROVES T HAT HIS CASE IS NOT COVERED BY THE PROVISIONS OF PENALTY U/S. 158BFA[2] . IN THIS CASE THE APPELLANT COULD NOT FINALLY PROVE THE SOURCE OF CAS H OF RS.1,00,000/- EVEN THOUGH THE BENEFIT OF ESTIMATION HAS BEEN GIVE N BY THE CIT(A) TO THE EXTENT OF RS.1,00,000/- & FURTHER BY ITAT TO TH EE EXTENT OF RS.50,000/-. THAT DOES NOT MEAN THAT THE ADDITION O F UNDISCLOSED INCOME WAS MADE ON ESTIMATION BASIS. I HAVE BEEN TA KING A STAND THAT SINCE THE PENALTY U/S.158BFA[2] IS LEVIED ON THE UN DISCLOSED INCOME OF THE APPELLANT WHICH IS NOT DISCLOSED IN THE RETURN OF INCOME AND IT IS REPRESENTED BY THE UNACCOUNTED ASSETS OR UNDISCLOSE D INCOME, IN THE ABSENCE OF ANY BONA FIDE REASON, IT IS LEVIABLE IN ALL THE CASES OF ADDITION OF UNDISCLOSED INCOME. AS THE COMPUTATION OF UNDISCLOSED INCOME ASSESSED U/S. 158BC IS BASED ON THE UNACCOUN TED CASH FOUND AT THE TIME OF SEARCH, PENALTY ON SUCH UNDISCLOSED INCOME US. 158BFA[2] IS CORRECTLY LEVIED BY THE ASSESSING OFFI CER IN THE ABSENCE OF ANY VALID EXPLANATION FROM THE APPELLANT. FROM THE ABOVE PARAS OF THE ORDER OF LD. CIT(A), WE FIND THAT CASH OF RS.2.50 LAKH WAS FOUND AT THE RESIDENCE OF THE ASSESSEE. RE GARDING SOURCE OF THIS CASH, IT WAS STATED THAT RS.1 LAKH IS OUT OF AGRICU LTURAL INCOME, RS.75,000/- IS BELONGING TO WIFE OF THE ASSESSEE AND RS.50,000/- I S BELONGING TO DAUGHTER OF ASSESSEE AND BALANCE RS.25,000/- IS BELONGING TO AS SESSEE. THE TRIBUNAL HAS DELETED THE ADDITION OF RS.1.50 LAKH BY ACCEPTING T HE EXPLANATION OF THE ASSESSEE IN PART. THE TRIBUNAL HAS ACCEPTED THE EXP LANATION OF ASSESSEE REGARDING RS.1 LAKH OUT OF AGRICULTURAL INCOME, RS. 25,000/- AS SAVING BY THE WIFE AND DAUGHTER OF THE ASSESSEE EACH. IN THE LIGH T OF THESE FACTS, WE FIND THAT ALTHOUGH CASH WAS FOUND OF RS.2.50 LAKH BUT TH E SOURCE OF THE SAME WAS EXPLAINED BY THE ASSESSEE. SUCH EXPLANATION WAS NOT ACCEPTED IN FULL BUT IT WAS ACCEPTED IN PART WITHOUT POINTING OUT ANY FALSI TY IN THE CLAIM OF THE ASSESSEE. THE EXPLANATION WAS NOT ACCEPTED MAINLY F OR THE REASONS THAT THE ASSESSEE COULD NOT PRODUCE EVIDENCES TO SUBSTANTIAT E THE EXPLANATION. IN OUR CONSIDERED OPINION, IN RESPECT OF THOSE EXPLANATION S, WHICH COULD NOT BE IT(SS)A NO641./AHD/2010 B.P. 1-4-90 TO 28-6-00 SAKALCHAND C PATEL V. ACIT CIR-6, ABD PAGE 4 SUBSTANTIATED BY THE ASSESSEE, ADDITION IS ALRIGHT BUT PENALTY IS NOT JUSTIFIED UNLESS IT IS FOUND THAT EXPLANATION OF THE ASSESSEE WAS FALSE. HENCE, IN OUR CONSIDERED OPINION, PENALTY IN THE PRESENT CASE IS NOT JUSTIFIED AND WE DELETE THE SAME. 6. IN THE RESULT, APPEAL OF ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- ( G.C.GUPTA ) ( A.K.GARODIA ) (VICE PRESIDENT) (ACCOUNTANT MEMBER) #!$%- 31/12/2012 '!! ( DKP* !' !' !' !' ))* ))* ))* ))* +* +* +* +* / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. $$)0 1 / CONCERNED CIT 4. 1- / CIT (A) 5. *45 )))0, )0, '!! / DR, ITAT, AHMEDABAD 6. 589 :; / GUARD FILE. BY ORDER/ !' ,