RUKMINI SURYAVANSHI, MUMBAI V. ACIT CIR 23(3), MUMBAI

ITSSA 87/MUM/2009

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9101 (ITAT-MUMBAI)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 09-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: misc
• Appeal Filed On: 26-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Opportunity of cross examination; Third party statement

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH, MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER IT(SS) A NO. 87/MUM/2009 (BLOCK PERIOD: 01-04-1888 TO 20-08.1993) MRS. RUKMINI SURYAVANSHI ACIT, CIRCLE 23(3) T.G. NO. 119/6/9, SAMBHAJI NAGAR AAYAKAR BHAVAN, M. K. ROAD LBS MARG, MULUND (W) VS. MUMBAI 400020 MUMBAI 400080 PAN - AAIPS 8912 K APPELLANT RESPONDENT APPELLANT : IN PERSON RESPONDENT BY: MRS. JITENDRA YADAV O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF THE CIT(A)- XXIII, MUMBAI DATED 12.07.2009 CONFIRMING THE PENALTY LEVI ED UNDER SECTION 158BFA(2) OF RS.1,53,797/- BY THE A.O. THERE WAS A DELAY OF 15 DAYS IN FILING THE APPEAL, WHICH ON THE REQUEST OF THE ASSE SSEE WAS CONSIDERED AND CONDONED. ASSESSEE APPEARED IN PERSON ALONG WITH HE R HUSBAND. 2. BRIEFLY STATED, THERE WAS A SEARCH AND SEIZURE OPER ATION IN THE CASE OF DBC GROUP, WHICH ESTABLISHED THAT THEY WERE TAKING ACCOMMODATION BILLS FOR TRANSPORT CHARGES TO REDUCE TAXABLE INCOME FROM MOT A GROUP AND THEIR EMPLOYEES. MR. VENKAT SURYAVANSHI, HUSBAND OF THE A SSESSEE WAS EMPLOYEE OF M/S. MOTA TRANSPORT CORPORATION UPTO A.Y. 1994-9 5. DURING THE FINANCIAL YEAR 1994-95 TWO CONCERNS IN THE NAME OF M/S. SAGAR TRANSPORT AS PROPRIETARY CONCERN IN THE NAME OF MR. VENKAT SURYA VANSHI AND M/S. SWASTIK TRANSPORT, A PROPRIETARY CONCERN IN THE NAM E OF THE ASSESSEE WERE PROMOTED FOR ISSUE OF BOGUS BILLS. THIS HAS BEEN AD MITTED BY MR. VENKAT SURYAVANSHI IN THE STATEMENT RECORDED ON 20 TH AUGUST 1998 IN THE COURSE OF IT(SS) A NO. 87/MUM/2009 2 SEARCH AND SEIZURE PROCEEDINGS IN THE DBC GROUP. TH E MODUS OPERANDI WERE EXPLAINED THAT BANK ACCOUNTS WERE OPENED IN BANK OF INDIA, BALLARD ESTATE BRANCH AND SIGNED BLANK CHEQUES OF MOTA TRANSPORT, RELATED CONCERNS AND INDIVIDUALS WERE GIVEN TO HIM BY KANTIBHAI OR MANOJ BHANUSHALI, CA AND ON INSTRUCTION BY THESE PEOPLE HE USED TO COLLECT CHEQ UES FROM DCB GROUP AND DEPOSITED IN THE RESPECTIVE BANK ACCOUNT AND LATER ON WITHDRAW CASH AND RETURNED THE MONEY TO THE PARTIES. IN ASSESSMENTS T HE AMOUNT OF 6% WAS CONSIDERED AS COMMISSION FOR ACCOMMODATION BILLS, W HICH WAS REDUCED IN THE APPELLATE PROCEEDINGS TO 1.5%. CONSEQUENT TO CO NFIRMATION OF THE COMMISSION IN THE HANDS OF THE ASSESSEE AT 1.5% THE A.O. LEVIED PENALTY UNDER SECTION 158BFA(2). THE CIT(A), AFTER RECORDIN G HER SUBMISSION IN PARA 2.1 CONFIRMED THE PENALTY VIDE PARA 2.2 AS UNDER. : - 2.1 IT WAS SUBMITTED THAT THE APPELLANT WAS A VICT IM OF CIRCUMSTANCES. HER HUSBAND WAS PEON IN MOTA TRANSPORT CORPORATION AND BLINDLY FOLLOWING INSTRUCTIONS AS HE WAS POOR AND ILLITERAT E. HIS EMPLOYER HAS USED HIM FOR WHICH HE RECEIVED A PALTRY SUM. THE AP PELLANT WAS UNKNOWINGLY MADE A PARTY. SHE WAS LIVING A HAND TO MOUTH EXISTENCE. AFTER CONSIDERING THESE FACTS SUBSTANTIAL RELIEF HA D BEEN GRANTED BY THE HON'BLE ITAT. THE APPELLANT CANNOT BE HELD TO HAVE CONCEALED PARTICULARS AS SHE ACTED IN IGNORANCE. THE LEVY OF PENALTY LEVI ED WAS HENCE UNWARRANTED. 2.2 THE SUBMISSION HAS BEEN CAREFULLY CONSIDERED. THE H ON'BLE ITAT HAS CONFIRMED THE ADDITION IN PRINCIPLE AS THE MODU S OPERANDI OF ISSUE OF BOGUS BILLS WAS ESTABLISHED. HOWEVER, CONS IDERING THE CIRCUMSTANCES REDUCED COMMISSION RECEIVED FROM 6% T O 1%. IN THE CIRCUMSTANCES THE APPELLANT IS TO BE HELD TO HA VE CONCEALED INCOME TO THIS EXTENT. THE LEVY OF PENALTY IS CONFI RMED. 3. BEFORE US THE ASSESSEE SUBMITTED THAT HER HUSBAND W AS BLINDLY FOLLOWING THE INSTRUCTIONS OF THE EMPLOYER AND BEIN G ILLITERATE ALSO THEY WERE UTILIZING HIM BY PAYING PALTRY SUM. THE ASSESSEE WA S HAVING DIFFICULTY IN LIVING AT PRESENT. AFTER THE SEARCH THEY ARE EMPLOY ED ON A DAILY WAGE BASIS. IT WAS SUBMITTED THAT THEY HAVE NOT EARNED ANY AMOUNT AND THERE IS NO CASE FOR LEVY OF PENALTY. SHE PLEADED INNOCENCE IN THE E NTIRE TRANSACTIONS AND REQUESTED FOR DELETION OF PENALTY. IT(SS) A NO. 87/MUM/2009 3 4. THE LEARNED D.R., HOWEVER, RELIED ON THE ORDERS OF THE A.O. AND THE CIT(A) AND SUBMITTED THAT QUANTUM WAS CONFIRMED IN THE 158BD PROCEEDINGS AND ACCORDINGLY THE PENALTY IS LEVIABLE . 5. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE ORDE RS PASSED BY THE A.O. AND CONFIRMED BY THE ITAT THE PROCEEDINGS WERE INITIATED UNDER SECTION 158BD, EVEN THOUGH THERE IS NO SEIZED MATERIAL PERT AINING TO ASSESSEES BUSINESS CONCERN. THE BASIS FOR ESTIMATING 6% IS TH E TDS CERTIFICATE ISSUED BY THE DBC GROUP ON WHICH RETURNS WERE FILED CLAIMI NG EXPENDITURE. IT WAS ON THE BASIS OF THE STATEMENT OF ONE MR. AVTAR KISH AN BHATT, WHO IS PART OF THE HAVALA OPERATIONS OF KANTIBHAI AND MANOJ BHANUS HALI AND MOTA TRANSPORT GROUP, THE ASSESSEE WAS VESTED WITH COMMI SSION OF 6% OF THE TOTAL RECEIPTS BASED ON THE TDS CERTIFICATES ISSUED BY DB C GROUP CONCERNS. THIS COMMISSION WAS ESTIMATED ON THIRD PARTY STATEMENT, EVENTHOUGH ASSESSEE HAS NOT ADMITTED ANY COMMISSION RECEIPTS. ALL ALONG IT WAS THE CONTENTION THAT SHE WAS ILLITERATE AND HAS NOT DONE ANY BUSINE SS AND HER HUSBAND WAS UTILISED BY THE EMPLOYER FOR PREPARATION OF BOGUS B ILLS. THE MODUS OPERANDI WAS EXPLAINED BY HER HUSBAND. THE ORDER OF THE A.O. ALSO CONFIRMS THE MODUS OPERANDI AND RELYING ON THE STATEMENT OF THIR D PARTY AND THE RETURNS FILED FOR CLAIMING TDS REFUND, THE COMMISSION WAS E STIMATED. THE ITAT, TAKING INTO CONSIDERATION THE TOTAL FACTS OF THE CA SE, HAS ESTIMATED THE RATE OF COMMISSION AT 1.5%. SINCE THE COMMISSION WAS CONFIR MED ON ESTIMATE BASIS AND SINCE THERE IS NO EVIDENCE OF RECEIPT OF ANY AC TUAL COMMISSION AND THERE IS NO OTHER INCRIMINATING MATERIAL EXCEPT THE FINDI NG OF MODUS OPERANDI IN THE GROUP CASES FOR WHICH THE ASSESSEE IS AN INNOCE NT VICTIM, WE ARE OF THE OPINION THAT EXPLANATION GIVEN BY HER IS TO BE ACCE PTED AS A GENUINE EXPLANATION. IN THESE PECULIAR CIRCUMSTANCES OF THE CASE, WE ARE OF THE VIEW THAT THERE IS NO NEED TO LEVY PENALTY UNDER SECTION 158BFA(2). AS SEEN FROM THE ORDER OF PENALTY ALSO THE ASSESSEE EXPLANATION WAS NOT REBUTTED AND WHAT IS STATED BY THE A.O. IS THAT HE WAS NOT SATIS FIED WITH THE SUBMISSIONS OF THE ASSESSEE. THE EXPLANATION THAT SHE WAS UTILI SED BY HER HUSBANDS EMPLOYER WITHOUT HER KNOWLEDGE AND SHE BEING ILLITE RATE AND POOR HAD NO REASON FOR EITHER EARNING THE INCOMES OR DOING BUSI NESS IS A REASONABLE IT(SS) A NO. 87/MUM/2009 4 EXPLANATION, WHICH, IN OUR OPINION, HAS TO BE ACCEP TED AS GENUINE. MOREOVER THE INCOME WAS ONLY ESTIMATION. ACCORDINGLY, PENALT Y IS CANCELLED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH JULY 2010. SD/- SD/- (R.S. PADVEKAR) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 9 TH JULY 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXIII, MUMBAI 4. THE CIT XXIII, MUMBAI CITY 5. THE DR, D BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.