ACIT Central Cir.-1(2),, Pune v. M/s. Supreme Builders, Pune

ITA 1263/PUN/2010 | 2005-2006
Pronouncement Date: 30-03-2012 | Result: Dismissed

Appeal Details

RSA Number 126324514 RSA 2010
Assessee PAN AAEFS1264Q
Bench Pune
Appeal Number ITA 1263/PUN/2010
Duration Of Justice 1 year(s) 6 month(s) 3 day(s)
Appellant ACIT Central Cir.-1(2),, Pune
Respondent M/s. Supreme Builders, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-03-2012
Date Of Final Hearing 23-02-2012
Next Hearing Date 23-02-2012
Assessment Year 2005-2006
Appeal Filed On 27-09-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NOS. 1263 & 1264/PN/2010 (ASSTT. YEAR : 2005-06 & 2006-07 ) ACIT CENTRAL CIRLCE 1(2) PUNE ... APPELLANT P.M.T. BUILDING 4 TH FLOOR C WING PUNE V. M/S. SUPREME BUILDERS RESPONDENT 151 M.G. ROAD PUNE 411001 PAN : AAEFS 1264Q APPELLANT BY : MS. ANN KAPTHUAMA RESPONDENT BY : SHRI. NIKHIL PATHAK DATE OF HEARING :23/2/12 DATE OF PRONOUNCEMENT : -3-12 ORDER PER I.C. SUDHIR JM IN THESE APPEALS THE REVENUE HAS QUESTIONED THE FIRST APPELLATE ORDER ON THE GROUND THAT THE LD CIT(A) HAS ERRED IN CANCELLING THE PENALTY LEVIED U/S. 271(1)(C ). 2. THE RELEVANT FACTS ARE THAT THE ASSESSEE PARTNER SHIP FIRM ENGAGED IN THE BUSINESS OF BUILDERS & PROMOTERS WAS SUBJECT ED TO SEARCH AND SEIZURE ACTION U/S. 132 ON 21 ST SEPTEMBER 2006. IN THE ASSESSMENT FRAMED U/S. 143(3) R.W.S. 153A(A) THE A.O ACCEPTED THE RETURNED INCOME. THE A.O. HOWEVER LEVIED PENALTY U/S. 271 (1)(C ) ON THE BASIS THAT THE ASSESSEE WOULD NOT HAVE COME FORWARD TO D ISCLOSE THE INCOME HAD THERE BEEN NO SEARCH. BEFORE THE LD CIT(A) THE ASSESSEE ASSERTED THAT THE ADDITION IN THE ASSESSMENT U/S. 153A(A) R .W.S. 143(3) HAS BEEN MADE ONLY ON THE BASIS OF STATEMENTS GIVEN BY THE A SSESSEE U/S. 132(4) OF THE ACT. THE RETURNED INCOME HAS BEEN ACCEPTED BY THE A.O WITHOUT ITA . NOS.1263 & 1264//PN/2010 M/S. SUPREME BUILDERS A.YS. 2005-06 & 2006-07 PAGE OF 7 2 MUCH OF DISCUSSION IN RESPECT OF ANY EVIDENCE OR D OCUMENT FOUND TO SUPPORT THE ADDITION. IT WAS CONTENDED THAT IT IS NOT POSSIBLE EVEN FOR THE ASSESSEE TO SUBSTANTIATE THAT ADDITIONAL INCOME SH OWN IN THE RETURN FILED U/S. 156A IS THE CORRECT INCOME NOR FOR THE A.O TO VERIFY THE CORRECTNESS OF THE SAME. THUS THE ASSESSEE SEEMS TO HAVE STAT ED THAT DECLARATION IS VOLUNTARY AND TO BUY PEACE FROM PROTRACTED LITIGA TION. IT WAS SUBMITTED THAT UNLESS THERE IS FINDING OF THE A.O THAT THE AS SESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURA TE PARTICULAR THEREOF PENALTY U/S. 271(1)(C ) CANNOT BE LEVIED. IT WAS S UBMITTED THAT ASSESSMENT AND LEVY OF PENALTY ARE INDEPENDENT PROC EEDINGS AND THUS ADDITION MADE IN THE ASSESSMENT DOES NOT LEAD AUTOM ATICALLY FOR LEVY OF PENALTY U/S. 271(1)(C ) OF THE ACT. IT WAS CONTEND ED THAT THE ASSESSEE HAD NOT FILED RETURN TILL THE DATE OF SEARCH AND TH EREFORE THE RETURN FILED U/S. 153A(A) IS THE FIRST RETURN FILED BY THE ASS ESSEE FOR THE A.YS. UNDER CONSIDERATION TIME FOR WHICH THOUGH BELATED BUT WAS STILL THERE. SEVERAL DECISIONS INCLUDING DECISION OF HONBLE SUPREME COU RT IN THE CASE OF CIT VS. SURESHCHAND MITTAL 251 ITR 9 (SC) WERE ALSO SI TED. BEING CONVINCED WITH THE SUBMISSION OF THE ASSESSEE THE LD CIT(A) HAS DELETED THE PENALTY IN QUESTION. HENCE REVENUE IS AGGRIEVED BY THE SAID ACTION OF THE FIRST APPELLATE AUTHORITY. 3. IN SUPPORT OF THE GROUND THE LD. D.R. HAS BASIC ALLY PLACED RELIANCE ON THE PENALTY ORDER. SHE SUBMITTED THAT UNDISPUTE DLY THE ADDITION MADE IN THE ASSESSMENT FRAMED U/S. 153A R.W.S. 143( 3) OF THE ACT WAS THE RESULT OF SEARCH AND SEIZURE ACTION AT THE PREM ISES OF THE ASSESSEE. HENCE THE SAME WAS CONCEALMENT OF PARTICULARS OF I NCOME ON THE PART OF THE ASSESSEE DURING THE A.YS. UNDER CONSIDERATION T O ATTRACT PENAL ITA . NOS.1263 & 1264//PN/2010 M/S. SUPREME BUILDERS A.YS. 2005-06 & 2006-07 PAGE OF 7 3 PROVISION U/S. 271(1)(C ) OF THE ACT. WITHOUT APPR ECIATING THIS MATERIAL FACT OF THE PRESENT CASE THE LD CIT(A) HAS DELETED THE PENALTY. 4. THE LD. A.R. ON THE OTHER HAND HAS REITERATED TH E CONTENTIONS MADE BEFORE THE AUTHORITIES BELOW; HE REITERATED THAT NO INCRIMINATING DOCUMENTS WAS FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AT THE PREMISES OF THE ASSESSEE AND THE ADDITION I .E. SUBJECT MATTER OF THE PENALTY HAS BEEN MADE IN THE ASSESSMENT FRAMED U/S. 153A R.W.S. 143(3) SOLELY ON THE BASIS OF STATEMENT MADE BY TH E ASSESSEE U/S. 132(4) OF THE ACT. HE SUBMITTED THAT THE ASSESSEE HAD DECLARED THE INCOME AND PAID TAX ON IT TO BUY PEACE AND TO AVOI D PROTRACTED LITIGATIONS. HE SUBMITTED FURTHER THAT THE ASSESSE E IN THE BUSINESS OF BUILDER HAS BEEN FOLLOWING PROJECT COMPLETION METHO D AND POSSESSION OF THE CONSTRUCTED PREMISES WERE NOT HANDED OVER TO TH E BUYERS. IN SUPPORT HE REFERRED PAGE NOS. 20 TO 29 OF THE PAPE R BOOK I.E. COPIES OF RETURN OF INCOME ALONG WITH BALANCE SHEET FOR THE A .YS. 2005-06 AND 2006-07 UNDER CONSIDERATION. HE ALSO REFERRED PAGE NOS. 30 TO 34 OF THE PAPER BOOK WHERE COPY OF THE RETURN OF INCOME ALONG WITH BALANCE SHEET FOR THE A.Y. 2003-04 HAS BEEN MADE AVAILABLE. THE LD. A.R. ALSO REFERRED COPY OF THE STATEMENTS U/S. 132(4) OF SHRI MAHMOOD MUSAVI MADE AVAILABLE AT PAGE NOS. 6 TO 19 OF THE PAPER BOOK. THE LD. A.R. CONTENDED THAT THE ASSESSMENT AND PENALTY PROCEEDINGS ARE TWO DIFFERENT AND INDEPENDENT PROCEEDINGS. HE ALSO PLACED RELIANCE ON THE FOLLOWING DECISIONS TO SUPPORT HIS CONTENTION THAT IN ABSENCE OF FINDING BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE PENALTY U/S. 271(1)(C ) CANNOT BE LEVIED MERELY ON THE BASIS OF STATEMENTS OF THE ASSESSEE DE HORSE EVIDENCE IN CORROBORATION : ITA . NOS.1263 & 1264//PN/2010 M/S. SUPREME BUILDERS A.YS. 2005-06 & 2006-07 PAGE OF 7 4 1) JAINARAYAN BABULAL VS. CIT 170 ITR 399 (BOM) 2) ITO VS. PATIL AUTOMOBILES 91 ITD 1 (PUNE) ( T M ) 3) CIT VS. C.A. TAKATAWALA (2009) (GUJ.) 309 ITR 4 17 4) SANTOSH NARAIN KAPUR VS. DCIT 115 TTJ (LUCK.) 402 5) ITO VS. BABITABEN RAMESHBHAI PATEL 116 TTJ (AHM .) 421 5. WE HAVE CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF THE ORDERS OF THE LOWER AUTHORITIES MATERIAL AV AILABLE ON RECORD AND DECISIONS RELIED UPON. IT IS AN ESTABLISHED PROPOS ITION OF LAW THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS AND IT IS ALWAYS NOT NECESSARY THAT EVE RY ADDITION MADE IN THE ASSESSMENT WILL AUTOMATICALLY RESULT IN LEVY OF PENALTY U/S. 271(1)( C ) OF THE ACT. IT IS ALSO AN ESTABLISHED PROPOSITION OF LAW THAT EVEN IF LEVY OF PENALTY U/S. 271(1)(C ) IS CONSIDERED A CIVIL LIAB ILITY BUT IT IS PENAL IN NATURE HENCE EVIDENCE OF COMMITMENT OF OFFENCE IS TO BE SEEN BEFORE LEVYING THE SAME. THERE IS NO REBUTTAL TO THE CLAI M OF THE ASSESSEE THAT ADDITION IN THE ASSESSMENT IN QUESTION HAS BEEN MA DE MERELY ON THE BASIS OF STATEMENT OF THE ASSESSEE RECORDED U/S. 13 2(4) OF THE ACT. IN OTHER WORDS IT IS NOT THE CASE OF REVENUE THAT THE ADDITION I.E. SUBJECT MATTER OF THE PENALTY HAS BEEN MADE IN THE ASSESSME NTS ON THE BASIS OF ANY INCRIMINATING MATERIAL FOUND DURING THE COURSE OF SEARCH. MERELY BECAUSE THE ADDITION HAS BEEN MADE AS A RESULT OF S EARCH OR THE ASSESSEE WOULD NOT HAVE DISCLOSED THE INCOME IN HIS STATEMEN T HAD THERE BEEN NO SEARCH IN THE PREMISES OF THE ASSESSEE IS NOT SUFF ICED TO ATTRACT PENAL PROVISION U/S. 271(1)(C ) UNLESS THE REQUIREMENTS O F CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PART ICULARS THEREOF ON THE PART OF THE ASSESSEE RELATING TO THE ADDITION MADE IS FULFILLED. AS TO WHETHER THE ADDITION MADE IN THE ASSESSMENTS CAN BE HELD AS ITA . NOS.1263 & 1264//PN/2010 M/S. SUPREME BUILDERS A.YS. 2005-06 & 2006-07 PAGE OF 7 5 CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE WE WILL HAVE T O EXAMINE THE VERY STATEMENTS OF THE ASSESSEE RECORDED U/S. 132(4) OF THE ACT ON THE BASIS OF WHICH ADDITION HAS BEEN MADE IN THE PRESENT ASS ESSMENTS AND PENALTY HAS BEEN LEVIED THEREUPON. THE RELEVANT EXTRACT OF THE STATEMENTS OF SHRI MAHMOOD H. MUSAVI ARE BEING REPRODUCED HEREUND ER FOR A READY REFERENCE : I WOULD LIKE TO STATE VOLUNTARILY THAT MOST OF THE BOOKING OF THE FLATS AND SHOPS HAVE BEEN DONE IN THE F.Y. 2005-06. THIS SCHEME IS STILL INCOMPLETE AND I AM NEGOTIATING WITH THE PEOPLE WHO HAVE BOOKED THE FLATS & SHOPS TO CANCEL THE BOOKING AS I NEEDED TO COVERT THESE PROJECT INTO A HOTEL. THEREFORE I HA VE NOT COMPLETED THE PROJECT OR GIVEN POSSESSION TO ANY OF THE PEOPL E WHO HAVE BOOKED FLATS/SHOPS. HOWEVER I VOLUNTARILY DECLARE D THAT IN F.Y. 2004-05 I HAVE ACCEPTED CASH TO THE TUNE OF RS. 20 LAKHS (TWENTY LAKHS) AND IN F.Y. 2005-06 TO THE TUNE OF RS. 30 LA KHS(THIRTY LAKHS) WHICH HAVE NOT SHOWN IN THE AGREEMENT OR IN THE BOOKS OF ACCOUNTS AND THEREFORE I OFFER FOR TAX FOR A.Y. 20 05-06 AND A.Y. 2006-07. THE ABOVE ADDITIONAL INCOME WILL BE APAR T FROM THE FIRMS REGULAR INCOME.(EXTRACT OF ANSWER TO QUESTI ON NO. 6) (PAGE NO. 17 OF THE PAPER BOOK). 6. IN ABSENCE OF ANY EVIDENCE TO CONTRADICT THE ABO VE CONTENTION OF THE ASSESSEE THE ADDITION I.E. SUBJECT MATTER OF P ENALTY WAS VOLUNTARILY OFFERED BY THE ASSESSEE TO BUY PEACE AND AVOID LITI GATION. UNDER THE ABOVE FACTS WE ARE HAVING NO OPTION BUT TO COME T O A CONCLUSION IN THE PRESENT CASE THAT THERE WAS NO EVIDENCE BEYOND DOUB T TO HOLD THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISH ING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TOW ARDS THE ADDITION MADE IN THE ASSESSMENTS IN QUESTION TO JUSTIFY LEVY OF P ENALTY U/S. 271(1) (C ) OF THE ACT. IN ITS DECISION IN THE CASE OF CIT VS. C.A. TAKATAWALA ITA . NOS.1263 & 1264//PN/2010 M/S. SUPREME BUILDERS A.YS. 2005-06 & 2006-07 PAGE OF 7 6 (SUPRA) BEFORE HONBLE GUJARAT HIGH COURT IN SPIT E OF SEARCH OPERATION CARRIED OUT IN THE PREMISES OF THE ASSESSEE THE RE VENUE DID NOT HAVE IN ITS POSSESSION ANY INCRIMINATING MATERIAL NOR WAS A NY ADDITION MADE ON THE BASIS OF THE SEIZED MATERIAL. IN FACT THE ADDITIONS HAD BEEN MADE IN THE ASSESSMENT ORDER ONLY ON THE BASIS OF THE DE CLARATION MADE BY THE ASSESSEE SUBJECT TO CERTAIN MINOR VARIATION. THE T RIBUNAL CAME TO THE CONCLUSION THAT THE DECLARATION MADE BY THE ASSESSE E WAS VOLUNTARY AND IN GOOD FAITH. THE DECLARATION WAS FULL AND TRUE. THE ASSESSEE HAS PAID TAXES TO THE TUNE OF RS. 97 LAKHS ON THE DISCLOSED INCOME AND THE ASSESSEE HAD COOPERATED WITH THE DEPARTMENT AND ALL THESE WERE BEFORE DETECTION BY THE DEPARTMENT BECAUSE THE DEPARTMENT WAS NOT IN A POSITION TO POINT OUT ANY CONCRETE MATERIAL TO ESTA BLISH CONCEALMENT. THE HONBLE HIGH COURT WAS PLEASED TO HOLD THAT THE TRI BUNAL WAS RIGHT IN LAW AND ON FACTS IN CANCELLING THE PENALTY U/S. 271 (1)(C ) OF THE ACT ON THE GROUND THAT MERE FILING OF REVISED RETURNS ON A NUMBER OF OCCASIONS IN THE FACTS AND CIRCUMSTANCES OF THE CASE WERE NOT S UFFICIENT TO HOLD THAT THE RETURNS WERE NOT VOLUNTARY. ALMOST SIMILAR ARE THE FACTS IN THE PRESENT CASE BEFORE US. WE THUS RESPECTFULLY FOLLO WING THE ABOVE DECISION OF HONBLE GUJARAT HIGH COURT COME TO THE CONCLUSIO N THAT IN THE PRESENT CASE THE LD CIT(A) WAS JUSTIFIED IN DELETING THE P ENALTY IN QUESTION ON THE BASIS THAT THERE WAS NEITHER CONCEALMENT OF PAR TICULARS OF INCOME NOR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PA RT OF THE ASSESSEE TOWARDS THE ADDITIONS AS THE SAME HAVE BEEN MADE I N THE ASSESSMENT SOLELY BASED ON THE STATEMENTS OF ASSESSEE RECORDED U/S. 132(4) OF THE ACT. THE SAME IS UPHELD. THE GROUND IS ACCORDINGL Y REJECTED. 7. CONSEQUENTLY THE APPEALS ARE DISMISSED. ITA . NOS.1263 & 1264//PN/2010 M/S. SUPREME BUILDERS A.YS. 2005-06 & 2006-07 PAGE OF 7 7 THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30TH MARCH 2012. SD/- SD/- ( G.S. PANNU ) ACCOUNTANT MEMBER ( I.C. SUDHIR ) JUDICIAL MEMBER PUNE DATED THE 30TH MARCH 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CENTRAL PUNE 4. THE CIT(A)-IV PUNE 4. THE D.R. A BENCH PUNE 5. GUARD FILE / -TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE