Shri Tulsibhai Devjibhai Patel, Ahmedabad v. The Income tax Officer, Ward-7(1),, Ahmedabad

ITA 1462/AHD/2007 | 2002-2003
Pronouncement Date: 14-05-2010 | Result: Partly Allowed

Appeal Details

RSA Number 146220514 RSA 2007
Assessee PAN ACDPP5572F
Bench Ahmedabad
Appeal Number ITA 1462/AHD/2007
Duration Of Justice 3 year(s) 1 month(s) 1 day(s)
Appellant Shri Tulsibhai Devjibhai Patel, Ahmedabad
Respondent The Income tax Officer, Ward-7(1),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 14-05-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 14-05-2010
Date Of Final Hearing 11-05-2010
Next Hearing Date 11-05-2010
Assessment Year 2002-2003
Appeal Filed On 12-04-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL VP AND BHAVNESH SAINI JM) ITA NO.1462/AHD/2007 A. Y.: 2002-03 SHRI TULSIBHAI DEVJIBHAI PATEL PROP. M/S. AMARNATH TIMBERS 12 PUSHPAK BUNGALOW NR. LAD SOC BODAKDEV AHMEDABAD PA NO. ACDPP 5572 F VS THE INCOME TAX OFFICER WARD-7(1) AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI M. K. PATEL (FOR SN DIVETIA) AR RESPONDENT BY SHRI C. K. MISHRA DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XIII AHMEDABAD DAT ED 08-02-2007 FOR ASSESSMENT YEAR 2002-03 CHALLENGING THE ORDER OF TH E LEARNED CIT(A) IN LEVYING THE PENALTY LEVIED U/S 271 (1) ( C ) OF THE IT ACT. 2. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOT H THE PARTIES PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND C ONSIDERED THE MATERIAL ON RECORD. 3. THE FACTS OF THE CASE ARE THAT A SURVEY WAS COND UCTED IN THIS CASE ON 07-02-2002. THE ASSESSEE WAS FOUND TO HAVE MADE UNEXPLAINED INVESTMENT IN EXCESS SOCK OF RS.4 27 049/-. THE RET URN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR WAS FILED BUT THE EXCESS S TOCK FOUND AT THE TIME OF SURVEY WAS NOT DISCLOSED IN THE SAID RETURN. THE CASE WAS TAKEN UP FOR SCRUTINY IN WHICH ADDITION OF RS.4 27 049/- WAS MAD E BY THE AO HOLDING THE SAME TO BE UNEXPLAINED INVESTMENT MADE IN EXCES S STOCK. IT MAY ALSO ITA NO.1462/AHD/2007 TULSIDAS DEVJIBHAI PATEL VS ITO 2 BE POINTED OUT THAT THE AO FOUND THAT THE AFORESAID DIFFERENCE OF STOCK WAS FOUND IN EXCESS ON THE DATE OF SURVEY HAS NOT B EEN SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME. AT THE ASSESSMEN T STAGE THE ASSESSEES REPRESENTATIVE ADMITTED TO THE SAME AND AGREED TO THE ADDITION OF AN AMOUNT EQUIVALENT TO RS.4 27 049/- O N ACCOUNT OF HIS UNEXPLAINED INVESTMENT AS THE ASSESSEE HAS NOT ACCO UNTED FOR THIS EXCESS STOCK FOUND. THE LEARNED CIT(A) HOWEVER ALL OWED RELIEF TO THE ASSESSEE FOR A SUM OF RS.2 03 169/- AND BALANCE ADD ITION HAS BEEN CONFIRMED. THE AO INITIATED PENALTY PROCEEDINGS U/S 271 (1) ( C ) OF THE IT ACT AND VIDE SEPARATE ORDER THE AO LEVIED PENALTY U /S 271 (1) ( C ) OF THE IT ACT. IT MAY ALSO BE NOTED THAT NONE ATTENDED NOR HAS FURNISHED ANY REPLY TO THE SHOW CAUSE NOTICE OF LEVY OF THE PENAL TY BEFORE THE AO. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT THE AO HAS NOT GIVEN PROPER OPPORTUNITY AND THAT THE AO HAS FAILED TO APPRECIAT E THAT MERELY BECAUSE THE ASSESSEE HAS NOT PASSED JOURNAL ENTRIES IN RESP ECT OF EXCESS STOCK FOUND AT THE TIME OF SURVEY WOULD NOT MEAN THAT EX CESS STOCK WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN. IT WAS ALS O SUBMITTED THAT THE LEARNED CIT(A) PARTLY ACCEPTED THE EXPLANATION OF T HE ASSESSEE SO NO PENALTY SHOULD BE LEVIED WHEN EXPLANATION OF THE AS SESSEE HAS BEEN CONSIDERED TO BE BONA FIDE. THE LEARNED CIT(A) HOWE VER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AND DISMISSED THE AP PEAL OF THE ASSESSEE CONFIRMING THE PENALTY ORDER. THE LEARNED CIT(A) NO TED THAT IT IS UNDISPUTED FACT THAT EXCESS STOCK WAS FOUND AT THE TIME OF SURVEY. HAD THE SURVEY NOT BEEN CONDUCTED THE UNEXPLAINED INVE STMENT TO THE EXTENT OF RS.4 27 049/- WOULD NOT HAVE SEEN THE LIGHT OF T HE DAY. THE LEARNED CIT(A) ALSO NOTED THAT THE ASSESSEE DESPITE KNOWING UNEXPLAINED INVESTMENT IN THE STOCK DID NOT MAKE ANY DISCLOSURE IN THE RETURN OF INCOME. THEREFORE IT IS A CLEAR CASE OF CONCEALMEN T OF INCOME TO THAT EXTENT. THE LEARNED CIT(A) ALSO NOTED THAT IT MAY B E LEARNED CIT(A) ALLOWED PART RELIEF BUT IT WAS BECAUSE OF THE RELEV ANT CONTENTIONS CONSIDERED AT THE TIME OF SURVEY AND THE POST SURVE Y PERIOD. THE LEARNED ITA NO.1462/AHD/2007 TULSIDAS DEVJIBHAI PATEL VS ITO 3 CIT(A) THEREFORE HELD THAT IT IS A CASE OF CONCEA LMENT OF INCOME AND ACCORDINGLY DISMISSED THE APPEAL OF THE ASSESSEE. 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T AT LEAST PENALTY SHOULD NOT BE CONFIRMED ON THE AMOUNT OF WHICH THE LEARNED CIT(A) ON MERIT HAS GRANTED RELIEF TO THE ASSESSEE. THE LEARN ED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS ACCEPTED T HE ORDER OF THE LEARNED CIT(A) ON QUANTUM AND NO APPEAL IS PREFERRE D BEFORE THE TRIBUNAL. ON THE OTHER HAND LEARNED DR RELIED ON T HE ORDER OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL AVAILABLE ON RECORD. IT IS NOT IN DISPUTED FACT THA T DURING COURSE OF SURVEY ON 07-02-2002 EXCESS STOCK WAS FOUND. THE ASSESSEE FILED RETURN OF INCOME THEREAFTER ON 01-03-2003 IN WHICH THE ASSESS EE HAS NOT DISCLOSED EXCESS STOCK FOUND DURING THE SURVEY. HOWEVER AT T HE ASSESSMENT STAGE THE ASSESSEE AGREED TO THE ADDITION OF AMOUNT EQUAL TO RS.4 27 049/- ON ACCOUNT OF HIS UNEXPLAINED INVESTMENT AS THE ASSESS EE HAS NOT ACCOUNTED FOR THIS EXCESS STOCK FOUND. IT IS THERE FORE A CLEAR CASE OF CONCEALMENT OF INCOME TO THE EXTENT OF EXCESS STOCK FOUND DURING THE COURSE OF SURVEY. HAD THE SURVEY NOT BEEN CONDUCTED THE UNEXPLAINED INVESTMENT IN STOCK WOULD NOT HAVE BEEN AGREED BY T HE ASSESSEE TO THE REVENUE DEPARTMENT. HONBLE BOMBAY HIGH COURT IN TH E CASE OF JYOTI LAXMAN KONKAR VS CIT 292 ITR 163 HELD AS UNDER: THE ASSESSEE HAD FILED A RETURN FOR THE ASSESSMENT YEAR 1999-2000 DECLARING AN INCOME OF RS.7 40 510. NOT SATISFIED THEREWITH THE ASSESSING OFFICER CARR IED OUT A SURVEY UNDER SECTION 133A OF THE INCOME-TAX A CT 1961 AND DURING THE SURVEY FOUND THAT THERE WAS A DISCREPANCY IN STOCK TO THE TUNE OF RS.18 28 706 WH ICH WAS BROUGHT TO THE NOTICE OF THE ASSESSEE AND THE ASSESSEE FILED A REVISED RETURN DISCLOSING ADDITION AL ITA NO.1462/AHD/2007 TULSIDAS DEVJIBHAI PATEL VS ITO 4 INCOME OF RS.18 28 706. THE ASSESSING OFFICER IMPOS ED PENALTY UNDER SECTION 271 (1) ( C ) AND THIS WAS UP HELD BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD DISMISSING THE APPEAL THAT THE QUESTION WHETHER THERE IS CONCEALMENT OF INCOME OR NOT HAS T O BE DECIDED WITH REFERENCE TO THE FACTS OF A GIVEN CASE AND THE FACT FINDING AUTHORITIES UNDER THE ACT HAVING C OME TO THE CONCLUSION THAT IN THE FACTS OF THE CASE TH E ASSESSEE HAD CONCEALED THE INCOME INITIALLY WITH A VIEW TO AVOID PAYMENT OF TAX THE IMPOSITION OF PENALTY WAS VALID. HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF RU KMINIBAI VS CIT 276 ITR 650 AND IN THE CASE OF VIMAL GINNING AND PR ESSING FACTORY VS CIT 279 ITR 100 HELD THAT WHEN NO EXPLANATION OFFERED WHEN PENALTY PROCEEDINGS WERE INITIATED IMPOSITION OF P ENALTY U/S 271 (1) ( C ) IS VALID. CONSIDERING THE FACTS OF THE CASE AND IN THE LIGHT OF THE ABOVE DECISIONS IT IS CLEAR THAT THE REVENUE DEPAR TMENT DETECTED EXCESS STOCK AT THE TIME OF SURVEY WHICH THE ASSESSEE HAS NOT DISCLOSED IN THE RETURN OF INCOME. WHEN EXPLANATION OF THE ASSESSEE WAS CALLED FOR THE ASSESSEE AGREED WITH THE ADDITION. THE LEARNED CIT( A) HOWEVER ON QUANTUM APPEAL GAVE RELIEF TO THE ASSESSEE IN A SUM OF RS.2 03 169/- AND REST OF THE ADDITION WAS MAINTAINED. AT THE PEN ALTY STAGE THE ASSESSEE DID NOT RESPOND TO THE PENALTY NOTICE AND NO EXPLANATION WAS OFFERED. WE THEREFORE ARE SATISFIED THAT THE ASSE SSEE HAS CONCEALED PARTICULARS OF INCOME AND ACCORDINGLY LEVY OF PENAL TY U/S 271 (1) ( C ) OF THE IT ACT IS JUSTIFIED IN THE MATTER. WE CONFIRM T HE FINDINGS OF THE AUTHORITIES BELOW. HOWEVER WE FIND THAT THE LEARNE D CIT(A) IN QUANTUM GAVE A RELIEF IN A SUM OF RS.2 03 169/-. THEREFORE ON SUCH AMOUNT ON WHICH ADDITION IS DELETED BY THE LEARNED CIT(A) TH E AUTHORITIES BELOW WERE NOT JUSTIFIED IN LEVYING PENALTY ON THAT AMOUN T. WE ACCORDINGLY IN PRINCIPLE AGREE WITH THE FINDINGS OF THE AUTHORITIE S BELOW FOR LEVY OF PENALTY U/S 271(1) ( C ) OF THE IT ACT ON ACCOUNT O F EXCESS STOCK FOUND DURING THE COURSE OF SURVEY BUT THE AO IS DIRECTED TO CALCULATE THE ITA NO.1462/AHD/2007 TULSIDAS DEVJIBHAI PATEL VS ITO 5 PENALTY ON THE REMAINING AMOUNT FOR WHICH ADDITION HAS BEEN ULTIMATELY SUSTAINED BY THE LEARNED CIT(A) EXCLUDING THE AMOUN T OF RS.2 03 169/- THE AO WILL PASS CONSEQUENTIAL ORDER ACCORDINGLY. 6. AS A RESULT THE APPEAL OF THE ASSESSEE IS PARTL Y ALLOWED. ORDER PRONOUNCED ON 14-05-2010 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 14-05-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD