ITO, Nashik v. Shri Hero Ramchand Lalwani, Nashik

ITA 1609/PUN/2012 | 2009-2010
Pronouncement Date: 30-04-2014 | Result: Dismissed

Appeal Details

RSA Number 160924514 RSA 2012
Assessee PAN AAEPL6761H
Bench Pune
Appeal Number ITA 1609/PUN/2012
Duration Of Justice 1 year(s) 9 month(s) 4 day(s)
Appellant ITO, Nashik
Respondent Shri Hero Ramchand Lalwani, Nashik
Appeal Type Income Tax Appeal
Pronouncement Date 30-04-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-04-2014
Date Of Final Hearing 21-01-2014
Next Hearing Date 21-01-2014
Assessment Year 2009-2010
Appeal Filed On 26-07-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER ITA NO.1609/PN/2012 (A.Y: 2009-10) ITO CENTRAL-2 NASHIK APPELLANT VS. SHRI HERO RAMCHAND LALWANI M/S. HEERA HOSIERY ANNAPURNA SANKUL DAHIPOOL NASIK 422001 PAN: AAEPL6761H RESPONDENT APPELLANT BY : SHRI P.L.PA THADE RESPONDENT BY : SHRI NIK HIL PATHAK DATE OF HEARING: 29.04.2014 DATE OF ORDER : 30.04.2014 ORDER PER SHAILENDRA KUMAR YADAV J.M: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEAL)-I [IN SHORT CIT(A)] NASHIK DATED 24.05.2012 FOR A.Y. 2009-10 ON THE FO LLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A)-I NASIK ERRED IN DELETING THE PENAL TY OF RS.3 88 322/- LEVIED UNDER SECTION 271AAA OF THE INCOME-TAX 1961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A)-I NASIK ERRED IN APPLYING THE RATIO IN THE CASE OF MAHENDRA C. SHAH 299 ITR 305 (GUJ) SINCE THE DECISI ON RENDERED IN THAT CASE RELATED TO PENALTY U/S 271(1) (C) OF THE ACT WHEREAS IN THE ASSESSEE'S CASE THE PENALTY IS LEVIE D U/S 271AAA OF THE ACT AND THEREFORE DISTINGUISHABLE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LEARNED CIT(A)-I NASIK ERRED IN DELETING THE PENA LTY LEVIED ON 2 ADDITION MADE OF RS.70 000/- ON ACCOUNT OF UNEXPLAI NED INVESTMENT IN JEWELLERY BY WRONGLY INTERPRETING THE CBDT INSTRUCTION NO.1916. 4. THE APPELLANT CRAVES LEAVE TO ADD AMEND MODIFY TH E GROUNDS OF APPEAL IF CONSIDERED NECESSARY SUBSEQUE NTLY. 5. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF TRADING IN RE ADYMADE HOSIERY. A SEARCH ACTION U/S.132 HAS BEEN CONDUCTE D IN THE CASES OF KARDA & LALWANI GROUP ON 30.01.2009. THE ASSESSEE HAS FILED RETURN OF INCOME U/S.139(1) OF THE ACT. THE DETAILS OF INCOME RETURN ADDITIONS MADE INCOME ASSESSED AND PENALTY IMPOSED ARE AS UNDER: A.Y. INCOME RETURNED U/S.139 ADDITION INCOME ASSESSED PENALTY LEVIED ON AMT. OF PENALTY U/S.271AAA 2009 - 10 55 73 080 70 000 56 46 080 38 83 321 3 88 332 THE ASSESSING OFFICER IMPOSED PENALTY U/S.271AAA O N ADDITIONAL INCOME OFFERED TO TAX OF 38 83 321/- IN THE RETURN OF INCOME FILED U/S.139 OF THE ACT AND ALSO ON ADDITIO N OF 70 000/- TOWARDS ALLEGED UNEXPLAINED JEWELLERY. 3. THE MATTER WAS CARRIED BEFORE FIRST APPELLATE AU THORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE ON BOTH ACCOUNTS. THE CIT(A) HAVING CONSI DERING THE SAME DELETED THE PENALTY ON BOTH ACCOUNTS. THE SA ME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENUE INTER ALIA STATED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETING THE PENALTY OF 3 88 322/- LEVIED U/S 271AAA OF THE I.T. 1961. THE CIT(A) ALS O ERRED IN DELETING THE PENALTY LEVIED ON ADDITION MADE OF 70 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY. ACCORDINGLY THE ORDER OF CIT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTO RED. ON THE OTHER HAND THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUP PORTED THE ORDER OF CIT(A) ON THE ISSUE AND REQUESTED TO UPHOLD THE ORDER OF CIT(A). 3 4. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND MA TERIAL ON RECORD REGARDING PENALTY ON THE AMOUNT OF 38 13 321/- U/S.271AAA OF THE ACT WE FIND THAT IN RESPECT OF I NCOME OF 38 13 321/- OFFERED TO TAX IN RETURN OF INCOME TH E ASSESSEE HAS FULFILLED THE CONDITIONS LAID DOWN BY SUB-SECTION ( 2) OF SECTION 271AAA OF THE ACT. THE ASSESSEE HAS OFFERED THE AB OVE MENTIONED INCOME TO TAX IN THE STATEMENT U/S.132(4) AND ALSO IN THE RETURN OF INCOME FILED U/S.139(1) AND HAS PAID TAX ALONG WITH INTEREST ON THE SAID INCOME. 4.1 THE LEARNED AUTHORIZED REPRESENTATIVE DREW OUR ATTENTION TO THE DECISION OF CUTTACK BENCH IN THE CASE OF PRAMOD KUMAR JAIN VS. DY.CIT WHEREIN THE PENALTY WAS LEVIED U/S.271AAA OF THE ACT AS CONSEQUENT TO THE SEARCH FOR A.Y. 2007-08 AND 2008- 09. THE ASSESSEE MADE DISCLOSURE U/S.132(4) INCLUDED THE S AID AMOUNT IN ITS RETURN AND PAID TAX AND INTEREST THEREON. IN SUCH A SITUATION HELD THAT THE PENALTY NOT LEVIABLE U/S.271AAA OF THE ACT . BESIDES THIS THE LEARNED AUTHORIZED REPRESENTATIVE ALSO DREW OUR ATT ENTION TO THE DECISION OF DELHI BENCH E IN THE CASE OF NEERAT S INGAL VS. ACIT CENTRAL CIRCLE-13 NEW DELHI WHEREIN THE PENALTY WAS LEVIED U/S.271AAA OF THE ACT AS CONSEQUENT TO THE SEARCH O N THE BASIS OF CERTAIN DOCUMENTS FOUND AND SEIZED DURING THE SEARC H AT HIS PREMISES. THE ASSESSEE FURNISHED CERTAIN AMOUNT AS UNDISCLOSED INCOME AND ALSO PAID DUE AMOUNT THEREON IN THE STAT EMENT U/S.132(4). THE ASSESSEE STATED THAT THE INCOME WA S DERIVED FROM FORWARD/SPECULATIVE AND PROPERTY TRANSACTION CARRIE D OUT IN THE FINANCIAL YEAR 2009-10. BEING NOT SATISFIED WITH A SSESSEES EXPLANATION THE ASSESSING OFFICER LEVIED PENALTY U /S.271AAA. WHETHER WHEN AUTHORIZED OFFICER HAS NOT RAISED ANY QUERY DURING THE COURSE OF RECORDING OF STATEMENT U/S.132(4) ABOUT T HE MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN DERIVED AND ABOUT ITS SUBSTANTIATION. IN SUCH A SITUATION IT WAS HELD B Y ITAT DELHI BENCH THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED IN IMP OSING PENALTY 4 U/S.271AAA ESPECIALLY WHEN OFFERED THE UNDISCLOSED INCOME HAS BEEN ACCEPTED AND TAXES DUE THEREON PAID BY THE ASS ESSEE. IN THE CASE BEFORE US THE ASSESSEE HAS GIVEN EXPLANATION TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERI VED. IN VIEW OF ABOVE LEGAL DISCUSSION THE ASSESSING OFFICER WAS N OT JUSTIFIED IN IMPOSING THE PENALTY ON AMOUNT OF 38 13 321/- U/S.271AAA OF THE ACT AND THE SAME WAS RIGHTLY DELETED BY THE CIT(A). WE UPHOLD THE SAME. 4.2 WITH REGARD PENALTY IMPOSED ON THE ADDITION OF 70 000/- WE FIND THAT THE ASSESSING OFFICER HAS INITIATED PENAL TY PROCEEDINGS U/S.271AAA IN RESPECT OF 70 000/- ON ACCOUNT OF ALLEGED UNEXPLAINED GOLD ORNAMENTS. THE ASSESSING OFFICER HAS IMPOSED PENALTY U/S.271AAA @ 10% OF 70 000/- REJECTING THE CONTENTION OF ASSESSEE THAT IN VIEW OF INSTRUCTION NO.1916 ISSUED BY CBDT AND VARIOUS CASE LAWS THAT JEWELLERY FOUND IN SEARCH AC TION IS REASONABLE AND NOT EXCESSIVE. 4.3 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHALF OF AS SESSEE. HAVING CONSIDERED THE SAME THE CIT(A) DELETED THE PENALTY IN QUESTION. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENU E INTER ALIA STATED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELETIN G THE PENALTY LEVIED ON ADDITION MADE 70 000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY BY WRONGLY INTERPRETING THE CBDT INSTR UCTION NO.1916. ACCORDINGLY REQUESTED TO SET ASIDE THE ORDER OF CI T(A) DELETING THE PENALTY IN QUESTION AND RESTORE THAT OF ASSESSING O FFICER ON THE ISSUE. ON THE OTHER HAND THE LEARNED AUTHORIZED REPRESENT ATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 4.4 IN THIS BACKGROUND WE FIND THAT THE PENALTY HA S ARISEN AS RESULT OF ADDITION OF 70 000/- ON ESTIMATED BASIS. SO THE PENALTY U/S.271AAA OR 271(1)(C) IS NOT JUSTIFIED IN RESPECT OF ESTIMATED ADDITION. THE FAMILY OF ASSESSEE CONSIST S OF ASSESSEE 5 HIS WIFE HIS PARENTS AND A SISTER. THE TOTAL GOLD FOUND IS MUCH LESS IF THE INSTRUCTION NO.1916 OF CBDT IS CONSIDER ED AND COMPARED TO ACTUAL GOLD FOUND FROM THE PROVISIONS O F SECTION 271AAA CAN BE NOTED THAT THE UNDISCLOSED INCOME AS PER EXPLANATION-A TO SECTION 271AAA MEANS ANY INCOME OF SPECIFIED PREVIOUS YEAR. THE CIT(A) HAVING CONSIDERED THE SU BMISSIONS ON BEHALF OF ASSESSEE HAS OBSERVED THAT INSTRUCTION N O.1916 PROVIDES FOR REASONABLE JEWELLERY WHICH CAN BE HELD BY EACH PERSON AND WHICH CANNOT BE SEIZED. THE CONTENTION OF THE ASSESSEE WAS FOUND CORRECT BY THE CIT(A). IT IS A SETTLED LEGAL POSITION THAT THE ASSESSMENT PROCEEDINGS AND PENALT Y PROCEEDINGS ARE DIFFERENT TO EACH OTHER AND THE PEN ALTY IS NOT AUTOMATIC. IN VIEW OF ABOVE THE CIT(A) WAS JUSTIF IED IN DELETING PENALTY ON ADDITION OF 70 000/- U/S.271AAA OF THE ACT. WE UPHOLD THE SAME. 5. IN THE RESULT APPEAL FILED BY THE REVENUE IS DI SMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE DAY 30 TH OF APRIL 2014. SD/- SD/- (G.S. PANNU) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE DATED: 30 TH APRIL 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I NASHIK 4) THE CIT-I NASHIK 5) THE DR A BENCH I.T.A.T. PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY I.T.A.T. PUNE