Shri Rambhai Savjibhai Patel, Surat v. The Income tax Officer, Ward-2(1),, Surat

ITA 1819/AHD/2007 | 2004-2005
Pronouncement Date: 23-04-2010 | Result: Allowed

Appeal Details

RSA Number 181920514 RSA 2007
Bench Ahmedabad
Appeal Number ITA 1819/AHD/2007
Duration Of Justice 2 year(s) 11 month(s) 20 day(s)
Appellant Shri Rambhai Savjibhai Patel, Surat
Respondent The Income tax Officer, Ward-2(1),, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 23-04-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 23-04-2010
Date Of Final Hearing 20-04-2010
Next Hearing Date 20-04-2010
Assessment Year 2004-2005
Appeal Filed On 03-05-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI B. SAINI JUDICIAL MEMBER AND SHRI N.S.SAINI ACCOUNTANT MEMBER DATE OF HEARING : 20-04-10 DRAFTED ON: 20-04-10 ITA NO.1819/AHD/2007 ASSESSMENT YEAR : 2004-2005 SHRI RAMBHAI SAVJIBHAI PATEL 20 SADANAND SOCIETY UDHNA MAGDALLA ROAD SURAT. VS. ITO WARD 2(1) AYKAR BHAVAN SURAT. PAN/GIR NO. : AFTPP 44065 R (APPELLANT) .. (RESPONDENT) APPELLANT BY : URVASHI SODHAN ADV. RESPONDENT BY: SHRI RAJA RAM SOH SR. D.R. O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-II SURAT DATE D 27.02.2007. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERRED IN CONFIR MING THE LEVY OF PENALTY OF RS.2 92 366/- UNDER SECTION 271(1)(C) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION SHOWING INC OME OF RS.1 77 986/- AND AGRICULTURAL INCOME OF RS.14 76 603/- TOGETHER WITH AUDITED PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. THE RETURN WAS PROCESSED UNDER SECTION 143(1) OF THE ACT AND SUBSEQUENTLY SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED ON 15.09.2005 AND SERVED ON THE ASSESSEE ON 10.10.2005. A - 2 - QUESTIONNAIRE ALONGWITH NOTICE UNDER SECTION 142(1) WAS ALSO ISSUED ON 22.07.2005. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS TH E LEARNED ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SHO WN NET INCOME FROM AGRICULTURE OF RS.14 76 603/-. THE ASSESSEE FILED C OPY OF 7/12 AND 8A IN SUPPORT OF EARNING OF AGRICULTURE INCOME AND ALSO F ILED COPIES OF SALE BILLS. FROM FORM NO.8A THE LEARNED ASSESSING OFFICER NOTI CED THAT ASSESSEE OWNED 18 BIGHAS OF LAND AT MEHSANA AND HAD GROWN CR OPS SUCH AS JIRA VARIARI MUG WHEAT TAL AND BAJARI. FROM VERIFICAT ION OF SALE BILLS THE LEARNED ASSESSING OFFICER FOUND THAT THE ASSESSEE S OLD JIRA MUSTARD SEEDS CASTOR SEEDS AND GAVAR. THUS THE LEARNED ASSESSING OFFICER FOUND THAT THE ASSESSEE HAD NOT GROWN MUSTARD SEEDS AND CASTER SEE DS AND GAVAR THOUGH IT HAD SHOWN SALES. IN RESPONSE TO THE QUERY OF THE LE ARNED ASSESSING OFFICER THE ASSESSEE SUBMITTED THAT HE HAS NOT MAINTAINED A NY BOOKS OF ACCOUNT WITH REGARD TO HIS AGRICULTURE INCOME AND ADMITTED THAT EXPENSES AS CLAIMED TO HAVE BEEN INCURRED MAY NOT BE ACCURATE IN THE ABSEN CE OF PROPER RECORD. IT WAS ALSO SUBMITTED THAT REGARDING MISMATCH OF SOME OF T HE CROP GROWN THE TALATI SOMETIMES IN SPITE OF INTIMATION DO NOT UPDATE THE ENTRIES IN 7/12 RECORDS AND SOMETIMES DO NOT WRITE THE COMPLETE PARTICULARS SO AS TO INCLUDE ALLIED CROPS OBTAINED ALONG WITH THE MAIN CROPS AND FINALLY ADMI TTED TO SURRENDER AND OFFERED 60% OF HIS DECLARED AGRICULTURE INCOME FOR TAX TO AVOID LITIGATION AND BUY PEACE OF MIND IN CONSIDERATION OF HIS OLD AGE B UT DID NOT ADMIT ANY WILLFUL CONCEALMENT OF ANY INCOME OF ANY PARTICULARS THEREO F. THEREFORE THE LEARNED ASSESSING OFFICER TREATED RS.8 85 962/- OUT OF THE TOTAL AGRICULTURE INCOME SHOWN BY THE ASSESSEE OF RS.14 76 603/- AS INCOME F ROM OTHER SOURCES AND ADDED THE SAME TO THE INCOME OF THE ASSESSEE. - 3 - 5. THEREAFTER THE LEARNED ASSESSING OFFICER ISSUE D NOTICE AND LEVIED PENALTY UNDER SECTION 271(1)(C) OF RS.1 50 0 00/- WHICH WAS CONFIRMED IN APPEAL BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). 6. THE LEARNED AUTHORISED REPRESENTATIVE OF THE AS SESSEE ARGUED THAT THE ASSESSEE WAS NOT LIABLE TO PENALTY BECAUSE IT SURRENDER THE INCOME IN ORDER TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION. THE LEARNED ASSESSING OFFICER ACCEPTED THE ADDITIONAL INCOME DI SCLOSED BY THE ASSESSEE WITHOUT MAKING ANY FURTHER INQUIRY INTO THE MATTER SO AS TO BRING ANY COGENT AND RELEVANT MATERIAL ON RECORD TO SHOW THAT THE AD DITIONAL INCOME DISCLOSED BY THE ASSESSEE WAS IN FACT THE CONCEALED INCOME OF THE ASSESSEE. FOR THIS WE PLACED RELIANCE ON THE DECISION OF AHMEDABAD C BE NCH OF THE TRIBUNAL IN THE CASE OF M/S. MAYUR ROADWAYS VS. ACIT CIRCLE-2( 1) IN ITA NO.3807 AND 3808/AHD/2007 IN ASSESSMENT YEARS 2002-03 AND 2003- 04 CONSOLIDATED ORDER DATED 14.12.2007. THE LEARNED AUTHORISED REPRESENT ATIVE OF THE ASSESSEE ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 9 (SC) W HERE IT WAS HELD THAT THOUGH THE ASSESSEE SURRENDERED ADDITIONAL INCOME B Y WAY OF REVISED RETURNS AFTER PERSISTENT QUERIES BY AO ONCE THE REVISED RET URNS HAVE BEEN REGULARISED BY REVENUE THE EXPLANATION OF THE ASSESSEE THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF VEXED LITIGA TION COULD BE TREATED AS BONA FIDE AND PENALTY UNDER S. 271(1)(C) WAS NOT LE VIABLE. THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE ALSO RELI ED ON THE DECISION OF ITAT JAIPUR BENCH IN THE CASE OF SHYAM NATHANI VS. ITO (2007) 109 TTJ (JP) 421 WHERE IT WAS HELD THAT IN THE CASE OF ESTIMATED ADD ITIONS AND IN THE ABSENCE OF SATISFACTION OF AO REGARDING CONCEALMENT PROPERLY R ECORDED DURING ASSESSMENT PROCEEDINGS PENALTY UNDER S. 271(1)(C) WAS NOT JUSTIFIED. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND VEHEMENTLY ARGUED IN SUPPORT OF THE ORDERS OF THE L OWER AUTHORITIES AND - 4 - SUBMITTED THAT THE LEARNED COMMISSIONER OF INCOME T AX(APPEALS) HAS DISCUSSED THE ISSUE AT PAGE.5 OF THE ORDER WHEREIN HE HAS STATED THAT THE ISSUE WAS NOT WHETHER THERE WAS A DIFFERENCE BETWEEN THE CROPS CLAIMED TO HAVE BEEN GROWN BY THE ASSESSEE AND THE CROPS RECORDED B Y THE TALATI. THE ISSUE INVOLVED THE DIFFERENCE BETWEEN THE CROPS SHOWN IN THE SALE BILLS AND THE CROPS SHOWN IN THE LAND RECORDS. THIS CLEARLY POINTED TO THE FALSITY OF THE ASSESSEE CLAIM OF AGRICULTURE ACTIVITY. FURTHER THE ASSESS EE FAILED TO SUBSTANTIATE EITHER THE INCOME EARNED OR THE EXPENDITURE INCURRED SINCE HE DID NOT MAINTAINED ANY BOOKS OF ACCOUNT PERTAINING TO THE AGRICULTURAL ACT IVITY. IF THESE FACTS DID NOT CONCLUSIVELY ESTABLISHED THAT THE ASSESSEES CLAIM WAS BOGUS THE AR HAS NOT EXPLAINED WHILE ARGUING ON THIS ISSUE AS TO WHAT EV IDENCE WOULD BE CONCLUSIVE AS FAR AS THE LEARNED ASSESSING OFFICER WAS CONCERN ED. THUS THE LEARNED ASSESSING OFFICER CLEARLY ESTABLISH ON ONE HAND THE ASSESSEE DID NOT SALE THE CROPS WHICH SHE HAD CLAIMED TO HAVE GROWN WHILE ON THE OTHER THE CLAIM OF THE AGRICULTURAL INCOME BY ITSELF WAS UNSUBSTANTIAT ED. IT WAS WHEN THE ASSESSEE WAS CONFRONTED WITH CONCRETE FINDINGS THAT HE CAME FORWARD TO SURRENDER 60% OF THE AGRICULTURE INCOME AND OFFER THE SAME FOR TA XATION. THIS SURRENDER IN EFFECT WAS AN IMPLIED ACCEPTANCE OF THE FACTS THAT 60% OF THE SUM CLAIMED AS AGRICULTURE INCOME HAD A REASON FROM NON AGRICULTUR E OR UNDISCLOSED SOURCES. HENCE HE SUBMITTED THAT THE ORDER OF THE LEARNED C OMMISSIONER OF INCOME TAX(APPEALS) SHOULD BE CONFIRMED. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. IN THE INSTANT CASE THE ASSESSEE IN THE RETURN OF INCOME FILED BESIDES SHOW ING TAXABLE INCOME OF RS.1 77 986/- HAD ALSO SHOWN AGRICULTURE INCOME OF RS.14 76 603/-. THE ASSESSEE FILED COPY OF FORM NO.7/12 AND 8A AND ALSO COPY OF SALE BILLS IN SUPPORT OF EARNING OF AGRICULTURE INCOME. THE LEARN ED ASSESSING OFFICER FOUND FROM LAND RECORDS AND THE SALE BILLS FILED BY THE ASSESSEE THAT THE ASSESSEE HAS SHOWN SALE OF MUSTARD SEEDS CASTER SE EDS AND GAVAR WHICH WERE - 5 - NOT GROWN BY THE ASSESSEE. THE ASSESSEE EXPLAINED THAT SOMETIMES THE TALATI DO NOT UPDATE THE ENTRIES IN 7/12 RECORDS AND DO NO T WRITE THE COMPLETE PARTICULARS SO AS TO INCLUDE THE ALLIED CROPS OBTAI NED ALONG WITH THE MAIN CROPS. THE ASSESSEE TO AVOID PROTRACTED LITIGATION AND FOR MENTAL PEACE SURRENDERED 60% OF THE AGRICULTURE INCOME FOR TAX B Y STATING THAT IT DOES NOT ADMIT TO ANY CONCEALMENT OF INCOME BY DOING SO. THE LEARNED ASSESSING OFFICER THEREBY MADE ADDITION OF RS.8 85 962/- TO T HE INCOME OF THE ASSESSEE CONSIDERING THE AGRICULTURE INCOME SURRENDERED BY T HE ASSESSEE AS INCOME FROM OTHER SOURCES. THEREAFTER THE LEARNED ASSESSI NG OFFICER LEVIED PENALTY OF RS.1 50 000/- FOR FURNISHING OF INACCURATE PARTI CULARS OF HIS INCOME UNDER SECTION 271(1)(C) OF THE ACT WHICH WAS CONFIRMED I N APPEAL BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). IN THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE WE FIND IN THE INSTANT CASE THE LEARNE D ASSESSING OFFICER OBSERVED FROM THE SALE BILLS FURNISHED BY THE ASSESSEE THAT THE ASSESSEE HAS ALSO SHOWN SALE OF MUSTARD SEEDS CASTER SEEDS AND GAVAR WHICH WAS NOT SHOWN AS GROWN BY THE ASSESSEE IN THE TALATI RECORDS ALSO FURNISHE D BY THE ASSESSEE . THE ASSESSEE EXPLAINED THE REASONS FOR THE SAME THAT TA LATI AT TIMES RECORDS ONLY THE PRODUCTION OF MAIN DROPS AND DOES NOT RECORD PRODUC TION OF ALLIED CROPS. IN THE ABOVE CIRCUMSTANCES THE ASSESSEE TO AVOID PROT RACTED LITIGATION AND TO COME OUT OF VEXED LITIGATION OFFERED TO PAY TAX ON 60% OF THE AGRICULTURAL INCOME I.E. RS.8 85 962/- AND ALSO SUBMITTED THAT T HIS OFFER SHOULD NOT BE TREATED AS CONCEALMENT OF INCOME BY THE LEARNED ASS ESSING OFFICER. WE FIND THAT THE LEARNED ASSESSING OFFICER HAS BROUGHT NO M ATERIAL ON RECORD TO CONTROVERT THE EXPLANATION OF THE ASSESSEE. THE LEA RNED ASSESSING OFFICER HAS NOT RECORDED THAT THE PRODUCTION OF MUSTARD SEEDS CASTER SEEDS AND GAVAR WERE NOT ONLY ALLIED CROPS AND WERE NOT THE MAIN CROP AS CLAIMED BY THE ASSESSEE. THE LEARNED ASSESSING OFFICER HAS ALSO NOT VERIFIED FROM THE TALATI THAT WHETHER THE ALLIED CROPS ARE ALSO REGULARLY RECORDE D IN HIS RECORDS OR NOT. IN THE CIRCUMSTANCES WE FIND THAT THE LEARNED ASSESSIN G OFFICER HAS BROUGHT NO MATERIAL TO SHOW THAT EXPLANATION FURNISHED BY THE ASSESSEE WAS NOT ACCEPTABLE - 6 - ONE. IT IS ALSO OBSERVED THAT THE ASSESSMENT WAS CO MPLETED ON THE BASIS OF THE OFFER MADE BY THE ASSESSEE HIMSELF AND NOT ON THE B ASIS OF DISCREPANCY ALLEGEDLY FOUND BY THE LEARNED ASSESSING OFFICER. I N OUR CONSIDERED OPINION WHEN THE OFFER OF THE ASSESSEE IS ACCEPTED BY THE D EPARTMENT THEN THE OFFER CAN BE ACCEPTED IN TOTALITY ONLY AND NOT ON THE PART WH ICH IS IN FAVOUR OF THE DEPARTMENT. THUS CONSIDERING THE FACTS AND CIRCUMS TANCES OF THE CASE IN TOTALITY IN OUR CONSIDERED OPINION THE REVENUE WAS NOT JUSTIFIED IN IMPOSING PENALTY UNDER SECTION 271(1)(C) IN THE INSTANT CASE OF RS. 1 50 000/-. WE THEREFORE DELETE THE PENALTY OF RS.1 50 000/- IMPO SED UNDER SECTION 271(1)(C) OF THE ACT AND ALLOW THE APPEAL OF THE ASSESSEE. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON 23 RD DAY OF APRIL 2010. SD/- SD/- (BHAVNESH SAINI) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS 23 RD DAY OF APRIL 2010 PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-II SURAT. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD - 7 - DATE INITIALS 1. DRAFT DICTATED ON 20.04.2010 --------------- ---- 2. DRAFT PLACED BEFORE AUTHORITY 20.04.2010 ----- -------------- 3. DRAFT PROPOSED & PLACED 21.04.2010 ----------- -------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED 21.04.2010 ---------- --------- JM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S 21.04.2010 -------- ------------ 6. KEPT FOR PRONOUNCEMENT ON 23.04.2010 --------- ----------- 7. FILE SENT TO THE BENCH CLERK 23.04.2010 ------ -------------- 8. DATE ON WHICH FILE GOES TO THE---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- --- ------------------