SHRI GIRISH M RUPAREL, MUMBAI v. THE CIT(A)-XIII, MUMBAI

ITA 2171/MUM/2008 | 1998-1999
Pronouncement Date: 29-07-2011 | Result: Dismissed

Appeal Details

RSA Number 217119914 RSA 2008
Assessee PAN AAAPR9769D
Bench Mumbai
Appeal Number ITA 2171/MUM/2008
Duration Of Justice 3 year(s) 3 month(s) 28 day(s)
Appellant SHRI GIRISH M RUPAREL, MUMBAI
Respondent THE CIT(A)-XIII, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 29-07-2011
Date Of Final Hearing 12-07-2011
Next Hearing Date 12-07-2011
Assessment Year 1998-1999
Appeal Filed On 01-04-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI BEFORE SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER A ND SMT. ASHA VIJAYRAGHAVAN JUDICIAL MEMBER ITA NO. 2171/MUM./2008 (ASSESSMENT YEAR : 1998-99 ) DATE OF HEARING 12.7.2011 SHRI GIRISH M. RUPAREL MANDVI NAVJEEVAN 121/127 KAZI SAYED STREET MUMBAI 400 003 PAN AAAPR9769D .. APPELLANT V/S INCOME TAX OFFICER WARD-13(2)(3) MUMBAI .... RESPONDENT ASSESSEE BY : MR. SANJAY PARIKH REVENUE BY : MR. A.K. NAYAK O R D E R PER J. SUDHAKAR REDDY A.M. THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 6 TH SEPTEMBER 2007 PASSED BY THE COMMISSIONER (APPEALS)-XIII MUMBAI UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 (FOR SHORT 'THE ACT' ) FOR ASSESSMENT YEAR 1998-99. 2. LEARNED COUNSEL MR. SANJAY PARIKH APPEARING ON BE HALF OF THE ASSESSEE SUBMITS THAT DUE TO LAPSE OF MORE THAN TE N YEARS IT WAS NOT POSSIBLE FOR THE ASSESSEE TO FURNISH THE INFORMATIO N SOUGHT BY THE ASSESSING SHRI GIRISH M. RUPAREL ITA NO.2171/M./2008 2 OFFICER ON THE LOAN TAKEN BY THE ASSESSEE FOR PAYME NT OF TAXES UNDER THE VOLUNTARY DISCLOSURE OF INCOME SCHEME (VDIS). HE SU BMITS THAT THE ASSESSEE IS A PARTNER OF M/S. DHEERAJLAL MANGALDAS & CO. AND THE FIRM HAD TO RECOVER CERTAIN DUES FROM ITS DEBTORS. HE SUBMIT S THAT DUE TO VARIOUS COURT CASES AND BANK DISCONTINUING CREDIT FACILITIE S OF M/S. DHEERAJLAL MANGALDAS & CO. WAS FACING ACUTE FINANCIAL DIFFICU LTIES. HE SUBMITS THAT THE ASSESSEE HAD RECOVERED CERTAIN DUES OF THE PARTNERS HIP FIRM IN CASH AND HAD ALSO TAKEN CERTAIN LOANS FROM FRIENDS AND RELATIVES BY WHICH THE TAX DUES AS PER VDIS WAS PAID BY THE ASSESSEE. HE SUBMITS THAT THE ASSESSEE WAS NOT ABLE TO FURNISH THE DETAILS OF THE PARTIES AND CONF IRMATION LETTER AS ALMOST TEN YEARS HAVE LAPSED. HE RELIED ON THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN HASTIMAL V/S CIT (1963) 49 ITR 273 (MAD.) AND THE DECISION OF CHANDIGARH BENCH OF THE TRIBUNAL IN JINDAL UDYOG V/ S ITO (2002) 83 ITD 248 (CHANDI.). HE FURTHER SUBMITS THAT THE ASSESSEE GAVE EXPLANATION AND SUCH EXPLANATION IS NOT FOUND TO BE FALSE HENCE N O PENALTY CAN BE LEVIED. HE RELIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN CIT V/S RELIANCE PETROPRODUCTS PVT. LTD. (2010) 322 ITR 158 (SC). 3. LEARNED DEPARTMENTAL REPRESENTATIVE MR. A.K. NAYAK ON THE OTHER HAND RELIED ON THE ORDER OF THE COMMISSIONER (APPE ALS) AND SUBMITS THAT BASIC INFORMATION SUCH AS NAME OF THE LENDERS THE AMOUNT GIVEN ETC. COULD NOT BE FURNISHED BY THE ASSESSEE. HE RELIED ON SECT ION 271(1)(B) AND SUBMITS THAT AS THE ASSESSEES EXPLANATION IS NOT B ONAFIDE AND HE WAS NOT ABLE TO SUBSTANTIATE THE SAME THE PENALTY IS RIGHT LY LEVIED. REFERRING TO THE JUDGMENT OF HONBLE MADRAS HIGH COURT IN HASTIMAL ( SUPRA) HE SUBMITS THAT ONLY SEVEN / EIGHT YEARS HAS LAPSED IN THIS CASE AN D IT IS NOT A CASE WHERE EXPLANATION AS TO THE SOURCE WAS GIVEN BY THE ASSES SEE AND THE REVENUE FAILED TO EXAMINE THE SAME. HE REFERRED TO THE DECI SION OF G BENCH OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS VIDE ORDER DAT ED 20 TH OCTOBER 2009 AND SUBMITS THAT AT PARA-12 / PAGE-6 THE TRIBUNAL HAS CONFIRMED THE ADDITION BY OBSERVING THAT EVEN THE NAMES OF THE DE BTORS FRIENDS AND RELATIVES HAVE NOT BEEN MENTIONED. SHRI GIRISH M. RUPAREL ITA NO.2171/M./2008 3 4. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAP ERS ON RECORD AS WELL AS THE CASE LAWS CITED BEFORE US WE FIND THAT THE TRI BUNAL IN QUANTUM PROCEEDINGS IN ASSESSEES OWN CASE IN ITA NO.6436/M UM./2007 ETC. ORDER DATED 28 TH OCTOBER 2009 FOR ASSESSMENT YEAR 1998-99 VIDE PA RA-12 / PAGES-6-7 HELD AS FOLLOWS:- 12. REGARDING THE ENHANCEMENT OF INCOME AT ` 6 18 212 UNDISPUTEDLY THIS AMOUNT OF TAX WAS PAID ON 31.3.1 998 RELEVANT TO THE ASSESSMENT YEAR 1998-99. NO SATISFACTORY EXPLAN ATION HAVE BEEN FILED ON BEHALF OF THE ASSESSEE THAT FROM WHICH SOU RCE THIS AMOUNT HAS BEEN PAID. NEITHER THIS AMOUNT IS INCLUDED IN THE V DIS FORM. THEREFORE THIS AMOUNT HAS TO BE TREATED AS PAID FR OM UNEXPLAINED SOURCES. THE EXPLANATION OF THE ASSESSEE THAT IT WA S COLLECTED FROM DEBTORS OF THE PARTNERSHIP FIRM WHERE THE ASSESSEE WAS ONE OF THE PARTNERS AND WAS OUT OF CASH LOANS TAKEN FROM RELAT IVES OR FRIENDS IS NOT SATISFACTORY. IN OUR OPINION THIS CONTENTION O F THE ASSESSEE IS LIABLE TO BE DISMISSED AS CONFIRMATION FROM RELATIV ES AND FRIENDS CAN BE OBTAINED AT ANY TIME. CONFIRMATION FROM THE DEBTORS CAN ALSO BE OBTAINED AT ANY TIME. EVEN NAME OF THE DEBTORS FRI ENDS AND RELATIVES HAVE NOT BEEN MENTIONED EITHER BEFORE THE CIT(A) OR HERE BEFORE US. THEREFORE WE ARE IN AGREEMENT WITH THE FINDING OF THE LEARNED CIT(A) THAT THE AMOUNT OF ` 6 18 212 REPRESENTS UNEXPLAINED EXPENDITURE WITHIN THE MEANING OF SECTION 69C OF THE ACT. ACCOR DINGLY WE CONFIRM HIS ACTION. 5. THE ASSESSEE EVEN AT THIS STAGE DOES NOT MAKE ANY ATTEMPT TO FURNISH THE NAMES OF THE PERSONS FROM WHOM HE HAS B ORROWED THE MONEY. UNDER THESE CIRCUMSTANCES WE ARE OF THE CONSIDERED VIEW THAT THE ORDER OF THE COMMISSIONER (APPEALS) LEVYING PENALTY UNDER SE CTION 271(1)(C) HAS TO BE UPHELD. 6. COMING TO THE RELIANCE PLACED ON THE JUDGMENT OF HO NBLE MADRAS HIGH COURT IN HASTIMAL (SUPRA) WE FIND THAT THE FACTS W ERE DIFFERENT AS IN THAT CASE THE ASSESSEE HAD IN FACT FURNISHED EVIDENCE BEFORE THE ASSESSING OFFICER AND THE ASSESSING OFFICER HAD ACCEPTED MOST OF THE EXPLANATION. IN THE CASE ON HAND THERE IS NO EXPLANATION WHATSOEVE R. UNDER THESE CIRCUMSTANCES WE UPHOLD THE FOLLOWING FINDINGS OF THE FIRST APPELLATE AUTHORITY. SHRI GIRISH M. RUPAREL ITA NO.2171/M./2008 4 3. I HAVE CONSIDERED THE EXPLANATION OF THE ASSESSE E. IT IS AN ACCEPTED JUDICIAL PRINCIPLE THAT EVIDENCE SUFFICIEN T TO MAKE AN ADDITION TO INCOME MAY NOT BE SUFFICIENT TO LEVY PENALTY. BU T THE PRINCIPLE WILL APPLY ON FACTS OF EACH CASE. THE ADDITION IN THIS C ASE WAS MADE AS NO PROOF WAS PROVIDED ABOUT THE SOURCE OF PAYMENT. THE NAME OF DEBTORS FROM WHOM THE CASH WAS COLLECTED OR THE NAME OF THE RELATIVE FROM WHOM CASH LOAN WAS ALSO NOT GIVEN. NO FURTHER DETAI L WAS GIVEN DURING PENALTY PROCEEDINGS. IN SUCH A SITUATION WHERE NO P ROOF IS PROVIDED ABOUT THE SOURCE OF MONEY THE CASE LAWS RELIED ON BY THE ASSESSEE CANNOT BE APPLIED. THE DECISION OF SUPREME COURT CI TED BY THE ASSESSEE IS ALSO NOT APPLICABLE IN THIS CASE ON FAC T. THE FACT THAT THE ASSESSEE HAD PURCHASED FLAT ON UNDISCLOSED INCOME D ISPROVES HIS OWN CONTENTION. THE ASSESSEE NEVER FILED ANY RETURN OF INCOME. HE HAD UNDISCLOSED INCOME REGULARLY TILL 1997. THE VDIS DE CLARATION IS A PROOF OF THAT. HENCE THE PLEA THAT ASSESSEE COULD NOT HAV E AN INCOME OF ` 6 18 212 IS NOT ACCEPTABLE. THE FACT IS THAT THE SO URCE OF PAYMENT OF TAX OF ` 6 18 212 REMAINED UNPROVED. THE PRIMARY ONUS IS ON THE ASSESSEE TO GIVE THE PROOF. THE PRIMARY ONUS HAS NO T BEEN DISCHARGED. HENCE IN MY CONSIDERED OPINION IT IS A FIT CASE FO R LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE SAID AMOUNT IS FIXED LOOKING TO THE FACT THAT THE ASSESSEE HAD UNDISCLOSED INCOME P RIOR TO THIS YEAR. 7. IN THE RESULT ASSESSEES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29.7.2011 SD/- ASHA VIJAYRAGHAVAN JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI DATED: 29.7.2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A) MUMBAI CONCERNED; (4) THE CIT MUMBAI CITY CONCERNED; (5) THE DR G BENCH ITAT MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT MUMBAI BENCHES MUMBAI