ACIT 11(3), MUMBAI v. DR. MANJU SINHA, MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI BEFORE SHRI D.K. AGARWAL J.M. AND SHRI RAJENDRA SI NGH A.M. I.T.A. NO. 2384/MUM/2010 ASSESSMENT YEAR : 2003-04 ACIT 11(3) R.NO. 446 4 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020 VS. DR. MANJU SINHA BEMS HOSPITAL 674 16 TH CROSS ROAD BEHIND KHAR GYMKHANA MUMBAI-400 052 P.A. NO: AAGPS2577L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI R. S. SRIVASTAV RESPONDENT BY : SHRI SNEHAL SHAH ORDER PER D.K. AGARWAL J.M: THIS APPEAL PREFERRED BY THE REVENUE IS DIRECTED AG AINST THE ORDER DATED 14.01.2010 PASSED BY THE LD. CIT(A) FOR THE ASSESSM ENT YEAR 2003-04. 2. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE AS SESSEE AN INDIVIDUAL DRIVES INCOME FROM MEDICAL PROFESSION. IN THIS CASE A SURV EY U/S.133A OF THE INCOME TAX ACT 1961 (THE ACT) WAS CONDUCTED ON 24.10.2002 . IN A STATEMENT RECORDED AT THE TIME OF SURVEY THE ASSESSEE STATED THAT SHE HAD INVESTED ABOUT RS.25 00 000/- OUT OF HER UNACCOUNTED INCOME IN THE RENOVATION OF A BUILDING BELONGING TO M/S. BEAMS RESEARCH CO. PVT. LTD. IN W HICH SHE IS A DIRECTOR. SHE ALSO STATED THAT IN ADDITION SHE HAD RECEIVED RS.1 0 00 000/- AS CASH RECEIPTS FROM VARIOUS PATIENTS WHICH HAD NOT BEEN REFLECTED IN THE BOOKS OF ACCOUNTS OF DR. MANJU SINHA I.T.A. NO. 2384/MUM/2010 2 THE CURRENT YEAR. THUS THE ASSESSEE OFFERED THE SUM OF RS.35 00 000/- AS INCOME TO BUY PEACE OF MIND. HOWEVER ON 12.12.2002 I.E. 1 MONTHS FROM THE DATE OF SURVEY THE ASSESSEE FILED AN AFFIDAVIT RETRACTING FROM THE STATEMENT ON THE GROUND THAT THE ASSESSEE HAD BEEN COMPELLED TO SIGN THE SAID STATEMENT AND THAT SHE HAD NO UNDISCLOSED INCOME. THE ASSESSI NG OFFICER HOWEVER DID NOT ACCEPT THE RETRACTION ON THE GROUND THAT THE SA ME WAS AFTER THOUGHT AND AFTER THAT THE DEPARTMENT HAD STOPPED INVESTIGATING THE MATTER. IT WAS ALSO OBSERVED BY ASSESSING OFFICER THAT THE SPECIAL AUDI TORS IN THE REPORT U/S.142A HAD POINTED OUT SEVERAL DISCREPANCIES IN MAINTENANC E OF ACCOUNTS INDICATING INFLATION OF EXPENSES. THE ASSESSING OFFICER ACCORD INGLY MADE ADDITION OF RS.35 00 000/- U/S.69 OF THE ACT. IN APPEAL THE LD . CIT(A) CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. ON FURTHER APPEAL BEFORE THE TRIBUNAL THE TRIBUNAL HOWEVER DELETED THE ADDITION MADE BY THE ASSESSING OFFICER VIDE ORDER DATED 22.10.2009 PASSED IN ASSESSEES APPEAL IN ITA NO.4565/MUM/2007 FOR ASSESSMENT YEAR 2003-04. 3. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HA S ALSO INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. ACCORDINGLY A NOTICE WAS ISSUED TO THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY U/S.271(1) (C) SHOULD NOT BE IMPOSED. THE ASSESSING OFFICER AFTER CONSIDERING THE ASSESSE ES REPLY AND KEEPING IN VIEW THAT THE ADDITION MADE HAS BEEN CONFIRMED BY THE LD . CIT(A) HELD THAT THE ASSESSEE HAS NOT DISCLOSED HIS TRUE INCOME WHILE FI LING RETURN AND HAS FURNISHED INACCURATE PARTICULARS AS ENVISAGED U/S.2 71(1)(C) FOR LEVY OF PENALTY. AND ACCORDINGLY HE IMPOSED PENALTY OF RS.11 02 500 /- VIDE ORDER DATED 30.03.2009 PASSED U/S.271(1)(C) OF THE ACT. ON APPE AL THE LD. CIT(A) AFTER TAKING A NOTE THAT THE TRIBUNAL HAS DELETED THE ADD ITION MADE BY THE ASSESSING OFFICER CANCELLED THE PENALTY IMPOSED BY THE ASSES SING OFFICER. 4. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A) THE REVENUE IS IN APPEAL BEFORE US CHALLENGING IN ALL THE GROUNDS THE DELETI ON OF PENALTY IMPOSED BY THE ASSESSING OFFICER U/S.271(1)(C) OF THE ACT. DR. MANJU SINHA I.T.A. NO. 2384/MUM/2010 3 5. AT THE TIME OF HEARING THE LD. DR SUPPORTS THE O RDER OF THE ASSESSING OFFICER. 6. ON THE OTHER HAND THE LD. COUNSEL FOR THE ASSES SEE WHILE RELYING ON THE ORDER OF THE LD.CIT(A) FURTHER SUBMITS THAT SINCE T HE TRIBUNAL HAS DELETED THE ADDITIONS OF RS.35 00 000/- MADE BY THE ASSESSING O FFICER ON WHICH THE PENALTY HAS BEEN IMPOSED BY THE ASSESSING OFFICER. THEREFORE THE LD. CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY IMPOSED BY TH E ASSESSING OFFICER AND HIS ORDER BE UPHELD. 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF RIVAL PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND T HAT THE FACTS ARE NOT IN DISPUTE INASMUCH AS THE ASSESSING OFFICER HAS IMPOS ED PENALTY ON THE ADDITION OF RS.35 00 000/- WHICH HAS BEEN DELETED BY THE TRI BUNAL VIDE FINDING RECORD IN PARA 2.3 OF THE ORDER DATED 22.10.2009 OF THE TR IBUNAL AS UNDER: IN THE PRESENT CASE NO INCRIMINATING DOCUME NT WAS FOUND. THE STATEMENT OF THE ASSESSEE THAT SHE HAD UNACCOUN TED RECEIPTS FROM THE CLIENTS WAS NOT BASED ON ANY MATERIAL FOUND. SI MILARLY NO INCRIMINATING MATERIAL WAS FOUND REGARDING UNEXPLAI NED INVESTMENT IN THE BUILDING AND THE INVESTMENT IN THE BUILDING AS PER VALUERS REPORT WAS LOWER THAN THE VALUE ALREADY DISCLOSED. WE THER EFORE RESPECTFULLY FOLLOWING THE DECISION OF TRIBUNAL IN CASE OF THE H USBAND OF THE ASSESSEE (SUPRA) IN WHICH IDENTICAL ADDITIONS HAVE BEEN DELE TED SET ASIDE THE ORDER OF CIT(A) AND DELETE THE ADDITION MADE. IN THE ABSENCE OF ANY OTHER CONTRARY MATERIAL BROUG HT ON RECORD BY THE REVENUE AND KEEPING IN VIEW THAT THE ADDITION ON WH ICH THE ASSESSING OFFICER HAS IMPOSED PENALTY HAS SINCE BEEN DELETED BY THE T RIBUNAL WE ARE OF THE VIEW THAT THE PENALTY HAS NO LEGS TO STAND AND ACCORDING LY WE ARE INCLINED TO UPHOLD THE FINDING OF THE LD. CIT(A) IN DELETING TH E PENALTY IMPOSED BY THE ASSESSING OFFICER. THE GROUNDS TAKEN BY THE REVENUE ARE THEREFORE REJECTED. DR. MANJU SINHA I.T.A. NO. 2384/MUM/2010 4 8. IN THE RESULT REVENUES APPEAL STANDS DISMISSED. ORDER PRONOUNCED ON THIS 11 TH DAY OF FEBRUARY 2011. SD/- SD/- ( RAJENDRA SINGH ) ( D.K. AGARWAL ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DT: 11 TH FEBRUARY 2011. ROSHANI COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. 4. CIT (A) 5. THE DR I - BENCH ITAT MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI