Shri Devendra V.Mehta, Ahmedabad v. The ACIT.,Circle-11,, Ahmedabad

ITA 35/AHD/2010 | 1995-1996
Pronouncement Date: 18-11-2011 | Result: Allowed

Appeal Details

RSA Number 3520514 RSA 2010
Bench Ahmedabad
Appeal Number ITA 35/AHD/2010
Duration Of Justice 1 year(s) 10 month(s) 12 day(s)
Appellant Shri Devendra V.Mehta, Ahmedabad
Respondent The ACIT.,Circle-11,, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 18-11-2011
Date Of Final Hearing 14-11-2011
Next Hearing Date 14-11-2011
Assessment Year 1995-1996
Appeal Filed On 05-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH AHMEDABAD BEFORE SHRI MUKUL KUMAR SHRAWAT JUDICIAL MEMBER AND SHRI A. K. GARODIA ACCOUNTANT MEMBER I.T.A. NO. 35/ AHD/2010 (ASSESSMENT YEAR 1995-96) DEVENDRA V MEHTA 299 NEW CLOTH MARKET O/S RAIPUR GATE AHMEDABAD VS. ACIT CIRCLE 11 AHMEDABAD PAN/GIR NO. : AAPP8369M (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI R T SHAH AR RESPONDENT BY: SHRI VINOD TANWANI SR. DR DATE OF HEARING: 14.11.2011 DATE OF PRONOUNCEMENT: 18.11.2011 O R D E R PER SHRI A. K. GARODIA AM:- THIS IS ASSESSEES APPEAL DIRECTED AGAINST THE ORD ER OF LD. CIT(A) VI AHMEDABAD DATED 17.11.2009 FOR THE ASSESSMENT Y EAR 1995-96. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: (1) ORDER U/S.271(1)(C) DT.15.05.2009 IMPOSIN G PENALTY OF RS.88896/- IS TIME BARRED BAD IN LAW AND BE CANCEL LED. (2) IN THE FACTS OF THE CASE AND IN LAW PENALT Y OF RS.88896/- U/S.271(1)(C) IS NOT LEVIABLE AND BE DELETED. THE T ELESCOPING CLAIMED BY APPELLANT BONAFIDELY TO THE EXTENT OF HI S SHARE OUT OF G.P. ADDITIONS MADE IN PARTNERSHIP FIRMS VIZ. (1) M /S. DEVENDRAKUMAR VRUNDAVANDAS AND (2) M/S. RAJPAL & CO . IS ALLOWABLE IN LAW OR NOT IS A MATTER OF OPINION. THE LEARNED CIT(A) IS NOT CORRECT IN STATING THAT NO SUCH CLAIM OF TEL ESCOPING MADE BEFORE A.O. I.T.A.NO.35 /AHD/2010 2 (3) THE MAIN QUANTUM APPEAL ITA NO.723/AHD/200 9 FILED ON 09.03.2009 BEFORE 'C' BENCH IS PENDING AND BE FIXED ALONG WITH PRESENT PENALTY APPEAL. (4) THE APPELLANT SUBMITS THAT IN THE FACTS OF THE CASE AND IN LAW PROVISIONS OF SEC. 253(6)(D) ARE APPLICABLE FOR PAY MENT OF FEES RS.500/-. 2. FIRST WE TAKE UP GROUND NO.2 REGARDING THE MERI TS OF THE PENALTY IMPOSED BY THE A.O. THE BRIEF FACTS OF THE CASE AR E THAT IN THE COURSE OF SEARCH UNACCOUNTED ASSETS WERE FOUND TO THE TUNE O F RS.9 75 753/- AGAINST WHICH TELESCOPYING OF THE SHARE OF INCOME O F PARTNERSHIP FIRM WAS ALLOWED TO THE EXTENT OF RS.7.50 LACS ALTHOUGH THE CLAIM OF THE ASSESSEE REGARDING SUCH BENEFIT OF TELESCOPYING WAS TO THE E XTENT OF THE ENTIRE AMOUNT OF UNACCOUNTED ASSETS FOUND IN THE COURSE OF SEARCH. BY ALLOWING TELESCOPYING OF ONLY RS.7.50 LACS THE BALANCE AMOU NT OF RS.2 25 490/- WAS CONFIRMED ON WHICH PENALTY WAS ALSO IMPOSED BY THE A.O. OF RS.88 896/-. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS WITH REGARD T O PENALTY ON THIS AMOUNT ALTHOUGH PENALTY IMPOSED BY THE A.O. ON ONE MORE ADDITION WAS DELETED BY LD. CIT(A). NOW THE ASSESSEE IS IN FUR THER APPEAL BEFORE US. 3. IT WAS SUBMITTED BY THE LD. A.R. THAT IN QUANTUM PROCEEDINGS THE TRIBUNAL HAD CONFIRMED THE ORDER OF LD. CIT(A) REGA RDING ALLOWING THE TELESCOPYING BENEFIT TO THE EXTENT OF RS.7.50 LACS ONLY AS PER I.T.A.NO. 723/AHD/2009 DATED 11.02.2011 COPY OF WHICH WAS FUR NISHED ALONG WITH SYNOPSIS. IT WAS SUBMITTED THAT THE SHARE OF THE A SSESSEE IN INTANGIBLE ADDITION IN THE HANDS OF THE ASSESSEE FIRM WAS TO T HE EXTENT OF RS.14 42 092/- ALTHOUGH BENEFIT OF TELESCOPYING WAS ALLOWED BY LD. CIT(A) TO THE EXTENT OF RS.7.50 LACS ONLY AND THIS ORDER OF LD. CIT(A) WAS CONFIRMED BY THE TRIBUNAL IN QUANTUM PROCEEDING S BUT STILL IN PENALTY PROCEEDINGS IT CANNOT BE ACCEPTED THAT THERE WAS C ONCEALMENT OF INCOME I.T.A.NO.35 /AHD/2010 3 SINCE THE CLAIM OF THE ASSESSEE FOR TELESCOPYING BE NEFIT HAS BEEN ACCEPTED IN PART AND THEREFORE THE PENALTY IMPOSED SHOULD B E DELETED. 4. AS AGAINST THIS LD. D.R. OF THE REVENUE SUPPORT ED THE ORDERS OF AUTHORITIES BELOW. IN PARTICULAR OUR ATTENTION WA S DRAWN TO PARA 4.1 OF THE ORDER OF LD. CIT(A) WHEREIN IT IS NOTED BY THE LD. CIT(A) THAT OUT OF THE TOTAL UNACCOUNTED INCOME OF RS.27.72 LACS DISCL OSED BY THE FIRM AN AMOUNT OF RS.3 22 067/- WAS INVESTED IN UNACCOUNTED STOCK AND HENCE ONLY THE BALANCE AMOUNT OF RS.24.50 LACS WAS AVAILA BLE FOR DISTRIBUTION AMONG THE PARTNERS ON THE DATE OF SEARCH AND THE AS SESSEES SHARE IN THE SAME COMES TO APPROXIMATELY RS.7.50 LACS ONLY AND H ENCE FOR THE BALANCE AMOUNT THERE IS CONCEALMENT AND THEREFORE THE ORDER OF LD. CIT(A) SHOULD BE CONFIRMED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW. WE FIND THAT IN PARA 4.2 OF HIS ORDER THIS CONTENTION OF T HE ASSESSEE IS NOTED BY THE LD. CIT(A) THAT THE SHARE OF INCOME OF THE ASSESSEE FROM THE FIRMS WHO OPTED FOR KVSS COMES TO RS.14.42 LACS AND EVEN IF T HE ENTIRE AMOUNT OF INVESTMENT IN UNACCOUNTED STOCK OF THE FIRM OF RS.3 .22 LACS IS REDUCED THEREFROM THEN ALSO THE NET AVAILABLE AMOUNT COMES TO RS.11.10 LACS WHEREAS THE UNACCOUNTED ASSETS FOUND IN THE HANDS O F THE PRESENT ASSESSEE IS ONLY RS.9.75 LACS. ALTHOUGH IN QUANTUM PROCEEDI NGS THE ASSESSEE WAS ALLOWED BENEFIT OF TELESCOPYING TO THE EXTENT OF RS .7.50 LACS ONLY AND THIS ORDER OF LD. CIT(A) IN QUANTUM PROCEEDINGS HAS BEEN APPROVED BY THE TRIBUNAL IN QUANTUM PROCEEDINGS BUT STILL WE ARE OF THE CONSIDERED OPINION THAT IN THE FACTS OF THE PRESENT CASE IT CANNOT BE SAID THAT THE ASSESSEES CLAIM FOR TELESCOPYING BENEFIT TO THE EXTENT OF ENT IRE AMOUNT OF SHARE OF INCOME OF THE ASSESSEE IN FIRMS WHO OPTED FOR KVSS IS NOT BONA FIDE. THIS CLAIM OF THE ASSESSEE WAS REJECTED BY LD. CIT( A) MERELY ON THIS I.T.A.NO.35 /AHD/2010 4 BASIS THAT AT THE TIME OF SEARCH A SPECIFIC QUESTI ON WAS ASKED FROM THE ASSESSEE REGARDING THE SOURCE OF INVESTMENT FOUND A T THE TIME OF SEARCH AND IN REPLY THERETO HE STATED THAT THESE ASSETS W ERE ACQUIRED OUT OF UNACCOUNTED INCOME OF THE TWO FIRMS M/S. DEVNEDRA K UMAR VRUNDAVANDAS AND M/S. RAJPAL & CO. AMOUNTING TO RS. 27.72 LACS AND HENCE THE TELESCOPYING CAN BE ALLOWED ONLY IN RESPE CT OF THIS INCOME OF RS.27.72 LACS OUT OF WHICH AN AMOUNT OF RS.3.22 LA CS WAS INVESTED IN UNACCOUNTED STOCK OF THE FIRM AND HENCE ONLY RS.24 .50 LACS WAS AVAILABLE FOR DISTRIBUTION AMONG THE PARTNERS AND T HE SHARE OF THE ASSESSEE IN THIS IS ONLY AROUND RS.7.50 LACS APPROXIMATELY. THIS ARGUMENT IS VALID FOR THE QUANTUM PROCEEDINGS BUT IN OUR CONSID ERED OPINION FOR THE LEVY OF PENALTY IT CANNOT BE SAID THAT THE EXPLANA TION OF THE ASSESSEE IS NOT BONA FIDE AND HENCE IN OUR CONSIDERED OPINION EXPLANATION (1) TO SECTION 271(1)(C) IS NOT APPLICABLE AND THEREFORE NO PENALTY IS JUSTIFIED UNDER THESE FACTS. WE THEREFORE DELETE THE PENAL TY. 6. REGARDING GROUND NO.1 WE FIND THAT SINCE WE HAV E DELETED THE PENALTY THIS GROUND HAS BECOME OF ACADEMIC INTERES T ONLY AND HENCE IN OUR CONSIDERED OPINION NO ADJUDICATION IS CALLED F OR. 7. REGARDING GROUND NO.3 WE FIND THAT THIS GROUND DOES NOT SURVIVE BECAUSE THE QUANTUM APPEAL IS ALREADY DECIDED AS PE R THE TRIBUNAL DECISION DATED 11.02.2011 COPY OF WHICH WAS FURNISH ED BEFORE US. 8. IN THE RESULT APPEAL OF THE ASSESSEE STANDS PAR TLY ALLOWED IN TERMS INDICATED ABOVE. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./.- SD./- (MUKUL KUMAR SHRAWAT) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; I.T.A.NO.35 /AHD/2010 5 SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR AHMEDABAD BY ORDER 6. THE GUARD FILE AR ITAT AHMEDABAD 1. DATE OF DICTATION 14/11 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 15/11.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S.17/11 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 18/11 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.18/11 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 18/11/2011 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. ..