Shri Nilesh Jayantilal Soni, Dist.Ahmedabad v. The ACIT., Cent.Circle-2(2),, Ahmedabad

ITSSA 144/AHD/2007 | misc
Pronouncement Date: 13-08-2010 | Result: Dismissed

Appeal Details

RSA Number 14420516 RSA 2007
Assessee PAN ACCPA6952D
Bench Ahmedabad
Appeal Number ITSSA 144/AHD/2007
Duration Of Justice 2 year(s) 9 month(s) 12 day(s)
Appellant Shri Nilesh Jayantilal Soni, Dist.Ahmedabad
Respondent The ACIT., Cent.Circle-2(2),, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 13-08-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted C
Tribunal Order Date 13-08-2010
Date Of Final Hearing 05-08-2010
Next Hearing Date 05-08-2010
Assessment Year misc
Appeal Filed On 01-11-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH AHMEDABAD BENCH BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI T.K.SHARMA T.K.SHARMA T.K.SHARMA T.K.SHARMA J J J JUDI UDI UDI UDICIAL CIAL CIAL CIAL MEMBER MEMBER MEMBER MEMBER AND AND AND AND SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER SHRI N.S. SAINI ACCOUNTANT MEMBER DATE OF HEARING:6-8-2010 DRAFTED ON: 6-8-201 0 IT (SS) A . NO. 144 /AHD/ 2007 (BLOCK PERIOD 1.4.99 TO 12.7.2000) NILESH JAYANTILAL SONI CHABUTARA BAZAR DHANDHUKA DISTRICT: AHMEDABAD. VS. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIR.2(2) ROOM NO.333 3 RD FLOOR AAYAKAR BHAVAN ASHRAM ROAD AHMEDABAD. PAN/GIR NO. : ACCPA 6952 D (A PPE LLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI VIJAY RANJAN. RESPONDENT BY: SHRIK. M. MAHESH SR. D.R. O R D E R O R D E R O R D E R O R D E R PER N.S.SAINI ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST L EARNED COMMISSIONER OF INCOME TAX (APPEALS)-III AHMEDABAD DATED 22-8- 2007. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISMISSING THE ASSESSEES APPEAL AGAINST PENALTY LE VIED UNDER SECTION 158BFA (2) IN A SUM OF `. 31 590/-. WITHOUT PREJUDICE TO UNDISCLOSED INCOME ON THE FA CTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSI ONER OF INCOME TAX (APPEALS) SHOULD HAVE REALIZED THAT IT W AS NOT AT ALL A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 15 8BFA (2). 3. THE BRIEF FACTS OF THE CASE ARE THAT THE BLOCK A SSESSMENT WAS FRAMED ON 17-7-2005 ON THE UNDISCLOSED INCOME OF `. 3.95 LAKHS AS AGAINST THE DECLARED UNDISCLOSED INCOME OF `.3.50/- LAKHS. THE A.O. IN THE ASSESSMENT FELT THAT THE SOURCE OF INVESTME NT OF `.7.25/- - 2 - LAKHS IN RENOVATION OF HOUSE AND CONSTRUCTION OF TH REE SHOPS WAS EXPLAINED TO THE EXTENT OF `.6.80/- LAKHS ONLY I.E. `.2.25/- LAKHS BEING THE AMOUNT DECLARED BY HIS WIFE UNDER THE VDI S `.1.05/- LAKHS BEING THE SALE CONSIDERATION RECEIVED APART FROM THE OFFERED UNDISCLOSED INCOME OF `.3.50/- LAKHS. THE BALANCE O F `.45 000/- WAS THEREFORE ADDED. 4. THE ASSESSEE IN HIS REPLY TO THE SHOW CAUSE NOT ICE UNDER SECTION 158BFA (2) CONTENDED THAT THE ADDITION OF ` . 45 000/- WAS ONLY AN ESTIMATE AND MADE ON THE BASIS OF A SURMISE THAT THE PURCHASERS OF THE SHOP(S) SOLD BY THE ASSESSEE WE RE NOT FINANCIALLY CAPABLE OF PURCHASING THE SHOPS AT `.1 LAKH EACH AS HAD BEEN CONTENDED BY THE ASSESSEE DURING THE ASSESSMEN T PROCEEDINGS. IT WAS SUBMITTED THAT 3 OUT OF 5 PURCH ASERS HAVE CONFIRMED BUYING THE SHOP AT `.1 LAKH EACH AND THI S FACT WAS ALSO STATED BY ONE OF THE PURCHASERS KIRITBHAI WHEN HI S STATEMENT UNDER SECTION 132(4) HAD AFFIRMED HAVING RECEIVED ` .3/- LAKHS ON SALE OF THREE SHOPS AND `.2.25/- LAKHS ON SALE OF T WO OTHER SHOPS. IT WAS FURTHER POINTED OUT THAT THE SALE CONSIDERATION SHOWN IN THE SALE DOCUMENTS AT `.21 000/- FOR EACH OF THE SHOP WAS DELIBERATELY KEPT LOW TO AVOID STAMP DUTY BUT THE A CTUAL SALE CONSIDERATION WAS `.1/- LAKH AS AFFIRMED IN THE ST ATEMENT UNDER SECTION 132(4) AND IN THE CONFIRMATIONS/STATEMENT O F THE PURCHASER. EVEN OTHERWISE THE COST OF CONSTRUCTION OF THESE 3 SHOPS HAD COME TO `.2.25/- LAKHS AND SO THEIR SALE AT `.63 000/- (`.21 000 X 3) WOULD HAVE BEEN CONTRADICTORY. IN TH E FACTS AND CIRCUMSTANCES IT WAS ARGUED THAT IT DID NOT ATTRA CT THE PROVISIONS OF SECTION 158BFA. REFERENCE TO THE DECISION OF THE ITAT AHMEDABAD IN CASE OF GANDHI SERVICE STATION (100 TTJ 1143) WAS MADE TO STATE THAT UNLESS THE EXPLANATION GIVEN W AS NOT PROVED TO BE INCORRECT AND MALAFIDE AND/OR CONCEALMENT WAS ES TABLISHED PENALTY WAS NOT ATTRACTED. RELIANCE WAS ALSO PLACED ON THE DECISION IN CASE OF SMT. P.K. NOORJAHAN 155 CTR 509 (SC). - 3 - 5. ON APPEAL THE LEARNED COMMISSIONER OF INCOME TA X (APPEALS) DISMISSED THE APPEAL OF THE ASSESSEE BY O BSERVING AS UNDER :- THE CONTENTIONS/DETAILS WERE CONSIDERED FULLY. TH E APPELLANT HAD ARGUED THAT IT HAD RECEIVED `.5.25 LA KHS FROM SALE OF 5 SHOPS AND THESE PROCEEDS FORMED ONE OF TH E SOURCES OF THE INVESTMENT MADE IN RENOVATION OF HOU SE ETC. THE RELATED SALE DOCUMENTS HOWEVER RECORDED THE TOT AL SALE CONSIDERATION AT `.1.05 LAKH (`. 21 000 X 5). THE D IFFERENCE HAS BEEN ATTRIBUTED BY THE APPELLANT TO THE DESIRE TO AVOID STAMP DUTY. BY WAY OF EVIDENCE OF HAVING RECEIVED T HE AMOUNT OF `.5.25 LAKHS THE APPELLANT HAS REFERRED TO THE AFFIDAVITS OF THREE OF THE PURCHASERS AND THE STATE MENT OF ONE OF THEM RECORDED BY THE A.O. BUT THE APPELLANT HAS NOT ESTABLISHED THAT THE HIGHER SALE PROCEEDS REPORTED LY OBTAINED BY IT WAS UTILIZED IN THE MANNER STATED. THE A.O. HAS POINTED OUT THAT THE SALE CONSIDERATION AS PER THE RELEVANT DOCUMENTS CAME TO BE `.1.05 LAKHS ONLY. TH E APPELLANT HAD ALSO OFFERED THE AMOUNT OF `.3.50 LAK HS IN ITS BLOCK RETURN. IN THE FACTS AND CIRCUMSTANCES OF THE CASE THERE WAS NO REASON FOR THE A.O. TO ACCEPT THE VERSION OF THE APPELLANT BY OVERRIDING THE DOCUMENTARY EVIDENCE IN FORM OF THE SALE DEEDS. THE A.O. HAD MADE FURTHER QUERIES. APART FROM THE EVIDENCE AS PER THE SALE DEEDS THE A. O. H AD FOUND THAT THE PURCHASERS DID NOT HAVE THE CAPACITY TO PA Y `.1 LAKH. ON A HOLISTIC CONSIDERATION ONE CANNOT FIND ANY FA ULT IN THE ACTION OF THE A.O. IN IMPOSING THE PENALTY UNDER SE CTION 158BFA (2). AS SUCH IT IS CONFIRMED AND THE GROUND S OF APPEAL REJECTED. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE A SEARCH AND SEIZURE OPERATION WAS CONDUCTED ON 12-7-2000. DURIN G THE COURSE OF SEARCH IT WAS OBSERVED THAT THE ASSESSEE HAS INV ESTED `.7.25 /- LAKHS IN RENOVATION OF HOUSE AND CONSTRUCTION OF SH OPS. THE ASSESSEE DURING THE COURSE OF THE SEARCH EXPLAINED THE SOURCE OF ABOVE INVESTMENT AS `.2.25/- LAKHS FROM WIFE DISCLO SED UNDER VDIS `. 3.50/- LAKHS UNDISCLOSED INCOME `.3/- LAKHS FRO M SALE OF 3 SHOPS @ `.1/- LAKH PER SHOP. DURING THE COURSE OF THE ASS ESSMENT A.O OBSERVING THAT SALE DEED EXECUTED IN RESPECT OF SHO PS SHOWED THAT THE SALE OF SHOP WAS @ `.21 000/- PER SHOP. THE LE ARNED ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE HAD ACTUALL Y SOLD 5 SHOPS. THUS THE SALE CONSIDERATION OF SHOPS COMES TO `.1 0 5 000/-. THE - 4 - LEARNED ASSESSING OFFICER ACCEPTED THE ASSESSEES E XPLANATION OF `.2.25/- LAKHS AS INVESTED OUT OF WIFES MONEY AND `.3.50/- LAKHS AS INVESTMENT OUT OF UNDISCLOSED INCOME DISCLOSED IN T HE BLOCK RETURN. THUS THE TOTAL SUM OF INVESTMENT WAS FOUND AT `.6. 80/- LAKHS AS AGAINST INVESTMENT OF `.7.25/- LAKHS. THEREFORE TH E LEARNED ASSESSING OFFICER MADE ADDITION OF `.45 000/- IN TH E BLOCK ASSESSMENT ORDER PASSED AGAINST THE ASSESSEE. THERE AFTER THE LEARNED ASSESSING OFFICER LEVIED PENALTY OF `.31 59 0/- IN RESPECT OF AFORESAID ADDITION OF `.45 000/- UNDER SECTION 158 BFA(2) OF THE ACT. 7. ON APPEAL LEARNED COMMISSIONER OF INCOME TAX (A PPEALS) CONFIRMED THE ACTION OF THE LEARNED ASSESSING OFFIC ER AND OBSERVED THAT THE LEARNED ASSESSING OFFICER HAD FOUND THAT T HE PURCHASERS OF THE SHOP HAD NO CAPACITY TO PAY CONSIDERATION @ `.1/- LAKH PER SHOP. 8. BEFORE US THE LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE SHOPS WERE ACTUALLY SOL D FOR `.1 LAKH EACH AND AFFIDAVITS IN SUPPORT OF THE SAID AMOUNT O F THE PURCHASERS WERE FILED BEFORE THE LOWER AUTHORITIES. THE LEARNE D ASSESSING OFFICER HAS ALSO EXAMINED ONE OF THE PURCHASER UNDE R SECTION 131 WHEREIN THE SAID PURCHASER CONFIRMED HAVING PURCHAS ED THE SHOP FROM THE ASSESSEE AT `.1/- LAKH. IN THESE CIRCUMST ANCES THE ASSESSEE HAD `.5 LAKHS FROM SALE CONSIDERATION OF T HE SHOP AND THE SAID MONEY WAS UTILIZED FOR RENOVATION ETC. HE SUB MITTED THAT ONCE THE ACTUAL SALE CONSIDERATION IS TAKEN INTO ACCOUNT THEN ADDITION OF `.45 000/- WAS NOT WARRANTED AND THEREFORE PENALTY UNDER SECTION 158BFA (2) SHOULD NOT HAVE BEEN LEVIED AGAINST THAT ADDITION. 9. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTE D THE ORDERS OF THE LOWER AUTHORITIES. 10. ON A QUERY FROM THE BENCH THAT WHETHER THE TAX WAS PAID BY THE ASSESSEE ON THE SALE CONSIDERATION OF `.5/- LAK HS OF SHOPS THE - 5 - LEARNED AUTHORISED REPRESENTATIVE OF THE ASSESSEE C OULD NOT GIVE ANY REPLY. FURTHER WHEN IT WAS ASKED WHETHER THE S ALE CONSIDERATION AS CLAIMED BY THE ASSESSEE WAS DISCLO SED TO THE DEPARTMENT OR RECORDED IN ANY REGULAR BOOKS OF ACCO UNTS OR DOCUMENT PRIOR TO THE DATE OF THE SEARCH THE LEARN ED AUTHORISED REPRESENTATIVE OF THE ASSESSEE COULD NOT SUBSTANTIA TE THE SAME. IN ABSENCE OF ANY SUCH MATERIAL IN OUR CONSIDERED O PINION EVEN WHEN WE ASSUME THAT THE EXPLANATION OF THE ASSESSEE IS CORRECT THEN ALSO DIFFERENCE BETWEEN `.5/- LAKHS I.E. THE S ALE CONSIDERATION CLAIMED BY THE ASSESSEE AND `.1.05/- LAKHS I.E. SAL E CONSIDERATION AS PER THE REGISTERED SALE DEED I.E. `.3.95/- LAKHS BECOMES THE UNDISCLOSED INCOME OF THE ASSESSEE.. IN THE CIRCUMS TANCES LEVY OF PENALTY U/S. 158BFA (2) IN RESPECT OF INCOME OF `.4 5 000/- CANNOT HELD AS UNJUSTIFIED OR UNWARRANTED. THUS WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. HENCE THE SAME IS DI SMISSED. ORDER SIGNED DATED AND PRONOUNCED IN THE COURT ON THIS TH DAY OF AUGUST 2010. ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( T.K. SHARMA ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) ( N.S. SAINI ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER AHMEDABAD; ON THIS __ TH DAY OF AUGUST 2010 PATKI COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-III AHMEDABAD. 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER //TRUE COPY// (DY./ASSTT.REGISTRAR) ITAT AHMEDABAD - 6 - DATE INITIALS 1. DRAFT DICTATED ON 6-8-2010 ----------- -------- 2. DRAFT PLACED BEFORE AUTHORITY 9-8-2010 --- ---------------- 3. DRAFT PROPOSED & PLACED 9-8-2010 --------- ---------- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED --------------- - ------------------ JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO P.S ---------------- -------------------- 6. KEPT FOR PRONOUNCEMENT ON ---------------- -------------------- 7. FILE SENT TO THE BENCH CLERK ---------------- -------------------- 8. DATE ON WHICH FILE GOES TO THE ---------------- -------------------- 9. DATE OF DISPATCH OF ORDER ---------------- ---------------------