Mahesh Khanna,, Roorkee v. ACIT, Haridwar

ITSSA 3/DEL/2010 | misc
Pronouncement Date: 12-03-2010 | Result: Allowed

Appeal Details

RSA Number 320116 RSA 2010
Assessee PAN AIJPK2865L
Bench Delhi
Appeal Number ITSSA 3/DEL/2010
Duration Of Justice 2 month(s) 7 day(s)
Appellant Mahesh Khanna,, Roorkee
Respondent ACIT, Haridwar
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 12-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 12-03-2010
Assessment Year misc
Appeal Filed On 04-01-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI K.D. RANJAN ACCOUNTANT MEMBER ITA NO. 03/DEL/2010 BLOCK PERIOD : 1988-89 TO 19989-99 SHRI MAHESH KHANNA 405 AWAS COLONY ROORKEE. VS. ASSTT. COMMISSIONER OF INCOME TAX CIRCLE HARDWAR (APPELLANT) (RESPONDENT) PAN : AIJPK 2865 L APPELLANT BY : NONE RESPONDENT BY : SHRI G.S. SAHOTA SR. DR O R D E R PER: C.L. SETHI J.M. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 07.09.2009 PASSED BY THE LD. CIT(A) CONFIRMING THE PENALTY LEVIED BY THE AO U/S. 158 BFA(2) OF THE INCOME TAX ACT 1961 (THE ACT) FOR THE BLOCK PERIOD FROM 1988-89 TO 1998-99. 2. IN THIS CASE A SEARCH AND SEIZURE OPERATION U/S . 132 OF THE ACT WAS CONDUCTED ON THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ON 17.10.1997. IN RESPONSE TO THE NOTICE ISSUED U/S. 158 BC THE ASSESSEE FILED BLOCK RETURN DECLARING NIL INCOME. THE AO COMPLETE D THE ASSESSMENT ITA NO. 03/DEL/2010 PAGE 2 OF 6 DETERMINING THE TOTAL UNDISCLOSED INCOME AT RS. 1 8 9 300/- CONSISTING OF THE FOLLOWING ITEMS:- (I) ADDITION ON ACCOUNT OF UNEXPLAINED ADVANCES OF RS. 63 000/-. (II) ADDITION ON CASH CREDIT OF RS. 48 000/- (III) ADDITION ON ACCOUNT OF RECEIPT OF CASH IN THE NATURE OF STRIDHAN RS. 38 000/- 3. BEING AGGRIEVED WITH THE AOS ORDER THE ASSESSE E PREFERRED AN APPEAL BEFORE THE INCOME TAX APPELLATE TRIBUNAL WHERE THE TRIBUNAL VIDE ORDER DATED 17.03.2004 SET ASIDE THE AFORESAID ADDITIONS TO THE FILE OF THE AO TO DECIDE THE SAME AFRESH IN ACCORDANCE WITH THE LAW A ND AFTER GIVING AN OPPORTUNITY TO THE ASSESSEE. A FRESH ASSESSMENT WA S ULTIMATELY MADE DETERMINING THE TOTAL INCOME AT RS. 1 49 800/-. TH E AO INITIATED PENALTY PROCEEDINGS U/S. 158 BFA. IN REPLY TO THE SHOW CAU SE NOTICE U/S. 158 BFA THE ASSESSEE SUBMITTED THAT THE ADDITION OF RS. 1 4 9 800/- HAS BEEN MADE BY THE AO ON THE BASIS OF SURRENDER MADE BY THE ASSESS EE TO BUY PEACE OF MIND AND TO AVOID LITIGATION. THE ASSESSEE FURTHER SUBM ITTED THAT THERE WAS NO MATERIAL FOUND DURING THE COURSE OF THE SEARCH TO C ONCLUSIVELY ESTABLISH AND PROVE THAT THE AFORESAID ADDITION OF RS. 1 49 800/- WAS ACTUALLY THE UNDISCLOSED INCOME OF THE ASSESSEE AND THE ASSESSE E HAD CONCEALED THE SAME ITA NO. 03/DEL/2010 PAGE 3 OF 6 WHILE FILING REGULAR RETURN. THE AO HAS NOT ACCEPT ED THE SUBMISSIONS OF THE ASSESSEE AND LEVIED PENALTY. 4. ON AN APPEAL THE CIT(A) CONFIRMED THE ADDITION BY OBSERVING AS UNDER:- 5.7 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OFF THE LD. COUNSEL OF THE APPELLANT AND THE FACTS INDI CATED BY THE ASSESSING OFFICER IN THE PENALTY ORDER. IT IS OBSERVED THAT AS A RESULT OF REASSESSMENT PROCEEDINGS IN PUR SUANCE OF THE DIRECTIONS OF THE ITAT THE ASSESSING OFFICE R HAS QUANTIFIED UNDISCLOSED INCOME AT RS. 1 49 800/- AND THE SAID INCOME HAS BEEN AGREED TO SURRENDERED BY THE APPELLANT TO BUY PEACE OF MIND AND TO AVOID PROTRAC TED LITIGATION. THE POINTS OF ADDITIONS HAVE BEEN BY W AY OF UNEXPLAINED ADVANCE OF RS. 63 000/- CASH CREDIT AMOUNTING TO RS. 48 000/- UNEXPLAINED STRIDHAN AMOU NTING TO RS. 38 000/- AND THE APPELLANT HAS SURRENDERED A LL THESE INCOME FOR TAXATION. DURING THE COURSE OF PENALTY PROCEEDINGS THE APPELLANT HAS TAKEN THE PLEA THAT THE SAID SURRENDER HAS BEEN MADE TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATIONS. HOWEVER THIS SURREN DER HAS TAKEN PLACE BECAUSE OF DETECTION OF CONCEALED INCOM E BY THE DEPARTMENT AS A RESULT OF SEARCH & SEIZURE OPER ATION CONDUCTED IN THE CASE OF THE APPELLANT. SO IT CAN NOT BE SAID THAT THE SAID SURRENDER IS VOLUNTARY SURRENDER MADE BY THE APPELLANT IN ORDER TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATIONS. THE ASSESSING OFFICER HAS REFERRED TO SEVERAL JUDICIAL PRONOUNCEMENTS WHICH HAVE MADE IT VERY CLEAR THAT IF THERE IS DETECTION BY THE DEPART MENT ABOUT OMISSION ON THE PART OF THE ASSESSEE TO DISCLOSE TR ULY AND FULLY THE INCOME THEN EVEN IF THERE IS SURRENDER O F SUCH INCOME SUBSEQUENTLY IT WILL NOT TANTAMOUNT TO INAD VERTENT OMISSION AND SUCH OMISSION WILL INVARIABLY ATTRACT PENALTY U/S. 271(1)(C) OF I T ACT. KEEPING IN VIEW THESE F ACTS AND THE JUDICIAL AUTHORITIES RELIED UPON BY THE ASSESSI NG OFFICER I AM OF THE CONSIDERED OPINION THAT THE PE NALTY IS CLEARLY EXIGIBLE IN THE CASE OF THE APPELLANT U/S. 271(1)(C) OF THE IT ACT. HOWEVER MINIMUM PENALTY IN THE CAS E OF THE ITA NO. 03/DEL/2010 PAGE 4 OF 6 APPELLANT IS RS. 89 880/- AND THE MAXIMUM PENALTY I S RS. 2 69 640/- BEING 300% OF TAX SOUGHT TO BE EVADED. IN ORDER TO MEET THE ENDS OF JUSTICE SUCH PENALTY IS RESTRICTED TO THE MINIMUM PENALTY OF RS. 89 880/- AND THE ASSE SSING OFFICER IS HEREBY DIRECTED TO ALLOW CONSEQUENTIAL R ELIEF. 5. WE HAVE HEARD THE LD. DR. NONE FOR THE ASSESSEE WAS PRESENT. AN ADJOURNMENT PETITION FILED BY THE ASSESSEE WAS REJE CTED. 6. ON GOING THROUGH THE ASSESSMENT ORDER WE FIND T HAT WITH REGARD TO THE VARIOUS CASH CREDITS AND OTHER DEPOSITS THE ASSESS EE SUBMITTED VARIOUS DETAILS BEFORE THE AO. WITH REGARD TO THE AMOUNT O F RS. 15 000/- TAKEN FROM SMT. KRISHNA MALHOTRA IT WAS FOUND THAT SMT. KRISH NA MALHOTRA WAS THE GRANDMOTHER OF THE ASSESSEE AND THIS AMOUNT WAS GI VEN BY THE ASSESSEE TO HIS GRANDMOTHER IN 1985 AND THE SAME WAS RETURNED B Y HER IN 1990-91. SMT. KRISHNA MALHOTRA HAD ADMITTED THE TRANSACTION BY GI VING AN AFFIDAVIT. SHE HAD RENTAL INCOME IN THE PAST. THIS AMOUNT HAS BEE N SURRENDERED MERELY BECAUSE TIME OF MORE THAN EIGHT YEARS HAVE BEEN PAS SED AND THE ASSESSEE WAS NOT IN POSITION TO PRODUCE THE CREDITORS. SIMI LAR IS THE CASE ABOUT THE RECEIPT OF RS. 10 000/- FROM SHRI GOBIND RAM KHANNA WHO WAS THE REAL UNCLE OF THE ASSESSEE AND HAS IN THE MEAN TIME EXP IRED ON 10.12.1990 MAKING IT IMPRACTICABLE ON THE PART OF THE ASSESSEE TO PRODUCE HIM. WITH REGARD TO THE DEPOSIT OF RS. 15 000/- FROM ONE SHRI VINDO KUMAR DHINGRA THE ASSESSEE SUBMITTED THAT HE IS A REGULAR INCOME TAX PAYER AND HIS PAN IS AABPK 7659D AND THE AMOUNT WAS GIVEN AFTER WITHDRA WING FROM THE BANK ITA NO. 03/DEL/2010 PAGE 5 OF 6 ACCOUNT. AS FAR AS RS. 5 000/- FROM SHRI RAM SARAN DASS DHINGRA IS CONCERNED WE FIND THAT PAYER WAS THE FATHER-IN-LAW OF THE ASSESSEE AND HAS IN THE MEAN TIME EXPIRED IN 2004. HE HAD WORKED IN REVENUE DEPARTMENT OF PUNJAB GOVERNMENT AS PATWARI. WITH REGARD TO THE A MOUNT OF RS. 18 000/- FROM SHRI ASHOK KUMAR WE FIND THAT SHRI ASHOK KUMA R IS AN INCOME TAX ASSESSEE AND GIVEN THE AMOUNT TO THE ASSESSEE ON FR IENDLY RELATIONS. SIMILAR IS THE POSITION WITH OTHER CREDITS. IN THE COURSE OF FRESH ASSESSMENT PROCEEDINGS THE ASSESSEE HAD SURRENDERED THE INCOM E BY GIVING A REASON THAT BY THE TIME MORE THAN EIGHT YEARS HAVE PASSED AND T HE ASSESSEE WANT TO AVOID THE LITIGATION BY SURRENDERING THE INCOME TO TAX. THE AO HAS MADE THE ADDITION MERELY ON THE BASIS OF THE ASSESSEES SURR ENDER. THE AO HAS NOT POINTED OUT ANY FALSITY IN THE VARIOUS DOCUMENTS AN D EXPLANATIONS FURNISHED BY THE ASSESSEE. THE SURRENDER WAS MADE BY THE ASS ESSEE BECAUSE OF THE REASON THAT THE ASSESSEE WAS NOT IN A POSITION TO P RODUCE THE CREDITORS AS SOME OF THEM IN THE MEAN TIME EXPIRED AND MORE THA N EIGHT YEARS WERE PASSED. ALL THE RELEVANT CONFIRMATION BANK PASSBO OK AND OTHER DETAILS WERE DULY SUBMITTED BY THE ASSESSEE. IT IS THUS NOT A CASE WHERE THE ASSESSEE HAS CONCEALED ANY PARTICULARS RELATING TO THE ADDITIONS MADE BY THE AO AFTER ACCEPTING SURRENDER MADE BY THE ASSESSEE. IN THIS VIEW OF THE MATTER WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEES EXPLANAT ION WITH REGARD TO THE VARIOUS CREDITS AND AMOUNTS CANNOT BE SAID TO BE FA LSE OR UNBELIEVABLE. THE ITA NO. 03/DEL/2010 PAGE 6 OF 6 ASSESSEE HAS BEEN ABLE TO EXPLAIN THE CREDITS BONAF IDELY. IT IS NOT THE CASE OF THE DEPARTMENT THAT SOME PAPERS AND DOCUMENTS WERE FOUND DURING THE COURSE OF THE SEARCH INDICATING THAT VARIOUS AMOUNT RECEIVED FROM VARIOUS PERSONS WERE ACTUALLY ASSESSEES INCOME AND IT WAS AN ARRANGED AFFAIR TO COVER UP THE UNACCOUNTED INCOME OF THE ASSESSEE. W E THEREFORE DELETE THE PENALTY AND ALLOW THIS APPEAL. RESULTANTLY THE PE NALTY LEVIED BY THE AO IS CANCELLED AND THE ORDERS OF THE AUTHORITIES BELOW H AVE BEEN SET ASIDE. 7. IN THE RESULT THE APPEAL FIELD BY THE ASSESSEE IS ALLOWED. 8. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 12 TH MARCH 2010. SD/- (K.D. RANJAN) ACCOUNTANT MEMBER SD/- (C.L. SETHI) JUDICIAL MEMBER DATED: 12 TH MARCH 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR