RAMAKANT JHA, MUMBAI v. DCIT 22(3), MUMBAI

ITSSA 39/MUM/2009 | misc
Pronouncement Date: 31-03-2010 | Result: Partly Allowed

Appeal Details

RSA Number 3919916 RSA 2009
Assessee PAN ACYPJ3453E
Bench Mumbai
Appeal Number ITSSA 39/MUM/2009
Duration Of Justice 1 year(s)
Appellant RAMAKANT JHA, MUMBAI
Respondent DCIT 22(3), MUMBAI
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 31-03-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted D
Tribunal Order Date 31-03-2010
Date Of Final Hearing 09-03-2010
Next Hearing Date 09-03-2010
Assessment Year misc
Appeal Filed On 31-03-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH MUMBAI BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER IT(SS) NO.39/MUM/2009 (BLOCK PERIOD: 01.04.1989 TO 08.12.1999) ITA NO.1974/MUM/2009 (ASSESSMENT YEAR: 2001-02) SHRI RAMAKANT JHA DCIT - 22(3) C/O. RAJESH B. GUPTE MUMBAI BOMBAY MARKET APT. TARDEO ROAD VS. MUMBAI 400034 PAN - ACYPJ 3453 E APPELLANT RESPONDENT IT(SS) NO.38/MUM/2009 (BLOCK PERIOD: 01.04.1989 TO 08.12.1999) MRS. RENUKA JHA DCIT - 22(3) C/O. RAJESH B. GUPTE MUMBAI BOMBAY MARKET APT. TARDEO ROAD VS. MUMBAI 400034 PAN - AAIPJ 2919 B APPELLANT RESPONDENT APPELLANT BY: SHRI RAJESH B. GUPTE RESPONDENT BY: SMT. CHANDRA RAMKRISHNAN O R D E R PER B. RAMAKOTAIAH A.M. THESE THREE APPEALS OF GROUP OF ASSESSEES ARE AGAIN ST THE ORDERS OF THE CIT(A) XXII MUMBAI CONFIRMING THE PENALTY UNDER SE CTION 158BFA(2) AND 271(1)(C). IN THESE APPEALS THE ASSESSEES ARE CONTE STING THE CONFIRMATION OF PENALTY ON VARIOUS ADDITIONS CONFIRMED BY THE ITAT IN QUANTUM PROCEEDINGS. IT(SS) NO.39/MUM/2009 2. IN THE SEARCH AND SEIZURE PROCEEDINGS CONDUCTED IN THE CASE OF MR. RAMAKANT JHA AND HIS FAMILY MEMBERS LARGE NUMBER OF FIXED DEPOSITS INVESTMENTS AND JEWELLERY WERE IDENTIFIED/SEIZED AN D IN THE BLOCK ASSESSMENT AFTER CONSIDERABLE EXAMINATION OF THE RECORD AND RE FERRING THE MATTER BACK TO IT(SS) 39& 38 & ITA 1974/MUM/2009 SHRI RAMAKANT JHA & MRS. RENUKA JHA 2 THE CIT(A) ITAT FOUND THAT THE CIT(A) HAS GIVEN SU BSTANTIAL RELIEF AND CONFIRMED SOME OF THE ADDITIONS. CONSEQUENT TO THOS E CONFIRMATIONS PENALTY WAS LEVIED. THE ISSUE IN THESE APPEALS IS WITH REFE RENCE TO LEVY OF PENALTY ON VARIOUS ADDITIONS MADE. IN ITA NO. 89/MUM/2009 IN THE CASE OF RAMAKANT JHA THE ADDITIONS CONFIRMED ARE A UNDER: - SR.NO. NATURE OF ADDITION AMOUNT 1 ARREARS OF SALARY 43 780 2 DEPOSIT IN BANK A/C. 14 000 3 GIFT 16 260 4 INVESTMENT IN UTI 71 000 5 ESTIMATION OF DIVIDEND 64 080 6 INTEREST ON FD 55 524 TOTAL 264 644 3. IT WAS THE SUBMISSION OF THE LEARNED COUNSEL THAT T HE ASSESSEE HAS RECEIVED ARREARS OF SALARY AND WAS UNDER THE IMPRES SION THAT THESE WERE DECLARED AS PART OF REGULAR RETURNS AND ACCORDINGLY THERE IS NO OCCASION FOR ASSESSEE TO DECLARE THEM IN THE BLOCK ASSESSMENT. T HE DEPOSITS IN BANKS ACCOUNT WERE ALSO EXPLAINED AS WITHDRAWAL FROM THE SALARY ACCOUNT. WITH REFERENCE TO THE GIFT IT WAS HIS SUBMISSION THAT TH E GIFT WAS RECEIVED FROM THE SON WHICH WAS DISBELIEVED. LIKEWISE THE INVESTMENT S IN UTI WERE MADE FOR THE PURPOSE OF TAX BENEFIT BUT THE ADDITION WAS CON FIRMED AS ASSESSEE COULD NOT CORRELATE THE SAME IN THE BLOCK ASSESSMENT. CON SEQUENT TO VARIOUS INVESTMENTS THE A.O. ESTIMATED A DIVIDEND OF RS.64 280/- AND ALSO INTEREST ON FDS AT RS.55 524/-. IT IS ASSESSEES SUBMISSION THAT THE ASSESSEE WAS HAVING LARGE NUMBER OF BANK ACCOUNTS AND THE ENTIRE GROUP ADDITIONS WERE MADE IN ASSESSEES HANDS ORIGINALLY AND AFTER SUBST ANTIAL EXPLANATIONS AND VERIFICATION ONLY FEW OF THESE AMOUNTS WERE CONFIRM ED AND ASSESSEE HAD A BONAFIDE REASON FOR NOT DISCLOSING THE AMOUNTS IN T HE BLOCK RETURNS. HE REQUESTED FOR CANCELLATION OF THE PENALTY. 4. THE LEARNED D.R. RELIED ON THE ORDERS OF THE CIT(A) WHO CONFIRMED THE PENALTY IN THE DETAILED ORDER. 5. WE HAVE PERUSED THE RECORD AND CONSIDERED ASSESSEE S CONTENTIONS. IN THIS CASE ORIGINALLY SUBSTANTIAL ADDITIONS HAVE BEE N MADE CONSIDERING IT(SS) 39& 38 & ITA 1974/MUM/2009 SHRI RAMAKANT JHA & MRS. RENUKA JHA 3 VARIOUS DEPOSITS IN BANK ACCOUNTS INVESTMENTS IN F AMILY MEMBERS NAME AND AFTER RESTORING THE MATTER OF THE GROUP TO THE CIT(A) HE HAS GIVEN RELIEF OF RS.1 19 62 023/- IN ASSESSEES CASE. AS SEEN FRO M THE NATURE OF ADDITIONS THE ARREARS OF THE SALARY RECEIVED BY THE ASSESSEE SHOULD HAVE BEEN OFFERED IN THE REGULAR ASSESSMENTS. NOT ONLY THAT WHEN THE SEARCH WAS CONDUCTED THE ASSESSEE FAILED TO DISCLOSE THE SAME IN THE BLO CK ASSESSMENT ALSO. ON EXAMINATION OF VARIOUS INVESTMENTS AND SOURCES IT B ECAME AN ADMITTED FACT THAT ARREARS OF SALARY HAVE NOT BEEN DISCLOSED BY T HE ASSESSEE AT ANY POINT OF TIME. IN VIEW OF THIS WE ARE OF THE OPINION THAT T HE NON-DISCLOSURE OF THE ARREARS OF SALARY EITHER IN THE REGULAR ASSESSMENT OR IN THE BLOCK ASSESSMENT ITSELF WILL LEAD TO PENALTY. THE EXPLANATION GIVEN BY THE ASSESSEE CANNOT BE ACCEPTED AS A BONAFIDE ONE AS IT IS A SIMPLE MATTER OF VERIFICATION WHETHER THE ARREARS OF SALARY HAVE BEEN INCLUDED OR NOT WHE N FILING THE RETURN. THERE CANNOT BE A PRESUMPTION THAT THE AMOUNTS HAVE BEEN DISCLOSED WHEN THE SAME ARE NOT DISCLOSED. WITH REFERENCE TO THE AMOUN TS OF DEPOSITS IN BANK ACCOUNTS GIFT AND INVESTMENTS IN UTI AS SEEN FROM THE ORDERS THE EXPLANATION OF THE ASSESSEE WAS THAT THE SOURCES AR E FROM SALARY ACCOUNT AND FROM OTHER BANK ACCOUNTS OF THE ASSESSEE HAVE N OT BEEN ACCEPTED IN VIEW OF LACK OF CORRELATION. THERE CAN BE A GENUINE EXPLANATION AS THESE DEPOSITS ARE STATED BE OUT OF SALARY AMOUNTS DRAWN AND INVESTMENTS CAN BE FOR THE PURPOSE OF INCOME TAX EXEMPTION AND ASSESSE E HAS NO OTHER SOURCE OF INCOME. ACCORDINGLY THE ASSESSEES EXPLANATION O N THIS CAN BE ACCEPTED AS A BONAFIDE EXPLANATION AND PENALTY ON THAT IN OUR VIEW IS NOT WARRANTED. WITH REFERENCE TO THE AMOUNT OF ESTIMATION OF DIVID END IT IS PURE AND SIMPLE ESTIMATION BY THE A.O. WITHOUT ANY CORRESPONDING EV IDENCE IN THE MATERIAL. SINCE THE AMOUNT IS ADDED ON THE BASIS OF ESTIMATIO N WE ARE OF THE VIEW THAT PENALTY CAN NOT BE LEVIED ON THE ABOVE AMOUNTS. WI TH REFERENCE TO INTEREST ON FDS THE ASSESSEE HAS NOT DISCLOSED THE INTEREST ON FDS AT THE TIME OF ORIGINAL RETURNS OR IN THE BLOCK ASSESSMENT. SINCE THE ASSESSEE HAS RECEIVED THESE AMOUNTS WE ARE OF THE OPINION THAT NON-DISCL OSURE OF THE ABOVE AMOUNT IN THE BLOCK RETURN EVER AFTER THE SEARCH WILL ATTRACT THE PROVISIONS OF SECTION 158BFA(2) AND THE EXPLANATION OF THE ASS ESSEE CANNOT BE ACCEPTED AS A BONAFIDE ONE. IN VIEW OF THIS WE ARE OF THE O PINION THAT PENALTY IS IT(SS) 39& 38 & ITA 1974/MUM/2009 SHRI RAMAKANT JHA & MRS. RENUKA JHA 4 VALIDLY LEVIED ON INTEREST OF FDS. IN A NUTSHELL TH E PENALTY IS CONFIRMED ON THE ADDITIONS BROUGHT TO TAX ON ARREARS OF SALARY A ND INTEREST OF FDS AND DELETED ON BALANCE OF THE ADDITIONS CONFIRMED BY TH E ITAT. THE A.O. IS DIRECTED TO REWORK OUT THE PENALTY ACCORDINGLY. 6. APPEAL IS PARTLY ALLOWED IT(SS) NO.38/MUM/2009 7. THIS IS ALSO PENALTY UNDER SECTION 158FBA(2) ON THE FOLLOWING ADDITIONS SUSTAINED IN THE ASSESSMENT: - SR.NO. NATURE OF ADDITION AMOUNT 1 MATURITY OF OLD FD 205 500 2 LOAN 20 000 3 ADDITIONAL INCOME ADMITTED AT THE TIME OF HEARING 242 107 4 UNDISCLOSED INCOME 39 066 TOTAL 506 673 8. THE CIT(A) HAS CONSIDERED THE ABOVE ADDITIONS IN TH E APPELLATE ORDERS AS UNDER: - 2.8.3 THE APPELLANT HAS FAILED TO PROVE THAT SHE HAS NOT CONCEALED THE INCOME IN THIS CASE AND IS NOT LIABLE FOR PENAL TY U/S 158BFA(2) OF THE I.T. ACT 1961. IT IS ALSO TO BE KEPT IN MIND THAT T HE HON'BLE TRIBUNAL WHICH IS THE LAST FACT FINDING AUTHORITY HAS ALSO C ONFIRMED THESE ADDITIONS MADE THE ASSESSING OFFICER WHICH HAVE BEE N SUSTAINED BY THE ORDER OF THE CIT(A). THEREFORE KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE THE PENALTY LEVIED BY TH E ASSESSING OFFICER OF RS.3 48 837/- IS UPHELD AND THE GROUNDS OF APPEAL A RE DISMISSED AS FACTS REVEAL THAT THIS IS A CASE OF CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS. 9. IT IS THE CONTENTION OF THE ASSESSEE THAT IN A CASH FLOW STATEMENT FURNISHED BEFORE THE CIT(A) ASSESSEE HAS CLAIMED C REDIT FOR MATURITY OF THE WHOLE FD BUT COULD NOT FURNISH EVIDENCE HENCE THE ADDITION WAS SUSTAINED. LIKEWISE REGARDING LOAN OF RS.20 000/- ALSO. HOWEV ER THE ASSESSEE HAS ADMITTED IN THE COURSE OF ASSESSMENT AN ADDITIONAL INCOME OF RS.2 40 107/- AND UNDISCLOSED INCOME OF RS.39 066/- PERTAINING TO FD INTEREST AFTER VERIFICATION AND WAS CONFIRMED BY THE ITAT HENCE IT IS THE BONAFIDE BELIEF OF THE ASSESSEE THAT PENALTY UNDER SECTION 158BFA(2) DOES NOT ARISE. IT(SS) 39& 38 & ITA 1974/MUM/2009 SHRI RAMAKANT JHA & MRS. RENUKA JHA 5 10. THE LEARNED D.R. HOWEVER RELIED ON THE ORDERS OF THE A.O. AND CIT(A). 11. WE HAVE CONSIDERED THE ISSUE. AS FAR AS ADMITTED IN COME OF RS.2 40 107/- AND RS.39 066/- ARE CONCERNED THESE A MOUNTS ARE NOT DISCLOSED AT THE TIME OF ORIGINAL RETURNS OR AT THE TIME OF FILING THE BLOCK RETURN. DURING THE COURSE OF BLOCK ASSESSMENT ONLY THESE AMOUNTS HAVE BEEN ADMITTED AND ASSESSEE ACCEPTED THE ADDITIONS. IN VIEW OF THIS WE ARE OF THE OPINION THAT PENALTY UNDER SECTION 158BFA(2) IS LEVIABLE ON THE ABOVE TWO AMOUNTS AS PER THE PROVISIONS. HOWEVER WITH RE FERENCE TO THE BALANCE AMOUNT OR RS.2 25 5000/- THE ASSESSEES EXPLANATION WAS THAT THESE ARE MATURITY OF OLD FDS AND LOAN AMOUNTS WHICH COULD NO T BE SUBSTANTIATED. IT MAY BE SUFFICIENT TO MAKE AN ADDITION BUT IN OUR V IEW MAY NOT BE SUFFICIENT TO LEVY PENALTY AS THERE IS NO CONTRARY EVIDENCES T O DISPROVE ASSESSEES CONTENTIONS. AS SEEN FROM THE ORDER OF THE CIT(A) A LSO GAVE RELIEF OF RS.34 17 940/-. ONLY AN AMOUNT OF RS.11 75 007/- WA S CONFIRMED AS UNDISCLOSED INCOME. CONSIDERING THE SUBSTANTIAL REL IEF GRANTED IN OTHER ADDITIONS AND AS THERE ARE NO FINDINGS TO THE CONTR ARY THAT THE ASSESSEES CLAIMS ARE NOT GENUINE WE ARE OF THE OPINION THAT PENALTY IS NOT WARRANTED ON THE ABOVE TWO AMOUNTS ADDED OUT OF MATURITY OF O LD FD AND LOAN AMOUNTS. ASSESSEE GETS RELIEF ON THESE TWO AMOUNTS. A.O. IS DIRECTED TO REWORK OUT THE PENALTY ACCORDINGLY. 12. APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 1974/MUM/2009 13. IN THIS APPEAL IT IS NOT A PENALTY UNDER SECTION 1 58BFA(2) BUT PENALTY UNDER SECTION 271(1)(C). POST SEARCH THE A.O. HAS ADDED MANY AMOUNTS WHICH WERE CONFIRMED BY THE CIT(A) BY DIFFERING FR OM THE VIEWS EXPRESSED BY HIS PREDECESSOR WHO DELETED VARIOUS ADDITIONS IN TH E BLOCK ASSESSMENT. THE ADDITIONS CONFIRMED ARE RS 3 30 000/- OF DEPOSITS I N FAMILY MEMBERS NAMES AND INTEREST ON FDS AT RS 2 25 000 ON ESTIMATION AN D RS 1 03 321/- BUSINESS INCOME OF WIFE SMT. RENUKA JHA. THE A.O. HAS CONSIDERED THE ABOVE AND LEVIED PENALTY. 14. IT IS THE EXPLANATION OF THE ASSESSEE THAT ALL THE BANK ACCOUNTS WERE IN THE NAME OF THE FAMILY MEMBERS AND INTEREST INCOME ON THESE FDS IT(SS) 39& 38 & ITA 1974/MUM/2009 SHRI RAMAKANT JHA & MRS. RENUKA JHA 6 ALONGWITH BUSINESS INCOME OF WIFE WERE ADDED IN ASS ESSEES HAND AND THE FINDINGS OF THE CIT(A) IN THE REGULAR ASSESSMENT WE RE DIFFERING FROM THE FINDINGS OF THE CIT(A) IN THE BLOCK ASSESSMENT. IT WAS HIS SUBMISSION THAT THE DEPOSITS IN THE HANDS OF THE FAMILY MEMBERS WH O HAVE EXPLAINED THE SOURCE CANNOT BE MADE IN ASSESSEES HANDS. LIKEWIS E INTEREST ALSO WAS CLUBBED. IT IS ALSO ON RECORD THAT THE ARREARS OF W IFE WERE SEPARATELY MADE AND ADDITION WAS ALSO MADE IN ASSESSEES HANDS. 15. THE LEARNED D.R. RELIED ON THE ORDERS OF THE ITAT W HICH CONFORMED THE ADDITIONS. 16. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING THE RELEVANT MATERIAL ON RECORD WE FIND THAT THERE IS NO CASE FOR LEVY O F PENALTY UNDER SECTION 271(1)(C) ON THE FACTS OF THE CASE. IT IS TRUE THAT ADDITIONS WERE CONFIRMED BUT THE ASSESSEE EXPLAINED THAT SOME OF THE ADDITIONS M ADE ON INVESTMENT OF FAMILY MEMBERS SHOULD NOT HAVE BEEN CONFIRMED IN HI S HANDS. THIS IS A BONA FIDE EXPLANATION AS THE SAME WAS ACCEPTED IN T HE BLOCK ASSESSMENT PROCEEDINGS AND ADDITIONS WERE DELETED. AS SEEN FRO M THE ORDERS OF BLOCK ASSESSMENT AS WELL AS ORDERS OF REGULAR ASSESSMENT THE ASSESSEE HAS EXPLAINED A LARGE NUMBER OF DEPOSITS IN FAMILY MEMB ERS NAME BUT THE CIT(A) DIFFERING FROM THE FINDINGS OF HIS PREDECESSOR HAS CONFIRMED THE ADDITIONS IN HIS CASE. IT MAY BE GOOD ENOUGH FOR SUSTAINING THE ADDITIONS IN THE ASSESSMENT BUT NOT SUFFICIENT TO CONSIDER LEVY OF P ENALTY. ACCORDINGLY WE ARE OF THE VIEW THAT NO PENALTY UNDER SECTION 271(1)(C) IS WARRANTED ON THE ADDITIONS MADE AND CONFIRMED BY THE CIT(A). PENALTY IS THEREFORE CANCELLED. GROUND IS CONSIDERED ALLOWED. 17. IN THE RESULT IT(SS) NOS. 38 & 39/MUM/2009 IS PART LY ALLOWED AND ITA NO. 1974/MUM/2009 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31SR MARCH 20 10. SD/ SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 31 ST MARCH 2010 IT(SS) 39& 38 & ITA 1974/MUM/2009 SHRI RAMAKANT JHA & MRS. RENUKA JHA 7 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) XXII MUMBAI 4. THE CIT XXII MUMBAI CITY 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.