Smt. Heena Sharma, Ahmedabad v. The Dy.CIT.,Cent.Circle-2(2),, Ahmedabad

ITSSA 5/AHD/2011 | 2002-2003
Pronouncement Date: 30-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 520516 RSA 2011
Assessee PAN AMDPS6419E
Bench Ahmedabad
Appeal Number ITSSA 5/AHD/2011
Duration Of Justice 10 month(s) 25 day(s)
Appellant Smt. Heena Sharma, Ahmedabad
Respondent The Dy.CIT.,Cent.Circle-2(2),, Ahmedabad
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 30-11-2011
Date Of Final Hearing 04-11-2011
Next Hearing Date 04-11-2011
Assessment Year 2002-2003
Appeal Filed On 05-01-2011
Judgment Text
. .. . . .. . ! !! ! . .. .'# !'# '# !'# '# !'# '# !'# $ $ $ $ % % % % IN THE INCOME TAX APPELLATE TRIBUNAL : B BENCH : AHMEDABAD BEFORE HONBLE SHRI D.K.TYAGI J.M. & HONBLE SHRI A.MOHAN ALANKAMONY A.M.) ! ! ! !. IT(SS)A NO. 5/AHD./2011 : # &'- 2002-2003 SMT. HEENA SHARMA AHMEDABAD VS- DCIT CEN TRAL CIRCLE-2(2) AHMEDABAD (PAN : AMDPS 6419E) (*+ /APPELLANT) ( *+ /RESPONDENT ) *+ - . / APPELLANT BY : SHRI GAURAV NAHTA A.R. *+ - . / RESPONDENT BY : SHRI SAMIR TEKRIWAL SR.D.R. /#0 - 1 $ / DATE OF HEARING : 04/11/2011 2'& - 1$ / DATE OF PRONOUNCEMENT : 30/11/2011 3 3 3 3 / ORDER PER SHRI A.MOHAN ALANKAMONY ACCOUNTANT MEMBER : THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS)-III AHMEDABAD IN APPEAL NO. CIT(A)- III/263&264/DCIT/CC-2(2)/09-10 DATED 20.10.2010 FOR THE ASSESSMENT YEAR 2002- 2003 PASSED UNDER SECTION 250 R.W.S. 271(1)(C) OF T HE I.T. ACT 1961. 2. THE ASSESSEE HAS RAISED THREE GROUNDS IN HER AP PEAL. HOWEVER THE CRUX OF THE ISSUE IS THAT THE LD. CIT(APPEALS)-III AHMEDABAD H AS ERRED IN LAW AND ON FACTS IN PASSING APPELLATE ORDER DATED 20/10/2010 FOR THE A. Y. 2002-03 IN THE CASE OF ASSESSEE BY CONFIRMING THE PENALTY U/S 27(1)(C) AMOUNTING TO RS.36 240/-. 3. DURING THE YEAR THE ASSESSEE FILED HER RETURN O F INCOME FOR THE RELEVANT ASSESSMENT YEAR ON 22.11.2005 DECLARING INCOME OF R S.41 930/- AND AGRICULTURAL INCOME OF RS.1 91 216/- PURSUANT TO NOTICE UNDER S ECTION 153A CONNECTED WITH THE IT(SS)A NO. 5/AHD/2011 2 WARRANT OF AUTHORIZATION UNDER SECTION 132 IN RELAT ION TO SEARCH CONDUCTED IN THE GROUP CASES OF ROYAL GROUP. 3.1 DURING THE ASSESSMENT PROCEEDINGS THE LD.AO A FTER MAKING ENQUIRIES INTO THE GENUINENESS OF THE AGRICULTURAL INCOME SHOWN BY THE ASSESSEE CAME TO THE CONCLUSION AFTER EXAMINING THE SALES VOUCHERS PRODUCED BY THE ASSESSEE THAT MOST OF THE SALES INVOICES WERE BOGUS AND CANNOT BE RELIED UPON. FURT HER EXAMINING THE REVENUE DOCUMENTS FILED BY THE ASSESSEE IN DETAIL AND THE L EVEL OF AGRICULTURAL ACTIVITIES THAT COULD BE PERFORMED IN THE AGRICULTURAL LAND OF THE ASSESSEE THE LD. A.O. ESTIMATED THE AGRICULTURAL INCOME OF THE ASSESSEE AT RS.43 920/- AS AGAINST RS.1 91 216/- SHOWN BY THE ASSESSEE. ON APPEAL BEFORE THE LD. CIT(A) THE LD. CIT(A) VIDE HIS ORDER NO.CIT(A)-III/120/CC-2(2)/06-07 DATED 11/11/2008 HE LD THAT 60% OF TOTAL AGRICULTURAL INCOME OF THE ASSESSEE BE TREATED AS AGRICULTURAL I NCOME AND 40% AS NON-AGRICULTURAL INCOME. SIMILARLY THE AO HAD OBSERVED THAT THE ASS ESSEE HAD FOREIGN TRAVEL BY WAY OF VISIT TO UAE. SINCE THE ASSESSEE COULD NOT FURNISH THE SOURCE OF EXPENSES TO THE SATISFACTION OF THE REVENUE AN AMOUNT OF RS.50 000/ - WAS ESTIMATED AND ADDED TO THE INCOME OF THE ASSESSEE. THE CONTENTION OF THE ASSES SEE WAS THAT ONE MR.JAGDISH M. JOSHI BORE THE EXPENSES OF TRAVEL INCLUDING BOARDIN G AND LODGING WITH REGARD TO ASSESSEES TOUR TO UAE. THIS ADDITION OF RS.50 000/ - WAS FURTHER SUSTAINED BY THE LD. CIT(A). THEREAFTER THE LD. A.O. LEVIED PENALTY ON SUCH ADDITION FOR WRONG CLAIM OF AGRICULTURAL INCOME. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A) WITH REGARD TO THE LEVY OF PENALTY. THE LD. CIT(A) CONFIRMED THE ORDER OF THE LD. A.O. WITH THE FOLLOWING OBSERVATIONS: IN MY VIEW IT IS NOT POSSIBLE TO PRODUCE 1.91 LAC S WORTH OF AGRICULTURE PRODUCE OUT OF 1.92 HA OF LAND IN ANY DISTRICT OF G UJARAT. THE WEBSITE OF GUJARAT GOVERNMENT ALSO SHOWS THAT THE PRODUCTION OF WHEAT AND BAJRA ON THE TOTAL LAND OF 1 .92 HA CANNOT EXCEED RS. 50 000 PER HECTARE. I HAVE THEREFORE NO HESITATION IN FOLDING THAT THE APPELLANT HAD FURNIS HED INACCURATE PARTICULARS OF HER INCOME. AS THERE WAS NO GENUINE AG RICULTURAL INCOME THE APPELLANT PREPARED BOGUS SALE BILLS WHICH WERE FOUN D TO BE NON-GENUINE BY THE AO. IN MY VIEW THE CIT(A) HAS BEEN TOO GENEROUS IN RESTRICTING THE ADDITION OF RS. 76 4907- AS AGAINST TOTAL ADDITION OF RS.1 47 2 95/- MADE BY THE AO. MERELY IT(SS)A NO. 5/AHD/2011 3 THAT THE AO HAS TO RESORT TO THE ESTIMATION OF THE AGRICULTURAL PRODUCE ON THE GROUND THAT THE SALE BILLS WERE FOUND TO BE NON GEN UINE DOES NOT GIVE THE ASSESSEE A HANDLE TO ARGUE 'THAT SINCE THE AO HAS E STIMATED THE AGRICULTURAL INCOME PENALTY CANNOT BE LEVIED ON THE ESTIMATED A DDITIONS. AS HELD BY ME AS PER THE DATA OF THE GUJARAT GOVERNMENT IN NONE OF THE DISTRICT AGRICULTURAL PRODUCE CAN EXCEED RS. 40 000 TO 50 000 PER HA THI S FACT ALONE IS SUFFICIENT TO PROVE THAT THE APPELLANT HAS FURNISHED INACCURATE P ARTICULARS OF HER INCOME ON WHICH PENALTY UNDER SECTION 27I(L)(C) IS LEVIABLE. FURTHER THE AO HAS PROVED THAT THE SALE BILLS PRODUCED BY THE APPELLANT WERE NOT GENUINE AND THEN HE MAKES CERTAIN ADDITIONS ON ACCOUNT OI' BOGUS AGRICU LTURAL INCOME AND ALSO AT THE END OF THE ASSESSMENT ORDER HE INITIATES PENAL TY UNDER SECTION 27T(L)(C) OF THE INCOME TAX ACT THIS CLEARLY PROVES THAT HE HAS APPLIED HIS MIND WHILE INITIATING PENALTY UNDER SECTION 271(1)(C). THE SAT ISFACTION IS THUS DISCERNIBLE FROM THE ASSESSMENT ORDER WHICH CLEARLY SHOWS THAT THE APPELLANT HAS INTRODUCED UNACCOUNTED INCOME IN THE GARB OF AGRICU LTURAL INCOME. IN VIEW OF THE AMENDED PROVISIONS OF SECTION 271( IB) OF THE I NCOME TAX ACT THERE IS A PROPER SATISFACTION BEFORE INITIATING THE PENALTY U NDER SECTION 271(L)(C) OF THE INCOME TAX ACT. THE RELIANCE PLACED BY THE AR ON VA RIOUS DECISIONS IS OF NO HELP BECAUSE MOST OF THE CASES RELIED UPON BY THE. AR TALKS ABOUT THE MENS REA TO BE PROVED BY THE DEPARTMENT WHEREAS THIS VIEW HA S BEEN REVERSED BY THE SPECIAL BENCH OF HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE. FURTHER IN THIS CASE THE APPELLANT HAS TRIED TO IN TRODUCE HER UNACCOUNTED INCOME IN THE FORM OF AGRICULTURAL INCOME TO AVOID PAYMENT OF TAXES. I THEREFORE CONFIRM THE LEVY OF PENALTY OF RS.36 240/- IN ASSES SMENT YEAR 2002-03. 5. DURING THE COURSE OF HEARING BEFORE US THE LD. A.R. VEHEMENTLY ARGUED STATING THAT THE ADDITION ON ACCOUNT OF AGRICULTURAL INCOME IS BASED ON ESTIMATION. THEREFORE PENALTY IS NOT SUSTAINABLE. FURTHER HE SUBMITTED TH E LETTER FROM MR. JAGDISH M. JOSHI CERTIFYING THE FOREIGN TRAVEL EXPENSES OF THE ASSES SEE BORNE BY HIM ON BEHALF OF THE ASSESSEE. THE LD. A.R. FURTHER RELIED ON THE VARIOU S CASE LAWS RELIED BEFORE THE REVENUE ON BOTH THE EARLIER OCCASIONS AND PRAYED THAT PENAL TY MAY NOT BE LEVIED ON THE ASSESSEE. 6. ON THE OTHER HAND THE LD. D.R. SUBMITTED BEFORE US THE ORDER OF THE TRIBUNAL IN ITA NO.3415/AHD/2009 FOR THE ASSESSMENT YEAR 2004-0 5 IN ASSESSEES OWN CASE WHEREIN THE PENALTY LEVIED WAS CONFIRMED IN REGARD TO THE WRONG CLAIM OF AGRICULTURAL INCOME BASED ON THE SAME FACTS. THE LD. D.R. FURTHE R ARGUED STATING THAT THE ASSESSEE WAS NOT ABLE TO ESTABLISH THE GENUINENESS OF THE HO ST MR. JAGDISH M. JOSHI. IT WAS THEREFORE PRAYED THAT THE PENALTY LEVIED WAS IN ORD ER AND MAY BE SUSTAINED. IT(SS)A NO. 5/AHD/2011 4 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. IN REGARD TO THE LEVY OF PENALTY WITH DUE TO THE ADDITION MAD E FOR RS.50 000/- ON ACCOUNT OF FOREIGN TRAVEL THE ASSESSEE HAS PRODUCED A LETTER FROM MR. JAGDISH M. JOSHI ALONG WITH HIS PERMANENT ACCOUNT NUMBER STATING THAT HE HAD UN DERTAKEN AND BORNE THE BOARDING AND LODGING EXPENSES OF THE ASSESSEE ON HER TOUR TO UAE. THE LETTER IS REPRODUCED HEREINBELOW FOR REFERENCE. TO WHOM SOEVER IT MAY CONCERN THIS IS TO CERTIFY THAT SHRI BHANWARLAL G. SHARMA I S MY FRIEND. 1 HAD INVITED HIM ALONG WITH HIS FAMILY MEMBERS IN PAST YEARS. TH EY BEING MY GUEST ENTIRE TRAVEL EXPENSES INCLUDING LODGING AND BOARDING EXPE NSES WERE MET BY ME. IN THE PREVIOUS CERTIFICATE ISSUED BY ME DUE LO INADV ERTENCE THE NAME OF SMT. HEENA B. SHARMA FOR UAR TOUR IN 2001 REMAINED TO BE ADDED ALONG WITH HER FAMILY MEMBERS. I CONFIRM THAT HER EXPENSES ON UAE TOUR IN APRIL - MAY 2001 INCLUDING LODGING AND BOARDING EXPENSES WERE ALSO M ET BY ME. MY PAN NO. IS AAAPJ 5006B SD/- (JAGDISH M. JOSHI) PLACE : MUMBAI DATE : 7.1 THIS LETTER WAS BEFORE THE REVENUE AUTHORITIES AND THE LD. A.O. ACKNOWLEDGED THAT THE ASSESSEE HAS SUBMITTED A LETTER IN THE FOR M OF A CERTIFICATE FROM SHRI JAGDISH M. JOSHI STATING THAT THE TRAVEL EXPENSES INCLUDING BO ARDING AND LODGING WITH REGARD TO ASSESSEES TOUR TO UAE IN THE MONTH OF MAY 1999 WA S SPONSORED BY HIM. TAKING NOTE OF THIS LETTER IN THE INTEREST OF JUSTICE WE ARE OF THE CONSIDERED VIEW THAT PENALTY LEVIED ON ACCOUNT OF UNEXPLAINED FOREIGN TRAVEL EXPENSES F OR RS.50 000/- BE DELETED. IT IS ORDERED ACCORDINGLY. 7.2 WITH RESPECT TO ADDITION MADE ON EXCESSIVE AGRI CULTURAL INCOME CLAIMED BY THE ASSESSEE AS POINTED OUT BY THE LD. D.R. THE ITAT IN ITS EARLIER ORDER FOR THE ASSESSMENT YEAR 2004-05 IN ITA NO.3415/AHD/2009 HA D CONFIRMED THE ADDITION BASED ON THE SIMILAR FACTS. THE RELEVANT PARAGRAPHS OF THE ORDER ARE REPRODUCED HEREINBELOW: 6. ON THE OTHER HAND SHRI SAMIR TEKRIWAL APPEARI NG ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF THE LD. CIT(A). WITH REGARD TO IT(SS)A NO. 5/AHD/2011 5 PENALTY LEVIED ON TREATING AGRICULTURAL INCOME AS N ON-AGRICULTURAL INCOME TO THE EXTENT OF RS.66 976/- THE LD. D.R. POINTED OUT THAT THIS ADDITION WAS MADE ON THE GROUND THAT THE ASSESSEE HAS NOT PRODUCED TH E SALE BILL OF AGRICULTURAL PRODUCES EITHER DURING THE COURSE OF ASSESSMENT PRO CEEDINGS OR APPELLATE PROCEEDINGS. IN QUANTUM APPEAL ALSO THESE WERE NOT PRODUCED. HE ACCORDINGLY POINTED OUT THAT TO THE EXTENT AGRICULTURAL INCOME IS ACCEPTED BY THE APPELLATE AUTHORITY AS NON-GENUINE AGRICULTURAL INCOME PENAL TY LEVIED UNDER SECTION 271(1)(C) BE UPHELD. 6.1 .............................................. 7. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE T HAT IN PARA 3.5 OF THE ASSESSMENT ORDER THE AO HAS MENTIONED THAT SALES BILLS OF AGR ICULTURAL INCOME BY THE ASSESSEE AND HER HUSBAND HAVE BEEN FOUND INGENUINE. TO FURNISH CORRECT DETAILS IN THE RETURN OF INCOME AND DURING THE ASSESSMENT P ROCEEDINGS IS THE RESPONSIBILITY OF THE PERSON FILING THE RETURN OF I NCOME. APART FROM THIS THE AO IN THIS PARA HAS MENTIONED THAT DURING THE ASSESSM ENT YEAR UNDER CONSIDERATION THE SURVEY ACTION TOOK PLACE AT THE LAND SITUATED AT VILLAGE BHATT ON 17.10.2003. DURING THE SURVEY IT WAS FOUND THAT NO CROP WAS STANDING IN THE FIELDS SITUATED AT VILLAGE BHATT. IN THESE CIRCUMST ANCES IT CAN NOT BE SAID THAT AGRICULTURAL ACTIVITY WAS BEING CARRIED OUT AT THAT TIME AT VILLAGE BHATT BECAUSE THERE WAS NO CROP STANDING AT THE LAND SITUATED AT BHATT. APART FROM THIS IT WAS ALSO MENTIONED THAT NO CROP WAS STANDING AT LAND SI TUATED IN VILLAGE AMIYAPUR. ON THE BASIS OF THIS IT WAS MENTIONED THAT FOR THE RELEVANT ASSESSMENT YEAR THE QUANTUM OF AGRICULTURAL PRODUCES WOULD BE LOWER THA N THE EARLIER ASSESSMENT YEARS. IN THE ASSESSMENT YEARS 2001-02 TO 2003-04 THE AGRICULTURAL INCOME WAS ESTIMATED AT RS.43 920/- ON THE BASIS OF YIELD DATE OF GUJARAT GOVERNMENT. CONSIDERING THE FINDINGS RECORDED BY THE AO IN THE ASSESSMENT ORDER AND PENALTY ORDER WE ARE CONVINCED THAT IN RESPECT OF THIS ADDITION TO THE EXTENT OF RS.66 976/- SUSTAINED IN QUANTUM APPEAL PENALTY UN DER SECTION 271(1)(C) IS RIGHTLY LEVIED BY THE AO AND CONFIRMED BY THE LD. C IT(A) IN THE IMPUGNED ORDER. WE THEREFORE DECLINE TO INTERFERE. 7.1 WITH REGARD TO PENALTY LEVIED IN RESPECT OF ADD ITION OF RS.6 77 082/- WE ARE CONVINCED THAT THIS ADDITION IS MADE ON ESTIMAT E BASIS. IT IS PERTINENT TO NOTE THAT ASSESSEES SHARE WAS 40%. THE AO REFERRED THE MATTER OF VALUATION TO THE VALUATION CELL. IN THE ASSESSMENT ORDER ITSELF THE AO HAS STATED THAT COPY OF VALUATION REPORT WAS PROVIDED TO THE ASSESSEE AND T HE SAME WAS OBJECTED BY FILING ANOTHER VALUATION REPORT WHICH WAS PLACED ON RECORD. THE AO FOUND THAT THE REPORT OF THE ASSESSEE WAS NOT COMPLETE AND ACC ORDINGLY HE MADE THE ADDITION REJECTING THE DISCREPANCY POINTED OUT BY T HE ASSESSEE. THE LD. CIT(A) REDUCED THE ADDITION AND CONFIRMED RS.6 77 082/- AS UNEXPLAINED INVESTMENT. APART FROM THIS THERE IS NO FINDING INDICATING THE RECORDING OF UNRECORDED INVESTMENT. IT IS PERTINENT TO NOTE THAT A SEARCH W AS CONDUCTED IN THE GROUP CASE OF ROYAL GROUP ON 17.10.2003. THE DETAILED REASONIN G GIVEN BY THE AO FOR IT(SS)A NO. 5/AHD/2011 6 MAKING THE ADDITION INDICATES THAT THIS ADDITION HA S BEEN MADE ONLY ON THE BASIS OF VALUATION REPORT. ITAT H BENCH DELHI IN THE CASE OF JMD ADVISORS (P) LTD. (SUPRA) RELIED ON BY THE LD. COUNSEL OF T HE ASSESSEE HELD THAT VALUATION DONE BY THE DVO ON ESTIMATE WHICH MAY B E MADE BASIS FOR MAKING ADDITION TO THE INCOME BUT CANNOT BE THE BASIS FOR HOLDING THAT THERE WAS CONCEALMENT FOR IMPOSING PENALTY UNDER SECTION 271( 1)(C) OF THE I.T. ACT. WE THEREFORE FOLLOWING THIS DECISION CANCEL THE PENA LTY ON ADDITION OF RS. 6 77 082/- LEVIED AND CONFIRMED BY THE LD. CIT(A) I N THE IMPUGNED ORDER. TO SUM UP PENALTY ON ADDITION OF RS.66 976/- IS UPHEL D AND PENALTY ON ADDITION OF RS. 6 77 082/- IS CANCELLED. THE AO IS ACCORDINGLY DIRECTED TO RE-WORK OUT THE PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT ON 66 976/- WHICH IS CONFIRMED BY THE TRIBUNAL. SINCE THE TRIBUNAL HAS TAKEN A DECISION BASED ON TH E SAME FACTS WE ARE BOUND TO ADOPT THE SAME. IT IS ORDERED ACCORDINGLY. 8. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 4 3 - 2'& 5#!' 30 / 11 /2011 ' 6 - 0 7 SD/- SD/- (D.K.TYAGI) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT M EMBER DATED : 30/11/2011 3 3 3 3 - -- - 18 18 18 18 98&1' 98&1' 98&1' 98&1'- -- - 1. *+ 2. *+ 3. !! 1 /= 4. /=- - 5. 8@ 1# 7 6. B4 3 C/ !E 7 TALUKDAR/ SR. P.S.