Shri Murarilal Ratanlal Agarwal, Surat v. The ACIT.,Cent.Circle--2,, Surat

ITSSA 573/AHD/2012 | 2004-2005
Pronouncement Date: 05-07-2013 | Result: Allowed

Appeal Details

RSA Number 57320516 RSA 2012
Assessee PAN ABKPA5609G
Bench Ahmedabad
Appeal Number ITSSA 573/AHD/2012
Duration Of Justice 7 month(s) 2 day(s)
Appellant Shri Murarilal Ratanlal Agarwal, Surat
Respondent The ACIT.,Cent.Circle--2,, Surat
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 05-07-2013
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 05-07-2013
Date Of Final Hearing 10-05-2013
Next Hearing Date 10-05-2013
Assessment Year 2004-2005
Appeal Filed On 03-12-2012
Judgment Text
IT(SS)A NOS. 573 & 615/AHD/2012 . A.Y. 2004- 05 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI A.M.) I.T.(SS) A. NOS. 573 & 615/AHD/2012 (ASSESSMENT YEAR: 2004-05 MURARILAL RATANLAL AGARWAL C/O OF BRIJWASI DEVELOPERS PVT LTD. 102 PLATINUM APARTMENT BRIJWASI ESTATE NEAR GATEWAY HOTEL PARLE POINT SURAT-395007 (APPELLANT) VS. THE A.C.I.T CENTRAL CIRCLE-2 SURAT (RESPONDENT) PAN: ABKPA5609G APPELLANT BY : SHRI RAJESH SHAH RESPONDENT BY : SHRI Y.P. VERMA SR. D.R. ( )/ ORDER DATE OF HEARING : 10-05-20 13 DATE OF PRONOUNCEMENT : 05-07-2013 PER SHRI ANIL CHATURVEDI A.M. 1. THESE 2 APPEALS ARE FILED BY THE ASSESSEE AGAINS T THE PENALTY ORDERS PASSED ON 24 TH MARCH 2001 FOR A.Y. 2004-05 AND ORDER DATED 29.03 .2011 FOR A.Y. 2005-06 WHEREBY PENALTY OF RS. 19 78 100/- AND RS. 507300/- RESPECTIVELY WHICH WAS LEVIED BY ASSESSING OFFICER AND WHICH WAS CONFIRMED BY CIT(A) IT(SS)A NOS. 573 & 615/AHD/2012 . A.Y. 2004- 05 2 VIDE ORDER DATED 28.09.2012 AND 18.10.2012 FOR A.YS . 2004-05 & 2005-06 RESPECTIVELY. AGGRIEVED BY THE AFORESAID ORDER T HE ASSESSEE IS NOW IN APPEAL BEFORE US. WE FIRST TAKE UP IT(SS) A NO. 573/AHD/2012 (A .Y. 2004-05). THE GROUND RAISED BY ASSESSEE READS AS UNDER:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WELL AS LAW ON THE SUBJECT THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY OF RS. 19 78 1 00/- U/S 271(1)(C) ARISING OUT OF ADDITION OF RS. 60 LACS ON ACCOUNT O F UNEXPLAINED INVESTMENTS IN LAND. 2. THE FACTS AS CULLED OUT FROM THE ORDER OF LOWER AUTHORITIES ARE AS UNDER. 3. A SEARCH AND SEIZURE ACTION IN THE CASE OF ASSESSEE WAS CONDUCTED ON 18.01.2006 WHEREIN KABJA RASID DATED 16.12.2003 F OR TPS NO. 5 FP NOS. 62 63 64 66 AND 67 WERE SEIZED. THE KABJA RASID WER E BETWEEN MURARI LAL AND OTHERS AND TRI STAR HOUSING SOCIETY. IN THE KABJA RASID IT WAS MENTIONED THAT MURARI LAL AND OTHERS HAD PAID RS. 60 LACS TO TRI S TAR HOUSING SOCIETY FOR ABOVE MENTIONED LAND PROPERTIES AND IN TURN THEY HAVE GOT THE POSSESSION OF THE PROPERTY. ASSESSING OFFICER THUS CONCLUDED THAT TH E ASSESSEE HAS MADE INVESTMENT OUT OF HIS UNACCOUNTED INCOME SINCE THE PAYMENT IN QUESTION WAS NOT REFLECTED IN THE BOOKS OF ACCOUNT. ACCORDINGLY RS. 60 LACS WAS ADDED TO THE INCOME OF THE ASSESSEE AS UNACCOUNTED INVESTMENT. O N THE AFORESAID ADDITION ASSESSING OFFICER LEVIED PENALTY OF RS. 19 78 100/- U/S 271(1)(C) OF THE ACT VIDE ORDER DATED 24.03.2011. AGGRIEVED BY THE ACTION OF THE ASSESSING OFFICER IN THE QUANTUM PROCEEDINGS THE ASSESSEE CARRIED THE MATTE R IN APPEAL TRIBUNAL VIDE ITS ORDER DATED 15.03.2013 IN ITA NO. 3384/A/2009 D ELETED THE ADDITION MADE BY ASSESSING OFFICER BY HOLDING AS UNDER:- IT(SS)A NOS. 573 & 615/AHD/2012 . A.Y. 2004- 05 3 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE PAPER BOOK SUBMITTED BY THE APPELLANT. IT IS UNDISPUTED THAT T HERE WAS A KABJA RASID FOUND DURING THE COURSE OF SEARCH WHICH SHOWS THE AREA OF LAND 1400 SQ. YARD OF FINAL PLOT NO.62 TO 64 65 & 67 WHEREAS TH E PURCHASE AGREEMENT DATED 22.06.2005 SHOWS THAT THE AREA OF 1480 SQ.YAR D I.E. 1237.46 SQ. MTR. THE OPEN LAND OF FINAL PLOT NO.62 HAVING TOTAL AREA OF 3280 SQ. MTR. THE PLOT NO. IN THE KABJA RASID WAS MENTIONED IN ADDITION TO PLO T NO.62 63 TO 64 65 & 67 THE AREA WAS ALSO DIFFERENT BUT IT WAS FOR SAME LA ND. IT IS ALSO REVEALED THAT THE SOCIETY HAD MADE AN APPLICATION BUILDING PERMIS SION ON 01.03.2002 WHICH WAS GIVEN ON 02.11.2002 AND COMPLETION OF THIS BUIL DING WAS MADE ON 30.04.2004. FOR TP SCHEME NO. 5 (UMRA-NORTH) FP NO. 62FTO 64 66 & 67 WHEN PERMISSION WAS GIVEN IN THE NAME OF THE SOCIET Y FOR CONSTRUCTION OF THE BUILDING WHICH WAS COMPLETED ON 30.04.2004. AS PER THE SURAT MUNICIPAL CORPORATION CERTIFICATE DATED 05.07.2004 WHEREAS TH E ASSESSEE HAD PURCHASED OPEN LAND 1237.46 SQ.MTRS. OUT OF 3240 SQ . MTRS. IN KABJA RASID PLOT NO.65 IS MENTIONED WHEREAS IN SURAT MUNICIPAL CORPORATION THE PLOT NO.66 MENTIONED. REMAINING PLOT NOS. ARE SAME IN TH E BOTH AGREEMENTS. FURTHER ASSESSEE'S PURCHASE DID NOT SHOW FINAL PLOT NO. 62 TO 67. THE ID. A.O. HAD NOT BROUGHT ON RECORD ANY EVIDENCE THAT WHAT WA S THE REAL POSITION AS PER THE PHYSICAL VERIFICATION OF THE PLOT AT THE TIME O F SEARCH NO STATEMENT HAD BEEN RECORDED BY THE AUTHORIZED OFFICER ON THIS ISS UE EVEN THEN AFTER COMPLETING THE SEARCH NO INQUIRY HAD BEEN MADE BY THE A.O. BEFORE COMPLETING THE SEARCH ASSESSMENT FROM THE OFFICE OF THE SOCIETY FROM THE OFFICE OF SURAT MUNICIPAL CORPORATION WHETHER WHIC H PART OF THE LAND WAS CONSTRUCTED BY THE SOCIETY AND WHO HAD POSSESSION O N IT. HE HAD NOT VERIFIED THE MUNICIPAL RECORD AS WELL AS ELECTRICITY DEPARTM ENT AND OTHER AUTHORITY TO ESTABLISH THE TRANSACTION IS GENUINE. THUS IN ABS ENCE OF ANY CONCLUSIVE EVIDENCE WE REVERSE THE ORDER OF CIT(A). ACCORDING LY THE ASSESSEE'S APPEAL IS ALLOWED. 4. BEFORE US THE LEARNED A.R. SUBMITTED THAT SINC E THE QUANTUM ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED ITSELF HAS BEEN DELETED THERE IS NO QUESTION OF LEVY OF PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME. HE THUS URGED THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER BE DELETED. THE LEARNED D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF ASSESSING OFFICER . 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IT IS AN UNDISPUTED FACT THAT WHILE FINALIZING ASSESSMENT U/ S 143(3) AN ADDITION OF RS. 60 LACS AS UNEXPLAINED INVESTMENT IN LAND WAS MADE BY THE ASSESSING OFFICER. THE AFORESAID ADDITION WAS DISPUTED BY THE ASSESSEE AND THE SAME WAS DELETED BY THE CO-ORDINATE BENCH OF TRIBUNAL VIDE ORDER DATED 15.03.2013 (IN ITA NO. IT(SS)A NOS. 573 & 615/AHD/2012 . A.Y. 2004- 05 4 3384/A/2009). SINCE THE QUANTUM ADDITION OF WHICH THE PENALTY ITSELF HAS BEEN LEVIED HAS BEEN DELETED THE PENALTY DOES NOT SURVI VE. WE ARE THEREFORE OF THE VIEW THAT IN THE PRESENT CASE PENALTY CANNOT BE LEV IED. WE THEREFORE DIRECT THE DELETION OF PENALTY. THUS THIS GROUND OF ASSESSEE IS ALLOWED. IT(SS)A NO. 615/AHD2012 FOR A.Y. 05-06:- 6. A SEARCH AND SEIZURE ACTION IN THE CASE OF ASSES SEE WAS CONDUCTED ON 18.01.2006 WHEREIN ONE BANK ACCOUNT IN THE NAME OF RAJESH TEXTILE WAS FOUND. ON BEING CONFRONTED THE ASSESSEE ADMITTED IT TO BE HIS BENAMI BANK ACCOUNT AND ALSO ADMITTED THAT ALL THE TRANSACTIONS REFLECT ED IN THE BANK ACCOUNT BELONGS TO HIM. ASSESSING OFFICER NOTICED THAT THE ASSESSE E HAD INTRODUCED SEED MONEY OF RS. 60 000/-. HE FURTHER NOTICED THAT THE PEAK OF THE ACCOUNT FOR A.Y. 2004-05 WAS 14 45 702/- ON 4.02.2005. HE FURTHER NOTICED T HAT ASSESSEE HAD ALREADY DISCLOSED RS. 5 50 000/- IN HIS RETURN OF INCOME FO R A.Y. 2005-06. THE ASSESSING OFFICER THEREFORE CONCLUDED THAT THE ASSESSEE HAS O FFERED ONLY RS. 5 50 000/- AND HE ACCORDINGLY CONSIDERED THE ADDITION OF RS. 9 55 702/- (60 000+14 45 702- 5 50 000) AS INCOME OF THE ASSESSEE. THE ADDITION WAS CONFIRMED BY CIT(A). ON THE AFORESAID ADDITION ASSESSING OFFICER LEVIED PEN ALTY UNDER SECTION 271(1)(C) OF RS. 5 07 300/- VIDE ORDER DATED 29.03.2011 AS HE W AS OF THE VIEW THAT HAD THERE BEEN NO SEARCH OR SURVEY THE UNACCOUNTED INCOME WO ULD NOT HAVE COME TO THE KNOWLEDGE OF THE DEPT. HE WAS FURTHER OF THE VIEW THAT THERE WAS COMPLETE FAILURE ON THE PART OF ASSESSEE TO EXPLAIN THE ENTR IES AND TRANSACTIONS RECORDED IN THE IMPOUNDED DOCUMENTS. HE WAS THEREFORE OF THE VI EW THAT ASSESSEE WAS LIABLE FOR PENALTY UNDER EXPLANATION 5. TO SECTION 271(1)(C) OF THE ACT. IN THE ALTERNATE HE HELD THAT ASSESSEES CASE WAS COVERED BY EXPLANATION. 1. TO SECTION 271(1)(C) AND ACCORDINGLY LEVIED PENALTY U/ S. 271(1)(C) AGGRIEVED BY THE PENALTY ORDER ASSESSEE CARRIED THE MATTER BEFORE C IT(A). CIT(A) CONFIRMED THE PENALTY AS HE WAS OF THE VIEW WITH THE ADDITIONAL I NCOME OFFERED IN RESPONSE TO NOTICE UNDER SECTION 153A WAS NOT VOLUNTARILY SURRE NDER BY HIS ASSESSEE AS THE SAME WAS BASED ON INCRIMINATING DOCUMENTS AND BENAM I BANK ACCOUNT OF THE IT(SS)A NOS. 573 & 615/AHD/2012 . A.Y. 2004- 05 5 ASSESSEE AND WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME FILED PRIOR TO SEARCH. HE WAS OF THE VIEW THAT THE OMISSION AT TH E TIME OF FILING ORIGINAL RETURN OF INCOME WAS DELIBERATE AND THE ASSESSEE HAS NOT FURN ISHED BONA FIDE EXPLANATION THAT CAN SHOW THAT ALL THE FACTS RELATING TO UNDISC LOSED INCOME AND THE MATERIAL TO THE COMPUTATION OF HIS INCOME HAS BEEN DISCLOSED BY THE ASSESSEE. HE THUS CONFIRMED THE LEVY OF PENALTY BY THE ASSESSING OFFI CER. 7. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE IS NOW IN APPEAL BEFORE US. 8. BEFORE US THE LD. A.R. SUBMITTED THAT THE INCOME PERTAINING TO THE BANK ACCOUNT FOUND DURING THE COURSE OF SEARCH WAS DISCLOSED BY ASSESSEE AT RS. 5 50 000/- BUT THE CALCULATION OF PEAK CREDIT AS WORKED OUT BY ASSESSEE WAS NOT FOUND CORRECT BY ASSESSING OFFICER AND HE ACCORDINGLY COM PUTED THE PEAK CREDIT OF RS. 15 05 702/-. HE FURTHER SUBMITTED THAT THE ADDITIO N IS ON ACCOUNT OF ESTIMATION AND THEREFORE NO PENALTY IS LEVIABLE. HE FURTHER S UBMITTED THAT INCOME HAS BEEN OFFERED TO TAX BASED ON THE BANK ACCOUNT SEIZED AT THE TIME OF SEARCH. HE FURTHER SUBMITTED THAT UNLIKE PROVISIONS OF EXPLANATION. 5A THE PROVISIONS OF EXPLANATION. 5 CANNOT BE INVOKED IN RESPECT OF THE AFORESAID ADD ITION. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT CONCEALMENT ANY PARTICULA RS OF INCOME AND THEREFORE NO PENALTY IS LEVIABLE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD DISCLOSED INCOME OF RS. 5 50 000/- BASED ON THE PEAK CREDIT WORKED OUT FROM THE BANK ACCOUNT FOUND DURIN G THE COURSE OF SEARCH. THE PEAK CREDIT AS WORKED OUT BY THE ASSESSEE WAS NOT F OUND CORRECT BY ASSESSING OFFICER AND HE WORKED OUT PEAK CREDIT OF RS. 15 05 702/- AND ON THE ENHANCED PEAK CREDIT PENALTY U/S. 271(1)(C) WAS LEVIED BY AS SESSING OFFICER. THE ADDITION MADE BY THE ASSESSING OFFICER IS ON ESTIMATION BASI S AND IS NOT BASED ON ANY TANGIBLE MATERIAL ON RECORD. IT IS A SETTLED LAW T HAT PENALTY CANNOT BE LEVIED MERELY ON ESTIMATION OF INCOME. FURTHER THE EXPLANA TION GIVEN BY ASSESSEE HAS IT(SS)A NOS. 573 & 615/AHD/2012 . A.Y. 2004- 05 6 NOT BEEN FOUND TO BE FALSE. IN VIEW OF AFORESAID F ACTS WE ARE OF THE VIEW THAT NO PENALTY CAN BE LEVIED IN THE PRESENT CASE. THUS THE PENALTY IS DELETED. 10. THE APPEALS OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 05-07 -2013. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR. ITAT AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT AHMEDABAD