Hamidaben Ashikali Narsinh, Surat v. The ACIT.,Circle-3,, Surat

ITSSA 69/AHD/2007 | misc
Pronouncement Date: 21-01-2011 | Result: Allowed

Appeal Details

RSA Number 6920516 RSA 2007
Bench Ahmedabad
Appeal Number ITSSA 69/AHD/2007
Duration Of Justice 3 year(s) 9 month(s) 16 day(s)
Appellant Hamidaben Ashikali Narsinh, Surat
Respondent The ACIT.,Circle-3,, Surat
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 21-01-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 21-01-2011
Date Of Final Hearing 06-01-2011
Next Hearing Date 06-01-2011
Assessment Year misc
Appeal Filed On 04-04-2007
Judgment Text
- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI MAHAVIR SINGH JM AND D.C.AGRAWAL AM HAMIDABEN ASHIK ALI NARSINH 15 KARIBABAD SOCIETY GHOD DOD ROAD SURAT. VS. ASSTT. CIT CIRCLE-3 SURAT. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI HARDIK VORA AR RESPONDENT BY:- SMT. SUMIT KAUR DR O R D E R PER D.C. AGRAWAL ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE ASSESSEE RAISING FO LLOWING GROUND:- (1) ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE ACTION OF THE AO IN LEVYING PENALTY OF RS.4 80 4-8/- UNDER SE CTION 158BFA(2) OF THE IT ACT. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS REGARD ING LEVY OF PENALTY UNDER SECTION 158BFA(2). THE FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE IT ACT WAS CARRIED AT THE PREMIS ES OF THE ASSESSEE. IN THE ASSESSMENT UNDER SECTION 158BC FOLLOWING ADDITI ON WERE MADE :- 1. UNEXPLAINED CASH DEPOSITS RS.17 99 000 2. UNEXPLAINED INVESTMENT IN GOLD & JEWELLERY RS. 1 78 340/- IT(SS)A NO.69/AHD/2007 ASST. YEAR 1990-91 TO 1999-2000 IT(SS)A NO.69/AHD/2007 ASST. YEAR 1990-91 TO 1999-2000 2 THE LD. CIT(A) DELETED THE ADDITION OF RS.3 99 000/ - OUT OF UNEXPLAINED CASH DEPOSIT AND RS.1 01 248/- OUT OF AN ADDITION M ADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN GOLD AND JEWELLERY. THE M ATTER TRAVELLED TO THE TRIBUNAL WHICH FURTHER ALLOWED A RELIEF OF RS.7 00 000/- OUT OF UNEXPLAINED CASH DEPOSITS AND SET ASIDE ADDITION OF RS.3 00 000/- TO THE FILE OF AO. IN RESPECT OF GOLD AND JEWELLERY FURTHE R RELIEF OF RS.76 752/- WAS ALLOWED. THUS NET RESULT WAS THE CONFIRMATION O F ADDITION OF RS.4 LACS OUT OF CASH DEPOSIT AND RS.340/- IN GOLD AND JEWELL ERY. THE AO INITIATED PENALTY PROCEEDINGS UNDER SECTION 158BFA(2). THE ST AND OF THE ASSESSEE WAS THAT A SUM OF RS.4 LACS REPRESENTED SALE PROCEE DS OF HIS SHOP SOLD TO SHRI HARISH PATEL ON 1.3.1999. SHRI HARISH PATEL HA D GIVEN A STATEMENT THAT HE HAS NOT PURCHASED THE SHOP FROM THE ASSESSE E BUT THIS STATEMENT WAS RETRACTED THROUGH AN AFFIDAVIT FILED BEFORE LD. CIT(A) WHO DID NOT PROVIDE ANY OPPORTUNITY FOR CROSS-EXAMINATION OF SH RI PATEL. THE LD. CIT(A) RELYING ON THE ORDER OF THE TRIBUNAL HELD TH AT ASSESSEE HAS NOT EXPLAINED CORRECTLY THE DEPOSIT OF RS.4 LACS AND T HEREFORE PENALTY IS LEVIABLE. 3. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW BEFORE LEVYING OF PE NALTY EVEN U/S 158BFA(2) THE AO HAS NECESSARILY TO SEE WHETHER EXP LANATION FURNISHED BY THE ASSESSEE IS SATISFACTORY OR NOT. EVEN THOUGH ALL THE INGREDIENTS OF SECTION 271(1)(C) MAY NOT BE FULLY APPLICABLE TO TH E PROVISIONS OF SECTION 158BFA BUT THE FUNDAMENTAL REQUIREMENTS OF NATURAL JUSTICE HAS TO BE FULFILLED. THE EXPLANATION FURNISHED BY THE ASSESSE E HAS TO BE EXAMINED AND SEEN WHETHER IT IS REASONABLE AND SATISFACTORY. IF IT IS SO NO PENALTY NEEDS TO BE LEVIED. IF THERE IS ANY DOUBT THEN THE AO IS REQUIRED TO CARRY OUT ENQUIRIES AND GIVE A FINDING EITHER THE EXPLANA TION BEING SATISFACTORY IT(SS)A NO.69/AHD/2007 ASST. YEAR 1990-91 TO 1999-2000 3 OR NOT SATISFACTORY. IT IS ONLY IN A CASE FINDING I S GIVEN THAT EXPLANATION FURNISHED BY THE ASSESSEE IS NOT SATISFACTORY PENAL TY CAN BE LEVIED UNDER SECTION 158BFA(2). HOWEVER THIS FINDING IS A JUDIC IAL PROCESS WHICH CAN BE REVIEWED BEFORE SUPERIOR COURT THEIR FINDING W ILL PREVAIL OVER THE FINDING GIVEN BY THE AO. THE LD. CIT(A) IN THE PRES ENT CASE DID NOT CONSIDER THE RETRACTION OF THE ORIGINAL STATEMENT G IVEN BY SHRI HARISH PATEL TO THE EFFECT THAT HE HAD ACTUALLY GIVEN SUM OF RS.4 LACS FOR PURCHASE OF SHOP. THE FACT OF PURCHASE OF SHOP IS CLEARLY VE RIFIABLE EVENT AND THE AO CANNOT BRUSH ASIDE THE CLAIM WITHOUT SUBJECTING IT TO VERIFICATION. THUS EXPLANATION OF THE ASSESSEE WAS REJECTED WITHO UT CARRYING OUT TWO VERIFICATIONS FURTHER WHETHER SHRI HARISH PATEL HA D ACTUALLY PURCHASED ANY SHOP OR NOT AND SECONDLY WHETHER RETRACTION OF ORIGINAL STATEMENT OF SHRI HARISH PATEL WAS BONA FIDE OR NOT. FOR THIS SH RI HARISH PATEL OUGHT TO HAVE BEEN SUBJECTED TO CROSS EXAMINATION. THEREFOR E IN OUR CONSIDERED VIEW THE EXPLANATION FURNISHED BY THE ASSESSEE IS I N GREY AREA AND IS REQUIRED TO BE EXAMINED BY THE AO. WE THEREFORE R ESTORE THE MATTER TO THE FILE OF AO FOR CARRYING OUT TWO ENQUIRIES BEFOR E DECIDING ABOUT SATISFACTORY NATURE OF EXPLANATION FURNISHED BY THE ASSESSEE IN RESPECT OF SUM OF RS.4 LACS. THE OTHER SUM BEING TOO SMALL RS .340/- NEEDS TO BE IGNORED FOR THE PURPOSE OF LEVY OF PENALTY. 4. ACCORDINGLY WE RESTORE THE MATTER TO THE FILE OF AO FOR CARRYING OUT ENQUIRIES AS ABOVE. THE APPEAL OF THE ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. IT(SS)A NO.69/AHD/2007 ASST. YEAR 1990-91 TO 1999-2000 4 5. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED BUT FOR STATISTICAL PURPOSES. ORDER WAS PRONOUNCED IN OPEN COURT ON 21.1.11. SD/- SD/- (MAHAVIR SINGH) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEM BER AHMEDABAD DATED : 21.1.11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER DEPUTY / ASSTT.REGISTRAR ITAT AHMEDABAD 1.DATE OF DICTATION 10/1/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 13/1/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..