Income Tax Appellate Tribunal - Ahmedabad
Premanand S.Patel, Ahmedabad vs Assessee on 17 April, 2015
IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 1 आयकर अपीलीय अिधकरण, अिधकरण, अहमदाबाद यायपीठ 'ए' अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER ITA/IT(SS)A/CO No. AY Appellant Respondent Premanand Sobhai Patel, "Chandra Prem", Prerna DCIT, IT(SS)A No. 2007-08 Park, Opp. L.G. Hospital, Central Circle- 1(3), 661/Ahd/2011 Maninagar, Ahmedabad Ahmedabad PAN : AFVPP 8305 F Arvind Natverbhai Patel, "Ashirwad", 8, Radhanpur IT(SS)A No. 2007-08 Society, Nr. Swaminarayan Revenue 662/Ahd/2011 Temple, Rambaug, Maninagar, Ahmedabad PAN : ACNPP 2156 M Ritaben Rakeshbhai Patel, 48, Premsagar, Jagabhai IT(SS)A No. 2007-08 Park, Opp LG Hospital, Revenue 663/Ahd/2011 Maninagar, Ahmedabad PAN : ABRPP 6410 H Rakesh Dahyabhai Patel, 48, Premsagar, Jagabhai IT(SS)A No. 2007-08 Park, Opp LG Hospital, Revenue 664/Ahd/2011 Maninagar, Ahmedabad PAN : AAWPP 6152 C Dahyabhai S. Bhagat, "Amarjyot", Prerna Park, IT(SS)A No. 2007-08 Opp LG Hospital, Revenue 665/Ahd/2011 Maninagar, Ahmedabad PAN : AAWPP 6157 H Atulbhai Dahyabhai Patel "Amarjyot", Prerna Park, IT(SS)A No. 2007-08 Opp LG Hospital, Revenue 666/Ahd/2011 Maninagar, Ahmedabad PAN : ABHPP 4100 G Sejalben Atulbhai Patel "Amarjyot", Prerna Park, IT(SS)A No. 2007-08 Opp LG Hospital, Revenue 667/Ahd/2011 Maninagar, Ahmedabad PAN : ABHPP 4100 G Onilbhai Natvarbhai Patel, 2003-04 "Viral", 5/B, Gokul Park 2004-05 IT(SS)A Nos. Society, Opp. Parimal 2005-06 Revenue 668 to 672/Ahd/2011 Hospital, Maninagar, 2007-08 Ahmedabad PAN : AAWPP 6158 J IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 2 Bhartiben Onilbhai Patel, "Viral", 5/B, Gokul Park IT(SS)A No. 2007-08 Society, Opp. Parimal Revenue 672/Ahd/2011 Hospital, Maninagar, Ahmedabad PAN : ABHHP 4102 E Assessee(s) by : Shri Sanjay Vastupal, AR Revenue by : Shri Dinesh Singh, Sr. DR सुनवाई क तार ख/ / Dateof Hearing : 07 /04/2015 घोषणा क तार ख / Date of Pronouncement: 17/04/2015 आदे श/O R D E R PER G.D. AGRAWAL, VICE PRESIDENT:
This bunch of appeals by the different assessees have been filed against a consolidated order of learned CIT(A)-III, Ahmedabad dated 18.10.2011. Since these appeals involve common issues, these were heard together and are being disposed of by this consolidated order for the sake of convenience.
2. The only common ground raised in all these appeals by various assessees is against the confirmation of the penalty levied u/s 271(1)(c) by the ld. CIT(A). The name of the assessees, assets which are treated as unexplained and the penalty levied are tabulated at Annexure-1 appended herewith the order.
3. At the time of hearing before us, the ld. Counsel for the assessee argued at length. His main submission was that the gold ornaments were acquired by the various assessees and their spouse and children in the preceding year. The Assessing Officer treated the small portion of the gold ornaments as unexplained merely by partially accepting assessee's explanation. The assessee had explained total gold ornaments found from each and every assessee. He further submitted that some gold ornaments IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 3 are also received by the members of the family as gifts, etc. on various occasions from their in-laws and other relatives from time to time. Some part of the gold ornaments might have been acquired by the assessees in the preceding year. He further submitted that all the assessees and the family members have sufficient income from past many years and substantial withdrawal for household expenses. He also submitted that the assessee did not file the appeal against the additions made by the Assessing Officer for unexplained jewelry or cash so as to end the litigation and to buy peace.
That merely because the additions have been accepted by the assessee, it should not automatically result into the levy of penalty u/s 271(1)(c) of the Act, especially when the assessee had given the plausible explanation for the jewelry as well as the cash found at the time of search. That merely because the explanations of the assessee have been partly accepted, it does not mean that the assessee had any concealed income. He further submitted that the assessee discharged the onus by giving proper explanation with regard to jewelry, cash and other valuables found at the time of search. He, therefore, submitted that the penalty levied u/s 271(1)(c) in the case of all the assessees should be cancelled.
4. The ld. Departmental Representative, on the other hand, relied upon the orders of the authorities below.
5. We have carefully considered the arguments of both the sides and perused the material placed before us. So far as the gold ornaments are concerned, we find that significant part of the gold ornaments have been accepted by the Assessing Officer as explained in the case of all the assessees and only a very small portion is treated as unexplained. For example, in the case of Atulbhai D. Patel, out of 1453 gms of the gold ornaments only 107 gms are treated as unexplained. In the case of Sejalben A. Patel, out of 1919 gms, 188 gms is treated as unexplained. Thus, IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 4 approximately 90% of the gold ornaments have been accepted to be explained. It is not in dispute that the gold ornaments were acquired by all these assessees from time to time and the assessee may not be able to maintain the complete documentary evidence for the acquisition of each and every gold ornament. Substantial portion of the gold ornaments found from the assessee have been accepted and only a small portion of which is treated as unexplained on estimated basis. This by itself does not amount to concealment of income. The assessee has given the plausible explanation in respect of all the gold ornaments found with them and merely because the Assessing Officer partly accepted the gold ornaments to be explained, it would not be proper to levy the penalty u/s 271(1)(c) in respect of the small portion of the gold ornaments which are treated as unexplained. However, the same logic cannot be applied in respect of cash found from various assessees; substantial portion of which is treated as unexplained. The assessee has not been able to give any proper explanation for the substantial cash found with Dahyabhai S Patel, Premanandbhai S. Patel, Arvindbhai N. Patel and Onil N. Patel. The assessee has simply claimed that the cash belonged to various family members. However, we find that the Assessing Officer has given sufficient credit for the cash which can be presumed to have been belonging to various family members. Despite giving the above credit, more than 50% of the cash found from each person is treated as unexplained which is accepted by the assessee by not filing the appeal. The assessees' contention is that the substantial withdrawals are for household expenses and therefore, the accumulation of cash is out of saving from house hold withdrawal. This explanation of the assessee cannot be accepted because the withdrawal is not much.
6. The CIT(A) has given at page 17, the year-wise withdrawal for household expenditure by Shri Onilbhai N. Patel, which is reproduced below for ready reference.
IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 5 Ass. Total withdrawals Cash withdrawals Year during the year during the year 2007-08 270880 180000 2006-07 251425 175000 2005-06 148580 100000 2004-05 236235 155000 2003-04 128862 105000 2002-03 94449 75000 2001-02 98773 90000 Total 1229204 880000 From the above, it is evident that his cash withdrawal during the accounting year relevant to assessment year 2001-02 to 2003-04 was less than Rs.10,000/- per month and in other years also it is less than Rs.20,000/- per month. While the total cash found from Shri Onilbhai N. Patel was Rs.4,72,900/-, out of which Rs. 3,52,900/- have been treated as unexplained; in addition to which, the investment made by Shri Onilbhai N. Patel in the preceding year, without recording in the books of accounts was Rs.60,000/- in Kisan Vikas Patrika, Rs.10,000/- in NSC and Rs.3,20,000/- in SBI bond. No satisfactory explanation has been given for source of investment in KVP, NSC and SBI Bond. Therefore, in our opinion, these investments as well as Rs.3,52,900/- out of cash found from the assessee are clearly the undisclosed income of the assessee and penalty u/s 271(1)(c) has rightly been levied thereon.
7. With Shri Arvindbhai N Patel, cash of Rs.1,58,909/- was found, out of which Rs.1,00,000/- was treated as unexplained. At page No.20, the CIT(A) has given the year-wise withdrawal which is reproduced below for ready reference:-
Ass. Total withdrawals Cash withdrawals Year during the year during the year 2007-08 230658 135000 2006-07 122635 77500 2005-06 103309 60000 IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 6 2004-05 127298 99000 2003-04 124385 95000 2002-03 115514 110000 2001-02 88373 79000 Total 912172 655500 From the above, it is evident that his cash withdrawal was less than or around Rs.10,000/- per month, while total withdrawal was also less than Rs.20,000/- per month. In the above circumstances, the Assessing Officer has rightly treated the cash of Rs.58,909/- to be explained and balance Rs.1,00,00/- as undisclosed income.
8. Almost similar position is in the case of Premanand S. Patel. The total cash found with him was Rs. 3,49,679/-, out of which the Assessing Officer has accepted more than a lac to be explained and treated Rs. 2,49,000/- to be unexplained. Details of his cash withdrawal are as under:-
Ass. Total withdrawals Cash withdrawals Year during the year during the year 2007-08 537973 149000 2006-07 521256 15000 2005-06 59759 43000 2004-05 50630 46000 2003-04 113663 28000 2002-03 29117 21000 Total 1312398 302000 His cash withdrawal is less than Rs.5,000/- per month in 5 years, and in only one year it is around Rs.12,000/- per month. In the above circumstances, in our opinion, the Assessing Officer was fair enough in accepting the cash of Rs.1,00,000/- to be explained.
9. In the case Shri Dahyabhai S. Patel, total cash found was Rs.2,73,800/, out of which Rs.1,61,000/- was treated as unexplained. His position of withdrawal for household expenses is as under:-
IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 7 Ass. Total withdrawals Cash withdrawals Year during the year during the year 2007-08 40873 110000 2006-07 43870 55000 2005-06 156713 60000 2004-05 39285 65000 2003-04 252104 100000 2002-03 19653 60000 Total 552493 450000 From the above, it is evident that out of six years, in four years his cash withdrawal was only Rs.5000/- per month and in other two years also it is less than Rs.10,000/- per month. In the above circumstances, in our opinion, the Assessing Officer was quite fair in accepting the cash of more than a lac as explained and treated the balance cash of Rs.1,61,000/- as unexplained being the undisclosed income of the assessee. No proper explanation has been given by the assessee during the penalty proceedings also in respect of unexplained cash found and investments in Kisan Vikas Patrika, NSC, SBI bond etc.
10. After considering the facts of the case and the arguments of both the sides, we are of the opinion that so far the gold ornaments are concerned, the assessee has given the proper explanation for the source of gold ornaments in respect of each and every assessee. The Assessing Officer substantially accepted the assessee's explanation and treated only a small part of the gold ornaments to be unexplained. Therefore, in our opinion, the assessee has given proper explanation in respect of the gold ornaments which is not found to be false or untrue, though the Assessing Officer accepted the assessee's explanation partially on estimated basis. In the above circumstances, in our opinion, levy of penalty in respect of part of the gold ornaments which are treated as unexplained is not justified. However, the facts are different in respect of cash found and investments in other IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 8 assets like KVP, NSC and SBI Bond. No proper explanation has been given in respect of cash found or the investment in KVP, NSC and SBI Bond. The only explanation for cash in hand was that it belongs to various family members and the savings is out of the withdrawal for household expenditure in the preceding year. We have seen that the withdrawal by the assessee in the preceding year is meager with which the assessee would be able to manage the household expenses only and would not be able to save much. No evidence has been given that the part of the cash belongs to the family members. The Assessing Officer has already given the credit on estimated basis in respect of some cash in hand. In view of above, we are of the opinion that in respect of cash in hand which is treated as unexplained and also the investments in KVP, NSC and SBI Bond, it cannot be said that the assessee was able to substantiate his explanation. The explanation given was general, without any supporting evidences. In view of above, we are of the opinion that the levy of penalty u/s 271(1)(c) in respect of unexplained jewelry was not justified while the levy of penalty in respect of unexplained cash and investments in KVP, NSC, SBI Bond was justified. Accordingly, the Assessing Officer is directed to recalculate the penalty as indicated above.
11. In the result, the appeal bearing IT(SS)A Nos. 663, 664, 666, 667 & 672 are allowed. The appeal bearing IT(SS)A Nos. 661, 665 & 671 are partly allowed. The appeal bearing IT(SS)A Nos. 662, 668, 669 & 670 are rejected.
Order pronounced in the Court on 17th April, 2015 at Ahmedabad.
Sd/- Sd/-
(S. S. GODARA) (G.D. AGRAWAL)
JUDICIAL MEMBER VICE-PRESIDENT
Ahmedabad; Dated 17/04/2015
Biju T., PS
IT(SS)A Nos. 661 to 672/Ahd/2011
Premanand S. Patel and others vs. DCIT 9 Annexure-1 Sr. IT(SS) No. Name of the assessee AY Jewelry Jewelry Cash Cash Others Penalty No. found treated as Found treated as levied unexplained (in Rs.) unexplained (in Rs.) (in Gms) (in Rs.) In Gms Amount 1 661/Ahd/2011 Premanand Sobhai 2007-08 3050 441 Gms 3,49,679 2,49,000 - 2,44,798 Patel Rs.4,15,038 2 662/Ahd/2011 Arvindbhai N Patel 2007-08 - - 1,58,909 1,00,000 - 29,690 3 663/Ahd/2011 Ritaben R. Patel 2007-08 1910 329 Gms - - - 88,280 Rs.3,09,486 4 664/Ahd/2011 Rakesh R. Patel 2007-08 978 253 Gms - - - 60,310 Rs.2,38,047 5 665/Ahd/2011 Dahyabhai S. Patel 2007-08 1412 35 Gms 2,73,800 1,61,000 - 88,040 Rs. 33,022/-
6 666/Ahd/2011 Atulbhai D. Patel 2007-08 1453 107 Gms - - - 34,010 Rs. 1,01,041 7 667/Ahd/2011 Sejalben A. Patel 2007-08 1919 188 Gms - - - 54,220 Rs.1,77,190 8 668/Ahd/2011 Onil N. Patel 2003-04 - - - - Investment 18,000 in KVP Rs.60,000 9 669/Ahd/2011 Onil N. Patel 2004-05 - - - - NSC 3,000 Rs.10,000 10 670/Ahd/2011 Onil N. Patel 2005-06 - - - - SBI Bond 97,918 Rs.3,20,000 11 671/Ahd/2011 Onil N. Patel 2007-08 1399+1982 297 4,72,900 3,52,900 - 2,50,660 Rs.2,70,466 12 672/Ahd/2011 Bhartiben O. Patel 2007-08 2402+233 308 - - - 81,740 Rs.2,89,567 IT(SS)A Nos. 661 to 672/Ahd/2011 Premanand S. Patel and others vs. DCIT 10 षत Copy आदे श क ूितिल'प अमे'षत/ of the Order forwarded to :
1. अपीलाथ* / The Appellant
2. ू+यथ* / The Respondent.
3. संबंिधत आयकर आयु- / Concerned CIT
4. आयकर आयु-(अपील) / The CIT(A)-III, Ahmedabad
5. 'वभागीय ूितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad
6. गाड3 फाईल / Guard file.
/ BY ORDER, आदे शानुसार TRUE COPY Dy./Asstt.Registrar) उप/सहायक पंजीकार ( उप/ अिधकरण, अहमदाबाद / आयकर अपीलीय अिधकरण, ITAT, Ahmedabad