Income Tax Appellate Tribunal - Ahmedabad
Sarojben P.Patel L/H. Of Late Pravin ... vs Assessee on 7 March, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL,
" C" BENCH, AHMEDABAD
Before Shri A. K. GARODIA, ACCOUNTANT MEMBER
and Shri KUL BHARAT, JUDICIAL MEMBER
I.T.A. No.1334 / Ahd/2011
(Assessment year 1004-95)
Smt. Sarojben P Patel, Vs. ITO, Ward 2(3),
L/h of Late Shri Pravin N Patel, Ahmedabad
Gurukrupa,
Near Bidiwala Bunglow,
Shahinbaug, Ahmedabad
PAN/GIR No. : AAXPP0918K
(APPELLANT) .. (RESPONDENT)
Appellant by: Shri Suresh Gandhi, AR
Respondent by: Shri Vinod Tanwani, Sr.
DR
Date of hearing: 07.03.2012
Date of pronouncement: 13.04.2012
ORDER
PER SHRI A. K. GARODIA, AM:-
This is assessee's appeal directed against the order of Ld. CIT(A) XVI, Ahmedabad dated 17.02.2011 for the assessment year 1994-95. the grounds raised by the assessee is regarding penalty imposed by the A.O. and confirmed by Ld. CIT(A) of Rs.89,600/- u/s 271(1)(c) of the Act.
2. The brief facts of the case till the stage of levy of penalty by the A.O. are noted by Ld. CIT(A) in para 2 of his order which is reproduced below:
" 2. In the penalty, order, the AO has stated that while finalizing the assessment under section 143(3), an addition of Rs. 18 .25 lakh was made in respect of which penalty proceedings were initiated 2 I.T.A.No. 1334 /Ahd/2011 but only Rs. 2 Lacs addition was confirmed by the CIT (A). A search and seizure operation had been conducted under section "132 on the residential premises of Shri N Patel father of the assessee on 22/03/1994. While recording the statement under section 132 (4), the disclosure of Rs. 20 lakhs was made by the father of assessee in the name of Late Pravin N Patel and the assessee is legal held of this person. The AO had levied the penalty under section 271(l)(c) of Rs. 9.8 lakh on the concealed income of Rs. 12.25 lakh. The ITAT confirmed the addition of only Rs. 2 lakh on account of disclosure not shown in the income tax return. In view of this reason, the AO stated that the penalty levied of Rs. 9.8 lakh required it to be reduced in view of the provisions of section 275 (1A). The AO therefore issued a show cause notice as to why the penalty in respect of Rs. 2 lakh be not retained. The assessee contended that major addition made by the AO has already been deleted by the CIT appeal/ITAT. The assessee further stated that the unexplained investment in agriculture land of Rs. 151250/-and unexplained credit entry of Rs. 2 lakh are outside the purview of penalty because after giving telescoping effect, as per the order of CIT (A) dated 22/01/2010 .the addition was reduced to nil. The AO did not accept this explanation and stated that the concealed income of Rs. 2 lakh had been sustained by the ITA T. and therefore penalty has to be kept in respect of this amount. The AO therefore stated that minimum penalty at the rate of 100 percent of tax sought to be evaded on this amount comes to Rs. 89600/-. He levied 200% penalty amounting to Rs. 179200/-."
3. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A) who has confirmed the penalty to the extent of 100% of tax sought to be evaded as against 200% penalty imposed by the A.O. Now, the assessee is in further appeal before us.
4. It is submitted by the Ld. A.R. that the tribunal order in quantum proceeding is available on pages 29-36 of the paper book and the relevant para is para 5 of the tribunal order which can be seen on page 31 of the paper book. It is further submitted by the Ld. A.R. that the submissions made by the assessee before the A.O. as per letter dated 19.02.2010 in the 3 I.T.A.No. 1334 /Ahd/2011 course of penalty proceedings is available on pages 34-47 of the paper book and in particular, our attention was drawn to pages 36-37 of the paper book and it was submitted that the assets found were only worth Rs.18 lacs whereas the disclosure of Rs.20 lacs was made in the present case in the statement u/s 132(4) of he Act. Hence, for such an addition of Rs.2 lacs, penalty is not justified. He also submitted that submissions made by the assessee before Ld. CIT(A) are available on pages 48-51 of the paper book in which reliance has been placed by the assessee on various judgments and reliance on such judgements are placed before the tribunal also.
5. As against this, Ld. D.R. of the revenue supported the order of Ld. CIT(A). He also submitted that full telescopying was given by the A.O. by passing appeal effect order on 31.12.2007. He strongly supported the order of Ld. CIT(A).
6. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below. We find that it is noted by the Ld. CIT(A) in para 5 of his order that the assessee has disclosed a sum of Rs.20 lacs which is under consideration and this disclosure was in order to cover various undisclosed assets found during the course of search. He has also noted that assessee has not disclosed the manner in which income was earned. In the light of these findings of Ld. CIT(A), we examine the amount of actual undisclosed asses found in the course of search belonging to the assessee. On page 3 of the assessment order, breakup of these assets are given by the assessee as has been reproduced by the A.O. and the same is of Rs.18 lacs only. When the assets of Rs.18 lacs were found in the course of search as per the assessee, and no finding is given by the authorities below that any asset 4 I.T.A.No. 1334 /Ahd/2011 over and above Rs.18 lacs was found in the course of search, we are of the considered opinion that although the addition has been confirmed by the tribunal on the basis of the disclosure made by the assessee u/s 132(4) of Rs.20 lacs, penalty is not justified in respect of such addition which is not supported by any undisclosed assets which has been found in the course of search and there is no source of income alleged by the A.O. with regard to this additional income of Rs.2 lacs. Under these facts, we feel that penalty is not justified and hence, we delete the same.
7. In the result, the appeal of the assessee is allowed.
8. Order pronounced in the open court on the date mentioned hereinabove.
Sd./- Sd./-
(KUL BHARAT) (A. K. GARODIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Sp
Copy of the Order forwarded to:
1. The applicant
2. The Respondent
3. The CIT Concerned
4. The Ld. CIT (Appeals)
5. The DR, Ahmedabad By order
6. The Guard File
AR,ITAT,Ahmedabad
1. Date of dictation.........10/4
2. Date on which the typed draft is placed before the Dictating Member.........12/4....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 ............13/4
5. Date on which the fair order comes back to the Sr. P.S./P.S.13/4
6. Date on which the file goes to the Bench Clerk ...13/4/12
7. Date on which the file goes to the Head Clerk .......................
8. The date on which the file goes to the Assistant Registrar for signature on the order .........................
9. Date of Despatch of the order. ......................