Income Tax Appellate Tribunal - Ahmedabad
Shri Yogesh Kirchand Shah,, Ahmedabad vs The Dy.Cit, Circle-3,, Ahmedabad on 24 April, 2019
IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD "B" BENCH
Before: Shri Rajpal Yadav, Judicial Member
And Shri Amarjit Singh, Accountant Member
IT(SS)A No. 392/Ahd/2014
Block Period 1.4.1992 to 25.5.2001
Shri Yogesh K. Shah, The DCIT,
14-B, Sthanakvasi Jain Circle-3,
Society, Naranpura, Vs Ahmedabad
Ahmedabad-380013 (Respondent)
PAN: AEDPS4653L
(Appellant)
Revenue by: Shri Mudit Nagpal, Sr. D.R.
Assessee by: Ms. Arti Shah, A.R.
Date of hearing : 08-04-2019
Date of pronounce ment : 24-04-2019
आदेश /ORDER
PER : AMARJIT SINGH, ACCOUNTANT MEMBER:-
The solitary ground of appeal of the assessee is against the decision of CIT(A)-XX, Ahmedabad in confirming the order of the assessing officer levying penalty of Rs. 13,70,854/- u/s. 158BFA(2) of the act.
2. The brief fact of the case is that a search u/s. 132 had been conducted in the case of the assessee on 25th May, 20001. Thereafter, a notice u/s. 158BC was issued on 3rd Sep, 2001. The assessee had filed return of income I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 2 Shri Yogesh K. Shah vs. DCIT on 22nd October, 2001 showing the nil income. During the course assessment, the assessing officer noticed that as per seized record that assessee Shri Yogesh K Shah was managing all the affairs of the group. In his statement recorded u/s. 132(4) of the act, the assessee has owned up all the undisclosed and unrecorded income. The assessing officer has stated that assessee in his rely had not objected to taxing of the entire undisclosed income in his hand. The assessing officer has computed the total undisclosed income of the assessee summarized as under:-
Incomes on the basis of undisclosed earnings incomes on the basis of undisclosed expenditures and investments Unaccounted profit from 52,82,600 Unaccounted investment in 3,84,943 silver business (para 8 of silver stock (para 7 of this this order) order) Unaccounted profit from 50,00,000 Unaccounted investment 15,00,000 undisclosed speculative in real estates and transactions (para 11-of construction activity (para 9 of this order) this order) Unaccounted investment in 7,91,555 shares (para 10 of this order) Unaccounted 15,00.000 investment/expenditure in residential property (para 12 of this order) Unaccounted cash (para 13 of 5,50,000/-
this order)
TOTAL 1,02,82,600 TOTAL 47,26,498/-
The assessing officer has stated that undisclosed investment and undisclosed expenditure as computed above were met from the undisclosed income quantified above, therefore, after taking a judicious view the total undisclosed income of the assessee was assessed at Rs. 1,02,82,600/-. The I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 3 Shri Yogesh K. Shah vs. DCIT assessing officer has also initiated penalty proceedings u/s. 158BFA(2) of the act and noticed u/s. 158BFA(3) was issued. During the penalty proceedings, the assessing officer has stated that Settlement Commission has rejected the application filed by the assessee. Accordingly, the assessment u/s. 158BC r.w.s. 158BE was completed on 25th April, 2016 determining total income as cited above to the amount of Rs. 1,02,82,600. The total undisclosed income of Rs. 1,02,82,600/- was comprised of unaccounted profit from silver business amounting to Rs. 52,82,600/- and unaccounted profit of Rs. 50 lacs on account of speculative transaction. The assessing officer has also made alternative addition on account of unexplained expenditure on account of unexplained expenditure and investment to the amount of Rs. 47,26,498/-. In the appeal, the ld. CIT(A) has deleted the addition of Rs. 1,02,82,600/-. However, the ld. CIT(A) has confirmed the addition made on alternative basis on account of undisclosed investment and expenditure to the extent of Rs. 39,05,566/- as under:-
(a) Unaccounted stock of silver of 83.5 Kg Rs. 3,84,943/-
(b) Unaccounted investment, in shares as admitted before the settlement Rs. 7,62,625/-
commission
(c) Unaccounted profit from speculation Rs. 2,04,533/-
(d) Unaccounted investment (Ann. A -64 Pages 41 to 45) Rs. 11,50,000/-
(e) Unaccounted cash found Rs. 5,50,000/-
(f) Unaccounted investment (Ann. A - 64 Pa.ges 92) Rs.1,85,017/-
(g) Unaccounted purchase of material for renovation . ' Rs. 68,448/-,
Total Rs. 39,05,566/-
The ITAT Ahmedabad vide ITA No. 76/Ahd/2008 and ITA nos. 5 &6 /Ahd/2009 dated 14-12-2012 has also upheld the order of ld. CIT(A) in I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 4 Shri Yogesh K. Shah vs. DCIT confirming the addition made on alternative basis to the amount of Rs. 39,05,566/-. In response to the penalty show cause notice, the assessee has submitted that additions were made on presumption basis and it cannot be held that there was concealment of income for the purpose of imposing penalty under aforesaid section. The assessing officer has not accepted the explanation of the assessee and referred provision of section 158BFA(2) of the act stating that to levy penalty under the aforesaid section, it is imperative that the condition laid down under the said section are fulfilled. The relevant part of the section is as under:-
"15SBFA. Levy of interest and penalty in pertain cases- . . .-(2) The Assessing Officer' or the Commissioner (Appeals), in the course of any proceedings under this Chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC: ... . ' • Provided that no order imposing penalty shall be made in respect of a person if-(i) Such person has furnished a return under clause (a) of section 158BC;
(ii) the tax payable on the basis of such return has been paid or, if the assets-seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable;
(iii) Evidence of tax paid is furnished along with the return; and
(iv) An appeal is not filed against the assessment of that part of income which is shown in the return Provided further that the provisions of the preceding proviso shall not apply where the undisclosed income determined by the Assessing Officer is in excess of the income shown in the return and in such cases the penalty shall be imposed on that portion of-undisclosed income determined which is in excess of the amount of undisclosed income, shown in the return."
After referring the aforesaid section, the assessing officer stated that penalty can be levied in a case where undisclosed income determined by the assessing officer is in excess of the income returned. The assessing officer has stated that initially during the course of search, the assessee has disclosed Rs. 1.05 cores, however, he has shown nil income in the return of income filed after search action. The assessing officer has finalized the assessment u/s. 158BC r.w.s. 158BE on 25/04/2006 and made an addition of Rs. 1,02,82,600/- and the ld. CIT(A) and ITAT has confirmed the addition to the extent of Rs. 39,05,566/- as mentioned supra in this order. In the penalty I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 5 Shri Yogesh K. Shah vs. DCIT order, the assessing officer has elaborately discussed the issues emanating from the seized material on the basis of which additions were made and sustained to the extent of Rs. 3905556/- in the appeal. After considering the aforesaid facts and circumstances of the case, the assessing officer has levied minimum penalty of Rs. 39,05,566 u/s. 158BFA(2) of the Act.
3. Aggrieved assessee has filed appeal before the ld. CIT(A). The ld. CIT(A) has sustained the penalty levied by the assessing officer stating that assessee has failed to offer the undisclosed income in his block return of income.
4. During the course of appellate proceedings before us, the ld. counsel has submitted paper book containing detail of submission made before assessing officer and ld. CIT(A) during the course of assessment and appellate proceedings. She has also contended that assessee has disclosed income before the Settlement Commission therefore no penalty in the case of the assessee should be levied. On the other hand, the ld. departmental representative has vehemently supported the order of ld. CIT(A) and submitted that assessee has failed to offer the undisclosed income in his block return and the assessing officer has rightly imposed penalty u/s. 158BFA(2) of the act. The ld. departmental representative has also placed reliance on the decision of Hon'ble Jurisdictional High Court in the case of Kondoi Bhogilal Mulchand vs. DCIT (2012) 21 taxman.com 153 (Guj) dated 8th Nov, 2011.
I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 6 Shri Yogesh K. Shah vs. DCIT
5. We have heard both the sides and perused the material on record carefully. In this case, the assessing officer has levied penalty u/s. 158BCA(2) on the aforesaid addition of Rs. 3905566/- which have been confirmed by the ld. CIT(A) in the appellate proceedings and subsequently also sustained by the Hon'ble ITAT Ahmedabad in appellate order as mentioned above in this order. The ld. representative has also brought to our notice that Hon'ble Gujarat High Court has also dismissed the appeal of the assessee filed against the decision of the ITAT in sustaining the quantum addition in this case. In the case of the assessee search action was taken place on 25th May, 2001 and in response to notice u/s. 158BC the asssessee has filed its block return for the block period on 22nd October, 2001 showing nil income, however, during the course of search action the assessee has disclosed income of Rs. 1,05 crores. The assessee has also filed an application before the Settlement Commission and offer undisclosed income to the amount of Rs. 3,06,7066/-. The application filed by the asssessee before Settlement Commission on 31st March, 2003 was rejected for want of true and full disclosure of the undisclosed income. The assessing officer has assessed total undisclosed income at Rs. 1,02,82,600/- u/s. 158BC r.w.s. 158BE of the act on 25th April, 2006. In the appellate proceedings, the ld. CIT(A) and ITAT has confirmed the addition to the tune of 3905366/- as stated supra in this order. In the light of the above facts and circumstances, the assessing officer has levied penalty of Rs. 1370854/- u/s. 158BFA(2) of the act as the assessee has failed to offer the undisclosed income in his block return of income. After perusal of the material on record, we observe that the assessee has failed to establish that it has neither concealed his particulars of income nor furnished inaccurate particulars of income. Under I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 7 Shri Yogesh K. Shah vs. DCIT the circumstances, it is very clear from the penalty provisions u/s. 158BFA(2) that if the assessed income for the block period is in excess of the income returned by the assessee in response to the notice u/s. 158BC, the penalty shall have to be levied. The contention of the ld. counsel that penalty shall not be levied as the assessee has made offer before the Settlement Commission is not appropriate and coherent under the facts and circumstances existed in the case of the assessee. The Settlement Commission has rejected the petition of the assessee for the reasons stated above in this order. However, the assessee has failed to offer the undisclosed income in his block of return of income and it is substantiated from the material facts as elaborated in his order that penalty u/s. 188BFA(2) was appositely levied. After considering the material on record, we find that ld. CIT(A) has rightly confirmed the penalty levied u/s. 158BFA as the assessing officer has computed income in excess on what was declared by the assessee for block period. We do not find any infirmity in the decision of ld. CIT(A) in confirming the penalty imposed by the assessing officer as provided in sub-section 2 of section 158BFA, therefore, this appeal of the assesssee is dismissed.
6. In the result, the appeal of the assessee is dismissed.
Order pronounced in the open court on 24-04-2019
Sd/- Sd/-
(RAJPAL YADAV) (AMARJIT SINGH)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad : Dated 24/04/2019
I.T(SS).A No. 392/Ahd/2014 A.Y. Block Period Page No 8
Shri Yogesh K. Shah vs. DCIT
आदेश क त ल प अ े षत / Copy of Order Forwarded to:-
1. Assessee
2. Revenue
3. Concerned CIT
4. CIT (A)
5. DR, ITAT, Ahmedabad
6. Guard file.
By order/आदेश से,
उप/सहायक पंजीकार
आयकर अपील य अ धकरण,
अहमदाबाद