BEHRAM B. DUBASH, MUMBAI v. DCIT 36, MUMBAI

ITSSA 43/MUM/2009 | misc
Pronouncement Date: 22-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 4319916 RSA 2009
Assessee PAN AACPD7289E
Bench Mumbai
Appeal Number ITSSA 43/MUM/2009
Duration Of Justice 10 month(s) 19 day(s)
Appellant BEHRAM B. DUBASH, MUMBAI
Respondent DCIT 36, MUMBAI
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 22-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 22-02-2010
Assessment Year misc
Appeal Filed On 03-04-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B: MUMBAI BEFORE SHRI R.S. SYAL (AM) AND SHRI R.S. PADVEKAR (JM) I.T. (SS) 43/MUM/2009 (BLOCK PERIOD : 1.4.1988 TO 20.8.1998) SHRI BEHRAM B. DUBASH APPELLANT DARABSHAW HOUSE BALLARD ESTATE MUMBAI 400 038 PAN : AACPD 7289E V/S. DCIT 36 RESPONDENT CENTRAL CIRCLE 36 AAYAKAR BHAVAN MUMBAI 400 020 APPELLANT BY :S/SHRI. VIJAY MEHTA/A.T.JAI N RESPONDENT BY :S/SHRI. S.S. RANA / T.T. JACOB (D.R) : O R D E R : PER R.S. PADVEKAR J.M THIS APPEAL HAS BEEN BY THE ASSESSEE CHALLENGING T HE IMPUGNED ORDER OF THE LD CIT(A)- CENTRAL VI MUMBAI DATED 12.2.200 9 IN WHICH THE LD CIT(A) HAS CONFIRMED THE PENALTY LEVIED BY THE A.O. U/S. 1 58BFA(2) OF THE ACT. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING TWO GROUND S : 1. THE COMMISSIONER OF INCOME TAX ( APPEALS) VI MUMBAI [HEREINAFTER REFERRED TO AS CIT(A)] ERRED IN CONFI RMING THE ACTION OF THE AO IN LEVYING PENALTY OF RS. 3 96 630/- ON UNEXPLA INED INVESTMENT IN ANTIQUES U/S 158BFA(2) OF I.T. ACT. 2. THE DCIT ERRED IN CHARGING SURCHARGE OF RS.57 63 0/- (17% OF TAX AMOUNT) ON TAX AMOUNT OF RS.3 39 000 ON ASSURED UND ISCLOSED INCOME. I.T.(SS)A 43/MUM/2009 2 3. THE FIRST GROUND IS IN RESPECT OF THE PENALTY LE VIED U/S. 158BFA (2) OF THE I.T. ACT. 4. WE HAVE HEARD THE PARTIES. THE FACTS ARE IN NAR ROW COMPASS. THE ASSESSEE IS A DIRECTOR IN NUMBER OF COMPANIES. THE RE WAS A SEARCH ACTION U/S. 132 AGAINST THE ASSESSEE ON 20.8. 1998. IN C ONSEQUENCE OF THE SEARCH SOME INCRIMINATING EVIDENCE/MATERIAL WAS FOUND. SO FAR AS THE CONTROVERSY BEFORE US IS CONCERNED IT IS LIMITED TO THE ADDITI ON MADE TOWARDS ANTIQUES AND FURNITURE ITEMS. AS PER THE ASSESSMENT ORDER LARG E NUMBER OF ANTIQUE PIECES FLOOR BOATS PAINTINGS WOODEN CARVINGS AND FURNITU RE ITEMS WERE FOUND AT THE RESIDENCE OF THE ASSESSEE WHICH DETAILS ARE GIVEN AS UNDER : SR.NO. ITEM QTY. 1. ANTIQUES 114 2. PAINTING 42 3. FURNITURE ITEMS 109 4. FLOWER POTS 25 TOTAL: 290 AS NOTED BY THE A.O THE ASSESSEE COULD ONLY EXPLAI N THE SOURCE OF THE 122 OUT OF 290 ITEMS. THE A.O THEREFORE WORKED OUT THE V ALUE OF THE BALANCE ITEMS BY TAKING THE AVERAGE RATE OF RS. 10 000/- PER PIEC E/ITEM AND MADE THE ADDITION OF RS.16 13 048/- AS UNEXPLAINED INVESTMEN T. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD CIT(A) A ND THE LD CIT(A) HELD THAT IN ADDITION TO 122 ARTICLES FURTHER 41 ARTICLES WE RE EXPLAINED BY THE ASSESSEE. HE THEREFORE GAVE THE RELIEF TO THE EXTENT OF 41 ITEMS BY REDUCING THE ADDITION BY RS. 4 10 000/- AND BALANCE ADDITION OF RS.12 03 048/- WAS SUSTAINED. THE ASSESSEE CARRIED THE ISSUE BEFORE T HE TRIBUNAL AND THE ISSUE REACHED THE FINALITY. THE TRIBUNAL HELD THAT THE A DDITION SHOULD BE RESTRICTED TO ONLY TO 113 ITEMS BUT SO FAR AS THE VALUATION I S CONCERNED THE AVERAGE RATE OF RS. 5000/- IS TREATED AS A REASONABLE ONE AND AD DITION WAS RESTRICTED TO RS. 5 65 000/-. AFTER THE DECISION OF THE TRIBUNAL TH E A.O. PASSED THE ORDER U/S. 158 BFA(2) OF THE ACT AND LEVIED THE PENALTY OF RS. 5 37 030/-. IT IS TO BE MENTIONED HERE THAT FOR THE PURPOSE OF LEVYING THE PENALTY THE A.O ALSO TOOK I.T.(SS)A 43/MUM/2009 3 INTO CONSIDERATION THE ADDITION OF RS. 2 00 000/- M ADE TOWARDS THE UNDISCLOSED CASH BUT TO THE EXTENT OF RS. 2 00 0 00/- THE CIT(A) DELETED THE PENALTY AND THE ONLY ISSUE BEFORE US IS RESTRICTED TO THE ADDITION RELATING TO THE ANTIQUES. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES. WE HAVE ALSO PERUSED THE RECORD AND ALSO TOOK INTO CONSIDERATIO N THE DIFFERENT PRECEDENT RELIED ON BY THE LD COUNSEL. THE LD COUNSEL ARGUED THAT MERELY BECAUSE THE ASSESSEE COULD NOT EXPLAIN THE SOURCE OF THE OLD IT EMS AND THE ADDITIONAL IS PARTLY SUSTAINED THAT CANNOT BE THE REASON FOR LEV YING THE PENALTY U/S. 158BFA(2). IT IS ARGUED THAT THE POWER OF THE A.O TO LEVY THE PENALTY U/S. 158BFA(2) IS DISCRETIONARY AND NOT MANDATORY. IN SUPPORT OF HIS PLEA HE RELIED ON THE DECISION OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT V/S. DODSAL LTD. 312 ITR 112 (BOM). WE HAVE HEARD THE LD. D.R. ALSO. 6. AS EXPLAINED ABOVE THE ISSUE IS LIMITED TO TH E ADDITION MADE ON ACCOUNT OF THE ANTIQUES. IT IS PERTINENT TO NOTE H ERE THAT AS PER THE RECORD IN THE COURSE OF SEARCH TOTAL 290 ITEMS WERE FOUND B UT EXCEPT 113 ITEMS THE ASSESSEE COULD PROVE THE SOURCE IN RESPECT OF OTHER ITEMS. WE FIND FORCE IN THE ARGUMENT OF THE LD COUNSEL THAT WHEREVER POSSIB LE THE ASSESSEE COULD PRODUCE THE RECEIPTS AS WELL AS THE EVIDENCE BUT I T IS VERY DIFFICULT IN THE CASE OF THE OLD ANTIQUES TO PROVE THE SOURCE. ADMITTEDL Y IN THIS CASE EVEN THE VALUE IS DETERMINED ON THE ESTIMATE BASIS AND NOTHI NG WAS FOUND IN THE COURSE OF SEARCH TO SUPPORT THE VALUATION FINALLY SETTLED BY THE TRIBUNAL. IN OUR OPINION THERE IS NO JUSTIFICATION TO LEVY THE PENA LTY U/S. 158BFA (2) SO FAR AS THE FACTS OF THE CASE ARE CONCERNED. WE ACCORDING LY DELETE THE SAME. 7. IN RESPECT OF GROUND NO.2 THE LD COUNSEL SUBMIT TED THAT HE IS NOT PRESSING GROUND NO. 2. AS THE GROUND NO. 2 IS NOT PRESSED THE SAME IS DISMISSED. 8. IN THE RESULT ASSESSEES APPEAL IS PARTLY ALLOW ED. I.T.(SS)A 43/MUM/2009 4 ORDER PRONOUNCED IN THE OPEN COURT ON 22ND DAY OF FEBRUARY 2010. SD/- SD/- (R.S. SYAL) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIA L MEMBER MUMBAI ON THIS 22ND DAY OF FEBRUARY 2010. :US COPY TO: 1. APPELLANT 2. RESPONDENT 3.THE CIT(A)- VI MUMBAI 4.THE CIT CENT.III MUMBAI 5.THE DR B BENCH MUMBAI 6.GUARD FILE BY ORDER TRUE COPY ASSTT..REGISTRAR ITAT MUMBAI. I.T.(SS)A 43/MUM/2009 5 US DATE INITIALS 1. DRAFT DICTATED ON 17/2/10 --------------- SR.P.S . 2. DRAFT PLACED BEFORE AUTHORITY 18/2/10 -------- ------ SR.P.S. 3. DRAFT PROPOSED & PLACED ----------- ---------- --- JM BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED ----------- ----------- -- JM/AM BY SECOND MEMBER 5. APPROVED DRAFT COMES TO ----------- ------------ - SR.P.S. THE SR. P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON --------- ----------- -- SR.P.S. 7. FILE SENT TO THE BENCH CLERK --------- --------- ---- SR.P.S. 8. DATE ON WHICH FILE GOES TO THE ------- --------- ---- 9. DATE OF DISPATCH OF ORDER --------- --------- ----