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TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 418
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....circumstances of the case and the impugned penalty order being illegal and void ab-initio and the impugned penalty order has been framed without considering the submissions/evidences of the assessee and without providing any adverse material on record and without establishing that there was concealment or furnishing of inaccurate particulars of income on the part of the assessee. iii. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned penalty order being contrary to law as the assessment order framed under section 143(3) dated 24-12-2009 and additions made therein were also illegal, beyond jurisdiction and void abinitio. iv. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) on the additions made in the assessment order u/s 143(3) dated 24-12-2009 as these additions are also contrary to law and facts. v. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levyin....
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....s year." It is the contention of the appellant that the aforesaid statement was obtained under duress and there were no vouchers found as a result of survey operations which were not accounted in the books of account as alleged by the Assessing Officer. Subsequently, the said statement was retracted vide its letter dated 25th October, 2007 and while retracting the statement made during the course of survey operations, the appellant reiterated that there were no papers found indicating undisclosed investments in the construction of building at B-14, Industrial Area, G.T. Karnal Road, Delhi. It was further submitted that based on this objections, the Assessing Officer referred the matter to DVO who vide his report dated 16th December, 2009, stated that the construction of the property took place during the period from 1st February, 2003 to 13th March, 2006 which means there was no construction that took place during the previous year relevant to the assessment year under consideration. However, during the course of assessment proceedings, the appellant made application under the provisions of Section 144A of the Act to the Additional Commissioner of Income Tax for issuance of direc....
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....ging 'the imposition of the tax upon him claiming that the addition made on account of unaccounted investment in construction of property. It has been repeatedly claimed that no such documents/paper were found during survey which could justify the investment made by the Appellant and his wife on the construction of the building during F. Y. 2006-07 and therefore there is no justification for addition in the case of the Appellant or in the case of his wife Smt. Kamini Jain. However, these arguments do not give the true picture of the case which is discussed hereunder. 8.2 It is further seen that this is not a case of a forced surrender followed by a retraction. In fact, in this case the surrender had been made was entirely on the basis of documents found in the Survey and subsequently the Assessee and his wife gave letters seeking retraction of the surrender on 25.10.2007. However, subsequently it is seen that as per the first two paragraphs on page 5 of the written submissions of the Appellant the retraction of 25.10.2007 was withdrawn. Thus in this case there was a surrender followed by a retraction which was followed by a withdrawal of the retraction. The abovementioned two ....
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....he directions of Addl. CIT, Range-20, New Delhi the property at B-14, Industrial Area, G.T. Karnal Road was referred to the valuation cell for determination of cost of construction on the plot as on 31.3.2007. The Valuation Officer vide his report dated 16.12.2009 has determined the cost of investment/construction as on 31.3.2007 at Rs. 1,61,01,272/- as against declared value of Rs. 1,08,29,859/-. The assessee was provided copy of valuation report for his comments. In compliance thereto the AR of the assessee Sh. Sanjay Aggarwal attended on 23.12.2009 and requested that the DVO has allowed deduction of sale supervision at the rate of 5% only. You are requested to enhance this deduction. The AR of the assessee also requested that the addition of Rs. 22,51,060/- on account of investment in the property as admitted in the statement during the course of survey be made and remaining difference be considered in the case of assessee' wife Smt. Kamini lain. Accordingly, the case was referred to the Addl. CIT, Range-20 for his directions u/s 144A for making proposed addition of Rs. 22,51,000/- on account of investment in the property on the basis of vouchers of expenses found at the tim....
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....rds unaccounted investment in the hands of the Assessee and his wife. 8.5 Perusal of the penalty order shows that it was the fault of the Assessee that the documents were not produced. Perusal of the second paragraph on page 1 of the penalty order dated 30.06.2010 shows the following narration:- "In the instant case a survey uls 133A was conducted at the assessee's business premises on 20.3.2007, the assessee surrendered an amount of Rs. 45,02,0001- being unaccounted expenditure incurred on construction at B-l4, G.T Karnal Road, Delhi in F. Y 2006-07. This amount was surrendered on the basis of certain vouchers found at the time of survey, copies of which were promised to be produced by the assessee before the AO within a couple of days but which were never produced. " 8.6 Thus it is seen that the addition made on account of unexplained expenditure for construction of property was made not just on the basis of the statement or admission of the Assessee but rather there were vouchers which gave evidence for this unaccounted investment which were found during the course of Survey. These documents were to be produced by the Appellant before the Income Tax Authorities but were ....
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....sing Officer has also discussed several other judicial decisions and on the basis of these judicial decisions and the facts of the case, held as under in the last paragraph of page 5 and the first paragraph of page 6 of the penalty order :- "Thus it is clear from the above that the assessee had knowingly, intentionally and fraudulently concealed particulars of income on account of unaccounted investment in construction of property as surrendered during the course of survey and neither proved during the assessment proceedings nor penalty proceedings the assessee could adduce any evidence in support of its claim. Accordingly, in view of the above facts and further deriving support from the judicial decision supra, 1 hold that the assessee has furnished inaccurate particulars of income and thereby concealed its income for the year under consideration. Consequently, as the default of the assessee U/S 271(l)(c) is established. " 8.9 It is seen that the Assessee has tried to twist the facts of the case to claim that it was only on the basis of the statement of the Assessee that the addition was made and that the penalty was imposed only because the addition was made. However, this is ....
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....ove this fact lies with the department because it is a department who alleged that the some vouchers were found as a result of survey operations. He also assailed the finding of the CIT(A) that the addition were based on the DVO's report. He further submitted that no addition can be made based on mere statement of surrender of the assessee. In support of this proposition, he relied on the decision of Hon'ble Madras High court in the case of CIT Vs. Khader Khan Son, 300 ITR 157 (Mad.) and the decision of the Hon'ble Kerala High Court in the case of Paul Mathews and Sons Vs. CIT, (2003) 263 ITR 101 (Ker.). He further submitted that no penalty is leviable and in respect of an item for which the addition was made based on the concession of the party and in support of this proposition, he relied on the decision of Hon'ble Gujarat High Court in the case of National Textiles Vs. CIT, (2001) 249 ITR 125 (Guj.). He also submitted that no penalty can be levided based on the DVO's report as held by the Hon'ble Supreme Court in the case of Dilip N. Shroff Vs. CIT, 291 ITR 519 (SC) and he finally submitted that the Assessing Officer himself was not sure as to what charge should be levelled agai....
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.... were not accounted in the books of account. Therefore, it is the duty of the Revenue to prove that which vouchers were not accounted in the books of account. The Assessing Officer never brought any such vouchers on the record except making ipse dixit statement that some vouchers are found that apart, the Hon'ble Madras High Court in the case of CIT Vs. S. Khader Khan Sons, 300 ITR 157 (Mad.) and the Hon'ble Kerala High Court in the case of Paul Mathews and Sons Vs. CIT, (2003) 263 ITR 101 (Ker.) had clearly held that no addition can be made based on the mere statement. The decision of the Hon'ble Madras High Court was approved by Hon'ble Supreme Court in the case of CIT Vs. Khader Khand Son, (2013) 352 ITR 480 (SC) after granting the leave. That apart, the CBDT which is the apex body in administering the provisions of Income Tax Act had issued Circle dt. 10th March, 2003 to its officers that no addition can be made on mere statement of assessee without bringing any independent incriminating material on record. Therefore, in the light of the above decision, the very addition made by the Assessing Officer is not free from doubt. The mere disallowance cannot be a sound basis for impo....