DCIT, JAIPUR vs. ASHISH KUMAR GATTANI, JAIPUR

PER SHRI KUL BHARAT, JM.

This appeal by the Revenue is directed against the order of ld. CIT (A)-4,

Jaipur dated 30/10/2015 pertaining to A.Y. 2012-13.

The Revenue has raised the following revised grounds of appeal :-

“1. Whether on the facts and in the circumstances of the case, the CIT(A) was right in deleting the penalty of Rs. 15,70,068/- levied u/s 271AAA of the IT Act, Whereas the assessee failed to justify the second condition laid down u/s 271AAA of the IT Act, 1961.

2 ITA No. 1021/JP/2015 M/s Shri Ashish Kumar Gattani, Jaipur.

The appellant crave, leave or reserves the right to amend, modify, alter, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal.”

Income-tax Act, 1961 was carried out by the Income-tax Department on Ganpati

Lockers Pvt. Ltd. on 29/06/2011. As part of such proceedings, the search action was

also carried out at 16 lockers bearing nos. 228, 863, 686, 853, 877, 875 876, 899,

923, 378, 371, 239, 223, 1042, 867 & 940 situated at Ganpati Pvt. Ltd., Ganpati

Plaza, M.I. Road, Jaipur. It was observed by the Assessing Officer, during the

aforesaid action valuables being jewellery valued by the registered valuer at Rs.

1,53,29,689 and cash of Rs. 3,71,000/- aggregating to Rs. 1,57,00,689/- were found

and seized from the locker no. 923 and the article thereof were found to be

belonging to Shri Ashish Kumar Gattani. It is observed by the Assessing Officer that

on the basis of the statement u/s 131 of the Act by the DDIT (unit-III), Jaipur on

03/08/2011 wherein, the assessee claimed that the locker no. 923 had been hired by

him in the name of Nisha, Kitti & Pitu. The assessee further claimed in the said

statement that all valuables cash found and seized from this locker belong to him.

The Assessing Officer issued a noticed u/s 271AAA of the Act. Further, the

Assessing Officer levied a penalty u/s 271AAA of Rs. 1,57,00,689/- being 10% of the

undisclosed income of Rs. 1,57,00,689/-.

after considering the submissions partly allowed the appeal. While allowing the

appeal, the Ld. CIT(A) deleted the penalty. Against this, the Revenue is in appeal

before this Hon’ble Tribunal.

3 ITA No. 1021/JP/2015 M/s Shri Ashish Kumar Gattani, Jaipur.

penalty. He submitted that the Assessing Officer in the penalty order has given a

finding. Per contra Ld. AR reiterated the submissions as made in the written brief.

The Ld. Counsel submitted that the action of the Assessing Officer is contrary to the

provision of u/s 271AAA. The Ld. Counsel has taken as through the assessment

order of the penalty order. He pointed out that the Assessing Officer in the penalty

order has levied a penalty by observing that in the given facts and circumstances of

this case, it may be true that the sum of Rs. 1,57,00,689/- in the form of

outstanding balances of sundry creditors may have been recorded in the regular

books of accounts.

However, it is also undeniable facts that sundry creditors to the extent of such

accounts were found to be bogus non-existing during the course of search. It is also

undeniable fact that the assessee itself, during the course of statement u/s 132(4)

had admitted that the sundry creditors balances to the extent of Rs. 1,57,00,689/-

were bogus in nature and were not required to be paid any more. It is on this

account that sum of Rs. 1,57,00,689/- was surrender for taxation. In this

background it is clear that the entry of sundry creditors in respect of the expenses

record of unexplained books of accounts were found to be falls during the course of

search. It is also clear that this would not have been possible to found if the search

has been conducted. Accordingly, the bogus outstanding balances record in the

books of accounts to the extent of Rs. 1,57,00,689/- Clearly falls under the purview

of undisclosed income as provided in sub-section 2 of section 271AAA of the Act.

Hence, the contention raised by the assessee found not acceptable. He contended

that the aforesaid observation of the Assessing Officer is contrary to the record.

4 ITA No. 1021/JP/2015 M/s Shri Ashish Kumar Gattani, Jaipur.

There was no such issue in the case of the assessee related to sundry creditors.

Moreover, he submitted that, there was no search, no statement u/s 132(4) was

recorded, it was only in the statement recorded u/s 131 of the Act. The assessee

has duly stated the source of the investment made in acquiring the jewellery and

cash.

authorities below. We find there are glaring contradiction in the Assessment Order

and the Penalty Order. The Revenue could not explain the reason for such

contradiction. Admittedly, the penalty was initiated for the investment in the

jewellery and cash found in locker no. 923 and the Assessing Officer while imposing

the penalty stated in the order about the outstanding balances of the sundry

creditors. It is also admitted facts that no search action was carried out at the

premises of the assessee. The statement was not recorded u/s 132(4) keeping

these unrebutted facts in view, the penalty order so passed cannot be sustained.

Therefore, we do not see any reason to interfere into the order of the Ld. CIT(A),

same is hereby affirmed. Thus, grounds are rejected in this appeal.

Order is pronounced in the open court on Friday, the 28th day of April 2017.

Sd/- Sd/- ( HkkxpUn ½ ( dqy Hkkjr) ( BHAGCHAND) ( KUL BHARAT ) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Jaipur

Dated: 28 /04/2017

5 ITA No. 1021/JP/2015 M/s Shri Ashish Kumar Gattani, Jaipur.

POOJA आदेश की प्रतिलिपि अग्रेषित@ब्वचल वf जीम वतकमत वितूंतकमक जवरू

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सहायक पंजीकार@ Aेेपेजंदज. त्महपेजतंत