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Varsha C Batra Versus The ACIT. Central Circle 18 & 19 Mumbai

Penalty u/s 271(1)(c) - Held that:- Deleting both the additions on account of cash component of brokerage and on account of transactions with M/s. Vinita Estates, the consequential penalty levied u/s 271(1)(c) of the Act would not now survive for consideration. - Decided in favour of assessee - ITA No. 3627 /MUM/2014 - Dated:- 17-2-2016 - SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOSAIN (JM) For The Appellant : Shri. Sumit Kumar For The Respondent : Shri. Dharshan Gandhi ORDER PER JASON P. BOAZ, .....

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nd jewellery valued at ₹ 4,17,405/- was seized. For Asst year 2007-08, the assessee filed her return of income on 20/02/2008 declaring income of ₹ 2,19,324/-. The case was taken up for scrutiny and the assessment was completed u/s 143(3) of the Act wherein the assessee s income was determined at ₹ 42,66,010/- in view of the following additions/disallowances to the returned income :- (i) Cash Component of brokerage ₹ 4,80,000/- (ii) Undisclosed investment in diamond jewell .....

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ssee filed here objections to levy of the same and placed reliance on certain judicial pronouncements. There submissions by the assessee did not find favour with the Assessing Officer who held that both in assessment as well as penalty proceedings, the assessee was not able to place on record any material evidence to corroborative her claim/contentions. In that view of the matter, the Assessing Officer proceeded to levy penalty of ₹ 5,56,765/- u/s 271(1)(c) of the Act vide order dt. 29/03/ .....

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the Act. 3.1 Aggrieved by the order of the CIT(Appeals)-39, dt. 14/02/2014 confirming the levy of penalty of ₹ 5,56,765/- u/s 271(1)(c) of the Act for Asst. year 2007-08, the assessee has preferred this appeal raising the following grounds:- 1. On the facts and circumstances of the case and in law the Ld. Commissioner of Income Tax (appeals) failed to appreciate that cross appeals are pending before the Hon ble ITAT, and therefore the limitation period for imposition of penalty not yet ex .....

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es to alter, amend, withdraw or substitute any ground or grounds or to add any new ground or grounds of appeal on or before the hearing. 3.2 At the outset, the Ld. AR for the assessee submitted that the additions of ₹ 17,14,640/- made by the Assessing Officer, comprising of cash components of brokerage of ₹ 4,80,000/- and ₹ 12,34,640/- in respect of undisclosed transactions with M/s. Vinita Estates was the basis for levy of penalty of ₹ 5,56,765/- u/s. 271(1)(c) of the Ac .....

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co-ordinate bench in the aforesaid order, the penalty of ₹ 5,56,765/- levied in this regard would not non survive and its therefore to be cancelled. 3.3.1 We have heard both the Ld. AR for the assessee and the Ld. DR for revenue in the matter and perused and carefully considered the material on record in the matter of the penalty of ₹ 5,56,765/- levied u/s 271(1)(c) of the Act for Asst. year 2007-08. As submitted by the Ld. AR for the assessee, we find that the co-ordinate bench of .....

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) has deleted this addition holding as under:- 3. The first common issue urged by all the assessees relate to the addition made to the brokerage income by holding that these assesses have received part of brokerage income in cash and did not disclose the same. The addition made by the AO under this head is tabulated below, for the sake of convenience:- S.No Name of assessee Amount in dispute (for quantum appeal) in Rs. 1 Chaturbhuj T Batra 92,82,233 2 Varsha Batra, 4,80,000 3 Premkumar Batra 66, .....

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e equal amount of brokerage declared by the assessees in all the years covered by the search assessments. 4. In the appellate proceedings, the Ld CIT(A) confirmed the addition, but granted telescoping benefit against certain other additions. The revenue is aggrieved by the telescoping benefit so given by the Ld CIT(A). 5. We notice that this issue has been considered in the case of these assessees by the co-ordinate bench of Tribunal in other years. We notice that SMC bench of the Tribunal has c .....

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2010 - AY 2001-02 to 2006-07) and Shri Premkumar T Batra (ITA Nos. 8058 to 8063/Mum/2010 - AY 2001-02 to 2006-07). The relevant observations made by the co-ordinate bench in the common order dated 25.04.2014 passed in the above cited group cases are extracted below:- 4. At the outset, it has been brought to our notice that the cases in hand are squarely covered by the decision of the Tribunal in the case of Shri Rajeev C. Batra in ITA No.7772/Mum/2010 for the assessment year 2003-04, wherein sim .....

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50% of the brokerage in cash which is unaccounted in the books. I find, the Assessing Officer has taken this view on the basis of seized documents with regard to two properties namely Regiland Flat in 5th' Floor and Flat at Sommerset Building. No independent enquiry from the purchasers has been made. I find, the CIT(A) had mentioned in para 11.1 of his order that 'at the outset it is to be mentioned that there is no clear cut evidence available to show that any cash component is involve .....

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ssessee also could not be controverted by the ld D.R. I find, in para 11.4 of the CJT(A)'s order; the Ld.CIT(A) has mentioned that he was convinced that these seized documents do not indicate any cash component of brokerage received by the assessee. I find despite giving this findings, which are reproduced elsewhere in this order; the CIT(A) sustained the addition on the ground that the appellant was not accounting the brokerage income correctly. This, in my opinion, is uncalled for. It has .....

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Ld. CIT(A) that the only income of the assessee is from brokerage. Therefore, when the unexplained deposits of ₹ 98,765/- has been added and the only source of income of the assessee being brokerage and since the assessee being brokerage and since the assessee has not challenged the same, therefore, confirming the addition of ₹ 1 lakh made by the Assessing Officer on estimate basis and telescoping the same in my opinion is not justified. I therefore, set aside the order of the Ld. C .....

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the Ld.CIT(A) in the said cases and the additions made/confirmed on this count stand deleted. 6. In the instant year also, the assessing officer has made the impugned addition on the basis of very same documents. Accordingly, consistent with the view taken by the co-ordinate bench of the Tribunal, we hold that the assessing officer has made the impugned addition without bringing any credible material on record. Accordingly, we set aside the order passed by Ld CIT(A) in the hands of these assess .....

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d Shri Karan Batra relates to the addition made on the basis of proforma invoice raised by theses assessees on M/s Vinita Estates (P) Ltd. The addition made by the AO is given below:- (a) Shri Chaturbhuj T Batra 25,25,400 (b) Smt. Varsha Batra 12,34,640 (c) Shri Karan Batra 1,10,060 The facts relating to the above said addition are stated in brief. During the course of search operations, the proforma invoices raised by the above said three parties on M/s Vinita Estates (P) Ltd were found. The as .....

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ainst the invoices found during the course of search. However, the director said that the bills are generally prepared only after rendering the services. Despite the denial of transactions by both the concerned parties, the AO took the view that both the assessees and M/s Vinita Estates (P) Ltd are not coming out with truth. During the course of search such kind of proforma invoices prepared by the assessees were found and the explanations furnished by the assessee were not found to be satisfact .....

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proforma invoices have been prepared, have denied the transactions. Except the invoices, no other material was found during the course of search to demonstrate that the services stated in the invoices were actually rendered by the assessees. During the course of assessment proceedings also, the assessing officer has failed to bring any material on record to show that the services mentioned in the invoices have been actually rendered or the money has actually passed the hands. At the time of hear .....

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show that these assessees have received any money over and above that mentioned in the statement. By placing reliance on the decision rendered by Hon ble Supreme Court in the case of Godhra Electricity company (225 ITR 746)(SC), the Ld A.R contended that the assessing officer could assess only the real income has accrued or received or deemed to have been accrued or received. He submitted that the assessing officer has not brought any material to show that the income stated in the proforma invo .....

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