Suresh C. Basantani, Mumbai vs Assessee

Shri Suresh C. Basantani, ACIT - Circle 7(2), A.T. Jain & Co., Mumbai 212, Rewa Chambers, Vs. 31, New Marine Line, Mumbai - 400 020 PAN: AIQBP 6043G (Appellant) (Respondent)

Present for: Assessee by : Shri Jitendra Jain, A.R. & Ravikant S. Pathak, A.R. Revenue by : Shri Neil Philip, D.R.

Date of Hearing : 22.06.2015 Date of Pronouncement : 30.06.2015

ORDER

Per Sanjay Garg, Judicial Member:

The present appeal has been preferred by the assessee against the order dated 06.01.2012 of the Commissioner of Income Tax (Appeals) [(hereinafter referred to as CIT(A)] relevant to assessment year 1997-98.

2. The assessee has taken following Grounds of appeal:

"The Commissioner of Income Tax (Appeals) - 13 Mumbai [hereinafter referred to as CIT (A)] erred in confirming the penalty of Rs.3,65,000/- u/s. 158 BFA(2) of the I.T. Act levied by DCIT.

Your Appellant submits that on the facts and circumstances of the case, penalty levied U/s 158BFA(2) of the I.T. Act shall be deleted."

3. The assessee in this appeal is aggrieved by the confirmation of penalty levied u/s 158BFA of the income Tax Act. The assessee is an individual and a resident of Dubai. A search &r seizure action U/S 132 of the I.T. Act was 2 ITA No.18/M/2012 Shri Suresh C. Basantani

carried out at the residential premises of the assessee on 24th September, 2004. In response to the notice U/s 158BC of the I.T. Act, the assessee had neither filed the return of income nor made any submission. The Assessment was completed by the AO u/s 158BC r.w.s. 144 of the I.T. Act vide order Dt. 29th Sept, 2004 assessing the undisclosed income at Rs. 75,58,524/-. The penalty proceedings were also initiated U/s 158 BFA (2) of the I.T. Act.

4. The assessee preferred appeal against the quantum additions. The Commissioner of Income Tax (Appeal) partly allowed the appeal of the assessee. Agitating the additions sustained by the ld. CIT(A), the assessee filed an appeal before this Tribunal (ITAT). The ITAT vide its order Dt. 5th may, 2009 allowed substantial relief to the assessee and deleted various additions in relation to different issues, however sustained additions in respect of dollar deposits of 206220/- and other credits of Rs.3,65,200/- in the Bank Account of the assessee. On giving effect to the ITAT order, the AO assessed the revised undisclosed income at Rs. 5,78,213/- He also passed an order u/s 158BFA (2) of the I.T. Act levying penalty of Rs. 3,65,000/- i. e. @ 100% of the tax levied on the amount of addition confirmed by the ITAT.

Being aggrieved by the penalty order, the assessee filed appeal before the CITA). The CIT(A) vide impugned order has confirmed the penalty. Being aggrieved, the assessee has come in appeal before us.

5. The Ld. AR of the assessee has submitted before us, that during the course of Block Assessment Proceedings, the amount credited in various financial years was treated as unexplained cash credit for the block period totaling Rs. 14,49,275/- The CIT (A) vide his order dt. 06.09.2005 has allowed relief to the extent of Rs. 8,15,000/- and the ITAT vide order dated 05.05.2009 has allowed further relief to the extent of Rs. 25,261/- (i.e. 20,821 + 4,440) to the assessee. The Ld. AR has further submitted that the credit entries in bank 3 ITA No.18/M/2012 Shri Suresh C. Basantani

account of HDFC Bank representing Dollar deposit to the extent of 2,06,220/- and other bank deposits were out of the dollars which the assessee had brought from abroad on his visits to India on various occasions and had remained unutilized during the period of stay in India. The ld. AR has further submitted that the assessee has no business in India or source of Income in India for past several years. The deposit in Bank account represent only remittances from abroad or unutilized money out of money brought in from abroad. The Ld. AR has relied upon the documents showing the dates of visit and period of stay of the assessee in India. He has further relied on the dates and details of deposits to contend that the amounts were out of the unutilized funds of the assessee which were brought by the assessee during his visits to India. The Hon'ble Jurisdictional High Court of Bombay in the case of "CIT vs. Dodsal ltd." [2008]218 CTR 430 has held that terminology of section 158BFA(2) makes it clear that there is a discretion to the AO to direct the payment of penalty. The levy of penalty is not mendatory in relation to the addition of undisclosed income. The Hon'ble High Court has thus upheld the order of the ITAT in accepting the explanation of the assessee and thereby deleting the penalty which was levied by the AO under section 158BFA(2) of the Act. In the case in hand also, the assessee has given explanation about the deposits in the bank. The explanation of the assessee in respect of the other additions/deposits has been accepted in the quantum appeals. Neither during the quantum proceedings nor during the penalty proceedings, there is no rebuttal put by the revenue to the contention of the assessee that he does not carry any business in India and has no source of income in India. We further find that the ITAT in the quantum appeal has sustained the additions to the above extent observing that the explanation given by the assessee was not convincing. However the Tribunal has not given any finding that the explanation given by the assessee was wrong. In view of our discussion made 4 ITA No.18/M/2012 Shri Suresh C. Basantani

above, we do not think it to be fit case of levy of penalty. The penalty levied/confirmed by the lower authorities is therefore ordered to be deleted.

6. In the result, the appeal of the assessee is hereby allowed.

Order pronounced in the open court on 30.06.2015.

Sd/- Sd/- (R.C. Sharma) (Sanjay Garg) ACCOUNTANT MEMBER JUDICIAL MEMBER

Mumbai, Dated: 30.06.2015. * Kishore, Sr. P.S.

Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The CIT (A) Concerned, Mumbai The DR Concerned Bench //True Copy// [

By Order

Dy/Asstt. Registrar, ITAT, Mumbai.