9911796707
TMI Blog2013 (6) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... . Even though the findings and the conclusions of the Commissioner (Appeals) cannot be affirmed however penalty is deleted in view of the interpretation of Explanation 5A to section 271(1)(c). Consequently, the ground raised by the Revenue is treated as dismissed. X X X X Extracts X X X X X X X X Extracts X X X X ..... vey proceedings in our office premises, we were asked to provide tentative trading account and WIP as on the date of survey, but due to laborious and time consuming work this is not possible. On going through the physical break up of work --in-progress with the books I would like to add that the balance sheet of Madhav sankalp for financial year 2007-09(A. Y.2008-09) reveal as under:- SALE 88.54 crores Less:- Estimated Profit 40% 35.42 crores Estimated overall expenditure 53.12 crores Work-in-progress @ 62% 32.94 crores FY 2007-08-Expenditure .. 14 cr FY 2008-09-Expenditure .. 14cr 28.00 crores Estimated difference in expenditure 4.94 crores Say 5.00 crores I would like to further add here that out of the estimated expenditure of ₹ 5.0 crores, ₹ 2,5 crores is for FY 2007-08 and ₹ 2.5 crores is for FY 2008-09. this money has been in vested by both the F. Yrs, on which myself and my son Raja are ready to pay due taxes. We declare this additional income u/s. 132(4), over and above our regular income for F.Yrs. 2007-08 and 2008-09, @ ₹ 1.25 crores each F.Yr under the head investment in Madhav construction (profit in land dealing). 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... findings of Hon'ble ITAT Rajkot Bench in the case of Shabbir Alluddin Latiwala V/s. Deputy Commissioner of Income Tax and Shri Gopichand Rupchand Rajani (Supra) I am inclined to agree with the assessee that lnspite assessee's case not being covered by the immunity provided under explanation 5A to sec. 271(1)(c) I hold that even if the assessee is not in a position to establish conclusively that additional income was offered by him voluntarily but at the same time I find that A.O. has also not been able to identify the very foundation on the basis of which assessee had offered additional income. The A.O. neither in the course of assessment proceedings nor in the penalty proceedings has been able to link declaration of additional income with any material found even In the course of search. Even the sale figure of ₹ 88.54 Cr has been adopted purely on the basis. Profit is estimated at 40% to arrive at estimated expenditure. WIP up to date of survey Is estimated at 62%. I further find that the income has been offered only on estimate which Is clearly proved from the statement u/s. 132(4) where every figure has been mentioned on estimate to the extent of even rounding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in Income Tax Appeal no.71 of 2012, vide judgment dated 20th March 2013 and the judgment of Gauahati High Court in CIT v/s Rajesh Kumar Jalan, [2006] 286 ITR 276 (Gau.). Relying on these case laws, he submitted that in these cases, the High Court, in the context of section 54(2) and 54F, wherein similar phrase has been used and in particular in section 54(2), the words mentioned is "time limit under section 139", has been interpreted by the Hon'ble High Court to mean that the words "due date" means the return of income filed under section 139(1) or 139(4) because section 139(4) is the extended period only. If the requirements of the due date has been fulfilled within the time limit of section 139(4) then it meats the requirement of the law. He, thus, submitted that the assessee's income disclosed at the time of search has already been shown on the due date for filing of the return of income and, therefore, penalty cannot be levied by invoking the provisions of Explanation 5A of section 271(1)(c). He further reiterated his submissions as made before the learned Commissioner (Appeals) with regard to the levy of penalty on estimated income. 9. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income." 10. On a plain reading of the aforesaid Explanation, it is apparent that following conditions are essential for levy of penalty under section 271(1)(c):- (i) this Explanation is applicable to an assessee in whose case search has been initiated under section 132 on/or after 1st June 2007; further, (ii) during the course of search, the assessee should be found to be the owner of - (a) any money, bullion, jewellery, for other valuable article or thing to which and the assessee claims to have acquired such assets by utilizing his income for any previous year; or (b) any income which is based on any entry in any books of account or other documents or transactions and claims that these represents income for any previous year which is ended before the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly, in section 43B also, the "due date" has been specifically provided as the date mentioned in sub-section (1) of section 139. In the aforesaid Explanation 5A, the legislature has not specified the due date as provided in section 139(1) but has merely envisaged the words "due date". This "due date" can be very well inferred as due date of the filing of return of income filed under section 139, which includes section 139(4). Where the legislature has provided the consequences of filing of the return of income under section 139(4), then the same has also been specifically provided. For e.g., section 139(3), provides that for the purpose of carry forward losses under sections 72 to 74A, the return of income should be filed within the time limit provided under section 139(1), otherwise losses cannot be set-off. In absence of such a restriction, the limitation of time of "due date" cannot be strictly reckoned with section 139(1). Thus, the meaning of the words "due date", sans any limitation or restriction as given in clause (b) of Explanation 5A, cannot be read as "due date" as provided in section 139(1). The words " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2), if the amount of capital gains is not appropriated by the assessee towards the purchase of new asset within one year before the date on which the transfer of the original asset took place, or which is not utilized by him for the purchase or construction of the new asset before the date of furnishing the return of income under s. 139, the amount shall be deposited by him before furnishing such return not later than due date applicable in the case of assessee for furnishing the return of income under sub-s. (1) of s. 139 in an account in any such bank or institution as may be specified. Relevant sub-s. (2) of S. 54 of the Act reads as under:- Xxx xxx xxx 7. The question which arises is; whether the return filed by the assessee before the expiry of the year ending with the assessment year is valid under s. 139(4) of the Act? 8. Learned counsel for the Revenue has argued that the assessee was required to file return under sub-s. (1) of s. 139 of the Act in terms of sub-s. (2) of s. 54 of the Act. It is contended that sub-s. (4) is not applicable in respect of the assessee so as to avoid payment of long-term capital gain. 9. On the other hand, learned counsel for the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion (2) of Section 54 of the Income-tax Act, 1961, it is clear that only section 139 of the Income-tax Act, 1961, is mentioned in section 54(2) in the context that the unutilized portion of the capital gain on the sale of property used for residence should be deposited before the date of furnishing the return of the Income-tax under section 139 of the Income-tax Act. Section 139 of the Incometax Act, 1961, cannot be meant only section 139(1), but it means all sub-sections of section 139 of the Income-tax Act, 1961. Under sub- section (4) of section 139 of the Income-tax Act any person who has not furnished a return within the time allowed to him under sub-section (1) of Section 142 may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment year whichever is earlier." The said judgment was relied upon by a Division Bench of the Karnataka High Court in Fathima Bai v. ITO, ITA No.435 of 2004 Decided on 17th October 2008, wherein it was held to the following effect:- "11. The extended due date under section 139(4) would be 31.3.1990. The assessee did not file ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
