M/s Ekido Holiday Tours Pvt. Limited, Chandigarh V. DCIT, Chandigarh

ITA 1015/CHANDI/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6171 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1015/CHD/2013 ASSESSMENT YEAR: 2006-07 M/S EKIDO HOLIDAY TOURS PVT. LTD., VS. THE D.C.I.T CHANDIGARH, CIRCLE I(1) CHANDIGARH PAN NO. AAACE6729K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. JASPAL SHARMA RESPONDENT BY : SHRI J.S. NAGAR DATE OF HEARING : 21/07/2014 DATE OF PRONOUNCEMENT : 25/07/2014 ORDER PER T.R.SOOD, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 22.08.2013 OF CIT (APPEALS), CHANDIGARH. 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL:- 1. THE IMPUGNED ORDER IS BOTH AGAINST FACTS AND ERRONE OUS IN LAW. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN H AVING CONFIRMED THE PENALTY AMOUNTING TO RS. 58,500/- IMP OSED BY THE ASSESSING OFFICER U/S 271(1)(C)OF THE INCOME TA X ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) HAS ERRED IN HAVING HELD THAT THE PENA LTY FOR CONCEALMENT HAS RIGHTLY BEEN LEVIED IN VIEW OF EXPL ANATION 1(B) BELOW SECTION 271(1) OF THE ACT. 2 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS REC EIVED UNSECURED LOANS FROM DIRECTORS SHRI N.K. MALHOTRA, SHRI KAPIL MALHOTRA A ND SHRI SANDESH MALHOTRA AMOUNTING TO RS. 50,000/-, RS. 75,000/- AND RS. 73, 000/- RESPECTIVELY. THE ASSESSEE WAS REQUESTED TO PRODUCE THE COPIES OF THE BANK ACCOUNTS AND CONFIRMATION ETC. FROM THE BANK STATEMENTS IT WAS NOTICED THAT CASH WAS DEPOSITED ON TWO - THREE DAYS BEFORE THE CHEQUE WAS ISSUED IN THE NAME OF THE COMPANY, THEREFORE, THESE UNSECURED LOANS WERE NOT ACCEPTED AND AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. PENALTY PROCE EDINGS U/S 271(1)(C) WERE ALSO INITIATED. 4. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY IT WAS MAINLY SUBMITTED THAT ALL THE DIRECTORS WERE INCOME TAX PA YEES AND EXPLANATION FOR THE SOURCE OF DEPOSIT WAS ALSO GIVEN BEFORE THE APPEAL PROCEEDINGS. THE ASSESSING OFFICER DID NOT FIND FORCE IN THESE SUBMISSIONS AND HE RECORDED OBSERVATIONS MADE IN THE ASSESSMENT ORDER THAT THERE WAS NO DEFI NITE SOURCE OF DEPOSIT AND LEVIED A MINIMUM PENALTY OF RS. 58,500/-. 5. ON APPEAL THE ACTION OF THE ASSESSING OFFICER WA S CONFIRMED BY LD. CIT(A). 6. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITT ED THAT ASSESSEE HAS GIVEN A BONAFIDE EXPLANATION REGARDING THE DEPOSITS MADE BY THE DIRECTORS. EVEN IF SUCH BONAFIDE EXPLANATION WAS NOT ACCEPTABLE, PLAUS IBLE ACTION SHOULD HAVE BEEN TAKEN IN THE HANDS OF THE DIRECTORS BECAUSE ASSESSE E COMPANY WAS NOT RESPONSIBLE FOR DEPOSITS. FURTHER ONCE THE BONAFID E EXPLANATION IS GIVEN THEN PENAL ACTION IS NOT POSSIBLE. 7. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ER OF ASSESSING OFFICER. 3 8. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT ASSESSEE HAS GIVEN A BONAFIDE EXPLANATION THAT CASH WAS DEPOSITED BY TH E DIRECTORS FROM CASH SAVED OUT OF VARIOUS WITHDRAWALS BY THESE DIRECTORS. EVEN THE DETAILS OF WITHDRAWALS WERE FURNISHED BEFORE THE ASSESSING OFFICER. EVEN IF THIS EXPLANATION WAS NOT ACCEPTED THIS WILL NOT LEAD TO CONCLUSION THAT ASSE SSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF INCOME. KEEPING IN VIEW THESE FACTS IN HAND AS WELL AS SMALLNESS OF TH E AMOUNT INVOLVED, WE ARE OF THE OPINION, THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY AND, THEREFORE, WE SET ASIDE THE ORDER OF LD. CIT(A) AND DELETE THE SAME. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 25.7.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R.SOOD) JUDICIAL MEMBER ACCOUNTANT MEMER DATED : 25 TH JULY, 2014 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR