SHRI SANJAY KUMAR, Jaipur V. ITO, Jaipur

ITA 1017/JPR/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7789 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 21-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 68

Judgement Text

ITA NO. 1017/JP/2011 SANJAY KUMAR VS. ITO, WARD - 3(1), JAIPUR 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 1017/JP/2011 ASSESSMENT YEARS : 2004-05 PAN : AIOPK 8247 R SHRI SANJAY KUMAR VS. THE ITO B-1/552, 553, 554, AAKANSHA EXCELLENCY WARD- 3(1) PRATAP MARG, CHITRKOOT YOGNA, JAIPUR JAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI VINOD KUMAR GUPTA DEPARTMENT BY: SHRI RAJESH OJHA DATE OF HEARING: 08-09-2014 DATE OF PRONOUNCEMENT: 26-09-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 06-09-2011 FOR THE ASSESS MENT YEAR 2004-05 CHALLENGING THE IMPOSITION OF PENALTY OF RS. 1,60,5 00/- U/S 271(1)( C) OF THE I.T. ACT, 1961. 2.1 BRIEF FACTS OF THE CASE ARE THAT THE AO MADE V ARIOUS ADDITIONS INCLUDING THE ABOVE ADDITION DURING 1 ST ROUND OF ASSESSMENT PROCEEDINGS. 2.2 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL ON QUANTUM ADDITIONS WHERE THE LD. CIT(A) DELETED THE ADDITIONS. THE ITA T IN REVENUES APPEAL ITA NO. 1017/JP/2011 SANJAY KUMAR VS. ITO, WARD - 3(1), JAIPUR 2 VIDE ITS ORDER DATED 29-10-2010 IN ITA NO. 914/JP/2 008 SET ASIDE THE QUANTUM ISSUES AND FURTHER DIRECTING THE AO TO SET OFF TRADING ADDITION AGAINST THE LOAN AMOUNT RECEIVED BY FOLLOWING OBSER VATIONS. 12. REMAINING GROUND IN APPEAL OF THE DEPARTMENT IS DIRECTING TO ALLOW SET OFF OF THE TRADING ADDITION AGAINST THE CONFIRMED ADDITION OF RS. 5 LACS MADE BY THE AO UNDER SECTION 68. AN ADDITION OF RS. 5 LACS WAS MADE UNDER SECTION 68 AS ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE LOAN TAKEN FROM SHRI SANJAY JAIN. ALTERNATIVE CONTENTION OF THE ASSESSEE WAS ACCEPTED BY THE LD. CIT (A) THAT WHATEVER THE TRADING ADDITION IS SUSTAINED THAT SHO ULD BE ALLOWED TO BE SET OFF AGAINST THE AMOUNT OF LOAN. ACCORDINGLY, THE AO WAS DIRECTED. 13. .. 14. 15. AFTER CONSIDERING THE SUBMISSIONS AND PERUSING OTHER MATERIAL ON RECORD, WE ARE OF THE VIEW THAT THIS MA TTER SHOULD GO BACK TO THE FILE OF AO TO EXAMINE THIS ASPECT AFRESH THA T WHETHER SET OFF OF THE PROFIT DETERMINED BY AO CAN BE ALLOWED AGAINST UNPROVED LOAN. IT IS A SETTLED PROPOSITION OF LAW THAT IF ANY TRADING ADDITION IS MADE THAT CAN BE SET OFF AGAINST ANY OTHER ASSET. HOWEVER, TH E ONUS IS ON THE ASSESSEE TO PROVE THAT TRADING ADDITION MADE BY AO WAS AVAILABLE WITH THE ASSESSEE BEFORE INTRODUCING THE ASSET I.E. IN SHAPE OF LOAN OR OTHERWISE. THIS FACT HAS NOT BEEN EXAMINED BY LD. CIT (A) NOR THE AO WAS ALLOWED ANY OPPORTUNITY, THEREFORE, TO MEET THE ENDS OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF AO. THE AO IS AL SO DIRECTED TO AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESS EE. 2.3 IN THE MEANWHILE THE AO PASSED THE IMPUGNED PEN ALTY ORDER ON 30- 03-2009 WITHOUT AWAITING THE RESULT OF THE APPEAL O N QUANTUM. AGAINST THIS PENALTY ORDER ALSO, THE ASSESSEE PREFERRED FIRST AP PEAL BEFORE THE LD. CIT(A). ITA NO. 1017/JP/2011 SANJAY KUMAR VS. ITO, WARD - 3(1), JAIPUR 3 THOUGH LD CIT(A) HAS MENTIONED THE ITAT ORDER SETTI NG ASIDE THE QUANTUM STILL CONFIRMED THE PENALTY. 2.4 CONSEQUENT TO ITAT ORDER SETTING ASIDE THE QUAN TUM ADDITIONS, THE ASSESSMENT WAS REFRAMED BY THE AO VIDE ORDER DATED 12-12-2011 WHICH IS PLACED AT PAGES 38 TO 41 OF ASSESSEE'S PAPER BOOK AGAIN MAKING THE SAID ADDITIONS. LD AO AGAIN IMPOSED THE PENALTY U/S 271( 1) (C ) OF THE ACT VIDE HIS ORDER DATED 28-06-2012 QUA THESE ADDITIONS. A S THE FACTS UNFOLD, ASSESSE STAND PENALIZED TWICE U/S 271(1) ( C ) 2.5 THE ASSESSEE'S APPEAL AGAINST PENALTY LEVIED DU RING FIRST ROUND CAME UP FOR HEARING BEFORE THE LD. CIT(A) WHO BY IMPUGNE D ORDER DATED 06-09- 2011 CONFIRMED THE PENALTY ORDER OF THE AO DATED 3 0-03-2009. 2.6 AGGRIEVED AGAINST THIS ORDER, THE ASSESSEE IS B EFORE US. 2.7 THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AND CONTENDED THAT THE FIRST ORDER OF THE AO STANDS MERGED WITH ITAT O RDER DATED 29-10-2010 AND CONSEQUENTLY THE PENALTY IMPOSED QUA THAT 1 ST ROUND ORDER ALSO BECOMES INFRUCTUOUS INASMUCH AS THE QUANTUM ADDITION ITSELF HAVE BEEN SET ASIDE. THEREFORE, THE IMPUGNED ORDER OF THE LD. CIT(A) IS BAD IN LAW AS NEITHER FIRST QUANTUM ORDER NOR THE PENALTY ORDER NO MORE EXIST. THERE IS NO PREJUDICE TO THE REVENUES INTEREST INA SMUCH AS THE AO HAS AGAIN IMPOSED THE PENALTY ON THE SAME ADDITIONS IN 2 ND ROUND VIDE ORDER ITA NO. 1017/JP/2011 SANJAY KUMAR VS. ITO, WARD - 3(1), JAIPUR 4 DATED 28-06-2012 AGAINST WHICH ALSO ASSESSEE HAS FI LED AN APPEAL. THE COPY OF 2 ND ROUND PENALTY ORDER AND APPEAL MEMO FILED BEFORE C IT(A) IN FORM NO. 35 IS PLACED AT PAGE 50 OF THE ASSESSEE'S PAPER BOO K IN THIS BEHALF. IT IS PLEADED THAT THE LD. CIT(A)S ORDER IS BAD IN LAW A ND IT SHOULD BE HELD AS INVALID AND THUS THE APPEAL OF THE ASSESSEE BE ALLO WED. 2.8 THE LD. DR IS HEARD ON THIS ISSUE. 2.9 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND MERIT IN THE ARGUMENTS OF THE LD. COUNSEL FOR THE ASSESSEE RELEVANT ORDERS ARE PLACED IN THE PAPE R BOOK. IT IS A FACT EMERGING FROM RECORD THAT AOS ORIGINAL QUANTUM ORDE R HAS BEEN SET ASIDE. THE LD. CIT(A) OUGHT NOT TO HAVE CONFIRMED THIS PEN ALTY MORE SO WHEN HE HAS HIMSELF REFERRED THE ITAT ORDER SETTING ASIDE T HE QUANTUM ADDITIONS. AO HAS PASSED THE ORDER GIVING THE EFFECT TO THE ITAT ORDER (SUPRA) AND AGAIN IMPOSED PENALTY FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE THE LD. CIT(A) WHICH IS PENDING. THIS HAS RESULTED IN DOUBLE JEOPA RDY FOR THE ASSESSE BY PENALIZING FOR PENALTY TWICE QUA SAME ADDITIONS. TH US WE HOLD THAT THE IMPUGNED ORDER OF THE LD. CIT(A) IS BAD IN LAW WHIC H IS QUASHED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE A LLOW THE APPEAL OF THE ASSESSEE. ITA NO. 1017/JP/2011 SANJAY KUMAR VS. ITO, WARD - 3(1), JAIPUR 5 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 26- 09-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 26 TH SEP 2014 *MISHRA COPY FORWARDED TO:- 1. SHRI SANJAY KUMAR, JAIPUR 2. THE ITO, WARD- 3 (1), JAIPUR 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO. 1017/JP/2011) BY ORDER AR ITAT, JAIPUR