Shri Anil Yashpal Khosla, Ahmedabad V. The Income Tax Officer,Ward-7(2), Ahmedabad

ITA 1078/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5902 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 29-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: PF JAIN
• Section: 133(6)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 1078 & 1079/AHD/2015 (ASSESSMENT YEAR: 2009-10) SHRI ANIL YASHPAL KHOSLA B-24, KONARK KARISHNA, NEAR RENUKA HALL, VASTRAPUR, AHMEDABAD- 380015 PAN NO. AFYPK 8876P AND SMT. GEETA ANIL KHOSLA B-24, KONARK KARISHNA, NEAR RENUKA HALL, VASTRAPUR, AHMEDABAD-380015 PAN NO. AFYPK 5596C V/S INCOME TAX OFFICER, WARD- 7 (2), AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P. F. JAIN, A.R. RESPONDENT BY : SHRI G. C. DAXINI, SR. D.R. ( )/ ORDER DATE OF HEARING : 01 -03-201 8 DATE OF PRONOUNCEMENT : 19 -03-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER 1. ITA NOS. 1078 & 1079/AHD/2015 ARE TWO SEPARATE APPE ALS BY TWO DIFFERENT ASSESSEES PREFERRED AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-13 ITA NOS. 107 8 & 1079/AHD/2015 . A.Y. 2009-1 0 2 AHMEDABAD AND CIT(A)-3, AHMEDABAD DATED 23.03.2015 PERTAINING TO A.Y. 2009-10 RESPECTIVELY. 2. SINCE THE GRIEVANCE OF THE BOTH THE APPELLANTS RELA TE TO THE SIMILAR SET OF FACTS, THEREFORE BOTH THE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVIT Y. 3. IN ITA NO. 1078/AHD/2015, THE ASSESSEE IS AGGRIEVED BY THE LEVY OF PENALTY OF RS. 22.15 LACS U/S. 271(1)(C) OF THE ACT AND ITA NO . 1079/AHD/2015, THE ASSESSEE IS AGGRIEVED BY THE LEVY OF PENALTY OF RS. 9 LACS U/S. 271(1)(C) OF THE ACT. 4. FACTS OF THE CASE WHICH TRIGGER THE LEVY OF PENALTY RELATES TO THE DEPOSIT OF CASH FOND IN THE AXIS BANK LTD, VASTRAPUR BRANCH AND ALS O IN ICICI BANK, VASTRAPUR BRANCH IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT ALONG WITH SUPPO RTING EVIDENCE. IT WAS EXPLAINED THAT THE ASSESSEE HAS STARTED TRADING BUS INESS IN SUIT PIECE AND THE CASH DEPOSITED IN THE BANK ACCOUNT WERE OUT OF THE SALE OF ITS TRADING GOODS. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSEE CLAIMED TO HAVE DONE BUSINESS WITH UTSAV CORPORATION AND JAY AMBE SALES CORPORATION. T HE A.O. ISSUED NOTICE U/S. 133(6) OF THE ACT. IN RESPONSE TO THIS NOTICE, SHRI PIYUSH PATEL ATTENDED THE PROCEEDINGS AND STATED THAT HE HAS DONE NO TRANSACT ION WITH THE ASSESSEE. 5. THE ASSESSEE WAS CONFRONTED WITH THE STATEMENT OF S HRI PIYUSH PATEL. THE ASSESSEE STATED THAT HE DOES NOT KNOW UNDER WHAT CI RCUMSTANCES SHRI PIYUSH PATEL DENIED OF HAVING DONE ANY TRANSACTION, THOUGH THE ASSESSEE STILL CONTENDS THAT THE TRANSACTIONS WERE DONE. ITA NOS. 107 8 & 1079/AHD/2015 . A.Y. 2009-1 0 3 6. ON THESE FACTS, THE A.O. TREATED THE ENTIRE CASH DE POSIT AS THE INCOME OF THE ASSESSEE AND INITIATED PENALTY PROCEEDINGS U/S. 271 (1)(C) OF THE ACT. 7. DURING THE COURSE OF THE PENALTY PROCEEDINGS, THE A SSESSEE FILED AN AFFIDAVIT OF SHRI PIYUSH PATEL WHO IN HIS AFFIDAVIT STATED THAT HE WANTED TO CLARIFY THE INCORRECT STATEMENT AND FOR WHICH HE WENT TO THE OF FICE OF THE ASSESSING OFFICER BUT WAS NOT ALLOWED TO GIVEN A FRESH STATEM ENT. IN HIS AFFIDAVIT, SHRI PIYUSH PATEL CATEGORICALLY STATED THAT HE HAS ISSUE D SALES BILL FROM JAY AMBE SALES CORPORATION. 8. THE A.O. WAS NOT IMPRESSED BY THIS AND CONCLUDED TH E PENALTY PROCEEDINGS BY LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. 9. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. 10. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE VEHEMEN TLY STATED THAT THOUGH HE HAS LOST IN THE QUANTUM PROCEEDINGS BUT THE FACT OF THE MATTER IS THAT THE CASH FOUND TO BE DEPOSITED IN THE BANK ACCOUNT WERE RELA TED TO THE SALES OF SUIT PIECES. IT IS THE SAY OF THE LD. COUNSEL THAT BUSIN ESS RECEIPTS WERE DEPOSITED IN THE BANK ACCOUNT AND AT THE MOST ONLY PROFIT MARGIN SHOULD HAVE BEEN CONSIDERED AS THE INCOME OF THE ASSESSEE. BE THAT A S IT MAY, THE LD. COUNSEL STATED THAT THE PENALTY SO LEVIED IS CONTRARY TO TH E FACTS OF THE CASE. PER CONTRA, THE LD. D.R. STRONGLY SUPPORTED THE FINDINGS OF THE A.O. 11. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. IT IS WELL SETTLED THAT ASSESSMENT PROCEEDIN GS AND PENALTY PROCEEDINGS ITA NOS. 107 8 & 1079/AHD/2015 . A.Y. 2009-1 0 4 ARE SEPARATE AND DISTINCT PROCEEDINGS AS HELD BY TH E HONBLE SUPREME COURT IN THE CASE OF ANANTHRAMAN VEERASINGHAIALT & CO. 123 I TR 457. THE FINDING IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CO NCLUSIVE FOR THE PURPOSES OF THE PENALTY PROCEEDINGS. THE LAW IS WELL SETTLED THAT THOUGH THE FINDING RECORDED IN THE ASSESSMENT ORDERS ARE RELEVANT EVID ENCE TO SUPPORT THE ALLEGATION OF CONCEALMENT, FILING OF INACCURATE PAR TICULARS OF INCOME BUT THESE CANNOT BE THE FOUNDATION FOR HOLDING THE ASSESSEE G UILTY OF CONCEALMENT/ FILING OF INACCURATE PARTICULARS OF INCOME. IN THE LIGHT O F THIS WELL SETTLED PRINCIPLE, THE AFFIDAVIT OF SHRI PIYUSH PATEL CANNOT BE BRUSHED AS IDE LIGHTLY. WE DO NOT KNOW UNDER WHAT CIRCUMSTANCES SHRI PIYUSH PATEL MADE THE STATEMENT BEFORE THE A.O. BUT THE CONTENTS OF HIS AFFIDAVIT ARE SELF EXP LANATORY THOUGH THE SAME WAS NOT FILED DURING THE COURSE OF THE ASSESSMENT PROCE EDINGS. 12. WE FIND THAT AFTER FURNISHING THE AFFIDAVIT, THE AS SESSEE HAD MADE SPECIFIC REQUEST FOR MAKING FURTHER ENQUIRIES/INVESTIGATION BUT NO FURTHER ENQUIRY WAS MADE BY THE A.O. IF UTSAV CORPORATION DID NOT RESPO ND TO THE NOTICE U/S. 133(6) OF THE ACT, THE A.O. SHOULD NOT HAVE DRAWN A NY ADVERSE INFERENCE WITHOUT MAKING ANY FURTHER ENQUIRY. IT APPEARS THAT THE ENTIRE ADDITIONS HAVE BEEN MADE ONLY ON THE BASIS OF SUSPICION, CONJUNCTU RES AND SURMISES. IN OUR CONSIDERED OPINION, THE SAME CANNOT BE THE FOUNDATI ON FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 13. IN OUR CONSIDERED OPINION, THE ASSESSEE HAD GIVEN A VERY LOGICAL AND REASONABLE EXPLANATION IN RESPECT OF CASH FOUND TO BE DEPOSITE D IN THE BANK ACCOUNTS. IT IS EQUALLY TRUE THAT THE SAID EXPLANATION DID NOT FIND ANY FAVOUR WITH THE A.O. BUT THE FACT REMAINS THAT A VERY LOGICAL AND REASONABLE EXPLANATION WAS GIVEN BY THE ASSESSEE. IN OUR UNDERSTANDING OF THE FACTS, WE DO NOT FIND ANY THIS TO BE A FIT ITA NOS. 107 8 & 1079/AHD/2015 . A.Y. 2009-1 0 5 CASE FOR THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. WE ACCORDINGLY SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY IN BOTH THESE APPEALS. BOTH THESE APPEALS ARE ACCORDINGLY A LLOWED. 14. BEFORE CLOSING, THE ASSESSEE HAS ALSO RAISED AN ADD ITIONAL GROUND BUT THE SAME WAS NOT PRESSED AND THEREFORE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 03- 20 18 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 19 /03/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD