Sh. Shyam Lal Mulwani, Lucknow V. ITO, Lucknow

ITA 110/LKW/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 48331 (ITAT-LUCKNOW)
• Duration Of Justice: 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 13-04-2011
• Assessment Year: 2002-2003
• Appeal Filed On: 04-03-2011
• Court: TRIBUNAL
• Department Lawyers: P K B AJAJ
• Assessee Lawyers: K R RASTOGI
• Section: 271(1)(c); 143(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: LUCKNOW BENCH SMC, LUCKNOW (BEFORE HONBLE SHRI H. L. KARWA, VICE PRESIDENT) ITA NO.110/LKW/2011 ASSESSMENT YEAR:2002-03 SHYAM LAL MULWANI C/O ABC CORNER, 6A, AMINABAD PARK LUCKNOW V. THE INCOME TAX OFFICER RANGE V(1), LUCKNOW (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K. R. RASTOGI, C.A. RESPONDENT BY: SHRI. P. K. BAJAJ, D.R. O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) II, LUCKNOW DATED 16.11.2010 IN CONFIR MING THE PENALTY OF $ 27,540 LEVIED U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 2002-03. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT FOR THE ASSESSMENT YEAR 2002-03, THE ASSESSEE FILED RETURN ON 30.1.2003 DEC LARING TOTAL INCOME AT $ 1,93,910 WHICH COMPRISED OF RENTAL INCOME OF $ 83,640, INCOME FROM BUSINESS OF $ 1,06,067 AND INCOME FROM OTHER SOURCES OF $ 13,202. A DEDUCTION OF $ 9,000 WAS CLAIMED UNDER CHAPTER VI-A THEREON. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON 26.3.2003 O N THE RETURNED INCOME AND A DEMAND OF $ 21,389 WAS RAISED THEREON. THE CASE WAS SUBSEQUENT LY PICKED UP UNDER COMPUTERIZED SELECTION OF SCRUTINY CASES AND IN COMPLIANCE OF THE SAME A NOTICE U/S. 143(2) OF THE ACT DATED 1 2.11.2003 WAS ISSUED AND DULY SERVED ON THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT IN THE BANK ACCOUNT TWO CREDIT ENTRIES APPEARED ON 21.7.2001 INDICATING CRE DIT OF $ 1,03,000 AND $ 90,000. BOTH OF THESE AMOUNTS WERE PAID TO THE ASS ESSEE BY M/S AMBER SAHKARI AWAS SAMITI LIMITED BY CHEQUE NOS.968994 AN D 968991. AS NO SATISFACTORY EXPLANATION WAS OFFERED BY THE ASSESSE E, THE SAME WAS ADDED :-2-: TO THE TOTAL INCOME OF THE ASSESSEE TREATING AS INC OME FROM UNEXPLAINED BUSINESS. THE ASSESSING OFFICER ISSUED NOTICE U/S. 271(1)(C) OF THE ACT REQUIRING THE ASSESSEE TO SHOW CAUSE AS TO WHY PENA LTY U/S. 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED. NO COMPLIANCE WAS M ADE BY THE ASSESSEE AND THEREFORE THE ASSESSING OFFICER ISSUED ANOTHER SHOW CAUSE NOTICE ON 7.8.2006. ACCORDING TO THE ASSESSING OFFICER, ON 8 .8.2006 THE ASSESSEE FILED WRITTEN SUBMISSIONS. HOWEVER, THE ASSESSING OFFICER DID NOT FIND ANY MERIT IN THE SUBMISSIONS OF THE ASSESSEE AND LEVIED A PENALTY OF $ 27,540 OBSERVING AS UNDER:- 4. THE CASE LAWS CITED BY THE ASSESSEE ARE DISTING UISHABLE ON FACTS AND NOT APPLICABLE IN THE INSTANT CASE. AS A T THE APPELLATE STAGES I.E. LD. CIT(A) AND HON'BLE ITAT, THE ADDITI ON OF $ 90,000 WAS CONFIRMED, I AM, THEREFORE, OF THE OPINION THAT THE ASSESSEE HAS CONCEALED/FURNISHED INACCURATE PARTICULARS OF INCOM E AND IS LIABLE FOR IMPOSITION OF PENALTY U/S. 271(1)(C) OF THE INC OME-TAX ACT, 1961. THE MAXIMUM AND MINIMUM PENALTY LEVIABLE WOR KS OUT TO $ 27,540 AND $ 82,620 RESPECTIVELY. LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE I IMPOSE A PENALTY OF $ 27,540 (RUPEES TWENTY SEVEN THOUSAND FIVE HUNDRED FORTY ONLY) U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961. ISSUE NOTICE OF DEMAND A ND CHALLAN ACCORDINGLY. 3. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER, TH E ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE PENALTY STATING THAT THE CREDIT ENTRY OF 90,000 HAS BEEN CONFIRMED BY THE TRIBUNAL. 4. I HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE ALSO PE RUSED THE MATERIALS AVAILABLE ON RECORD. SHRI K. R. RASTOGI, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT RECEIVED FROM M/ S AMBER SAHKARI AWAS SAMITI LIMITED HAS BEEN REPAID BY CHEQUE NO.9902 FR OM ASSESSEES S.B ACCOUNT NO.222119 WITH UNITED BANK OF INDIA, AMINAB AD, LUCKNOW ON :-3-: 31.3.2005. THE ASSESSEE ALSO FILED A COPY OF BANK STATEMENT WITH UNITED BANK OF INDIA, AMINABAD, LUCKNOW WHICH IS AVAILABLE AT PAGES 17 AND 18 OF ASSESSEES PAPER BOOK. ACCORDING TO SHRI K. R. RAS TOGI, LD. COUNSEL FOR THE ASSESSEE, IT IS THUS EVIDENT THAT THE AMOUNT RECEIV ED AS ADVANCE TOWARDS SALE OF AGRICULTURAL LAND HAS BEEN RETURNED BACK TO M/S AMBER SAHKARI AWAS SAMITI LIMITED BECAUSE THE DEAL COULD NOT BE MATERI ALIZED WITH M/S AMBER SAHKARI SAMITI. THE ASSESSEE ALSO FURNISHED A COPY OF BANK STATEMENT OF M/S AMBER SAHKARI AWAS SAMITI LIMITED WITH ORIENTAL BANK OF COMMERCE, ACCOUNT NO.05012010030650 WHEREIN AN AMOUNT OF $ 1.93 LAKHS ( $ 1.03 LAKHS + $ 90,000) HAS BEEN SHOWN IN THE CREDIT SIDE. SHRI K. R. RASTOGI, LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT IN TH E COURSE OF PROCEEDINGS BEFORE THE LD. CIT(A)-II, LUCKNOW, THE ASSESSEE HAS ALSO FILED CONFIRMATORY LETTER DATED 1.4.2005 OF M/S AMBER SAHKARI AWAS SAM ITI LIMITED CONFIRMING THE ADVANCE OF $ 1.03 LAKHS AND $ 90,000. THE COPY OF THE SAME IS AVAILABLE AT PAGES 14 AND 15 OF THE ASSESSEES PAPER BOOK. T HE SAID CONFIRMATORY LETTER READS AS UNDER:- AMBER SAHKARI AVAS SAMITI LTD. REGISTERED OFFICE : 4, SAPRU MARG, LUCKNOW REGN. NO.1879/93 DATE 1.4.2005 TWO WHOM IT MAY CONCERN THIS IS TO CERTIFY THAT WE HAVE RECEIVED BACK $ 1,93,000 (RUPEES ONE LAKH NINETY THREE THOUSAND ONLY) VIDE CHEQUE NO.009 902 OF DATED 31.3.2005 UBI BANK, AMINABAD, LUCKNOW FROM SHRI SHY AM LAL MULWANI C/O ABC CORNER, 6-A, AMINABAD PARK, LUCKNOW , BEING THE AMOUNT GIVEN TOWARDS THE PURCHASE OF AGRICULTURAL L AND AS PER AGREEMENT TO SELL DATED 17 TH DAY OF JULY, 2001. THE LAND IS SITUATED AT VILLAGE AHEMA MAU, DISTRICT LUCKNOW. SINCE SALE OF SAID AGRICULTURAL LAND IN OUR FAVOUR COULD NOT MATURE BECAUSE OF LAND IS ACQUIRED BY U.P. GOVERNMENT VIDE NOTIFICATION UNDER SECTION 4 OF BHOOMI ARJAN ADHINIYAM, 1984. :-4-: WE HAVE GIVEN ADVANCE TO SHRI SHYAM LAL MULWANI, TH E DETAIL IS AS UNDER:- DATE CHEQUE NO. AMOUNT 21.7.01 968994 $ 1,03,000 21.7.01 968991 190,000 THE SAID AMOUNT WERE PAID FROM OUR ACCOUNT WITH ORI ENTAL BANK OF COMMERCE S/B A/C NO.030650. WE HAVE CANCELLED, THE SALE AGREEMENT MADE WITH SHR I SHYAM LAL MULWANI, AS THE SAME IS NO MORE RELEVANT. AMBER SAHKARI AWAS SAMITI LIMITED REGD. OFFICE: 4, SAPRU MARG, LUCKNOW SD/- (SECRETARY) 4.1 SHRI K. R. RASTOGI, LD. COUNSEL FOR THE ASSESSEE SU BMITTED THAT THE LD. CIT(A) HAS NOT PROPERLY CONSIDERED THE EVIDENCE FILED BY THE ASSESSEE AND CONFIRMED THE PENALTY SOLELY ON THE BASIS OF TH E FINDINGS OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS. IN VIEW OF THE CONFIRM ATORY LETTER DATED 1.4.2005 OF M/S AMBER SAHKARI AWAS SAMITI LIMITED, IT IS CLEAR THAT THE ASSESSEE HAD REPAID THE ADVANCE TO THE AFORESAID PA RTY WHICH WAS DULY CREDITED IN THE ACCOUNT OF M/S AMBER SAHKARI AWAS S AMITI LIMITED WITH ORIENTAL BANK OF COMMERCE AND COPY OF BANK STATEMEN T OF THE SAID PARTY IS AVAILABLE AT PAGES 19 AND 20 OF THE ASSESSEES PAPE R BOOK. THE MAIN REASON FOR MAKING THE ADDITION OF $ 90,000 WAS THAT THE ASSESSEE DURING THE QUANTUM PROCEEDINGS COULD NOT PRODUCE THE CONFIRMAT ORY LETTER FROM M/S AMBER SAHKARI AWAS SAMITI LIMITED AND COPIES OF BAN K STATEMENTS OF THE PARTIES, AND THEREFORE THE ADDITION WAS CONFIRMED U PTO THE LEVEL OF THE TRIBUNAL. NOW IN PENALTY PROCEEDINGS, THE ASSESSEE HAS SUBMITTED ALL THESE :-5-: DOCUMENTS BEFORE THE AUTHORITIES BELOW. IT IS SETT LED LAW THAT PENALTY PROCEEDINGS ARE QUASI-CRIMINAL. FINDINGS GIVEN IN THE ASSESSMENT PROCEEDINGS ARE CERTAINLY RELEVANT AND HAVE PROBATI VE VALUE, BUT SUCH FINDINGS ARE MATERIAL ALONE AND MAY NOT JUSTIFY THE IMPOSITION OF PENALTY IN A GIVEN CASE, BECAUSE CONSIDERATIONS THAT ARISE IN PENALTY PROCEEDING ARE DIFFERENT FROM THOSE THAT ARISING IN ASSESSMENT PRO CEEDINGS. IN THE INSTANT CASE, IT IS APPARENT FROM THE RECORD THAT THE ASSES SEE HAD RECEIVED ADVANCE OF $ 90,000 THROUGH CHEQUE FROM M/S AMBER SAHKARI AWAS S AMITI LIMITED FOR WHICH COPY OF AGREEMENT, COPY OF CONFIRMATORY LETTE R CONFIRMING THE ADVANCE AND EVIDENCE FOR MAKING REPAYMENT OF ADVANC E HAVE BEEN FILED AND THEREFORE THERE IS NO REASON FOR IMPOSING PENALTY O N THE AMOUNT OF $ 90,000. IN THE INSTANT CASE, THE LD. CIT(A) HAS NO T APPRECIATED THE SUBMISSIONS MADE IN THE PENALTY PROCEEDINGS. EVEN THE LD. CIT(A) HAS NOT CONSIDERED THE CONFIRMATORY LETTER DATED 1.4.2005 F ILED BY M/S AMBER SAHKARI AWAS SAMITI LIMITED. IN MY OPINION, THE IM PUGNED PENALTY IS NOT LEVIABLE IN THE FACTS AND CIRCUMSTANCES OF THE PRES ENT CASE AND ACCORDINGLY I CANCEL THE PENALTY. 5. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLO WED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 13.4.201 1 SD/- [H. L. KARWA] VICE PRESIDENT DATED:13.4.2011 JJ:1304 COPY FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR