Parmanand Soni, V. I.T.O,

ITA 113/JAB/2013

• Counselvise Citation: 11322914 RSA 2013
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 10-02-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 03-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHISHEK SHUKLA
• Keywords: Unexplained cash credit; Source of fund

Judgement Text

I.T.A. NO. 113/JAB/2013 ASSESSMENT YEAR 2000-01 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR [CORAM: I C SUDHIR JM AND PRAMOD KUMAR AM] I.T.A. NO. 113/JAB/2013 ASSESSMENT YEAR: 2000-01 PARMANAND SONI, .APPELLANT C/O USHA GOLD PALACE, PRAKASH CHOWK, REWA. [PAN: AOPPS 1004 K] VS. INCOME-TAX OFFICER, RESPONDENT REWA-I. APPEARANCES BY: NONE FOR THE APPELLANT ABHISHEK SHUKLA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING: 11 TH FEBRUARY, 2015 DATE OF PRONOUNCING THE ORDER: 31 ST MARCH, 2015 O R D E R PER PRAMOD KUMAR: 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT H AS CHALLENGED CORRECTNESS OF LEARNED CIT(A)S ORDER DATED 01.11.2012 CONFIRMING PENALTY IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 , FOR THE ASSESSMENT YEAR 2000- 01. 2. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIA L FACTS NEED TO BE TAKEN NOTE OF. THIS IS A CASE IN WHICH UNEXPLAINED CASH CREDIT TO THE EXTENT OF RS.5,00,000 HAS BEEN CONFIRMED ON THE GROUND THE SOURCE OF FUNDS IN THE HANDS OF THE LENDER COULD NOT BE CONFIRMED. IN RESPECT OF THIS QUANTUM ADDITION PENA LTY UNDER SECTION 271(1)(C) AS I.T.A. NO. 113/JAB/2013 ASSESSMENT YEAR 2000-01 PAGE 2 OF 3 UNDISCLOSED INCOME WAS ALSO IMPOSED. WHEN PENALTY W AS CHALLENGED IN APPEAL, LEARNED CIT(A) CONFIRMED THE SAME BY OBSERVING AS F OLLOWS : DECISION: ON CAREFUL PERUSAL OF MATERIAL ON RECORD AND THE SU BMISSIONS OF THE COUNSEL, I FIND THAT THE APPELLANT SATED THAT HE HA D RAISED LOAN OF RS. 5 LACS FROM ONE SHRI PRABHU OF SANA. IT WAS ONLY LATER THAT HE CHANGED HIS STAND AND SUBMITTED THAT HE HAD TAKEN THE LOAN NOT FROM MR. PRABHU BUT FROM APSARA STORES PROP : SHRI NARAYANDAS SABNANI, SATNA. ON VERIFICATION BY THE D EPARTMENT, IT WAS FOUND THAT APSARA STORES HAD CLOSED ITS BUSINESS PRIOR TO AY 2 000-01 AND NO RETURN OF INCOME FILED BY SHRI NARAYANDAS SABNANI AND FURTHER, THERE WAS NO WITHDRAWAL OF MONEY FROM THE ACCOUNT OF APSARA STORES FOR PURCHASE OF T HE DRAFT. SHRI SABNANI STATED THAT THE DRAFT WAS PURCHASED IN CASH AND COULD NOT EXPLAIN THE SOURCE OF FUND FOR PURCHASE OF DRAFT. THE APPELLANT INITIALLY STATED T HAT LOAN OF RS.5 LACS WAS TAKEN FROM MR. PRABHU IN HIS STATEMENT RECORDED ON OATH. WHEN THE APPELLANT WAS ASKED TO PRODUCE MR. PRABHU, HE CHANGED HIS STAND AND STA TED TO HAVE RECEIVED THE LOAN FROM M/S APSARA STORES PROP. NARAYANDAS SABNANI. M /S. APSARA STORES CLOSED ITS BUSINESS. THE PURCHASE OF DRAFT WAS NOT VERIFIABLE FROM THE BOOKS OF ACCOUNT OF APSARA STORES AS NO BOOKS OF ACCOUNTS WERE MAINTAIN ED BY THIS CONCERN DURING THE RELEVANT FINANCIAL YEAR. THE PURCHASE OF DRAFT IS A LSO NOT APPEARING IN THE BANK ACCOUNT OF THE CONCERN AS IT WAS PURCHASED IN CASH. THOUGH, NARAYANDAS SABNANI CONFIRMED THE LOAN GIVEN TO THE APPELLANT, BUT THIS CONFIRMATION HAS NO MEANING AS SOURCE OF FUNDS HAS NOT BEEN EXPLAINED. THE APPELLA NT SHIFTING STAND OF RENAMING THE CREDITOR INDICATES NEITHER THE IDENTITY OF THE CREDITOR NOR THE GENUINENESS OF THE TRANSACTION HAS BEEN PROVED. IN VIEW OF ABOVE, I HOLD THAT THE AO HAD CORRECTLY IMPOSED THE PENALTY OF RS.2,62,304/- UNDER SECTION 271(1)(C) OF THE I.T. ACT THE CASE LAWS CITED HAVE BEEN PERUSED AND ARE FOUND DIS TINGUISHABLE ON FACTS AND HENCE, NOT CONSIDERED. THE PENALTY LEVIED, IS HEREB Y CONFIRMED. 3. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. NONE APPEARED FOR THE ASSESSEE BUT THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS. WE HAVE HEARD THE DEPARTMENTAL REPRESENTATIVE, PERU SED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTS OF THE CASE IN THE LIGHT OF T HE APPLICABLE LEGAL POSITION. 5. WE HAVE NOTED THAT ASSESSEE HAS NOT ONLY GIVEN A REASONABLE EXPLANATION ABOUT THE CREDIT BUT THE LENDER HAS ALSO CONFIRMED THE SA ME. WHILE WE REFRAIN FROM MAKING ANY OBSERVATION ON MERITS, WE HAVE TAKEN NOTE OF HO NBLE JURISDICTIONAL HIGH COURTS DECISION HAVING TAKEN A STAND, IN THE CASE CIT VS. METACHEM INDUSTRIES (245 ITR 160), I.T.A. NO. 113/JAB/2013 ASSESSMENT YEAR 2000-01 PAGE 3 OF 3 THAT ONCE AN ASSESSEE IS ABLE TO EXPLAIN AND PRODUC E THE PERSON WHO HAS GIVEN HIM THE FUNDS AND IRRESPECTIVE OF WHETHER OR NOT SUCH P ERSON IS ABLE TO SHOW WHERE SUCH LENDER GOT FUNDS FROM, THE RESPONSIBILITY OF THE AS SESSEE IS DISCHARGED. IN SUCH A SITUATION, IT IS ONLY ELEMENTARY THAT WHEN ASSESSEE HAS IDENTIFIED AND ESTABLISHED THE LENDER, THE ASSESSEE CANNOT BE SADDLED WITH PENALTY U/S 271(1)(C) JUST BECAUSE SOURCE OF FUNDS IN THE HANDS OF THE LENDER COULD NO T BE CONFIRMED. ACCORDINGLY, IN OUR VIEW, AUTHORITIES BELOW WERE IN ERROR IN REJECTING EXPLANATION OF THE ASSESSEE. 6. FOR THE REASONS SET OUT ABOVE, WE UPHOLD THE PLE A OF THE ASSESSEE AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PENALT Y. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 7. IN THE RESULT, APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT TODAY ON 31 ST MARCH, 2015. SD/- SD/- I C SUHDIR PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) DATED: THE 31 ST DAY OF MARCH, 2015 *AKS/- COPIES TO : (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL JABALPUR BENCH, JABALPUR