ITO, Chandigarh V. Smt. Manpreet Khaira, Chandigarh

ITA 114/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77140 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 29-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 114/CHD/2014 ASSESSMENT YEARS : 2009-10 I.T.O. WARD 4(3) V SMT. MANPREET KHAIRA CHANDIGARH H NO. 1598, SECTOR 33D CHANDIGARH ADGPV 3675 H (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI J.S. NAGAR RESPONDENT BY: SHRI N EERAJ JAIN DATE OF HEARING 17.6.2014 DATE OF PRONOUNCEMENT 27.6.2014 O R D E R PER T.R. SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 27.11.2013 OF THE LD CIT(A), CHANDIGARH. 2. IN THIS APPEAL THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: 1 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW THE LD. CIT(A) HAS ERRED IN ALLOWING APPEAL OF THE ASSE SSEE WITHOUT APPRECIATING THE FACTS OF THE CASE. 2 ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 4,00,000/- IMPOSED U/S 271(1)(C) EVEN THOUGH THE ASSESSING OFF ICER HAD HELD THAT THE ASSESSEE HAD CONCEALED THE TRUE PARTICULAR S OF HER INCOME AND THE CASE WAS COVERED BY CLAUSE A OF EXPLANATION 1 TO SECTION 2711(C) OF THE ACT. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT DURIN G ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICE D THAT ASSESSEE HAD SHOWN A SUM OF RS. 20,70,000/- AS SECU RITY AND FEES RECEIVED IN ADVANCE. IT WAS FURTHER NOTICED T HAT ALL RECEIPTS OF SECURITIES AND ADVANCE WERE RECEIVED IN CASH BUT NO DOCUMENTARY EVIDENCE WAS AVAILABLE. FURTHER ADD ITION OF RS. 577183/- WAS MADE TO THE CAPITAL ACCOUNT AND WI THDRAWALS 2 WERE AMOUNTING TO RS. 784369/-. HOWEVER, PERUSAL O F THE CAPITAL ACCOUNT SHOWED ADDITION OF RS. 23 LAKHS AND WITHDRAWALS WERE AT RS. 708340/-. THIS SHOWED THAT FIGURES OF BOTH ACCOUNTS DO NOT TALLY. IN THIS BACKGROUND SHO W CAUSE NOTICE WAS ISSUED THAT WHY THE BEST JUDGMENT ASSESS MENT SHOULD NOT BE MADE. ULTIMATELY NET PROFIT OF 37.70 % AS DECLARED BY THE ASSESSEE WAS APPLIED ON THE TOTAL B ANK DEPOSITS WHICH INCLUDED SECURITY AND ADVANCE RECEIP TS. ON THIS ADDITION PENALTY PROCEEDINGS U/S 271(1)(C) OF THE A CT WERE ALSO INITIATED. 4 THE ASSESSING OFFICER HAS LEVIED PENALTY OF RS. 4 LAKHS ON THE ABOVE ADDITION ON THE BASIS THAT THE COUNSEL FOR THE ASSESSEE HAD AGREED FOR THE ABOVE ADDITION. 5 ON APPEAL BEFORE THE LD. CIT(A) IT WAS MAINLY SUB MITTED THAT THE ADDITION HAS BEEN AGREED WITH THE CONDITIO N THAT NO PENALTY WOULD BE IMPOSED. THE LD. CIT(A) OBSERVED THAT ADDITION WAS MADE ON THE ESTIMATED BASIS, THEREFORE PENALTY IS NOT LEVIABLE. 6 BEFORE US. THE LD. D.R. FOR THE REVENUE STRONGLY SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 7 ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESS EE SUBMITTED THAT NORMALLY ADVANCE RECEIPT CANNOT BE T AXED. THE LD. COUNSEL FOR THE ASSESSEE HAD ACCEPTED THE ADDIT ION UNDER WRONG IMPRESSION. HE ALSO STRONGLY SUPPORTED THE I MPUGNED ORDER. 8 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT THIS ISSHE HAS BEEN ADJUDICATED BY THE LD. CIT(A) VIDE P ARAS NO. 5, 5.1 & 5.2 WHICH ARE AS UNDER: 3 5 I HAVE CONSIDERED THE SUBMISSIONS OF THE LD. LD. COUNSEL FOR THE ASSESSEE. FOR THE SAKE OF READY REFERENCE, PARA 3.3 OF THE ASSESSMENT ORDER IS REPRODUCED BELOW: THE ASSESSEES COUNSEL AGREED TO THE ABOVE PROPOSAL AND ALSO FILED A WRITTEN SUBMISSION THAT IN REGARD TO R ECEIPTS OF THE ASSESSEE AND THE SECURITY AND FEE RECEIVED IN A DVANCE, THE ASSESSEE IS NOT ABLE TO TRACE THE FEE BOOK AND THE DETAILS OF THE PERSON FROM WHOM FEE HAS BEEN RECEIV ED AS SHE IS NOT WELL AND NOT ATTENDING THE OFFICE AND HA S NO EMPLOYEE WHO CAN HELP HER AS SHE IS SLOWLY WIDING U P THE BUSINESS. 5.1 THUS THE ASSESSING OFFICER HAD MADE AN ESTIMATE AS AGREED BY THE LD. COUNSEL FOR THE APPELLANT. THE APPELLAN T HAD SUBMITTED BEFORE THE ASSESSING OFFICER IN THE ASSESSMENT PROC EEDINGS THAT THE ADDITION WAS AGREED TO SUBJECT TO NO PENALTY. SINCE THE ADDITION IN THIS CASE WAS MADE ON ESTIMATED BASIS B Y APPLYING NPR AS CLEARLY MENTIONED IN THE ASSESSMENT ORDER, IT IS HELD THAT THE ASSESSING OFFICER WAS NOT RIGHT IN LEVYING PENALTY U/S 271(1)(C) IN VIEW OF JUDGMENT OF HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF HARIGOPAL SINGH, 258 ITR 85 IN WHICH IT HAS BEEN HELD: ADDITION IN HIS INCOME WERE MADE AS ALREADY OBSERV ED ON ESTIMATED BASIS AND THAT BY ITSELF DOES NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE EITHER CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS OF SUCH INCOME. THERE HAS TO BE A POSITIVE ACT OF CON CEALMENT ON HIS PART AND THE ONUS TO PROVE THIS IS ON THE DE PARTMENT. 5.2 IN VIEW OF THE ABOVE, PENALTY LEVIED IS CANCELLED. ABOVE CLEARLY SHOW THAT THE LD. CIT(A) HAS CORRECTL Y DELETED THE PENALTY BECAUSE ADDITION WAS MADE PURELY ON EST IMATED BASIS THAT TOO ON ADVANCE RECEIPTS WHICH MAY NOT BE TAXABLE AT ALL. THEREFORE WE FIND NOTHING WRONG IN THE ORDER OF CIT(A) AND CONFIRM THE SAME. 9. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 27.6.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27.6.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4