Shri Vijyakumar R.Naik, Ahmedabad V. The Income Tax Officer,Ward-7(3), Ahmedabad

ITA 1146/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5932 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 05-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, *,L *,L*,L *,L- -- -,E ,E,E ,E- -- -LH LHLH LH* ** * IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.1146/AHD/2015 ( / ASSESSMENT YEAR : 2007-08) SHRI VIJAYKUMAR R. NAIK, PROP; ANI AGENCIES, SF-3, AKAS COMPLEX, STADIUM ROAD, AHMEDABAD 380 013 VS. THE INCOME TAX OFFICER, WARD 7(3), 5 TH FLOOR, PRATYAKHA KAR BHAVAN, AHMEDABAD 380 015 ! PAN/GIR NO. : AAQPN 6050 F ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI DHIREN SHAH, A.R. #'%$ / RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R & ' (%) * / DATE OF HEARING 25/01/2018 +,-. %) * / DATE OF PRONOUNCEMENT 07/03/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE RELATING TO ASSESSMEN T YEAR 2007-08 IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-3, AHMEDABAD DATED 25/02/2015 WHICH IS AR ISING OUT OF ORDER U/S.271(1)(C) OF THE INCOME TAX ACT, 1961, VIDE APP EAL NO.CIT(A)- 3/ITO/WD.3(3)(3)/263/14-15. 2. FOLLOWING GROUNDS HAVE TAKEN BY THE ASSESSEE: 1. THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE PENALTY LEVIED BY THE LD. AO U/S.271(1)(C) OF THE A CT OF RS.5,58,260/- BEING 100% OF THE TAX SOUGHT TO BE EV ADED. ITA NO.1146/AHD /2015 SHRI VIJAYKUMAR R. NAIK VS. ITO ASST.YEAR 2007-08 - 2 - 2. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN FAILING TO PROPERLY CONSIDER APPELLANTS SUBMISSIONS AS WELL A S THE VARIOUS JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE APPELLAN T. 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, ASSESSEE HAS DEPOSITED CASH TOTALING TO RS.20,72,200/- IN HIS SAVING BANK ACCOUNT WITH HSBC BANK. DURING T HE COURSE OF ASSESSMENT PROCEEDINGS, TIME AND AGAIN THE ASSESSEE HAS REITERATED THAT THE AMOUNT IS OUT OF SALE OF GOLD. HOWEVER, AS PER HIS LEDGER ACCOUNT, THE FOLD SALES DURING THIS YEAR WAS ONLY OF RS.4,01,450 /- AND NOT RS.20,72,200/-. AS THE SOURCE OF RS.16,70,750/- WAS NOT EXPLAINED, THE SAME WAS ADDED BY THE ASSESSING OFFICER. THE SAME W AS ADDED BY THE ASSESSING OFFICER IN PENALTY PROCEEDINGS UNDER SECT ION 271(1) WAS INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF INCOME. 4. THEREAFTER, ASSESSEE PREFERRED APPEAL BEFORE THE LD.CIT(A) WHO CONFIRMED THE ACTION OF LD. ASSESSING OFFICER. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. LD. AR FILED A VOLUMINOUS DETAIL PAPER BOOK IN SUPP ORT OF HIS CONTENTION AT PAGE NO.148. APPELLANT STATED THAT HE HAS PROVID ED THE DETAILS AND EXPLANATIONS IN RESPECT OF SOURCE OF DEPOSITS OF CA SH IN SAID HSBC BANK ACCOUNT VIDE HIS LETTER DATED 31/12/2009. FURTHER S TATED THAT APPELLANT HAS FILED THE CONFIRMATION OF PERSON TO WHOM GOLD WAS S OLD AND ONE PERSON NAMELY NITIN PATELS STATEMENT WAS RECORDED U/S.133 (1A) OF THE ACT. HE ITA NO.1146/AHD /2015 SHRI VIJAYKUMAR R. NAIK VS. ITO ASST.YEAR 2007-08 - 3 - HAS CONFIRMED THE FACT THAT HE HAS PURCHASED GOLD O RNAMENTS FROM THE APPELLANT AND FURTHER SUBMITTED THAT APPELLANT WAS HAVING THE OLD GOLD AND DIAMOND ORNAMENTS HAVING OPENING BALANCE OF RS. 1,50,530/- WHICH HAS BEEN SOLD BY HIM DURING THE F.Y.2006-07 AND FUR THER STATED THE PERSON TO WHOM THE GOLD AND DIAMOND ORNAMENTS WERE SOLD, HAVE ACCEPTED THIS FACT IN THEIR RESPECTIVE STATEMENT RE CORDED BY THE LD. AO U/S.133(1A) OF THE ACT. PAGE NO.34 TO 41 AND PAGE N O.60 TO 64 OF PAPER BOOK. FROM THE PERUSAL OF THIS BANK ACCOUNT AND CAS H BOOK, IT CAN BE NOTICED THAT THE APPELLANT HAS MADE WITHDRAWAL EITH ER THROUGH ATM OR BY CHEQUES FROM THE SAID BANK FROM TIME TO TIME ON DIF FERENT DATES, WHICH HAS BEEN UTILIZED BY HIM FOR RE-DEPOSITING THE SAME IN THE SAID HSBC BANK ACCOUNT. HE HAS ALSO SUBMITTED THE BANK STATEM ENT BEFORE THE AUTHORITIES BELOW. 6. IN SUPPORT OF HIS CONTENTION LD. AR CITED A JUDG MENT OF GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILE VS. CIT(SUPRA), WHERE IN IT HAS BEEN HELD THAT THE ASSESSEE IN THE QUANTUM PROC EEDINGS FAILED TO PRODUCE THE ACCOUNTANT BUT THE DEPARTMENT ALSO IN P ENALTY PROCEEDINGS MADE NO EFFORT TO SUMMON HIM APPLYING THE TEST, DIS CUSSED (II) ABOVE, THEREFORE, IT WAS A CASE WHERE THERE WAS NO CIRCUMS TANCES TO LEAD TO A REASONABLE AND POSITIVE INTERFERENCE THAT THE ASSES SEES CASE THAT THE CASH CREDITS WERE ARRANGED AS TEMPORARY LOANS, WAS FALSE THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOT HESIS THAT IT COULD HAVE BEEN SUNDRY LOANS IN SMALL AMOUNTS OBTAINED F ROM DIFFERENT PARTIES. IN OUR OPINION, THEREFORE EVEN TAKING RECOURSE TO E XPLANATION-1, THE SAME CIRCUMSTANCES OR STATE OF EVIDENCE ON WHICH THE CAS H CREDITS WERE TREATED ITA NO.1146/AHD /2015 SHRI VIJAYKUMAR R. NAIK VS. ITO ASST.YEAR 2007-08 - 4 - AS INCOME, COULD NOT BY THEMSELVES JUSTIFY IMPOSITI ON OF PENALTY WITHOUT ANYTHING MORE ON RECORD PRODUCED BY THE ASSESSEE OR THE DEPARTMENT. IN THIS CASE, HONBLE HIGH COURT GIVEN BENEFIT TO THE ASSESSEE. 7. APART FROM THIS, LD. AR CITED A JUDGMENT OF SUPR EME COURT OF INDIA IN THE MATTER OF CIT VS. RELIANCE PETROPRODUCTS PVT. LTD.,(SUPRA), WHEREIN IT HAS BEEN HELD THAT MERELY BECAUSE THE A SSESSEE HAS CLAIMED THE EXPENDITURE, WHICH CLAIM WAS NOT AC CEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT , IN OUR OPINION, ATTRACT THE PENALTY UNDER SECTION 271(1)(C). IF WE ACCEPT T HE CONTENTION OF THE REVENUE THEN IN CASE OF EVERY RETURN WHERE THE CLAI M MADE IS NOT ACCEPTED BY ASSESSING OFFICER FOR ANY REASON, THE A SSESSEE WILL INVITE PENALTY UNDER SECTION 271(1)(C). THAT IS CLEARLY NO T THE INTENDMENT OF THE LEGISLATURE. 8. APART FROM THIS, LD. AR CITED AN ORDER OF CO-ORD INATE BENCH IN ITA NO.2155/AHD/2010 FOR ASST. YEAR 1994-95 , WHEREIN, IT HAS BEEN HELD THAT NON-AVAILABILITY OF CONFIRMATION AND OTHER DET AILS ARE VALID POINTS FOR MAKING ADDITION U/S.68. BUT BECAUSE THE EXPLANATION OF THE ASSESSEE WITH REGARD TO THE GENUINENESS OF DEPOSITS IS NOT ACCEPT ED, IT CANNOT STRAIGHT AWAY RESULT INTO PENALTY. IN THE PRESENT CASE THE A SSESSEE FAILED TO PRODUCE SOME OF THE DEPOSITORS TO PROVE THE GENUINE NESS AND CREDITWORTHINESS INSPITE OF THE EFFORTS MADE, IT RE SULTED INTO ADDITION U/S.68 BUT IT CANNOT LEAD TO PENALTY FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THEREFORE, IN OUR CONSIDERED OPINION THE LD . CIT(A) HAS RIGHTLY DELETED THE PENALTY. ITA NO.1146/AHD /2015 SHRI VIJAYKUMAR R. NAIK VS. ITO ASST.YEAR 2007-08 - 5 - 9. IN THIS CASE, APPELLANT TRIED TO GIVE AS MUCH AS EXPLANATION AND PROVE IN SUPPORT OF HIS CONTENTION AND PERSONS WERE ALSO PRODUCE TO WHOM GOLD JEWELRY WAS SOLD AND HE HAS ALSO FILED TH E BANK STATEMENT OF HSBC THAT MIGHT BE CASE OF ADDITION U/S.68. BUT IN OUR CONSIDERED OPINION, IN SUCH CASE, PENALTY CANNOT BE LEVIED AND PENALTY CONFIRMED BY THE LD. CIT(A) AS DELETED. 10. IN THE RESULT, APPEAL FILED BY THE APPELLANT IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 07 / 0 3 /201 8 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ EGKOHJ EGKOHJ EGKOHJ IZLKN IZLKN IZLKN IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 07/03/2018 PRITI YADAV, SR.PS !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)- 3, AHMEDABAD. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD