Shri Patil Shashikant Shripati, Kolhapur V. Asstt. CIT Cir. 1, Latur

ITA 1155/PUN/2008

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 3337 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 05-09-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, B PUNE BEFORE SHRI I.C. SUDHIR, JM AND SHRI D. KARUNAKAR A RAO, AM I.T.A. NO. 1155/PN/2008: A.Y. 2001-02 SHRI PATIL SHASHIKANT SHRIPATI PROP. OF M/S. SHYAM FABRICATORS 1325/42-E SURVENAGAR, KOLHAPUR. PAN AFEPP 9580 P APPELLANT VS. ASSTT. CIT CIR. 1, KOLHAPUR RESPONDENT APPELLANT BY : SHRI M.K. KULKARNI RESPONDENT BY: SHRI SANTOSH KUMAR ORDER PER I.C. SUDHIR, JM THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER BASICALLY ON THE GROUND THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN SUSTAINING THE CONCEALMENT PENALTY U/S 271(1)(C) OF THE ACT. 2. IN SUPPORT OF THE GROUND, THE LEARNED AR SUBMITT ED THAT THE PENALTY OF RS. 6,37,257/- HAS BEEN LEVIED ON TH E ADDITION OF RS. 8,68,008/- MADE U/S 68 OF THE ACT. DUE TO N ON-CO- OPERATION OF THE PARTNERS OF THE ASSESSEE, THE ASSE SSEE COULD NOT PRODUCE CASH CREDITORS OR THEIR CONFIRMATIONS B EFORE THE A.O. THE LEARNED AR SUBMITTED FURTHER THAT THE DUE AMOUNT TO THE CREDITORS HAS HOWEVER, BEEN PAID DURING THE SUBSEQUENT ITA NO.1155/PN/2008 PATIL SHASHIKANT SHRIPATI A.Y. 2001-02 , 2 YEARS. IN THIS REGARD, HE FURNISHED A CHART. HE S UBMITTED THAT NOW THERE IS NO DISPUTE WITH ITS PARTNERS, HENCE TH E ASSESSEE IS IN A POSITION TO RECONCILE THE DIFFERENCE IN THE BALANCE SHEET IN ITS OWN BOOKS AND IN THE BOOKS OF THE CREDITORS. WITH ASSISTANCE OF THESE SUBMISSIONS, THE LEARNED AR CON TENDED THAT THERE WAS THUS BONAFIDE REASON BEYOND CONTROL AND POWER OF THE ASSESSEE IN NOT ESTABLISHING GENUINENESS OF ITS CLAIM OF CREDITS, HENCE PENALTY U/S 271(1)(C) SHOULD HAVE NO T BEEN LEVIED. 3. THE LEARNED DR ON THE OTHER HAND, OPPOSED THE AP PEAL WITH THE SUBMISSION THAT UNDISPUTEDLY THE ASSESSEE COULD NOT ESTABLISH GENUINENESS OF CLAIMED CREDITS, HENCE, TH ERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE REG ARDING THE ADDITION MADE U/S 68 OF THE AC BY THE A.O AND SUSTA INED BY THE LEARNED CIT(A). 4. AFTER HAVING GONE THROUGH THE ORDERS OF LOWER AU THORITIES, WE FIND THAT THE LEARNED CIT(A) HAS SUSTAINED THE P ENALTY LEVIED WITH REGARD TO THE ADDITION AMOUNTING TO RS. 8,68,008/- ON THE BASIS THAT THE SAID ADDITION HAS BEEN MADE O N THE BASIS OF A LETTER RECEIVED FROM THE CREDITOR AND THAT THE ASSESSEE HAD NOT BEEN ABLE TO RECONCILE THE DIFFERENCE IN THE BA LANCE SHEET IN ITS OWN BOOKS AND IN THE BOOKS OF THE CREDITORS. NOW, THE ITA NO.1155/PN/2008 PATIL SHASHIKANT SHRIPATI A.Y. 2001-02 , 3 LEARNED AR HAS COME WITH THIS ARGUMENT THAT DUE TO INDIFFERENCE WITH ITS PARTNERS, THE ASSESSEE, DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS OR PENALTY PROCEEDINGS WA S NOT ABLE TO ESTABLISH ITS CLAIM BUT DUE TO SETTLEMENT I N BETWEEN WITH ITS PARTNERS, HE IS ABLE TO RECONCILE THE DIFF ERENCE IN THE BALANCES IN ITS OWN BOOK AND IN THE BOOKS OF CREDIT ORS AND FURTHER THAT NOW IT IS IN A POSITION TO ESTABLISH G ENUINENESS OF ITS CLAIM REGARDING THE SAME. THERE IS NO DISPUTE THAT THE PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSME NT PROCEEDINGS. IN PENALTY PROCEEDINGS, THE ASSESSEE, REGARDING THE SUBJECT MATTER OF PENALTY I.E. ADDITION OR DISA LLOWANCE, HAS TO ESTABLISH THAT THERE WAS NO CONCEALMENT OF PARTI CULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS THER EOF ON THE PART OF THE ASSESSEE TOWARDS THOSE ADDITIONS OR DIS ALLOWANCES MADE AND SUSTAINED IN QUANTUM PROCEEDINGS. THE ASS ESSEE HAS SHOWN SOME REASONS FROM WHICH IT APPEARS THAT P ROBABLY DUE TO DIFFERENCE BETWEEN IT AND ITS PARTNERS, THE ASSESSEE COULD NOT BE ABLE TO ESTABLISH THE GENUINENESS OF I TS CLAIM TOWARDS THE CASH CREDITS IN QUESTION AND THUS POSSI BILITY OF BONAFIDE REASON ON THE PART OF THE ASSESSEE IN NOT PROVING ITS CLAIM CANNOT BE TOTALLY RULED OUT. WE THUS, SET AS IDE THE MATTER TO THE FILE OF THE LEARNED CIT(A) TO CONSIDE R THE ISSUE AFRESH AFTER AFFORDING AN OPPORTUNITY OF BEING HEAR D TO THE PARTIES AND EXAMINING THE CORRECTNESS OF EVIDENCE W HICH THE ASSESSEE INTENDS TO FILE TO ESTABLISH ITS BONAFIDE IN NOT ITA NO.1155/PN/2008 PATIL SHASHIKANT SHRIPATI A.Y. 2001-02 , 4 ESTABLISHING THE CLAIM. THE GROUND IS THUS ALLOWED FOR STATISTICAL PURPOSES. 5. CONSEQUENTLY, THE APPEAL IS ALLOWED FOR STATISTI CAL PURPOSES. ORDER IS PRONOUNCED IN THE OPEN COURT ON 31 ST AUGUST 2010. SD/- SD/- (D. KARUNAKARA RAO) (I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE,DATED THE 31 ST AUGUST 2010 ANKAM COPY FORWARDED TO: (1) ASSESSEE (2) DEPARTMENT (3) CIT- (A) KOLHAPUR (4) CIT KOLHAPUR (5) THE D.R. ITAT B BENCH, PUNE TRUE COPY BY ORDER, ASSISTANT REGISTRAR INCOME-TAX APPELLATE TRIBUNAL, PUNE BENCHES, PUNE