SHRI MUNIR V. MEHTA, Ahmedabad V. THE ACIT, CIRCLE-11, Ahmedabad

ITA 1194/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6353 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 23-06-2011
• Assessment Year: 1990-1991
• Appeal Filed On: 17-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: S N SOPARKAR
• Keywords: Depreciation; Question of law; Onus to prove; Reassessment proceedings
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE S/SHRI G. D. AGARWAL, VP AND BHAVNESH SAINI , JM) ITA NO.1194/AHD/2009 A. Y.: 1990-91 SHRI MUNIR V. MEHTA, 4, JAIN MERCHANT SOCIETY, PALDI, AHMEDABAD VS THE A. C. I. T., CIRCLE-11, AAYAKAR BHAVAN, AHMEDABAD PA NO. ABCPV 7597 A (APPELLANT) (RESPONDENT) APPELLANT BY SHRI S. N. SOPARKAR, AR RESPONDENT BY SHRI ALBINUS TIRKEY, DR O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-XV I, AHMEDABAD DATED 13-02-2009, FOR ASSESSMENT YEAR 1990-91, CHAL LENGING LEVY OF PENALTY U/S 271 (1 ( C ) OF THE IT ACT. 2. THE FACTS OF THE CASE NOTED IN THE IMPU GNED ORDER ARE THAT THE ASSESSEE IS A TRAVEL AGENT. IN THE BAL ANCE SHEET AN AMOUNT OF RS. 3,30,000/- WAS SHOWN UNDER THE HEAD S UNDRY CREDITORS FROM HASMUKH PATEL, SECRETARY, PALDI CRICKET, A SSOCIATION FOR TICKETS OF 17 PLAYERS TO U.K. SINCE THE VISAS COULD NOT BE OBTAINED THE AMOUNT WAS RETURNED BACK AFTER DEDUCTING RS.1OOO/ - PER PLAYER. IN THE ORIGINAL ASSESSMENT ORDER DATED 30-3-1993, T HE AO MADE ADDITION OF RS. 3,30,000/- UNDER SECTION 68 OF T HE IT ACT ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE SHRI HAS MUKH PATEL ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 2 BEFORE HIM. IT APPEARS THAT THE CIT(A) REMANDED THE MATTER TO THE AO. THE AO RECORDED STATEMENT OF SHRI HASMUKH PATEL WHO CONFIRMED HAVING PAID RS. 3,30,000/- TO THE ASSESSE E ON BEHALF OF 17 PLAYERS. ON THE BASIS OF THIS STATEMENT, THE CIT(A) DELETED THE ADDITION. THE ITAT SET ASIDE THE MATTER TO THE FILE OF AO WITH A DIRECTION TO PRODUCE SHRI HASMUKH PATEL BEFORE THE AO AGAIN. IN THE SECOND ROUND OF LITIGATION, THE ASSESSEE FAILED TO PRODUCE HASMUKH PATEL. HE ISSUED SUMMONS ON THE GIVEN ADDRESS BUT F OUND THAT HASMUKH PATEL DOES NOT STAY AT THE GIVEN ADDRESS. H E THEREFORE, DOUBTED THAT SOMEBODY ELSE WAS PRESENTED BEFORE THE AO AT THE TIME OF REMAND PROCEEDINGS. THE ASSESSEE FAILED TO PRODU CE SHRI HARMUKH PATEL DURING THE SECOND ROUND OF LITIGATION , THEREFORE, THE AO MADE ADDITION OF RS. 3,30,000/- VIDE HIS ORDER D ATED 27-3-2002. THE CIT(A) DELETED THE ADDITION ON THE GROUND THAT THE IDENTITY OF THE PERSON STOOD ESTABLISHED AND HE HAD ADMITTED TO HAV ING ADVANCED SUM OF RS. 3,30,000/- TO THE ASSESSEE. THE ITAT VID E ITS ORDER DATED 3-1-2007 HELD AS UNDER:- WE HAVE HEARD THE PARTIES, AND CONSIDERED THEIR RIVAL SUBMISSIONS. THE ID. DR SUBMITTED THAT DURING THE FRESH ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER REQUESTED THE ASSESSEE TO PRODUCE SHRI HASMUKH PATE L FOR EXAMINATION, BUT THE ASSESSEE EXPRESSED HIS INA BILITY TO PRODUCE SHRI PATEL STATING THAT SHRI PATE/ HAD L EFT INDIA ALONG WITH HIS FAMILY AND SETTLED IN UK. THE ASSESS ING OFFICER DEPUTED HIS INSPECTOR TO VERIFY THE TRUTH R EGARDING SHRI HASMUKH PATEL NOT BEING AVAILABLE IN CITY. THE INSPECTOR REPORTED THAT THE HE INQUIRED AT 5, ABHIL ASHA SOCIETY, JIVRAJ PARK, AT THE ADDRESS OF SHRI HASMUK H PATE/ AND FOUND THAT ONE SHRI RUGNATH PUROHIT WAS RESIDIN G THERE FROM 1990. SINCE RUGNATH PUROHIT WAS UNDERGOI NG ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 3 TREATMENT IN HOSPITAL THE INSPECTOR GATHERED THE FA CTS FROM HIS SON MASTER VIKRAM STUDYING IN 10 TH CLASS IN PRESENCE OF HIS SISTER AGED 15 TO 16 YEARS. SINCE BOTH THE C HILDREN WERE MINORS HE FURTHER INQUIRED FROM NEIGHBORS AND CONFIRMED THAT SHRI RUGNATH PUROHIT WAS RESIDING TH ERE SINCE 1990 AND ANY PERSON IN THE NAME OF SHRI HASMU KH PAFEL WAS NOT KNOWN IN THAT AREA AS RESIDENT AROUND THE YEAR 1994. THERE IS NO DOUBT THAT THE ASSESSEE CO ULD NOT PRODUCE SHRI PATEL FOR VERIFICATION AT THE REAS SESSMENT STAGE. THE CIT(A) WAS NOT JUSTIFIED IN DIRECTING TO DELETE THE ADDITION. WE REVERSE THE ORDER OF THE CIT(A) AND RESTORE THAT OF THE A.O.' AFTER THE ORDER OF ITAT, THE AO LEVIED MINIMUM PENA LTY OF RS.1,55,412/- U/S. 271 (1}( C). THE ASSESSEE FILED W RITTEN SUBMISSIONS DATED 20-12-2008 AND PAPER BOOK ON 29-1-2009. THE M AIN ARGUMENTS OF THE ASSESSEE ARE AS UNDER:- A) IN VIEW OF THE DECISION OF (1) HON'BLE GUJARAT H IGH COURT IN THE CASE OF BARODA TIN WORKS 221 ITR 661 ( GUJ) & (2) NOTIONAL TEXTILES 249 ITR 125 (GUJ) PENALTY U /S. 271(L)(C ) CANNOT BE LEVIED AUTOMATICALLY MERELY BE CAUSE THE QUANTUM ADDITION WAS MADE IN ASSESSMENT PROCEEDINGS U/S. 68. B) FOR LEVYING PENALTY U/S. 271(L)(C ), IT IS TO BE PROVED THAT THE CONCEALING OF PARTICULARS OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WAS A DELIBERATE ACT ON THE PART OF THE APPELLANT. THE AP PELLANT RELIED UPON THE DECISION OF:- I) K C BUILDERS 261 ITR 562 (SC) II) DILIP N SHROFF 291 ITR 519 (SC) III) ASHOK PAI 292 ITR 11 (SC) C) WHEN THERE ARE MORE THAN ONE VIEWS POSSIBLE, PEN ALTY U/S. 271(L)(C ) CANNOT BE LEVIED ON SUCH ADDITIONS. ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 4 RELIANCE WAS MADE ON NATIONAL TEXTILES 249 ITR 125 (GUJ). IT WAS STATED THAT SINCE THE CIT(A) HAS DELETED THE ADDITION IN QUANTUM PROCEEDINGS IN BOTH ROUNDS OF LITIGATION BU T THE ITAT CONFIRMED THE ADDITION IN SECOND ROUND OF LITIGATIO N, THERE ARE TWO POSSIBLE VIEWS OF THE MATTER AND THEREFORE. PENALTY U/S. 271(L) (C) CANNOT BE LEVIED. 3. THE LEARNED CIT(A) CONSIDERING THE SUBMISSIONS O F THE ASSESSEE IN THE LIGHT OF THE FINDINGS OF THE TRIBUN AL ON QUANTUM CONFIRMED THE LEVY OF PENALTY AND DISMISSED THE APP EAL OF THE ASSESSEE. HIS FINDINGS IN PARA 7 TO 8 ARE REPRODUCE D AS UNDER: 7. I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLA NT. THE FINDING IN THE ASSESSMENT ORDER THAT SHRI HASMU KH PATEL WAS NOT STAYING AT THE GIVEN ADDRESS BUT ONE SHRI RAGHUNATH PANDIT WAS STAYING THERE SINCE 1990 ARE V ERY IMPORTANT. THE RELEVANT ASSESSMENT YEAR IN THIS CAS E IS A Y 1990-91. THE SEQUENCE OF EVENTS IN THIS CASE ARE: - (I) IN THE ORIGINAL ROUND THE APPELLANT COULD NOT PRODUCE SHRI HASMUKH PATEL BEFORE THE ASSESSING OFFICER , (II) ONE PERSON BY THE NAME OF SHRI HASMUKH PATEL WAS PRODUCED BEFORE THE ASSESSING OFFICER AT THE TIME OF REMAND PROCEEDINGS WHO CONFIRMED HAVING PAID RS.3,30,000/- TO THE APPELLANT, (III) AFTER THE MATTER WAS SET ASIDE BY THE TRIBUNA L TO THE ASSESSING OFFICER FOR EXAMINING SHRI HASMUKH PATEL AGAIN, HE COULD NOT BE PRODUCED BY THE APPELLANT, ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 5 (IV) THE ITAT CONFIRMED THE ADDITION ON THE GROUND THAT SHRI HASMUKH PATEL COULD NOT BE PRODUCED BY THE APPELLANT. 7.1 IN THE SECOND ROUND, THE ASSESSING OFFICER DOU BTED THE GENUINENESS OF THE PERSON WHO WAS PRODUCED BEFO RE THE ASSESSING OFFICER DURING THE REMAND PROCEEDINGS . THIS WAS THE DUTY OF THE APPELLANT TO PRODUCE SUFFI CIENT EVIDENCE REGARDING THE GENUINENESS OF SHRI HASMUKH PATEL. IN MY OPINION, THE APPELLANT FAILED TO DISCH ARGE HIS ONUS IN PROVING THE GENUINENESS OF THE PERSON WHOSE STATEMENT WAS RECORDED BY THE ASSESSING OFFICER AT THE TIME OF REMAND PROCEEDINGS IN FIRST ROUND OF LITIGA TION. IN VIEW OF THE JUDGMENT OF HON'BLE SUPREME COURT IN TH E CASE OF DHARMENDRA TEXTILE PROCESSORS & OTHERS 306 ITR 277 (SC), THE APPELLANT FAILED TO PROVE ITS BONAFID E AND THEREFORE, IN MY VIEW, THE ASSESSING OFFICER WAS RI GHT IN LEVYING PENALTY. AS REGARDS THE CONTENTION OF THE A PPELLANT THAT TWO VIEWS WERE POSSIBLE IN THIS CASE - ONE OF THE CIT(A) WHO DELETED THE ADDITION IN QUANT UM APPEAL AND OTHER OF ITAT WHO CONFIRMED THE ADDITION IN QUANTUM APPEAL ; IT IS TO BE STATED THAT IF THE ALL EGATION OF THE ASSESSING OFFICER THAT SOMEBODY ELSE WAS PRODUC ED FOR SHRI HASMUKH PATEL DURING REMAND PROCEEDINGS IS CORRECT, THEN EVEN THOUGH THE CIT(A) HAD TAKEN A DI FFERENT VIEW, IN MY OPINION, IT IS A FIT CASE FOR LEVYING P ENALTY U/S. 271 (1 )( C). IF A VIEW IS TAKEN ON MISREPRESENTATI ON OF FACTS THEN DEFINITELY THAT VIEW IS NOT A CORRECT VI EW. 7.2 I THEREFORE HOLD THAT IN THIS CASE THE GENUINE NESS OF THE PERSONS COULD NOT BE PROVED BY THE APPELLANT AN D THE SEQUENCE OF EVENTS INDICATES THAT THE APPELLANT FAI LED TO PROVE ITS BONAFIDE. HENCE THE PENALTY OF RS. 1 ,55, 412/- IS CONFIRMED. 8. APPEAL OF THE APPELLANT IS DISMISSED. ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 6 4. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ASSESSEE PRODUCED SHRI HASMUKH PATEL BEFORE THE AO IN THE REMAND PROCEEDINGS AND HIS STATEMENT ON OATH WAS RE CORDED IN WHICH HE HAS EXPLAINED TO HAVE GIVEN THE AMOUNT IN QUESTION TO THE ASSESSEE FOR BOOKING OF TICKETS FOR CRICKET PLAYERS AND ON FAILURE TO OBTAIN VISA, THE AMOUNT WAS REFUNDED. HE HAS SUBMIT TED THAT LATER ON ENQUIRY MADE BY THE INSPECTOR FROM THE MINOR IS IRR ELEVANT AND NOT ADMISSIBLE IN LAW. HE HAS SUBMITTED THAT THE TRIBUN AL IN THE SET ASIDE PROCEEDINGS NEVER DIRECTED TO PRODUCE SHRI HASMUKH PATEL FOR FURTHER EXAMINATION VIDE ORDER DATED 29-06-2001 BECAUSE THE MATTER WAS REMANDED TO THE FILE OF THE AO AS REMAND REPORT DAT ED 08-07-1994 FILED BY THE AO WAS NOT PRODUCED BEFORE THE TRIBUNA L (COPY ENCLOSED). THE LEARNED COUNSEL FOR THE ASSESSEE SUB MITTED THAT SINCE THE QUANTUM AND PENALTY PROCEEDINGS ARE DIFFE RENT AND MERELY BECAUSE ADDITION ON QUANTUM IS CONFIRMED BY THE TRI BUNAL IS NO GROUND TO LEVY PENALTY. HE HAS HOWEVER, FAIRLY SUBM ITTED THAT THE ASSESSEE HAS NOT CHALLENGED THE QUANTUM ORDER BEFOR E THE HONBLE HIGH COURT. HE HAS, THEREFORE, SUBMITTED THAT THE F ACTS OF THE CASE JUSTIFY CANCELLATION OF PENALTY IN THE MATTER. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE WAS A DO UBT ABOUT THE APPEARANCE OF SHRI HASMUKH PATEL BEFORE THE AO IN T HE REMAND PROCEEDINGS; THEREFORE, THE INSPECTOR RIGHTLY GAVE HIS REPORT IN THE MATTER. THE ASSESSEE FAILED TO PRODUCE SHRI HASMUKH PATEL FOR EXAMINATION BEFORE THE AO AGAIN IN SECOND ROUND PRO CEEDINGS; ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 7 THEREFORE, ADDITION ON QUANTUM WAS MADE WHICH IS UL TIMATELY CONFIRMED BY THE TRIBUNAL. THEREFORE, LEVY OF PENAL TY IS JUSTIFIED IN THE MATTER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND DO NOT FIND ANY JUSTIFICATION TO SUSTAIN THE ORDERS OF THE AUTHORIT IES BELOW IN LEVYING AND CONFIRMING THE PENALTY U/S 271 (1) ( C ) OF THE IT ACT. WE HAVE GONE THROUGH VARIOUS ORDERS PASSED BY THE LEARNED C IT(A) AND THE TRIBUNAL AT DIFFERENT STAGES MENTIONED ABOVE. COPIE S OF THE SAME ARE FILED IN THE PAPER BOOK. THE LEARNED CIT(A) IN HIS APPELLATE ORDER DATED 05-10-1995 (PB-II PAGE 1) MENTIONED ALL THE F ACTS OF THE CASE AND NOTED THAT THE AMOUNT IN QUESTION WAS RECEIVED BY THE ASSESSEE FROM THE CLUB FOR TICKET BOOKING. THE CONFIRMATION LETTER FROM THE CLUB WAS ALSO FILED IN WHICH IT WAS MENTIONED THAT THE A MOUNT HAD BEEN PAID FOR PURCHASE OF TICKETS ETC., BUT ULTIMATELY T OUR WAS CANCELLED AND THE AMOUNT WAS REFUNDED TO THE CLUB. THE AO ASKED T HE ASSESSEE TO PRODUCE THE SECRETARY OF THE CLUB FOR EXAMINATION, BUT SUMMONS ISSUED BY THE AO COULD NOT BE SERVED BECAUSE OF NON -LOCATION OF THE CLUB AT THE ADDRESS GIVEN. IT IS ALSO NOTED THAT TH E PREDECESSOR OF THE LEARNED CIT(A) HAD REMANDED THIS MATTER TO THE AO F OR MAKING FURTHER ENQUIRIES ON THIS ISSUE. THE AO SUBMITTED HIS REPOR T DATED 08-07-1994 IN WHICH IT WAS STATED THAT THE STATEMEN T OF SHRI HASMUKH PATEL OF PALDI CRICKET WELFARE CLUB WAS RECORDED IN WHICH SHRI HASMUKH PATEL STATED THAT THE CLUB HAD DECIDED TO T AKE A GROUP OF 17 PLAYERS TO LONDON AND FOR THAT PURPOSE AN AMOUNT OF RS.25,000/- FROM EACH PLAYER HAD BEEN COLLECTED AND OUT OF THE AMOUNT COLLECTED, RS.3,30,000/- WAS GIVEN TO THE ASSESSEE. IT WAS ALS O STATED THAT ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 8 SUBSEQUENTLY, THE AMOUNT WAS REFUNDED BY THE ASSESS EE BECAUSE THE TOUR COULD NOT BE MATERIALIZED. THE LEARNED CIT (A) ACCEPTED THE REMAND REPORT FIELD BY THE AO AND DELETED THE ADDIT ION. IT MAY BE NOTED THAT THE STATEMENT OF SHRI HASMUKH PATEL WAS RECORDED BY THE ACIT, CIRCLE -8(1), AHMEDABAD UNDER THE DIRECTION O F THE LEARNED CIT(A). THIS FACT IS ALSO RECORDED BY THE AO IN THE ASSESSMENT ORDER DATED 27-03-2002 U/S 143(3) READ WITH SECTION 254 O F THE IT ACT (PB-I PAGE 22). IT WOULD PROVE THAT THE STATEMENT OF SHRI HASMUKH PATEL WAS RECORDED CORRECTLY BY THE ACIT DURING THE REMAN D PROCEEDINGS ON OATH. COPY OF THE STATEMENT OF SHRI HASMUKH PATE L IS ALSO FILED ON RECORD WHICH SUPPORTS THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT CORRECT AND GENUINE STATEMENT WAS REC ORDED. THE QUESTIONS AND ANSWERS IN HIS STATEMENT CLEARLY SUPP ORT THE CASE OF THE ASSESSEE BECAUSE SHRI HASMUKH PATEL ANSWERED EA CH AND EVERY QUESTION OF THE AO AND SUPPORTED THE EXPLANATION OF THE ASSESSEE THAT HE HAD GIVEN RS.3,30,000/- TO THE ASSESSEE FOR BOOKING OF TICKETS FOR THE PLAYERS. IT IS, THEREFORE, UNBELIEVABLE THA T AN OUTSIDER WOULD APPEAR BEFORE THE AO AND WOULD GIVE CORRECT ANSWERS TO EACH AND EVERY QUESTION ASKED BY THE AO. FURTHER, THE AO BEF ORE RAISING ANY DOUBT HAS NOT EXAMINED THE ACIT, CIRCLE -8(1), AHME DABAD WHO HAS RECORDED THE STATEMENT OF SHRI HASMUKH PATEL. IN TH E ABSENCE OF ANY EXAMINATION OF THE CONCERNED AO/ACIT WHO HAS RECORD ED STATEMENT OF SHRI HASMUKH PATEL, IT WAS HIGHLY IMPROPER ON TH E PART OF THE AO TO RAISE THE DOUBT ON THE STATEMENT OF SHRI HASMUKH PA TEL WITHOUT ANY JUST REASON. THE AO FORGOT TO NOTE THAT THE STATEME NT OF SHRI HASMUKH PATEL RECORDED ON OATH IS ADMISSIBLE EVIDEN CE IN LAW AND PART OF THE RECORD OF THE REVENUE DEPARTMENT. THE R EPORT OF THE ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 9 INSPECTOR CANNOT CRITICIZE THE REMAND REPORT FILED BY THE AO ON EXAMINATION OF SHRI HASMUKH PATEL ON OATH. SUCH COU RSE ADOPTED BY THE AO IN THE SET ASIDE PROCEEDINGS CANNOT BE APPRO VED PARTICULARLY WHEN THE MATTER WAS VERY OLD AND THE INSPECTOR OF T HE INCOME TAX DEPARTMENT WAS BELOW IN THE HIERARCHY TO THE AO(ACI T). IT MAY ALSO BE NOTED HERE THAT THE REMAND REPORT WAS FILED BY T HE AO ON 08-07-1994 IN RESPECT OF THE MATTER PERTAINING TO T HE ASSESSMENT YEAR 1990-91 AND THE INSPECTOR GAVE THE REPORT ON 1 9-03-2002 [(PB-I (24)] I.E. ABOUT LAPSE OF 12 YEARS FROM THE ASSESSM ENT YEAR. WE MAY ALSO NOTE THAT THE LEARNED COUNSEL FOR THE ASSESSEE RIGHTLY CONTENDED THAT THE TRIBUNAL WHILE REMANDING THE MATTER VIDE O RDER DATED 29-06-2001 DID NOT GIVE ANY DIRECTION TO THE ASSESS EE TO PRODUCE SHRI HASMUKH PATEL AGAIN FOR EXAMINATION BEFORE THE AO. THE TRIBUNAL WHILE ALLOWING THE APPEAL OF THE REVENUE RESTORED T HE MATTER TO THE FILE OF THE AO BECAUSE THE COPY OF THE REMAND REPORT OF THE AO DATED 08-07-1994 WAS NOT PRODUCED BEFORE THEM FOR APPRAIS AL. SINCE, THERE WAS NO DIRECTION ISSUED BY THE TRIBUNAL TO PRODUCE SHRI HASMUKH PATEL AGAIN FOR EXAMINATION, THEREFORE, IT APPEARS TO US THAT THE AUTHORITIES BELOW WITHOUT ANY JUST CAUSE HAVE AGAIN TRIED TO LOCATE THE WHEREABOUTS OF SHRI HASMUKH PATEL WHO WAS STATED TO HAVE SETTLED IN UK. IT IS, THEREFORE, WRONG TO SAY THAT SHRI HAS MUKH PATEL WAS NOT PRODUCED BEFORE THE AO FOR EXAMINATION AT THE ASSES SMENT STAGE. THE LEARNED CIT(A) IN THE ORDER DATED 22-07-2003 NO TED THE COMPLETE FACTS AND DID NOT AGREE WITH THE OBSERVATION OF THE AO THAT SOMEBODY MIGHT HAVE IMPERSONATED SHRI PATEL FOR RECORDING HI S STATEMENT BY THE AO ON THE DIRECTION OF THE LEARNED CIT(A). IT W AS NOTED THAT THE STATEMENT HAS BEEN RECORDED ON OATH BY ISSUE OF SUM MONS TO THE ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 10 PERSON, THEREFORE, IT IS NOT POSSIBLE THAT HIS IDEN TITY WAS NOT ESTABLISHED BY THE THEN AO AT THE TIME OF RECORDING HIS STATEMENT. IT WAS ALSO RECORDED THAT A MERE ENQUIRY BY THE INSPEC TOR THAT TOO FROM THE MINOR/YOUNG GIRL OF 11 YEARS WOULD NOT NEGATE T HE FACT THAT SHRI PATELS IDENTITY WAS VERIFIED BY THE THEN AO AND HI S STATEMENT WAS RECORDED ON OATH. THE REPORT OF THE INSPECTOR IS TH US IRRELEVANT AGAINST THE EVIDENCE ON RECORD IN THE FORM OF STATE MENT OF SHRI HASMUKH PATEL RECODED ON OATH. THE ASSESSEE ALSO OB JECTED TO THE REPORT OF THE INSPECTOR BEFORE THE AO IN THE ASSESS MENT ORDER DATED 27-03-2002 (PB I PAGE 22) AND IT WAS CONTENDED THAT THE INSPECTOR VISITED THE PREMISES AND MADE ENQUIRY FROM 11 YEARS OLD DAUGHTER OF SHRI RAGHUNATH PUROHIT. IT WOULD, THEREFORE, SHOW T HAT ENQUIRY WAS MADE BY THE INSPECTOR FROM THE MINOR IN THE YEAR 20 02 FOR THE CASH CREDIT PERTAINING TO THE ASSESSMENT YEAR 1990-91 AN D AT THAT TIME EVEN THE MINOR WOULD NOT BE KNOWING ANYTHING ABOUT THE PRESENCE OF SHRI HASMUKH PATEL BECAUSE OF HER TENDER AGE. IT IS , THEREFORE, INCORRECT ON THE PART OF THE AO AND THE INSPECTOR TO SAY THAT SHRI HASMUKH PATEL WAS NOT AVAILABLE FOR CROSS EXAMINATION BECAU SE HE WAS ALREADY EXAMINED BY THE THEN AO ON OATH AND SHRI HA SMUKH PATEL CONFIRMED GIVING OF THE AMOUNT IN QUESTION TO THE A SSESSEE. CONSIDERING THE FACTS OF THE CASE AND THE DETAILS N OTED IN DIFFERENT ORDERS OF THE LEARNED CIT(A) AND THE TRIBUNAL AND M ATERIAL AVAILABLE ON RECORD, IT IS CLEAR THAT SHRI HASMUKH PATEL APPE ARED BEFORE THE THEN AO (ACIT) AND MADE A STATEMENT ON OATH IN FAVO UR OF THE ASSESSEE FOR GIVING OF THE AMOUNT IN QUESTION TO TH E ASSESSEE. THEREFORE, THE STATEMENT OF SHRI HASMUKH PATEL ON R ECORD CANNOT BE BRUSHED ASIDE WITHOUT ANY COGENT REASONS. THE ASSES SEE CLAIMED ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 11 BEFORE THE AO IN THE SET ASIDE PROCEEDINGS THAT SHR I HASMUKH PATEL HAS LEFT INDIA ALONG WITH FAMILY MEMBERS AND SETTLE D IN UK. THEREFORE, IF HE WAS NOT FOUND AT THE GIVEN ADDRESS AFTER 12 Y EARS FROM THE ASSESSMENT YEAR, NO FAULT CAN BE FOUND WITH THE ASS ESSEE. THERE WAS NO REASON FOR THE AO TO ASK FOR HIS PRESENCE AG AIN PARTICULARLY WHEN HIS STATEMENT WAS ALREADY RECORDED ON OATH WAS AVAILABLE ON RECORD. THERE WAS NO MATERIAL OR EVIDENCE AVAILABLE ON RECORD TO SHOW THAT THE STATEMENT OF SHRI HASMUKH PATEL RECOR DED ON 08-07- 1994 WAS INCORRECT. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS SPAN HOLDINGS LTD., 294 ITR 83 HELD AS UNDER: DEPRECIATION IN RESPECT OF THE SALE AND LEASE BACK OF THE BIO GAS PLANT IN THE ASSESSMENT YEAR 1993-94 WAS ALLOWED. SUBSEQUENTLY, IN THE REASSESSMENT PROCEEDINGS AFTER A GAP OF FIVE YEARS THE ASSESSEE WAS REQUIRED TO PRODUCE THE MANAGING DIRECTOR OF THE LESSEE COMPANY WHICH THE ASSESSEE COULD NOT DO FOR REASONS BEYOND THE CONTROL. THE ASSESSING OFFICER DISALLOWED THE DEPRECIATION. THE ASSESSEE APPEALED TO THE COMMISSIONER OF INCOME- TAX (APPEALS). MEANWHILE, THE ASSESSING OFFICER ALS O INITIATED PENALTY PROCEEDINGS UNDER SECTION 271 (1) (C) OF THE INCOME-TAX ACT, 1961, IMPOSED A PENALTY ON THE ASSESSEE. THE COMMISSIONER OF INCOME-TAX (APPEALS) SET ASIDE THE PENALTY PROCEEDINGS. THIS W AS CONFIRMED BY THE TRIBUNAL. ON APPEAL: HELD, DISMISSING THE APPEAL, THAT THE TRIBUNAL HAD CONSIDERED THE FINDINGS ARRIVED AT BY THE COMMISSIONER. THE TRIBUNAL HAD ALSO TAKEN INTO CONSIDERATION THE FACT THAT MORE THAN FIVE YEARS HA D GONE BY BETWEEN THE ORIGINAL ASSESSMENT AND THE REASSESSMENT PROCEEDINGS AND IT WAS UNDER THESE CIRCUMSTANCES THAT THE ASSESSEE WAS UNABLE TO PRODUCE THE MANAGING DIRECTOR OF THE LESSEE ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 12 COMPANY. THE TRIBUNAL ALSO NOTED THAT THE ASSESSING OFFICER HAD MERELY STATED AFTER REFERRING TO THE ASSESSEES SUBMISSION THAT THE ENTIRE DEPRECIATION WAS DISALLOWED. THERE WAS NO MATERIAL OR EVIDENCE T O SHOW THAT THE TRANSACTION OF SALE AND LEASE BACK WA S NOT GENUINE OR WAS BOGUS NOR WAS ANY MATERIAL BROUGHT ON RECORD IN THE COURSE OF THE REASSESSMENT PROCEEDINGS. IN THE ABSENCE OF ANY MATERIAL HAVING BEEN PRODUCED BY THE REVENUE TO SHOW THAT THE TRANSACTION OF SALE AND LEASE BACK WAS NOT GENUINE OR WAS BOGUS, THERE WAS NO REASON TO INTERFERE WITH TH E CONCURRENT FINDINGS ARRIVED AT BOTH BY THE COMMISSIONER AS WELL AS BY THE TRIBUNAL. NO SUBSTANTIAL QUESTION OF LAW AROSE FOR DETERMINATION . 6.1 THE LEARNED DR HOWEVER, CONTENDED THAT ULTIMATE LY SINCE THE ADDITION ON QUANTUM HAS BEEN CONFIRMED BY THE TRIBU NAL, THEREFORE, PENALTY MAY BE IMPOSED. IT IS SETTLED LAW THAT THE PENALTY AND QUANTUM PROCEEDINGS ARE ESSENTIALLY INDEPENDENT AND SEPARATE PROCEEDINGS. THE ASSESSMENT PROCEEDINGS ARE CERTAIN LY RELEVANT AND HAVE PROBATIVE VALUE BUT SUCH FINDINGS ARE MATERIAL ALONE AND MAY NOT JUSTIFY PENALTY IN A GIVEN CASE, BECAUSE THE CO NSIDERATION THAT ARISES IN THE PENALTY PROCEEDINGS ARE DIFFERENT FRO M THOSE THAT ARISES IN THE ASSESSMENT PROCEEDINGS. WE RELY UPON THE DEC ISION OF THE ALLAHABAD HIGH COURT IN THE CASES OF BANARAS TEXTOR IUM VS CIT, 169 ITR 782, CIT VS M. K. GUPTA, 113 ITR 473 AND CIT VS ESHTIZQ HUSSAIN, 232 ITR 673. 6.2 IT IS, THEREFORE, CLEAR THAT PENALTY AND QUANTU M PROCEEDINGS ARE ENTIRELY DIFFERENT PROCEEDINGS. THE FINDINGS GIVEN IN THE ASSESSMENT PROCEEDINGS ARE RELEVANT AND HAVE PROBATIVE VALUE B UT SUCH PROCEEDINGS ARE NOT MATERIAL ALONE AND MAY NOT JUST IFY IMPOSITION OF ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 13 PENALTY IN A GIVEN CASE. THE ASSESSEE CAN CHALLENGE THE ORDER OF PENALTY. THE ONUS IS UPON THE ASSESSEE TO REBUT THE PRESUMPTION OF CONCEALMENT OF INCOME BY COGENT MATERIAL AND RELIAB LE EVIDENCE. THE ASSESSEE COULD PROVE FROM THE FACTS AND CIRCUMSTANC ES OF THE CASE THAT IT WAS NOT A CASE OF PENALTY AND COULD HAVE SH IFTED HIS BURDEN OF PROOF UPON THE DEPARTMENT. 6.3 CONSIDERING THE FACTS OF THE CASE AND ABOVE DIS CUSSIONS, IT IS CLEAR THAT CONFIRMATION OF GIVING OF AMOUNT WAS FIL ED BY THE ASSESSEE. THE STATEMENT OF SHRI HASMUKH PATEL ON OATH WAS REC ORDED BY THE THEN AO IN WHICH HE HAS CONFIRMED TO HAVE GIVEN THE AMOUNT IN QUESTION TO THE ASSESSEE. THEREFORE, THE ASSESSEE I S ABLE TO PROVE THAT HE HAS RECEIVED THE AMOUNT IN QUESTION GENUINE LY FOR BOOKING OF THE TICKETS AND THE AMOUNT WAS REFUNDED ON CANCELLA TION OF BOOKING BEING THE TRIP TO FOREIGN COUNTRY WAS NOT MATERIALI ZED. THUS, THE ASSESSEE IS ABLE TO SUBSTANTIATE HIS CONTENTION BEF ORE THE AUTHORITIES BELOW AND WOULD NOT WARRANT LEVY OF PENALTY FOR CON CEALMENT OR FOR FILING OF INACCURATE PARTICULARS OF INCOME. THE ASS ESSEE DISCLOSED ALL THE FACTS BEFORE THE AUTHORITIES BELOW AND PROVED T HE SAME THROUGH RELIABLE AND COGENT EVIDENCES. THEREFORE, IN OUR OP INION, IT IS NOT A FIT CASE FOR LEVY OF PENALTY IRRESPECTIVE OF THE ADDITI ON MAINTAINED FINALLY BY THE ORDER OF THE TRIBUNAL. WE ACCORDINGLY, SET A SIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. WE MA Y CLARIFY HERE THE FINDINGS GIVEN IN THIS ORDER SHALL NOT AFFECT THE F INDINGS GIVEN ON QUANTUM AND SHALL HAVE NO BEARING ON THE QUANTUM PR OCEEDINGS. ITA NO.1194/AHD/2009 SHRI MUNIR V. MEHTA VS ACIT, CIR-11, AHMEDABAD 14 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 01-07-2011 SD/- SD/- (G. D. AGARWAL) VICE PRESIDENT (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 01-07-2011 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD