The ITO, Ward-2(2), Surat V. Shri Manojbhai Kantilal Patel, Surat

ITA 1206/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80478 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 6 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 30-09-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Keywords: Unexplained cash credit; Deemed to accrue or arise in india
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI , ACCOUNTANT MEMBER ITA NO . 1206 /AHD/20 1 1 A. Y. 200 6 - 0 7 THE INCOME TAX OFFICER, WARD - 2(2), SURAT . VS SHRI MANOJBHAI KANTILAL PATEL, 19A SAL KRUPA IND. SOCIETY, UDHNA MAGDALLA ROAD, SURAT. PAN: AAVPP 7326F (APPELLANT) (RESPONDENT) REVENUE BY : SHRI V .K. SINGH , SR. D.R. , ASSESSEE(S) BY : NONE / DATE OF HEARING : 30 / 09 /201 4 / DATE OF PRONOUNCEMENT: 31 / 10 /201 4 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN A PPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF TH E L EARNED CIT (A ) - I I , SURAT , DAT ED 15 / 0 2 /201 1 FOR A.Y. 200 6 - 0 7 AND THE ONLY GROUND IS IN RESPECT OF DELETION OF PENALTY LEVIED U/S.271(1)(C) OF IT ACT IMPOSED IN RESPECT OF AN ADDITION PERTAINING TO UNEXPLAINED CASH CREDIT U/S.68 OF IT ACT . 2. FACTS IN BRIE F AS EMERGED FROM THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) DATED 30 TH DECEMBER, 2008 AND THE PENALTY ORDER PASSED U/S.271(1)(C) DATED 2 4 .06.200 9 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS IN THE BUSINESS OF MANUFACTURING OF ART SILK CLOTH . AS PER THE ASSESSMENT ORDER AN ADDITION OF RS.13,35,000/ - WAS MADE ON ITA NO. 1206 /AHD/201 1 ITO, WARD - 2(2), SURAT VS. SHRI MANOJBHAI KANTILAL PATEL FOR A.Y. 200 6 - 0 7 - 2 ACCOUNT OF UNEXPLAINED CASH CREDIT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ON VERIFICATION OF BALANCE SHEET IT WAS FOUND BY THE AO THAT THE ASSESSEE HAD TAKEN UNSECURED LOANS OF R S.13,35,000/ - FROM M/S. MEHER TEXTILES. THE ASSESSEE PREFER RED TO SURRENDER THAT AMOUNT BEFORE AO; THEREFORE, THE OFFER OF THE ASSESSEE WAS ACCEPTED AND THE IMPUGNED AMOUNT WAS TAXED U/S.68 OF IT ACT. WHILE LEVYING THE PENALTY THE AO HAS HELD THAT THE ASSESS EE WAS NOT ABLE TO PROVE THE CREDITWORTHINESS AND IDENTITY , H ENCE, OFFERED THE AMOUNT BUT THAT OFFER WAS NOT MADE VOLUNTARILY BUT ONLY AFTER AN INVESTIGATION WAS STARTED BY THE AO. THE AO HAS THEREFORE LEVIED THE PENALTY OF RS.4,42,8 3 3/ - U/S.271 OF IT ACT. 3. WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(A) HAS CONSIDERED FEW CASE LAWS AND FACTS OF THE CASE AND THEREUPON DECIDED IN FAVOUR OF THE ASSESSEE IN THE FOLLOWING MANNER: 6.1 IN VIEW THAT GROUNDS OF APPEAL NOS.1 & 3 ARE AGAINST LEVY OF PENALTY U/S.271(1)(C), I TAKE THEM UP TOGETHER FOR DISCUSSION AND DISPOSAL. I HAVE DULY CONSIDERED THE SUBMISSION OF THE APPELLANT AND THE DISCUSSION MADE IN THE PENALTY ORDER AS WELL AS THE ASSESSMENT ORDER AND FIND THAT IN THE PENALTY ORDER THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE APPELLANT HAD EVEN BEFORE DETECTION BY THE ASSESSING OFFICER VOLUNTARILY OFFERED RS.13,35,000/ - AND HAD SUO - MOTU DECLARED THE ABOVE AMOUNT WITHOUT ANY ENQUIRY OR DEDUCTION BY THE DEPARTMENT. THUS, THE ONLY ISSUE WHICH IS INVOLVED IN THIS REGARD IS WHETHER PENALTY CAN BE LEVIED ON AN AMOUNT WHICH HAS BEEN VOLUNTARILY DISCLOSED OR ADMITTED AS UNDISCLOSED INCOME OR OFFERED FOR TAXATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE APPELLANT IN THIS REGA RD, IN THE SUBMISSION REPRODUCED ABOVE HAS RELIED UPON THE DECISION OF THE PUNJAB HARYANA HIGH COURT IN THE CASE OF RAJIV GARG AND ORS. (SUPRA) AND THE SUPREME COURT S DECISION IN THE CASE OF SURESH CHANDRA MITTAL (SUPRA) 6.3 UPON PERUSAL OF THE ABOV E DECISIONS, I FIND THAT ALL THE ABOVE DECISIONS RELIED UPON BY THE APPELLANT ARE DIRECTLY ON THE ISSUE OF SURRENDER OF INCOME DURING THE COURSE OF ASSESSMENT PROCEEDINGS TO BUY PEACE WHEREIN IT HAS BEEN HELD THAT PENALTY U/S.271(1)(C) OF THE ACT IS NOT LE VIABLE IN SUCH CASES. THE FACTS RELATING TO LEVY OF PENALTY IN THE CASE OF THE APPELLANT, THEREFORE, ARE SIMILAR TO THE FACTS IN THE ABOVE RELIED UPON DECISIONS. IN VIEW OF THE SAME, I HOLD THAT PENALTY IS NOT EXIGIBLE IN THE CASE OF THE APPELLANT, AND ACC ORDINGLY DELETE THE SAME. THE GROUNDS OF APPEAL NOS.1 AND 3 ARE, THEREFORE, ALLOWED. ITA NO. 1206 /AHD/201 1 ITO, WARD - 2(2), SURAT VS. SHRI MANOJBHAI KANTILAL PATEL FOR A.Y. 200 6 - 0 7 - 3 4. IT IS WORTH TO MENTION THAT ON THE DATE OF HEARING NO ONE HAS APPEARED FROM THE SIDE OF THE RESPONDENT - ASSESSEE ; HENCE, CONSIDERING THE ISSUE BEING TRIVIAL IN NATURE D ECIDED EX - PARTE QUA THE ASSESSEE AFTER HEARING LEARNED SR.D.R. WHO HAS PLACED RELIANCE ON THE PENALTY ORDER AS WELL AS THE ASSESSMENT ORDER. ON CAREFUL EXAMINATION OF THE FACTS AND THE TOTALITY OF THE CIRCUMSTANCES OF THE CASE , WE ARE IN AGREEMENT WITH THE FINDING OF LEARNED CIT(A) SPECIALLY WHEN HE HAS CONSIDERED FEW JUDGMENTS AS LISTED BELOW: 1. CIT VS. SURESHCHANDA MITTAL (2001) 251 ITR 9 (SC) 2. CIT VS. M.M. GUJAMGADI (2007) 290 ITR 168 (KAR) 3. CIT VS. RAJIV GARG & ORS (2009) 313 ITR 256 4. NATIONAL TEXTILES VS. CIT (2001) 249 ITR 125 (GUJ.) 4.1 APART FROM THESE JUDGMENTS, THE LATEST POSITION IS THAT THE HON BLE GUJARAT HIGH COURT IN THE CASE OF JALARAM OIL MILLS, 253 ITR 192 (GUJ) CATEGORICALLY OPINED THAT THE ADDITION U/S. 68 BEING AN INVOCATION O F DEEMING PROVISION; THEREFORE, NOT JUSTIFIABLE TO IMPOSE CONCEALMENT PENALTY ON SUCH DEEMED INCOME. RESPECTFULLY, FOLLOWING THESE DECISIONS, WE HEREBY CONFIRM THE FINDING OF LEARNED CIT(A) AND DISMISS THIS GROUND OF THE REVENUE. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. SD/ - SD/ - ( ANIL CHATURVEDI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 31 / 10 / 20 1 4 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT ITA NO. 1206 /AHD/201 1 ITO, WARD - 2(2), SURAT VS. SHRI MANOJBHAI KANTILAL PATEL FOR A.Y. 200 6 - 0 7 - 4 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD