Mining Associates, Asansol V. ACIT, Circle - 2, Asansol, Asansol

ITA 1224/KOL/2009

• Counselvise Citation: 122423514 RSA 2009
• Duration Of Justice: 1 year(s) 9 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2011
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 25-04-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 20-07-2009
• Court: TRIBUNAL
• Department Lawyers: S C JAIN
• Keywords: Deemed to accrue or arise in india
• Section: 271(1)(c)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH A, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND ! ! ! ! , '# SHRI AKBER BASHA, ACCOUNTANT MEMBER $ $ $ $ / ITA NO . 1224/KOL/2009 %& '(/ ASSESSMENT YEAR : 2001-02 (*+ / APPELLANT ) MINING ASSOCIATES (PAN: AAEFM 9709 Q) - % - - VERSUS - . (-.*+/ RESPONDENT ) THE A.C.I.T., CIRCLE-2, ASANSOL *+ / 0 '/ FOR THE APPELLANT: SMT. SHREYA LOYALKA -.*+ / 0 '/ FOR THE RESPONDENT: SHRI S.C.JAIN '! / ORDER ( (( ( ! ! ! !) )) ), , , , '# PER SHRI AKBER BASHA, AM THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 18.05.2009 OF THE CIT (A)-ASANSOL PERTAINING TO ASSESSMENT YEAR 2001-02 C ONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT. 2. THE BRIEF FACTS OF THIS CASE ARE THAT THE ASSES SING OFFICER, FOR THE YEAR UNDER CONSIDERATION, MADE THE FOLLOWING ADDITIONS W HICH WERE SUSTAINED BY THE APPELLATE AUTHORITIES. 1. DASHMESH TYRE RS. 36,000/- 2. RANCHI SANITATION RS. 22,724/- 3. A.K.STEEL RS.4,02,500/- 4. OTHERS TRADE LIABILITY RS. 47,851/- 2 2.1. THE ASSESSING OFFICER, AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE, HELD THAT THE ASSESSEE CONCEALED INCOME AND HE LEVI ED PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT. AGGRIEVED BY THE ORDER OF THE ASSESS ING OFFICER, THE ASSESSEE WENT IN APPEAL BEFORE THE CIT (A) WHO CONFIRMED THE PENALTY . AGGRIEVED FURTHER, THE ASSESSEE IS IN APPEAL BEFORE US. 3. THE LEARNED COUNSEL, SMT. SHREYA LOYALKA, APPEA RING ON BEHALF OF THE ASSESSEE SUBMITTED THAT PENALTY CANNOT BE LEVIED WH ERE THERE WAS NO CONCEALMENT OF FACTS AND IT IS SUBMITTED THAT THE LOWER AUTHORITIE S SUSTAINED THE MAJOR PORTION OF THE ADDITION OF TRADE LIABILITY BY MERELY RELYING UPON THE LEDGER ACCOUNT SUBMITTED BY THE LOAN CREDITORS. THE LOWER AUTHORITIES HAVE NOT POIN TED OUT ANYTHING ON RECORD TO PROVE THAT THE ASSESSEE HAS REALLY CONCEALED THE INCOME. IT IS FURTHER SUBMITTED THAT THE ASSESSEE FURNISHED ALL THE DETAILS OF PAYMENTS OF R S.9,10,000/- MADE TO M/S. AK.STEEL IN THE SUBSEQUENT YEAR WITH REFERENCE TO THE ABOVE PAYMENTS. THERE IS NO CROSS EXAMINATION BY THE DEPARTMENT WITH M/S. A.K.STEEL A ND THE ASSESSING OFFICER MADE THIS ADDITION IN THE ORIGINAL ASSESSMENT BY CONCLUD ING THAT BY WAY OF CESSATION OF LIABILITY AS CONFIRMED BY THE PARTIES, VIDE THEIR C ONFORMITY SUBMISSIONS, HELD THAT SOME BENEFITS ACCRUED TO THE ASSESSEE AND THE SAME IS DE EMED TO BE PROFITS AND GAINS OF THE BUSINESS AND ACCORDINGLY THE ASSESSING OFFICER BROU GHT THE AFORESAID AMOUNT TO TAX AS PER THE PROVISIONS OF SECTION 41(1)(A) OF THE IT AC T. SINCE THE DEPARTMENT HAS NOT PROVED THAT THE ASSESSEE CONCEALED THE INCOME, NO P ENALTY IS LEVIABLE UNDER SECTION 271 (1)(C) OF THE IT ACT. 4. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REP RESENTATIVE, SHRI S.C.JAIN, RELIED ON THE ORDERS OF THE LOWER AUTHORI TIES AND SUBMITTED THAT AFTER THE INSERTION OF THE EXPLANATION TO SECTION 271(1)(C) B Y THE FINANCE ACT, THE REVENUE NEED NOT PROVE MENS REA ON THE PART OF THE ASSESSEE TO CONCEAL THE INCOME. IT IS SUBMITTED THAT THE ASSESSEE ADMITTED THE CESSATION OF LIABILITY WHICH WAS NOT ACCOUNTED FOR DUE TO ABSENCE OF INFORMATION AVAILABLE TO THEM . THUS, THE LOWER AUTHORITIES RIGHTLY SUSTAINED THE ADDITION AND LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE IT ACT. HE PRAYED BEFORE US TO CONFIRM THE ORDERS OF THE LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIALS AVAILABLE ON RECORD. IT IS WELL SETTLED LAW THAT P ENALTY CANNOT BE IMPOSED WHERE THERE 3 WAS NO CONCEALMENT OF FACTS OR WHERE THE ASSESSEE H IMSELF WAS NOT AWARE OF THE FACTS THAT THERE WAS INCOME ACCRUED TO THE ASSESSEE. IN THE CASE UNDER CONSIDERATION, THE DEPARTMENT MADE THE ADDITIONS, BEING THE DIFFERENCE BETWEEN THE BALANCES OF SUNDRY CREDITORS AS PER THE BOOKS OF THE ASSESSEE FIRM AND THE BOOKS OF THE RESPECTIVE CREDITORS, TREATING THE SAME AS DEEMED INCOME OF T HE ASSESSEE UNDER SECTION 41[1] OF THE ACT. SINCE THE ASSESSEE HAD NO KNOWLEDGE ABOUT THE CONTENTS OF THE BOOKS OF ACCOUNT OF THE OTHER PARTIES, IT WAS IMPRACTICABLE FOR THE ASSESSEE TO ASCERTAIN THE DIFFERENCE AND OFFERED THE SAME TO TAX. AND ALSO I T IS IMPRACTICABLE TO ASCERTAIN THE FACT, TO WHICH THE YEAR, THE DEEMED INCOME REALLY A CCRUES TO THE ASSESSEE. IT IS WELL SETTLED LAW THAT PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDINGS ARE SEPARATE. THOUGH THE FINDINGS IN ASSESSMENT PROCEEDINGS ARE RELEVANT IN PENALTY PROCEEDINGS, BUT THE SAME ARE NOT CONCLUSIVE ENOUGH. IT IS ALSO WELL SET TLED LAW THAT MERELY BECAUSE ADDITION IS SUSTAINED, PENALTY IS NOT AUTOMATIC. I N THE CASE UNDER CONSIDERATION, THE ASSESSEE FIRM APPEARS TO HAVE FURNISHED FULL PARTIC ULARS OF ITS INCOME AND DID NOT FILE ANY INACCURATE PARTICULARS OF ITS INCOME IN ITS RET URN. THE ASSESSEE FIRM ALSO APPEARS TO HAVE OFFERED ITS EXPLANATIONS FOR THE DIFFERENCE IN THE LEDGER BALANCES. THE DEPARTMENT MADE THE ADDITIONS ONLY AS DEEMED INCOME UNDER SECT ION 41 [1] OF THE ACT ON ACCOUNT OF DIFFERENCE AS PER THE BOOKS OF THE ASSESSEE AND THE CREDITORS. HENCE, AFTER CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED VIEW, PENALTY CANNOT BE LEVIED IN CASES, RELATING TO THE INCOME DEEMED TO BE ACCRUING TO THE ASSESSEE. ACCORDINGLY, THE PENALTY LEVIED UNDER SE CTION 271 [1] [C] OF THE ACT IS NOT SUSTAINABLE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25.04.2011. SD/- SD/- , , , , MAHAVIR SINGH, JUDICIAL MEMBER ! ! ! !, ,, , '# '# '# '# , AKBER BASHA, ACCOUNTANT MEMBER. ( (( (1# 1# 1# 1#) )) ) DATE: 25.04.2011. R.G.(.P.S.) 4 '! / -2 3'2'4- COPY OF THE ORDER FORWARDED TO: 1. M/S. MINING ASSOCIATES ATWAL NAGAR, S.B.GORAI ROAD, ASANSOL. 2 THE A.C.I.T., CIRCLE-2, ASANSOL. 3. THE CIT, 4. THE CIT(A)-ASANSOL. 5. DR, KOLKATA BENCHES, KOLKATA .2 -/ TRUE COPY, '!%:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES