SHREE SAI CONSTRUCTION, MUMBAI V. DCIT 23(1), MUMBAI

ITA 1248/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6651 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 04-03-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 23-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: K GOPAL AW MR JITENDRA SINGH; NARENDRA PANDE
• Keywords: Source of fund; Onus to prove; Bogus loan
• Section: 131; 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI , , BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEM BER . / ITA NO. 1248 /MUM./201 2 ( / ASSESSMENT YEAR : 20 03 04 ) M/S. SHREE SAI CONSTRUCTION 109, BHARAT INDUSTRIAL ESTATE LBS MARG, BHANDUP (W) MUMBAI 400 078 .. / APPELLANT V/S DY. COMMISS IONER OF INCOME TAX CIRCLE 2 3( 1 ) (4) , MUMBAI .... / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AALFS8731P / ASSESSEE BY : MR. K. GOPAL A/W MR. JITENDRA SINGH AND MR. NARENDRA PANDE / REVENUE BY : MR. ASHOK SURI / DATE OF HEARING 04 .0 3 .201 4 / DATE OF ORDE R 11.04.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE AFORESAID APPEAL HA S BEEN PREFERRED BY THE ASSESSEE CHALLENGING THE IMPUGNED ORDER DATED 15 TH NOVEMBER 2011 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) XXXV I , MUMBAI, IN THE MATTER OF M/S. SHREE SAI CONSTRUCTION 2 PENALTY PROCEEDINGS UNDER SECTION 271(1)(C), FOR THE ASSESSMENT YEAR 2003 04 . THE SOLE DISPUTE IN THIS APPEAL IS, WHETHER OR NOT THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN CONFIRMING THE PENALTY OF ` 8,03,250 UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) , LEVIED BY THE ASSESSING OFFICER ON ACCOUNT OF ADDITIONS MA DE UNDER SECTION 68 FOR SUMS AGGREGATING ` 22,50,000. 2 . FACTS IN BRIEF : THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPERS OF HOUSING PROJECTS. FOR THE YEAR UNDER APPEAL, THE ASSESSEE HAD FILED ITS RE TURN OF INCOME DE CLARING NET LO SS OF ` 5,553 ON 27 TH NOVEMBER 2003. AS AGAINST THE RETURNED INCOME, THE ASSESSMENT WAS COMPLETED AT AN INCOME OF ` 1,89,28,640 AND HE MAJOR ADDITION WAS ON ACCOUNT OF PROFIT WORKED OUT IN RESPECT OF CONSTRUCTION ACTIVITY OF ` 1,60,96,185 AND THE ADDITION ON ACCOUNT OF BOGUS LOAN MADE UNDER SECTION 68 FOR SUMS AGGREGATING TO ` 27,50,000. IN THE QUANTUM PROCEEDINGS, THE MATTER HAD REACHED UP TO THE STAGE OF TRIBUNAL FROM WHERE THE ADDITION IN RESPECT OF PROFIT OF CONSTRUCTION WAS DELETED. HOWEV ER, WITH REGARD TO THE ADDITION UNDER SECTION 68 IN RESPECT OF LOAN TAKEN FROM TWO PARTIES VIZ. MR. D.A. SAWANT AND M/S. G.R. INDUSTRIES , WAS CONFIRMED. INSOFAR AS THE ISSUE OF LOAN TAKEN FROM M/S. G.S. SACHDEVA, THE SAME WAS REMANDED BACK TO THE FILE OF T HE ASSESSING OFFICER FOR FRESH CONSIDERATION, WHICH IS NOT THE SUBJECT MATTER OF THE PENALTY IN THE PRESENT APPEAL. 3 . THE FACTS, LEADING TO THE ADDITION MADE UNDER SECTION 68 WITH REGARD TO TWO PARTIES ARE THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS BORROWED LOANS FOR SUMS AGGREGATING TO ` 50,15,000 FROM DIFFERENT PARTIES. TO VERIFY THE GENUINENESS AND CREDITWORTHINESS OF THE LENDERS, M/S. SHREE SAI CONSTRUCTION 3 SUMMONS UNDER SECTION 131 WERE ISSUED TO VARIOUS PARTIES. IN RESP ONSE TO THE SUMMONS UNDER SECTION 131, ONE MR. D.A. SAWANT, HAD APPEARED BEFORE THE ASSESSING OFFICER AND HIS STATEMENT WAS RECORDED. IN THE STATEMENT, HE STATED THAT HE IS A SALARIED EMPLOYEE AND IS NOT ASSESSED TO TAX. WITH REGARD TO THE QUESTION , WHETHE R HE HAS GIVEN ANY LOAN TO THE ASSESSEE, HE ADMITTED THAT HE HAS GIVEN A LOAN OF ` 20,00,000 AND ALSO GIVEN DETAILS OF CHEQUE DATE AND THE NAME OF THE BANK FROM WHICH THE SAID CHEQUES WERE ISSUED. WITH REGARD TO THE SOURCE OF THE AMOUNT CREDITED IN HIS BAN K ACCOUNT, HE SUBMITTED THAT THE SAME WAS RECEIVED FROM ONE MR. KAWALJEET SINGH SACHDEVA, DIRECTOR OF M/S. STANDARD CLUTCHES AND SPARES, WHO HAD DEPOSITED THE CHEQUES IN HIS BANK ACCOUNT. THE RELEVANT PORTION OF THE QUESTIONS AND ANSWERS, AS REPRODUCED IN THE PENALTY ORDER AS WELL AS ASSESSMENT ORDER, IS REPRODUCED HEREIN BELOW: Q. WHAT ARE YOUR SOURCES OF INCOME AND ARE YOU ASSESSED TO TAX? ANS. MY ONLY SOURCE OF INCOME IS FROM SALARY. I DO NOT HAVE ANY OTHER SOURCE OF INCOME. I AM NOT ASSESSED TO TAX B UT I HAVE TAKEN PAN RECENTLY NO.BDPPS8188G ALLOTTED BY UTI. I GOT THE PAN CARD ON 20.2.2006. Q. HAVE YOU GIVEN ANY LOAN TO M/S. SHREE SAI CONSTRUCTION? ANS. YES. I HAVE GIVEN LOAN OF ` 20,00,000 AS DETAILED BELOW: DATE CHEQUE NO. NAME OF BANK AMOUNT 17 .4.2002 438382 VIJAYA BANK, CHAMBUR ` 5,00,000 17.4.2002 438383 VIJAYA BANK, CHAMBUR ` 5,00,000 17.4.2002 438384 VIJAYA BANK, CHAMBUR ` 5,00,000 17.4.2002 438385 VIJAYA BANK, CHAMBUR ` 5,00,000 TOTAL: ` 20,00,000 M/S. SHREE SAI CONSTRUCTION 4 Q. WHAT IS THE SOURCE OF ABOVE ` 20 ,00,000? ANS. ONE MR. KAWALJEET SINGH SACHDEVA, DIRECTOR OF M/S. STANDARD CLUTCHES AND SPARES PVT. LTD. HAS MANAGED TO GET ALL THE CHEQUES DEPOSITED IN MY BANK A/C AND I HAVE SIGNED ALL CHEQUES ISSUED TO M/S. SHREE SAI CONSTRUCTION. I DO NOT HAVE ANY MONE Y OF MINE IN THIS ACCOUNT. Q. WHETHER YOU GOT ANY BENEFIT OR OFFER FOR DOING THE ABOVE BANK TRANSACTIONS? ANS. NO. I HAVE DONE SO AS I AM WORKING UNDER HIM. 4 . FROM THE AFORESAID STATEMENT, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT MR. D.A. SAWANT , DID NOT HAD THE CAPACITY TO ADVANCE ` 20,00,000 TO THE ASSESSEE, AS HE WAS A SALARIED EMPLOYEE EARNING A SALARY OF ` 8,000 PER MONTH. ACCORDINGLY, HE MADE THE ADDITION UNDER SECTION 68. SIMILARLY, IN THE CASE OF M/S. G.R. INDUSTRIES, FROM WHOM THE ASSESS EE HAD BORROWED SUM OF ` 2,50,000, THE ASSESSEE COULD NOT PRODUCE THE SAID PARTY TO VERIFY THE GENUINENESS OF THE LOAN. ACCORDINGLY, THE SAME WAS ALSO ADDED UNDER SECTION 68. THE SAID ADDITION S NOW HAVE BEEN CONFIRMED BY THE TRIBUNAL IN QUANTUM PROCEEDINGS MAINLY ON THE GROUN D THAT MR. D.A. SAWANT, DID NOT HAD THE CAPACITY AND CREDITWORTHINESS TO GIVE A LOAN AMOUNTING TO ` 20,00,000 AND HE WAS A MERE SALARIED EMPLOYEE OF ` 8,000 PER MONTH. FURTHER, THE ASSESSEE ALSO COULD NOT EXPLAIN AS TO WHY ` 20,00,000 W AS GIVEN BY MR. KAWALJEET SINGH SACHDEVA TO THE ASSESSEE THROUGH THE BANK ACCOUNT OF MR. D.A. SAWANT. THUS, THE GENUINENESS AND THE CREDITWORTHINESS COULD NOT BE SUBSTANTIATED BY THE ASSESSEE. SIMILARLY, THE LOAN AMOUNT OF ` 2,50,000 RECEIVED FROM M/S. G.R . INDUSTRIES WAS ALSO CONFIRMED ON THE GROUND THAT THE ASSESSEE DID NOT DISCHARGE I T S ONUS CAST UPON HIM. M/S. SHREE SAI CONSTRUCTION 5 5 . IN THE PENALTY PROCEEDINGS, THE ASSESSEE, VIDE LETTER DATED 30 TH NOVEMBER 2009, WAS REQUIRED TO SHOW CAUSE , AS TO WHY THE PENALTY SHOULD NOT BE LEVI ED ON THESE CIRCUMSTANCES . HOWEVER, IT APPEARS THAT IN RESPECT TO THE SAID NOTICE, THE ASSESSEE COULD NOT FURNISH ANY EXPLANATION. ACCORDINGLY, THE ASSESSING OFFICER, AFTER NARRATING THE ENTIRE FACTS AND THE FINDINGS OF THE TRIBUNAL, LEVIED THE PENALTY OF ` 8,03,250. 6 . BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESSEE RAISED A PRELIMINARY GROUND THAT THE ASSESSING OFFICER HAS PASSED THE PENALTY ORDER WITHOUT GIVING PROPER OPPORTUNITY OF EXPLAINING THE CASE AND IT WAS SUBMITTED THAT IN RESPONSE TO THE SHOW CAUSE NOTICE, THE ASSESSEE HAD SOUGHT ADJOURNMENT REQUESTING FOR A DATE OF HEARING IN JANUARY 2010 AND ON 18 TH JANUARY 2010, THE ASSESSEE FILED REPLY WHICH HAD NOT BEEN CONSIDERED BY THE ASSESSING OFFICER. ON MERITS, THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS THE APPELLATE PROCEEDINGS, THE ASSESSEE HAD FURNISHED ALL THE DETAILS TO PROVE THE GENUINENESS OF THE LOAN AND MERELY BECAUSE THE ADDITIONS HAVE BEEN SUSTAINED IN THE QUANTUM PROCEEDINGS, THE PENALTY CANNOT BE JUSTIFIED. IN SUPPORT OF THIS PROPOSITION, VARIOUS CASE LAWS WERE RELIED UPON WHICH HAS BEEN INCORPORATED BY THE LEARNED COMMISSIONER (APPEALS) AT PAGE 4 AND 5 OF THE APPELLATE ORDER. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD FURNISHED THE BANK ACC OUNTS OF THE CREDITORS FROM WHERE THESE CREDITORS HAVE LENT THE MONEY TO THE ASSESSEE AND INSOFAR AS THE SOURCES OF INCOME OF THE LENDERS ARE CONCERNED, IT WAS VERY DIFFICULT TO PROVE , DUE TO VARIOUS DISPUTES WITH THEM. THE ASSESSEE HAS THUS, NOT ONLY ESTA BLISHED THE IDENTITY BUT ALSO THE IMMEDIATE SOURCE OF LOAN AND WITHOUT ANY FURTHER ENQUIRY BY THE ASSESSING OFFICER THE SAID LOAN CANNOT BE TREATED AS NON GENUINE. THE M/S. SHREE SAI CONSTRUCTION 6 RELEVANT REPLY ON MERITS HAS BEEN INCORPORATED BY THE LEARNED COMMISSIONER (APPEALS) IN HIS ORDER AT PAGE 10 AND 11. 7 . THE LEARNED COMMISSIONER (APPEALS), ON THE PRELIMINARY ISSUE, HELD THAT THE ASSESSING OFFICER HAD GIVEN A SHOW CAUSE NOTICE TO THE ASSESSEE AND THE ASSESSEE COULD NOT FURNISH THE REPLY AND EVEN IF THE LETTER DATED 18 TH JANUARY 2010, HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER, THEN ALSO THE PENALTY CANNOT BE QUASHED AS THE ASSESSING OFFICER HAS PASSED THE ORDER ON MERITS. O N MERITS OF THE ADDITION, THE LEARNED COMMISSIONER (APPEALS) HAD REFERRED TO VARIOUS DECISIONS AND TH E LEGAL IMPLICATION OF EXPLANATION TO SECTION 271(1)(C) AND THE LEGISLATIVE HISTORY OF SECTION 271(1)(C) AND HOW THEY HAVE BEEN INTERPRETED BY THE VARIOUS COURTS. HE ALSO TOOK NOTE OF THE ASSESSEES LETTER DATED 18 TH JANUARY 2010, WHICH IT WAS STATED TO HA VE BEEN FILED BEFORE THE ASSESSING OFFICER , WHEREIN IT WAS EXPLAINED BY THE ASSESSEE THAT THE ASSESSEE HAD RECEIVED THE LOAN THROUGH CHEQUES FROM MR. D.A. SAWANT, AND THE PERSON WHO HAD DEPOSITED THE CHEQUE IN HIS BANK ACCOUNT IS NOT A KNOWN PERSON TO THE ASSESSEE. THERE IS NO NEXUS BETWEEN THE ASSESSEE AND THE LENDER. THERE IS NO REQUIREMENT UNDER THE LAW TO PROVE THE SOURCE OF THE SOURCE AND ONCE THE IDENTITY OF THE CREDITOR HAS BEEN PROVED AND THE LOAN HAS BEEN RECEIVED THROUGH CHEQUE, THEN NO PENALTY SH OULD BE LEVIED. SIMILARLY, IN CASE OF M/S. G.R. INDUSTRIES, THE LOAN WAS TAKEN THROUGH CHEQUE AND THE SAME HAS BEEN REPAID. IN CASE OF LOAN TAKEN FROM MR. D.A. SAWANT ALSO, THE SAME HAS BEEN REPAID. HOWEVER, THE LEARNED COMMISSIONER (APPEALS) AGAIN REFERRE D TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN CIT V/S OASIS HOSPITALITIES PVT. LTD. & ORS. , ITA NO.2093 OF 2010, JUDGMENT DATED 31 ST JANUARY 2011, AND WITHOUT DISCUSSING THE ISSUE ON THE EXPLANATION M/S. SHREE SAI CONSTRUCTION 7 GIVEN BY THE ASSESSEE AND ON MERITS, HAS DISMISSED THE ASSESSEES APPEAL. 8 . BEFORE US, THE LEARNED COUNSEL, MR. K. GOPAL, ON BEHALF OF THE ASSESSEE, REITERATED THE SUBMISSIONS MADE BEFORE THE LEARNED COMMISSIONER (APPEALS) AND SUBMITTED THAT ONCE THE ASSESSEE HAS PRO VED THE IDENTITY OF THE PERSONS AND THE IMMEDIATE SOURCE OF THE LOAN WHICH HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE S , THEN, INSOFAR AS THE PENALTY PROCEEDINGS ARE CONCERNED, THE ONUS STANDS DISCHARGED AND WITHOUT ANY FURTHER MATERIAL ON RECORD, PENALTY SHOULD NOT BE LEVIED. HE FURTHER SUBM ITTED THAT MR. D.A. SAWANT, HAD CATEGORICALLY ADMITTED THAT HE HAS GIVEN THE LOAN TO THE ASSESSEE AND ALSO FURNISHED THE DETAILS OF CHEQUE S AND BANK ACCOUNT. IF THE AMOUNT HAS BEEN RECEIVED FROM THE THIRD PERSON IN THE LENDERS BANK ACCOUNT, THEN THE ASSES SEE DOES NOT HAVE ANY ONUS TO PROVE THE SOURCE OF THE SOURCE. THUS, HE SUBMITTED THAT NO PENALTY IS WARRANTED ON THESE FACTS. SIMILARLY, IN CASE OF M/S. G.R. INDUSTRIES, HE SUBMITTED THAT THE AMOUNT HAS BEEN RECEIVED THROUGH ACCOUNT PAYEE CHEQUE, THEREFORE , NO ADVERSE INFERENCE SHOULD BE DRAWN. HE ALSO EMPHASIZED REPEATEDLY THAT THE SAID LOANS HAVE BEEN REPAID. 9 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, STRONGLY RELYING UPON THE PENALTY ORDER AS WELL AS THE ORDER OF LEARNED COMMISSIONER (A PPEALS), SUBMITTED THAT IN THE CASE OF MR. D.A. SAWANT, STATEMENT WAS RECORDED , WHEREIN HE HAD ADMITTED THAT THE AMOUNT HAS BEEN DEPOSITED IN THE BANK ACCOUNT BY MR. KAWALJEET SINGH SACHDEVA, AND THE SAME AMOUNT WAS IN TURN GIVEN TO THE ASSESSEE. THUS, MR. D.A. SAWANT, WAS ONLY A CONDUIT. HE ALSO REFERRED TO THE FINDINGS GIVEN BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS TO CONTEND M/S. SHREE SAI CONSTRUCTION 8 THAT THE TRIBUNAL HAS GIVEN CATEGORICAL FINDING OF THE FACT THAT THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE LOAN AND ALS O THE CREDITWORTHINESS AND, THEREFORE, THE PENALTY HAS RIGHTLY BEEN LEVIED AND CONFIRMED. 10 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. IN THIS CASE, PENALTY HAS BEEN CONFIRMED ON ACCOUNT OF UNEXPLAINED LOAN RECEIVED FROM TWO PERSONS VIZ. MR. D.A. SAWANT FOR SUM OF ` 20,00,000 AND M/S. G.R. INDUSTRIES FOR SUM OF ` 2,50,000. IN CASE OF MR. D.A. SAWANT, A STATEMENT WAS RECORDED IN THE PRESENCE OF THE ASSESSING OFFICER , WH EREIN HE HAS STATED THAT HIS ONLY SOURCE OF INCOME IS SALARY AND DOES NOT HAVE THE PAN AT THE TIME OF GIVING THE LOAN. THE PAN CARD WAS ONLY ALLOTTED TO HIM IN THE YEAR 2006. IN HIS STATEMENT, THOUGH HE CONFIRMED THE GIVING OF LOAN TO THE ASSESSEE AND HAS ALSO GIVEN THE PARTICULARS OF THE CHEQUE S , DATE OF ISSUANCE AND THE BANK DETAILS, BUT AT THE SAME TIME HAD STATED THAT THE SOURCE OF ` 20,00,000 IN HIS BANK ACCOUNT WAS FROM MR. KAWALJEET SINGH SACHDEVA, WHO HAS MANAGED TO GET ALL THE CHEQUES DEPOSITED IN HIS BANK ACCOUNT AND HE HAS MERELY ISSUED THE CHEQUES TO THE ASSESSEE. HE DOES NOT HAVE HIS OWN MONEY IN HIS BANK ACCOUNT. HE WAS FURTHER ASKED AS TO WHAT WAS THE BENEFIT HE RECEIVED IN DOING SO, HE STATED THAT HE HAS DONE SO AS HE WAS WORKING UNDER MR. KA WALJEET SINGH SACHDEVA. THE TRIBUNAL, AFTER TAKING INTO CONSIDERATION ALL THESE VITAL FACTS, HAS CONFIRMED THE ADDITION ON THE GROUND THAT THE GENUINENESS OF THE TRANSACTIONS OF THE LOAN AND THE CREDITWORTHINESS COULD NOT BE ESTABLISHED IN THIS CASE. THE A SSESSEES EXPLANATION BEFORE US AS WELL AS BEFORE THE LEARNED COMMISSIONER (APPEALS) IS THAT THE IDENTITY OF THE PERSON HAS BEEN ESTABLISHED AND THE GENUINENESS OF THE TRANSACTION IS BORNE OUT FROM M/S. SHREE SAI CONSTRUCTION 9 THE FACT THAT THE ASSESSEE HAS RECEIVED THE LOAN THROUGH A CCOUNT PAYEE CHEQUES WHICH HA S ORIGINATED FROM THE BANK ACCOUNT OF THE LENDER AND INSOFAR AS THE ASSESSEE IS CONCERNED, IT IS NOT REQUIRED TO PROVE THE SOURCE OF SOURCE. 11 . IT IS A SETTLED PROPOSITION OF LAW THAT THE FINDINGS GIVEN IN THE ASSESSMENT PROCEED INGS ARE QUITE RELEVANT AND HAVE PROBATIVE VALUE BUT SUCH A FINDING ALONE MAY NOT JUSTIFY THE LEVY OF PENALTY IN A GIVEN CASE, BECAUSE THE CONSIDERATIONS THAT ARISE IN THE PENALTY PROCEEDINGS ARE DIFFERENT FROM THE ASSESSMENT PROCEEDINGS. IN THE PENALTY PR OCEEDINGS, THE MATTER HAS TO BE EXAMINED FROM THE ANGLE THAT WHETHER THE ASSESSEE IS GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME. IN THE PENALTY PROCEEDINGS, THE ISSUE HAS TO BE EXAMINED AFRESH AND THE ASSESSEE MAY ADDUCE FRESH EVIDENCE IN THE PENALTY PROCEEDINGS TO ESTABLISH BY WAY OF MATERIAL, RELEVANT FACTS WHICH MAY COME INTO EFFECT AS LIABILITY OF PENALTY. THE ASSESSEE EVEN THOUGH MAY NOT FILE ANY FRESH EVIDENCE BUT STILL MAY RELY UPON THE EXISTING MATERIAL TO PROVE T HAT PRESUMPTION RAISED BY THE EXPLANATION WOULD STAND REBUTTED AND HE IS NOT GUILTY OF CONCEALMENT OF FURNISHING OF IN ACCURATE PARTICULARS OF INCOME OR FOR CONCEALMENT. IN THE PRESENT CASE, THE SOLE MATERIAL WHICH HAS BEEN RELIED UPON BY THE DEPARTMENT AS WELL AS BY THE ASSESSEE IS STATEMENT OF MR. D.A. SAWANT. IN THE SAID STATEMENT ITSELF, THE SAID PERSON HAS GIVEN CATEGORICAL AVERMENT THAT HE DOES NOT HAVE ANY MONEY OF HIS OWN IN HIS BANK ACCOUNT BUT HAS BEEN MANAGED TO BE DEPOSITED BY ONE MR. KAWALJEET S INGH SACHDEVA. THIS P IECE OF MATERIAL ALONE CAST A SERIOUS DOUBT AGAINST THE GENUINENESS OF THE LOAN. HOWEVER, THIS MAY NOT BE CONCLUSIVE FOR THE PENALTY PROCEEDINGS. THE LEARNED COMMISSIONER (APPEALS) HAS MERELY QUOTED THE CONTENTS OF THE EXPLANATION GIVE N BY M/S. SHREE SAI CONSTRUCTION 10 THE ASSESSEE AND HAS NOT DEALT WITH THE ISSUE ON MERITS , EXCEPT FOR REFERRING AND RELYING UPON VARIOUS DECISIONS. ONCE THE ASSESSEE FURNISHED THE EXPLANATION BASED ON THE MATERIAL ON RECORD, H E HAS TO GIVE A CONCLUSIVE FINDING ON SUCH E XPLANATION WHET HER IT IS A BONAFIDE OR HAS BEEN SUBSTANTIATED OR NOT. EVEN THE ASSESSING OFFICER HAS MERELY REFERRED TO THE FINDINGS GIVEN ON THE QUANTUM SIDE. UNDER THESE FACTS AND CIRCUMSTANCES, WE ARE OF THE CONSIDERED OPINION THAT THIS MATTER NEEDS TO BE RESTORED TO THE FILE OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND RESTORE BACK THE ENTIRE ISSUE OF PENALTY TO THE FILE OF THE ASSESSING OFFICER AND DIRECT HIM TO CONSIDER THE ASSESSEES EXPLANA TION AND THE ONUS WILL BE UPON THE ASSESSEE TO R EBUT THE CHARGE WITH SOME CREDIBLE EVIDENCE. THEREAFTER, THE ASSESSING OFFICER I F DEEM ED FIT WOULD CARRY OUT NECESSARY ENQUIRY FROM MR. KAWALJEET SINGH SACHDEVA, WHO IS STATED TO HAVE DEPOSITED THE AMOUNT IN TH E BANK ACCOUNT OF THE LENDER . T HE ASSESSEE MAY PRODUCE THE CONFIRMATION FROM THE SAID PERSON SO AS TO CORROBORATE THE BONAFIDE OF ITS EXPLANATION AND ALSO TO SHOW THE PRIMA FACIE GENUINENESS OF THE TRANSACTION. REGARDING LEVY OF PENALTY ON THE UNEXPLAINED LOAN OF ` 2,50,000 FROM G.R. INDUSTRIES, THE ASSESSEE HAS TO SUBSTANTIATE ITS EXPLANATION, WHICH HAS TO BE EX AMINED BY THE ASSESSING OFFICER. THUS, ON THIS SCORE ALSO, THE MATTER IS SET ASIDE TO THE FILE OF THE ASSESSING OFFICER. THUS, A FTER CONSIDERING T HE ENTIRE MATERIAL AND EXPLANATION, THE ASSESSING OFFICER WILL DECIDE THE ISSUE OF PENALTY AFRESH AND IN ACCORDANCE WITH THE PROVISIONS OF LAW AND AFTER PROVIDING DUE AND EFFECTIVE OPPORTUNITY OF HEARING TO THE ASSESSEE. ACCORDINGLY , THE GROUND RAISED BY T HE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. M/S. SHREE SAI CONSTRUCTION 11 12 . 1 2 . IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. 11 TH APRIL 2014 ORDER PRONOUNCED IN THE OPEN COURT O N 11 TH APRIL 2014 SD/ - SANJAY ARORA ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 11 TH APRIL 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI