Shri Sandip Shantilal Mehta, Ahmedabad V. The Income Tax Officer, Ward-7(4),

ITA 1262/AHD/2015

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6129 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 11-05-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K P SHAH
• Keywords: Unexplained cash credit; Salary income; Difference of opinion; Change of opinion
• Section: 143(3); 131; 27; 11; 68

Judgement Text

, *,L *,L*,L *,L- -- -,E ,E,E ,E- -- -LH LHLH LH* ** * IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER I.T.A. NO.1262/AHD/2015 ( / ASSESSMENT YEAR : 2009-10) SHRI SANDIP SHANTILAL MEHTA, C-501, VASUPUJYA APARTMENT, B/H. ST. XEVIERS SCHOOL, NARANPURA, AHMEDABAD 380 013 VS. ITO, WARD 7(4), AHMEDABAD. ! PAN/GIR NO. : AGYPP 0967 A ( ' / APPELLANT ) .. ( #' RESPONDENT ) '$ APPELLANT BY : SHRI K. P. SHAH, A.R. #'%$ / RESPONDENT BY : SHRI JAMES KURIAN, SR. D.R & ' (%) * / DATE OF HEARING 24/01/2018 +,-. %) * / DATE OF PRONOUNCEMENT 12/02/2018 / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS APPEAL OF THE ASSESSEE RELATING TO ASSESSMEN T YEAR 2009-10 IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-10, AHMEDABAD DATED 24/03/2015 WHICH IS A RISING OUT OF ORDER U/S.271(1)(C) OF THE INCOME TAX ACT, 1961, VIDE APP EAL NO.CIT(A)- 10/ITO 7(4)/96/2014-15. 2. ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: YOUR APPELLANT BEING AGGRIEVED BY THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS)-IO, AHMEDABAD; FOR A.Y. ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 2 - 2009 - 10 PRESENTS THIS APPEAL ON THE FOLLOWING AMO NGST OTHER GROUNDS OF APPEAL. THE GROUNDS OF APPEAL ARE INDEPENDENT OF AND WITHOU T PREJUDICE TO EACH OTHER. 1. THE LEARNED C.I.T. (APPEALS) -10, AHMEDABAD GROSSLY ERRED IN LAW AND ON FACTS IN UPHOLDING PENALTY U/S 271(1)(C) IN RESPECT OF ADDITION FOR OUTSTANDING EXPENSES FOR PURCHASE OF GOODS AND EXPENSES OF RS.10,47,627/- U/S. 68 AND ADDITION OF RS.85,000/- IN RESPECT OF OPENING BALANCE OF DEPOSITS OF RS.85,000/-. (2)(I) THE LEARNED C.I.T. (APPEALS) -10, AHMEDABAD HAS ERRED IN NOT APPRECIATING THE ORDER U/S. 143(3) R.W.S.147 OF THE I T ACT, 1961 FOR A.Y. 2007-08 AND 2008-09 AS PER WHICH THE SAME A.O. HAD MADE REASSESSMENT WITHOUT MAKING ANY ADDITION FOR S IMILAR OUTSTANDING EXPENSES FOR PURCHASE OF GOODS AND EXPE NSES. (II) THE LEARNED C.I.T. (APPEALS) -10, AHMEDABAD ERRED IN REJECTING THE LEGAL PRECEDENT THAT THE PASSING OF THE REASSES SMENT ORDERS FOR 2007-08 AND 2008-09 CAN BE DESCRIBED AS CHANGE OF OPINION AS HELD BY THE HON'BLE CALCUTTA HIGH COURT IN THE C ASE OF CIT VS. CALCUTTA CREDIT CORPORATION (166 ITR 29). 3.(I) THE LEARNED C.I.T. (APPEALS)-10, AHMEDABAD ER RED IN CONFIRMING THE DECISION OF THE LEARNED A.O., FOR CONSIDERING C REDITORS FOR EXPENSES AND GOODS OF RS.10,47,627 AS CONCEALED INC OME UNLAWFULLY AND WITHOUT BASE. (II) THE LEARNED C.I.T. (APPEALS)-10, AHMEDABAD ERR ED IN CONFIRMING THE DECISION OF THE LEARNED A.O., FOR CONSIDERING C REDITORS OF RS.7,50,572/- AS CONCEALED INCOME ON THE BASIS OF T HE STATEMENT OF THREE PARTIES RECORDED U/S.131 OF THE ACT, WHICH WAS NOT SUBMITTED TO THE APPELLANT FOR CROSS VERIFICATION A ND THE ADDITION WAS MADE WITHOUT INFORMING TO THE APPELLANT AS REGA RDS TO THE STATEMENT OF THE PARTIES. THE LEARNED C.I.T.(APPEALS) -10, AHMEDABAD ERRED IN CONFIRMING THE DECISION OF THE LEARNED A.O., FOR CONSIDERING C REDITORS OF RS.2,97,055/- AS CONCEALED INCOME ONLY BECAUSE APPE LLANT COULD NOT PRODUCE THE CREDITORS FOR VERIFICATION. ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 3 - (III) THE LEARNED C.I.T. (APPEALS)-10, AHMEDABAD ER RED IN CONFIRMING FOUR CREDITORS HAVING BALANCE OF RS.5,43,398/- OUT OF SEVEN CREDITORS AS NEW CREDITORS EVEN THOUGH THE SAME WER E OLD CREDITORS. (IV) THE LEARNED C.I.T.(APPEALS) -10, AHMEDABAD ERR ED IN CONFIRMING SEVEN CREDITORS FOR GOODS AND EXPENSES HAVING BALAN CE OF RS.10,47,6277- AS NON GENUINE, EVEN THOUGH BOOK RES ULTS AS PER AUDITED BOOKS OF ACCOUNTS HAVE BEEN ACCEPTED FULLY. (V) THE LEARNED C.I.T.(APPEALS) -10, AHMEDABAD ERRE D IN CONFIRMING CREDITORS FOR EXPENSES AND GOODS HAVING BALANCE OF RS.10,47,627/- AS UNEXPLAINED CASH CREDIT U/S 68 OF THE I.T. ACT, 1961. 4. (I) THE LEARNED C.I.T.(APPEALS) -10, AHMEDABAD ERRED IN CONFIRMING THE ADDITION OF CREDIT OPENING BALANCE OF TWO DEPOS ITORS VIZ. (1) HARSHADBHAI V. PATEL RS.40,000/- AND (2) PRAVIN V. PATEL RS.45,000/-. (II) THE LEARNED C.I.T. (APPEALS)-10, AHMEDABAD ERRED IN CONFIRMING UNEXPLAINED CASH CREDIT OF RS.85,000/- AS CONCEALED INCOME; EVEN THOUGH THE AMOUNT OF RS.85,000 IS NOT CREDITED IN THE BOOKS FOR F.Y. 2008-09. 5. THE LEARNED C.I.T. (APPEALS) -10, AHMEDABAD ERR ED IN UPHOLDING PENALTY LEVIED BY THE LEARNED A.O. ONLY ON THE BASI S OF VOLUNTARY SURRENDER BY THE APPELLANT OF AN INCOME TO BUY PEAC E AND WITHOUT BRINGING SOME MATERIAL ON RECORD SO THAT IT IS CONCLUSIVELY ESTABLISHED THAT SUCH SURRENDER, IN FA CT, REPRESENTED THE REAL INCOME OR UNDISCLOSED INCOME OF APPELLANT. 6. THE LEARNED C.I.T.(APPEALS) -10, AHMEDABAD ERRED IN CONFIRMING THE PENALTY EVEN THOUGH NO CLEAR FINDING WHETHER TH E ASSESSEE IS GUILTY OF CONCEALING THE INCOME OR FURNISHING INACC URATE PARTICULARS OF INCOME WAS STATED IN THE SHOW CAUSE NOTICE DT.28/12/2011. [CIT VS. WHITEFORD INDIA LTD. 38 TAXMANN.COM 15 (GUJARAT)]. YOUR APPELLANT PRAYS FOR THE LEAVE TO ADD TO ALTER AND /OR TO AMEND ALL OR ANY OF THE GROUNDS BEFORE THE FINAL HEARING OF T HE APPEAL. ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 4 - 3. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- THE ASSESSEE HAS FILED RETURN OF INCOME ON 29/09/20 09 DECLARING TOTAL INCOME OF RS.3,29,140/-. THE CASE WAS SELECTE D FOR SCRUTINY UNDER CASS. THE ASSESSMENT WAS FINALIZED U/S.143(3) ON 27 /12/2011 ON TOTAL INCOME OF RS. 33,15,580/-. 3.1 DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE HAS RECEIVED SALARY OF RS.2,81,100/- F ROM TARGET INFRASTRUCTURE PVT. LTD. WHICH WAS ORIGINALLY NOT O FFERED TO TAX DURING THE FILING THE RETURN OF INCOME. DURING THE COURSE OF A SSESSMENT PROCEEDINGS THE ASSESSEE VIDE LETTER DT 19/05/2011, OFFERED THI S AMOUNT FOR TAX. AS THE ASSESSEE HAS NOT DISCLOSED THE SALARY, THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. PENALTY PROCEEDINGS U/S.271 (L)(C) WAS INITIATED VIDE ISSUING NOTICE ON 27/12/2011. 3.2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SU MMON WERE ISSUED TO 28 CREDITORS OUT OF THEM 7 PERSONS ARE EITHER NO T APPEARED OR DENIED TO HAVE ANY CREDIT TO THE ASSESSEE. THE AMOUNT INVOLVE WAS RS.10,47,627/- WHICH WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE . PENALTY PROCEEDINGS U/S.271(L)(C) WAS INITIATED VIDE SHOW CAUSE NOTICE ELATED 27.12.2011. 3.3 ON VERIFICATION OF UNSECURED LOAN, THE ASSESSEE WAS FAILED TO FILED CONFIRMATION OF TWO DEPOSITORS, NAMED BY HARSHAD V. PATEL RS.40,000/- AND PRAVIN V. PATEL RS.45,000/-. AS THE ASSESSEE DI D NOT PROVE THE ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 5 - GENUINENESS CREDIT WORTHINESS AND IDENTIFY OF DEPOS ITORS, THE SAME WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S.68 OF THE ACT. PENALTY PROCEEDINGS U/S.271(L)(C) WAS INITIATED VIDE SHOW C AUSE DATED 27/12/2012. 3.4 IN RESPONSE TO SHOW CAUSE ISSUED, THE ASSESSEE VIDE LETTER DATED 17/01/2012 STATED THAT:- YOUR ASSESSEE HAS THE FOLLOWING REASONS AND PROPOS ITIONS TO MAKE BEFORE YOUR LEARNED SELF. (1) SALARY OF RS.2,81,100/-: YOUR ASSESSEE HAD, AT THE FIRST INSTANCE, AGREED TO ADD THIS SALARY INCOME RECEIVED FROM TARGET INFRASTRUCTURE PVT LTD AS THE SAME WAS INADVERTENTLY LEFT TO OFFER FOR TAXATION AT THE TIM E OF FILING RETURN OF INCOME. [VIDE PARA 16) OF YOUR ASSESSEE'S SUBMISSIO N DATED 19/05/2011), THE EMPLOYER COMPANY HAD DEDUCTED TDS OF RS.13,500/- ON THE SALARY PAYMENTS OF RS.2,81,100/- MADE YOUR A SSESSEE. EVEN A SUBTLE THOUGHT OF CONCEALING SALARY INCOME WOULD NO T NATURALLY CROP UP IN A MIND WHERE TDS HAS BEEN DEDUCTED. THEREFORE BY NO STRETCH OF IMAGINATION, IT CAN BE SAID THAT THE CONCEALMENT WA S INTENTIONAL AND CONSCIOUS. FURTHER, YOUR ASSESSEE QUOTES THE FOLLOW ING RULINGS IN SUPPORT OF HIS PROPOSITIONS. A) NATIONAL TEXTILES V. CIT(2001)249 ITR 125 (GUJA RAT HIGH COURT) B) CIT V. SURESHCHANDRA MITTAL (2001) 251 ITR 9 (SC ) C) ''MERE OMISSION FROM THE RETURN OF AN ITEM OF RECEIPT DOES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME'. AS OBSERVED BY THE SUPREME COURT IN THE CASE OF K C BUILDERS V. ASST. CIT (2004) 265 ITR 56 2 D) SHRI SHADILAL SUGAR & GENERAL MILLS LTD. V. CIT (1987) 168 ITR 705 (SC) E) CIT V. SKYLINE AUTO PRODUCTS (P) LTD (2004) 271 ITR 335 (MP) HENCE, YOUR ASSESSEE EARNESTLY REQUESTS YOUR LEARNE D SELF TO DO AWAY WITH THE IMPOSITION OF PENALTY. ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 6 - CREDITORS OF RS.10,47,627/-: YOUR ASSESSEE HAS AGREED TO THE ADDITION OF RS.10,4 7,627/- FOR BUYING PEACE AND TRANQUILITY OF MIND.. IT IS A WELL FOUNDE D, SETTLED AND ACCEPTED POSITION IN THE LAW THAT IF AN ASSESSEE SURRENDERS INCOME TO BUY PEACE OF MIND AND AVOID FURTHER LITIGATION, PENALTY FOR CONC EALMENT IS NOT LEVIABLE. YOUR ASSESSEE FURTHER RELIES UPON THE FOL LOWING JUDICIAL PRONOUNCEMENTS TO SUPPORT HIS VIEWS. A) NATIONAL TEXTILES V. CIT(2001)249 ITR 125 (GUJA RAT HIGH COURT) B) CIT V. SURESHCHANDRA MITTAL (2001) 251 ITR 9 (S C) C) SHRI SHADILAL SUGAR & GENERAL LTD. V. CIT (1987) 168 ITR 705 (SC) THEREFORE, YOUR ASSESSEE HUMBLY REQUESTS YOUR GOOD SELF TO DO AWAY WITH THE LEVY OF PENALTY. (2)DEPOSITS OF RS. 85000/- : YOUR ASSESSEE COULD NOT FURNISH CONFIRMATION OF TWO DEPOSITORS WORTH RS.85,000/-. AT THE SAME TIME, THE REVENUE HAS NOT SUFFERED ANY TAX IN THE YEAR UNDER ASSESSMENT OR ANY YEAR IN THE PAST. HOWEVER, YOUR ASSESSEE HAS AGREED TO THE ADDITION OF RS.85,000/- FOR BUYING PEACE AND TRANQUILITY OF MIND. IT IS A WELL FOUNDED, SETTLED AND ACCEPTED POSITION IN THE LAW THAT IF AN ASSESSEE SURRENDERS INCOME TO BUY PEACE OF MIND AND AVOID FURTHER LITIGATION, PENALTY FOR CONCEALMENT I S NOT LEVIABLE. YOUR ASSESSEE FURTHER RELIES UPON THE FOLLOWING JUDICIAL PRONOUNCEMENTS TO SUPPORT HIS VIEWS. A) SMT. BRIJ BALA CHOUDARY V. ITO (2003) 87 ITD 173 (L UCK- TRIB)/(2004) 82 TTJ 355(LUCK -TRIB) B) NATIONAL TEXTILES V. CIT(2001) 249 ITR 125 (GUJARUT HIGH COURT) C) CIT V. SURESHCHANDRA MITTAL (2001) 251 ITR 9 (SC) D) SHRI SHADILAL SUGAR & GENERAL LTD. VS. CIT (1987) 168 ITR 705 (SC) HENCE, YOUR ASSESSEE URGES YOUR LEARNED SELF TO GRA NT IMMUNITY FROM LEVY OF PENALTY. ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 7 - 3.5 THE SUBMISSION OF THE ASSESSEE IS CAREFULLY EXA MINED AND FOUND NOT TENABLE. DURING THE COURSE OF ASSESSMENT PROCEE DING, IT WAS NOTICE THAT ASSESSEE HAS RECEIVED SALARY OF RS.2,81,100/- FROM TARJET INFRASTRUCTURE PVT. LTD., BUT THE SAME HAS NOT BEEN SHOWN IN RETURN OF INCOME. ON BEING ASKED THE ASSESSEE OFFERED SAME FO R TAXATION. DURING PENALTY PROCEEDING ASSESSEE SUBMITTED THAT CONCEALM ENT WAS NOT INTENTIONAL AND CONSCIOUS. THE ASSESSEE RELIED UPON VARIOUS RULING IN HIS SUPPORT. THE ASSESSEE HIMSELF AS ADMITTED THAT THER E IS A CONCEALMENT OF INCOME BUT CONCEALMENT IS NOT INTENTIONALLY AND CON SCIOUSLY. AS PER THE PROVISION OF SECTION 271(L)(C) OF THE ACT, PENALTY IS LEVIABLE FOR CONCEALMENT OF PARTICULARS OF INCOME. IT IS NOT NEC ESSARY THAT CONCEALMENT SHOULD BE INTENTIONALLY. THE JUDGMENT R ELIED BY THE ASSESSEE IS ALSO ON THE FACT THAT CONCEALMENT IS NOT INTENTI ONALLY AND THEREFORE THE SAME IS NOT APPLICABLE IN THIS CASE. 3.6 DURING THE ASSESSMENT PROCEEDING ADDITION OF RS .10,47,627/- WAS MADE AS ASSESSEE HAS FAILED TO PROVE THAT THE CREDI TOR TO THE EXTENT OF RS.10,47,627/- IS GENUINE. THE ADDITIONS WERE MADE AFTER RECORDING THE STATEMENT OF THE CREDITOR WHO HAS DENIED THE TRANSA CTIONS TO THE ASSESSEE OR NOT APPEARED. WHEN ASKED TO JUSTIFY THE CREDITOR S THE ASSESSEE VIDE LETTER ELATED 23/12/2011 AGREES THAT IS UNABLE TO J USTIFY CREDITWORTHINESS AND GENUINENESS OF THE CREDITORS AND OFFERED THE SA ME FOR TAXATION. WHEN ASKED AS TO WHY THE PENALTY SHOULD NOT BE IMPOSED F OR FURNISHING INACCURATE PARTICULARS AND THEREBY CONCEALMENT OF I NCOME, THE ASSESSEE SUBMITTED THAT THE ADDITION WAS AGREED FOR BUYING P EACE AND TRANQUILITY MIND. IT IS WELL SETTLED AND ACCEPTED POSITION IN T HE LAW THAT IF AN ASSESSEE ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 8 - SURRENDERS BY PIECE OF MIND PENALTY FOR CONCEALMENT IS NOT LEVIABLE. THE ASSESSEE HAS ALSO RELIED UPON VARIOUS JUDGMENTS IN SUPPORT OF HIS VIEW. THE ADDITION OF NON GENUINE CREDITOR WAS MADE AFTER RECORDING THE STATEMENT OF THE CREDITORS WHO HAS DENIED THE TRANS ACTIONS WITH THE ASSESSEE AND AFTER GIVING AN OPPORTUNITY TO THE ASS ESSEE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. WHICH ASSESSEE FAI LED TO PROVE AND FINALLY OFFERED FOR TAXATION. THE ABOVE FACT SHOWS THAT ASSESSEE HAS FURNISHED INACCURATE PARTICULARS BY CLAIMING BOGUS CREDITORS IN BOOKS OF ACCOUNTS. FURTHER THE DECISION RELIED UPON BY THE A SSESSEE IS NOT APPLICABLE IN THIS CASE AS FACTS AND CIRCUMSTANCES ARE TOTALLY DIFFERENCE FROM THE PRESENT CASE. THE JUDGMENT OF GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILE LTD HAS DELETED THE PENALTY ON THE GROUND THAT THE REVENUE HAS MADE NO EFFORTS TO PROVE THAT THE CASH CREDITOR WAS NOT GENUINE BY ISSUING SUMMONS. IN THE PRESENT CASE SUM MONS WERE ISSUED TO THE CREDITORS, THEIR STATEMENT WAS RECORDED U/S. 131 OF THE ACT, WHICH PROVES THAT CREDIT ENTRIES IN THE BOOKS ARE NOT GEN UINE. 3.7 THE HONORABLE ITAT IN THE CASE OF SMT. BRIJBALA CHAUDHARY IS HELD THAT PENALTY CANNOT BE IMPOSED ON ADDITION MAD E ON ESTIMATE BASIS. THIS IS NOT THE ISSUE WITH THE PRESENT CASE AND THE REFORE NOT APPLICABLE. 3.8 DURING THE ASSESSMENT PROCEEDING OUT OF UNSECUR ED LOAN, ADDITION OF RS.85,000/- U/S.68 OF THE ACT., WAS MADE IN RESP ECT OF TWO DEPOSITORS NAMELY SHRI HARSHAD V. PATEL OF RS.40,000/- AND PRA VIN V. PATEL OF RS.40,000/- AND PRAVIN V. PATEL OF RS.45,0000/- AS THE ASSESSEE FAILED TO FILE CONFIRMATION FROM THE ABOVE PERSONS. ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 9 - 3.9 DURING PENALTY PROCEEDING ASSESSEE SUBMITTED THAT HE HAS AGREED FOR THE ADDITION FOR BUYING PEACE AND TRANQU ILITY OF MIND AND HENCE PENALTY IS NOT LEVIABLE IN THIS CASE. THE ASS ESSEE HAS RELIED UPON VARIOUS JUDGMENTS IN SUPPORT OF HIS CLAIM. 3.10 DURING THE COURSE OF PENALTY PROCEEDING SUMMON S WERE ISSUED TO SHRI HARSHAD V PATEL AND PRAVIN V PATEL TO VERIFY T HE GENUINENESS OF DEPOSITS CLAIMED BY THE ASSESSEE. IN RESPONSE TO TH E SUMMONS SHRI HARSHAD V PATEL AND PRAVIN V PATEL ATTENDED AND GIV EN THEIR DECLARATION THAT THEY DOES NOT KNOW THE ASSESSEE AND ALSO NEVER ADVANCED ANY SUM TO HIM. THIS FACT ALONG WITH THE FACTS THAT ASSESSEE H AS NOT FILED CONFIRMATIONS SHOWS THAT ASSESSEE HAS INTRODUCED HI S OWN UNEXPLAINED FUND AS LOAN AND ADVANCES. IN VIEW OF THE ABOVE FAC TS IT IS CLEAR THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS AND T HEREBY CONCEALED THE INCOME, THE VARIOUS JUDGMENT RELIED UPON THE ASSESS EE IS DIFFERENT ON FACTS AND CIRCUMSTANCES AND THEREFORE NOT APPLICABL E IN THIS CASE. 3.11 FINALLY LD. AO LEVIED THE PENALTY OF RS.4,80,5 25/-. 4. AGAINST THE SAID ORDER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT (A) WHO DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IM PUGNED ORDER. THE APPELLANT IS A PROPRIETOR OF PAP - STAT INCORPO RATION WHICH IS CARRYING ON THE BUSINESS OF MANUFACTURING OF NOTE BOOKS AND FOOLSCAP BOOKS. THE APPELLANT HAS SUBMITTED AUDITED BOOKS OF ACCOUNTS A LONGWITH THE TAX ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 10 - AUDIT REPORT U/S.44AB OF THE I.T.ACT, 1961. WHILE P ASSING ORDER U/S.143(3) OF THE IT. ACT, 1961, THE LEARNED A.O. H AS ACCEPTED BOOK RESULTS FULLY. HOWEVER, AS PER THE SAID ORDER THE A .O. HAS MADE ADDITION OF SALARY OF RS. 2,81,100/- AND OF RS.11,32,627/- U /S.68 OF THE ACT. 5.1 AS REGARDS TO ADDITION OF SALARY OF RS.2,81,100 /- THE APPELLANT HAD SUBMITTED THAT THE EMPLOYER HAD MADE TDS OF RS.13,5 00/-. THE APPELLANT FURTHER SUBMITED THAT AS PER THE SCHEME OF THE ACT, INCOME TAX DEPARTMENT IS ALREADY HAVING THE DETAILS OF SALARY AND TDS MADE FROM THE SALARY OF EACH EMPLOYEE. 5.2 AS REGARDS TO THE ADDITION OF RS.11,32,627/- U/ S.68 OF THE ACT, THE APPELLANT HAD ALREADY AGREED FOR THE ADDITION DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS TO BUY PEACE, CALM AND TRANQ UILITY. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS REGARDS TO CRE DITORS FOR GOODS AND EXPENSES OF RS.10,47,627/- THE APPELLANT HAD TRIED TO SATISFY TO THE LEARNED A.O. AS TO THE GENUINESS OF THE CREDITORS. 5.3 THE LEARNED A.O. HAD ISSUED SUMMONS U/S.131 OF THE ACT, TO (1) VIKIBHAI M. RAVAL (2) BAKULBHAI PANCHAL AND (3) VIJ AY MAHASAN AND HAD RECORDED THEIR STATEMENTS. ON THE BASIS OF SUCH STA TEMENTS ADDITION OF RS.7,50,572/- WAS MADE. HOWEVER, THE APPELLANT WAS NOT INFORMED ABOUT THE STATEMENTS RECORDED U/S.131 OF THE I.T. ACT, 19 61 AND DESPITE OF THE FACT, APPELLANT WROTE A LETTER TO THE AO ON 10/07/2 012 TO PROVIDE COPIES OF STATEMENTS OF ALL THE PARTIES THOSE WERE EXAMINE D BY THE LD. AO U/S.131. BUT NEITHER OPPORTUNITY OF CROSS EXAMINATI ON NOR STATEMENT ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 11 - U/S.131 WAS REPORTED BY THE AO AND SUPPLIED TO THE APPELLANT AND MADE AN ADDITION WITHOUT INFORMING THE APPELLANT. SINCE AO HAS NOT GIVEN ANY CHANCE TO CROSS EXAMINES THE PERSON WHOSE STATEMENT WERE RECORDED U/S.131. MOREOVER, STATEMENT OF ABOVE SAID PERSONS WERE NOT SUPPLIED TO THE APPELLANT AND SAME IS AMOUNT TO MISCARRIAGE OF JUSTICE. LD. AO OUGHT TO HAVE SUPPLIED THE STATEMENT AND THEREAFTER GIVEN HIM CHANCE TO CROSS EXAMINE THE PERSON THOUGH STATEMENT WAS RECORDED BY THE AO. 6. IN OUR CONSIDERED OPINION, IN SUCH CIRCUMSTANCES PENALTY CANNOT BE LEVIED AND PENALTY OF RS.4,80,525/- DELETED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED THIS ORDER PRONOUNCED IN OPEN COURT ON 12/02/2018 SD/- SD/- IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ IZEKSN DQEKJ EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRAMOD KUMAR) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 12/02/2018 PRITI YADAV, SR.PS ITA NO.1262/AHD /2015 SANDIP S. MEHTA VS. ITO ASST.YEAR 2009-10. - 12 - !'# $#! COPY OF THE ORDER FORWARDED TO : 1. ' / THE APPELLANT 2. #' / THE RESPONDENT. 3. 012) & 3) / CONCERNED CIT 4. & 3) 45 / THE CIT(A)-10, AHMEDABAD. 5. 67 8)'12 *12. 0 / DR, ITAT, AHMEDABAD 6. 8 9: ( GUARD FILE. % & / BY ORDER, # 6)) //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 02/02/2018 (DICTATION-PAD 3 PA GES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 06/02/2018 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER