Ace Infrastructure Pvt. Ltd., Nadiad V. The Asstt. Commissioner of Income Tax, Nadiad

ITA 1413/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5912 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Assessee Lawyers: S N DIVETIA
• Keywords: Loose papers; Peak credit; Tangible material
• Section: 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NOS: 1413 & 1414/AHD/2016 (ASSESSMENT YEARS: 2006-07- 2007-08) ACE INFRASTRUCTURE PVT. LTD. 501, CITY POINT, NR. PARAS CINEMA, COLLEGE ROAD, NADIAD V/S ASSISTANT COMMISSIONER OF INCOME TAX, NADIAD (APPELLANT) (RESPONDENT) PAN: AAFCA 2444J APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SHRI G.C. DAXINI, SR. D.R. ( )/ ORDER DATE OF HEARING : 01 -03-201 8 DATE OF PRONOUNCEMENT : 19-03-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. ITA NOS. 1413 & 1414/AHD/2016 ARE APPEALS BY THE AS SESSEE PREFERRED AGAINST TWO SEPARATE ORDERS OF THE LD. CIT(A)-I, VA DODARA PERTAINING TO TWO DIFFERENT ASSESSMENT YEARS I.E. A.Y. 2006-07 & 2007 -08. ITA NOS. 141 3 & 1414/AHD/2016 . A.YS. 2006-0 7 & 2007-08 2 2. SINCE THE UNDERLYING FACTS IN BOTH THESE APPEALS AR E COMMON, THOUGH THE QUANTUM MAY DIFFER. THEREFORE, THESE ARE TAKEN UP T OGETHER AND ARE DISPOSED OF FOR THE SAKE OF CONVENIENCE. 3. THE GRIEVANCE OF THE ASSESSEE IN THE IMPUGNED APPEA L RELATE TO THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT. 4. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT SEARC H AND SEIZURE PROCEEDINGS U/S. 132 OF THE ACT WAS CONDUCTED IN THE CASE OF THE ASS ESSEE ON 03.04.2008. PURSUANT TO THE NOTICE U/S. 153A OF THE ACT, THE AS SESSEE FILED THE RETURN OF INCOME. DURING THE COURSE OF THE SEARCH PROCEEDINGS , CERTAIN LOOSE PAPERS/SHEETS WERE FOUND AND IMPOUNDED WHICH CONTAI NED CERTAIN ENTRIES. ON THE BASIS OF THE ENTRIES IN THE LOOSE PAPERS, THE A SSESSEE ESTIMATED THE PEAK CREDIT AND OFFERED THE SAME FOR TAXATION IN THE RET URN FILED U/S. 153AOF THE ACT. THE PEAK CREDITS WERE NOT ACCEPTED AS SUCH AND THE A.O. MADE THE ADDITION OF THE ENTIRE ENTRIES FOUND IN THE LOOSE SHEET. 5. THE ASSESSEE AGITATED THE MATTER BEFORE THE LD. CIT (A) AND THE PEAK CREDIT WERE PARTIALLY REDUCED. 6. IN ADDITION TO THE ESTIMATED PEAK CREDIT OFFERED BY THE ASSESSEE, THERE WAS ALSO ARITHMETICAL ERROR AND THE SAME WAS ALSO ADDED TO T HE PEAK CREDIT. PENAL PROCEEDINGS U/S. 271(1)(C) WERE SEPARATELY INITIATE D. IT IS WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF AN ANTHRAMAN VEERASINGHAIALT & CO. 123 ITR 457, THEREFORE, THE F INDINGS OF THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR TH E PURPOSES OF THE PENALTY ITA NOS. 141 3 & 1414/AHD/2016 . A.YS. 2006-0 7 & 2007-08 3 PROCEEDINGS. THE LAW IS WELL SETTLED THAT THOUGH TH E FINDING RECORDED IN THE ASSESSMENT ORDERS ARE RELEVANT EVIDENCE TO SUPPORT THE ALLEGATION OF CONCEALMENT/FILING OF INACCURATE PARTICULARS BUT TH ESE CANNOT BE THE FOUNDATION FOR HOLDING THE ASSESSEE GUILTY OF CONCEALMENT /FIL ING OF INACCURATE PARTICULARS. 7. THERE IS NO DISPUTE THAT CERTAIN CASH RECEIPTS WERE FOUND RECORDED IN THE LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. RECORDING S ON THESE PAPERS INCLUDED THE TRANSACTIONS WHICH WERE RECORDED IN THE BOOKS O F ACCOUNTS AND SOME TRANSACTIONS WHICH WERE NOT RECORDED IN THE BOOKS O F ACCOUNTS. IT IS ALSO TRUE THAT THE ASSESSEE HAS WORKED OUT THE PEAK CREDIT ON THE BASIS OF THE TRANSACTIONS FOUND RECORDED IN THE LOOSE SHEETS. IT IS EQUALLY T RUE THAT THE A.O. TAXED THE ENTIRE CASH RECEIPT WHICH WERE REDUCED BY THE LD. C IT(A) WHO ACCEPTED THE WORKING OF PEAK CASH CREDIT. 8. IN OUR CONSIDERED OPINION, THE QUANTUM ADDITIONS MA DE BY THE A.O. WERE SUBSTANTIALLY REDUCED IN THE APPELLATE PROCEEDINGS WHICH IS EVIDENCED BY THE FACT THAT THERE WERE OTHER ADDITIONS/DISALLOWANCES MADE BY THE A.O. WHICH WERE DELETED BY THE TRIBUNAL IN THE APPELLATE PROCE EDINGS. ONLY ADDITION REMAINED SUSTAIN RELATED TO THE WORKING OF THE PEAK CREDITS. IN OUR CONSIDERED OPINION, THE WORKING OF PEAK CREDIT WAS A DISPUTED ITEM AND KEPT ON CHANGING FROM ASSESSMENT TO APPELLATE PROCEEDINGS. THIS MEAN S THAT THERE WAS NO CONCRETE/CONCLUSIVE EVIDENCE FOUND AT THE TIME OF S EARCH PROCEEDINGS. THE ENTRIES FOUND IN THE LOOSE SHEETS WERE ADDED IN TOT O BY THE A.O. WHICH SUBSTANTIALLY REDUCED IN THE APPELLATE PROCEEDINGS. THEREFORE, IT CANNOT BE SAID THAT THE LOOSE SHEETS CONTAIN CONCEALED INCOME. MER ELY BECAUSE THE ASSESSEE WAS NOT IN A POSITION TO EXPLAIN THE CREDIT ENTRIES , IT ACCEPTED THE ADDITIONS ON PEAK CREDIT BASIS AND THE SAME WAS OFFERED FOR TAXA TION IN THE RETURN OF INCOME ITA NOS. 141 3 & 1414/AHD/2016 . A.YS. 2006-0 7 & 2007-08 4 FILED U/S. 153A OF THE ACT. THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF KIRIT DAYABHAI PATEL IN 121 ITD 159 SQUARELY APPLY. 9. A SIMILAR ISSUE WAS CONSIDERED BY THE CO-ORDINATE B ENCH IN THE CASE OF MURARILAL RATANLAL AGARWAL IN IT(SS)A NOS. 573 & 61 5/AHD/2012 AND THE CO- ORDINATE BENCH HELD AS UNDER:- 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAD DISCLOSED INCOME OF RS. 5,50,000/- BASED ON THE PEAK CREDIT WORKED OUT FROM THE BANK ACCOUNT FOUND DURIN G THE COURSE OF SEARCH. THE PEAK CREDIT AS WORKED OUT BY THE ASSESSEE WAS NOT F OUND CORRECT BY ASSESSING OFFICER AND HE WORKED OUT PEAK CREDIT OF RS. 15,05, 702/- AND ON THE ENHANCED PEAK CREDIT PENALTY U/S. 271(1)(C) WAS LEVIED BY AS SESSING OFFICER. THE ADDITION MADE BY THE ASSESSING OFFICER IS ON ESTIMATION BASI S AND IS NOT BASED ON ANY TANGIBLE MATERIAL ON RECORD. 10. CONSIDERING THE FACTS IN TOTALITY IN THE LIGHT OF THE DECISION OF THE CO-ORDINATE BENCH, WE SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY SO LEVIED. BOTH THE APPEALS BY THE ASSE SSEE ARE ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 19 - 03- 2018 SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 19 /03/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS)