Sukhdev Dhillon, Kaithal V. ITO, W-3, Kaithal

ITA 144/CHANDI/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4975 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 06-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income
• Section: 69; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHB, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND DR. B.R.R. KUMAR, ACCOUNTANT MEMBER ITA NO. 144/CHD/2018 (ASSESSMENT YEAR: 2011-12) SUKHDEV DHILLON VS. THE ITO S/O SHRI. JAGIR SINGH WARD-3, KAITHAL VILL-BHAGAL, KAITHAL PAN: AONPD3025K (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI. SUDHIR SEHGAL DEPARTMENT BY : SHRI. MANJIT SINGH DATE OF HEARING : 03/05/2018 DATE OF PRONOUNCEMENT : 09/05/2018 O R D E R PER DR.B.R.R.KUMAR, A.M . : THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF THE LD. CIT(A), KARNAL DT. 18/12/2017. 2. IN THE PRESENT APPEAL THE ASSESSEE HAS RAISED FO LLOWING GROUNDS: 1. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY A.O ON AGRICULTURAL INCOME AS THERE WAS NO BUSINESS INCOME . 2. THAT THE LD. CIT(A) ERRED IN CONFIRMING A PENALTY L EVIED BY A.O. UNDER SECTION 271(1)(C) AS APPELLANT NEITHER CONCEALED TH E PARTICULARS OF INCOME NOR FURNISHED INACCURATE PARTICULARS. 3. THAT THE LD. CIT(A) ERRED IN NOT APPRECIATING THE S UBMISSIONS OF APPELLANT AND DISMISSED ALL SUBMISSIONS WITHOUT THE APPLICATI ON OF MIND. 4. THAT THE LD. CIT(A) ALSO ERRED IN NOT FOLLOWING THE DECISIONS OF SUPERIOR COURTS BY DISBELIEVING 3 CASE-LAWS OF JURISDICTIONA L HIGH COURT. 3. THE ASSESSING OFFICER FOUND CASH DEPOSIT OF RS.3 4,33,000/- IN THE BANK ACCOUNT OF THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCES OF ALONGWITH NECESSARY EVIDENCE IN THIS REGARD RESPECT OF THE CASH DEPOSITED IN THE BANK. 2 4. BEFORE THE ASSESSING OFFICER THE ASSESSEE STATED THAT HE WAS AN AGRICULTURIST AND HAVING ONLY FOUR ACRE OF AGRICULT URAL LAND. THE ANNUAL INCOME FROM THE AGRICULTURE IS NEARLY TWO LACS OUT OF WHIC H FORTY THOUSAND IS SPENT FOR EARNING AGRICULTURAL INCOME AND 2 TONS WHEAT HAS BE EN KEPT FOR DOMESTIC USE. IT WAS EXPLAINED THAT THE ASSESSEE HAS NO OTHER SOURCE S. THE ASSESSEE EXPLAINED THAT THE ELDER SON HAS GONE TO NEWZELAND FOR STUDY ON 01/01/2012 AND SECOND SON IS STUDYING IN 10+2 AND HIS WIFE IS HOUSEHOLD L ADY AND NO OTHER FAMILY MEMBER IS EARNING HAND AND HIS HOUSEHOLD EXPENSES I S NEAR ABOUT RS. 20,000/- PER MONTH. IT WAS FURTHER EXPLAINED THAT THE ASSESS EE HAS SOLD 4 ACRES FOR RS. 17,10,000/- IN OCTOBER 2008 OUT OF THE TOTAL OWNERS HIP OF LAND OF 8 ACRES AND DEPOSITED THE AMOUNT IN HDFC BANK. HE EXPLAINED THA T THE PURPOSE OF SELLING THE LAND WAS, TO SEND SON FOR FURTHER STUDY TO NEWZ EALAND AND ACHIEVED THIS PURPOSE IN JANUARY 2012 TILL THEN THE MONEY (17,10, 000) REMAINED IN THE BANK AFTER WITHDRAWING & DEPOSITING PROCESS, HENCE THE S AME MONEY ROTATED OR RECYCLED DURING THAT PERIOD. 5. HAVING GONE THROUGH THE FACTUM OF THE CASE AND G OING THROUGH THE DEPOSITS AND WITHDRAWALS THE ASSESSING OFFICER MADE ADDITION OF RS. 4,50,000/- TO THE INCOME OF THE ASSESSEE AND CONSEQUENTLY LEVIED PENALTY OF RS. 45,835/-. 6. THE LD. CIT(A) UPHELD THE PENALTY LEVIED. 7. BEFORE US, THE LD. AR EXPLAINED THAT THERE WAS N EITHER CONCEALMENT OF INCOME NOR THE ASSESSEE HAS FURNISHED ANY INACCURAT E PARTICULARS OF INCOME. THE PENALTY WAS LEVIED AS THE ADDITION WAS MADE UND ER SECTION 69 AND NO SEPARATE ENQUIRIES WERE CONDUCTED NOR ANY NEW MATER IAL WAS BROUGHT ON RECORD FOR LEVY OF PENALTY. HE RELIED ON THE DECISI ON OF HON'BLE MADRAS HIGH- COURT IN THE CASE OF S.V KALYANAM VS. INCOME-TAX OF FICER (2010) 327 ITR 477 (MAD.) WHEREIN IT WAS HELD THAT ADDITION MADE U/S 6 9 REJECTING THE EXPLANATION OF THE ASSESSES, SECTION 69 IS DEEMING PROVISION AN D IT CANNOT BE EXTENDED TO THE PENALTY PROCEEDINGS. THE DEPARTMENT COULD NOT PRESU ME THAT THERE WAS CONCEALMENT. THERE MUST BE AN INDEPENDENT FINDINGS. HON'BLE GUJARAT HIGH-COURT IN CASE OF CIT V. VINAYC HAND HARILAL (1979) 120 ITR 752 (GUJ.) HELD THE MERE FACT THAT THE EXPLANAT ION OF THE ASSESSEE WAS FOUND UNSATISFACTORY AND THAT THE DEEMING PROVISION OF SE CTION 69 COULD BE INVOKED, DOES NOT NECESSARY MEAN THAT HE HAS NOT DISCHARGED THE BURDEN CAST UPON HIM BY THE EXPLANATION. 3 RELYING ON THE ABOVE JUDGMENTS THE LD. AR PRAYED T HAT NO PENALTY IS LEVIABLE ON THE FACTS OF THE CASE. 8. LD. DR RELIED ON THE ORDER OF THE LOWER AUTHORIT IES. 9. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PA RTIES AND PERUSED THE MATERIAL PLACED BEFORE US. 10. WE FIND THAT WHILE LEVYING PENALTY NO MATERIAL WAS BROUGHT ON RECORD AND THE PENALTY WAS LEVIED JUST AS A MATTER OF CONS EQUENTIAL ACTION TO THE ADDITION MADE TO THE TOTAL INCOME. IT IS A WELL-SET TLED LEGAL POSITION RELATING TO THE EXIGIBILITY OF THE PENALTY U/S 271(1)(C) OF THE ACT THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE DIFFERENT I N NATURE. HENCE FINDINGS ARE GIVEN IN ASSESSMENT PROCEEDING, THOUGH MAY CONS TITUTE GOOD EVIDENCE WHEREAS IT IS CANNOT CONSTITUTE CONCLUSIVE EVIDENCE FOR THE PURPOSE OF LEVYING PENALTY. SIMILARLY IN THE CASE OF SHERVANI HOSPITAL ITIES LTD. VS. CIT, REPORT OM (2011), DELHI HIGH COURT, IT WAS HELD BY THE COURT, LEVY OF PENALTY IS NOT AN AUTOMATIC CONSEQUENCE WHEN AN ADDITION IS MADE BY D ISALLOWING AN EXPENSE AND BY NOT ACCEPTING THE EXPLANATION GIVEN BY THE A SSESSEE. THUS, KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ADDITION MADE BY THE ASSESSING OFFICER, THE PENALTY LEVIED SUBSEQUENTLY, THE EXPLANATION OF THE ASSESSEE AND THE RATIOS LAID DOW N BY THE HONBLE COURTS REGARDING THE LEVY OF PENALTY WE HEREBY ORDER THE P ENALTY LEVIED BE DELETED. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (SANJAY GARG) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09/05/2018 AG COPY TO: 1.THE APPELLANT, 2. THE RESPONDENT, 3. THE CIT(A), 4. THE CIT, 5. THE DR