MOHAN LAL SWARANKAR, Jaipur V. ACIT, Jaipur

ITA 144/JPR/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5988 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2002-2003
• Appeal Filed On: 17-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Keywords: Unexplained cash credit; Wrong claim; Non compliance; Onus to prove; Revised return; Set aside
• Section: 271(1)(c); 143(3); 131

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 144/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2002-03. DR. MOHAN LAL SWARNKAR, 40,SINDHI COLONY, BANK PARK, JAIPUR. CUKE VS. THE ACIT, CIRCLE-7, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. ACZPS 7410 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.09.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/09/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 21.10.2016 OF LD. CIT (APPEALS) ARISING FROM PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE IT ACT FOR THE ASSESSMENT YEAR 2002-03. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW LD. CIT (A) ERRED IN CONFIRMING LEVY OF PENALTY OF RS. 6,03,240/- U/S 271(1)(C). 2. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. 2 ITA NO. 144/JP/2017 SHRI MOHAN LAL SWARANKAR, JAIPUR. 2. THE ASSESSEE IS A DOCTOR BY PROFESSION AND ALSO PROPRIETOR OF M/S. JAIPUR INSTITUTE OF MEDICAL GENERAL & RADIOLOGY. THE ASSE SSEE FILED HIS RETURN OF INCOME ON 31 ST OCTOBER, 2002 DECLARING A LOSS OF RS. 80,90,669/-. SUBSEQUENTLY, THE ASSESSEE FILED REVISED RETURN OF INCOME DECLARING LOSS OF RS . 29,77,789/-. THE ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON 23 RD MARCH, 2005 AT A LOSS OF RS. 4,57,972/- THEREBY THE AO MADE AN ADDITION OF RS. 76,32,697/-. THE ASSESSMENT ORDER WAS CHALLENGED BY THE ASSESSEE BEFORE THE LD. CIT (A) A ND VIDE ORDER DATED 13 TH MAY, 2008 THE LD. CIT (A) DELETED THE ADDITION AND GRANT ED PART RELIEF. SINCE THE PENALTY IS LEVIED AGAINST THE ADDITION MADE BY THE AO ON AC COUNT OF UNEXPLAINED CASH CREDITS, THEREFORE, THE ADDITION MADE BY THE AO ON THIS ACCOUNT IS RELEVANT FOR THESE PROCEEDINGS. THE AO MADE THE ADDITION OF RS. 41,00 ,000/- AS UNEXPLAINED CASH CREDIT AND THE LD. CIT (A) DELETED RS. 31,00,000/- OUT OF RS. 41,00,000/- AND SUSTAINED RS. 10,00,000/-. THE INTEREST OF RS. 1,4 0,634/- WHICH IS PROPORTIONATE TO THE ADDITION SUSTAINED BY THE LD. CIT (A) WAS ALSO SUSTAINED. AGAINST THE ORDER DATED 13.05.2008, BOTH ASSESSEE AS WELL AS DEPARTME NT PREFERRED APPEALS BEFORE THE TRIBUNAL AND THIS TRIBUNAL VIDE ORDER DATED 29 TH OCTOBER, 2010 CONFIRMED THE ORDER OF LD. CIT (A) SUSTAINING THE ADDITION OF RS. 10,00 ,000/- AND RESTORED THE MATTER AS REGARDS THE REMAINING AMOUNT OF RS. 31,00,000/- WHI CH WAS DELETED BY THE LD. CIT (APPEALS) TO THE FILE OF THE AO. IN THE SET ASIDE PROCEEDINGS, THE AO HAS REPEATED THE ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDIT TO THE EXTENT OF RS. 18,00,000/- AND CORRESPONDING DISALLOWANCE OF INTEREST OF RS. 2 8,000/-. THUS THE TOTAL ADDITION MADE BY THE AO IN THE SET ASIDE/REMAND PROCEEDINGS WAS RS. 18,28,000/-. THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE IN ITIATED IN RESPECT OF THE ADDITION 3 ITA NO. 144/JP/2017 SHRI MOHAN LAL SWARANKAR, JAIPUR. OF RS. 18,28,000/- AND CONSEQUENTLY THE AO LEVIED T HE PENALTY OF RS. 6,03,240/- BEING 100% OF TAX SOUGHT TO BE EVADED. THE ASSESSE E CHALLENGED THE LEVY OF PENALTY BEFORE THE LD. CIT (A) BUT COULD NOT SUCCEE D. 3. BEFORE THE TRIBUNAL, THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT ALL THE LOAN TRANSACTIONS WERE THROUGH ACCOUNT PAYEE CHEQUE S REFLECTED IN THE BANK ACCOUNT MAINTAINED BY THE ASSESSEE WHICH PROVE THE GENUINEN ESS OF THE TRANSACTION AND IDENTITY OF THE CREDITOR. HOWEVER, DUE TO LAPSE OF TIME, ASSESSEE WAS UNABLE TO FURNISH THE CONFIRMATIONS AND DOCUMENTARY EVIDENCE IN RESPECT OF CERTAIN LOAN CREDITORS. HE HAS FURTHER CONTENDED THAT OUT OF TH E UNSECURED LOANS WHICH WERE DISALLOWED BY THE AO IN THE SECOND ROUND, A SUM OF RS. 16,00,000/- WERE REPAID DURING THE FINANCIAL YEAR 2002-03 AND DETAILS OF WH ICH WERE FURNISHED DURING THE QUANTUM PROCEEDINGS. THUS THE LD. A/R SUBMITTED THA T ONCE THE TRANSACTION WAS THROUGH BANKING CHANNEL AND THE ASSESSEE HAS ALSO R EPAID THE SAID AMOUNT WHICH WAS NOT DISPUTED BY THE AO WHILE COMPLETING THE ASS ESSMENT FOR THE ASSESSMENT YEAR 2003-04, THEN THE ADDITION MADE FOR WANT OF FU RNISHING THE CONFIRMATION AND OTHER DOCUMENTARY EVIDENCE AS WELL AS PRODUCTION OF THE LOAN CREDITOR BEFORE THE AO WOULD NOT CONSTITUTE FURNISHING OF INACCURATE PARTI CULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME. ALL NECESSARY FACTS AND DET AILS WERE FURNISHED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS ITSELF, HOWEVER, NOT ACCEPTING THE CLAIM BY THE AO WOULD NOT IPSO FACTO ATTRACT PROVISIONS OF SECTI ON 271(1)(C) OF THE ACT. THIS IS ONLY IN THE SECOND ROUND OF APPEAL, THE AO HAS REPE ATED THE ADDITION. OTHERWISE, THE LD. CIT (A) IN THE FIRST ROUND HAS ACCEPTED THE CLAIM OF THE ASSESSEE AND DELETED THE ADDITION. THEREFORE, THIS IS NOT A BOGUS OR FA LSE CLAIM BUT DISALLOWANCE WAS 4 ITA NO. 144/JP/2017 SHRI MOHAN LAL SWARANKAR, JAIPUR. MADE DUE TO NON COMPLIANCE OR NON SATISFACTION OF T HE AO OF THE EXPLANATION FURNISHED BY THE ASSESSEE. IN SUPPORT OF HIS CONTE NTION, HE HAS RELIED UPON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS . RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158 (SC) AS WELL AS DECISION OF HONBLE JUR ISDICTIONAL HIGH COURT IN CASE OF CIT VS. SMT. CHANDRALATA GOSWAMI, 125 ITR 700 (RAJ. ). THE LD. A/R HAS ALSO REFERRED A SERIES OF DECISIONS ON THIS POINT. HENCE THE LD. A/R SUBMITTED THAT THE PENALTY LEVIED BY THE AO AND CONFIRMED BY THE LD. C IT (A) MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. D/R HAS RELIED UPON T HE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ASSESSEE HAS FAILED TO DISCHARGE HIS ONUS TO PROVE THE CREDITWORTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. THE AO CONDUCTED THE DUE ENQUIRY AND ISSUED THE SUMMONS UN DER SECTION 131, HOWEVER, OUT OF 12 PARTIES, ONLY 8 PARTIES HAVE RESPONDED TO THE SUMMONS. THEREFORE, THE AO HAS MADE THE ADDITION IN RESPECT OF THE LOAN CREDIT OR IN RESPECT OF WHOM THE ASSESSEE HAS NOT FILED ANY CONFIRMATION AND THOSE P ARTIES HAVE NOT RESPONDED TO THE NOTICE ISSUED BY THE AO. THUS IT IS A CASE OF FURN ISHING INACCURATE PARTICULARS OF INCOME ATTRACTING THE PROVISIONS OF SECTION 271(1)( C) OF THE IT ACT. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE PENALTY WAS LEVIED BY THE AO IN RESPEC T OF THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH CREDITS WHICH WERE SHOW N BY THE ASSESSEE AS LOAN TAKEN FROM VARIOUS PARTIES. IN THE ORIGINAL ASSESS MENT, THE AO MADE ADDITION OF RS. 41,00,000/- OUT OF WHICH THE LD. CIT (A) DELETED T HE ADDITION TO THE EXTENT OF RS. 31,00,000/-. ON FURTHER APPEAL BY THE DEPARTMENT A GAINST THE SAID RELIEF GRANTED BY 5 ITA NO. 144/JP/2017 SHRI MOHAN LAL SWARANKAR, JAIPUR. THE LD. CIT (A) OF RS. 31,00,000/-, THE TRIBUNAL RE MANDED THE MATTER TO THE RECORD OF THE AO FOR ADJUDICATING AFRESH AFTER CONDUCTING THE ENQUIRY. IN THE SET ASIDE PROCEEDINGS, THE AO ACCEPTED THE CLAIM OF THE ASSES SEE TO THE EXTENT OF RS. 13,00,000/- AS THE LOAN CREDITORS RESPONDED TO THE NOTICE ISSUED BY THE AO UNDER SECTION 131 OF THE ACT. HOWEVER, SOME OF THE LOAN CREDITORS HAVE NOT RESPONDED TO THE NOTICE ISSUED BY THE AO, THEREFORE, AN AMOUNT O F RS. 18,00,000/- WAS TREATED BY THE AO AS UNEXPLAINED CASH CREDIT. THUS IT IS CLEAR THAT IN THE FIRST ROUND OF LITIGATION THE LD. CIT (A) DELETED THIS ADDITION AND EVEN IN T HE SECOND ROUND WHEN THE MATTER WAS REMANDED BY THE TRIBUNAL TO THE RECORD OF THE A O, THE AO ACCEPTED PART OF THE CLAIM OF THE ASSESSEE. THUS IT IS NOT A CASE OF BO GUS OR FALSE CLAIM BUT DUE TO NON RESPONSE TO THE NOTICE ISSUED UNDER SECTION 131 AS WELL AS NOT FURNISHING THE CONFIRMATION FROM THESE LOAN CREDITORS, THE AO HAS REPEATED THE ADDITION TO THE EXTENT OF RS. 18,00,000/- AND CORRESPONDING DISALLO WANCE OF INTEREST OF RS. 28,000/-. IT IS ALSO NOT IN DISPUTE THAT THE ASSESSEE HAS CLA IMED TO HAVE REPAID A SUM OF RS. 16,00,000/- IN THE VERY NEXT YEAR I.E. FINANCIAL YE AR 2002-03 RELEVANT TO ASSESSMENT YEAR 2003-04 AND THE AO HAS NOT DOUBTED THE SAID TR ANSACTION OF REPAYMENT. THUS IN THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE ADDITION WAS MADE ONLY BECAUSE THE EXPLANATION OF THE ASSESSEE WAS NOT FOU ND TO BE SATISFACTORY AND NOT DUE TO THE REASON THAT THE CLAIM OF THE ASSESSEE WA S BOGUS OR ABSOLUTELY FALSE, THE SAID ADDITION MADE IN THE SECOND ROUND OF LITIGATIO N WOULD NOT IPSO FACTO LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS FURNISHED INACCURA TE PARTICULARS OF INCOME OR CONCEALED PARTICULARS OF INCOME. HENCE IN THE FACTS AND CIRCUMSTANCES OF THE CASE AS 6 ITA NO. 144/JP/2017 SHRI MOHAN LAL SWARANKAR, JAIPUR. DISCUSSED ABOVE, THE PENALTY LEVIED BY THE AO UNDER SECTION 271(1)(C) IS NOT SUSTAINABLE AND THE SAME IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/09/201 9. SD/- ( FOT; IKY JKWO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/09/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI MOHAN LAL SWARANKAR, JAIPUR. 2. THE RESPONDENT THE ACIT, CIRCLE-7, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 144/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR