Shyam Steels Pvt. Ltd., Bhavnagar V. The ACIT, Circle-1, Bhavnagar

ITA 1713/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 6122 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 13-04-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 03-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.1713/AHD/2014 ( / ASSESSMENT YEAR : 2005-06) SHYAM STEELS PVT.LTD. SYAM, 2264/B HILL DRIVE TALAJA ROAD BHAVNAGAR / VS. THE ACIT CIRCLE-1 BHAVNAGAR # ./ ./ PAN/GIR NO. : AADCS 0002 L ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : SHRI B.R. POPAT, AR '#& ) ( / RESPONDENT BY : SHRI JAMES KURIAN, SR.DR *+ ), / DATE OF HEARING 13/04/2017 -./0 ), / DATE OF PRONOUNCEMENT 19/ 04 /2017 / O R D E R PER PRADIP KUMAR KEDIA, AM: THE CAPTIONED APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-I, AHMED ABAD [CIT(A) IN SHORT] DATED 25/04/2014 FOR THE ASSESSMENT YEAR (AY) 2005-06. ITA NO.1713/AHD /2014 SHYAM STEELS PVT.LTD. VS. ACIT ASST.YEAR 2005-06 - 2 - 2. IN THIS APPEAL, THE ASSESSEE SEEKS TO CHALLENGE THE ACTION OF THE REVENUE IN IMPOSING THE PENALTY OF RS.2,92,740/- UN DER S.271(1)(C) OF THE ACT. 3. BRIEFLY STATED, THE ASSESSEE IS ENGAGED IN TRAD ING OF SHIP MACHINERIES AND ITS PARTS. THE SOURCE AND NATURE O F CERTAIN CASH CREDITS WERE NOT FOUND SATISFACTORY ON THE TOUCHSTONE S.68 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') AG GREGATING TO RS.8 LACS. THE CREDIT RECEIVED FROM FOUR PARTIES, NAMELY, JAG DISH R.SANGHAVI, KANIBEN H. PAREKH, RAMESH S. SHETH & PRAKASH H. SHA H RS.2 LACS EACH WAS TAKEN AS UNEXPLAINED INCOME UNDER S.68 OF THE A CT. AS A CONSEQUENCE, PENALTY WAS IMPOSED BY THE AO UNDER S. 271(1)(C) OF THE ACT THEREON. 4. IN FIRST APPEAL, THE CIT(A) ALSO CONFIRMED THE ACTION OF THE AO IN IMPOSING THE PENALTY UNDER S.271(1)(C) OF THE ACT. 5. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE TH E ITAT. 6. THE LD.AR FOR THE ASSESSEE MR. B.R.POPAT, AT TH E OUTSET, SUBMITTED THAT ALL PRIMARY EVIDENCES AND DOCUMENTS IN CONNECT ION WITH THE IMPUGNED CASH CREDIT RECEIVED FROM THE PARTIES NAME D ABOVE WERE DULY PRODUCED BEFORE THE LOWER AUTHORITIES IN QUANTUM PR OCEEDINGS. IN FACT, ITA NO.1713/AHD /2014 SHYAM STEELS PVT.LTD. VS. ACIT ASST.YEAR 2005-06 - 3 - ONE OF THE PARTIES PRAKASH H. SHAH WAS PRODUCED BEF ORE THE AO AND HIS STATEMENT UNDER S.131 OF THE ACT WAS ALSO RECORDED. IN THE STATEMENT, THE LENDER PRAKASH H. SHAH HAS ADMITTED TO HAVE ISSUED CHEQUE IN FAVOUR OF THE ASSESSEE. THE LOANS WERE ULTIMATELY REPAID WIT H INTEREST IN DUE COURSE OF TIME. THE LD.AR FURTHER EMPHASIZED THAT ALL THE SE LOANS WERE ACCEPTED THROUGH BANKING CHANNEL WITH THE HELP OF A BROKER. THE BROKER IS INDEPENDENTLY ASSESSED TO TAX AND HAS ALSO FILED AN AFFIDAVIT AND SUPPORTING DOCUMENTS IN CONNECTION WITH HIS HAVING RENDERED FINANCIAL BROKING SERVICES IN THIS REGARD. THE BROKER WAS PA ID BROKERAGE FOR SUCH SERVICES AND THAT TOO AFTER DEDUCTING TAX AT SOURCE FOR WHICH THE DOCUMENTS/EVIDENCES WERE PLACED ON RECORD. THE MA IN DEFICIT RECORDED BY THE LOWER AUTHORITIES IS THAT OTHER THREE LENDER S COULD NOT BE PRODUCED BEFORE THE AO. IN THIS CONNECTION, THE LD.AR SUBMI TTED THAT THESE PARTIES WERE BROUGHT TO THE INCOME TAX DEPARTMENT ON 17 & 1 8 TH JUNE-2009. HOWEVER, THEIR STATEMENT COULD NOT BE RECORDED AS T HE AO HIMSELF WAS ON LEAVE. A LETTER WAS FILED IN TAPAL ON THE DAY. 7. THE LD.DR RELIED UPON THE ORDER OF THE CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE L IMITED ISSUE FOR ADJUDICATION IN THE PRESENT CASE IS CORRECTNESS OF IMPOSITION OF PENALTY UNDER S.271(1)(C) OF THE ACT ON ASSESSEE IN THE GIV EN SET OF FACTS AND CIRCUMSTANCES EXISTING IN THE CASE. AT THE OUTSET, WE NOTE THAT ALL PRIMARY ITA NO.1713/AHD /2014 SHYAM STEELS PVT.LTD. VS. ACIT ASST.YEAR 2005-06 - 4 - DOCUMENTS HAVE BEEN FURNISHED INCLUDING THE CONFIRM ATION, PAN, BROKERS CONFIRMATION AS WELL AS TDS ON BROKERAGE S O PAID. WHEN SEEING THE FACTS HOLISTICALLY, ONE CANNOT COME TO A CONCLUSION THAT ONUS PLACED UNDER EXPLANATION-1 TO SECTION 271(1)(C) OF THE ACT HAS NOT BEEN DISCHARGED BY THE ASSESSEE. IN THE INSTANT CASE, T HE ASSESSEE HAS OFFERED AN EXPLANATION WHICH HAS BEEN SUBSTANTIATED TO A GR EAT DEAL. ALL THE FACTS CONCERNING THE CASH CREDIT HAS BEEN BROUGHT ON RECO RD. THE LOAN HAS BEEN ULTIMATELY REPAID. ONE OF THE LENDERS HAVE AL SO BEEN PRODUCED AS A WITNESS. THE REASONABLE EXPLANATION IS AVAILABLE O N RECORD TO JUSTIFY NON- RECORDING OF STATEMENT OF OTHER WITNESSES. THERE I S NOTHING ON RECORD WHICH PROVES CULPABILITY OF ANY SORT AGAINST THE AS SESSEE. IN THESE CIRCUMSTANCES, WE FIND MERIT IN THE PLEA RAISED BY THE ASSESSEE FOR DELETION OF PENALTY. THE PENALTY IMPOSED UNDER S.2 71(1)(C) OF THE ACT THEREFORE DESERVES TO BE DELETED. WE DIRECT THE AO TO DO SO ACCORDINGLY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 19 / 04 /2017 SD/- SD/- ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 19/ 04 /2017 4..*,.*../ T.C. NAIR, SR. PS ITA NO.1713/AHD /2014 SHYAM STEELS PVT.LTD. VS. ACIT ASST.YEAR 2005-06 - 5 - !'#$#! / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '#& / THE RESPONDENT. 3. 567, 8, / CONCERNED CIT 4. 8, ( ) / THE CIT(A)-I, AHMEDABAD 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 17.4.17 (DICTATION-PAD 9-P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17.4.17 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.19.4.17 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 19.4.17 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