Surinder Kumar, Chandigarh V. ITO, Chandigarh

ITA 174/CHANDI/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 51538 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 19-10-2011
• Assessment Year: 2000-2001
• Appeal Filed On: 14-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Assessee Lawyers: ANIL KUMAR BATRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI H.L.KARWA, VICE PRESIDENT AND SHRI MEHAR SINGH, ACCOUNTANT MEMBER ITA NO. 174/CHD/2011 ASSESSMENT YEAR: 2000-01 SHRI SURINDER KUMAR, V ITO, WARD 5(2), H.NO. 1545, CHANDIGARH. SECTOR 18D, CHANDIGARH. PAN: AOWPK-1310D (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ANIL KUMAR BATRA DEPARTMENT BY SHRI N.K.SAINI DATE OF HEARING : 21.10.2011 DATE OF PRONOUNCEMENT : 25.10.2011 ORDER PER MEHAR SINGH, AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER DATED 07.12.2010 PASSED BY THE LD. CIT(A) PAT IALA U/S 250(6) OF THE INCOME-TAX ACT,1961 (IN SHORT 'THE AC T'). 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL: THAT THE LD. CIT(A) HAS, WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES OF THE CASE AND WITHOUT ASCERTAINING THE TREATMENT METED OUT TO THE SUM OF RS..10,00,000/- FOUND AS A CREDIT IN THE BOOKS OF ACCOUNT OF M/S TRANJIT SINGH & CO. IN THE HANDS OF THE SAID CONCERN AND WITHOUT APPRECIATING THE AFFIDAVIT GIVEN BY THE APPELLANT IN EVIDENCE HAS ERRED IN CONCLUDING THAT RS.10,00,000/- WAS THE INCOME OF THE APPELLANT AND CONSEQUENTLY LEVYING TH E PENALTY OF RS.3,01,400/- U/S 271(1)(C) OF THE INCOM E- TAX ACT,1961. THE PENALTY BE DELETED. 2 3. THE FACTS OF THE CASE, IN BRIEF ARE THAT THE MAI N ADDITION WAS MADE ON ACCOUNT OF A SUM OF RS.10,00,0 00/- FOUND DEPOSITED IN THE BANK ACCOUNT OF M/S TARANJIT SINGH & CO. IN THE NAME OF THE APPELLANT AND THE AO TREAT ED THE SAME AS INCOME FROM OTHER SOURCE. THE AO LEVIED THE PENALTY AT RS.3,01,400/- AND THE SAME WAS UPHELD BY THE CIT(A). 4. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS MADE BY THE CONTENDING PARTIES INCLUDING THE FACTS OF TH E CASE. THE LD. CIT(A) UPHELD THE PENALTY OF RS.3,01,400/- LEVIED BY THE AO U/S 271(1)(C) OF THE ACT. THE FINDINGS OF T HE CIT(A) ARE AS UNDER : CONSIDERING THE TOTALITY OF THE FACTS, THE RIVAL CONTENTIONS OF THE COUNSEL FOR THE APPELLANT AND AOS REMAND REPORT AND AFTER CAREFUL CONSIDERATION, I AM OF THE VIEW THAT SINCE THE APPELLANT HAS FAILE D TO SUBSTANTIATE THE CORRECTNESS OF THE STATEMENT MADE BY THE DEPONENT IN THE AFFIDAVIT FILED THAT HE IS BENAMIDAR OF SHRI TARANJIT SINGH OR HIS FIRM, THEREFORE THE AMOUNT HAS BEEN RIGHTLY ADDED TO THE INCOME. ALSO THE LD. COUNSELS CONTENTIONS HAVE NO FORCE. EXPLANATION 1 OF SECTION 271(1)(C) CLEARLY STIPULATES THAT IN RESPECT OF ANY FACT MATERIAL TO THE COMPUTATION OF TOTAL INCOME, ANY PERSON OFFERS AN EXPLANATION WHICH IS FOUND TO BE FALSE OR WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFIDE, THE AMOUNT ADDED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THEREFORE, KEEPING IN VIEW THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, I HOLD THAT AO IS 3 JUSTIFIED IN IMPOSING THE PENALTY FOR CONCEALMENT O F PARTICULARS AND FOR FURNISHING INACCURATE PARTICULARS OF INCOME 5. AS THE QUANTUM ADDITION MADE BY THE AO AND UPHEL D BY THE CIT(A) HAS SINCE BEEN DELETED BY THE TRIBUNA L VIDE ORDER DATED 24.10.2011, THERE IS NO FOUNDATION LEFT FOR THE SURVIVAL OF THE IMPUGNED PENALTY. THE ABOVE FINDIN GS ARE SUPPORTED BY THE DECISION OF THE HON'BLE SUPREME CO URT IN THE CASE OF K.C.BUILDERS V ACIT (2004) 265 ITR 562 (S.C) WHEREIN IT HAS BEEN HELD THAT WHEN AN ORDER OF ASSE SSMENT OR RE-ASSESSMENT ON THE BASIS OF WHICH PENALTY HAS BEEN LEVIED ON THE ASSESSEE HAS ITSELF BEEN FINALLY SET ASIDE OR CANCELLED BY THE TRIBUNAL OR OTHERWISE, THE PENALTY CANNOT STAND BY ITSELF AND IS LIABLE TO BE CANCELLED. FOL LOWING THE DECISION OF THE HON'BLE SUPREME COURT, AS THE QUANT UM ADDITION HAS SINCE BEEN DELETED, AS DISCUSSED ABOVE , THE VERY BASIS OF LEVY OF PENALTY CEASES TO EXIST. CON SEQUENTLY, THE IMPUGNED PENALTY UPHELD BY THE CIT(A) IS QUASHE D. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH OCT.,2011. SD/- SD/- ( H.L.KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 25 TH OCT.,2011. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT ,DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH