Pioneer Construction Co., Ahmedabad V. The ACIT., Circle9, Ahmedabad

ITA 1861/AHD/2004

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0330 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 31-07-2009
• Assessment Year: 1997-1998
• Appeal Filed On: 31-05-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GOVIND SINGHAL
• Assessee Lawyers: J P SHAH
• Keywords: Question of law; Initiation of penalty proceedings; Wrong claim
• Section: 271(1)(c); 143(3); 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD AHMEDABAD A BENCH (BEFORE S/SHRI R.V.EASWAR, VICE-PRESIDENT AND N.S. SAINI, ACCOUNTANT MEMBER) ITA NO.1861/AHD/2004 [ASSTT YEAR : 1997-1998] PIONEER CONSTRUCTION CO. 1, KANCHI CO-OP. HSG. SOCIETY LTD. OPP: THALTEJ TEKRA S.G. HIGHWAY, AHMEDABAD. VS. ACIT, CIR.9 AHMEDABAD. ASSESSEE BY : SHRI J.P. SHAH REVENUE BY : SHRI GOVIND SINGHAL O R D E R PER R.V.EASWAR, VICE-PRESIDENT : THIS IS AN APPEAL FILED BY THE ASSESSEE CHALLENGING THE PENALTY OF RS.16.00 LAKHS IMPOSED ON IT UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT FOR CONCEALMENT OF INCOME. 2. THE APPEAL RELATES TO THE ASSESSMENT YEAR 1997-98. THE ASSESSEE IS A PARTNERSHIP FIRM ENGAGED IN THE CIVIL CONSTRUCTION BUSINESS AS CONTRACTOR AND SUB-CONTRACTOR FOR THE GOVERNMENT, GOVERNMENT OWNED BODIES, MUNICIPAL CORPORATIONS ETC. HE FILED A RETURN OF INCOME DECL ARING INCOME OF RS.12,76,270/- FROM THE AFORESAID BUSINESS. THE AO COMPLETED THE ASSESSMENT ON A TOTAL INCOME OF RS.74,54,040/-. ONE OF THE AD DITIONS MADE IN THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) ON 30- 3-2000 WAS THE DISALLOWANCE OF THE EXCESS TRACTOR HIRING CHARGES O F RS.52,38,000/-. BRIEFLY NOTICED, THE DISALLOWANCE WOULD APPEAR TO HAVE BEEN MADE FOR THE REASON THAT THE INQUIRIES MADE BY THE AO WITH THE TRANSPORT AUT HORITIES IN RAJASTHAN REVEALED THAT THE REGISTRATION NUMBERS OF THE TRACT ORS SUBMITTED BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS AND APPEARING ON THE TRANSPORTERS BILLS WERE NOT ACTUALLY TRACTORS, BUT WERE OTHER VEHICLES. TH E AO ALSO FOUND THAT THE MONIES DEPOSITED IN THE ACCOUNTS OF CERTAIN PERSONS FOR ARRANGING THE TRACTORS WERE IMMEDIATELY WITHDRAWN BY THEM IN CASH. ON THI S BASIS, THE AO CAME TO PAGE - 2 ITA NO.1861/AHD/2004 -2- THE CONCLUSION THAT THE TRACTOR HIRE CHARGES TO THE EXTENT OF RS.52,38,000/- CANNOT BE ALLOWED AS THE DEDUCTION. THE ASSESSEE A PPEALED TO THE CIT(A) AGAINST THE DISALLOWANCE WHO REDUCED THE SAME TO RS .44,93,000/- AND ON FURTHER APPEAL TO THE INCOME TAX APPELLATE TRIBUNAL THE DISALLOWANCE WAS REDUCED TO RS.40,00,000/-. IT WOULD APPEAR THAT BE FORE THE TRIBUNAL FOR THE FIRST TIME THE REPORT OF THE RAJASTHAN TRANSPORT AUTHORIT Y WAS DISCLOSED BY THE DEPARTMENT AS PART OF ITS PAPER BOOK. AT THIS IT S EEMS THAT THE ASSESSEE POINTED OUT THAT THE VEHICLE NUMBERS APPEARING IN THE BILLS OF THE TRANSPORTERS AND IN THE REPORT OF THE RAJASTHAN TRANSPORT AUTHORITY WERE DI FFERENT. HOWEVER, THE TRIBUNAL IN ITS ORDER UPHELD THE DISALLOWANCE OF RS .40 LAKHS. THE ASSESSEE THEREAFTER MOVED A MISC. APPLICATION UNDER SECTION 254(2) BEFORE THE TRIBUNAL BUT THE SAME WAS REJECTED ON THE GROUND THAT THE IS SUES RAISED IN THE APPLICATION WERE NEW AND THEY WERE NOT RAISED IN THE COURSE OF THE APPEAL BEFORE THE TRIBUNAL. AGAINST THE ORDER OF THE DISMISSAL OF TH E TRIBUNAL, THE ASSESSEE IS IN APPEAL BEFORE THE HONBLE GUJARAT HIGH COURT IN TAX APPEAL NO.453 OF 2004 AND THE FOLLOWING SUBSTANTIAL QUESTION OF LAW HAS B EEN ADMITTED BY THE HONBLE HIGH COURT (PAGE 95 OF THE ASSESSEES PAPER BOOK): WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE, THE ORDER OF THE TRIBUNAL DISALLOWING A SUM OF RS.40 LACS FOR THE HIRE CHARGES PAID BY THE APPELLANT FOR TRACTORS ACTUALLY TRANSPO RTED FROM AHMEDABAD TO MIZORAM IS VALID IN LAW AND IS SUPPORT ED BY THE EVIDENCE ON RECORD ?. 3. AFTER THE ORDER OF THE TRIBUNAL PENALTY PROCEEDI NGS FOR CONCEALMENT OF INCOME WERE INITIATED UNDER SECTION 271(1)(C) OF TH E ACT. AFTER CONSIDERING THE ASSESSEES REPLY, THE AO BY ORDER DATED 23-9-20 03 IMPOSED THE IMPUGNED PENALTY, WHICH IS THE MINIMUM IMPOSABLE, ON THE FOL LOWING GROUNDS: 8. I) IT IS NOT MERE ADDITION OR DISALLOWANCE AS C LAIMED BY THE ASSESSEE. BEFORE ARRIVING AT DEFINITE CONCLUSION T HE AO HAS CONDUCTED IN DEPTH INQUIRY, COLLECTED EVIDENCE, CROSS VERIFIE D THE RECEIPTS, BANK ACCOUNT WHICH HAS BEEN DISCUSSED IN DEPTH IN ASSESS MENT ORDER. PAGE - 3 ITA NO.1861/AHD/2004 -3- II) THE DISALLOWANCE OF TRACTOR HIRE CHARGE OF RS.4 0,00,000/- IN THE ULTIMATE RESULT OF APPLICATION OF MIND OF APPELLATE AUTHORIZES I.E. CIT(A)-IX, AHMEDABAD AND ITAT, AHMEDABAD. SO FAR F ACTS ARE CONCERNED ITAT IS FINAL AUTHORITY. THE PENALTY IS BEING LEVIED ON THE AMOUNT, AS MATTER OF FACT, WHICH HAS BEEN QUANTIFIE D BY THE FINAL FACT FINDING APPELLATE AUTHORITY. III) THE ASSESSEE HAS NEVER DISPUTED THE INITIATION OF PENALTY PROCEEDINGS IN ASSESSMENT ORDER. THE DISCUSSION IN THE BODY OF ORDER ITSELF PROVE THAT THE CLAIM OF TRACTOR HIRE CHARGES AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH ERE CANNOT BE MORE FIRM AND CONCLUSIVE FINDING THAN NARRATED IN THE AS SESSMENT ORDER. IV) AS REGARDS THE DEFECTS POINTED OUT IN THE ITAT, THROUGH AN APPLICATION U/S.254(2) OF THE IT ACT, DATED 27-6-20 03 IS CONCERNED, UNDERSIGNED IS NOT COMPETENT TO COMMENT. IT MAY BE ADDED THAT THE PENALTY HAS BEEN LEVIED ON THE GROUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME AMOUNTING TO RS.40 LAKHS ON ACCOUNT OF TRACTOR HIRE CHARGES. 4. THE PENALTY HAVING BEEN CONFIRMED BY THE CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE CONSIDERED THE FACTS AND THE RIVAL CONTE NTIONS. THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE IS THAT THE IMPUGNED ORDER OF THE CIT(A) CONFIRMING THE PENALTY IS ENTIRELY BASED ON THE ORI GINAL REPORT OF THE TRANSPORT AUTHORITIES IN RAJASTHAN WHICH HAS BEEN CLARIFIED L ATER AND THE CLARIFICATION HAS BEEN DISBELIEVED BY THE DEPARTMENTAL AUTHORITIES WI THOUT ANY JUSTIFICATION. IT WOULD APPEAR THAT IN THE FIRST REPORT WHICH HAS BEE N RELIED ON BY THE AO IN THE ASSESSMENT ORDER, THE TRANSPORT AUTHORITIES HAD STA TED THAT THE VEHICLE NUMBERS SHOWN IN THE TRANSPORTERS BILLS, ON THE BASIS OF W HICH THE TRACTOR HIRE CHARGES WERE CLAIMED BY THE ASSESSEE, WERE NOT THOSE OF TRA CTORS BUT WERE THOSE OF OTHER VEHICLES. THIS REPORT WAS OBVIOUSLY IN FAVOUR OF T HE REVENUE AND THEREFORE THE AO RELIED UPON THE SAME IN THE ASSESSMENT ORDER. T HE ACTUAL REPORT, ACCORDING PAGE - 4 ITA NO.1861/AHD/2004 -4- TO THE LEARNED COUNSEL FOR THE ASSESSEE, WAS MADE A VAILABLE TO THE ASSESSEE ONLY IN THE COURSE OF THE APPEAL BEFORE THE TRIBUNAL, FR OM WHICH THE ASSESSEE CAME TO KNOW FOR THE FIRST TIME THAT THERE WAS A DISCREP ANCY IN THE SENSE THAT THE LETTER R HAD BEEN OMITTED WHILE DESCRIBING THE RE GISTRATION NUMBERS, WHEREAS IN THE SUBSEQUENT REPORT OF THE RAJASTHAN TRANSPORT AUTHORITY THEY HAVE CERTIFIED THAT THE VEHICLES WERE IN FACT TRACTORS S INCE THE REGISTRATION NUMBERS INCLUDED THE ALPHABET R. A COMPARATIVE CHART, CE RTIFIED BY THE PARIVAHAN KARIYALAY, JODHPUR ON 25-8-2003 SHOWING THE VEHICLE REGISTRATION NUMBERS WITHOUT THE ALPHABET R AND THE DESCRIPTION OF SUC H VEHICLES AS OTHER THAN TRACTORS AND THE VEHICLE REGISTRATION NUMBERS WITH THE ALPHABET R AND THE DESCRIPTION OF THESE VEHICLES AS TRACTORS IS PLACED AT PAGE 86 OF THE PAPER BOOK. IT IS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSE SSEE THAT THIS CERTIFICATE WAS OBTAINED BY THE ASSESSEE AFTER THE TRIBUNAL PASSED ITS ORDER ON 5-2-2003 CONFIRMING THE DISALLOWANCE OF THE TRACTOR HIRE CHA RGES AND IF THIS CLARIFICATION IS TAKEN INTO ACCOUNT, THEN IT WILL BE CLEAR THAT T HE SUSPICION OF THE DEPARTMENT THAT THE ASSESSEE HAD MADE A FALSE CLAIM OF TRACTOR HIRE CHARGES IS UNFOUNDED. IT IS FURTHER ARGUED ON THE BASIS OF THE JUDGMENT OF T HE CALCUTTA HIGH COURT IN CIT VS. OFFSHORE INDIA LTD., (1994) 209 ITR 473 THA T IF A REFERENCE IS ADMITTED BY THE HIGH COURT ON THE BASIS THAT THERE IS A QUES TION OF LAW ARISING FROM THE ORDER OF THE TRIBUNAL, THEN THE BONA FIDE OF THE CL AIM OF THE ASSESSEE CANNOT BE DOUBTED AND THE LEVY OF PENALTY CANNOT BE UPHELD. IT IS POINTED OUT THAT IN THE PRESENT CASE THE HONBLE GUJARAT HIGH COURT HAS ADM ITTED THE APPEAL OF THE ASSESSEE AND HAS FRAMED THE SUBSTANTIAL QUESTION OF LAW AND THEREFORE AND THEREFORE THE BONA FIDE OF THE ASSESSEES CLAIM THA T IT PAID HIRE CHARGES FOR TRACTORS TRANSPORTED FROM AHMEDABAD TO MIZORAM CANN OT BE DOUBTED AND PENALTY FOR CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS CANNOT BE LEVIED ON THAT BASIS. OUR ATTENTION WAS ALSO DRAWN TO THE FACT THAT IN THE ASSESSMENT YEAR 1996-97 THE CIT(A) HAS CANCELLED THE DISALLOWA NCE OF THE TRACTOR HIRE CHARGES ON THE BASIS OF THE SUBSEQUENT CLARIFICATIO N ISSUED BY THE TRANSPORT PAGE - 5 ITA NO.1861/AHD/2004 -5- AUTHORITIES OF RAJASTHAN AGAINST WHICH THE DEPARTME NT IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LEARNED CIT-DR ON THE OTHER HAND CONTENDED THAT THE AO HAS DISALLOWED THE HIRE CHARGES NOT MERELY BECAUSE OF D ISCREPANCIES IN THE REGISTRATION NUMBERS OF THE VEHICLES, BUT HAS ALSO DISALLOWED THEM ON THE GROUND THAT THE PAYMENT WAS NOT GENUINE AND IN THIS CONNECTION DREW OUR ATTENTION TO PAGES 7, 15 AND 20 OF THE PAPER BOOK A S WELL AS PARAGRAPH-6 OF THE ASSESSMENT ORDER. PAGE-6 OF THE ASSESSMENT ORDER S HOWS THAT IT CAME TO THE NOTICE OF THE AO THAT THE OWNERS OF THE TRACTORS AL LEGEDLY TAKEN ON HIRE BY THE ASSESSEE WERE NOT PAID FOR ABOVE TWO YEARS WHICH IS QUITE IMPROBABLE CONSIDERING THAT FARMERS CANNOT WAIT FOR SUCH A LON G PERIOD FOR PAYMENT OF THE HIRE CHARGES. FROM PAGES 15 ONWARDS OF THE PAPER B OOK, WHICH ARE NOTHING BUT PARA-6.5 ONWARDS OF THE ASSESSMENT ORDER, THE LEARN ED CIT-DR DREW OUR ATTENTION TO THE STATEMENTS OF SOME OF THE PERSONS WHO HAVE SENT THE TRACTORS TO MIZORAM. HE POINTED OUT THAT IN THESE STATEMENTS I T HAS BEEN BROUGHT OUT THAT THERE WERE CASH WITHDRAWALS FROM THE BANK ACCOUNTS IMMEDIATELY AFTER THE CHEQUES WERE DEPOSITED BY THOSE PERSONS. ACCORDING TO THE LEARNED CIT-DR THIS WAS A VERY SUSPICIOUS CIRCUMSTANCE. SOME OF T HE PARTIES TO WHOM PAYMENTS WERE MADE WERE NOT PRODUCED. HE ALSO POIN TED OUT THAT ALL THE BANK ACCOUNTS HELD IN THE NAME OF THE PERSONS WHO TRANSP ORTED THE TRACTORS TO MIZORAM WERE GOT OPENED IN VISNAGAR BRANCH BY THE A SSESSEE OR HIS PERSONS AND FURTHER AT THE TIME OF THE CASH WITHDRAWALS, TH ESE PERSONS USED TO ACCOMPANY THE PAYEES. THUS, ACCORDING TO THE CIT-D R THERE WERE TWO REASONS MAINLY FOR DISALLOWING THE TRACTOR HIRE CHARGES AND THE ARGUMENTS OF THE ASSESSEE COVERED ONLY THE ASPECT REGARDING THE DISC REPANCIES IN THE VEHICLE REGISTRATION NUMBERS AND THEY DID NOT COVER THE PAY MENT ASPECT. THE LEARNED CIT-DR, RELYING ON THE OBSERVATIONS IN PARA-3 OF TH E ORDER OF THE TRIBUNAL DATED 5-2-2003, SUBMITTED THAT THERE WERE CLEAR FIN DINGS ENTERED BY THE PAGE - 6 ITA NO.1861/AHD/2004 -6- TRIBUNAL DOUBTING THE GENUINENESS OF THE PAYMENTS A ND THE EMPHASIS WAS MORE ON THIS ASPECT OF THE MATTER RATHER THAN ON THE DIS CREPANCIES IN THE REGISTRATION NUMBERS OF THE VEHICLES. HE DREW OUR ATTENTION TO SECTION 114 OF THE EVIDENCE ACT TO CONTEND THAT THE COURT MAY PRESUME THE EXIST ENCE OF CERTAIN FACTS CONSIDERING THE NORMAL COURSE OF THE EVENTS EVEN TH OUGH THERE IS NO DIRECT EVIDENCE TO PROVE THOSE FACTS. WHAT THE LEARNED C IT-DR CONTENDS IS THAT THE TRIBUNAL MAY PRESUME THAT THE MONIES PAID BY THE AS SESSEE AS HIRE CHARGES CAME BACK TO ITS COFFERS AND THOUGH THERE MAY BE NO DIRECT EVIDENCE TO PROVE IT AS A FACT, THERE IS SUFFICIENT CIRCUMSTANTIAL EVIDE NCE TO THAT EFFECT. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN A.M. SHAH & CO. VS. CIT, 238 ITR 415 AND THE ORDER OF THE MUM BAI BENCH OF THE TRIBUNAL IN ACIT VS. SUPREME INDUSTRIES LTD., (2009 ) 21 DTR 97. ON THE BASIS OF THESE ARGUMENTS HE CONTENDED THAT THE PENA LTY HAS BEEN RIGHTLY IMPOSED ON THE ASSESSEE FOR HAVING FURNISHED INACCU RATE PARTICULARS OF ITS INCOME. 7. IN HIS REPLY THE LEARNED COUNSEL FOR THE ASSESSE E CONTENDED THAT EXCEPT SUSPICION THERE IS NO PROOF OR EVIDENCE TO SHOW THA T THE MONIES PAID AS HIRE CHARGES HAVE COME BACK IN ALL THE CASES TO THE COFF ERS OF THE ASSESSEE AND IN THE ABSENCE OF ANY DIRECT EVIDENCE TO THAT EFFECT THE A SSESSEE CANNOT BE HELD GUILTY OF HAVING FURNISHED INACCURATE PARTICULARS OF INCOM E. MERE SUSPICION, ACCORDING TO HIM, WAS NOT SUFFICIENT FOR THE PURPOS E OF LEVYING PENALTY THOUGH A PREPONDERANCE OF PROBABILITY MAY JUSTIFY THE DISALL OWANCE OF HIRE CHARGES IN THE ASSESSMENT PROCEEDINGS. HE FURTHER POINTED OUT THAT EVEN THE TRIBUNAL HAS RESORTED TO AN ESTIMATE IN REDUCING THE DISALLOWANC E FROM RS.42 LAKHS TO RS.40 LAKHS WHICH RULES OUT THE APPLICABILITY OF THE PENA LTY PROVISIONS. IN THIS CONNECTION OUR ATTENTION WAS DRAWN TO THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NAVNEET K. ZAVERI VS. CIT , 125 ITR 385 IN WHICH IT PAGE - 7 ITA NO.1861/AHD/2004 -7- WAS HELD THAT NO PENALTY CAN BE LEVIED FOR ESTIMATE D DISALLOWANCE OR ADDITION BY INVOKING THE PROVISIONS RELATING TO DEEMED INCOM E. 8. ON A CAREFUL CONSIDERATION OF THE RIVAL CONTENTI ONS, WE ARE OF THE VIEW THAT NO STRONG GROUNDS HAVE BEEN MADE OUT FOR LEVYI NG THE PENALTY. IT HAS TO BE REMEMBERED THAT THE PENALTY HAS BEEN LEVIED ON THE GROUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF ITS INCOME, THE INCOME BEING THE PAYMENT OF THE HIRE CHARGES OF RS.40 LAKHS. THE OR DER OF THE TRIBUNAL IN THE ASSESSMENT PROCEEDINGS HAS REDUCED THE DISALLOWANCE FROM RS.44,93,071/-, SUSTAINED BY THE CIT(A) OUT OF THE DISALLOWANCE OF RS.52,38,000/-, TO RS.40,00,000/- IN LUMP SUM. AS RIGHTLY POINTED OUT ON BEHALF OF THE DEPARTMENT THE TRIBUNAL HAS BASED ITS ORDER ON TWO REASONS. THE FIRST REASON IS THAT THE REGISTRATION NUMBERS OF THE MAJORITY OF TH E TRACTORS CLAIMED TO HAVE BEEN USED BY THE ASSESSEE IN THE AIZAWL (MIZORAM) P ROJECT WERE FOUND TO BE NOT CORRECT. THIS REASON CAN NO LONGER BE CONSIDER ED SUFFICIENT FOR LEVYING PENALTY ON THE GROUND THAT THE ASSESSEE FURNISHED I NACCURATE PARTICULARS OF ITS INCOME BECAUSE THE RAJASTHAN TRANSPORT AUTHORITIES, JODHPUR HAVE ISSUED A CERTIFICATE ON 25-8-2003 (PAGE 86 OF THE PAPER BOOK ) WHICH SHOWS THAT ALL THE VEHICLES BEARING REGISTRATION NUMBERS WHICH INCLUDE D THE ALPHABET R WERE TRACTORS. EARLIER, IN THE ASSESSMENT PROCEEDINGS A ND IN THE PROCEEDINGS BEFORE THE TRIBUNAL THE DEPARTMENT HAD RELIED ON THE FACT THAT THE VEHICLE REGISTRATION NUMBERS SHOWN IN THE TRANSPORTERS BILL WERE NOT TR ACTORS AND THIS FACT WAS BASED ON THE CERTIFICATE ISSUED BY THE RAJASTHAN TR ANSPORT AUTHORITIES AT THAT TIME. HOWEVER, THE VEHICLE NUMBERS WHICH WERE SENT BY THE AO TO THE RAJASTHAN TRANSPORT AUTHORITIES WERE WRONG AND THEY DID NOT INCLUDE THE ALPHABET R. THE ASSESSEE SUBMITTED A COPY OF THE LATER CERTIFICATE DATED 25-8- 2003 BEFORE THE CIT(A) IN THE APPEAL AGAINST PENALT Y. THE CIT(A) FORWARDED THE SAME TO THE AO WITH DIRECTIONS TO HIM TO OBTAIN A CONFIRMATION FROM THE RTO, JODHPUR BY 24-2-2004. HOWEVER, THERE WAS NO R EPLY FROM THE RTO, PAGE - 8 ITA NO.1861/AHD/2004 -8- JODHPUR TO THE COMMUNICATION SENT BY THE AO. THE C IT(A) DECIDED THE APPEAL ON THE BASIS THAT THE AUTHENTICITY OF THE LATER CER TIFICATE ISSUED BY THE RTO, JODHPUR COULD NOT BE VERIFIED. AT THIS JUNCTURE, T HE ASSESSEE FILED AN AFFIDAVIT BEFORE THE CIT(A) TO THE EFFECT THAT THE CERTIFICAT E DATED 25-8-2003 WAS OBTAINED FROM RTO, JODHPUR IN PERSON BY THE EMPLOYE E OF THE ASSESSEE. THE AFFIDAVIT REMAINS UNCONTROVERTED. THE AUTHENTICITY OF THE CERTIFICATE DATED 25- 8-2003 CANNOT BE QUESTIONED MERELY BECAUSE THE AO W AS UNABLE TO VERIFY THE SAME TILL THE DISPOSAL OF THE APPEAL BY THE CIT(A). SECTION 114 (E) OF THE EVIDENCE ACT RAISES A PRESUMPTION THAT ALL JUDICIAL AND OFFICIAL ACTS HAVE BEEN REGULARLY DONE. IF A PERSON CHALLENGES THE AUTHENT ICITY OF THE OFFICIAL ACT HEREIN, THE CERTIFICATE ISSUED BY THE RTO, JODHPUR ON 25-8-2003 IT IS FOR THAT PERSON TO LEAD STRONG EVIDENCE TO DISPLACE THE PRES UMPTION. SINCE THAT HAS NOT BEEN DONE EITHER BEFORE THE CIT(A) OR EVEN BEFORE U S WE DO NOT THINK THAT THE PENALTY LEVIED FOR THE REASON THAT THERE WERE DISCR EPANCIES IN THE VEHICLE REGISTRATION NUMBERS CAN BE UPHELD. 9. THE LEARNED CIT-DR POINTED OUT FROM PARA-3 OF TH E ORDER OF THE TRIBUNAL DATED 5-2-2003 THAT THE OBSERVATIONS THERE IN CAST SERIOUS DOUBT ABOUT THE GENUINENESS OF THE TRANSACTIONS. HE HAS MAINLY RELIED ON THE FACT THAT SOME OF THE PAYEES OF THE HIRE CHARGES COULD NOT BE PROD UCED BEFORE THE AO AND ALSO ON THE FACT THAT THERE WERE CASH WITHDRAWALS IMMEDI ATELY AFTER THE DEPOSITS OF THE CHEQUE IN THE BANK ACCOUNT OF THE PAYEES BY WAY OF HIRE CHARGES. THE ASSESSEE HAS EXPLAINED THAT APART FROM THE CHEQUES BY WAY OF HIRE CHARGES THERE WERE OTHER CHEQUES ALSO DEPOSITED IN THE BANK ACCOU NTS WHICH INDICATED THAT THE TRACTOR ARRANGERS WERE ENGAGED IN OTHER ACTIVITIES ALSO. APPARENTLY IT IS THE ASSESSEES CASE THAT THE WITHDRAWALS FROM THE BANK ACCOUNTS OF THE ARRANGERS OF THE TRACTORS CAN BE ATTRIBUTED TO THE CHEQUES OTHER THAN THE CHEQUES BY WAY OF HIRE CHARGES. IN ANY CASE, THERE IS NO DIRECT EVID ENCE TO LINK THE WITHDRAWALS WITH THE ASSESSEE. THE FACT THAT ALL THE BANK ACCO UNTS IN VISNAGAR BANK WERE PAGE - 9 ITA NO.1861/AHD/2004 -9- GOT OPENED BY THE ASSESSEE OR THE PERSONS CONNECTED WITH THE ASSESSEE FIRM MAY BE A CIRCUMSTANCE WHICH MAY GIVE RISE TO FURTHER IN QUIRY, AND MAY EVEN JUSTIFY THE DISALLOWANCE OF THE HIRE CHARGES ON PREPONDERAN CE OF PROBABILITIES BUT BY ITSELF WOULD NOT BE SUFFICIENT TO SAY THAT THE ASSE SSEE CONCEALED ITS INCOME BY FURNISHING INACCURATE PARTICULARS. THE CIT(A) IN T HE IMPUGNED ORDER AS WELL AS THE TRIBUNAL IN THEIR ORDER DATED 5-2-2003 HAVE NOT ED THAT THE BANK ACCOUNTS WERE OPENED AROUND THE TIME THE CONTRACT WORK START ED IN AIZAWL IN NOVEMBER, 1995 AND WERE CLOSED AFTER THE PROJECT WAS COMPLETE D. THIS PERHAPS IS THE WAY IN WHICH SUCH CONTRACTS ARE EXECUTED AND BY ITSELF DOES NOT PROVE ANYTHING AGAINST THE ASSESSEE. ALL THE ACCOUNTS WERE CLOSED IN JUNE/JULY, 1999 WHEN THE CONTRACTS WERE ALSO COMPLETED. IT APPEARS TO US TH AT WHEN THERE IS NO NEED ANY MORE FOR THE TRACTORS, THERE IS NOTHING SURPRISING OR UNUSUAL FOR THE BANK ACCOUNTS OF THE ARRANGERS OF THE TRACTORS TO BE CLO SED. 10. THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF A.M. SHAH & CO., (SUPRA) CITED BY THE LEARNED CIT-DR IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. THERE THE ADDITIONS MADE BY T HE TRIBUNAL IN THE QUANTUM PROCEEDINGS WERE NOT MADE THE BASIS OF THE LEVY OF PENALTY. FURTHER, THE FACTS IN THE PRESENT CASE ARE NOT SIMILAR TO THE FACTS IN THE CITED JUDGMENT. HENCE THAT JUDGMENT IS NOT APPLICABLE TO THE PRESENT CASE. F URTHER, THE QUESTION WHETHER AN ASSESSEE IS GUILTY OF FURNISHING INACCURATE PART ICULARS OF ITS INCOME IS TO BE JUDGED ON THE BASIS OF THE FACTS AND CIRCUMSTANCES OF EACH CASE. WE HAVE DEMONSTRATED IN THE EARLIER PARAGRAPHS AS TO HOW TH E FACTS OF THE PRESENT CASE DO NOT JUSTIFY THE CHARGE OF THE DEPARTMENT THAT THE A SSESSEE FURNISHED INACCURATE PARTICULARS OF ITS INCOME. 11. IT ALSO NEEDS TO BE NOTICED THAT SINCE A SUBSTA NTIAL QUESTION OF LAW HAS BEEN FRAMED BY THE HONBLE HIGH COURT IN THE APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE TRIBUNAL DATED 5-2-2003 CO NFIRMING THE DISALLOWANCE OF THE TRACTOR HIRE CHARGES TO THE EXTENT OF RS.40 LAKHS, THE BONA FIDE OF THE PAGE - 10 ITA NO.1861/AHD/2004 -10- ASSESSEES CLAIM CANNOT BE DOUBTED AS HELD BY THE C ALCUTTA HIGH COURT IN CIT VS. OFFSHORE INDIA LTD. (SUPRA). 12. FOR THE ABOVE REASONS, WE CANCEL THE PENALTY OF RS.16 LAKHS IMPOSED ON THE ASSESSEE UNDER SECTION 271(1)(C) OF THE ACT FOR HAVING FURNISHED INACCURATE PARTICULARS OF ITS INCOME. THE APPEAL IS ALLOWED W ITH NO ORDER AS TO COSTS. ORDER PRONOUNCED IN THE OPEN COURT 9 TH OCTOBER, 2009. SD/- SD/- (N.S. SAINI) ACCOUNTANT MEMBER (R.V.EASWAR) VICE-PRESIDENT PLACE : AHMEDABAD DATE : 09-10-2009 COPY OF THE ORDER FORWARDED TO: 1) : ASSESSEE 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR, ITAT, AHMEDABAD