Philips Verghese, Ahmedabad V. The Income tax Officer,Ward-6(4), Ahmedabad

ITA 1875/AHD/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6829 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-04-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 31-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHELLEY JINDAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI D.K.TYAGI, HONBLE JUDICIAL MEMBER, AND SHRI D. C. AGRAWAL, HONBLE ACCOUNTANT MEMBER ITA NO.1875/AHD/2010 ASSESSMENT YEAR:2004-05 DATE OF HEARING:4.4.11 DRAFTED:4.4.11 PHILIPS VERGHESE, C-1/B, 90/16, GIDC, PHASE-I, B/H BANK OF INDIA, VATVA, AHMEDABAD -382445 PAN NO.ACIPP6423G V/S . INCOME TAX OFFICER, WARD-6(4), 1 ST FLOOR, C.U. SHAH BUILDING, ASHRAM ROAD, AHMEDABAD (APPELLANT) .. (RESPONDENT) APPELLANT BY :- NONE RESPONDENT BY:- SHRI SHELLEY JINDAL, CIT-DR O R D E R PER D.K.TYAGI, JUDICIAL MEMBER:- THIS IS ASSESSEES APPEAL AGAINST THE ORDER OF COM MISSIONER OF INCOME-TAX(APPEALS)-XXI AHMEDABAD IN APPEAL NO. CIT (A)-XXI /303/ WD.6(4) /09-10 DATED 05-03-2010 FOR THE ASSESSMENT YEAR 200 4-05 CONFIRMING THE PENALTY OF RS.24,000/- LEVIED BY ASSESSING OFFICER U/S.271(1)(C) OF THE I.T. ACT, 1961. 2. NONE APPEARED ON BEHALF OF ASSESSEE NOR ANY APPL ICATION FOR ADJOURNMENT WAS FILED BY ASSESSEE THOUGH REGISTERED NOTICE WAS SERVED UPON HIM. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSING O FFICER MADE ADDITION OF UNSECURED DEPOSITS OF THREE PARTIES AMOUNTING TO RS .4.42 LAKH ON THE BASIS OF GENUINENESS OF SUCH DEPOSITS COULD NOT BE ESTABLISH ED. IN APPEAL, FIRST APPELLATE AUTHORITY DELETED THE ADDITION AMOUNTING TO RS.3.62 LAKH PERTAINING ITA NO.1875/AHD/2010 A.Y. 2004-05 PHILIPS VERGHESE V. ITO WD-6(4), ABD PAGE 2 TO TWO DEPOSITORS AND KEPT ON ADDITION OF RS.80,000 /- AS ASSESSEE WAS UNABLE TO PROVE THE CREDITWORTHINESS OF THE SAID DEPOSITOR S. A NOTICE U/S 271(1)(C) WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THIS, AS SESSEE FILED DETAILED SUBMISSION. AFTER TAKING INTO CONSIDERATION THE REP LY OF THE ASSESSEE, ASSESSING OFFICER WAS OF THE VIEW THAT NEITHER DURI NG ASSESSMENT PROCEEDINGS NOR DURING APPELLATE PROCEEDINGS THE ASSESSEE COULD FURNISH THE LOAN CONFIRMATION OF THE DEPOSITOR MR. ANIL CHERIAN AND AS SUCH THE GENUINENESS OF THE DEPOSIT OF RS.80,000/- WAS DOUBTFUL. HE THEREFO RE WAS SATISFIED THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IN COME AND CONCEALED INCOME OF RS.84,000/- AND PENALTY OF RS.24,000/- WA S IMPOSED. THIS ACTION OF ASSESSING OFFICER WAS CONFIRMED BY LD. CIT(A). 4. FURTHER AGGRIEVED NOW ASSESSEE IS IN APPEAL BEFO RE US. 5. AFTER HEARING LD. CIT-DR AND GOING THROUGH THE W RITTEN SUBMISSION FILED ON BEHALF OF ASSESSEE WE FIND THAT PENALTY OF RS.24 ,000/- HAS BEEN LEVIED U/S.271(1) AS THE ADDITION OF RS.80,000/- WAS CONF IRMED BY LD. CIT(A). WE FURTHER FIND THAT THIS ADDITION WAS MADE BY ASSESSI NG OFFICER AND SUSTAINED BY LD. CIT(A) AS ASSESSEE FAILED TO GIVE CONFIRMATION FROM MR. ANIL CHERIAN. THE OTHER EVIDENCES FILED BY ASSESSEE WERE IGNORED BY L OWER AUTHORITIES. NO INDEPENDENT INQUIRY WAS MADE BY AO TO HOLD THAT THI S WAS ASSESSEES MONEY SHOWN IN THE NAME OF CREDITOR MR. ANIL CHERIAN IN H IS BOOKS OF ACCOUNT. IT IS WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALT Y PROCEEDINGS ARE SEPARATE AND DISTINCT AS HELD BY HONBLE APEX COURT IN THE CASE OF ANANTARAM VEERASINGHAIAH & CO V. CIT (1980) 123 ITR 457 (SC) AND THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLU SIVE FOR THE PURPOSE OF PENALTY PROCEEDINGS. IT IS, THEREFORE NECESSARY TO RE-APPRECIATE AND RE- CONSIDER THE MATTER SO AS TO FIND OUT AS TO WHETHER THERE IS THE CONCEALMENT ON THE PART OF ASSESSEE AS ENVISAGED IN SECTION 271 (1)(C) OF THE ACT AND WHETHER IT IS A FIT CASE TO IMPOSE THE PENALTY BY I NVOKING THE SAID PROVISIONS. EXPLANATION-1 TO SECTION 271(1)(C) IN RESPECT OF AN Y FACTS MATERIAL TO THE ITA NO.1875/AHD/2010 A.Y. 2004-05 PHILIPS VERGHESE V. ITO WD-6(4), ABD PAGE 3 COMPUTATION OF TOTAL INCOME STATES THAT THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF ASSESSEE SHALL BE DEE MED TO BE THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. T HIS DEEMING PROVISION FOR CONCEALMENT IS HOWEVER NOT ABSOLUTE. IT MUST BE SHO WN EITHER THAT (A) ASSESSEE FAILED TO OFFER AN EXPLANATION OR (B) HE O FFERS EXPLANATION WHICH IS FOUND TO BE FALSE (C) HE OFFERS AN EXPLANATION WHIC H CANNOT BE SUBSTANTIATED OR SHOWN TO BE BONA FIDE. IN THE INSTANT CASE, ASSESSE E OFFERED AN BONA FIDE EXPLANATION AND THE SAME WAS NOT FOUND FALSE BY THE LOWER AUTHORITIES. THEREFORE, IT CANNOT BE SAID THAT ASSESSEE IS GUILT Y OF FURNISHING OF INACCURATE PARTICULARS OF INCOME WARRANTING PENALTY PROCEEDING S U/S. 271(1)(C). THEREFORE, THE PENALTY OF RS.24,000/- LEVIED BY ASS ESSING OFFICER U/S. 271(1)(C) AND SUSTAINED BY LD. CIT(A) IS HEREBY DEL ETED. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 21/04 /2011 SD/- SD/- (D.C.AGRAWAL) (D.K. TYA GI) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, DATED : 21/04/2011 *DKP COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-XXI, AHMEDABAD 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD