KAILASH SWAROOP AGARWAL, V. ITO, Ajmer

ITA 193/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99425 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 13-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA SINGH
• Keywords: Income from undisclosed sources; Opportunity of being heard
• Section: 143(3)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA- @ ITA NO. 193/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2008-09 KAILASH SWAROOP AGARWAL, A-402, SATYAM SKYLINE, AEC CROSS ROADS, NARANPURA, AHMEDABAD- 380013. CUKE VS. INCOME TAX OFFICER, WARD 1(2), AJMER. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAWPA 3131 G VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : WRITTEN SUBMISSIONS. JKTLO DH VKSJ LS @ REVENUE BY : SHRI RAJENDRA SINGH (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 15/10/2015 MN ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 30/10/2015 VKNS'K @ ORDER PER: T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 23/12/2013 PASSED BY THE LEARNED CIT(A), AJMER FOR A.Y. 2008-09. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1 THAT CONSIDERATION TO THE FACTS THAT THE HON'BLE HIGH COURT OF RAJASTHAN, JAIPUR HAS ADMITTED THE APPEAL FILED BY THE APPELLANT AGAINST THE ORDER PASSED BY THE HONBLE ITAT WHICH WAS PASSED WITHOUT VERIFYING THE FACTS OF THE CASE AND CONSIDERING NEW PLEA CONTRARY TO ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 2 THE FACTS ON RECORD AND CONTRARY TO THE RULE 29 OF THE APPELLATE TRIBUNAL RULES, 1963. 2. THAT BOTH, THE ASSESSING OFFICER AND THE HONBLE ITAT HAVE MADE THE ASSESSMENT JUST ON THE BASIS OF ASSUMPTIONS, HYPOTHETICAL IRRELEVANT STATEMENTS AND DIVERSIFICATIONS AND WERE REMAIN FAILED IN VERIFYING THE FACTS OF THE CASE AND DOCUMENTS PRESENTED BY THE APPELLANT BEFORE THEM AND ACCORDINGLY PENALTY U/S 271(1)(C) IS NOT ATTRACTED AS BOTH THE ORDERS WERE MADE MERELY BASED ON ESTIMATION OF INCOME WHICH AT ALL DOES NOT MEAN CONCEALMENT. 3. THAT NO PENALTY IS WARRANTED BOTH ON FACTS AS WELL AS IN LAW. 4. THAT IT IS NOT CORRECT TO ESTIMATE THE SAVINGS OF A PERSON AT THE AGE OF MORE THAN 70 YEARS AND AFTER HAVING ALMOST 40 YEARS OF SERVICE IN THE BANKING INDUSTRY AT A SENIOR POSITION TO HAVE A PERSONAL BA LANCE APPROX TO RS. 1.80 LACS. THEREFORE, PART OF THAT SAV INGS, I.E. RS. 81,000/- COULD NOT BE TREATED AS UNACCOUNT ED INCOME OF THE ASSESSEE. HOWEVER, JUST TO HAVE A PEAC E OF MIND THE APPELLANT HAD NOT PREFERRED AN APPEAL AGAINST THAT ADDITION. 2. ALL THE GROUNDS OF APPEAL ARE INTERLINKED AND AG AINST CONFIRMING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (I N SHORT THE ACT) BY THE LD CIT(A). IN THIS CASE SCRUTINY U/S 143(3) OF T HE ACT WAS MADE BY THE ASSESSING OFFICER AND ADDITION ON ACCOUNT OF UNEXPL AINED CASH DEPOSITED IN UNION BANK OF INDIA AT RS. 15.51 LACS WAS ADDED B Y THE ASSESSING OFFICER, WHICH WAS PARTLY DELETED BY THE LD CIT(A) AND IN FINALITY, ONLY ADDITION OF RS. 81,000/- WAS SUSTAINED BY THE LD CIT( A). BEFORE IMPOSING ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 3 PENALTY U/S 271(1)(C), THE LD ASSESSING OFFICER GAV E REASONABLE OPPORTUNITY OF BEING HEARD. THE ASSESSEE ALSO REPLIE D IN RESPONSE TO SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSESSING OFFICER HELD THA T THE ASSESSEE HAD DEPOSITED CASH IN SAME BANK ACCOUNT MAINTAINED IN U NION BANK OF INDIA WITHOUT HAVING NO CASH BALANCE. THEREFORE, SOURCE OF CASH OF RS. 81,000/- WERE UNEXPLAINED, THEREFORE, HE HELD THAT THE ASSESS EE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND CONCEALED THE REAL PARTICULARS OF INCOME TO THE EXTENT OF RS. 81,000/- WITHIN THE MEAN ING OF SECTION 271(1)(C) OF THE ACT. HENCE, HE IMPOSED PENALTY UND ER THIS SECTION AT RS. 25,028/-, WHICH IS 100% OF TAX SOUGHT TO BE EVADED O N CONCEALING THE INCOME. 3. BEING AGGRIEVED BY THE ORDER OF THE LEARNED ASSE SSING OFFICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LEARNED CIT( A), WHO HAD CONFIRMED THE ORDER OF THE ASSESSING OFFICER BY OBSERVING AS UNDER:- 3.3 I HAVE CONSIDERED THE CONTENTIONS OF THE APPEL LANT AS WELL AS ASSESSMENT ORDER. IT IS SEEN THAT IN THIS CASE THE A.O. HAD MADE THE ADDITION OF UNEXPLAINED CASH DEPOSIT OF RS . 15,51,000/- IN UNDISCLOSED BANK ACCOUNT IN THE UNIO N BANK OF INDIA. ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 4 THE LD CIT(A) HAS DECIDED THE ISSUE IN THE QUANTUM APPEAL REGARDING THE SOURCE OF ABOVE DEPOSITS AS UNDER: 7.3 APPELLANT EXPLAINED SOURCE OF DEPOSITS IN HIS BANK ACCOUNT AS FOLLOWS: A. RS. 11,50,000 OUT OF CASH LOANS. B. RS. 3,20,000 OUT OF EARLIER WITHDRAWALS. C. RS. 81,000 OUT OF HIS CASH BALANCE 7.5 REGARDING THE SUM OF RS. 81,000 IT IS CLAIMED B Y APPELLANT THAT THE SAME WAS DEPOSITED OUT OF HIS CASH BALANCE. THI S ARGUMENT IS NOT ACCEPTABLE. AS MENTIONED EARLIER IN RESPECT OF GROU ND NO. 3 AND 4, DEPOSIT OF RS. 15,000 AND RS. 82,800 RESPECTIVELY W ERE CLAIMED TO BE MADE OUT OF CASH BALANCE AVAILABLE WITH APPELLANT. THESE CLAIMS OF APPELLANT HAVE BEEN ACCEPTED BY THE UNDERSIGNED. TH US NO FURTHER CASH IS LIKELY TO REMAIN WITH APPELLANT FOR MAKING THIS DEPOSIT. THEREFORE SOURCE OF THIS SUM OF RS. 81,000 REMAINS UNEXPLAINE D. I HOLD THAT ADDITION TO THE EXTENT OF RS. 81,000/- IS JUSTIFIED . A.O. IS DIRECTED TO RESTRICT ADDITION IN RESPECT OF CASH DEPOSITS IN UN ION BANK OF INDIA TO RS. 81,000/- AS AGAINST RS. 15,51,000/- MADE BY HIM. GR OUND NO. 5 IS THUS PARTLY ALLOWED. AS REGARDING THE ISSUE UNDER CONSIDERATION, THERE WERE DEPOSITS OF RS. 11,50,000 + RS.3,20,000 + RS.81,000 IN THE UNION BANK OF INDIA. OUT OF ABOVE DEPOSITS, THE ASS ESSEE CLAIMED THE AMOUNT OF RS. 11,50,000 BEING OUT OF LO ANS RECEIVED FROM 63 PERSONS FROM AHMEDABAD AND RS. 3,2 0,000 BEING DEPOSITED OUT OF EARLIER WITHDRAWALS FROM THE S AME BANK ACCOUNT. REGARDING THE BALANCE AMOUNT OF RS. 81,000/- WHICH IS SUBJECT MATTER OF PENALTY, IT WAS STATED THA T RS. 81,000/- WERE DEPOSITED OUT OF HIS OWN SAVINGS. ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 5 THE LD CIT(A) HAS MENTIONED THAT ASSESSEE WAS ALREADY GIVEN THE BENEFIT OF CASH AVAILABILITY BY WAY OF RS.15,000 DEPOSITED BY THE ASSESSEE IN THE ICICI BANK AND RS. 82,800 SP ENT BY THE ASSESSEE FOR THE STAMP PAPERS AND REGISTRY CHAR GES FOR PURCHASE OF THE NEW HOUSE. SO, IT HAS BEEN MENTIONE D THAT BENEFIT OF THE SAVINGS OR ACCUMULATION IN THE HANDS OF THE ASSESSEE HAS ALREADY BEEN GIVEN (RS. 15,000 + RS. 8 2,000) TO THE ASSESSEE AND THE SOURCE OF DEPOSIT OF RS. 81,00 0 REMAIN UNEXPLAINED AND IT REPRESENTS UNACCOUNTED INCOME OF THE ASSESSEE. DURING APPEAL, IT HAS BEEN POINTED OUT THAT THE HO NBLE ITAT HAS CONFIRMED THE ABOVE ADDITION OF RS. 81,000 ALON GWITH OTHER ADDITIONS MADE BY THE A.O.. THE ASSESSEE IN H IS SUBMISSIONS MERELY EMPHASIZED AGAINST THE FINDINGS GIVEN IN THE ORDER OF THE ITAT AND HAS MENTIONED THAT APPEAL HAS BEEN ADMITTED AGAINST THE SAID ORDER BY THE HON'BLE HIGH COURT. SO, THE ISSUE IS DEBATABLE. IT MAY BE MENTIONED HERE THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBMIT ANY EXPLANATION REGARDING THE CASH D EPOSIT OF RS. 81,000/- IN HIS BANK ACCOUNT IN UNION BANK OF I NDIA AT ANY STAGE I.E. ASSESSMENT STAGE AS WELL AS DURING TH E PENALTY PROCEEDINGS. THE ABOVE CASH DEPOSITS WERE FOUND IN TH E ASSESSEES BANK ACCOUNT AND IT REPRESENTED THE INCO ME OF THE ASSESSEE WHICH WAS NOT DISCLOSED IN THE RETURN OF IN COME. AS THE ASSESSEE HAS NOT BEEN ABLE TO JUSTIFY THE SAVIN GS SO ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 6 CLAIMED AND HAS NOT BEEN ABLE TO SUBSTANTIATE THE S OURCE OF CASH DEPOSITS IN ANY MANNER, THE PENALTY LEVIED BY THE A.O. IS CONFIRMED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. NO ONE A PPEARED ON BEHALF OF THE ASSESSEE BUT WRITTEN SUBMISSIONS HAS B EEN FILED. IN WRITTEN SUBMISSIONS, IT HAS BEEN STATED THAT AGAINST THE QU ANTUM ADDITION, THE ASSESSEE HAD FILED APPEAL BEFORE THE HON'BLE RAJAST HAN HIGH COURT. THEREFORE, PENALTY SHOULD NOT HAVE IMPOSED BY THE AS SESSING OFFICER AS THE MATTER IS DEBATABLE. THE APPELLANT HAS WELL IN TI ME HAVE FURNISHED ALL THE DETAILS REQUIRED FROM HIM RELEVANT TO THE DIFFE RENT CASH LOANERS INCLUDING THE LOAN CONFIRMATIONS DULY SIGNED BY ALL OF THEM WITH THEIR PAN, ADDRESS PROOF, ITRS, BANK PASSBOOKS, BALANCE SHEETS ETC., THE A.O. HAS ASKED TO PRODUCE THE LOANERS FOR EXAMINATION ON 21/ 12/2010 I.E. ON THE LAST HOURS OF THE ASSESSMENT TIME EVEN KNOWING THE F ACT THAT ALL OF THE LOANERS ARE FROM AHMADABAD. IN THE REPLY BY THE AR ON 23/12/2010 GIVEN IN DAK, THIS ONLY FACT WAS MENTIONED THAT IT I S NOT POSSIBLE TO PRODUCE THE CASH LOANERS WITHIN SUCH A SHORT NOTICE, HENCE ASSESSEES SOUGHT TIME FOR PRODUCTION OF THEM. THE APPELLANT H AD NEVER DENIED FOR PRODUCING THE LOANERS FOR EXAMINATION. THUS, IT IS M ERELY THE CASE OF NON ACCEPTANCE OF COGENT AND REASONABLE EXPLANATION AS WELL AS EVIDENCES ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 7 PLACED BEFORE THE ASSESSING OFFICER, IN WHOSE OPINI ON, THE SAME WERE NOT ACCEPTABLE. NEVERTHELESS, THE SAID FACT CANNOT BE T ERMED AS EITHER FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF INCOME. THE MERE FACT THAT THE EXPLANATION GIVEN BY THE APPE LLANT WAS NOT ACCEPTABLE TO THE DEPARTMENT IS NOT SUFFICIENT TO L EAD TO AN IRRESISTIBLE INFERENCE THAT THERE WAS DELIBERATE CONCEALMENT OR F URNISHING OR INACCURATE PARTICULARS OF INCOME ON PART OF THE APP ELLANT. THE LD ASSESSING OFFICER HAD NOT MADE A CASE OF CULPABLE OR WILLFUL O MISSION NOR DELIBERATE CONCEALMENT. IN THE INSTANT CASE, THE EXPLANATION OFFERED BY THE APPELLANT IN SUPPORT OF ITS CONTENTION IS BONAFIDE . THERE IS NO FRAUD OR ANY GROSS OR WILLFUL NEGLECT ON PART OF THE APPELLANT. I N SO FAR AS FILING OF SECOND APPEAL BEFORE THE HONBLE ITAT IS CONCERNED, AGAINST THE APPEAL ORDER PASSED BY THE LD CIT(A), AJMER CONFIRMING THE ADDITION OF RS. 81,000/-, IT IS SUBMITTED THAT NO FURTHER APPEAL WA S PREFERRED IN ORDER TO BUY PEACE AS WELL AS TO AVOID PROTRACTED LITIGATION KEEPING IN VIEW THE FACT THAT THE APPELLANT IS NON-FUNCTIONAL AND A PHYSICAL LY HANDICAPPED SENIOR CITIZEN. THEREFORE, PENALTY IMPOSED U/S 271(1)(C) OF THE ACT IS NOT JUSTIFIED. IN SUPPORT OF THE SUBMISSIONS, FOLLOWING CASE LAWS HAS BEEN CITED:- ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 8 (I) SIR SHADILAL SUGAR & GENERAL MILLS LTD. VS. CI T (1987) 168 ITR 705 (SC). (II) CIT VS. BARODA TIN WORKS (1996) 221 ITR 661 (GU J). (III) CIT VS LALLUBHAI JOGIBHAI PATEL (1983) 139 ITR 1028 (GUJ). (IV) CIT VS C.J. RATHNA SWAMI (1997) 223 ITR 5 (MAD.) . ON THE BASIS OF THE WRITTEN SUBMISSIONS, THE ASSESSE E PRAYED TO DELETE THE ADDITION CONFIRMED BY THE LD CIT(A). 5. AT THE OUTSET, THE LD D.R. HAS VEHEMENTLY SUPPOR TED THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE ASSESSEE H AS DEPOSITED CASH IN THE BANK ACCOUNT, WHICH HAS NOT BEEN EXPLAINED BY H IM, THEREFORE, THE LD CIT(A) HAS CONFIRMED THE ADDITION TO THE EXTENT OF R S. 81,000/-. THEREAFTER, THE ASSESSEE HAS NOT FILED APPEAL BEFORE THE ITAT ON ADDITION RESTRICTED TO RS. 81,000/- AGAINST THE ORDER OF CIT (A) BUT REVENUE HAS FILED APPEAL BEFORE THE ITAT, WHO HAD PARTLY REVERSED THE O RDER OF THE LD CIT(A) AND ADDITION WAS CONFIRMED BY THE ITAT AT RS. 12.50 LACS AGAINST THE ORIGINAL ADDITION OF RS. 15.51 LACS. THE ASSESSE E HAS FILED APPEAL BEFORE THE HON'BLE RAJASTHAN HIGH COURT ON CONFIRMI NG ADDITION OF RS. 12.50 LACS BY THE ITAT. THE EXPLANATION FILED BY THE ASSESSEE IS NOT ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 9 BONAFIDE AS HE HAS CONCEALED THE INCOME TO THE EXTE NT OF RS. 81,000/- AND ALSO FURNISHED INACCURATE PARTICULARS OF INCOME IN THE RETURN. ON THE ADMISSION OF APPEAL BY THE HON'BLE HIGH COURT, IT C ANNOT BE CONSTRUED THAT ISSUE IS DEBATABLE. VARIOUS ITATS HAD DELETED T HE PENALTY ON THE GROUND OF PAYMENT OF APPEAL BEFORE THE HON'BLE HIGH COURT. THIS ISSUE WAS CONSIDERED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. DHARAMSHI B SHAH [2014] 366 ITR 140 (GUJ) WHEREIN T HE HONBLE COURT HAS HELD THAT APPEAL TO THE HIGH COURT DOES NOT EMP OWER TO DELETE THE PENALTY BY THE ITAT. THE ASSESSEES CONTENTION ALSO NOT ACCEPTABLE THAT THERE WAS NO GUILTY CONSCIOUS OF THE ASSESSEE TO CON CEAL THE INCOME. NOW THIS ISSUE HAS BEEN SETTLED BY THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILES PROCESSORS AND OTHERS [2008] 306 ITR 277 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT INCOME TAX IS CIVIL LIA BILITY AND THE ASSESSING OFFICER IS NOT REQUIRED TO PROVE THE MENS REA OF TH E ASSESSEE TO CONCEAL THE INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. RECENTLY THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD . VS. COMMISSIONER OF INCOME-TAX [2013] 358 ITR 593 (SC) WHEREIN THE HON'BLE SUPREME COURT HAS HELD THAT VOLUNTARY DISCL OSURE OF INCOME NOT AUTOMATIC IMMUNE FROM THE PENALTY. SURRENDER SUBJEC T TO NON-INITIATING ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 10 THE PENALTY PROCEEDING AND PROSECUTION DOES NOT ABS OLVE THE ASSESSEE FROM LIABILITY OF PENALTY. THE MATERIAL FACT IS THAT THE ASSESSEE OFFERED ANY EXPLANATION FOR CONCEALMENT OR FURNISHING OF INACCU RATE PARTICULARS OF INCOME TO BE SEEN. PENALTY PROCEEDING AND SATISFACT ION OF THE ASSESSING OFFICER NEED NOT BE RECORDED IN A PARTICULAR MANNER . THEREFORE, THE ASSESSEE DOES NOT GET ANY IMMUNITY FROM THE PENALTY ON THE GROUND THAT APPEAL HAS BEEN ADMITTED BEFORE THE HON'BLE HIGH CO URT WHICH ALSO DOES NOT MAKE ISSUE BEFORE THE HON'BLE HIGH COURT DEBATA BLE. THE FACT IS THAT THE ASSESSEE HAD DEPOSITED CASH FROM UNDISCLOSED SO URCE, WHICH HAS NOT BEEN EXPLAINED BY HIM BEFORE THE LOWER AUTHORITY. THU S WE CONFIRM THE ORDER OF THE LD CIT(A). 7. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 30/10/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 30 TH OCTOBER, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI KAILASH SWAROOP AGARWAL, AHMADABAD . ITA 193/JP/2014_ KAILASH SWAROOP AGARWAL VS. ITO 11 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 1(2), AJMER 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 193/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR