Smt. Hansaben Hasmukhbhai Patel, Anand V. The Income Tax Officer, Ward-2, Anand

ITA 205/AHD/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8149 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 23-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Business expenditure
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] LOZJH IZNHI DQEKJ DSFM;K] YS[KK LNL; ,OA EGKOHN IZL KN] U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA U;KF;D LNL; DS LE{KA BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.205/AHD/2015 ( / ASSESSMENT YEAR : 2008-09) HANSABEN HASMUKHBHAI PATEL, AMBICA ENTERPRISE, MAI KRUPA, AT & PO. VANSOL, TAL:- UMRETH, DIST ANAND - 387515 / VS. ITO, WARD (2), ANAND - 388001 ./ ./ PAN/GIR NO. : ANGPP 5796 H ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : --NONE-- / RESPONDENT BY : SHRI MUDIT NAGPAL, SR. D.R. / DATE OF HEARING 10/10/2017 !'# / DATE OF PRONOUNCEMENT 22/11/2017 $% / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-IV, BARODA, DAT ED 27/10/2014 FOR THE ASSESSMENT YEAR (AY) 2008-09, ON THE FOLLOW ING GROUNDS: THE ASSESSING OFFICER HAS LEVIED PENALTY U/S 271(1) (C) OF THE ACT ON ACCOUNT OF DISALLOWANCE MADE U/S 68 OF THE ACT VIDE ORDER DATED 11/10/2010. THE ASSESSING OFFICER HAD LEVIED PENALT Y U/S.271(1)(C) AS WE COULD NOT ESTABLISH IDENTITY, GENUINENESS AND CR EDITWORTHINESS OF THE PERSONS FROM WHOM WE HAD TAKEN LOANS TO RUN BUSINES S. YOUR HONOUR, THE LOANS WHICH WERE TAKEN BY US WERE UTILIZED FOR BUSINESS EXPENSES, NO BUSINESS EXPENSES WERE DISALL OWED. WE HAD ITA NO.205/AHD/ 2015 HANSABEN HASMUKHBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 2 - PLEADED THE ASSESSING OFFICER OF GENUINENESS OF TRA NSACTIONS. THE FACTS OF THE CASE ARE THERE WERE 22 KNOWN PEOPLE I HAD TA KEN LOANS FROM AND PAID INTEREST TO THEM. THE DEPARTMENT HAD CALLED UP ON MAXIMUM PEOPLE AND THEY HAD APPEARED APPEAL IN DEPARTMENT AND CONF IRMED THE GENUINENESS OF TRANSACTION. THE ASSESSING OFFICER W AS NOT SATISFIED WITH CREDITWORTHINESS. I PREFERRED AN APPEAL WHICH WAS D ISMISSED ON SIMILAR GROUNDS. NOTICE FOR PENALTY WAS SERVED UPON ME AND THIS PENALTY WAS UPHELD. I HAVE ALREADY PAID THE TAXES. IT WOULD BE VERY HAR SH ON ME IF I HAVE TO PAY PENALTIES ON THE AMOUNT OF LOANS I HAVE OBTAINE D FOR RUNNING BUSINESS, PAY THE LOANS BACK AND EVEN INTEREST TO P EOPLE I HAVE TAKEN LOANS FROM. THERE IS NO CONCEALMENT OF INCOME. CRED ITWORTHINESS COULD NOT BE ESTABLISHED BY ME, DOES NOT MEAN THAT THE TR ANSACTIONS ARE NOT GENUINE AND THERE CONCEALMENT OF INCOME. IN A DECISION BY AHMEDABAD BENCH OF ITAT REPORTED AS YOGESHKUMAR CHHOTALAL SHAH VS. ITO ((2013) 36 CCH 003 (AHD), THERE WERE ADDITION U/S 68 OF THE ACT WAS MADE IN RESPECT OF U NSECURED LOANS TAKEN IN CASH AND THE EVIDENCES OF ASSESSEE WERE NOT ACCE PTED BY THE DEPARTMENT. SINCE NO APPEAL WAS PREFERRED AGAINST Q UANTUM EXPECTANTLY PENALTY WAS FOLLOWED WITH. ON SUCH FACTS EVEN THOUG H NO APPEAL WAS FILED AGAINST THE QUANTUM ORDER, PENALTY WAS DELETE D BY THE TRIBUNAL HOLDING THAT IF ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED, I.E., IT IS NOT ACCEPTED BUT CIRCUMSTANC ES DO NOT LEAD TO REASONABLE AND POSITIVE INFERENCE THAT ASSESSEE'S C ASE IS FALSE, EXPLANATION CANNOT HELP DEPARTMENT BECAUSE THERE WI LL BE NO MATERIAL TO SHOW THAT AMOUNT IN QUESTION WAS INCOME OF ASSES SEE. IT WAS ALSO HELD THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AN D CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT IT DOES . SIMILAR VIEWS HAVE BEEN TAKEN IN FOLLOWING PRECEDEN TS: DCIT VS. MAX INDIA LTD. (ITA 94/ASR/2011) C. BASKER (2013- TIOL 39- ITAT - MAD) GULSHAN RAI V. ITO (ITA 1098/DEL/2012) MY CASE IS SIMILAR IN NATURE WHERE IN SPITE OF GIVI NG ALL THE EVIDENCES OF INDENTIFY, GENUINENESS ONLY CREDITWORTHINESS WAS NO T ACCEPTED BY DEPARTMENT. THERE IS NO EVIDENCE OF CONCEALMENT OF INCOME. IN S UCH CIRCUMSTANCES I PLEAT YOUR HONOR TO SQUASH THE ORDER OF PENALTY OF RS.1, 20,970/- U/S.271(1)(C) AND ITA NO.205/AHD/ 2015 HANSABEN HASMUKHBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 3 - SAVE ME FROM FINANCIAL HARDSHIP. I AM A SENIOR CITI ZEN WITH NO BUSINESS AND NO INCOME AT THIS POINT OF TIME. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- IN THIS CASE, ASSESSING OFFICER HAS LEVIED THE PENA LTY U/S. 271(1)(C) OF THE ACT ON ACCOUNT OF DISALLOWANCE MADE U/S.68 OF THE ACT VIDE ORDER DATED 11/10/2010. THE ADDITIONS MADE BY THE ASSESSI NG OFFICER WERE SUBSEQUENTLY CHALLENGED BY THE APPELLANT BEFORE THE CIT(A)-VI, BARODA WHO VIDE ORDER DATED 26/11/2010 DISMISSED THE APPEA L OF THE APPELLANT. HENCE, THE ASSESSING OFFICER HAD LEVIED THE PENALTY U/S.271(L)(C) OF THE ACT AS THE SAME WAS INITIATED AT THE TIME OF ASSESS MENT ORDER. THE APPELLANT HAS NOT APPEARED DURING THE COURSE OF APP ELLATE PROCEEDINGS IN SPITE OF SEVERAL NOTICES GIVEN ENUMERATE ABOVE. 2.2 ON PERUSAL OF THE PENALTY ORDER, IT WAS SEEN TH AT THERE HAVE BEEN LARGE NUMBER OF PERSONS FROM WHOM CASH DEPOSITS WER E SHOWN TO HAVE BEEN CREDITED BY THE APPELLANT IN HER BOOKS. AT THE TIME OF ASSESSMENT, THE APPELLANT COULD NOT PROVE THE REQUIREMENTS U/S. 68 OF THE ACT TO ESTABLISH THE IDENTITY, GENUINENESS AND CREDITWORTH INESS OF THE PERSONS. THE ASSESSING OFFICER, THEREFORE, WENT ON TO CONSID ER THE CASH CREDITS OF RS.3,83,780/- AND THE INTEREST THEREON AMOUNTING TO RS.23,175/- AS UNEXPLAINED DEPOSITS AND ADDED THE SAME TO THE INCO ME OF THE APPELLANT. THE FINDING OF THE ASSESSING OFFICER WERE UPHELD BY THE CIT(A). AS NO SUBMISSIONS HAVE BEEN MADE DURING THE APPELLATE PRO CEEDINGS. THEREFORE, PENALTY LEVIED BY THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT(A). ITA NO.205/AHD/ 2015 HANSABEN HASMUKHBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 4 - 3. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. UNDISPUTEDLY, LD.CIT(A) SENT SEVERAL NOTICES AS FOL LOWS: SR. NO. DATE OF NOTICE DATE OF HEARING REMARKS 1. 25.03.2014 10.04.2014 NONE ATTENDED 2. 11.04.2014 22.04.2014 SEEK ADJOURNMENT 3. 22.04.2014 28.04.2014 NONE ATTENDED 4. 07.05.2014 15.05.2014 NONE ATTENDED 5. 19.06.2014 08.07.2014 ADJOURNED TO 24.07.2014 AS PER APPELLANTS REQUEST 6. 24.07.2014 NONE ATTENDED 7. 26.08.2014 01.09.2014 NONE ATTENDED 8. 04.09.2014 11.09.2014 NONE ATTENDED 9. 10.10.2014 27.10.2014 NONE ATTENDED 3.2 BUT APPELLANT COULD NOT PURSUE HIS MATTER BEFOR E THE LD. CIT(A). IN THE INTEREST OF THE JUSTICE, WE REMIT THIS MATTER B ACK TO THE FILE OF THE CIT WHO WILL DECIDE THIS MATTER AFRESH AFTER GIVING OPP ORTUNITY OF BEING HEARD TO THE ASSESSEE. 4. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 22 / 11 /201 7 SD/- SD/- IZNHI IZNHI IZNHI IZNHI DQEKJ DSFM;K DQEKJ DSFM;K DQEKJ DSFM;K DQEKJ DSFM;K EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN EGKOHJ IZLKN YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LNL; L; L; L; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; (PRADIP KUMAR KEDIA) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 22/11/2017 PRITI YADAV, SR.PS ITA NO.205/AHD/ 2015 HANSABEN HASMUKHBHAI PATEL VS. ITO ASST.YEAR 2008-09 - 5 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-IV, BARODA 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 03/11/2017 (DICTATION-PAD 1 P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13/11/2017 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. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 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