Shri Roopchand C.Bhatia, Moti Daman V. The Income tax Officer,Vapi Ward-4, Daman

ITA 207/AHD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63231 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 21-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A TIRKEY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD D BENCH BEFORE: SHRI G.C. GUPTA, VICE PRESIDENT AND SHRI ANIL CHATURVEDI, ACCOUNTANT ME MBER I.T.A. NO.207/AHD/2010 A. Y. 2005-06 R.C. BHATIA, BHATIA HOUSE, MOTI-DAMAN-396 220 APPELLANT VS. THE INCOME TAX OFFICER, VAPI WARD-4, DAMAN RESPONDENT DEPARTMENT BY : SHRI A. TIRKEY, SR. D.R. ASSESSEE BY : SHRI MEHUL SHAH, A.R. DATE OF HEARING : 18.10.2012 DATE OF PRONOUNCEMENT 14.12.2012 / ORDER PER : ANIL CHATURVEDI, ACCOUNTANT MEMBER THE PRESENT APPEAL IS AGAINST THE PENALTY ORDER DAT ED 27.03.2009 PASSED U/S 271(1)(C) FOR A.Y. 2005-06 WHEREIN A PENALTY OF RS. 18600/- HAS BEEN LEVIED BY THE A.O. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. OBSERVED THAT ASSESSEE HAD OBTAINED LOANS AGGREGATING TO RS.30500 0/- FROM EIGHT PARTIES. ACCORDING TO THE A.O. SINCE THE ASSESSEE FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION , ADDITION OF ENTIRE LOAN RECEIPTS OF RS.305000/- WAS MADE U/S 68 OF THE ACT. TRIBUNAL VIDE ITS ORDER DATED 18.07.2008 (ITA NO.1501/AHD/2008) DELETED THE ADDIT ION OF RS.245000/- AND CONFINED THE ADDITION ONLY TO THE EXTENT OF RS.6000 0/-. IT IS ON THE AFORESAID ADDITIONS SUSTAINED, THE A.O. HELD THAT THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREFORE LIABLE TO PENAL TY U/S 271(1)(C) AND ACCORDINGLY I.T.A. NO.207/AHD/2010 A. Y. 2005-06 2 LEVIED PENALTY OF RS.18600/- VIDE ORDER DATED 27.03 .2009. AGAINST THE ORDER OF THE A.O., ASSESSEE PREFERRED APPEAL BEFORE LD. CIT( A). LD. CIT(A) VIDE ORDER DATED 11.09.2009 CONFIRMED THE ACTION OF THE A.O. AGGRIE VED BY THE ORDER OF CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE US. 3. BEFORE US LD. A.R. SUBMITTED THAT THE ADDITION O F RS.60000/- IS ON ACCOUNT OF LOAN OF RS.20000/- EACH FROM THREE PARTIES RECEIVED BY THE ASSESSEE. LD. A.R. SUBMITTED THAT DUE TO LAPSE OF TIME DUE TO THEIR NO N-AVAILABILITY IN DAMAN THE PARTIES COULD NOT BE CONTACTED. HE FURTHER SUBMITT ED THAT THERE WAS NO ELEMENT OF FRAUD OR NEGLECT INVOLVED ON THE PART OF THE ASSESS EE. SINCE THE LOAN TRANSACTIONS ARE RECORDED IN THE BOOKS OF ACCOUNTS OF THE ASSESS EE, IT GOES TO PROVE THAT THERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT OUT OF THE TOTAL ADDITION OF RS.305000/- MADE BY THE A. O. SUBSTANTIAL ADDITION HAS BEEN DELETED BY THE HONBLE ITAT VIDE ORDER DATED 1 8.07.2008. HE PLACED ON RECORD THE COPY OF THE ORDER. THEREFORE, ON THE BA LANCE AMOUNT OF RS.60000/-, THE PENALTY LEVIED BE DELETED. 4. LD. D.R., ON THE OTHER HAND, RELIED ON THE ORDER OF THE A.O. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE FACTUAL POSITION OF THE CASE IS THAT THE ASSESS EE HAD RECEIVED LOANS AGGREGATING TO RS.305000/- FROM EIGHT PARTIES AND T HE ENTIRE RECEIPTS WERE ADDED U/S 68. THE TRIBUNAL VIDE ITS ORDER DATED 18.07.20 08 (ITA NO.1501/AHD/2008) DELETED THE ADDITION OF RS.245000/- BUT SUSTAINED A GGREGATE ADDITION OF RS.60000/- IN RESPECT OF THREE PARTIES FOR THE REAS ON THAT THE ASSESSEE HAD NOT FILED EITHER THE CONFIRMATION OR THEIR ADDRESSES. THE A.O. HAS LEVIED PENALTY ON THE AFORESAID ADDITIONS OF RS.60,000/-. I.T.A. NO.207/AHD/2010 A. Y. 2005-06 3 6. PENALTY U/S 271(1)(C) OF THE ACT IS LEVIABLE IF THE A.O. IS SATISFIED IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT THAT ANY PE RSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS OF SUCH INCOME. IT IS WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALT Y PROCEEDINGS ARE SEPARATE AND DISTINCT AND THE FINDING IN THE ASSESSMENT PROC EEDINGS CANNOT BE REGARDED AS CONCLUSIVE FOR THE PURPOSES OF THE PENALTY PROCEEDI NGS. 7. THE NECESSARY INGREDIENTS FOR ATTRACTING EXPLANA TION-1 TO SECTION 271(1)(C) ARE THAT : (I) THE PERSON FAILS TO OFFER THE EXPLAN ATION, OR (II) HE OFFERS THE EXPLANATION WHICH IS FOUND BY THE A.O. OR THE CIT(A ) OR THE CIT TO BE FALSE, OR (III) THE PERSON OFFERS EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT A LL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM. IF THE CASE OF ANY ASS ESSEE FALLS IN ANY OF THESE THREE CATEGORIES, THEN ACCORDING TO THE DEEMING PROVISION PROVIDED IN EXPLANATION-1 TO SECTION 271(1) (C) THE AMOUNT ADDED OR DISALLOWED I N COMPUTING THE TOTAL INCOME SHALL BE CONSIDERED AS THE INCOME IN RESPECT OF WHI CH PARTICULARS HAVE BEEN CONCEALED, FOR THE PURPOSE OF CL.(C) OF SECTION 271 (1), AND THE PENALTY FOLLOWS. ON THE OTHER HAND, IF THE ASSESSEE IS ABLE TO OFFER AN EXPLANATION, WHICH IS NOT FOUND BY THE AUTHORITIES TO BE FALSE, AND ASSESSEE HAS BE EN ABLE TO PROVE THAT SUCH EXPLANATION IS BONA FIDE AND THAT ALL THE FACTS REL ATING TO THE SAME HAVE BEEN DISCLOSED BY HIM, THEN IN THAT CASE A PENALTY SHALL NOT BE IMPOSED. 8. IN THE PRESENT CASE, THE ASSESSEE HAD DISCLOSED THE MATERIAL FACTS BEFORE THE A.O. AND LD. CIT(A). WHEN THE ASSESSEE HAD MADE A PARTICULAR CLAIM, THE DISALLOWANCE OF SUCH CLAIM CANNOT AUTOMATICALLY LEA D TO THE CONCLUSION THAT THERE WAS CONCEALMENT OF PARTICULARS OF HIS INCOME BY THE ASSESSEE OR FURNISHING INACCURATE PARTICULARS THEREOF. WHAT IS TO BE SEEN IS WHETHER THE SAID CLAIM MADE I.T.A. NO.207/AHD/2010 A. Y. 2005-06 4 BY THE ASSESSEE WAS BONAFIDE AND WHETHER ALL THE MA TERIAL FACTS RELEVANT THERETO HAVE BEEN FURNISHED AND ONCE IT IS SO ESTABLISHED, THE ASSESSEE CANNOT BE HELD LIABLE FOR CONCEALMENT PENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT CASE, THE SUBMISSION OF THE ASSESSEE WAS THAT OUT OF THE TOTA L ADDITION, SUBSTANTIAL ADDITION HAS BEEN DELETED BY HONBLE ITAT AND ADDITION WHICH HAS BEEN SUSTAINED IS ONLY TO THE EXTENT OF RS.60000/- COMPRISING OF LOAN OF RS.2 0000/- EACH FROM THREE PARTIES. THE SUB MISSION OF THE ASSESSEE THAT IT COULD NOT G ET THE CONFIRMATION DUE TO LAPSE OF TIME SEEMS TO BE BONAFIDE EXPLANATION AND CANNOT BE DOUBTED IN THE PRESENT CIRCUMSTANCES. THE REVENUE HAS NOT BROUGHT ANY MAT ERIAL ON RECORD TO CONTROVERT THE SUBMISSIONS OF THE ASSESSEE. IN VIEW OF THE TO TALITY OF FACTS AND CONSIDERING THAT THE ADDITION SUSTAINED IS OF ONLY RS.60000/- O UT OF RS.305000/- WHICH WAS INITIALLY DISALLOWED, WE ARE OF THE VIEW THAT IN TH E PRESENT CASE LEVY OF PENALTY IS NOT CALLED FOR. WE, THUS, CANCEL THE PENALTY LEVIE D BY THE A.O. THEREFORE, THIS GROUND OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 14.12.201 2 SD/- SD/- (G.C. GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY N.K. CHAUDHARY, SR. P.S. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. , ! , '# / DR, ITAT, AHMEDABAD 6. $% &' / GUARD FILE. BY ORDER/ , ( / ' ) ! , '# *