Gopaldas Mangilal Agrawal, HUF, Jalgaon V. Assistant Commissioner of Income-tax,

ITA 219/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1025 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-07-2016
• Assessment Year: 2000-2001
• Appeal Filed On: 03-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Onus to prove
• Section: 153A; 68; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 219/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2000-01 GOPALDAS MANGILAL AGRAWAL-HUF, C/O. M/S. AGRAWAL BROTHERS, SITAMAI NAGAR, CHALISGAON, DISTT.-JALGAON 424101 PAN : AABHA7677N ....... / APPELLANT ' / V/S. ACIT, CENTRAL CIRCLE-1, NASHIK / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI P.L. KUREEL / DATE OF HEARING : 01-09-2016 / DATE OF PRONOUNCEMENT : 09-09-2016 * / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 19-12 -2013 FOR THE ASSESSMENT YEAR 2000-01 CONFIRMING THE LEVY OF PENA LTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2 ITA NO. 219/PN/2014, A.Y. 2000-01 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS HUF AND IS A PARTNER IN FIRMS M/S. AGRAWAL BRO THERS, CHALISGAON, G.M. OIL MILL, CHALISGAON AND AGRAWAL INDUSTRIAL COMP LEX, CHALISGAON. A SEARCH AND SEIZURE ACTION U/S. 132 (1) OF T HE ACT WAS CARRIED OUT IN THE CASE OF AGRAWAL GROUP ON 03-11-2004. IN RESPONSE TO NOTICE ISSUED U/S. 153A OF THE ACT, THE ASSESSEE DECLA RED INCOME OF ` 3,07,896/- AND AGRICULTURAL INCOME OF ` 32,618/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER MADE ADD ITION ON ACCOUNT OF LOW HOUSE HOLD EXPENSES ` 1,31,071/-, UNEXPLAINED INVESTMENT IN LAND ` 1,50,000/-, UNEXPLAINED CASH CREDIT ` 2,12,000/-. THE ASSESSEE FILED APPEAL AGAINST THE ASSESSMENT ORDER. IN FIRST APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE ENTIRE ADDIT ION IN RESPECT OF INVESTMENT IN LAND. THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED PART RELIEF ON ACCOUNT OF LOW HOUSE HOLD EXPENSES BY CONFIRMING THE ADDITION OF ` 84,644/-. FURTHER, THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD THE FINDINGS OF ASSESSING OFFICER IN RESPECT OF UNEXPLAINED CASH CREDITS ` 2,12,000/-. THE ASSESSING OFFICER, THEREAFTER, INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND LEVIED PENALT Y OF ` 69,960/- ON ` 2,12,000/- VIDE ORDER DATED 30-03-2012. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) UPHELD TH E LEVY OF PENALTY ON THE GROUND THAT THE ASSESSEE COULD NOT P ROVE GENUINENESS OF CASH CREDITS. NOW, THE ASSESSEE IS IN SECOND APPEAL BE FORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 3 ITA NO. 219/PN/2014, A.Y. 2000-01 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE HAD RECEIVED LOANS FROM VARIOUS PERSO NS AGGREGATING TO ` 2,12,000/- DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2000-01. THE AFORESAID LOANS TAKEN BY THE ASSESSEE WER E REPAID IN THE SUBSEQUENT YEARS. THE ASSESSEE HAD FILED CONFIRMATIONS FRO M THE PERSONS FROM WHOM THE ASSESSEE HAD TAKEN THE LOAN. TH E COMMISSIONER OF INCOME TAX (APPEALS) HAD RECORDED THIS FAC T IN HIS ORDER. THE LD. AR OF THE ASSESSEE REFERRED TO AFFIDAVITS OF VARIOUS PERSONS FROM WHOM THE ASSESSEE HAD ALLEGEDLY TAKEN LOAN AT PAGES 22 TO 32 OF THE PAPER BOOK. THE AUTHORITIES BELOW HAVE ERR ED IN DISBELIEVING THE AFFIDAVITS AS THE ASSESSEE COULD NOT PRODUC E THE PERSONS BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAD FU RNISHED LEDGER EXTRACTS OF THE CREDITORS AND AFFIDAVITS OF ALL THE CR EDITORS BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE LD. AR CONTE NDED THAT THE ASSESSEE HAS DISCHARGED ITS ONUS TO PROVE THE GEN UINENESS OF CREDITORS. SO FAR AS THE CREDITWORTHINESS OF THE CREDITOR S IS CONCERNED, THE LOAN AMOUNTS ARE SMALL FOR WHICH CREDITWORTHINESS NEED NOT BE PROVED. THE LD. AR CONTENDED THAT IN THE BALANCE SHEET OF THE MAYUR METALS PROPRIETARY CONCERN OF THE ASSESSEE THERE WERE TOTAL LOANS OF ` 4.66 LAKHS. THE ASSESSEE FURNISHED CONFIRMATIONS IN RESPECT OF LOANS TO THE TUNE OF ` 2.54 LAKHS. HOWEVER, DURING ASSESSMENT PROCEEDINGS THE ASSESSEE COULD NOT OBTAIN CONFIRMATIONS FROM THE SMALL CREDITORS AGGREGATING TO ` 2.12 LAKHS. THE ASSESSING OFFICER MADE ADDITION U/S. 68 OF THE ACT IN RESPECT OF UNCONFIRMED CREDITORS. THE AS SESSING OFFICER HAS ACCEPTED THE CONFIRMATIONS IN RESPECT OF ` 2.54 LAKHS, ON SAME ANALOGY THE AFFIDAVITS FROM THE CREDITORS FURNISHED BY THE ASSESSEE SHOULD HAVE ALSO BEEN ACCEPTED BY THE COMMISSIONER OF IN COME TAX (APPEALS). THE LD. AR CONTENDED THAT IN ANY CASE, NO PEN ALTY SHOULD 4 ITA NO. 219/PN/2014, A.Y. 2000-01 HAVE BEEN LEVIED AS CREDITORS HAVE CONFIRMED THE LOAN AND ALL THE CREDITORS ARE IDENTIFIABLE. THE LD. AR IN SUPPORT OF HIS CONTE NTIONS PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SKY CONSTRUCTION PVT. LTD. VS. INCOME TA X OFFICER IN ITA NO. 1217/PN/2010 FOR THE ASSESSMENT YEAR 2005-06 DECIDED ON 24-05-2013. 4. ON THE OTHER HAND SHRI P.L. KUREEL REPRESENTING THE D EPARTMENT VEHEMENTLY SUPPORTED THE FINDINGS OF COMMISSIONER OF INCOM E TAX (APPEALS) IN CONFIRMING THE ADDITION. THE LD. DR CONTENDED THA T THE AFFIDAVITS FILED BY THE ASSESSEE FROM THE ALLEGED CREDITORS AR E NOTHING BUT SELF SERVING DOCUMENTS. THE AFFIDAVITS ARE DEFECTIVE. NE ITHER THEY ARE NOTARIZED NOR THEY ARE SWORN BEFORE THE MAGISTRATE . THE LD. DR POINTED THAT IN THE AFFIDAVITS COMPLETE ADDRESS OF THE CRED ITORS IS NOT GIVEN. THE LD. DR FURTHER POINTED THAT ALL THE AFFIDAVITS WE RE EXECUTED ON THE SAME DATE AND ALL THE STAMP PAPERS ARE CONSECU TIVELY NUMBERED. THIS ITSELF SHOWS THAT THE AFFIDAVITS WERE FABRIC ATED AND NO SANCTITY CAN BE ATTACHED TO THE SAME. THE ASSESSEE HAS NOT BEEN ABLE TO PRODUCE EVEN SINGLE CREDITOR EITHER BEFORE THE ASSES SING OFFICER OR THE COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR PRAYED FOR DISMISSING THE APPEAL OF THE ASSESSEE AND CONFIRMING THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS). 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ASSESSEE IS IN APPEAL AGAINST THE CONFIRMATION OF PENALTY LEV IED U/S. 271(1)(C) OF THE ACT IN RESPECT OF ADDITIONS OF ` 2,12,000/- MADE U/S. 68 OF THE ACT. THE PENALTY OF ` 69,960/- HAS BEEN LEVIED ON ACCOUNT OF 5 ITA NO. 219/PN/2014, A.Y. 2000-01 UNEXPLAINED CASH CREDITS OF ` 2,12,000/-. THE ASSESSEE HAS FILED AFFIDAVITS AT PAGES 22 TO 32 OF THE PAPER BOOK AS CONFIRMA TION FROM CREDITORS FOR ADVANCING OF CASH LOANS AND ALSO ADMITTING RE PAYMENT OF SAME. A PERUSAL OF AFFIDAVITS PLACED ON RECORD SHOW THAT THEY ARE SELF CREATED DOCUMENTS BY THE ASSESSEE. THE COMPLETE ADDR ESS OF THE CREDITORS IS NOT MENTIONED IN THE AFFIDAVIT. THE AFFIDAVITS ARE NEITHER NOTARIZED NOR THEY ARE ATTESTED BY ANY MAGISTRATE. IT IS FURTHER OBSERVED THAT THE AFFIDAVITS ARE NOT EVEN WITNESSED, ALL T HE AFFIDAVITS ARE IDENTICALLY WORDED AND IN NONE OF THE SO CALLED AFFIDAVITS THE OCCUPATION OF CREDITORS IS MENTIONED. THE WRITINGS ON THE STAMP PAP ER CANNOT BE CONSIDERED AS AFFIDAVITS AS NEITHER THEY ARE EXECUTED IN T HE MANNER IN WHICH THEY SHOULD HAVE BEEN NOR THE IDENTITY OF THE PERS ONS IS ESTABLISHED. APART FROM THE AFFIDAVITS NO OTHER DOCUMENT H AS BEEN PLACED ON RECORD TO SHOW THE RECEIPT OF CASH LOANS FROM THE ALLEGED CREDITORS. AS HAS BEEN POINTED OUT BY THE LD. DR THE AS SESSEE HAS NOT PRODUCED A SINGLE CREDITOR BEFORE THE AUTHORITIES BELOW IN SUPPORT OF HIS CONTENTIONS. THE DOCUMENTS PLACED ON RECORD CANNOT BE CONSIDERED AS CONFIRMATIONS FOR THE REASONS MENTIONED ABOVE. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS UPHELD THE OR DER LEVY OF PENALTY BY OBSERVING AS UNDER : 7.1 AFTER CAREFULLY GOING THROUGH THE FACTS OF THE CASE, IT IS CLEARLY PROVED THAT THE APPELLANT COULD NOT PROVE THE GENUI NENESS OF THE CASH CREDITS. THE APPELLANT DID RIOT PRODUCE CREDITORS BEFORE THE AO EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR THE APPELLATE PROCEEDINGS. THE AFFIDAVITS FILED BY THE APPELLANT DURING THE APPELLATE PROCEEDINGS WERE NOTHING BUT SELF SERVING DOCUMENTS WHICH WERE NOT BACKED BY ANY OTHER DOCUMENTARY EVIDENCES. THE APPE LLANT HAS FAILED TO DISCHARGE HIS ONUS IN REGARD TO GENUINENESS OF THE ABOVE CASH CREDITORS. MOREOVER, ALL THESE FACTS CAME TO NOTICE OF THE DEP ARTMENT DURING SEARCH/POST SEARCH ENQUIRIES. THE APPELLANT HAS INT RODUCED BOGUS CASH 6 ITA NO. 219/PN/2014, A.Y. 2000-01 CREDITS IN HIS BOOKS OF ACCOUNT. THE VERY FACT THAT THE APPELLANT COULD' NOT PRODUCE ANY CASH CREDITOR ALSO ESTABLISHES THAT THE CASH CREDITS AMOUNTING TO ` 2,12,000/- WERE NOT GENUINE. THE APPELLANT WITH A MALAFIDE INTENTION TO EVADE TAX HAS INTRODUCED THE BOGUS CASH CREDITS IN HIS BOOKS OF ACCOUNT. THE APPELLANT HAS THEREFORE, FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND ALSO CONCEALED HIS IN COME. THE APPELLANT'S CASE IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C ) AND THE AO WAS THEREFORE, JUSTIFIED IN LEVYING THE SAME. THE PENAL TY OF ` 69,960/- IS CONFIRMED. 6. WE DO NOT FIND ANY INFIRMITY IN THE IMPUGNED ORDER CONFIRM ING THE LEVY OF PENALTY. THE APPEAL OF ASSESSEE IS DISMISSED AN D THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) IS UPHELD. 7. THE LD. AR OF THE ASSESSEE HAS TRIED TO DRAW SUPPORT FROM THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. SKY CONSTRUCTION PVT. LTD. VS. INCOME TAX OFFICER (SUPRA). AFTER EXAMINING THE SAME WE FIND THAT THE FACTS OF THE PRESENT CASE ARE ENTIRELY AT VARIANCE, THEREFORE, THE SAID CASE WOULD NOT SUPPORT THE CAUSE OF THE ASSESSEE. IN THE SAID CASE THE CREDITORS HAD CARRIED O UT SOME WORK FOR ASSESSEE. THE ASSESSEE HAD FURNISHED THE DETAILS OF WORK AND THE PAYMENTS MADE. THE ASSESSING OFFICER REJECTED THE CLAIM O F ASSESSEE AS THE PARTIES COULD NOT RESPOND TO THE VERIFICATION EXER CISE CARRIED OUT BY THE ASSESSING OFFICER DUE TO CHANGE IN ADDRESS. ONE OF THE CREDITORS APPEARED BEFORE ASSESSING OFFICER AND CONFIRMED THE WORK C ARRIED OUT FOR THE ASSESSEE. THERE WAS DISCREPANCY IN THE QUANTUM OF WORK ADMITTED AND THE CORRESPONDING PAYMENT. ASSESSING OFFICER MADE ADDITION U/S. 68 AND ALSO LEVIED PENALTY. THE TRIBUNAL DELETE D THE PENALTY ON THE GROUND THAT ALTHOUGH THERE WAS FAILURE ON THE PART OF ASSESSEE TO EXPLAIN THE BALANCES SATISFACTORILY BUT THERE IS NO POSITIVE 7 ITA NO. 219/PN/2014, A.Y. 2000-01 MATERIAL TO SAY THAT THE CREDIT BALANCES WERE FALSE. IN T HE INSTANT CASE THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH THE IDENTITY OF THE CREDITORS ITSELF. THE CONFIRMATIONS FURNISHED BY THE ASSESSEE IN THE FO RM OF SO CALLED AFFIDAVITS ARE NOTHING BUT SELF CREATED DOCUMENTS AN D THUS CANNOT BE RELIED UPON. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 09 TH DAY OF SEPTEMBER, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 09 TH SEPTEMBER, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-I, NASHIK 4. ' / THE CIT-II, NASHIK 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE