Premier Polysacks P Ltd., Pudukkottai V. DCIT, Trichy

ITA 2197/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96439 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 18-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 28-08-2014
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHAL
• Keywords: Unexplained cash credit; Income from undisclosed sources; Source of fund; Agreed addition
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . ! ' , # '$ % [ BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI G. PAVAN KUMAR, JUDICIAL MEMBER ] ./ I.T.A.NO.2197/MDS/2014 / ASSESSMENT YEAR : 2004-05 M/S PREMIER POLYSACKS P. LTD #12-D, SIPCOT INDUSTRIAL ESTATE TRICHY ROAD PUDUKKOTTAI 622 002 VS. THE DY. COMMISSIONER OF INCOME-TAX COMPANY CIRCLE-II TRICHY [PAN AAACP 5134 D] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI PHILIP GEORGE, ADVOCATE /RESPONDENT BY : DR. B. NISCHAL, JCIT / DATE OF HEARING : 18 - 1 1 - 2015 / DATE OF PRONOUNCEMENT : 27 - 1 1 - 2015 * / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TIRUCHIR APALLI, DATED 21.5.2014 FOR ASSESSMENT YEAR 2004-05. 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WI TH REGARD TO SUSTAINING PENALTY U/S 271(1)(C) OF THE ACT OF ` 2,75,000/- WHICH IS MORE THAN 100% OF LEVIABLE PENALTY. ITA NO. 2197/14 :- 2 -: 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THIS CASE PENALTY WAS LEVIED TOWARDS THE DISCREPANCIES FOUND DURING THE COURSE OF ASSESSMENT U/S 143(3) OF THE ACT AS FOLLOWS: (I) UNEXPLAINED CASH CREDIT TO THE EXTENT OF ` 5,63,300/- INTRODUCED IN THE NAMES OF 11 PERSONS. (II) SUPPRESSION OF SALES TURNOVER TO THE EXTENT OF ` 1,22,980/- ACCORDING TO THE LD. COUNSEL, THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THESE ADDITIONS DURING THE COURSE OF P ENALTY PROCEEDINGS DUE TO PASSAGE OF TIME AND IT IS ONLY AGREED ADDITI ONS AND THEREFORE, NO PENALTY COULD BE LEVIED. 4. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESENTAT IVE SUBMITTED THAT IT IS NOT AN AGREED ADDITION AND SIN CE THE ASSESSEE WAS NOT ABLE TO SUBSTANTIATE THE SOURCE OF FUNDS APPEAR ING IN THE NAMES OF VARIOUS CREDITORS AND THERE WAS SUPPRESSION OF SALE S, PENALTY SHOULD BE CONFIRMED IN ITS ENTIRETY. 5. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. WHEN ANY AMOUNT IS FOUND CREDITED IN THE B OOKS OF ACCOUNT OF THE ASSESSEE IN THE ASSESSMENT YEAR UNDER CONSIDER ATION, THE ASSESSEE IS BOUND TO EXPLAIN ITS CREDIT. THE ASSE SSEE IS NOT ABLE TO PROVE THE SOURCE OF CREDIT HENCE, IT IS TO BE CONSI DERED AS UNEXPLAINED CREDIT AND THE SAME IS OPEN FOR IMPOSITION OF PENAL TY U/S 271(1)(C) OF THE ACT. SIMILARLY, THE SUPPRESSION OF SALES WHICH WAS PROVED BY THE ITA NO. 2197/14 :- 3 -: DEPARTMENT THAT THE ASSESSEE HAS TRIED TO SUPPRES S THE UNACCOUNTED INCOME. WE FIND THAT THE LOWER AUTHORITIES ARE JUS TIFIED IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT. HOWEVER, IN OU R OPINION, IN THIS CASE, IT IS APPROPRIATE TO LEVY MINIMUM PENALTY OF ` 1,68,990/- INSTEAD OF ` 2,75,000/- LEVIED BY THE ASSESSING OFFICER. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH NOVEMBER, 2015, AT CHENNAI. SD/- SD/- ( . ! ' ) (G. PAVAN KUMAR) # / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER !' / CHENNAI #$ / DATED: 27 TH NOVEMBER, 2015 RD $%&& '(&)( / COPY TO: & 1 . / APPELLANT 4. & * / CIT 2. / RESPONDENT 5. (+,& - / DR 3. & *&./ / CIT(A) 6. ,0&1 / GF