ACIT, Circle - 3, Asansol, Asansol V. Raj Kumar Maheshwari, Burdwan

ITA 22/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78339 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2014
• Appeal Filed By: Department
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 05-01-2012
• Court: TRIBUNAL
• Assessee Lawyers: S K TULSIYAN; R N RAM
• Keywords: Unexplained cash credit; Assessment record
• Section: 143(3)

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOL KATA () BEFORE , /AND , ! ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SHAMIM YAHYA, AM] ' / I.T.A NOS.21 & 22/KOL/2012 #$ %&/ ASSESSMENT YEAR: 2008-09 ASSISTANT COMMISSIONER OF INCOME-TAX V RAJ KUMAR M AHESHWARI CIRCLE-3, ASANSOL (PAN: ADZPM1193L) (() /APPELLANT ) (*+()/ RESPONDENT ) DATE OF HEARING: 19.06.2014 DATE OF PRONOUNCEMENT: 19.06.2014 FOR THE APPELLANT: SMT MADHUMALTI GHOSH, JCIT, SR. DR FOR THE RESPONDENT: S/SHRI S. K. TULSIYAN & R. N . RAM / ORDER PER SHRI MAHAVIR SINGH, JM : BOTH APPEALS BY REVENUE ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A), ASANSOL, IN APPEAL NO. 83/CIT(A)/ASL/R-3/ASL/10-11 AND 20/CIT(A )/ASL/R-3/ASL/11-12 DATED 20.10.2011. ASSESSMENT WAS FRAMED BY JCIT, RANGE-3, ASANSOL U/S . 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSME NT YEAR 2008-09 VIDE HIS ORDER DATED 10.09.2010. PENALTY IN DISPUTE WAS ALSO LEVIED BY JCIT, RANGE-3, ASANSOL U/S. 271E OF THE ACT VIDE HIS SEPARATE ORDER DATED 31.03.2011. 2. FIRST WE TAKE UP ITA NO. 21/K/2012. THE ONLY IS SUE IN THIS APPEAL OF REVENUE IS AGAINST THE ORDER OF CIT(A) DELETING THE ADDITION OF UNEXPL AINED CREDIT ENTRIES IN THE BANK ACCOUNT ON VARIOUS DATES. FOR THIS, REVENUE HAS RAISED FOLLOWI NG GROUND: THAT THE LD. CIT(A) HAS ERRED IN DELETING THE ADDI TION RS.15,66,000/- AS UNEXPLAINED CASH CREDIT DESPITE OF THE FACT THAT THE AO FOUND T HAT RS.15,66,000/- WAS DEPOSITED IN THE ASSESSEES BANK A/C ON VARIOUS DATES WHICH WERE REM AINED UNEXPLAINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE MATERIAL F ACTS & CIRCUMSTANTIAL EVIDENCE BROUGHT BY THE AO ON THE ASSESSMENT RECORDS. 3 . BRIEFLY STATED FACTS ARE THAT THE AO FOUND THAT THE RE ARE CREDIT ENTRIES IN THE BANK ACCOUNT I.E. UNION BANK OF INDIA, RANIGANJ AND PUN JAB NATIONAL BANK, KANPUR WHICH ARE AS UNDER: S. NO. BANK DATE DEPOSIT 1. UNION BANK OF INDIA, RANIGANJ 24.07.07 5,00,000 2. UNION BANK OF INDIA, RANIGANJ 24.07.07 3,00,000 2 ITA NO.21&22/K/2012 RAJ KUMAR MAHESHWARI AY 2008-09 3. UNION BANK OF INDIA, RANIGANJ 07.03.08 2,00,000 /- 4. UNION BANK OF INDIA, RANIGANJ 24.03.08 5,00,000 /- 5. PUNJAB NATIONAL BANK, KANPUR 08.09.07 20,000/- 6. PUNJAB NATIONAL BANK, KANPUR 15.09.07 6000/- 7. PUNJAB NATIONAL BANK, KANPUR 04.02.08 5000/- 8. PUNJAB NATIONAL BANK, KANPUR 26.02.08 35,000/- ACCORDING TO AO, AS THE ASSESSEE FAILED TO EXPLAIN THE ENTRIES HE MADE ADDITION. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO AFTER CONSIDERING THE SUBMISSIONS OF ASSESSEE DELETED THE ADDITION BY OBSERVING AS UNDER: THE APPELLANT HAS SUBMITTED THAT THE LOAN CREDITOR WAS REPAID THROUGH BANKING CHANNELS BY DEPOSIT OF CASH WITHDRAWN FROM THE PROPRIETARY B USINESS AND SUBSEQUENT ISSUE OF CHEQUES OR DRAFTS. THE DETAILS OF THESE PAYMENT AR E SEEN AND HAVE BEEN SUBMITTED TO THE AO BY THE APPELLANTS LETTER DATED 01.10.2010. THE CHEQUES OR DRAFT NUMBERS TOGETHER WITH THE AMOUNTS INVOLVED ARE SEEN TO HAVE BEEN MENTIONE D IN THAT LETTER. BEFORE ME, THE APPELLANT HAS SUBMITTED THAT BOTH HE AND THE LOAN C REDITOR HAD ACCOUNTS WITH UNION BANK OF INDIA, RANIGANJ BRANCH WHEREAS PUNJAB NATIONAL B ANK DID NOT HAVE ANY BRANCH AT RANIGANJ. THEREFORE, TO FACILITATE THE REPAYMENT OF THE 1OAN, THE APPELLANT HAD PAID THE MONEY, WITHDRAWN FROM HIS PROPRIETARY BUSINESS INTO HIS BANK ACCOUNT AND ISSUED CHEQUES OR DRAFTS. THE EXPLANATION OF THE APPELLANT HAS BEE N CONSIDERED AND IS SEEN TO BE ADEQUATE. FURTHERMORE, I FIND THAT THE LOAN EXISTED IN THE BOOKS OF M/S. KIRAN BASTRALAYA. IN THAT CASE, WITHDRAWAL FROM THE BOOKS OF SAID CON CERNED FOR REPAYMENT OF THE LOAN CANNOT BE REFLECTED IN THE APPELLANTS DRAWINGS. SI MILARLY, FOR THE SAME REASON, THE CAPITAL ACCOUNT OF THE APPELLANT IN HIS PERSONAL STATEMENT OF AFFAIRS WILL NOT BE AFFECTED ALSO. I, THEREFORE, CONSIDER THESE TWO GROUNDS WHICH HAVE BE EN ADVANCED BY THE A.O. TO BE IRRELEVANT TO THE ISSUE AT HAND. FURTHERMORE, AS DI SCUSSED ABOVE, THE A.O. S NOT SEEN TO HAVE NEGATED THE APPELLANTS EXPLANATION REGARDING THE SOURCE OF THE FUNDS BEFORE PROCEEDING TO DECIDE THAT THOSE WERE UNEXPLAINED CA SH CREDITS. UNDER THE CIRCUMSTANCES, I FIND THAT THE SOURCE OF THE CASH DEPOSITS HAVE BEEN ADEQUATELY EXPLAINED BY THE APPELLANT. ACCORDINGLY, THE ADDITION MADE IS DIRECTED TO BE DE LETED. THIS GROUND OF APPEAL IS ALLOWED. AGGRIEVED, NOW REVENUE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET, IT IS NOTICED FROM THE LEDGER ACCOUN T OF SUNITA DEVI MAHESWARI IN THE BOOKS OF KIRAN BASTRALAYA VIZ-A-VIZ THE CASH BOOK OF KIRAN B ASTRALAYA WHOSE PROPRIETOR IS ASSESSEE SHRI RAJ KUMAR MAHESWARI WHERE THE AMOUNTS DEPOSITED IN UNION BANK OF INDIA AND PUNJAB NATIONAL BANK WERE WITHDRAWN. THE COPY OF CASH BOOK IS ENCLOSED IN ASSESSEES PAPER BOOK AT PAGES 14 TO 29 AND THE RELEVANT ENTRIES OF DEPOSITS IN BOTH THE BANKS ARE DULY EXPLAINED FROM THE WITHDRAWALS MADE FROM THE CASH BOOK. THE ASSESSEE H AS TAKEN A LOAN OF RS. 8 LAC FROM SMT. SUNITA DEVI MAHESWARI AND HAS BROUGHT THIS CASH FRO M KIRAN BASTRALAYA AS IS EVIDENT FROM CASH BOOK DATED 21.07.2007 AND THE SAME WAS DEPOSITED ON 25 TH JULY, 2007 IN UNION BANK OF INDIA, RANIGANJ. THE ASSESSEE HAS ENCLOSED RELEVANT PAGES OF CASH BOOK FROM WHERE THE CASH IS WITHDRAWN WHICH IS ENCLOSED IN ASSESSEES PAPER BOO K AT PAGE 15. SIMILARLY, SHRI RAJ KUMAR MAHASWARI HAS RENTAL INCOME AT RANIGAJ WHICH WAS DE POSITED IN UNION BANK OF INDIA, RANIGANJ 3 ITA NO.21&22/K/2012 RAJ KUMAR MAHESHWARI AY 2008-09 A SUM OF RS. 2 LAC. OUT OF THE RENTAL RECEIPTS AND CASH FLOW STATEMENT QUA SAME WAS FILED BEFORE AO AND EVEN NOW BEFORE US, WHICH CLEARLY REVEALS TH AT THERE IS RENTAL INCOME OF RS.1.60 LAC AND CASH WITHDRAWN FROM UNION BANK OF INDIA RS.90,000/- WHICH BECAME PART OF THIS DEPOSIT OF RS. 2 LAC. FURTHER, THE ASSESSEE HAS DEPOSITED A SUM O F RS. 5 LAC BROUGHT IN CASH FROM KANPUR AND WITHDRAWN FROM THE CASH BOOK OF KIRAN BASTRALAYA AN D THE SAME WAS DEPOSITED IN THE UNION BANK OF INDIA, RANIGANJ. THE RELEVANT ENTRY OF RS. 5 LAC DATED 20.03.2008 WITHDRAWING THIS AMOUNT FROM KIRAN BASTRALAYA AND DEPOSITING THE SAM E WITH UNION BANK OF INDIA, RANIGANJ ON 24.03.2008. FURTHER SMALL ENTRIES OF RS.20,000/-, RS. 6,000/-, RS.500/- AND RS.35,000/- ARE ALSO EXPLAINED AS WITHDRAWN FROM THE SAID CASH WHICH IS EVIDENT FROM KIRAN BASTRALAYAS CASH BOOK. SINCE THESE ENTRIES ARE EXPLAINED, WE FIND NO REASO N TO DEVIATE FROM THE FINDINGS OF THE CIT(A) AS FACTUALLY THE ASSESSEE IS ABLE TO EXPLAIN THE DE POSIT ENTRIES IN THE BANK. WE CONFIRM THE ORDER OF CIT(A AND THIS ISSUE OF REVENUES APPEAL IS DISM ISSED. 5. NOW, WE ARE COMING TO ITA NO. 22/K/2012. ONLY IS SUE IN THIS APPEAL OF REVENUE IS AS REGARDS TO THE ORDER OF CIT(A) DELETING THE PENALTY LEVIED BY JCIT, RANGE-3, ASANSOL U/S 271E OF THE ACT. FOR THIS REVENUE HAS RAISED FOLLOWING G ROUND :- THAT THE LD. CIT(A) HAS ERRED IN DELETING THE PEN ALTY U/S. 271E OF RS.14,00,000/- DESPITE OF THE FACT THAT THE AO FOUN D THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269T OF THE I.T ACT, 1961. 6. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE ASSESSEE HAS REPAID THE LOAN OF RS .8 LAKHS TO SMT. SUNITA DEVI MAHESHWARI BY ACCOUNT PAYEE CHEQUE ON 24.07.2007. FURTHER, A SUM OF RS. 5 LAKHS WAS PAID BY ACCOUNT PAYEE CHEQUE BY ASSESSEE TO SMT. SUNITA DEVI MAHESHWARI O N 25-03-2008. BOTH THE CHEQUES WERE ISSUED BY UNION BANK OF INDIA, RANIGANJ, WHERE ASSE SSEE IS MAINTAING ITS BANK ACCOUNTS. FURTHER, A SUM OF RS. 1 LAKH WAS PAID BY ASSESSEE T O SMT. SUNITA DEVI MAHESHWARI BY ACCOUNT PAYEE CHEQUE FROM THE BANK ACCOUNT. THE JCIT ASANSO L RANGE ADMITTED THIS FACT, BUT LEVIED THE PENALTY FOR THE SIMPLE REASON THAT EVIDENCE OF CHEQ UES WAS NOT PRODUCED BEFORE HIM. THE ASSESSEE FILED COMPLETE DETAILS INCLUDING CHEQUE NO S. BEFORE THE JCIT. AGGRIEVED THE ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO DELETED THE PEN ALTY BY OBSERVING AS UNDER:- THESE GROUNDS OF APPEALS ARE ADJUDICATED TOGETHER AS COMMON ISSUES ARE INVOLVED. IN THESE GROUNDS THE APPELLANT IS DIS PUTING THE IMPOSITION OF PENALTY U/S. 271E IN ITS CASE, FOR ALLEGED VIOLA TION OF THE PROVISIONS OF SECTION 269F OF THE INCOME TAX ACT, 1961. THE AO IS SEEN TO HAVE EXTENDED ARGUMENTS SIMILAR TO THOSE MADE IN THE ASS ESSMENT ORDER FOR A.Y 2008-09 DATED 10.09.2010 IN THE CASE OF THE APP ELLANT. THE DETAILS OF THE PAYMENTS MADE LIQUIDATE LOAN LIABILITY ARE SEEN TO HAVE BEEN SUBMITTED TO THE AO BY THE APPELLANTS LETTER DATED 01.10.2010, RECEIPTED COPY OF WHICH HAS BEEN FILED BEFORE ME. T HE CHEQUES OR DRAFT NUMBERS TOGETHER WITH THE AMOUNTS INVOLVED ARE SEEN TO HAVE BEEN 4 ITA NO.21&22/K/2012 RAJ KUMAR MAHESHWARI AY 2008-09 MENTIONED IN THAT LETTER. THE AO WHILE IMPOSING PEN ALTY U/S. 271E HAS NOT DISCUSSED THE CONTENTS OF THIS LETTER. THE AO H AS MENTIONED IN HIS ORDER THAT THE APPELLANT HAD SUBMITTED THAT THE ENT IRE PAYMENT HAD BEEN MADE BY ACCOUNT PAYEE CHEQUES, BUT THAT SUCH SUBMIS SION WAS UNEVIDENCED. HOWEVER, THE CONTENTS OF THE AFOREME NTIONED LETTER WHICH HAD BEEN FILED WITH THE AOS OFFICE ON 01.10.2010 S HOWS THAT THE APPELLANT HAD SUBMITTED THE NECESSARY DETAILS OF T HE BANK TRANSACTIONS. THE APPELLANT, IN MY OPINION, HAS THEREFORE DISCHAR GED HIS ONUS. NO EVIDENCE HAS BEEN BROUGHT FORWARD BY THE AO TO ESTA BLISH THAT THE REPAYMENT WAS MADE THROUGH OTHERWISE THAN BY CHEQUE OR DRAFT. THERE IS, THEREFORE, MATERIAL TO HOLD THAT THE APPELLANT HAD REPAID THE LOAN THROUGH BANKING CHANNELS. UNDER THE CIRCUMSTANCES, IMPOSITION OF PENALTY U/S. 271E CANNOT BE HELD. NO VIOLATION OF S ECTION 269T OF THE INCOME TAX ACT IS OBSERVED HERE. THE PENALTY IMPOSE D IS THEREFORE DIRECTED TO BE DELETED. FROM THE ABOVE, IT IS CLEAR THAT THE REPAYMENTS OF LOAN WERE MADE BY ASSESSEE BY WAY OF ACCOUNT PAYEE CHEQUES AND ONCE THIS POSITION IS ADM ITTED BY THE OFFICER LEVYING THE PENALTY U/S. 271E OF THE ACT, THERE NO POSSIBILITY TO SUSTAIN TH IS PENALTY. THERE IS NO VIOLATION OF PROVISIONS OF SECTION 269T OF THE ACT ONCE THE REPAYMENT IS BY ACCOUNT PAYEE CHEQUE. HENCE, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY AND WE CONFIRM THE SAME. APPEAL OF REVENUE IS DISMISSED. 7. IN THE RESULT, BOTH APPEALS OF REVENUE ARE DISMI SSED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- SD/- , ! , (SHAMIM YAHYA ) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19TH JUNE, 2014 -. #/0 1 JD.(SR.P.S.) 2 *3 4 3%5- COPY OF THE ORDER FORWARDED TO: 1 . () / APPELLANT ACIT, CIRCLE-3, ASANSOL 2 *+() / RESPONDENT SHRI RAJ KUMAR MAHESHWARI, 7, P. N. M ALIA ROAD, RANIGANJ, DIST. BURDWAN, PIN-713347 3 . # ( )/ THE CIT(A), ASANSOL 4. 5. # / CIT ASANSOL 3:; *# / DR, KOLKATA BENCHES, KOLKATA +3 */ TRUE COPY, #