M/s. Krupanidhi Construction, Ahmedabad V. The Dy.CIT, Circle-5, Baroda

ITA 2332/AHD/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5854 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 14-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ANIL SHAH WITH KINJAL SHAH
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. ITA NO.2332/AHD/2014 (ASSESSMENT YEAR:2007-08) M/S. KRUPANIDHI CONSTRUCTION, 7, KALYAN NAGAR SOCIETY, NEAR VITHALNAGAR WADI, KARELIBAUG, BARODA 390018 APPELLANT VS. DY. COMM. OF INCOME TAX, CRICELE-5, BARODA RE SPONDENT PAN: AAGFK7000E /BY ASSESSEE : MR. ANIL SHAH WITH KINJAL SHAH, A.R. /BY REVENUE : MR. JAMES KURIAN, SR. D.R. /DATE OF HEARING : 23.05.2017 /DATE OF PRONOUNCEMENT : 24.05.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2007-08 ARISES FROM THE CIT(A)-V, BARODAS ORDER DATED 16.06.2014, PASSED I N CASE NO. CAB(A)- V/02/12-13, UPHOLDING ASSESSING OFFICERS ACTION IM POSING PENALTY OF RS.1,26,460/- , IN PROCEEDINGS U/S. 271(1)(C) OF TH E INCOME TAX ACT, 1961; IN SHORT THE ACT. ITA NO. 2332/AHD/2014 (M/S. KRUPANIDHI CONSTRUCTIO N VS. DC IT) A.Y. 2007-08 - 2 - 2. RELEVANT FACTS ARE IN A VERY NARROW COMPASS. TH IS ASSESSEE IS A FIRM ENGAGED IN CIVIL CONSTRUCTION BUSINESS. THE ASSESS ING OFFICER COMPLETED A REGULAR ASSESSMENT IN ITS CASE ON 23.12.2009. HE C AME ACROSS ASSESSEES BOOKS OF ACCOUNTS STATING UNSECURED LOAN OF RS. 3.4 5LACS OBTAINED FROM ONE SHRI RAJENDRA C SHAH. THE ASSESSEE HAD PRODUCED TH E SAID CREDITORS CONFIRMATION ALONGWITH BANKS STATEMENT AND COPY OF RETURN. THE ASSESSING OFFICER FOUND HIS SALARY IN THE RELEVANT PREVIOUS Y EAR TO BE OF RS.81,760/- AS AGAINST THE HUGE LOAN IN QUESTION COMPARED TO THE S AID SALARY FIGURE. HE FURTHER NOTICED SHRI RAJENDRA C SHAH TO HAVE DEPOSI TED CASH BY SIX ENTRIES FROM 30.05.2006 TO 26.06.2006 FOLLOWED BY A CHEQUE OF RS.2LACS GIVEN TO ASSESSEE. HE FURTHER DEPOSITED TWO CASH FIGURES OF RS.45,000/- EACH ON 14 & 15.07.2006 AND ISSUED A CHEQUE OF RS.1LAC ON SAID L ATTER DATE TO THE ASSESSEE. THE ASSESSING OFFICER OBSERVED IN THESE FACTS THAT ALL THIS EXPLANATION FAILED TO CLEAR CREDITWORTHINESS TEST U/S.68 OF THE ACT. HE THUS INVOKED THE QUANTUM ADDITION QUA THE ABOVE PRINCIPAL AMOUNT AS WELL AS INTEREST OF RS.30,695/- IN ASSESSMENT ORDER DATED 23.12.2009. THE ASSESSING O FFICER FURTHER INITIATED THE IMPUGNED PENALTY PROCEEDINGS U/S.271(1)(C) OF T HE ACT. THE ASSESSEE PREFERRED QUANTUM APPEAL. THE CIT(A) UPHELD THE AB OVESTATED QUANTUM ADDITION IN HIS ORDER DATED 08.06.2010. THE ASSESS EE FILED ITA NO.2526/AHD/2010 BEFORE THIS TRIBUNAL. A CO-ORDINA TE BENCH AGAIN UPHELD THE IMPUGNED ADDITION. QUANTUM PROCEEDINGS ACCORDI NGLY ATTAINED FINALITY. 3. WE NOW ADVERT TO THE IMPUGNED PENALTY PROCEEDING S. THE ASSESSING OFFICER PLACED HEAVY RELIANCE UPON THE ABOVE QUANTU M DEVELOPMENTS TO TREAT THE SAID SECTION 68 ADDITION OF RS.3,75,695/- AS A CASE OF CONCEALMENT OF PARTICULARS OF INCOME SO AS TO IMPOSE THE IMPUGNED PENALTY OF RS.1,26,460/- AS UPHELD IN THE LOWER APPELLATE PROCEEDINGS. ITA NO. 2332/AHD/2014 (M/S. KRUPANIDHI CONSTRUCTIO N VS. DC IT) A.Y. 2007-08 - 3 - 4. WE HAVE HEARD RIVAL SUBMISSIONS. CASE FILE PERU SED. THERE IS NO DISPUTE THAT RIGHT FROM ASSESSING OFFICER UP TO THI S TRIBUNAL, NONE OF THE QUANTUM PROCEEDINGS HAS RAISED ANY QUESTION ABOUT I DENTITY OF THE ABOVESTATED CREDITOR SHRI RAJENDRA C SHAH. IT IS E VIDENT THAT THE ABOVESTATED QUANTUM ADDITION HAS BEEN MADE U/S.68 OF THE ACT FO R THE SOLE REASON THAT THE ASSESSEES EXPLANATION SUPPORTED BY ALL DUE EVIDENC E LACKS CREDITWORTHINESS AS THE CREDITOR IN QUESTION HAD A VERY MEAGER SALAR Y AMOUNT AS COMPARED TO THE LOAN IN QUESTION IN THE RELEVANT PREVIOUS YEAR. IT IS THEREFORE CLEAR THAT THE ASSESSEES EXPLANATION CLEARED THE FIRST TEST OF ID ENTITY FOLLOWED BY THE SECOND CRITERIA OF GENUINENESS. WE REITERATE HONBLE APEX COURTS DECISION IN CIT VS. RELIANCE PETRO PRODUCTS 322 ITR 158 (SC) HOLDING TH AT QUANTUM AND PENALTY PROCEEDINGS ARE SEPARATE AND EACH AND EVERY ADDITIO N MADE IN COURSE OF FORMER DOES NOT ATTRACT LATTER PENAL PROCEEDINGS TO CONCLUDE THAT THE ASSESSEES ACT AND CONDUCT IN SHOWING THE UNSECURED LOANS IN QUESTION IN HIS BOOKS FOLLOWED BY RELEVANT SUPPORTIVE EVIDENCE COUL D NOT BE HELD AS A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF INCOME. WE THEREFORE DELETE THE IMPUGNED PENALTY OF RS.1,26,46 0/- IMPOSED BY THE ASSESSING OFFICER AND UPHELD IN THE COURSE OF LOWER APPELLATE PROCEEDINGS. 5. THIS ASSESSEES APPEAL IS ALLOWED. [PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF MAY, 2017.] SD/- SD/- ( PRAMOD KUMAR ) (S. S. GODA RA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 24/05/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ITA NO. 2332/AHD/2014 (M/S. KRUPANIDHI CONSTRUCTIO N VS. DC IT) A.Y. 2007-08 - 4 - ! / CONCERNED CIT 4 !- / CIT (A) ( )* + ,--. . /0 / DR, ITAT, AHMEDABAD 1 + 23 4 5 / GUARD FILE. BY ORDER / . // . /0