M/s. Nagesh Enterprises, Belgaum V. Income Tax Officer (Ward ) 1(2), Belgaum

ITA 243/PAN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93540 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 06-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 26-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B BALA KRISHNA LD
• Assessee Lawyers: AMIT LAMJI
• Keywords: Unexplained cash credit; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 243/PNJ/2013 : (A.Y 2005 - 06) M/S. NAGESH ENTERPRISES, 589, PATIL GALLI, BELGAUM. PAN : AACFN7373D ( APPELLANT) VS. INCOME TAX OFFICER, WARD - 1(2), BELGAUM (RESPONDENT) ASSESSEE BY : AMIT LAMJI, ASSESSEE REVENUE BY : B. BALAKRISHNA, LD. DR DATE OF HEARING : 06/07/2015 DATE OF PRONOUNCEMENT : 06/07/2015 O R D E R PER GEORGE MATHAN : 1. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), BELGAUM IN ITA NO. 496/BGM/2010 - 11 DT. 10.7.2013 FOR THE A.Y 2005 - 06 AGAINST LEVY OF PENALTY U/S 271(1)(C). AT THE TIME OF HEARING, THE ASSESSEE MOVED AN ADJOURNMENT. AS THIS IS A VERY OLD APPEAL AND IT IS NOTICED THAT THE ASSESSEE HAS BEEN CONTINUOUSLY SEEKING ADJOURNMENTS, THE ADJOURNMENT REQUEST BY THE ASSESSEE STANDS REJECTED AND THE APPEAL OF THE ASSESSEE IS DISPOSED OFF ON MERIT. THE REVEN UE WAS REPRESENTED BY SHRI B. BALAKRISHNA, LD. DR AND SHRI AMIT LAMJI, ONE OF THE PARTNERS OF THE ASSESSEE FIRM REPRESENTED ON BEHALF OF THE ASSESSEE . 2 ITA NO. 243/PNJ/2013 (A.Y : 2005 - 06) 2. IT WAS SUBMITTED BY THE LD. DR THAT THE ASSESSEE IS A PARTNERSHIP FIRM DEALING IN T.V AND OTHER ELECTRIC AND ELECTRONIC GOODS. THE ASSESSMENT IN THE CASE OF THE ASSESSEE CAME TO BE COMPLETED ON 31.12.2007 WHEREIN VARIOUS ADDITIONS HAD BEEN MADE REPRESENTING THE PEAK CREDIT, UNEXPLAINED CASH CREDITS SHOW N AS SUNDRY CREDITORS AND UNEXPLAINED CREDITS IN THE CAPITAL ACCOUNT. AS A RESULT OF THE APPEAL FILED BEFORE THE LD. CIT(A), THE ADDITIONS CAME TO BE REDUCED AND THE PEAK CREDIT ADDITION TO THE EXTENT OF RS. 38,65,184/ - AND AN ADDITION OF RS. 2,50,000/ - W AS RETAINED. IT WAS THE SUBMISSION THAT IN THE COURSE OF THE ASSESSMENT , IN RESPECT OF THE UNEXPLAINED CREDITORS THE ASSESSEE HAD BEEN QUESTIONED AND THE ASSESSEE WAS UNABLE TO GIVE ANY REASONABLE EXPLANATION AND CONSEQUENTLY, THE ADDITION HAD BEEN MADE. IT WAS THE SUBMISSION THAT EVEN IN THE COURSE OF THE PENALTY PROCEEDINGS, THE ASSESSEE WAS UNABLE TO GIVE ANY EXPLANATION IN RESPECT OF THE ADDITIONS. IT WAS THE SUBMISSION THAT CERTAIN PERSONS IN WHOSE NAMES ADVANCES HAD BEEN RECORDED HAD ALSO DENIED HA VING PAID THE ADVANCES. IT WAS THE SUBMISSION THAT THIS WAS A CASE WHERE THE ASSESSEE HAD CLEARLY FURNISHED INACCURATE PARTICULARS OF INCOME AND CONSEQUENTLY THE AO HAD LEVIED PENALTY U/S 271(1)(C). 3. WE HAVE CONSIDERED THE SUBMISSIONS. A PERUSAL OF THE ORDER OF THE AO LEVYING PENALTY SHOWS THAT IT DOES NOT SPECIFY AS TO FOR WHAT REASON THE PENALTY IS LEVIED I.E. WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS. A FURTHER PERUSAL OF THE ORDER OF THE A O SHOWS THAT IN THE COURSE OF THE PENALTY PROCEEDINGS, WHEN THE ASSESSEE WAS QUESTIONED REGARDING LEVY OF PENALTY, THE ASSESSEE HAS CATEGORICALLY SUBMITTED THAT THE ASSESSEES FATHER, SHRI PARASHURAM LAMJI WAS MANAGING THE AFFAIRS OF THE FIRM AND SINCE HE EXPIRED, THE ASSESSEE WAS UNABLE TO EXPLAIN THE FACTS. WITH THIS IN MIND WHEN THE ASSESSMENT ORDER WAS VERIFIED, IT WAS NOTICED THAT EVEN IN THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE SAME THING HAS BEEN 3 ITA NO. 243/PNJ/2013 (A.Y : 2005 - 06) CATEGORICALLY MENTIONED THAT THE ASSESSEE WAS A PARTNERSHIP FIRM AND THE FATHER WHO WAS LOOKING AFTER THE AFFAIRS HAD EXPIRED AND CONSEQUENTLY, THE DETAILS IN RESPECT OF THE TRANSACTIONS COULD NOT BE GIVEN. NOW, A PERUSAL OF THE ORDER OF THE LD. CIT(A) SHOWS THAT THE LD. CIT(A) HAS TAKEN INTO CONSIDERA TION THE PARTICULAR FACT THAT INQUIRIES CONDUCTED BY THE AO IN TWO CASES I.E. IN THE CASE OF SRI R.S. KAMATE AND SRI RAJU J. KHURADE REVEALED THAT THE SAID PERSONS HAD DENIED TO HAVE GIVEN ANY ADVANCE FOR PURCHASE OF GOODS AND THE ELECTRONIC ARTICLES WERE STATED TO HAVE BEEN PURCHASED BY THEM BY PAYING READY CASH AT THE TIME OF PURCHASE OF THE GOODS. IT IS CLEARLY EVIDENT THAT THE SAID TWO PERSONS HAVE PURCHASED GOODS FROM THE ASSESSEE. THE ONLY QUESTION IS IN REGARD TO THE ADVANCES . W HETHER THE SAID TWO PERSONS COULD EXPLAIN THE SOURCE OF THE ADVANCES ITSELF HAS NOT BEEN VERIFIED BY THE AO BEFORE PUTTING THE BLAME ON THE ASSESSEE. THE OPPORTUNITY OF CROSS - EXAMINATION OF THESE TWO PERSONS HAS ALSO NOT BEEN GIVEN TO THE ASSESSEE. THE ASSESSEE, ADMITTEDLY , HAS BEEN HANDICAPPED BY THE DEATH OF HIS FATHER WHO WAS THE MANAGING PARTNER AND WHO WAS RUNNING THE SHOW. CONSIDERING ALL THESE FACTS, WE ARE OF THE VIEW THAT THIS IS NOT A CASE FOR LEVY OF PENALTY U/S 271(1)(C). CONSEQUENTLY, CONSIDERING THE FACTS OF THE PRESENT CASE, THE PENALTY AS LEVIED BY THE AO AND AS CONFIRMED BY THE LD. CIT(A) STANDS CANCELLED. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 06/07/2015. S D / - (N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 0 6 /07/ 201 5 *SSL* 4 ITA NO. 243/PNJ/2013 (A.Y : 2005 - 06) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 5 ITA NO. 243/PNJ/2013 (A.Y : 2005 - 06) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 06/07/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 06/07/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 06/07/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 0 7 /07/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 7 /07/2015 SR.PS 6. DATE OF PRONOUNCEMENT 06/07/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 0 7 /07/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER