M/s. Blessing Construction, Surat V. The Income tax Officer,Ward-3(2), Surat

ITA 2460/AHD/2011

• Counselvise Citation: 246020514 RSA 2011
• Duration Of Justice: 3 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-05-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 29-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIMESH YADAV SR DR
• Assessee Lawyers: PRITESH L SHAH
• Keywords: Unexplained cash credit

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ ././ ./ ITA NO. 2460/AHD/2011 / ASSESSMENT YEAR: 2005-06 M/S. BLESSING CONSTRUCTION, C/O. SURESH MEHTA, 51-B, ADARSH SOCIETY, NR. WOKHART HOSPITAL, ATHWALINES, SURAT PAN : AAGFB 1228 B V/S. ITO WARD-3(2), SURAT / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI PRITESH L. SHAH, AR REVENUE BY : SHRI NIMESH YADAV, SR. DR. !' # $%&/ // / DATE OF HEARING : 29/05/2015 '( # $%& / // / DATE OF PRONOUNCEMENT: 05/06/2015 )* )* )* )*/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THIS IS AN APPEAL FILED BY THE ASSESSEE AND IS DIRE CTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME-TAX(APPEALS )-II, SURAT DATED 05.08.2011, PERTAINING TO ASSESSMENT YEAR 2005-06. 2. THE ONLY GROUND RAISED BY THE ASSESSEE IN THE AP PEAL IS AGAINST THE CONFIRMATION OF PENALTY OF RS.3,65,925/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX ACT. 3. THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER MADE THE ADDITIO N OF RS.13,00,000/- FOR UNEXPLAINED CASH CREDIT WHICH WAS REDUCED TO RS.10, 00,000/- BY THE CIT(A) AND THE ITAT VIDE ORDER DATED 29.12.2011 IN ITA NO. 1487/AHD/2009 UPHELD THE ORDER OF THE CIT(A) THEREBY SUSTAINED TH E ADDITION OF ITA NO. 2460/AHD/2011 BLESSING CONSTRUCTION VS. ITO FOR AY 2005-06 2 RS.10,00,000/- FOR UNEXPLAINED CASH CREDIT. THE AS SESSING OFFICER LEVIED PENALTY U/S 271(1)(C) AMOUNTING TO RS.3,65,925/-, T REATING THE SUM OF RS.10,00,000/- AS CONCEALED INCOME OF THE ASSESSEE. ON APPEAL, THE CIT(A) SUSTAINED THE SAME; HENCE, THIS APPEAL BY THE ASSES SEE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. IT IS A SETTLED LAW THAT ASSESSMENT PROC EEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND INDEPENDENT. THE ITAT HAS SUSTAINED THE ADDITION OF RS.10,00,000/- ON THE GROUND THAT THE A SSESSEE COULD NOT PROVE THE CREDITWORTHINESS OF THE CREDITORS. THE ITAT AL SO NOTICED THAT THERE WAS A CASH DEPOSIT IN THE ACCOUNT OF ALL THE CREDITORS IM MEDIATELY BEFORE THE ISSUE OF CHEQUE TO THE ASSESSEE. THEREFORE, CONSIDERING T HE PREPONDERANCE OF THE PROBABILITY AND ALSO CONSIDERING THE DECISIONS OF H ONBLE APEX COURT IN THE CASES OF DURGA PRASAD MORE VS. CIT, (1971) 82 ITR 540 (SC) AND SUMATI DAYAL VS. CIT, (1995) 214 ITR 801(SC), SUSTAINED T HE ADDITION. HOWEVER, WE FIND THAT THE ASSESSEE HAD PRODUCED THE CONFIRMATIO N OF ALL THE CREDITORS. ALL THE CREDITORS ARE ASSESSED TO INCOME-TAX AND THEY W ERE PRODUCED BEFORE THE ASSESSING OFFICER. THEY ALSO ACCEPTED BEFORE THE AS SESSING OFFICER HAVING ADVANCED THE MONEY TO THE ASSESSEE. THE FACTS IN TH E CASE OF ALL THE CREDITORS ARE MORE OR LESS SAME; THEREFORE, WE DISCUSS HEREIN BELOW THE EVIDENCES FURNISHED BY THE ASSESSEE IN THE CASE OF ONE CREDIT OR VIZ. TARABEN A. MEHTA FROM WHOM THE ASSESSEE BORROWED RS.2,00,000/-. AT PAGE NO.13, TARABEN HAS GIVEN THE SOURCE OF THE DEPOSIT OF RS.2,00,000/ - IN HER BANK ACCOUNT. THE SOURCES INCLUDED OPENING BALANCE AND ALSO THE R EFUND OF LOAN AND ADVANCE WHICH WAS GIVEN IN THE PRECEDING YEAR. AT P AGE NO.14, THERE IS AN ACKNOWLEDGEMENT OF THE FILING OF RETURN FOR ASSESSM ENT YEAR 2005-06 IN WHICH SHE DISCLOSED THE INCOME OF RS.81,120/-. AT PAGE NO.15, THERE IS COMPUTATION OF INCOME IN WHICH THE CREDITOR DISCLOS ED THE INCOME FROM BUSINESS AS WELL AS INCOME FROM OTHER SOURCES (INTE REST INCOME). AT PAGE ITA NO. 2460/AHD/2011 BLESSING CONSTRUCTION VS. ITO FOR AY 2005-06 3 NO.16, THERE IS BALANCE-SHEET OF TARABEN IN WHICH L OAN GIVEN TO ASSESSEE I.E. BLESSING CONSTRUCTION RS.2,00,000/-HAS BEEN DISCL OSED. AT PAGE NOS. 17 & 18, THERE IS CONFIRMATION FROM TARABEN. AT PAGE NO .19, THERE IS COPY OF HER BANK ACCOUNT AND AT PAGE NO.20, THERE IS HER COPY O F ACCOUNT FROM ASSESSEES BOOKS FOR FINANCIAL YEAR 01.04.2006 TO 3 1.03.2007 IN WHICH THE LOAN IS REFUNDED BY CHEQUE. SIMILAR EVIDENCES WERE PRODUCED BY THE ASSESSEE IN THE CASE OF OTHER CREDITORS. AFTER CONS IDERING ALL THESE EVIDENCES, WE ARE OF THE OPINION THAT MERELY BECAUSE THE ASSES SING OFFICER OR THE ITAT DID NOT CONSIDER THESE EVIDENCES TO BE SUFFICIENT F OR THE PURPOSE OF EXPLAINING THE CASH CREDIT U/S 68, IT WILL NOT AUTO MATICALLY LEAD TO LEVY OF PENALTY U/S 271(1)(C). THE CONSIDERATION IN THE AS SESSMENT PROCEEDINGS AND THE PENALTY PROCEEDINGS ARE DIFFERENT. THE ADDITIO N CAN BE SUSTAINED ON PREPONDERANCE OF PROBABILITIES BUT WHERE THE ASSESS EE HAS GIVEN SUFFICIENT EVIDENCES WITH REGARD TO CREDIT IN HIS BOOKS OF ACC OUNTS AND SUCH EVIDENCES OR EXPLANATIONS HAVE NOT BEEN FOUND TO BE FALSE, ME RELY BECAUSE THE SAME IS NOT ACCEPTED IN ASSESSMENT PROCEEDINGS, THE LEVY OF PENALTY MAY NOT BE JUSTIFIED. AFTER CONSIDERING THE FACTS OF THE CASE AS WELL AS THE EXPLANATION OF THE ASSESSEE AND THE EVIDENCES PRODUCED BY THE ASSE SSEE, WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE FOR LEVY OF PENAL TY U/S 271(1)(C). ACCORDINGLY, THE PENALTY LEVIED U/S 271(1)(C) IS CANCELLED. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 5 TH JUNE, 2015 AT AHMEDABAD. SD/- SD/- (KUL BHARAT) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 05/06/2015 BIJU T., PS ITA NO. 2460/AHD/2011 BLESSING CONSTRUCTION VS. ITO FOR AY 2005-06 4 )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$ )* # $+ ,)+$/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. $ !- / CONCERNED CIT 4. !- ( ) / THE CIT(A) 5. +01 $ , , / DR, ITAT, AHMEDABAD 6. 13 4' / GUARD FILE . )*! )*! )*! )*! / BY ORDER, TRUE COPY 5 55 5/ // / 6 6 6 6 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD