Birender Singh, Jalandhar V. The Income Tax Officer, Jalandhar

ITA 255/ASR/2016

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0679 (ITAT-AMRITSAR)
• Duration Of Justice: 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 03-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A N MISHRA
• Keywords: Unexplained cash credit; Income from undisclosed sources
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. (CAMP AT JALANDHAR) BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.255(ASR)/2016 ASSESSMENT YEAR:2005-06 PAN: ABNPS2338F SH.BIRENDER SINGH VS. INCOME TAX OFFICER, C/O M/S. B.S. ENTERPRISES, WARD IV(2), JALANDHAR. ADAMPUR, JALANDHAR. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SH. A.N.MISHRA, DR DATE OF HEARING: 21/06/2016 DATE OF PRONOUNCEMENT: 22/06/2016 ORDER PER A.D. JAIN, JM; THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT YE AR 2005-06, AGAINST THE ORDER DATED 02.03.2016, PASSED BY THE LD. CIT( A), JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THAT THE ORDER OF THE CIT(A) IS AGAINST THE LAW AND FACTS OF THE CASE. 2. CIT (A) IS NOT JUSTIFIED WHILE REJECTING APPELLA NT VIEW THAT PENALTY CANNOT BE IMPOSED FOR ADHOC/ESTIMATED ADDITION. AO NOWHERE IN ORDER OR ORDER SHEET MENTIONED DETAIL OF PURCHASE B ILLS/LABOUR CHARGES VOUCHERS OR AMOUNT NOT FOUND IN BOOKS & AN D MADE ADHOC/ESTIMATED ADDITION OF RS.1,50,000/- ON ACCOUN T OF NON PRODUCTION OF PURCHASE BILLS/LABOUR EXPENSES. 3. CIT (A) IS NOT JUSTIFIED WHILE REJECTING APPELLA NT VIEW THAT CLEAR CUT FINDING OF NON PRODUCTION OF SALARY VOUCHERS IS NOT MENTIONED ANYWHERE. AO MADE ADDITION OF RS.1,00,000/- FOR NON PRODUCTION OF SALARY VOUCHERS OUT OF TOTAL SALARY OF RS.9,80,4 00/- AND NOWHERE 2 ITA NO. 255(ASR)/2016 MENTIONED HOW HE CALCULATED ABOVE MENTIONED AMOUNT OF RS.1,00,000/-. ADDITION CAN BE MADE FOR SUCH ADDITI ON BUT PENALTY CANNOT BE IMPOSED. 4. CIT (A) IS NOT JUSTIFIED WHILE REJECTING THE PLE A THAT CONFIRMATION OF LOAN TAKEN HAS BEEN FILED BY APPELLANT & REJECTED B Y AO FOR NOT GIVING PROPER FACTS IN CONFIRMATION. ADDITION CAN B E MADE DUE TO SUCH NON ACCEPTANCE BUT PENALTY PROCEEDING CANNOT B E INITIATED FOR SUCH INSTANCES. 5. CIT (A) IS NOT JUSTIFIED WHILE REJECTING THE VIE W THAT AO MAKE ADDITION AFTER NON ACCEPTANCE OF REASON GIVEN BY AP PELLANT THAT ADDITION MADE IN CAPITAL IS RECEIVED ON DEATH OF HI S MOTHER AS A RESULT OF ORAL FAMILY SETTLEMENT. IT IS AGREED THAT AO MAKE ADDITION FOR NON ACCEPTANCE OF APPELLANT PLEA BUT PENALTY PR OCEEDING CANNOT BE INITIATED FOR SUCH NON ACCEPTANCE. 2. NONE HAS APPEARED ON BEHALF OF THE ASSESSEE DESP ITE ISSUANCE OF NOTICE THROUGH RPAD ON 30.05.2016, WHICH HAS NOT RETURNED UNSERVED. HOWEVER, FINDING THAT THE MATTER CAN BE PROCEEDED WITH IN T HE ABSENCE OF THE ASSESSEE, WE ARE DOING SO. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE, A C IVIL CONTRACTOR, FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION O N 21.10.2005, DECLARING AN INCOME OF RS.4,49,948/-. HOWEVER, THE ASSESSMENT WA S COMPLETED VIDE ORDER U/S 143(3) OF THE I.T. ACT DATED 28.12.2007 AT AN A SSESSED INCOME OF RS.8,98,219/-. WHILE COMPLETING THE ASSESSMENT, THE AO HAS MADE THE FOLLOWING ADDITIONS: I) ADDITION ON ACCOUNT OF DISALLOWANCE OUT OF PURCHASE EXPENSES DUE TO NON PRODUCTION OF PURCHASE BILLS/VOUCHERS RS.1,00,000/- II) ADDITION ON ACCOUNT OF DISALLOWANCE OUT OF LABOUR CHARGES DUE TO NON PRODUCTION OF PAYMENT BILLS/VOUCHERS RS.50,000/- III) ADDITION ON ACCOUNT OF DISALLOWANCE OUT OF 3 ITA NO. 255(ASR)/2016 SALARY EXPENSES DUE TO NON PRODUCTION OF SALARY PAYMENT BILLS/VOUCHERS. RS.1,00,000/- IV) ADDITION ON ACCOUNT OF DISALLOWANCE OF ENGINEER SALARY DUE TO NON PRODUCTION OF PAYMENT BILLS VOUCHERS RS.60,000/- V) ADDITION ON ACCOUNT OF DISALLOWANCE OF VEHICLE REPAIR EXPENSES DUE TO NON PRODUCTION OF PAYMENT BILLS VOUCHERS RS.8,271/- VI) ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDITS IN THE NAMES OF BROTHER, FATHER AND WIFE RS.80,0 00/- VII) ADDITION ON ACCOUNT OF UNEXPLAINED CREDITS IN CAPITAL ACCOUNT OF ASSESSEE RS.50,000/- TOTAL OF ALL ADDITIONS RS.4,48,271/- PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FI LING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF ALL THE ADDITIONS WERE ALSO INITIATED. 4. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT(A) CONFIRMED THE LEVY OF PENALTY. 5. THE ASSESSEES STAND, AS REFLECTED IN THE GROUND S OF APPEAL RAISED, IS THAT THE ADDITION MADE BY THE A.O. BEING AN ESTIMATED/AD -HOC ADDITION, NO CONCEALMENT PENALTY IS LEVIABLE ON SUCH ADDITION. 6. THE LD. DR, RELIED ON THE IMPUGNED ORDER. 7. IT IS SEEN THAT THE LD. CIT(A), WHILE CONFIRMING THE PENALTY, HAS HELD AS FOLLOWS: 5.2 I HAVE CONSIDERED THE OBSERVATIONS OF THE AO AS MAD E BY HIM IN THE PENALTY ORDER. I HAVE ALSO CONSIDERED THE WR ITTEN SUBMISSIONS FILED BY THE ASSESSEE VIDE LETTER DT. 02.03.2016 ON THE ISSUE UNDER REFERENCE. I HAVE FURTHER CONSIDERED VARIOUS JUDIC IAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE AS WELL AS BY AO AND OTHER MATERIAL BROUGHT BY THE ASSESSEE ON RECORD. O N CAREFUL 4 ITA NO. 255(ASR)/2016 CONSIDERATION OF THE RIVAL CONTENTIONS, IT HAS BEEN NOTICED THAT ALL THE ADDITIONS OTHER THAN ADDITIONS ON ACCOUNT OF UNEXPL AINED CASH CREDITS IN THE NAME OF FAMILY MEMBERS AND UNEXPLAIN ED CREDIT IN CAPITAL ACCOUNT OF THE ASSESSEE HAVE BEEN MADE FOR WANT OF BILLS AND VOUCHERS IN RESPECT OF THESE EXPENSES AND ASSES SEE FAILED TO PRODUCE ANY BILLS AND VOUCHERS IN RESPECT OF THESE EXPENSES AND ASSESSEE FAILED TO PRODUCE ANY BILLS OR VOUCHERS EV EN DURING APPELLATE PROCEEDINGS. UNDER, THESE CIRCUMSTANCES T HE EXPENSES CLAIMED BY THE ASSESSEE TO THE EXTENT OF ADDITIONS MADE CANNOT BE SAID TO BE GENUINE APART FROM THIS, THE ASSESSEE CO ULD NOT EXPLAIN THE CASH CREDITS IN THE NAME OF HIS OWN FAMILY MEMB ERS AS WELL AS CREDIT IN HIS CAPITAL ACCOUNT. IT MEANS, THE ASSESS EE HAS INTRODUCED HIS OWN UNACCOUNTED INCOME BY WAY OF CASH CREDITS I N THE NAME OF FAMILY MEMBERS AND BY WAY OF INTRODUCTION IN HIS CA PITAL ACCOUNT. IN VIEW OF THESE FACTS, I AM ALSO OF THE CONSIDERED OP INION THAT THE ASSESSEE HAS CERTAINLY FILED INACCURATE PARTICULARS OF HIS INCOME TO THE EXTENT OF RS.2,40,271/-. MOREOVER, NON FILING O F FURTHER APPEAL ITSELF PROVE THAN THE ASSESSEE HAS INFLATED THE EXP ENSES DELIBERATELY AND HAS ALSO INTRODUCED HIS OWN UNACCOUNTED INCOME BY WAY OF CASH CREDITS IN THE NAME OF FAMILY MEMBERS AND BY W AY OF INTRODUCTION IN HIS CAPITAL ACCOUNT. THE JUDICIAL P RONOUNCEMENT RELIED UPON BY THE ASSESSEE ARE DISTINGUISHABLE ON FACTS A ND DO NOT SUPPORT THE CASE OF THE ASSESSEE. UNDER SUCH CIRCUM STANCES, THE ACTION OF THE AO IN LEVYING PENALTY U/S 271(1)(C) O F THE ACT FOR FILING INACCURATE PARTICULARS OF INCOME TO THE EXTENT OF R S.4,40,271/- CANNOT BE SAID TO BE UNJUSTIFIED. 5.3. IN VIEW OF THE ABOVE STATED FACTS AND IN THE C IRCUMSTANCES OF THE CASE, I AM OF THE OPINION THAT THE AO IS FULLY JUSTIFIED IN LEVYING PENALTY OF RS.1,63,839/- IN THIS CASE U/S 271(1)(C) OF THE ACT FOR FILING INACCURATE PARTICULARS OF INCOME TO THE EXTE NT OF RS.4,40,271/-. THE PENALTY OF RS.1,63,839/- LEVIED BY THE AO IN TH IS CASE U/S 271(1)(C) OF THE ACT FOR FILING INACCURATE PARTICUL ARS OF INCOME IS, THEREFORE, UPHELD. 8. THAT THE ADDITION MADE BY THE AO WAS AN ESTIMATE D/AD-HOC ADDITION IS PATENT ON RECORD. IN SUCH A SITUATION, THE CONSISTE NT LEGAL VIEW, AS REFLECTED IN THE FOLLOWING DECISIONS, AMONGST OTHERS, IS THAT NO CONCEALMENT PENALTY IS LEVIABLE: I) CIT VS. CAFEO SYNDICATE SHIPPING CO., 294 ITR 134 (MAD.) II) CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD, 322 ITR 158 (SC) 5 ITA NO. 255(ASR)/2016 III) CIT VS. SAHABD COOP SUGAR MILLS LTD., 322 ITR 373 (P&H) IV) AGGARWAL & GENERAL MILLS LTD. VS. CIT, 50 ITR 317 (P&H) V) CIT VS. AJAIB SINGH & CO., 253 ITR 630 (P&H) VI) CIT VS. BACARDI MARTINI INDIA LTD., 288 ITR 585 (DEL.) VII) CIT VS. HARSHVARDHAN CHEMICAL & MINERAL LTD., 259 ITR 585 (DEL.) VIII) CIT VS. M.M. RICE MILLS, 253 ITR 17 (P&H) IX) CIT VS. ACIT VS. ALLIED CONSTRUCTION, 106 TTJ (DE L) 616 X) ITO VS. RAVI KHURANA, 114 TTJ (DEL) 561 XI) KAMAL CHAND SURAN VS. ITO, 118TTJ (DEL) 561 XII) CIT VS. MEHTA ENGG. LTD., 300 ITR 308 (P&H) 9. IN VIEW OF THE ABOVE, THE FINDINGS RECORDED BY T HE LD. CIT(A) ARE NOT SUSTAINABLE IN LAW. ACCORDINGLY, THE ORDER OF THE L D. CIT(A), CONFIRMING THE PENALTY LEVIED ON THE ASSESSEE, IS REVERSED. THE GR IEVANCE OF THE ASSESSEE IS ACCEPTED. THE PENALTY LEVIED IS CANCELLED. 10. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22/06/ 20 16. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 22/06/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. BIRENDER SINGH, JALANDHAR. 2. THE ITO, WARD IV(2), JALANDHAR. 3. THE CIT(A), JLR 4. THE CIT, JLR 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER