Shri Devendra G. Kothari, Ahmedabad V. The Income tax Officer, Ward-8(1), Ahmedabad

ITA 2690/AHD/2004

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 7725 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-06-2009
• Assessment Year: 1994-1995
• Appeal Filed On: 08-09-2004
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Unexplained investment; Set aside
• Section: 271(1)(c); 143(3); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING : 16.06.09 DRAFTED ON: 22.07.09 ITA NO.2690/AHD/2004 ASSESSMENT YEAR : 1994-95 DEVENDRA G.KOTHARI 37, PRASHANT PARK VASNA AHMEDABAD VS. THE ITO WARD-8(1) AHMEDABAD PAN/GIR NO. : - (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI M.K. PATEL RESPONDENT BY: SHRI JAYANT JHAVERI, SR.DR O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS APPEAL IS BY THE ASSESSEE AGAINST THE ORDER O F THE LD.CIT(APPEALS)-XVII, AHMEDABAD DATED 23/07/2 004 PASSED FOR ASSESSMENT YEAR 1994-95. 2. THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(APPEALS) HAS ERRED IN CONFIRMING PENALTY OF RS.5,04,232/- IMPOSED UNDER SECTION 271(1)(C) OF TH E INCOME TAX ACT, 1961 BY THE ASSESSING OFFICER. ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 2 - 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTION 143(3) OF THE INCO ME TAX ACT, 1961 WHEREIN VARIOUS ADDITIONS LIKE UNEXPL AINED CASH CREDITS, RENOVATION OF HOUSE PROPERTY, INVESTM ENT IN SHARES, UNEXPLAINED HOUSEHOLD EXPENDITURE, ETC. WER E MADE AND PENALTY PROCEEDINGS INITIATED DURING THE COURSE OF ASSESSMENT. THE APPELLANT PREFERRED AN APPEAL WHEREIN ADDITION ON ACCOUNT OF UNEXPLAINED CASH CREDITS AT RS.6,80,652/-, ON-MONEY PAID ON INVESTMENT IN HOUSE PROPERTY AT RS.50,000/-, UNEXPL AINED INVESTMENT IN RENOVATION OF PROPERTY AT RS.1,20,000 /-, INVESTMENT IN HOUSEHOLD VALUABLES AT RS.15,000/-, UNEXPLAINED INVESTMENT IN THE SHARES AT RS.1,18,100 /- AND UNEXPLAINED HOUSEHOLD EXPENSES AT RS.39,117/- WERE CONFIRMED BY THE FIRST APPELLANT AUTHORITY. AT TH E PENALTY STAGE, THE APPELLANT DESPITE REPEATED SHOW-CAUSE NOTICES, DID NOT FURNISH ANY REPLY NOR ANY EXPLANAT ION WAS FILED AND THE ASSESSING OFFICER, THEREFORE, IMPOSED A ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 3 - PENALTY OF RS.5,04,232/- UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 BEING 100% OF THE TAX SOUGHT T O BE EVADED. 4. IN APPEAL, THE LD. CIT(APPEALS) CONFIRMED THE LE VY OF PENALTY MADE BY THE ASSESSING OFFICER. 5. THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSE E, DURING THE COURSE OF HEARING, SUBMITTED THAT AS REG ARDS ADDITION OF CASH CREDIT OF RS.6,05,652/-, THE ITAT AHMEDABAD BENCH A IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 1994-95 IN ITA NO.1052/AHD/1999 OR DER DATED 19/05/2006, SET ASIDE THE ADDITION OF RS.4, 05,652/- TO THE FILE OF THE ASSESSING OFFICER FOR RE-ADJUDIC ATION AND CONFIRMED THE ADDITION OF RS.1,43,150/- AND DELETED THE ADDITION OF RS.56,850/-. THEREFORE, HE SUBMITTED THAT PENALTY SHOULD BE DELETED ON THE AMOUNT OF RS.4,05, 652/- WHICH WAS SET ASIDE TO THE FILE OF THE ASSESSING OF FICER BY THE TRIBUNAL AND ON THE AMOUNT OF RS.56,850/- DEL ETED BY THE TRIBUNAL. AS REGARDS, CONFIRMATION OF ADDI TION OF ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 4 - RS.1,43,150/-, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT IT IS A CASE OF REJECTION O F PLAUSIBLE EXPLANATION GIVEN BY THE ASSESSEE AND NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INC OME OR CONCEALMENT OF INCOME. THEREFORE, NO PENALTY SH OULD BE LEVIED ON THE SAME. FURTHER, THE LD. AUTHORIS ED REPRESENTATIVE OF THE ASSESSEE ALSO SUBMITTED THAT CASH CREDITS OF RS.75,000/- WAS ALSO SET ASIDE TO THE FI LE OF ASSESSING OFFICER FOR FRESH ADJUDICATION BY THE TRI BUNAL, SO NO PENALTY SHOULD BE LEVIED ON THIS AMOUNT ALSO. AS REGARDS CONFIRMATION OF ADDITION BY THE TRIBUNAL O N ACCOUNT OF PAYMENT OF 'ON-MONEY' OF RS.50,000/- F OR PURCHASE OF HOUSE, THE LD. AUTHORISED REPRESENTATIV E OF THE ASSESSEE SUBMITTED THAT NO SUCH PAYMENT WAS MAD E BY THE ASSESSEE. THE ADDITION WAS MADE MERELY ON THE BASIS OF THE STATEMENT UNDER SECTION 132(4) OF THE INCOME TAX ACT, 1961 AND NO MATERIAL OR EVIDENCE WA S FOUND IN RESPECT OF THE ALLEGED PAYMENT. FURTHER, THE ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 5 - HOUSE IN NOT IN THE NAME OF THE ASSESSEE AND SHRI KAMAL RATHOD IS NOT CONSIDERED AS BENAMI OF THE ASSESSEE. THE CHEQUE AMOUNT HAS BEEN PAID FROM THE BANK ACCOUNT OF SHRI KAMAL K.RATHOD AND THE BANK ACCOUNT WAS HEL D TO BE BELONGING TO THE ASSESSEE ONLY IN VIEW OF THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.4257/AHD/2003 FOR ASSESSMENT YEAR 1996-97, DATE D 24/11/2006. FURTHER, AS REGARDS ADDITION OF RS. 1,20,000/- ON ACCOUNT OF RENOVATION OF HOUSE, THE LD. AUTHORIS ED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ADDITION WAS CONFIRMED BY THE TRIBUNAL AS THE GROU ND OF APPEAL WAS NOT PRESSED BY THE ASSESSEE AT THE TIME OF HEARING. THE LD. AUTHORISED REPRESENTATIVE OF TH E ASSESSEE SUBMITTED THAT ADDITION WAS NOT PRESSED ON AGREED BASIS IN ORDER TO AVOID PROTRACTED LITIGATIO N AND TO BUY PEACE. RELIANCE WAS PLACED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (2001) 251 ITR 09 (SC) AND DECISION OF ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 6 - HON'BLE GUJARAT HIGH COURT IN THE CASE OF JUMABHAI PREMCHAND (HUF) VS. CIT (2000) 243 ITR 812 (GUJ.). FURTHER, AS REGARDS CONFIRMATION OF THE ADDITION O F RS.15,000/- BY THE TRIBUNAL FOR INVESTMENT IN HOUS EHOLD VALUABLES, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ADDITION WAS CONFIRMED AS THE GROUND OF APPEAL WAS NOT PRESSED ON AGREED BASI S IN ORDER TO AVOID PROTRACTED LITIGATION AND TO BUY PEA CE. FURTHER, AS REGARDS INVESTMENT IN SHARES OF RS.1,18 ,100/-, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THIS ISSUE WAS SET ASIDE TO THE FIL E OF ASSESSING OFFICER FOR FRESH ADJUDICATION AND, HENCE , NO PENALTY SHOULD BE LEVIED ON THE SAME. FURTHER, WIT H REGARD TO ADDITION OF RS.39,117/- ON ACCOUNT OF UNEXPLAINED HOUSEHOLD EXPENSES, THE LD. AUTHORISED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE ADDITION WAS CONFIRMED SINCE THE GROUND OF APPEAL WAS NOT PRESSED BY THE ASSESSEE BEFORE THE TRIBUNAL IN ORDER ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 7 - TO AVOID PROTRACTED LITIGATION AND TO BUY PEACE AND , THEREFORE, NO PENALTY SHOULD BE LEVIED ON THIS ADDI TION. 6. THE LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED TH E ORDER OF THE LD. CIT(APPEALS). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIA LS AVAILABLE ON RECORD. IN THE INSTANT CASE IT IS OBS ERVED THAT PENALTY UNDER SECTION 271(1)(C) WAS LEVIED IN RESPE CT OF CERTAIN ADDITIONS WHICH WERE MADE BY THE ASSESSING OFFICER IN HIS ORDER OF THE ASSESSMENT AND WHICH WA S CONFIRMED BY THE LD. CIT(APPEALS) . IT WAS POINTED OUT THAT THE APPEAL AGAINST THE ORDER OF THE LD. CIT(AP PEALS) WAS FILED BEFORE THE TRIBUNAL WHICH WAS DISPOSED OF F THE TRIBUNAL VIDE ITS ORDER DATED 19.5.2006 IN ITA NO: 1052/AHD/1999 WHEREAS THE PENALTY WAS LEVIED BY THE ASSESSING OFFICER ON 30.9.1999 AND THUS THE ASSESSI NG OFFICER DID NOT HAVE THE BENEFIT OF THE ORDER OF TH E TRIBUNAL . IT WAS POINTED OUT THAT CERTAIN PENALTIE S WERE ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 8 - ALSO LEVIED IN RESPECT OF THE ISSUES WHICH WERE DEC IDED BY THE TRIBUNAL EITHER IN THE FAVOUR OF THE ASSESSE E OR WERE SET-ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. IN VIEW OF THE ABOVE IN OUR CONSIDERE D OPINION IT SHALL BE IN THE INTEREST OF THE JUSTICE TO SET-ASIDE THIS PENALTY ORDER AND RESTORE THE MATTER BACK TO T HE FILE OF THE ASSESSING OFFICER FOR ADJUDICATION AFRESH AF TER CONSIDERING THE TRIBUNALS ORDER IN THE QUANTUM APP EAL IN ACCORDANCE WITH THE LAW. NEEDLESS TO MENTION THAT PROPER OPPORTUNITY OF HEARING SHALL BE ALLOWED TO T HE ASSESSEE BEFORE PASSING THE ORDER AFRESH. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES . 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 24/07/2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 24/07/2009 T.C. NAIR ITA NO.2690/AHD/2004 M/S.DEVENDRA G.KOTHARI VS. ITO ASST.YEAR - 1994-95 - 9 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. TH E LD. CIT(APPEALS)-XVII, AHMEDABAD 5. THE DR, AHMEDABAD BENCH 6. THE GUARD F ILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD