Sri D Prabhakar, Visakhapatnam V. The JCIT, Central Circle-1, Visakhapatnam

ITA 27/VIZ/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2587 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 16-11-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 18-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S SUNDER SINGH

Judgement Text

ITA NOS 26 & 27 OF 2010 D PRABHAKAR, VISAKHAPATNAM PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NOS. 26& 27/VIZAG/2010 ASSESSMENT YEAR S : 2001 - 02 & 2002 - 03 D. PRABHAKAR, VISAKHAPATNAM VS. JCIT CENTRAL CIURCLE-1, VISAKHAPATNAM (APPELLANT) PAN NO:AAKPD 5893 N (RESPONDENT) APPELLANT BY: SHRI C. SUBRAHMANYAM, CA RESPONDENT BY: SHRI D.S. SUNDER SINGH, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THESE APPEALS FILED BY THE ASSESSEE ARE DIRECTED AG AINST THE ORDERS PASSED BY LD. CIT(A), VISAKHAPATNAM AND THEY RELATE TO THE ASSESSMENT YEARS 2001-02 AND 2002-03. SINCE THE ISSUE URGED IN THESE TWO AP PEALS IS IDENTICAL IN NATURE, THEY WERE HEARD TOGETHER AND HENCE WE FIND IT CONVE NIENT TO DISPOSE OF THESE APPEALS BY THIS COMMON ORDER. 2. THE PENALTY LEVIED UNDER SECTION 271(1)(C) O F THE ACT IN THESE TWO YEARS, HAVING BEEN CONFIRMED BY THE LEARNED CIT(A), THE AS SESSEE IS IN APPEAL BEFORE US. 3. THE FACTS NECESSARY FOR THE DISPOSAL OF THE ISSUE BEFORE ARE STATED IN BRIEF. THE ASSESSMENTS IN BOTH THE YEARS WERE COMPLETED BY MAKING CERTAIN ADDITIONS, WHICH INTER ALIA, INCLUDED ADDITIONS PERTAINING TO THE CASH CREDIT AS DETAILED BELOW: ASST. YEAR 2001-02 - RS.2,81,050/- ASST. YEAR 2002-03 - RS.2,25,000/- BEFORE THE ITAT, THE ASSESSEE GOT RELIEF OF RS.1.00 LAKH FOR THE ASST. YEAR 2002-03. FOR THE REMAINING AMOUNT OF RS.1.25 LAKHS AND THE A DDITION OF RS.2,81,050/- MADE IN THE ASSESSMENT YEAR 2001-02, THE ASSESSEE DID NO T PRESS THE RESPECTIVE GROUND BEFORE THE TRIBUNAL FOR WANT OF CERTAIN DOCUMENTS T O SUPPORT THE CASH CREDITS AND HENCE THE TRIBUNAL CONFIRMED THE SAID ADDITIONS. T HE ASSESSEE GOT RELIEF IN RESPECT ITA NOS 26 & 27 OF 2010 D PRABHAKAR, VISAKHAPATNAM PAGE 2 OF 3 OF OTHER ADDITIONS. THE ASSESSING OFFICER LEVIED F OLLOWING AMOUNTS AS PENALTY UNDER SECTION 271(1)(C) OF THE ACT FOR THE TWO YEAR S UNDER CONSIDERATION IN RESPECT OF THE CASH CREDITS CONFIRMED. ASSESSMENT YEAR 2001-02 - RS.98,631/- ASSESSMENT YEAR 2002-03 - RS.38,250/- THE APPEALS FILED BY THE ASSESSEE WERE DISMISSED BY THE LEARNED CIT(A). HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 4. IT WAS SUBMITTED BY THE LEARNED AUTHORISED REP RESENTATIVE THAT THE ASSESSEE HAD TAKEN LOAN FROM HER SISTER AND ALSO FILED THE C ONFIRMATION LETTERS OBTAINED FROM THE SAID CREDITOR BEFORE THE ASSESSING OFFICER AND FURTHER THESE LOANS WERE RECEIVED BY WAY OF ACCOUNT PAYEE CHEQUES. HOWEVER, THE ASSESSEE COULD NOT PRODUCE THE BANK ACCOUNT COPIES OF THE CONCERNED CR EDITOR AND HENCE HE DID NOT PRESS THE RELEVANT GROUND BEFORE THE TRIBUNAL WHICH LED TO THE CONFIRMATION OF THE IMPUGNED ADDITIONS. ACCORDINGLY IT WAS CONTENDED T HAT THE SAID ADDITIONS, BEING TECHNICAL IN NATURE, COULD NOT BE CONSTRUED AS CONC EALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE VERY FACT THAT TH E ASSESSEE DID NOT PRESS THE GROUND RELATING TO THESE ADDITIONS SUGGEST THAT THE ASSESSEE WAS NOT IN A POSITION TO PROVE THE IMPUGNED CASH CREDITS. ACCORDINGLY, H E PRAYED THAT THE PENALTY LEVIED IN THESE TWO CASES SHOULD BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFUL LY PERUSED THE RECORD. IT IS NOW A WELL SETTLED PROPOSITION THAT A FINDING IN THE AS SESSMENT PROCEEDING CONSTITUTES A GOOD EVIDENCE IN THE PENALTY PROCEEDING. HOWEVER T HE AUTHORITIES, DURING THE COURSE OF PENALTY PROCEEDING, HAVE TO CONSIDER THE MATTER AFRESH, SINCE THE QUESTION OF CONCEALMENT HAS TO BE CONSIDERED IN A D IFFERENT ANGLE. THERE IS NO DISPUTE WITH REGARD TO THE SETTLED POSITION OF LAW THAT THE EXPLANATION 1 TO SEC. 271 PLACES A REBUTTABLE PRESUMPTION TO THE EXTENT OF TH E AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF AN ASSESSEE. 6. WITH REGARD TO THE IMPUGNED CASH CREDIT ADDI TIONS, WE NOTICE THAT THE ASSESSEE, DURING THE COURSE OF PENALTY PROCEEDINGS, HAVE EXPLAINED THAT THE IMPUGNED CASH CREDITS WERE OBTAINED BY WAY OF ACCOU NT PAYEE CHEQUES FROM THE SISTER OF THE ASSESSEE AND THE CONFIRMATION LETTER S WERE ALSO FILED IN SUPPORT OF THE ITA NOS 26 & 27 OF 2010 D PRABHAKAR, VISAKHAPATNAM PAGE 3 OF 3 SAID CLAIM DURING THE ASSESSMENT PROCEEDINGS. IT W AS ALSO EXPLAINED THAT THESE AMOUNTS HAVE SINCE BEEN RETURNED BY WAY OF ACCOUNT PAYEE CHEQUES. THE SAID EXPLANATION WAS NOT FOUND TO BE FALSE AND ALL THE M ATERIALS THAT WERE AVAILABLE WITH THE ASSESSEE WERE FILED WITH THE ASSESSING OFFICER. AS POINTED OUT BY LEARNED AUTHORISED REPRESENTATIVE, THE TRIBUNAL HAS CONFIRM ED THE ADDITIONS, SINCE THE ASSESSEE DID NOT PRESS THE RELEVANT GROUNDS. IN TH ESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE HAS DISCHARGED THE BURDE N PLACED UPON HIM UNDER EXPLANATION 1 TO SEC. 271. ACCORDINGLY WE ARE OF T HE VIEW THAT THE PENALTY UNDER SECTION 271(1)(C) IS NOT LEVIABLE ON ACCOUNT OF THE IMPUGNED CASH CREDITS. IN VIEW OF THE FOREGOING, WE SET ASIDE THE ORDERS OF LEARNE D CIT(A) UNDER CONSIDERATION AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENA LTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IN THE TWO YEARS UNDER CONSIDE RATION. 7. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29 TH NOVEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 29-11-2010 COPY TO 1 SH RI D. PRABHAKAR, C/O SHRI C. SUBRAHMANYAM, CHARTERE D ACCOUNTANT 102 LAKSHMI APARTMENTS, FACOR LAYOUT WALTAIR UPLANDS, V ISAKHAPATNAM 530 003 2 THE JT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, VISAKHAPATNAM 3 4. THE CIT CENTRAL, HYDERABAD THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM