The DCIT, Circle-3., Surat V. Amit Krishan Khurana, Surat

ITA 2730/AHD/2011

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1248 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 16-12-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 04-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained cash credit; Tangible material
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE S/SHRI S. S. GODARA, JM, & MANISH BORAD, AM. ITA NO.2730/AHD/2011 ASST. YEAR:2004-05 .DY. CIT, CIRCLE-3, SURAT. VS SHRI AMIT KISHAN KHURANA, 202, TAKSHILA APT., NEAR UMA BHAVAN, BHATAR ROAD, SURAT. (APPELLANT) (RESPONDENT) PA NO.AFMPK5852M APPELLANT BY SHRI RAJDEEP SINGH, SR. DR RESPONDENT BY SHRI RASESH SHAH, AR DATE OF HEARING: 5.10.2015 DATE OF PRONOUNCEMENT: 9/10/2015 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER. THIS APPEAL OF THE REVENUE IS FILED AGAINST THE OR DER OF CIT(A)- II, SURAT, DATED 23 RD AUGUST, 2011 FOR AY 2004-05. PENALTY ORDER WAS FRAMED UNDER SECTION 271(1)(C) OF THE INCOME-TAX AC T, 1961 (IN SHORT THE ACT) BY ACIT, CIRCLE-3, SURAT ON 27.03.2009. RE VENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- (1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A)-II, SURAT HAS ERRED IN DELETING THE PENALTY U/S 271(1)(C) OF THE I.T. ACT OF RS.3,41,876/- WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE FAILED TO OFFER AN EXPLANATION TO SUBS TANTIATE HIS CLAIM THAT ALL FACTS RELATING TO HIS TOTAL INCOME H AVE BEEN DISCLOSED BY HIM AND HE HAS NOT CONCEALED THE PARTI CULARS OF ITA NO. 2730/AHD/2011 ASST. YEAR2004-05 2 HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF S UCH INCOME IN VIEW OF THE EXPLANATION-1 TO SECTION 271(1)(C) OF T HE I.T. ACT. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE ASSESS ING OFFICER. (3) IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THAT OF ASSESSING OFFICER MAY BE RESTORED TO THE ABOVE EXTENT. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT AS SESSMENT OF THE ASSESSEE WAS COMPLETED U/S 143(3) OF THE ACT ON 28. 12.2006 FOR AY 2004-05 ON A TOTAL INCOME OF RS.13,84,190/- WHEREIN THE AO MADE THE FOLLOWING ADDITIONS ON WHICH PENALTY FOR CONCEA LMENT WAS ALSO INITIATED: I. UNACCOUNTED SALE OF STOCK RS.24,000/- II. UNEXPLAINED CASH DEPOSITED IN BANK RS.64,000/- III. LOW HOUSEHOLD WITHDRAWALS RS.50,000/- IV. UNEXPLAINED CASH CREDITS IN FORM OF SALE OF SHARES RS.10,01,420/- TOTAL RS.11,39,420/- THE AO WAS SATISFIED THAT AS ASSESSEE HAS CLEARLY C OMMITTED DEFAULT UNDER SECTION 271(1)(C) OF THE ACT BY FURNISHING IN ACCURATE PARTICULARS OF INCOME, PASSED PENALTY ORDER UNDER SECTION 271(1 )(C) IN RESPECT OF ADDITION OF RS.11,39,420/- AS MENTIONED ABOVE AND I MPOSED MINIMUM PENALTY @ 100% OF THE TAX SOUGHT TO BE EVAD ED WHICH WORKED OUT AT RS.3,41,826/-. ITA NO. 2730/AHD/2011 ASST. YEAR2004-05 3 3. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEFORE CI T(A) WHO QUASHED THE ORDER OF AO BY DELETING THE PENALTY OF RS.3,41,826/-. 4. AGGRIEVED, THE REVENUE IS NOW IN APPEAL BEFORE T HE TRIBUNAL. 5. THE LD. DR RELIED ON THE ORDER OF AO. ON THE OTH ER HAND, THE LD. AR OF THE ASSESSEE APPRAISED THE BENCH THAT IN THE ASSESSEES OWN CASE FOR AY 2004-05 IN ITA NO.142/AHD/2008 VIDE ORD ER DATED 10.05.2013 IN REGARD TO THE APPEAL OF A.O. UNDER SE CTION 143(3), THE CO-ORDINATE BENCH HAS PARTLY ALLOWED THE ASSESSEES APPEAL AND, THEREFORE, SUBMITTED THAT IN THE LIGHT OF THE ORDER OF THE TRIBUNAL, PENALTY UNDER SECTION 271(1)(C) LEVIED BY THE AO SH OULD BE DELETED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS OF THE CASE AS WELL AS RECORDS AVAILABLE AND THE OR DER OF THE CO- ORDINATE BENCH IN ASSESSEES OWN CASE REFERRED ABOV E. THE FOUR ADDITIONS MADE BY THE AO IN THE ORDER U/S 143(3) WE RE AS FOLLOWS :- I. UNACCOUNTED SALE OF STOCK RS.24,000/- II. UNEXPLAINED CASH DEPOSITED IN BANK RS.64,000/- III. LOW HOUSEHOLD WITHDRAWALS RS.50,000/- IV. UNEXPLAINED CASH CREDITS IN FORM OF SALE OF SHARES RS.10,01,420/- TOTAL RS.11,39,420/- ITA NO. 2730/AHD/2011 ASST. YEAR2004-05 4 FROM PERUSAL OF ORDER OF THE TRIBUNAL DATED 10.5.20 13 IN ASSESSEES OWN CASE FOR AY 2004-05 FOLLOWING DECISIONS HAVE BE EN GIVEN IN REGARD TO THE ABOVE REFERRED FOUR ADDITIONS :- (I) IN REGARD TO UNACCOUNTED SALE OF STOCK - 11. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS N OT EXPLAINED OR SUBMITTED THE DETAILS OF THE SALE OF CLOSING STOCK. HE HAS JUST MADE A SUBMISSION WITHOUT SUBSTANTIATED THE SAME. IN VIE W OF THESE FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDE R OF THE AO. THUS, THIS GROUND OF ASSESSEE IS DISMISSED. (II) IN REGARD TO UNEXPLAINED CASH DEPOSITED IN BANK 15. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAS N OT SUBSTANTIATED THE SOURCE OF DEPOSITS EITHER BEFORE THE AO OR BEFORE THE CIT(A) AND ALSO NOT BEFORE US. IT IS ALS O A FACT THAT AN ADDITION OF RS.24,000/- HAS ALSO BEEN MADE BY THE A O AND THE SAME HAS BEEN SUSTAINED BY US IN GROUND NO.2 HEREIN ABOVE. THE PRESENT ADDITION OF RS.64,000/- ALSO INCLUDES, THE ADDITION OF RS.24,000/- WHICH ACCORDING TO US APPEARS TO BE DOU BLE ADDITION. WE THEREFORE DIRECT THE ADDITION TO BE SUSTAINED AT ONLY RS.40,000/- AS AGAINST RS.64,000/- MADE BY AO. THE ASSESSEES GROUND IS PARTLY ALLOWED. (III) IN REGARD TO HOUSEHOLD WITHDRAWAL OF RS.50,00 0/- 20. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. BEFORE US, IT IS SUBMITTED THAT THE ASSE SSEE IS A BACHELOR AND STAYING WITH HIS PARENTS WHO ARE INCOME-TAX ASS ESSEE. THE ASSESSEE DOES NOT HAVE ANY VEHICLE NOR ANY MOVABLE PROPERTY. HE IS ALSO NOT A MEMBER OF ANY CLUB. THESE FACTS COULD NOT BE COTROVERTED BY REVENUE. CONSIDERING THE AFORESAID F ACTS, WE ARE OF THE VIEW THAT THE ADDITION MADE BY THE AO ON AN EST IMATED BASIS, IS UNCALLED FOR. WE, THUS DIRECT THE DELETION OF AD DITION. THUS, THIS GROUND IS ALLOWED. ITA NO. 2730/AHD/2011 ASST. YEAR2004-05 5 (IV) IN REGARD TO UNEXPLAINED CASH CREDITS IN FORM OF SALE OF SHARES - 26. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. THE FACTUAL MATRIX OF THE CASE IS THAT THE ASSESSEE IS SAID TO HAVE PURCHASED THE SHARES THROU GH M/S BUBNA STOCK BROKING SERVICES LTD. IN CALCUTTA STOCK EXCHANGE AND SOLD THE SHARES THROUGH PRAMODKUMAR KOTHARI. IN RESPONSE TO THE SUMMONS U/S 131, CALCUTTA STOCK EXCHANGE HAS CO NFIRMED THAT NO PURCHASE OF SHARES IN WHICH THE ASSESSEE HA D DEALT WAS EXECUTED FROM THE ON LINE SYSTEM OF EXCHANGE. IT IS ALSO A FACT THAT A.O. HAD ISSUED SUMMONS U/S 131 TO M/S BUBNA STOCK BROKING SERVICES LTD. & PRAMODKUKAR KOTHARI BUT THE SAME WE RE NOT RESPONDED BY THE RESPECTIVE PARTIES. THE ASSESSEE A LSO COULD NOT CONTRADICT THE FINDINGS OF AO & CIT(A) BY BRINGING ANY TANGIBLE MATERIAL ON RECORD. THE CASE LAW RELIED BY ASSESSEE ARE DISTINGUISHABLE ON FACTS. THE ASSESSEE IN ITS PAPER BOOK HAS SUBMITTED THE COPY OF THE BANK ACCOUNT OF THE BROKE RS TO WHOM THE SHARES WERE SOLD AND HAS ALSO STATED TO HAVE RE CEIVED THE SALE PROCEEDS BY ACCOUNT PAYEE CHEQUES. HOWEVER, TH E PURCHASE OF SHARES FROM M/S BUBNA STOCK BROKING SERVICES LTD . HAS NOT BEEN PROVED BY THE ASSESSEE. THE ASSESSEE COULD NOT CONCLUSIVELY PROVE THAT THE SHARE WHICH IT HAD SOLD , HAS BEEN HELD BY HIM FOR A PERIOD EXCEEDING 1 YEAR AND THEREFORE, THE GAINS ON SALE OF SHARES IN THE NATURE OF LONG TERM CAPITAL G AIN. SINCE HOLDING THE SHARES FOR A PERIOD OF EXCEEDING 1 YEAR HAS NOT BEEN PROVED CONCLUSIVELY. WE ARE OF THE VIEW THAT THE AS SESSEE CANNOT CLAIM THE PROFIT EARNED ON SALE OF SHARES AS LONG T ERM CAPITAL GAIN. WE, THEREFORE, DIRECT THAT THE PROFIT BE CONS IDERED AS SHORT TERM CAPITAL GAIN AND TAX ACCORDINGLY. THUS, THE GR OUND OF ASSESSEE IS DISMISSED. 7. FROM GOING THROUGH THE FINDINGS OF THE CO-ORDINA TE BENCH WE FIND THAT OUT OF TOTAL ADDITION OF RS.11,63,450/-, CO-ORDINATE BENCH HAS DELETED THE ADDITIONS OF RS.11,23,450/- AND ONLY A SMALL AMOUNT OF RS.40,000/- HAS BEEN SUSTAINED. THE MAJOR ADDITION WHICH WAS MADE BY THE AO WAS OF RS.10,01,450/- ON ACCOUNT OF UNEXP LAINED CASH ITA NO. 2730/AHD/2011 ASST. YEAR2004-05 6 CREDIT IN THE FORM OF SALE OF SHARES WHICH WAS DULY SHOWN IN THE RETURN OF INCOME BY THE ASSESSEE AS LONG TERM CAPITAL GAIN SUBJECT TO TAX @ 10% UNDER SECTION 112 OF THE ACT, WHEREAS THE CO-OR DINATE BENCH HAS HELD IT TO BE A SHORT-TERM CAPITAL GAIN AND TO BE TAXED ACCORDINGLY, WHICH MEANS THAT NECESSARY DETAILS AND INFORMATION WERE PROVIDED IN THE INCOME-TAX RETURN EXCEPT THE PROPER HEAD OF INC OME WHICH WAS SHORT TERM CAPITAL GAIN BUT WAS SHOWN AS LONG TERM CAPITAL GAIN BY THE ASSESSEE. SUCH A MISTAKE CANNOT BE CONSTRUED AS A C ONCEALMENT OF INCOME U/S 271(1)(C). THEREFORE, IN VIEW OF ABOVE, AS WELL AS RELIEF GIVEN BY CO-ORDINATE BENCH TO THE ASSESSEE IN ASSES SEES OWN CASE FOR AY 2004-05 AGAINST THE ORDER OF AO U/S 143(3), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). WE UP HOLD THE SAME. THIS GROUND OF REVENUE IS DISMISSED. 8. OTHER TWO GROUNDS ARE OF GENERAL NATURE, WHICH D O NOT REQUIRE ADJUDICATION, HENCE REJECTED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9/10/2015 SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 9/10/2015 MAHATA/- ITA NO. 2730/AHD/2011 ASST. YEAR2004-05 7 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DY. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 5/10/2015 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 6/10/2015 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 9/10/2015 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: