Shri Amit Maneklal Reshamwala, Surat V. The Dy.CIT, Circle-2, Surat

ITA 2758/AHD/2013

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9453 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 26-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G C DAXINI
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ./ ITA NO. 2758/AHD/2013 / ASSESSMENT YEAR : 2007-08 SHRI AMIT MANEKLAL RESHAMWALA SHOP NO.131, RESHAMWALA MARKET, RING ROAD, SURAT PAN : AGPPR 9792 P VS DCIT, CIRCLE-2, SURAT / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI MEHUL SHAH, AR REVENUE BY : SHRI G C DAXINI, SR DR DATE OF HEARING : 0 7/12/2016 DATE OF PRONOUNCEMENT IN COURT : 17/01/20 17 / O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-II, SU RAT DATED 25.09.2013 FOR ASSESSMENT YEAR 2007-08. 2. THE SOLE GROUND RAISED READS AS UNDER:- ON THE FACTS AND CIRCUMSTANCE OF THE CASE AS WELL A S LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ER RED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY OF RS.1,18,500/- U/S 271(1)(C) OF THE I.T. AC, 1961. 3. BRIEF FACTS ARE THE ASSESSEE FILED HIS RETURN OF INCOME IN RESPECT OF SHORT TERM CAPITAL GAIN ON SALE OF IMMOVABLE PROPER TIES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LD. ASSESSING OFFICER FO UND THAT THE ASSESSEE HAS DEPOSITED CASH IN HIS DENA BANK AND HDFC BANK ACCOU NT AMOUNTING TO RS.14,40,000/-. IN REPLY THEREOF, THE ASSESSEE CON TENDED THAT THE DEPOSITS WERE MADE OUT OF SALE PROCEEDS OF AGRICULTURAL PROD UCTS, ADVANCES RECEIVED AGAINST SALE OF FLAT AND CASH WITHDRAWAL FROM BANK ACCOUNT WHICH WERE RE- DEPOSITED IN HDFC BANK ACCOUNT AND SOME BORROWINGS FROM FRIENDS AND SMC-ITA NO. 2758/AHD/2013 SHRI AMIT MANEKLAL RASHAMWALA VS.DCIT AY : 2007-08 2 RELATIVES. THE LD. ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT THE EXPLANATION AND MADE THE ADDITION. 3.1 AGGRIEVED, THE ASSESSEE PREFERRED APPEALS AND T HE ITAT VIDE ORDER DATED 15.05.2015 GAVE SUBSTANTIAL RELIEF BY RETAINI NG ONLY RS.3,95,000/- BY FOLLOWING OBSERVATIONS:- 7. THE NEXT EXPLANATION OF THE ASSESSEE IS WITH RE GARD TO SOURCE OF RS.7,70,000/-. THE ASSESSEE HAS CONTENDED THAT HE HAS MADE WITHDRAWAL FROM THE BANK AND THOSE AMOUNTS WERE RE-DEPOSITED S UBSEQUENTLY. LD. FIRST APPELLATE AUTHORITY HAS RECORDED A FINDING THAT ASS ESSEE HAS BEEN MAINTAINING CASH BOOK. THE AMOUNTS AFTER WITHDRA WING FROM THE BANK WERE TAKEN TO THE CASH BOOK AND SUBSEQUENTLY SAID AMOUNT WERE TAKEN OUT OF THE CASH BOOK AND DEPOSITED IN THE BANK. THERE WAS NO DEFECT IN THE CASH FLOW STATEMENT. THEREFORE, ASSESSING OFFICER OUGHT NO T TO HAVE DOUBTED THE EXPLANATION OF THE ASSESSEE. TO OUR MIND, FIRST APPELLATE AUTHORITY HAS RIGHTLY ACCEPTED THIS EXPLANATION OF THE SOURCE OF RS.7,70,000/-. THE ASSESSEE HAS PROVED THE CONCILIATION BETWEEN THE AMOUNTS WIT HDRAWN FROM THE BANK, TAKEN TO THE CASH BOOK AND VICE-VERSE. 8. THE NEXT EXPLANATION OF THE ASSESSEE IS WITH RE GARD TO SOURCE OF RS.3,95,000/-. IT WAS CONTENDED BY THE ASSESSEE THA T HE HAS BORROWED THE MONEY FROM FRIENDS AND RELATIVES BUT COULD NOT SUBS TANTIATE THIS CLAIM. ACCORDING TO THE LD. CIT(A), PERUSAL OF THE DETAILS DO NOT REFLECT THE COMPLETE NAME AND ADDRESS OF THE ALLEGED FRIENDS AND RELATIV ES. THEREFORE, LD. FIRST APPELLATE AUTHORITY HAS CONFIRMED THE ADDITION OF R S.3,95,000/-. THIS HAS BEEN CHALLENGED IN THE CROSS OBJECTION. HOWEVER, LE ARNED COUNSEL FOR THE ASSESSEE COULD NOT BRING ANY EVIDENCE TO OUR NOTICE WHICH CAN SATISFY THE ASSESSING OFFICER AS CONTEMPLATED IN SECTION 68 OF THE INCOME TAX ACT. LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY CONFIRMED THI S ADDITION. THUS, AS FAR AS, THE FINDING OF CIT(A) QUA THE CHALLENGE TO ADDI TION OF RS.14,40,000/- IS CONCERNED, WE DO NOT FIND ANY ERROR IN CONFIRMING T HE ADDITION OF RS.3,95,000/- AND DELETION OF ADDITION OF RS. 10,45 ,300/-. 3.2 PENALTY PROCEEDINGS WERE INITIATED IN THIS BEHA LF. LD. ASSESSING OFFICER IMPOSED A PENALTY OF RS.1,18,500/- U/S 271( 1)(C) OF THE ACT, CONTENDING THAT IN RESPECT OF FRIENDS AND RELATIVES THE ASSESSEE ONLY FURNISHED A LIST SHOWING NAME AND ADDRESSES OF THES E PERSONS; HOWEVER, NO SMC-ITA NO. 2758/AHD/2013 SHRI AMIT MANEKLAL RASHAMWALA VS.DCIT AY : 2007-08 3 EVIDENCE TO PROVE THE IDENTITY AND GENUINENESS OF T HE TRANSACTIONS WAS FURNISHED. 3.3 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL, WHERE THE PENALTY WAS CONFIRMED. 4. LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT THE O BSERVATIONS OF THE LD. ASSESSING OFFICER AND CIT(A) THAT THE NAMES AND ADD RESSES OF THE FRIENDS AND RELATIVES WERE NOT GIVEN IS NOT CORRECT. THE C OMPLETE DETAILS ABOUT THEIR ADDRESS, BUSINESS, DATE OF RECEIPT AND, MOREOVER, T HE FACT ABOUT REPAYMENT OF DEPOSITS HAVE BEEN DULY FURNISHED WHICH IS REFLE CTED IN PAGE NOS. 3 & 4 OF THE PAPER-BOOK ALONG WITH THEIR COPIES OF ACCOUN TS AND CASH BOOK ENTRIES. THE ASSESSMENT AND PENALTY PROCEEDINGS ARE DISTINCT AND SEPARATE AND IF THE ASSESSEE FAILED TO PRODUCE THE EVIDENCE IN THE ASSE SSMENT PROCEEDINGS, THE SAME CAN BE PRODUCED IN PENALTY PROCEEDINGS WHICH H AS BEEN DULY COMPLIED BY THE ASSESSEE. THEREFORE, THE PENALTY O RDER IS BASED ON THE FINDINGS WHICH ARE CONTRARY TO THE RECORDS. RELIAN CE IS PLACED ON FOLLOWING DECISIONS:- (I) CIT VS. JALARAM OIL MILLS, (2002) 253 ITR 192; (II) NATIONAL TEXTILES VS. CIT, (2001) 249 ITR 125; (III) CIT VS. CHANAKYA DEVELOPERS, (2014) 43 TAXMAN N.COM 91 (GUJ) (IV) SUDARSHAN P. AMIN VS. ACIT, (2015) 61 TAXMANN. COM 229 (AHD TRIB.) THE ASSESSEE THUS HAVING DISCHARGED HIS ONUS IN PEN ALTY PROCEEDINGS, THE LEVY OF PENALTY IGNORING THE RECORD IS UNJUSTIF IED. 5. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITI ES BELOW. PAGE NOS.3 & SMC-ITA NO. 2758/AHD/2013 SHRI AMIT MANEKLAL RASHAMWALA VS.DCIT AY : 2007-08 4 4 OF THE PAPER-BOOK CONTAIN THE COMPLETE DETAILS AB OUT THE NAMES, ADDRESS, DATE OF RECEIPT AND COMPUTATION OF THE CREDITORS AN D THE FACT ABOUT THE RE- PAYMENT OF THE AMOUNTS ARE ALSO MENTIONED IN THE SA ME LIST. IN VIEW THEREOF, I AM OF THE VIEW THAT THE PENALTY HAS BEEN IMPOSED WITHOUT DUE VERIFICATION OF THE RECORD FILED BY THE ASSESSEE. C ONSEQUENTLY, THE PENALTY IMPOSED IS DELETED AND THE ASSESSEES APPEAL IS THU S ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. SD/- R.P. TOLANI (JUDICIAL MEMBER) AHMEDABAD; DATED 17/01/2017 *BIJU T., SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD