Sri.K.V.Kunhikannan, Kasargode V. The ITo, Kasargode

ITA 276/COCH/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4712 (ITAT-COCHIN)
• Duration Of Justice: 4 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2000-2001
• Appeal Filed On: 09-05-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: T M SREEDHARAN
• Section: 40A(3)

Judgement Text

1 ITA NO.276&277/COCH/2013 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 276/COCH/2013 - A.Y. 2000-01 I.T.A NO. 277/COCH/2013 - A.Y. 2000-01 SHRI K.V. KUNHIKANNAN VS THE ITO, WD.1 BINDU JEWELLERY KASARGOD COURT ROAD, KSARAGOD DIST PAN : AFDPK8649F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI T.M. SREEDHARAN RESPONDENT BY : SMT. S VIJAYAPRABHA DATE OF HEARING : 16-07-2013 DATE OF PRONOUNCEMENT : 30-09-2013 O R D E R PER N.R.S. GANESAN (JM) BOTH THE APPEALS OF THE ASSESSEE ARE DIRECTED AGAI NST THE RESPECTIVE ORDERS OF CIT(A), KOZHIKODE DATED 05-03-2013 AND 28 -03-2013, RESPECTIVELY. 2. SINCE THE ASSESSEE IS CHALLENGING THE QUANTUM AD DITION AND THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT, WE HEARD B OTH THE APPEALS TOGETHER AND DISPOSE OF THE SAME BY THIS COMMON ORDER. 2 ITA NO.276&277/COCH/2013 3. LET US FIRST TAKE THE QUANTUM APPEAL IN ITA NO.2 76/COCH/2013. SHRI T.M. SREEDHARAN, THE LD.SENIOR COUNSEL FOR THE ASSE SSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED HIMSELF IN THE BUSINESS OF SALE OF GOLD JEWELLERY. 4. THE FIRST ISSUE, ACCORDING TO THE LD.SENIOR COUN SEL FOR THE ASSESSEE, IS THAT ORIGINALLY THE ASSESSING OFFICER MADE ADDIT ION OF RS.38,25,000 WHICH WAS CONFIRMED BY THE CIT(A). ON APPEAL BEFORE THIS TRIBUNAL, THIS TRIBUNAL REMANDED BACK THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER FOR RECONSIDERATION. THE ASSESSING OFFICER, AFTER RECO NSIDERATION MADE THE VERY SAME ADDITION WHICH WAS FURTHER CONFIRMED BY T HE CIT(A). THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE TH IS TRIBUNAL. ACCORDING TO THE LD.SENIOR COUNSEL, ONE SHRI SAIDALAVI CAME T O INDIA ON 19-02-1997. THE SAID SHRI SAIDALAVI BROUGHT 9911 GMS OF GOLD WH ICH WAS VALUED BY THE CUSTOMS DEPARTMENT AT RS.36 LAKHS. THE SAID SHRI SAIDALAVI HAS ALSO PAID CUSTOMS DUTY OF RS.2,18,042. ACCORDING TO THE LD. SENIOR COUNSEL FOR THE ASSESSEE, THE SAID GOLD WAS SOLD TO THE ASSESSEE ON 19-09-2000 FOR A SALE CONSIDERATION OF RS.38,25,000 ON CREDIT AND A SUM O F RS.30,62,000 WAS DUE AS ON 31-03-2000. 5. THE LD.SENIOR COUNSEL FOR THE ASSESSEE FURTHER S UBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, SHRI SAIDALAV I WAS EXAMINED BY THE ASSESSING OFFICER AND AN OPPORTUNITY FOR CROSS EXAMINATION WAS ALSO 3 ITA NO.276&277/COCH/2013 OFFERED TO THE ASSESSEE. IN THE COURSE OF CROSS EX AMINATION, SHRI SAIDALAVI ADMITTED THAT HE BROUGHT THE GOLD WHEN HE CAME TO I NDIA FROM DUBAI. THE LD.SENIOR COUNSEL FURTHER POINTED OUT THAT ON 11-02 -2000 WHEN HE WAS FURTHER EXAMINED HAS ADMITTED THAT THE GOLD BROUGHT BY HIM WAS SOLD TO THE ASSESSEE FOR A SUM OF RS.38,25,000. HE FURTHER ADM ITTED THAT A PERSON CAME TO KARIPUR AIRPORT AS TOLD BY THE AGENT AND HE HANDED OVER THE GOLD TO THAT PERSON. THE LD.SENIOR COUNSEL POINTED OUT THAT HE IDENTIFIED THAT ONE MR. MOHAMMED OF KASARGOD CAME TO KARIPUR AIRPORT AN D THE GOLD WAS HANDED OVER TO HIM. THE SAID SHRI MOHAMMED SUBSEQU ENTLY SOLD THE GOLD TO THE ASSESSEE. SHRI MOHAMMED COLLECTED THE CHEQU E IN THE NAME OF SAIDALAVI AND RECEIVED THE MONEY FROM THE BANK DIRE CTLY. ACCORDING TO THE LD.SENIOR COUNSEL FOR THE ASSESSEE, THE ASSESSING O FFICER MADE ADDITION ON THE GROUND THAT THE SO-CALLED PURCHASE IS A BOGUS O NE. ACCORDING TO THE LD.SENIOR COUNSEL FOR THE ASSESSEE, SHRI SAIDALAVI ACTED AS A CARRIER FOR BRINGING GOLD TO INDIA AND IT WAS HANDED OVER TO A PERSON IDENTIFIED BY THE PERSON, WHO WAS RESPONSIBLE FOR CARRYING THE GOLD A ND THE VERY SAME GOLD WAS SOLD TO THE ASSESSEE. THEREFORE, THERE IS NO Q UESTION OF ANY BOGUS TRANSACTION. THE FACT THAT SHRI SAIDALAVI ACTED AS A CARRIER FOR A PAID SALARY CANNOT BE A REASON TO DOUBT THE ENTIRE TRANSACTION. ACCORDING TO THE LD.SENIOR COUNSEL FOR THE ASSESSEE, THE VERY FACT T HAT THE ASSESSEE PURCHASED THE GOLD IN THE REGULAR COURSE OF BUSINES S ACTIVITY SHOWS THAT THE TRANSACTION IS GENUINE. ON A QUERY FROM THE BE NCH, WHETHER ANY 4 ITA NO.276&277/COCH/2013 INVESTIGATION WAS MADE BY THE DEPARTMENT TO TRACE O UT THE REAL PERSON WHO WAS RESPONSIBLE FOR SMUGGLING THE GOLD INTO INDIA, THE LD.SENIOR COUNSEL SUBMITTED THAT HE HAS NO KNOWLEDGE ABOUT FURTHER IN VESTIGATION BY THE DEPARTMENT. THE LD.SENIOR COUNSEL FOR THE ASSESSEE SUBMITTED THAT IF SHRI SAIDALAVI HAS NO SOURCE FOR INVESTMENT, THEN ADDITI ON HAS TO BE MADE IN THE HANDS OF THE PERSON WHO WAS RESPONSIBLE FOR BRI NBGING THE GOLD INTO INDIA. AT LEAST AN ADDITION SHOULD BE MADE IN THE HANDS OF SHRI MOHAMMED WHO CLAIMS TO BE THE MASTERMIND IN BRINGIN G THE GOLD INTO INDIA. THE DEPARTMENT HAS NOT TAKEN ANY ACTION AGA INST EITHER SHRI SAIDALAVI OR SHRI MOHAMMED. THEY SIMPLY DOUBTED TH E TRANSACTION MERELY BECAUSE SHRI SAIDALAVI WAS ACTED AS A CARRIER FOR A PAID SALARY. ACCORDING TO THE LD.SENIOR COUNSEL, WHEN THE SHRI SAIDALAVI B ROUGHT GOLD INTO INDIA AND PAID TAXES TO THE CUSTOMS DEPARTMENT IT CANNOT BE SAID THAT SHRI SAIDALAVI HAS NOT BROUGHT ANY GOLD TO INDIA. THE O FFICIAL DOCUMENT ISSUED BY THE CUSTOMS DEPARTMENT FOR COLLECTION OF TAX IN RESPECT OF THE VERY SAME GOLD AT THE AIRPORT CANNOT BE DOUBTED BY THE INCOME -TAX AUTHORITIES. IN FACT, NO DOUBT WAS EXPRESSED BY THE INCOME-TAX AUTH ORITIES ABOUT THE PAYMENT OF CUSTOMS DUTY ON THE GOLD BROUGHT TO IND IA BY SHRI SAIDALAVI. THEREFORE, ACCORDING TO THE LD.SENIOR COUNSEL FOR T HE ASSESSEE, THE ADDITION MADE BY THE ASSESSING OFFICER IS NOT JUSTIFIED. 5 ITA NO.276&277/COCH/2013 6. ON THE CONTRARY, SHRI M ANIL KUMAR, THE LD.DR SU BMITTED THAT ON THE DIRECTION OF THIS TRIBUNAL, SHRI SAIDALAVI WAS EXAM INED AND THE ASSESSEE WAS ALSO ALLOWED TO CROSS EXAMINE THE SHRI SAIDALAV I. THE STATEMENT RECORDED FROM SHRI SAIDALAVI ON THE CROSS EXAMINATI ON SHOWS THAT THE GOLD BROUGHT BY SHRI SAIDALAVI WAS HANDED OVER TO ONE SH RI MOHAMMED. ON EXAMINATION, SHRI SAIDALAVI SAYS THAT HE HANDED OVE R THE GOLD TO THE PERSON AS INDICATED BY THE PERSON WHO WAS RESPONSIB LE FOR BRINGING THE GOLD INTO INDIA AND HE CLARIFIED THAT IT MAY BE MOH AMMED OR SOMEBODY ELSE. THEREFORE, HE COULD NOT IDENTIFY THAT HE HAN DED OVER THE GOLD ONLY TO SHRI MOHAMMED. EXCEPT ADMITTING THAT HE BROUGHT GO LD AND HANDED OVER THE SAME TO A PERSON AT THE AIRPORT AS INDICATED BY THE PERSON RESPONSIBLE FOR BRINGING THE GOLD, HE CLAIMED THAT HE DOES NOT KNOW ANYTHING ELSE. THE SAID SHRI SAIDALAVI FURTHER CLARIFIED THAT HE RECEI VED RS.6,000 AS HIS SALARY FOR BRINGING GOLD INTO INDIA. THE ASSESSEE HAS ALS O IN HIS STATEMENT CLARIFIED THAT HE DID NOT KNOW THE ADDRESS OF SHRI MOHAMMED. THE LD.DR FURTHER SUBMITTED THAT IN THE BOOKS OF ACCOUNT A SU M OF RS.7,62,960 WAS CREDITED IN THE NAME OF SHRI SAIDALAVI AS IF IT WAS PAID BY CHEQUE. ACCORDING TO THE LD.DR, IT IS UNBELIEVABLE THAT THE CARRIER OF GOLD ON BEHALF OF SOMEBODY ELSE WOULD KEEP THE GOLD FOR 2 YEARS AND THEREAFTER SELL THE SAME TO THE ASSESSEE. THEREFORE, ACCORDING TO THE LD.DR, ALL THESE TRANSACTIONS RAISE A DOUBT. ON A QUERY FROM THE BE NCH WHETHER THE DEPARTMENT TOOK ANY INITIATIVE TO FIND OUT SHRI MOH AMMED, THE LD.DR FAIRLY 6 ITA NO.276&277/COCH/2013 SUBMITTED THAT NO STEPS WERE TAKEN BY THE DEPARTMEN T TO FIND OUT SHRI MOHAMMED. HOWEVER, HE SUBMITTED THAT EVEN THE ASSE SSEE COULD NOT KNOW THE WHEREABOUTS OF SHRI MOHAMMED. ACCORDING T O THE LD.DR, NO PRUDENT MAN WILL KEEP GOLD BROUGHT FROM FOREIGN COU NTRY FOR 2 YEARS. THOUGH BEARER CHEQUE WAS ISSUED IN THE NAME OF SHRI SAIDALAVI, THE SAID SAIDALAVI HAS NOT RECEIVED ANY AMOUNT FROM THE BANK EVEN AFTER BEARER CHEQUE WAS ISSUED. BUT IT APPEARS, SHRI MOHAMMED E NCASHED THE CHEQUE AND RECEIVED THE MONEY ON BEHALF OF SHRI SAI DALAVI. THEREFORE, ACCORDING TO THE LD.DR, THE ENTIRE TRANSACTION IS B OGUS AND THE ASSESSEE COULD NOT HAVE PURCHASED ANY GOLD EITHER FROM SHRI SAIDALAVI OR FROM SHRI MOHAMMED. HENCE, THE BOGUS CREDIT OF PURCHASE OF G OLD AS SHOWN IN THE ACCOUNTS WAS DISALLOWED AND THE ADDITION WAS ACCORD INGLY CONFIRMED BY THE CIT(A). 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSEE CLAIMS THAT HE PURCHASED GOLD FROM SHRI SAIDALAVI. THE SAID SAIDA LAVI WAS EXAMINED. THE TRANSLATED VERSION OF THE EXAMINATION AS IT IS FOUND AT PAGE 75 OF THE PAPER BOOK READS AS FOLLOWS: I AM DOING LABOUR WORK T PRESENT FOR LIVELIHOOD. MY FAMILY CONSIST OF MYSELF, WIFE, THREE DAUGHTERS, AND A SON . TWO 7 ITA NO.276&277/COCH/2013 DAUGHTERS ARE MARRIED. MY ONLY PROPERTY IS THE TIL ED HOUSE IN FOUR CENTS OF LAND. I HAVE NO OTHER PROPERTY THAN THIS. I WAS IN DUBAI FOR A LONG PERIOD OF TIME. DUE TO HEART PROB LEMS, I WAS NOT ABLE TO CONTINUE THE JOB. UNDER SUCH CIRCUMSTA NCES, I HAVE RETURNED FROM DUBAI IN FEBRUARY 1997. EVEN TH OUGH I HAVE WORKED IN GULF COUNTRIES, I COULD NOT MAKE ANY SAVINGS. FOR COMING TO NATIVE PLACE, ONE AGENT KNOWN TO ME O FFERED A PLANE TICKET FOR TAKING 85 GOLD BISCUITS AND ALSO G AVE DOLLARS VALUED AT RS.2,18,042/- FOR PAYMENT OF CUSTOMS DUTY . DUE TO FINANCIAL DIFFICULTIES FOR MY RETURN FROM ABROAD, I ACCEPTED THIS ARRANGEMENT AND HANDED OVER THE SAME TO THE PERSON WITH THE IDENTITY TOLD BY THEM, AT KARIPUR. AT THAT TIME, T HEY HAVE GIVEN ME RS.6,000/- AS AGREED. THEREFORE, I HAVE NO CONT ACT WITH THEM. DUE TO ILL HEALTH, I WAS IN HOSPITAL FOR A L ONG PERIOD. AFTERWARDS, I COULD NOT GO BACK. I AM WORKING AS A LABOURER HERE WITH GREAT DIFFICULTY. THERE IS NO AMOUNT DUE TO ME FROM ANY BODY EVEN THOUGH I HAVE TAKEN ABOUT RS.10,000/- FROM DIFFERENT PERSONS AS LOAN. 8. FROM THIS IT APPEARS THAT HE WAS IN GULF COUNTRI ES; HE BROUGHT 85 GOLD BISCUITS INTO INDIA AND ALSO PAID CUSTOM DUTY. THI S FACT IS NOT IN DISPUTE. EVEN THE DEPARTMENT HAS NOT DISPUTED THE FACT OF PA YMENT OF CUSTOM DUTY AND THAT SHRI SAIDALAVI BROUGHT GOLD TO INDIA AS A CARRIER. ON FURTHER EXAMINATION, THE SAID SHRI SAIDALAVI SAYS THAT HE D OES NOT KNOW THE PRESENT ASSESSEE AND HE HAS NOT ACCEPTED ANY CHEQUE FROM THE PRESENT ASSESSEE. HE HAS GONE TO THE EXTENT OF SAYING THAT HE DOES NOT KNOW 8 ITA NO.276&277/COCH/2013 ANYTHING ABOUT BANKS AT KASARGOD. HE HAS ALSO CLAI MED THAT HE HAS NOT SIGNED ANY CHEQUE AND RECEIVED THE AMOUNT. IN RESP ONSE TO A QUESTION HE REQUESTED THE CONCERNED OFFICERS TO ENQUIRE ABOUT T HE MATTER AND TO INITIATE SUITABLE ACTION. IN SPITE OF THIS, THE DEPARTMENT HAS NOT TAKEN ANY ACTION EITHER TO IDENTIFY THE PERSON WHO WAS RESPONSIBLE F OR BRINGING THE GOLD OR TO IDENTIFY THE PERSON, WHO INVESTED MONEY IN THE GOLD WHICH WAS BROUGHT TO INDIA THROUGH SHRI SAIDALAVI. THE FACT REMAINS IS THAT 9911 GMS OF GOLD BISCUITS WERE BROUGHT TO INDIA BY SHRI SAIDALAVI TH ROUGH KARIPUR AIRPORT AND THE SAID SHRI SAIDALAVI PAID RS.2,18,042 AS CUSTOMS DUTY FOR THE VERY SAME GOLD. IT IS ALSO ON RECORD THAT A SUM OF RS.6 ,000 WAS PAID TO SHRI SAIDALAVI FOR CARRYING THE GOLD INTO INDIA. SHRI S AIDALAVI HIMSELF ADMITS THAT HE HAS NO MEANS. THEREFORE, THE GOLD CANNOT BELONG TO SHRI SAIDALAVI. SOMEBODY ELSE IS MASTERMINDING THE ENTIRE TRANSACTI ONS TO BRING GOLD FROM DUBAI TO INDIA. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IF THE DEPARTMENT TOOK SOME MORE PAIN TO INVESTIGATE THE M ATTER, THE REAL PERSON BEHIND THE ENTIRE EPISODE COULD HAVE BEEN BROUGHT O N RECORD. UNFORTUNATELY, THE DEPARTMENT HAS NOT TAKEN ANY PAI N TO FIND OUT THE PERSON, WHO IS RESPONSIBLE FOR BRINGING THE GOLD TO INDIA. SHRI SAIDALAVI, AFTER REACHING INDIA, HANDED OVER THE GOLD TO A PER SON AS INSTRUCTED BY HIS PRINCIPAL. AND, WHO WAS PERSON, WHO RECEIVED THE G OLD AT KARIPUR AIRPORT IS ALSO COULD NOT BE CLARIFIED EVEN AT THIS STAGE. SH RI SAIDALAVI CLAIMS THAT IT MAY BE SHRI MOHAMMED OR SOMEBODY ELSE. THE DEPARTM ENT COULD ALSO 9 ITA NO.276&277/COCH/2013 NOT IDENTIFY WHO WAS THAT MOHAMMED OR WAS IT ANYONE ELSE WHO RECEIVED GOLD FROM SHRI SAIDALAVI. THERE IS A TOTAL LACK OF INVESTIGATION BY THE DEPARTMENT. UNDER NORMAL CIRCUMSTANCES, THIS TRIBU NAL WOULD HAVE REMANDED BACK THE MATTER TO THE FILE OF THE ASSESSI NG OFFICER TO INVESTIGATE THE MATTER THOROUGHLY AND FIND OUT THE REAL PERSON, WHO WAS RESPONSIBLE FOR BRINGING THE GOLD INTO INDIA. BUT THIS IS THE SECO ND ROUND OF LITIGATION BEFORE THIS TRIBUNAL. THE ASSESSMENT YEAR UNDER CONSIDERA TION IS 2000-01. AFTER LAPSE OF 13 YEARS, IF THE MATTER IS REMANDED BACK T O THE FILE OF THE ASSESSING OFFICER AT THIS STAGE, NO MEANINGFUL PURP OSE WOULD BE SERVED. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT REMANDING BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER AT THIS STAGE MAY NOT BE OF ANY HELP. 9. THE FACT REMAINS IS THAT SHRI SAIDALAVI BROUGHT GOLD INTO INDIA AND ON THE RECORDS OF THE DEPARTMENT, SHRI SAIDALAVI IS DE EMED TO BE THE OWNER OF GOLD. THE VERY SAME GOLD WAS SAID TO BE SOLD TO TH E ASSESSEE. EVEN THOUGH THERE WAS A CONFUSION WHETHER THE VERY SAME GOLD WAS PURCHASED BY THE ASSESSEE OR NOT, THE DEPARTMENT HAS NOT DOUB TED THE CLOSING STOCK OF THE ASSESSEE AFTER RECORDING THE GOLD IN THE STO CK OF THE ASSESSEE. WHEN THE CLOSING STOCK OF THE ASSESSEE WAS NOT DOUB TED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE PURCHASE OF GOLD CANNOT BE DOUBTED AT ALL. IT MIGHT HAVE BEEN PURCHASED EITHER FROM SHRI SAIDALAVI OR FROM SHRI 10 ITA NO.276&277/COCH/2013 MOHAMMED OR SOMEBODY ELSE. THAT FACT IS, THERE WAS PURCHASE OF GOLD BY THE ASSESSEE. SINCE THE GOLD WAS BROUGHT INTO INDI A ILLEGALLY THROUGH A CARRIER / MESSENGER, THE REAL PERSON, WHO IS RESPON SIBLE FOR BRINGING THE GOLD IS BEHIND THE SCENE. NEITHER THE DEPARTMENT N OR THE ASSESSEE DO NOT WANT TO DISCLOSE THE REAL PERSON WHO WAS RESPONSIBL E FOR BRINGING THE GOLD INTO INDIA. THE ASSESSEE ISSUED BEARER CHEQUE IN T HE NAME OF SHRI SAIDALAVI SINCE HE HAPPENED TO BE THE OWNER OF THE GOLD AS PER THE CUSTOMS RECORD MAINTAINED AT KARIPUR AIRPORT. THE DEPARTMENT COULD HAVE TAKEN PAIN TO INVESTIGATE AS TO WHO RECEIVED MONEY THROUGH THE HEARER CHEQUE ISSUED BY THE ASSESSEE. SHRI SAIDALAVI CLAI MS THAT HE HAS NOT RECEIVED ANY MONEY FROM THE CHEQUE ISSUED. EVEN AF TER DENIAL BY SHRI SAIDALAVI THAT HE HAS NOT RECEIVED ANY MONEY FROM T HE BANK AND HE HAS NOT SIGNED ANY CHEQUE, THE DEPARTMENT HAS NOT TAKEN ANY STEP TO INVESTIGATE THE MATTER AND EXAMINE THE OFFICERS OF THE BANK TO FIND OUT THE REAL PERSON TO WHOM THE MONEY WAS PAID ON THE BEARE R CHEQUE ISSUED BY THE ASSESSEE IN THE NAME OF SHRI SAIDALAVI. THIS T RIBUNAL IS OF THE CONSIDERED OPINION THAT DUE TO LACK OF PROPER INVES TIGATION, THE REAL PERSON, WHO INVESTED IN THE GOLD WAS ALLOWED TO GO SCOT FRE E. IF AN INVESTIGATION WAS DONE PROPERLY, THE PERSON, WHO IS BEHIND THE SC ENE COULD HAVE BEEN IDENTIFIED AND AN ADDITION COULD HAVE BEEN MADE IN HIS HANDS FOR MAKING INVESTMENT IN 9911 GMS OF GOLD WHICH WAS SENT TO IN DIA THROUGH SHRI SAIDALAVI. THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT SINCE THE STOCK 11 ITA NO.276&277/COCH/2013 POSITION OF THE ASSESSEE WAS NOT IN DISPUTE, THERE IS NO QUESTION OF DOUBTING IN THE PURCHASE. THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT SINCE THE GOLD WAS BROUGHT TO INDIA THROUGH A CARRI ER BY AN UNIDENTIFIED PERSON, THE CONFUSION REMAINS WITH REGARD TO THE PA YMENT. THE FACT REMAINS THAT THERE WAS A PURCHASE OF GOLD WHICH WAS AVAILABLE IN THE STOCK OF THE ASSESSEE SINCE THE SAME WAS NOT DISPUTED. T HEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE IS NO QUEST ION OF ANY ADDITION. ACCORDINGLY, THE ORDERS OF LOWER AUTHORITIES ARE SA ID ASIDE AND THE ADDITION OF RS.38,25,000 IS DELETED. 10. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ADD ITION OF RS.5,76,000 U/S 40A(3) OF THE ACT. 11. WE HEARD THE LD.SENIOR COUNSEL FOR THE ASSESSEE AND THE LD.DR. IT IS NOT IN DISPUTE THAT A BEARER CHEQUE WAS ISSUED FOR RS.28,80,000 FOR PURCHASE OF GOLD FROM SEVEN PERSONS. SECTION 40A(3 ) CLEARLY SAYS THAT ANY PAYMENT MADE OTHER THAN BY ACCOUNT PAYEE CHEQUE DRAWN ON BANK EXCEEDING RS.20,000 THERE SHALL BE A DISALLOWANCE T O THE EXTENT OF 20%. IN THIS CASE, CROSS CHEQUE WAS NOT ISSUED, THEREFOR E, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIT(A) HAS RIGHTLY CONF IRMED THE ADDITION. 12 ITA NO.276&277/COCH/2013 12. THE ASSESSEE HAS TAKEN ONE MORE GROUND WITH REG ARD TO LIMITATION IN PASSING THE ORDER OF ASSESSMENT. THOUGH THIS GROUN D WAS RAISED IN THE GROUNDS OF APPEAL, NO ARGUMENT WAS ADVANCED EITHER BY THE LD.SENIOR COUNSEL FOR THE ASSESSEE OR BY THE LD.DR AND THERE IS NO MENTION ABOUT THIS GROUND OF LIMITATION IN THE WRITTEN SUBMISSION . THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE IS N OT PRESSING THIS GROUND OF APPEAL. 13. NOW COMING TO PENALTY LEVIED U/S 271(1)(C) OF T HE ACT, THE ASSESSING OFFICER LEVIED PENALTY IN RESPECT OF PURCHASE OF GO LD TO THE EXTENT OF RS.38,25,000 AND DISALLOWANCE MADE U/S 40A(3) OF TH E ACT. AFTER CONSIDERING THE SUBMISSIONS OF BOTH THE PARTIES IN THE EARLIER PART OF THIS ORDER THIS TRIBUNAL DELETED THE ADDITION MADE BY TH E ASSESSING OFFICER WITH REGARD TO PURCHASE OF GOLD, THEREFORE, THERE IS NO QUESTION OF ANY CONCEALMENT. HENCE, THE PENALTY LEVIED BY THE ASSE SSING OFFICER IS NOT SUSTAINABLE. 14. NOW COMING TO DISALLOWANCE MADE U/S 40A(3), THE ASSESSEE HAS DISCLOSED ALL THE FACTS THAT THE PAYMENT WAS MADE B Y A BEARER CHEQUE. THE FACT WAS DISCLOSED. THE DISALLOWANCE WAS MADE AS PER THE STATUTORY PROVISIONS OF SECTION 40A(3) OF THE ACT. WHEN THE ASSESSEE DISCLOSED ALL THE FACTS THAT THE PAYMENT WAS MADE THROUGH A BEARE R CHEQUE, THE 13 ITA NO.276&277/COCH/2013 ASSESSEE HAS NOT CONCEALED ANYTHING. THE ASSESSING OFFICER MADE DISALLOWANCE BY APPLYING THE STATUTORY PROVISIONS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT IN VIEW OF THE JU DGMENT OF THE APEX COURT IN THE CASE OF ACIT VS RELIANCE PETROPRODUCTS (P) L TD (2010); 322 ITR 158 (SC) THERE CANNOT BE ANY LEVY OF PENALTY. BY RESPE CTFULLY FOLLOWING THE JUDGMENT OF THE APEX COURT IN RELIANCE PETROPRODUCT S (P) LTD (SUPRA), THE PENALTY IS DELETED. 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.276/COCH/2013 IS PARTLY ALLOWED AND THE APPEAL OF THE ASSESSEE IN IT A NO.277/COCH/2013 IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH SEPTEMBER, 2013. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 30 TH SEPTEMBER, 2013 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH