Aarti Govind Talreja, Ahmednagar V. Assistant Commissioner of Income-tax,

ITA 281/PUN/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 6954 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-11-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 26-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NIRUPAMA KOTRU; DR VIVEK AGGARWAL S
• Assessee Lawyers: PRAYAG JHA SHRI PRATEEK JHA
• Keywords: Question of law

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.281/PUN/2016 / ASSESSMENT YEAR : 2007-08 AARTI GOVIND TALERJA, NEAR ASHA TALKIES, MALIWADA ROAD, AHMEDNAGAR PAN : ADKPT4440J . /APPELLANT VS. ACIT, AHMEDNAGAR CIRCLE, AHMEDNAGAR . / RESPONDENT ASSESSEE BY : SHRI PRAYAG JHA, SHRI PRATEEK JHA REVENUE BY : SMT. NIRUPAMA KOTRU, & DR. VIVEK AGGARWAL, CIT-DRS / DATE OF HEARING : 23.11.2017 / DATE OF PRONOUNCEMENT: 13.12.2017 / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-2, PUNE FOR THE ASSESSMENT YEAR 2007-08 IN C ONNECTION WITH THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT. IN THE GROUNDS, IT IS MENTIONED THAT THE CIT(A) ERRED IN CONFIRMING TH E PENALTY OF RS.1,77,350/- ON THE CONFIRMED ADDITION OF RS.5,15, 000/- U/S.68 OF THE ACT. 2. BRIEFLY STATED RELEVANT FACTS OF THE CASE INCLUD E THAT ASSESSEE IS AN INDIVIDUAL AND ENGAGED IN THE BUSINESS OF ONL INE TRADING OF THE LOTTERY UNDER THE NAME AND STYLE OF M/S. TULSI DISTRIBUTORS. ASSESSEE FILED THE RETURN OF INCOME ON 18-10-2007 D ECLARING TOTAL INCOME OF RS.22,09,046/-. ASSESSED INCOME WAS DETE RMINED AT ITA NO.281/PUN/2016 AARTI GOVIND TALERJA 2 RS.56,63,035/-. DURING THE YEAR, ASSESSEE RECEIVED DEPOSIT AMOUNTS FROM THE SUBSCRIBERS AMOUNTING TO RS.13,60, 000/-. THESE AMOUNTS WERE RECEIVED FROM 53 DEPOSITORS. DU RING THE ASSESSMENT PROCEEDINGS, ASSESSEE COULD NOT DISCHARG E THE ONUS BY FILING CONFIRMATION LETTERS IN RESPECT OF THE 19 DE POSITORS. THEREFORE, AO PROCEEDED TO MAKE ADDITION OF RS.13,6 0,000/- U/S.68 OF THE I.T. ACT. THE CONTENTS OF PARA NO. 2 TO 2.2 OF THE ORDER OF AO ARE RELEVANT. AO ALSO FOUND SOME MISTA KES IN THE CONFIRMATION LETTERS FILED IN RESPECT OF SOME DEPOS ITORS. 3. IN THE FIRST APPELLATE PROCEEDINGS, ASSESSEE COU LD FILE CONFIRMATION LETTERS IN RESPECT OF 34 DEPOSITORS AL ONG WITH THE ADDRESSES AND PAN NUMBERS. CIT(A) ACCEPTED THE SAI D DEPOSITS AND RESTRICTED THE ADDITION TO RS.5,15,000/- INVOLV ING 19 DEPOSITORS. LIST OF THESE DEPOSITORS IS ENLISTED O N PAGE 3 VIDE PARA NO.4.1 OF THE PENALTY ORDER. AO PROCEEDED TO LEVY PENALTY ON THE CONFIRMED ADDITION BY THE CIT(A) AMOUNTING TO RS.5, 15,000/-. EVENTUALLY, FOR FURNISHING INACCURATE PARTICULARS O F INCOME, THE AO LEVIED THE PENALTY OF RS.1,77,350/- @100% OF THE TA X SOUGHT TO BE EVADED VIDE ORDER DATED 19-03-2013. FURNISHING OF STEREOTYPED LETTERS, FAILURE TO ESTABLISH THE IDENTITY, CAPACIT Y AND GENUINENESS OF THE DEPOSITORS AND FAILURE TO FURNISH 19 CONFIRM ATION LETTERS OUT OF 53 DEPOSITORS ARE THE REASONS FOR LEVYING THE PE NALTY. 4. CIT(A) CONFIRMED THE SAID PENALTY AS PER THE DIS CUSSION GIVEN IN PARA NO. 4 AND ITS SUB-PARAGRAPHS. DURING THE P ROCEEDINGS, IT IS MENTIONED BY THE CIT(A) THAT INABILITY OF THE AS SESSEE TO GARNER THE CONFIRMATION LETTERS FROM THE DEPOSITORS AFTER THE LAPSE OF TIME AND ASSESSEES FAILURE TO DISCHARGE THE ONUS IN FIL ING THE ITA NO.281/PUN/2016 AARTI GOVIND TALERJA 3 CONFIRMATION LETTERS ARE THE MAIN ISSUES DISCUSSED IN HIS ORDER. IN PARA NO.4.2.4 OF THE ORDER, THE CIT(A) DISCUSSED TH E FACT OF ASSESSEES FAILURE TO PROVE THE GENUINENESS OF THE CREDITS TO THE EXTENT OF RS.5,15,000/-. 5. AGGRIEVED WITH THE SAID ORDER OF THE CIT(A) WHO CONFIRMED THE PENALTY, THE ASSESSEE IS IN APPEAL BEFORE US. 6. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE AO NEVER HAD ANY INCRIMINATING EVIDENCE TO DEMO NSTRATE THE INACCURATE PARTICULARS FILED BY THE ASSESSEE. IT I S A MATTER OF TIME THAT THE ASSESSEE WOULD HAVE FILED THE CONFIRMATION LETTERS PROVIDED SUFFICIENT OPPORTUNITY IS GRANTED. NOTWIT HSTANDING, LD. COUNSEL FOR THE ASSESSEE RELIED ON VARIOUS DECISION S TO SUGGEST THAT THE ADDITION MADE U/S.68 DO NOT ATTRACT PENALT Y U/S.271(1)(C) OF THE ACT. 7. BRINGING OUR ATTENTION TO THE DECISION OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF ADVAITA ESTATE DEVELOPM ENT PVT. LTD. VS. ITO REPORTED IN 40 TAXMANN.COM 142, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT, IF THE ASSESSEE WAS TO GO TO HIGH COURT WITH THE SUBSTANTIAL QUESTION OF LAW, THE SAME WOUL D NOT HAVE BEEN ADMITTED IN SUCH CASES. IN VIEW OF THE DEBATA BILITY, ASSESSEE COULD HAVE BEEN ENTITLED TO RELIEF IN RESPECT OF TH E PENALTY U/S.271(1)(C) OF THE ACT. FURTHER, HE RELIED ON TH E JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILES VS. CIT REPORTED IN 114 TAXMANN 203 (GUJ.) FOR THE PROPOSIT ION THAT ABSENCE OF PROOF ACCEPTABLE TO THE DEPARTMENT CANNO T BE EQUATED WITH FRAUD OR WILLFUL DEFAULT. THERE IS NO POSITIV E EVIDENCE GATHERED BY THE AO AGAINST THE ASSESSEE WITH REGARD TO THE ITA NO.281/PUN/2016 AARTI GOVIND TALERJA 4 CORRECTNESS OF THE DEPOSITS RECEIVED BY THE ASSESSE E. IT IS A MATTER OF FURNISHING DOCUMENTS AND THE SAME CANNOT BE EQUA TED WITH CONCEALMENT OF INCOME OR DEEMED CONCEALMENT OF INCO ME. FURTHER, HE RELIED ON THE DECISION OF DELHI BENCH O F THE TRIBUNAL IN THE CASE OF SAKET AGARWAL VS ITO REPORTED IN 36 TAX MANN.COM 288 FOR THE PROPOSITION THAT FINALITY IN THE ASSESSMENT IS NOT A CONCLUSIVE EVIDENCE ATTRACTING THE IMPOSITION OF PE NALTY U/S.271(1)(C) OF THE ACT. HE ALSO RELIED ON VARIOU S OTHER DECISIONS TO SUPPORT HIS CASE. 8. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDERS OF THE AO AND THE CIT(A) AND HIGHLIGHTED THE FACT THAT THE ASSESSEE FAILED TO FILE THE CONFIRMATION LETTER S AS WELL AS DISCHARGE THE ONUS ABOUT THE GENUINENESS OF THE DEP OSITS. 9. WE HEARD BOTH THE PARTIES ON THIS ISSUE. THERE IS NO DISPUTE ON THE FACT THAT ASSESSEE FURNISHED THE NAMES AND A DDRESSES OF 19 DEPOSITORS AMOUNTING TO RS.5,15,000/-. EACH OF THE DEPOSIT VARY FROM RS.15,000/- TO RS.30,000/- PER THE DEPOSITOR. IT IS NOT THE CASE OF THE AO THAT THERE IS ANY POSITIVE EVIDENCE AGAINST THE ASSESSEE CONFIRMING THE CONCEALMENT OF INCOME OR FA KENESS OF THE CASH CREDITS ENTERED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. IT IS MERELY A CASE OF FAILURE TO FILE THE CONFIRMATION L ETTERS IN A PROPER FORMAT WITH ALL PARTICULARS MENTIONED IN IT. THE NA MES AND ADDRESSES OF THE 19 DEPOSITORS ARE ALREADY ON RECOR D. IT SHOWS THE EXISTENCE OF THE BASIC DETAILS OF THE DEPOSITORS. THE DETAILS FURNISHED BY THE ASSESSEE INDICATE THE CAPACITY OF THE ASSESSEE IN FURNISHING ALL THE DETAILS OF THE DEPOSITS AS WELL AS THE DEPOSITORS. IT IS POSSIBLE THAT THE ASSESSEE WOULD HAVE FURNISH ED IF THE TIME IS ITA NO.281/PUN/2016 AARTI GOVIND TALERJA 5 GIVEN AND NOT AFTER LAPSE OF TIME OF YEARS. PER CO NTRA, THE AO HAS NOT TAKEN ANY POSITIVE STEP TO DEMONSTRATE THE INCO RRECTNESS OF THE DETAILS SO FURNISHED BY THE ASSESSEE. THEREFORE, I N THE ABSENCE OF POSITIVE INCRIMINATING INFORMATION AGAINST THE ASSE SSEE, IN OUR VIEW, LEVY OF PENALTY OF RS.1,77,350/- U/S.271(1)(C ) OF THE ACT IS NOT JUSTIFIED. IT MAY BE GOOD ENOUGH FOR CONFIRMING TH E ADDITIONS ON MERIT IN QUANTUM APPEALS BUT CERTAINLY FALLS SHORT OF THE REQUIREMENT OF CONFIRMING THE PENALTY U/S.271(1)(C) OF THE ACT. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF DECEMBER, 2017. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 13 TH DECEMBER, 2017. / COPY OF THE ORDER FORWARDED TO : BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE THE APPELLANT THE RESPONDENT THE CIT(A) - 2, PUNE CIT - 2, PUNE % , , B BENCH PUNE; / GUARD FILE.