Shallu Bansal, Ahmedabad V. The Deputy Commissioner of Income Tax, Central Circle-1(3), Ahmedabad

ITA 30/AHD/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 6547 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 3 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2008-2009
• Appeal Filed On: 03-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: B R POPAT
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 80C; 68

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 30/AHD/2017 / ASSESSMENT YEAR: 2008-09 SHALLU BANSAL PLOT NO.1497-B OPP: THEOSOPHICAL LODGE RUPANI CIRCLE BHAVNAGAR 364 001. PAN : AIJPB 8274 G VS DCIT, CENT.CIR.1(3) AHMEDABAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI B.R. POPAT, AR REVENUE BY : SHRI KAMLESH MAKWANA, SR.DR / DATE OF HEARING : 11/04/2019 /DATE OF PRONOUNCEMENT : 30/04/2019 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST ORDER OF THE LD.CIT(A)- 5, AHMEDABAD DATED 6.12.2016 PASSED FOR THE ASSTT.YEAR 2008-09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.3,15,000/- WHICH WAS IMPOS ED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 . 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HER RETURN OF INCOME FOR THE ASSTT.YEAR 2008-09 ON 30.7.2008 DECL ARING TOTAL INCOME AT RS.13,94,510/-. IN THIS RETURN OF INCOME THE ASSES SEE HAS INCLUDED A SUM ITA NO.30 /AHD/2017 - 2 - OF RS.10,19,405/- AS SHORT TERM CAPITAL GAIN. THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT. THE LD.AO HAS OB SERVED THAT THIS SHORT TERM CAPITAL GAIN WAS SHOWN BY THE ASSESSEE ON PURC HASE AND SALE OF SHARES AND THESE TRANSACTIONS WERE ENTERED THROUGH M/S.MAHASAGAR SECURITIES P.LTD. THE SAID MAHSASAGAR SECURITIES H AS BEEN CLAIMED TO BE SUB-BROKER OF NSE AND TRANSACTION ROOTED THROUGH TH EM WERE FOUND TO BE BOGUS. HENCE, THE AO DID NOT ACCEPT THE CLAIM OF SHORT TERM CAPITAL GAIN. HE MADE ADDITION ON ACCOUNT OF UNEXPLAINED C ASH CREDIT UNDER SECTION 68 OF THE ACT. CONCLUSION AND COMPUTATION MADE BY THE AO IN THE ASSESSMENT ORDER READ AS UNDER: IN VIEW OF THE ABOVE, THE ENTIRE TRANSACTION OF SH ORT TERM CAPITAL GAIN FROM SHARES IS BOGUS. THUS, THE GAIN FROM SUCH TRAN SACTIONS IS ALSO BOGUS. THUS, THE SHORT TERM CAPITAL GAIN AMOUNTING TO RS. 10,19,4057- IS DISALLOWED AND TREATED AS CASH CREDIT U/S 68 OF THE IT ACT. PENALTY U/S. 271(L)(C) IS INITIATED FOR FURNISHING INACCURATE PART ICULARS OF INCOME AND THEREBY CONCEALING TAXABLE INCOME. (DISALLOWANCES OF RS. 10,19,405/-) 6. SUBJECT TO ABOVE AND FROM THE DATA MADE AV AILABLE, THE TOTAL INCOME OF THE ASSESSEE IS COMPUTED AS UNDER:- I INCOME FROM CAPITAL GAINS AS PER RETURN RS. 13,20,378/-LESS: STCG TREATED AS BOGUS AS PER PARA 5 ABOVE : RS. 10,19,405/- RS. 3,00,973 / - II INCOME FROM PROFITS AND GAINS FROM BUSINESS/ PROFESSION AS PER RETURN RS. 1,73,584/ - III INCOME FROM OTHER SOURCES AS PER RETURN RS. 551/-ADD: DISALLOWANCES PER PARA 5 RS. 10,19,405 / - RS. 10,19,956 / - GROSS TOTAL INCOME RS. 14,94,513/ - LESS: DEDUCTION UNDER CHAPTER - VI - A: - ITA NO.30 /AHD/2017 - 3 - 1) U/S. 80C ..... 1,00,000 / - RS. 1,00,000 / - TOTAL INCOME RS. 13,94,513/ - ROUNDED OFF RS.13,94,510/ - ASSESSED INCOME ..... RS.13,94,510/ - 4. THE AO HAS INITIATED PENALTY PROCEEDINGS UNDER S ECTION 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME. HE ULTIMATELY IMPOSED PENALTY OF RS.3,15,000/- ON THIS ADDITION. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. IN PRINCIPLE, THE LD.COUNSEL FOR THE ASSESSEE DI D NOT DISPUTE FOR VISITING THE ASSESSEE WITH PENALTY, BUT CONTENDED T HAT AS PER SUB-CLAUSE (III) OF SECTION 271(1)(C) OF THE ACT, PENALTY WOUL D BE COMPUTED ON THE AMOUNT WHICH IS ADDED TO THE INCOME OF THE ASSESSEE . THE ASSESSEE HAS ALREADY INCLUDED A SUM OF RS.10,19,405/- UNDER DIFF ERENT HEAD I.E. SHORT TERM CAPITAL GAIN. THE AO HAS ONLY CHANGED THE HE AD FROM SHORT TERM CAPITAL TO UNEXPLAINED CASH CREDIT. NOW, HOW THIS TOTAL AMOUNT ON WHICH THE ASSESSEE HAS ALREADY PAID TAXES UNDER THE HEAD SHORT TERM CAPITAL GAIN CAN BE CONSIDERED FOR VISITING THE ASS ESSEE WITH PENALTY. HE SUBMITTED THAT IF THERE IS ANY VARIATION IN THE TAX ES ON THIS ADDITION, ONLY TO THAT EXTENT PENALTY COULD BE COMPUTED. IN SUPPO RT OF HIS CONTENTIONS, HE RELIED UPON THE FOLLOWING DECISIONS: I) SIMRAN SINGH GAMBHIR VS. DDIT (INTERNATIONAL TAXATI ON), 69 TAXMANN.COM 357 (DELHI-TRIB); II) CIT VS. AMIT JAIN, 351 ITR 74 (DELHI); ITA NO.30 /AHD/2017 - 4 - III) CIT VS. BENNETT COLEMAN & CO. LTD., 33 TAXMANN.COM 227 (BOM) 6. ON THE OTHER HAND, THE LD.DR RELIED UPON THE ORD ERS OF THE REVENUE AUTHORITIES. 7. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. SUB-CLAUSE (III) OF SECTION 271( 1)(C) OF THE ACT HAS DIRECT BEARING ON THE CONTROVERSY. THEREFORE, WE DEEM IT APPROPRIATE TO TAKE NOTE OF THIS CLAUSE, WHICH READS AS UNDER; '271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTIC ES, CONCEALMENT OF INCOME, ETC. ** ** ** ** ** ** ** ** ** (III) IN THE CASES REFERRED TO IN CLAUSE (C) OR C LAUSE (D), IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF T AX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INCOME OR FRINGE BENEFIT THE FURNISHING OF INACCURATE PARTICU LARS OF SUCH INCOME OR FRINGE BENEFITS: 8. A BARE PERUSAL OF THIS CLAUSE WOULD INDICATE THA T IT PROVIDES A MECHANISM FOR COMPUTATION OF PENALTY. IT CONTEMPLA TES THAT PENALTY WILL BE COMPUTED EITHER EQUIVALENT TO THE TAX OR TH REE TIMES OF SUCH TAXES WHICH SOUGHT TO BE EVADED BY AN ASSESSEE BY REASON OF CONCEALMENT OF INCOME OR FURNISHING OF ACCURATE PARTICULARS OF INC OME. IN OTHER WORDS, THE TAX ON THE ADDITION MADE TO THE INCOME OF AN AS SESSEE ARE TO BE CONSIDERED AS SOUGHT TO BE EVADED BY REASON OF CONC EALMENT OR FURNISHING OF INACCURATE PARTICULARS, THE PENALTY E QUIVALENT TO THAT TAXES OR THREE TIME OF THAT TAX IS TO BE COMPUTED AGAINST AN ASSESSEE. IN THE PRESENT CASE, THE ASSESSEE HAS OFFERED SHORT TERM C APITAL GAIN ON THE ITA NO.30 /AHD/2017 - 5 - AMOUNT OF RS.10,19,405/-. THE AO TREATED IT AS UNE XPLAINED CASH CREDIT. BUT THIS AMOUNT HAS SUFFERED TAXES, IN THE RETURN O F INCOME ITSELF BY ADMISSION OF THE ASSESSEE. THUS, WE DIRECT THE AO TO CALCULATE THE PENALTY UNDER SUB-CLAUSE (III) OF SECTION 271(1)(C) IF ANY TAX WAS SOUGHT TO BE EVADED BY THE ASSESSEE BY TAKING THIS ADDITIO N UNDER TWO DIFFERENT HEADS. IN OTHER WORDS, THE DIFFERENCE OF TAX COMP ONENTS, IF THIS AMOUNT OF RS.10,19,405/- IS BEING ASSESSED UNDER THE HEAD UNEXPLAINED CASH CREDIT VIS--VIS SHORT TERM CAPITAL GIN, COMES OUT, THEN PENALTY EQUIVALENT TO THAT TAX COMPONENT WOULD BE CHARGED F ROM THE ASSESSEE. IN ANY AWAY, IT WILL NOT BE RS.3,15,000/-. THIS EX ERCISE BE CARRIED OUT AFTER HEARING THE ASSESSEE. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30 TH APRIL, 2019. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER