M/s. R.L. Traders, New Delhi V. ITO, New Delhi

ITA 3385/DEL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 6871 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC 1
• Next Hearing Date: 17-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 08-06-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N K BAWAL
• Assessee Lawyers: K R MANJANI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.3385/DEL/2016 ASSESSMENT YEAR : 2007-08 R.L. TRADERS, 2046, KATRA TOBACCO, KHARI BAOLI, NEW DELHI. PAN: AAAFR5508C VS. ITO, WARD-47(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.R. MANJANI, ADVOCATE DEPARTMENT BY : SHRI N.K. BAWAL, SR. DR DATE OF HEARING : 17.10.2016 DATE OF PRONOUNCEMENT : 17.10.2016 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 5.5.2016 IN RELATION TO THE ASSESSMEN T YEAR 2007-08, UPHOLDING THE PENALTY OF RS.45,301/- IMPOSED BY THE ASSESSING OFFICER (AO) U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE SHOWED CERTAIN UNSECURED LOANS IN HIS BOOKS OF ACCOUNT. D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO P RODUCE THE CREDITOR ITA NO.3385/DEL/2016 2 SHRI PRADEEP KUMAR BANSAL, FROM WHOM THE ASSESSEE H AD DECLARED TO HAVE AVAILED LOAN IN HIS INDIVIDUAL AS WELL AS HUF CAPAC ITY AMOUNTING TO RS.50,000 EACH. THE ASSESSEE WAS FURTHER REQUESTED THAT THE CREDITOR SHOULD BE ASKED TO BRING PROOF IN SUPPORT OF THE ID ENTITY AND CREDIT WORTHINESS. THE ASSESSEE, VIDE HIS LETTER DATED 2 .11.2009, ASKED THE AO TO SUMMON SHRI PRADEEP KUMAR BANSAL. COMPLYING WIT H SUCH A REQUEST, THE AO ISSUED SUMMONS U/S 131, IN RESPONSE TO WHICH SHRI PRADEEP KUMAR BANSAL ATTENDED THE PROCEEDINGS. HIS STATEMEN T WAS RECORDED. IN REPLY TO QUESTION NO.10, HE SUBMITTED THAT HE GAVE ENTRY LOAN OF RS.50,000/- TO THE ASSESSEE IN EXCHANGE OF CASH OF RS.50,000/-, WHICH WAS NOT A GENUINE LOAN TRANSACTION. SIMILARLY, ENTRY L OAN OF RS.50,000/- WAS ADMITTED TO HAVE BEEN GIVEN IN HUF CAPACITY, WHICH WAS ALSO NOT GENUINE. THE AO MADE THE ADDITION OF RS.1 LAC APAR T FROM DISALLOWANCE OF INTEREST AMOUNTING TO RS.34,584/-. THE ASSESSEE REMAINED UNSUCCESSFUL BEFORE THE LD. CIT(A) IN QUANTUM PROCEEDINGS. SIMI LAR WAS THE FATE OF THE ASSESSEE BEFORE THE TRIBUNAL. VIDE ORDER DATED 14. 8.2015, THE TRIBUNAL IN ITA NO.4495/DEL/2013, AFFIRMED THE ADDITION MADE BY THE AO. THE ASSESSEES CONTENTION THAT THE STATEMENT OF SHRI PR ADEEP KUMAR BANSAL ITA NO.3385/DEL/2016 3 WAS RECORDED AT HIS BACK AND, HENCE, THE ADDITION S HOULD BE DELETED, WAS TURNED DOWN BY THE TRIBUNAL BY NOTICING THAT SH. BA NSAL WAS THE ASSESSEES WITNESS. FURTHER, IN THE ABSENCE OF ANY OTHER EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTION, THE TRIBUNAL CO NFIRMED THE ADDITION. THE ASSESSEES MISCELLANEOUS APPLICATION ALSO CAME TO BE DISMISSED BY THE TRIBUNAL. IN THE MEAN TIME, THE AO IMPOSED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED ON THE CONCEALED INCOME OF RS.1 ,34,584/-, BEING THE AMOUNT OF ADDITION OF RS.1 LAC AND THE INTEREST CLA IMED TO HAVE BEEN PAID ON SUCH LOANS. THE ASSESSEE REMAINED UNSUCCESSFUL BEFORE THE LD. CIT(A) AS WELL. THAT IS HOW THE APPEAL IS BEFORE THE TRIBU NAL. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IT IS NOTICED THAT SHRI PRADEEP KUMAR B ANSAL APPEARED BEFORE THE AO AT THE INSTANCE OF THE ASSESSEE. IT WAS THE ASSESSEE ALONE, WHO DID NOT PRODUCE THE CREDITOR AND RATHER REQUESTED THE A O TO ISSUE SUMMONS. THAT LED TO THE ISSUANCE OF SUMMONS BY THE AO. SHR I PRADEEP KUMAR BANSAL ADMITTED BEFORE THE AO IN HIS STATEMENT, A C OPY OF WHICH IS AVAILABLE ON RECORD, THAT HE GAVE ONLY ENTRY LOAN O F RS.50,000/- TO THE ASSESSEE IN EXCHANGE OF CASH OF RS.50,000/- AND IT WAS NOT A GENUINE ITA NO.3385/DEL/2016 4 TRANSACTION. SIMILAR WAS THE POSITION AS REGARDS TH E ALLEGED LOAN GIVEN BY HIS HUF. THIS STAND OF THE AO HAS BEEN AFFIRMED UP TO THE LEVEL OF THE TRIBUNAL. NO DOUBT, THE ASSESSMENT AND PENALTY PROC EEDINGS ARE INDEPENDENT OF EACH OTHER. I FIND THAT IN THE PENA LTY PROCEEDINGS TOO, THE ASSESSEE HAS NOT BROUGHT ON RECORD ANYTHING TO SUBS TANTIATE THE GENUINENESS OF THE TRANSACTION. THERE IS NO RETRAC TION BY SHRI PRADEEP KUMAR BANSAL FROM THE STATEMENT GIVEN BEFORE THE AO . THESE FACTS GO TO SHOW THAT THE ASSESSEE FAILED TO PROVE THE GENUINEN ESS OF THE TRANSACTION AND, CONSEQUENTLY, IN MY CONSIDERED OPINION, THE PE NALTY HAS BEEN RIGHTLY IMPOSED AND CONFIRMED. I, THEREFORE, UPHOLD THE SAM E. 4. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 17.10.2 016. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED, 17 TH OCTOBER, 2016. DK ITA NO.3385/DEL/2016 5 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.