Bhairab Kumar Sahoo, Bhubaneswar V. ITO, Ward-2(2), Bhubaneswar

ITA 384/CTK/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7209 (ITAT-CUTTACK)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 25-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 02-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: B PANDA B R PANDA
• Keywords: Income from undisclosed sources; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO S . 384,385 & 386 /CTK/2016 ASSESSMENT YEAR : 2009 - 2010 SRI BHAIRAB KUMAR SAHOO, PLOT NO.703/1623, BAYABABA MATHA ROAD, BHOI NAGAR, BHUBANESWAR. VS. ITO, WARD 2(2), BHUBANESWAR. PAN/GIR NO. AMJPS 8547F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI B.PANDA/B.R.PANDA, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 25 /01/ 2017 DATE OF PRONOUNCEMENT : 25 /01/ 2017 O R D E R THESE ARE APPEALS FILED BY THE ASSESSEE AGAINST SEPARATE ORDERS OF CIT(A) - 2, BHUBANESWAR DATED 22.8.2016 , 31.8.2016 & 18.8.2016 FOR THE ASSESSMENT YEAR 2009 - 10 . 2. IN ITA NO.383/CTK/2016, THE FIRST GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.3,98,652/ - AS INCOME FROM OTHER SOURCES. 2 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER FOUND TH A T THERE WAS DEPOSIT OF RS.3,98,652/ - IN SAVING BANK ACCOUNT NO.1082500100236001 IN KARNATAKA BANK VIDE CHEQUE NO.40269 ON 31.10.2008. THE ASSESSEE HAD SHOWN THIS AS CASH RECEIVED FROM MRS TANULATA SAHOO. SINCE, LD A.R. OF THE ASSESSEE COULD NOT EXPLAIN THE NATURE O F CREDIT PROPERLY, SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. 4. ON APPEAL, BEFORE THE CIT(A), THE ASSESSEE SUBMITTED AS UNDER: 'THAT, THE APPELLANT HAS APPEARED BEFORE THE LD. AO THROUGH HIS AUTHORIZED REPRESENTATIVE BY FURNISHING THE DETAILS AS PER TH E REQUIREMENTS OF THE LD. AO FOR SCRUTINIZATION OF HIS CASE. THE LD. ITO HAS GONE THROUGH THE BANK A/CS. MAINTAINED BY THE APPELLANT OUT OF WHICH IN SB A/C. IN KARNATAK BANK LTD. VIDE SB A/C. NO. 1082500100236001 HAS BEEN VIVIDLY EXAMINED, WHERE THE LD. AO HAS POINTED OUT AN ENTRY ON DT. 31/10/2008 DISCLOSING TO RS. 3,98,652/ - , WHICH HAS DEPOSITED IN THE BANK A/C. OF THE APPELLANT IN SHAPE OF ACCOUNT PAYEE CHEQUE. THE LD . A.O. HAS ASKED THE DETAILS OF SUCH DEPOSITING IN THE SAID BANK A/C. AT RS. 3,98,652/ - . THE STATEMENT OF THE AUTHORISED REPRESENTATIVE OF THE APPELLANT IN THAT RESPECT WAS 'CASH RE CEIVED FROM MRS. TANULATA SAHOO . BUT, THE FACTS REMAINS ONE SANTOSH KUMAR M OHANTY HAS GIVEN ADVANCE RS. 4 LAKHS IN ACCOUNT PAYEE CHEQUE NO. 40269 DT. 30/08/2008 OF BANK OF INDIA WHICH HAS DEPOSITED IN THE BANK A/C, OF THE APPELLANT AND THE SAME HAS CLEARED AT RS. 3,98,652/ - AFTER DUE DISCOUNT OF THE CHEQUE. HENCE, IT CANNOT BE TR EATED AS INCOME IN THE HAND OF THE APPELLANT WHICH HAS WRONGLY HELD BY THE LD. AO. HOWEVER, SRI SANTOSH KU. MOHANTY HAS SUBMITTED HIS CONFIRMATION BY STATING THAT, THE LAND BELONGS TO TANULATA SAHOO W/O. SRI BHAIRAB KU. SAHOO. THE SAID LAND HAS SOLD THROUG H SANTOSH KU. MOHANTY VIDE RSD NO. 16946, 16947 AND 16948 AND CONSIDERATION OF THE SAID LAND RS. 4 LAKHS HAS BEEN PAID BY SANTOSH KU. MOHANTY TO TANULATA SAHOO WHICH HAS DEPOSITED TO THE BANK A/C. OF THE APPELLANT INSTEAD OF SMT. TANULATA SAHOO BEING THE C HEQUE HAS ISSUED IN THE NAME OFBHAIRAB KU. SAHOO. THE CONFIRMATION LETTER IN THAT SUPPORT CLEARLY DISCLOSED THE SAID AMOUNTS BELONGS TO THE SMT. TANULATA SAHOO AND SMT, TANULATA SAHOO HAS CONFIRMED THE SAME. IT IS A MATTER ON RECORD SMT. TANULATA SAHOO IS ALSO AN ASSESSEE ASSESSED BY THE IT DEPTT. AND SAID SALE OF PLOTS HAVE CLEARLY DISCLOSED IN HER IT RETURN, THEREBY THE 3 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 ADDITION OF RS. 3,98,652/ - IS COMPLETELY NON - APPLICATION OF MIND BY THE LD. A. O. THE APPELLANT COULD NOT ABLE TO SUBMIT CONFIRMATION LET TER OF SANTOSH KU. MOHANTY AT - ARUNODOYA MARKET, MADHUPATNA, CUTTACK AT THE TIME OF ASSESSMENT AS THE SAID SANTOSH KU. MOHANTY WAS NOT AVAILABLE AT THAT POINT OF TIME. ' 5. THE CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER ON 14.9.2015. THE ASSESSING OFFICER IN HIS REMAND REPORT DATED 7.12.2015 STATED AS UNDER: 1. THE DESCRIPTION OF LANDED PROPERTY SOLD BY SMT TANULATA SAHOO DURING THE FINANCIAL YEAR 2008 - 09 CORRESPONDING TO THE A.Y. 2009 - 10 WITH RESPECTIVE FAIR MARKET VALUE OF SUCH LAND IN ANNEXURE - I (21 SALE DEEDS ARE ENCLOSED FOR YOUR HONOURS READY REFERENCE). 2. DETAILS OF LAND SOLD THROUGH SHRI SANTOSH KUMAR MOHANTY, CUTTACK ALONG WITH COPY OF SALE DEED AS EVIDENCE FOR SUCH TRANSACTION IN ANNEXURE - II. 3. SRI SANTOSH KUMAR MOHANTY HAS DEPOSITED RS. 4,00,000/ - VIDE CHEQUE NO. 40269 DATED 31/10/2008 IN SB ACCOUNT OF SRI BHAIRAB KUMAR SAHOO IN THE KARNATKA BANK, SAHID NAGAR. THE BANK CREDITED RS. 3,98,652/ - AFTER DEDUCTING THE BANK CHARGES. THE COPY OF BANK ACCOUNT IS PROVIDE D IN ANNEXURE - III. 4, THE COPY OF GENERAL POWER OF ATTORNEY PROVIDED IN THE NAME OF SRI BHAIRAB KUMAR SAHOO IN ANNEXURE - IV. 5. COPY OF IT. RETURN FOR AY . 2009 - 10 AND 2010 - 11.' 6. THE CIT(A) THEREAFTER REQUIRED THE ASSESSEE TO FILE REJOINDER IN WRITING. IN TH E REJOINDER BEFORE THE CIT(A) ON 17.8.2016, IT WAS SUBMITTED BY THE ASSESSEE THAT THE AMOUNT OF RS.3,98,652/ - WAS THE SALE PROCEEDS OF LAND. 7. THE CIT(A) OBSERVED THAT THE ASSESSEE CLAIMED THAT CASH RECEIVED ON 3.11.2 008 FROM LALIT KUMAR DAS OF RS.2,08 .000/ - , CASH REC EIVED ON 4.11.2008 FROM APUN MO HAPATRA OF RS.1,79,400/ - HAS BEEN UTILIZED TO GIVE ADVANCE OF 4 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 RS.4,00,000/ - BY SANTOSH KUMAR MOHANTY TO THE ASSESSEE. AFTER DEDUCTING THE BANK CHARGES, THE BANK CREDITED AN AMOUNT OF RS.3,85,652/ - TO THE ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAS FILED DECLARATION OF SHRI SANTOSH KUMAR MOHANTY, WHICH READS ASUNDER: 'I HAVE GIVEN AN ADVANCE OF RS. 4,00,000/ - , VIDE CH NO - 40269 DT 30.08.2008 BANK OF INDIA DEPOSITED ON KARNATAK BANK & SBA/C NO - 2360 CUTTACK BR IN FAVOUR OF MR. BHAIRAB KU SAHOO AGAINST SALE OF LAND MOUZA KESURA, KHATA NO - 514/14, & KHATA NO - 514/78, KHATA NO - 514/34 PLOT NO~623, 631, 621 3 PLOT 3 KHATA TOTAL AREA AO 195 DIE SALES TO DIFFERENT PERSON BY SMT TANULATA S AHOO. BUT AT HER REQUEST IT WAS ISSUED PART PAYMENT IN THE NAME OF HER HUSBAND MR. BHAIRAB KUMAR SAHOO. THE SAID ADVANCE WAS ADJUSTED AGAINST SALE OF LAND. VIDE RSD NO 16946 A0080. 16947 A0046. 16948 A0069 ON 4.11.2008. SD/ - SANTOSH KUMAR MOHANTY AT/PO - ARU NDAY MARKET PS MADHUPATNA DIST - CUTTACK.' 8. THE CIT(A) FURTHER OBSERVED THAT THE ASSESSEE HAS FILED SALE DEEDS IN SUPPORT OF THE CLAIM OF RECEIPT OF CASH FROM THE PERSO NS WHO HAVE PURCHASED THE PLOTS AS UNDER: NAME OF THE PERSON DATE OF SALE DEEDS KHATA NO. PLOT NO. AMOUNT. SMT. BULBUL MISHRA 03.11.2008 514/34, 514/14 620,631 RS. 1,19,600/ - LALIT KUMAR DASH 03.11.2008 514/78, 514/34 621, 620 RS. 2,08,000/ - APUN KUMAR MAHAPATRA 04.11.2008 514/14 627 RS, 1,79,400/ - 9. THEREAFTER, THE CIT(A) OBSERVED THAT IT CAN BE SEEN FROM THE ABOVE, SHRI SANTOSH KUMAR MOHANTY RECEIVED CASH ON 03.11.2 008 AND 04.11.2008 WHICH IS CLAIMED TO HAVE BEEN UTILIZED FOR ISSUE OF CHEQUE TO THE ASSESSEE. THE 5 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 CHEQUE WAS ISSUED ON 31.08.20 08. IT WAS CREDITED TO ASSESSEES ACCOUNT ON 31.10.2008. IF THE CASH IS UTILISED FOR ISSUE OF THE CHEQUE THEN THE DEPOSIT OF CASH SHOULD BE EARLIER THAN THE CREDIT OF THE CHEQUE BUT IN THIS CASE IT IS THE REVERSE. THEREFORE, THE CIT(A) OBSERVED THAT IT IS CLEAR THAT THE ASSESSEE HAS TRIED TO MIS GUIDE THIS OFFICE AND HAS MISREPRESENTED THE FACTS IN EXPLAINING THE SOURCE OF THE CHEQUE IN THE ACCOUNT OF THE ASSESSEE. HE FURTHER OBSERVED THAT THE ASSESSEE HAS NOT CLARIFIED WHETHER ALL THE ABOVE MENTIONED CASH DEPOSITS OF RS. 1,79,400/ - , RS. 2,08,000 / - AND RS. 1,19,600/ - WERE DEPOSITED IN THE ACCOUNT OF SANTOSH KUMAR MOHANTY. BANK STATEMENT OF SRI SANTOSH KUMAR MOHANTY HAS NOT BEEN FILED WHEREIN THE DEPOSIT OF THREE INSTALMENTS OF CASH AND ISSUE OF CHEQUE COULD BE SEEN. THE CIT(A) FURTHER OBSERVED TH AT SMT. TANULATA SAHOO RECEIVED CASH AFTER SELLING PLOTS . IF RS.4,00,000/ - WAS TO BE GIVEN BY SMT. TANULATA SAHOO TO THE ASSESSEE, THE CASH COULD HAVE BEEN DEPOSITED BY HER IN THE ACCOUNT OF THE ASSESSEE. THE ASSESSEE HAS NOT BEEN ABLE TO ESTABLISH ANY L INK OF CASH RECEIVED FROM THE BUYERS OF THE PLOT, ITS DEPOSIT IN THE BANK ACCOUNT OF SRI SANTOSH KUMAR MOHANTY AND ISSUE OF CHEQUE FROM THIS CASH RECEIVED. THE DECLARATION OF SRI SANTOSH KUMAR MOHANTY IS FALSE. THEREFORE, THE ADDITION OF RS.3,98,652/ - M ADE BY THE ASSESSING OFFICER IS CONFIRMED. 10. BEFORE ME, LD A.R. OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 6 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 11. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 12. I FIND THAT THE UNDISPUTED FAC TS ARE THAT A DEPOSIT OF RS.3,98,652/ - WAS FOUND IN THE SAVING BANK ACCOUNT NO. NO.1082500100236001 IN KARNATAKA BANK . THIS AMOUNT WAS O N ACCOUNT OF CHEQUE NO.40269 DT 31.10.2008 FOR RS.4,00,000/ - CLAIMED BY THE ASSESSEE TO HAVE BEEN RECEIVED FROM SHRI SANTOSH KUMAR MOHANTY AND AFTER DEDUCTING THE BANK CHARGES, THE BANK HAS CREDITED THE BALANCE AMOUNT OF RS.3,98,652/ - IN THE BANK ACCOUNT OF THE ASSESSEE. THE EXPLANATION OF THE ASSESSEE IS THAT THE CHEQUE WAS RECEIVED FRO M SHRI SANTOSH KUMAR MOHANTY, WHO WAS GIVEN THE POWER OF ATTORNEY BY THE WIFE OF THE ASSESSEE, SMT. TANULATA SAHOO FOR SALE OF PLOTS OF LAND. IT IS ALSO NOT IN DISPUTE THAT SHRI SANTOSH KUMAR MOHANTY HAS SOLD LAND ON BEHALF OF THE ASSESSEE. IT IS THE S UBMISSION OF THE LD A.R. OF THE ASSESSEE THAT THE WIFE OF THE ASSESSEE WAS TO RECEIVE RS.1,19,600/ - FROM SMT. BULBUL MISHRA, RS.2,08,000 FROM LALIT KUMAR DASH AND RS.1,79,400/ - FROM APUN KUMAR MOHAPATRA AGGREGATING TO RS.5,07,000/ - . AGAINST THE SALE CONSID ERATION OF THESE PLOTS OF LAND BY SHRI SANTOSH KUMAR MOHANTY, THE POWER OF ATTORNEY HOLDER FOR SMT. TANULATA SAHOO,WIFE OF THE ASSESSEE GAVE A CHEQUE OF RS.4 LAKHS TO THE HUSBAND OF TANULATA SAHOO, THE ASSESSEE IN THE PRESENT CASE, WHICH WAS DEPOSITED BY H IM IN HIS BANK ACCOUNT WITH KARNATAKA BANK AND A SUM OF RS.3,98,652/ - WAS CREDITED BY THE BANK AFTER DEDUCTING BANK CHARGES. THE CONTENTION OF THE REVENUE IS THAT THE CASH 7 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 WAS RECEIVED FROM THREE PERSONS TO WHOM PLOTS OF LAND WERE SOLD ON 3.11.2008 AND 4. 11.2008 BY SHRI SANTOSH KUMAR MOHANTY AND THE CHEQUE WAS GIVEN TO THE ASSESSEE ON 31.10.2008, WHICH WAS PRIOR TO THE RECEIPT OF CASH BY SHRI SANTOSH KUMAR MOHANTY AND, THEREFORE, SAME WAS NOT BELIEVED BY THE REVENUE. IN THE ABOVE FACTS AND CIRCUMSTANCES O F THE CASE, I AM OF THE CONSIDERED VIEW THAT THE ASSESSEE GAVE AN EXPLANATION FOR DEPOSIT OF RS.3,98,652/ - TO THE REVENUE IN HIS BANK ACCOUNT WITH KARANATA KA BANK. THE REVENUE HAS DOUBTED THE RECEIPT ON THE GROUND THAT THE CHEQUE WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE ON 31.10.2008 WHICH WAS PRIOR TO THE RECEIPT OF CASH FROM THE PURCHASERS OF THE PLOTS OF LAND ON 3.11.2008 AND 4.11.2008, WHICH WAS NOT POSSIBLE. THE ASSESSEE HAS ALSO FILED CONFIRMATION FROM SHRI SANTOSH KUMAR MOHANTY, POWER ATTO RNEY HOLDER OF SMT. TANULATA SAHOO, WIFE OF THE ASSESSEE TO THE EFFECT THAT HE HAS GIVEN RS.4,00,000/ - VIDE CHEQUE NO.40269 DT.30.8.2009 DRAWN ON BANK OF INDIA, WHICH WAS DEPOSITED BY THE ASSESSEE IN HIS SAVING ACCOUNT WITH KARNATAKA BANK. THE REVENUE T HEREAFTER VERIFYING THE FACTS HAS BROUGHT NO MATERIAL ON RECORD TO SHOW THAT THE EXPLANATION OF THE ASSESSEE WAS FALSE OR AN AFTERTHOUGHT. IT IS ALSO NOT THE CASE OF THE REVENUE AFTER VERIFYING THE BANK ACCOUNT OF SHRI S.K.MOHANTY THAT SHRI S.K.MOHANTY DI D NOT HAVE SUFFICIENT BALANCE IN HIS ACCOUNT BEFORE ISSUING CHEQUE OF RS.4,00,000/ - . IN MY CONSIDERED VIEW SUSPICION HOW SOEVER GRAVE CANNOT TAKE PLACE OF PROOF. IT IS AN ADMITTED FACT THAT THE WIFE OF THE ASSESSEE HAS SOLD PLOTS OF LAND TO THREE PERSONS FROM WHOM SUM OF 8 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 RS.5,07,000/ - WAS DUE THROUGH THE BROKER SHRI SANTOSH KUMAR MOHANTY. THEREFORE, IN MY CONSIDERED VIEW THAT THE ADDITION OF RS.3,98,652/ - WAS MADE ONLY ON SUSPICION AND WITHOUT ANY PROOF THAT SHRI S ANTOSH KUMAR MOHANTY DID NOT HAVE THE CAPACITY TO GIVE RS.3,98652/ - TO THE ASSESSEE . MY VIEW FINDS SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SREELEKHA BANERJEE VS CIT, (1963), 49 ITR 112 (SC), WHEREIN, HONBLE SUPREME COURT HELD TH AT THE DEPARTMENT CANNOT BY MERELY REJECTING A GOOD EXPLANATION UNREASONABLY, CONVERT GOOD PROOF INTO NO PROOF. HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE ADDITION OF RS.3,98,652/ - AND ALLOW THIS GROUND OF APPEAL OF THE ASSESSEE . 13. THE SECOND GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,30,000/ - AS INCOME FROM OTHER SOURCES. 14. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER FOUND THAT THERE WAS DEPOSIT OF RS.1,30,000/ - IN THE SAVING BANK ACCOUNT NO.1618 IN KARNATAKA BANK. THE ASSESSEE EXPLAINED THE SAME AS LOAN FROM UTKAL MARINE PRIMARY FISH PRODUCTION AND MARKETING CO - OPERATING S OCIETY, PARADIP. THE ASSESSEE FURNISHED COPY OF LOAN SANCTION LETTER FROM UTKAL MARINE PRIMARY FISH PRODUCTION AND MARKETING CO - OPERATING SOCIETY. IT 9 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 WAS FOUND FROM THE SAID SANCTION LETTER THAT THE LOAN HAD BEEN SANCTIONED TO SMT. BANALATE SAHOO FOR PURCHASE OF 4000 LITERS OF DIESEL TO BE USED FOR TRAWLER. THEREFORE, THE ASSESSING OFFICER CONCLUDED THAT THE TRANSACTION MADE IN THE ABOVE BANK AS SHOWN BY THE ASSESSEE BEING LOAN TAKEN FROM UTKAL MARINE PRIMARY FISH PRODUCTION AND MARKETING CO - OPER ATING SOCIETY, IS NOT CORRECT. HE HELD THAT THE GENUINENESS OF ABOVE TRANSACTION IS DOUBTFUL AND ALSO NOT PROVED. THEREFORE, HE ADDED RS.1,30,000/ - TO THE INCOME OF THE ASSESSEE AS INCOME FROM UNDISCLOSED SOURCES. 15. BEFORE THE LD CIT(A), IN THE STATE MENT OF FACTS, IT WAS STATED BY THE ASSESSEE THAT AS THE TRAWLER OF SMT. BANALATE SAHOO WAS DAMAGED, THE DIESEL WAS SOLD IN THE OPEN MARKET OUT OF WHICH RS.1,30,000/ - HAS BEEN DERIVED AS INCOME AND THIS AMOUNT REPRESENTED THE INCOME OF SMT. BANALATA SAHOO ALIAS SMT. TANULATA SAHOO AND HAS BEEN DISCLOSED IN THE FILE OF SMT. BANATALA SAOO. 16. THE CIT(A) REFERRED THE ISSUE TO THE ASSESSING OFFICER FOR VERIFICATION ON 14.9.2015. THE ASSESSING OFFICER IN HIS REMAND REPORT DATED 7.12.2015 STATED THAT SMT TANUL ATA SAHOO, WIFE OF THE ASSESSEE HAS DISCLOSED INCOME FROM PROFITS AND GAINS OF BUSINESS OF RS.2,97,450/ - AND INCOME FROM OTHER SOURCES OF RS.1275/ - AGGREGATING TO RS.2,98,705/ - . 10 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 17. THE CIT(A) CALLED FOR A REJOINDER FROM THE ASSESSEE TO THE REMAND REPORT OF THE ASSESSING OFFICER AND THE ASSESSEE DURING THE HEARING ON 17.8.2016 STATED THAT THE TRAWLER WAS DEFUNCT , DIESELS OF 4000 LITRES WAS SOLD IN THE OPEN MARKET AND RS.50,000/ - WERE RECEIVED ON 26.7.2008, RS.20,000/ - WERE RECEIVED ON 13.8.2008 AND RS.60,0 00/ - WERE RECEIVED ON 3.10.2008 TOTALLING TO RS.1,30,000/ - FROM SALE OF DIESEL. 18. THE CIT(A) THEREAFTER OBSERVED THAT FROM THE EXPLANATION FILED AT THE TIME OF ASSESSMENT PROCEEDINGS AND DURING APPELLATE PROCEEDINGS, THE ASSESSEE HAS CHANGED THE STAND F ROM BEING LOAN TO SALE PROCEEDS OF DIESEL . T HERE IS INCONSISTENCY IN THE EX PLANATION SUBMITTED BY THE ASSESSEE. HE NOTED THAT I HAVE PERUSED THE STATEMENT OF INCOME OF MRS TANULATA SAHOO, AND IT IS SEEN THAT SHE HAS RECEIVED SALARY FROM M/A. MAA SANTOSH AQUA CULTURE OF RS.48,000/ - AND INTEREST RECEIVED FROM MAA SANTOSHI AQUA CULTURE OF RS.80,630/ - AND COMMISSION OF RS.1,68,800/ - . SHE HAS DISCLOSED CAPITAL GAIN OF NIL AMOUNT AND INTEREST FROM SB ACCOUNT OF RS.1,275/ - . NEITHER SALE PROCEEDS NOR THE PROFIT FROM SALE OF DIESEL HAS BEEN DISCLOSED BY SMT. TANULATA SAHOO. THEREFORE, HE WAS IN AGREEMENT WITH THE ASSESSING OFFICER THAT THE SOURCE OF CASH DEPOSIT OF RS.1,30,000/ - REMAINED UNEXPLAINED AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 11 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 19. BEFORE ME, .LD A.R. REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 20. I FIND THAT THE EXPLANATION OF THE ASSESSEE THROUGHOUT BEFORE THE ASSESSING OFFICER, THE CIT(A) AS WELL AS BEFORE ME IS T HAT RS.1,30,000/ - IS THE SALE PROCEEDS OF 4000 LITRES OF DIESEL, WHICH HAS BEEN DEPOSITED IN THE BANK ACCOUNT WITH KARNATA KA BANK ACCOUNT NO.1618. IT IS ALSO THE SUBMISSION THAT THE INCOME FROM SALE OF 4000 LITRES DIESEL HAS BEEN SHOWN IN THE INCOME TAX R ETURN OF SMT. TANULATA SAHOO, WIFE OF THE ASSESSEE. IT IS OBSERVED FROM THE FINDINGS OF THE CIT(A) THAT NO SUCH INCOME FROM SALE OF DIESEL OF 4000 LITRES HAS BEEN SHOWN IN THE RETURN OF INCOME FILED BY TANULATA SAHOO. THIS FINDING OF FACT HAS NOT BEEN C ONTROVERTED BY THE LD A.R. OF THE ASSESSEE BY BRINGING ANY COGENT AND RELEVANT MATERIAL ON RECORD. THEREFORE, I FIND NO GOOD REASON TO INTERFERE WITH THE FINDINGS OF LD CIT(A), WHICH IS HEREBY CONFIRMED AND GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED. 21. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. 22. IN ITA NO.384/CTK/2016, THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.1,52,456/ - U/S.271(1)(C) OF THE ACT. 12 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 23. AT THE OUTSET, LD A.R. OF THE ASSESSEE ARGUED AND SUBMITTED THAT IT WILL BE OBSERVED FROM THE ORDER DATED 28.6.2012 PASSED U/S.271(1)(C) OF THE ACT FOR LEVY OF PENALTY OF RS.1,54,456/ - , THE ASSESSING OFFICER HAS OBSERVED AT PAGE 2 PARA 2 AS UNDER: PROCEEDINGS U/S.271( 1)(C) OF I.T.ACT WAS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME BY THE ASSESSEE. 24. THE AR OF THE ASSESSEE ARGUED THAT IN VIEW OF THE RECENT DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SSAS. EMARLD MEA DOWS DATED 11 TH JANUARY, 2017 PASSED IN SPECIA L LEAVE TO APPEAL (CC NO.11485/2016) HAS HELD THAT OMISSION BY THE AO TO EXPLICITLY SPECIFY IN THE PENALTY NOTICE AS TO WHETHER PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR FO R CONCEALMENT OF INCOME MAKES THE PENALTY ORDER LIABLE FOR CANCELLATION. HENCE, HE SUBMITTED THAT THE PRESENT ORDER DATED 28.6.2012 LEVYING PENALTY U/S.271(1)(C) OF RS.1,52,456/ - IS, THEREFORE, LIABLE TO BE CANCELLED. 25. THE D.R. COULD NOT CONTROVERT THE ABOVE SUBMISSION OF LD A.R. OF THE ASSESSEE. 26. I FIND THAT THE FACTS IN THE PRESENT APPEAL ARE NOT IN DISPUTE AND THE ASSESSING OFFICER IN THE ORDER PASSED U/S.271(1)(C ) DATED 28.6.2012 LEVIED PENALTY OF RS.1,52,456/ - OBSER VING AT PAGE 2 PARA 2 AS UNDER: 13 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 PROCEEDINGS U/S.271(1)(C) OF I.T.ACT WAS INITIATED FOR FURNISHING OF INACCURATE PARTICULARS OR CONCEALMENT OF INCOME BY THE ASSESSEE. THEREFORE, THE FACTS OF THE PRESENT APPEAL ARE IDENTICAL TO THE FACTS OF THE CASE BEFO RE THE HONBLE SUPREME COURT IN THE CASE OF SSAS. EMARLD MEADOWS(SUPRA) AND, THEREFORE, THE DECISION OF HONBLE S UPREME COURT SQUARELY APPLIES TO THE CASE OF THE ASSESSEE. HENCE, RESPECTFULLY FOLLOWING THE SAME, I CANCEL THE LEVY OF PENALTY OF RS.1,52,456 / - U/S.271(1)(C) AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 26. IN THE RESULT, APPEAL IS ALLOWED. 27. IN ITA NO.385/CTK/2016, THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE CIT(A) ERRED IN LEVYING PENALTY U/S.271D OF I.T.ACT, 1961 OF RS.13,23,711/ - . 2 8. I HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. 29. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM HOUSE PROPERTY, SALARY AND INTEREST FROM PART NERSHIP FIRM. THE ASSESSEE FILED RETURN OF INCOME ON 16.7.2010 SHOWING TOTAL INCOME OF RS.3,94,200/ - . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS TAKEN LOAN OF RS.23,02,363/ - ON VARIOUS DATES F ROM SMT. TANULATA SAHOO, WIFE OF THE ASSESSEE IN VIOLATION 14 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 OF SECTION 269SS OF INCOME TAX ACT, 1961. THEREFORE, THE ASSESSING OFFICER LEVIED PENALTY U/S.271D OF THE ACT OF RS.13,23,711/ - . 30. ON APPEAL, LD CIT(A) CONFIRMED THE LEVY OF PENALTY. 31. BEFORE ME, LD A.R. OF THE ASSESSEE RELIED ON THE ORDER DATED 20 TH NOVEMBER, 2009 OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE O F SHRI MOHAMMED SALEEM VS ACIT IN ITA N O.833/HYD/2008 FOR A.Y. 2003 - 04 AND SUBMITTED THAT THE TRIBUNAL HAS HELD THAT IN CASE OF MONEY BORROWED FROM THE WIFE OF THE ASSESSEE, THERE WAS ONLY TECHNICAL AND VENIAL BREACH OF SECTION 269SS OF THE ACT. THE TRANSACTION BETWEEN HUSBAND AND WIFE CANNOT CONSTITUTE A LOAN TRANSACTION, LAW DOES NOT TAKE INTO ACCOUNT TRIVIALITIES. IN RESPECT OF THE LOAN TAKEN FROM THE WIFE, THE SAID BORROWING CARRIES NO INTEREST AND NO CONDITION REGARDING THE REPAYMENT. THEREFORE, IT CANNOT BE CONSTRUED TO BE A TRANSACTION BORROWER AND THE LENDER AND D ELETED THE LEVY OF PENALTY U/S.271D OF THE ACT. HE SUBMITTED THAT IN THE CASE OF THE ASSESSEE, THE FACTS ARE IDENTICAL AND, THEREFORE, THE LEVY OF PENALTY U/S.271D SHOULD BE DELETE D FOLLOWING THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL REFERRED ABOVE. 32. FURTHER, HE RELIED ON THE DECISION OF HONBLE JHARKHAND HIGH COURT IN THE CASE OF OMEC ENGINEERS VS CIT IN TAX CASE NO.40 OF 1998 ORDER DATED 18.9.2007 AND SUBMITTED THAT THE HONBLE HIGH COURT HELD THAT WHERE THE RETURN FILED BY THE ASSESSEE WAS ACCE PTED AFTER SCRUTINY U/S.143(3) AND FURTHER THERE IS NO FINDING OF THE APPELLATE AUTHORIT Y THAT THE TRANSACTION IN 15 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 BREACH OF THE PROVISIONS OF SECTION 269SS MADE BY THE ASSESSEE WAS MALAFIDE AND WITH THE SOLE OBJECT TO DISCLOSE THE CONCEALED OR UNDISCLOSED MONEY, PENALTY U/S.271D CANNOT BE LEVIED MERELY ON TECHNICAL MISTAKE COMMITTED BY THE ASSESSEE. 33. HE SUBMITTED THAT IN THE CASE OF THE ASSESSEE ALSO, THERE IS NO FINDING BY THE APPELLATE AUTHORITY THAT THE BREACH U/S.269SS COMMITTED BY THE ASSESSEE WAS MALAFIDE WITH AN INTENTION TO DISCLOSE THE CONCEALED UNDISCLOSED MONEY. HENCE, THE BREACH WAS A TECHNICAL BREACH FOR WHICH NO PENALTY U/S.271D CAN BE VISITED ON THE ASSESSEE. 34. LD D.R. RELIED ON ORDERS OF LOWER AUTHORITIES. 35. I FIND THAT THE ISSUE AT HAND IS SQUARELY COVERED BY THE DECISION OF HYDERABAD BENCH OF THE TRIBUNAL IN THE CASE OF SHRI MOHAMMED SALEEM (SUPRA), WHEREIN, IT HAS BEEN HELD THAT IN CASE OF MONEY BORROWED FROM THE WIFE OF THE ASSESSEE, THERE WAS ONLY TECHNICAL AND VENIAL BREACH OF SECTION 269SS OF THE ACT AND NO PENALTY U/S.271D CAN BE LEVIED AS THE RELATIONSHIP DOES NOT CONSTITUTE AS ONE BETWEEN BORROWER AND LENDER. FURTHER, THERE IS NO FINDING BY THE AUTHORITIES BELOW THAT THE BREACH OF PROVISIONS OF SECTION 269SS OF THE ACT BY THE ASSESSEE WAS MALAFIDE AND THE SOLE OBJECTION TO DISCLOSE THE CONCEALED OR UNDISCLOSED MONEY BY THE ASSESSEE AND, THEREFORE, IT IS MERELY A TECHNICAL MISTAKE COMMITTED BY THE ASSESSEE AND, THEREFORE, THE ASSESSEE IS NOT LIABLE FOR PENALTY U/S.271D OF TH E ACT AS HELD BY THE HONBLE JHARKHAND 16 ITA NOS. 384,385 & 386 /CTK/2016 ASSESSMENT YEAR :2009 - 2010 HIGH COURT IN THE CASE OF OMEC ENGINEERS ( SUPRA) . HENCE, I SET ASIDE THE ORDERS OF LOWER AUTHORITIES AND DELETE THE PENALTY OF RS.13,23,711/ - LEVIED U/S.271D OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSE E. 36. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. 37. IN FINE, THE APPEAL IN ITA NO.383/CTK/2016 IS PARTLY ALLOWED AND APPEALS IN ITA NOS. 384 & 385/CTK/2016 ARE ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 2 5 / 01/2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 25 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, CUTTACK 1. THE APPELLANT : SRI BHAIRAB KUMAR SAHOO , PLOT NO.703/1623, BAYABABA MATHA ROAD, BHOI NAGAR, BHUBANESWAR. 2. THE RESPONDENT: ITO, WARD 2(2), BHUBANESWAR. 3. THE CIT(A) - 2, BHUBANESWAR. 4. PR.CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//