Shambhu Bagaria, Delhi V. Addl. CIT, New Delhi

ITA 4053/DEL/2009

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5647 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 09-02-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 06-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B KISHORE
• Keywords: Unexplained cash credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH E: NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT & SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NO. 4053/DEL/2009 ASSESSMENT YEAR: 2002-03 SHAMBHU BAGARIA, PROP. M/S SHIV ENTERPRISES, A-48, CHETAK APARTMENTS, SECTOR-9, ROHINI, DELHI. PAN NO. AENPB6166R VS. ADDL. CIT, RANGE-21, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY: SH. B. KISHORE, SR. DR O R D E R PER I.P. BANSAL, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER OF CIT(A) DATED 16.07.09 FOR A.Y. 2002-03. T HE ASSESSEE IN THE PRESENT APPEAL IS AGGRIEVED BY THE LEVY OF CONCEALM ENT PENALTY AMOUNTING TO RS. 30,594/- WHICH HAS BEEN UPHELD BY LD. CIT(A). 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUF ACTURING AND TRADING OF STAINLESS STEEL UTENSILS. FOR THE YEAR UNDER CONSIDERATION HE FILED RETURN OF INCOME AT RS. 30,74,151/- AND ASSES SMENT WAS COMPLETED AT AN INCOME OF RS. 32,07,963/-. THE ADDITION MADE BY THE AO WAS RS. 1 LAKH U/S 68 OF INCOME TAX ACT IN RESPECT OF UNEXP LAINED CASH CREDIT ON WHICH THE IMPUGNED PENALTY HAS BEEN IMPOSED. THE S AID AMOUNT WAS SURRENDERED BY THE ASSESSEE DURING THE COURSE OF AS SESSMENT PROCEEDINGS TO PURCHASE PEACE OF MIND AND NO FURTHE R APPEAL WAS FILED BY THE ASSESSEE. ITA NO. 4053/D/09 2 3. IT IS RECORDED IN THE ORDER OF CIT(A) THAT THERE IS NO DISPUTE TO THE FACT THAT ADDITION MADE BY THE AO WAS SURRENDERED B Y THE ASSESSEE FOR PEACE OF MIND AND SUCH FINDINGS ARE RECORDED IN PAR A 6.8 OF THE IMPUGNED ORDER. HOWEVER, LD. CIT(A) HAS CONFIRMED THE PENALTY PROCEEDINGS TO THE EXTENT OF 100% ON THE UNEXPLAINE D CASH CREDIT ON THE GROUND THAT ASSESSES EXPLANATION REGARDING SAID CRE DIT WAS NOT BONAFIDE. IT IS RECORDED IN THE ORDER OF CIT(A) IN THE WRITTEN SUBMISSIONS FILED BY THE ASSESSEE THAT ASSESSEE HAD FURNISHED C ONFIRMATION, PAN NO. OF THE CREDITOR AND AO HAS ALSO MENTIONED IN THE AS SESSMENT ORDER THAT THE IDENTITY OF THE CREDITOR WAS ESTABLISHED. THE ONLY ALLEGATION AGAINST ASSESSEE THAT HE COULD NOT PRODUCED THE CREDITOR FO R VERIFICATION. WHILE CONFIRMING THE PENALTY LD. CIT(A) HAS RELIED UPON S OME JUDICIAL PRECEDENTS AND IT HAS BEEN HELD THAT PENALTY WAS RI GHTLY LEVIED. THE ASSESSEE IS AGGRIEVED, HENCE IN APPEAL. 4. NOTICE OF HEARING WAS SENT TO ASSESSEE. HOWEVER , NONE WAS PRESENT ON THE FIXED DATE OF HEARING. SINCE IT IS A SMALL APPEAL, WE PROCEED TO DECIDE THIS APPEAL EX-PARTE QUA THE ASSE SSEE ON MERITS. 5. LD. DR RELIED UPON THE ORDER OF AO AND CIT(A). 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF L D. DR AND ALSO CAREFULLY GONE THROUGH THE PENALTY ORDER AND THE OR DER OF CIT(A). IN THE SUBMISSIONS MADE BEFORE CIT(A) IT HAS CLEARLY BEEN STATED THAT ASSESSEE HAD FURNISHED THE CONFIRMATION, PAN NO. OF THE CREDITOR BUT ASSESSEE FAILED TO PRODUCE THE CREDITOR TO PROVE TH E CASH CREDIT. IDENTITY IS ALSO SAID TO BE ESTABLISHED. THE AMOUNT WAS SUR RENDERED BY THE ASSESSEE FOR PEACE OF MIND WHICH FACT IS ALSO UNDIS PUTED. IT HAS ITA NO. 4053/D/09 3 NOWHERE BEEN MENTIONED THAT AO ISSUED ANY SUMMONS T O THE CREDITOR AND HAS ESTABLISHED THAT THE CASH CREDIT APPEARING IN THE BOOKS OF ACCOUNT OF THE ASSESSEE WAS UNEXPLAINED. IN ABSENC E OF ANY MATERIAL BROUGHT AGAINST THE ASSESSEE THAT IT WAS THE INCOME OF THE ASSESSEE WHICH WAS TAKING SHAPE OF UNEXPLAINED CASH CREDIT, IT CANNOT BE PRESUMED THAT THE EXPLANATION OF THE ASSESSEE WAS E ITHER FALSE OR NOT BONAFIDE. THERE MAY BE SEVERAL REASONS ACCORDING T O WHICH ASSESSEE MAY NOT HAVE BEEN ABLE TO PRODUCE THE CREDITORS AND JUST TO AVOID PROTECTED LITIGATION HAS SURRENDERED THE CASH CREDI T. THE ASSESSEE HAD RETURNED A GOOD INCOME AND NO OTHER ADDITION COULD BE MADE EXCEPT SMALL PERSONAL DISALLOWANCES OF RS. 33,812/-. IN AB SENCE OF ANY MATERIAL TO BE BROUGHT ON RECORD TO SUGGEST THAT EXPLANATION OF THE ASSESSEE WAS NOT BONAFIDE OR IT WAS FALSE, IN OUR OPINION LEVY O F PENALTY WAS NOT JUSTIFIED. GOING THROUGH THE FACTS OF THE CASE, WE FIND THAT IT IS NOT A FIT CASE WHERE LEVY OF PENALTY COULD BE HELD JUSTIFIED. THEREFORE, WE DELE TE THE PENALTY AND ALLOW THE APPEAL FILED BY THE ASSESSEE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2010. (G.E. VEERABHADRAPPA) VICE PRESIDENT (I.P. BANSAL) JUDICIAL MEMBER DATED: 19 TH FEBRUARY, 2010. *KAVITA ITA NO. 4053/D/09 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR