ACIT 23(1), MUMBAI V. KUSUM K. JAIN, MUMBAI

ITA 407/MUM/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93084 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 17-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Keywords: Unexplained cash credit; Principle of natural justice
• Section: 133(6); 131; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES A, MUMBAI .. , , . . '#$ , & BEFORE SHRI I P BANSAL, JM, & SHRI N K BILLAIYA, AM ./ITA NO.407/MUM/2014 ( ' / ASSESSMENT YEAR : 2005-06) ACIT 23(1) MUMBAI VS. KUSUM K JAIN SHOP NO.4, ISHWAR NIWAS, RAMKISHAN WADI, GROUND FLOOR, BHANDUP (W), MUMBAI 400078 PAN : AADPJ9059P ( () /APPELLANT) ( *+() / RESPONDENT) APPELLANT BY : SHRI ASGHAR ZAIN RESPONDENT BY : SHRI JAYANT R BHATT DATE OF HEARING : 25.06.2015 DATE OF PRONOUNCEME NT : 30.06.2015 / O R D E R PER I P BANSAL, JUDICIAL MEMBER : THIS APPEAL IS FILED BY THE REVENUE. IT IS DIRECTE D AGAINST THE ORDER PASSED BY THE CIT(A) DATED 01.10.2013 FOR A.Y. 2005-06. THE GROUNDS OF APPEAL READ AS UNDER: WHETHER ON THE FACTS AND IN CIRCUMSTANCES OF THE C ASE AND IN LAW THE LD. CIT(A) WAS RIGHT IN DELETING PENALTY LEVIED U/S. 271(1)(C) OF THE INCOME-TAX ACT 1961 OF RS.12,09,516/- WITHOU T APPRECIATING THAT QUANTUM ADDITION WAS MADE ON THE BASIS OF INFO RMATION RECEIVED THAT THE ASSESSEE HAD ADVANCED LOAN, SOURC ES OF WHICH COULD NOT BE EXPLAINED BY THE ASSESSEE DURING THE A SSESSMENT PROCEEDINGS, INTERALIA, THE ASSESSEE HAD FILED INAC CURATE PARTICULARS OF INCOME AND ALSO CONCEALED THE PARTICULARS OF INC OME UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX A CT, 1961. 2 ITA NO. 407/MUM/2014 AY: 2005-06 2. THE IMPUGNED PENALTY IS LEVIED ON AN ADDITION OF RS.36,80,000/-, WHICH COMPRISES OF AMOUNT RECEIVED BY THE ASSESSEE FROM T HE FOLLOWING PERSONS: NAME AMOUNT JAGDISHJI 5,00,000 LAXMANLAL 5,00,000 MOHAN SHINGH 5,00,000 RUPALALJI 5,00,000 VIJAY SINGH 5,00,000 GORDHAN SINGH 5,00,000 MOD SINGH 5,00,000 TOTAL 35,00,000 IT WAS THE CASE OF THE ASSESSEE THAT THESE AMOUNTS WERE GIVEN TO THE AFOREMENTIONED PERSONS IN EARLIER YEARS FOR THE PURPOSE OF MINING, WHICH WERE RECEIVED BACK BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION. HOWE VER, THE AO DISBELIEVED SUCH VERSION OF THE ASSESSEE AND ADDED A SUM OF RS.36,80 ,000/-, WHICH INCLUDED THE AFOREMENTIONED AMOUNT OF RS.35 LACS. THE ADDITION WAS AGITATED IN AN APPEAL FILED BEFORE THE CIT(A), WHO CONFIRMED THE ADDITION VIDE HIS ORDER DATED 15.03.2011. THE ADDITION WAS SUSTAINED BY THE LEARNED CIT(A) MAINLY ON THE GROUND THAT AMOUNT OF RS.35 LACS IS OUTSTANDING TO BE RECEIVABLE EVEN IN THE BALANCE SHEET FILED FOR A Y 2005- 06 AND THESE FINDINGS OF THE LEARNED CIT(A) IN THE QUANTUM ORDER ARE FOUND IN PARA 16 TO 18, WHICH ARE REPRODUCED BELOW: 16. HAVING SAID THAT THE RETURN FILED BY APPELLANT STARTING FROM ASSESSMENT YEAR 1997-98 ONWARDS HAVE ALSO BEEN LOOKED INTO. IT IS SEEN FROM THE BALANCE SHEET OF MS. KUS UM JAIN ON 31.03.1997 THAT THE AMOUNT OF RS. 35 LAKHS IS REFLE CTED UNDER THE HEAD LOANS AND ADVANCES AS FOUND AND STATED ABOVE. HOWEVER, DETAIL SCHEDULE FOR THE SAME IS NOT FORMING PART OF THE AUDITED ACCOUNTS FILED BY THE APPELLANT. SAME IS THE CASE FOR ASSESSMENT YEAR 1998-99 WHERE THE AMOUNT OF RS.35 LAKHS IS APP EARING UNDER THE HEAD LOANS AND ADVANCES HOWEVER AGAIN PARTY WIS E DETAILS IS NOT AVAILABLE. IT IS ONLY IN A.Y. 2004-05 THAT THE NAMES OF SEVEN PERSONS ARE APPEARING IN THE SCHEDULE FOR LOANS AND ADVANCES I.E SHRI MOD SINGH, SHRI MOHAN SINGH, SHRI GORDHAN SING H, SHRI VIJAY SINGH, SHRI LAXMANLAL, SHRI JAGDISH GAMETI AND SHRI RUPALALJI. THE APPELLANT HAS STATED THAT THE AMOUNT WAS PAID TO TH E PARTIES AS ADVANCES WAY BACK IN ASSESSMENT YEAR 1997-98. HOWE VER, IN ASSESSMENT YEAR 2005-06 ALSO THE AMOUNT IS REFLECTE D AT 3 ITA NO. 407/MUM/2014 AY: 2005-06 35,00,000/- IT IS IN CONTRADICTION TO APPELLANT TH AT IN CASE OF SHRI JAGDISH GAMETI COPY OF AGREEMENT (THROUGH UNREGISTE RED) DATED 14.07.2004 HAS BEEN FILED IN SUPPORT OF THE CLAIM THAT THE APPELLANT RECEIVED BACK ALSO RS.5 LAKHS FROM SHRI J AGDISH GAMETI. 17. THEN RECORDS OF EARLIER YEAR AVAILABLE IN FORM OF AUDIT REPORT HAVE ALSO BEEN CHECKED. IT IS SEEN FROM THE AUDIT REPORTS FILED ALONG WITH RETURN FOR ASSESSMENT YEAR 1996-97 THAT RENT FOR POCKLAIN MACHINE HAS BEEN DEBITED AT RS.3,69,600/- IN THE TRADING ACCOUNT OF LOVELY MARBLE. HIRE CHARGES UNDER THE H EAD FOR POCKLAIN MACHINE AN AMOUNT OF RS.50,937/- IS DEBITE D FOR ASSESSMENT YEAR 2001-02 AND THEN HIRE CHARGES FOR P OCKLAIN MACHINE FOR ASSESSMENT YEAR 2002-03 ARE NIL 18. IN VIEW OF THIS THE VERY PREMISE TAKEN BY THE A PPELLANT THAT THE CASH AMOUNT WHICH WAS ADVANCED TO M/S. APS ARA JEWELLERS WAS RECEIVED FROM THE PARTIES TO WHOM IT WAS ADVANCED MUCH EARLIER IN SOMEWHERE IN 1997 IS NOT SUSTAINABL E FOR TWO REASONS: (1) THE APPELLANT HAS NOT BEEN ABLE TO PROVE THE AM OUNT GIVEN AND RECEIVED FROM THEM SATISFACTORILY. THE O NLY THING IN HER FAVOUR WAS THAT THE TRANSACTION WAS MADE IN CASH BE CAUSE THERE WERE NO BANK BRANCH IN THE NEAR BY AREA WHERE THESE PERSONS ARE RESIDING AND WORKING. THOUGH THE APPELLANT HERSELF IS IN A CITY LIKE MUMBAI SHE COULD NOT SUBSTANTIATE WITH ANY EVIDENCE THE WITHDRAWAL IF ANY MADE BY HER TO THAT EXTENT MADE F OR THAT YEAR INCLUDING BANK STATEMENTS, CASH BOOK CLAIMED TO BE MAINTAINED BY BUSINESS AND CAPITAL ACCOUNT FOR RELEVANT ASSESSMEN T YEAR. IT IS NOT DISPUTED THAT THE BALANCE SHEET FOR THAT YEAR I S SHOWING LOANS AND ADVANCES FOR RS.35,00,000/- HOWEVER AS STATED T HERE IS NO SCHEDULE AVAILABLE GIVING THE DETAILS LIKE NAME OF THE PARTIES AND AMOUNT THEREOF FOR THE LOANS AND ADVANCE REFLECTED AT RS.35,00,000/- TILL A.Y. 2003-04. IT IS ONLY IN A. Y. 2004-05 THAT SEVEN NAMES ARE REFLECTED AS PRODUCED ABOVE. AGAIN LOAN AND ADVANCES ARE REFLECTED AT RS.35,00,000/- AS ON 31.0 3.2005 EVEN THOUGH APPELLANT CLAIMS THAT RS.5,00,000/- WERE RETURNED BY ONE OF DEBTORS NAMED SHRI JAGDISH GAMETI ON 14.07.2004 WHICH GOES AGAINST APPELLANT. (2) ALONG WITH THIS THE WHOLE ISSUE REVOLVED AROUND THE MAKE BELIEVE STORY OF APPELLANT WAS THAT IT WAS DON E BECAUSE INTENSIVE LABOUR WAS REQUIRED TO WORK ON THE SITE A ND THEY HAVE TO BE PAID IN CASH ONLY FOR THE REASON THAT IN INITIAL STAGE OF MINING THE EXTRACTION OF SUB SOIL AND SOFT STRATA IS NOT P OSSIBLE WITH THE HELP OF MACHINES I.E. POCKLAIN MACHINE AND JVC AS I T IS INTENSIVE MANUAL JOB. NOW HAVING FOUND THAT THE APPELLANT WA S HIRING 4 ITA NO. 407/MUM/2014 AY: 2005-06 POCKLAIN MACHINE WAY BACK IN 1997 AS REFLECTED IN P & L ACCOUNT OF LOVELY MARBLES AND COULD PURCHASE IT IN 2004 ONL Y AS REFLECTED IN OPENING BALANCE OF BLOCK OF ASSETS IN A.Y. 2002- 03, IT CANNOT BE STATED THAT IT WAS INITIAL STAGE OF MINING WHERE IN TENSIVE LABOUR JOBS WERE REQUIRED. (3) IT IS ALSO SEEN FROM THE LICENSE THAT IN 1997 T HE APPELLANT GOT RENEWAL OF LICENCE FOR ANOTHER TWENTY YEARS. T HIS MEANS THAT THE APPELLANT WAS ALREADY CARRYING MINING JOB AND A FTER LAPSE OF PERMITTED PERIOD SHE APPLIED FOR RENEWAL OF LICENSE . CONSEQUENTLY, THE MINING RIGHTS WERE RENEWED FURTHE R FOR ANOTHER TWENTY YEARS FROM 1999 TO 2090 (2019) VIDE ORDER DA TED 01.07.1997. THUS BY NO STRETCH OF IMAGINATION IT C AN BE PRESUMED THAT LICENSE BEING RENEWED IN THE YEAR 199 7, STILL 1997 WAS INITIAL YEAR OF MINING WHEN MINING JOB COULD BE DONE ONLY WITH MANUAL LABOURERS AND HENCE THE THEORY ADVANCED BY THE APPELLANT IS FOUND TOTALLY UNSUPPORTED AND IN FACT CONTRADICTORY WITH THE FACTS AVAILABLE ON THE RECORD. IN VIEW OF THIS THE AMOUNT INTRODUCED IN THE CAPITAL ACCOUNT OF THE APPELLANT IN HER PROPRIETARY CONCERN RS.13,80,000/- AND ANOTHER RS.2 4,00,000/- ADVANCED TO KISHANLAL SURYA PROPRIETOR OF M/S. APSA RA JEWELLERS RS.36,80,000/- REMAINS UNPROVED AND HENCE ADDITION FOR THIS MUCH AMOUNT IN THE HAND OF THE APPELLANT ARE SUSTAI NED. (EMPHASIS IMPLIED) 3. ON THE BASIS OF THE CONFIRMATION OF ADDITION BY THE CIT(A), IMPUGNED PENALTY HAS BEEN LEVIED BY THE AO. THE AFOREMENTIONED ORDER OF THE CIT(A) WAS CHALLENGED BY THE ASSESSEE IN FURTHER APPEAL, WHICH HAS BEEN DECIDED BY THE TRIBUNAL VIDE ITS ORDER DATED 17.06.2015 AND IT WAS FOUND THAT AFOREMENTIONED FIN DINGS OF THE CIT(A) IN THE QUANTUM PROCEEDINGS WERE CONTRARY TO THE FACTS AVAILABLE ON RECORD AS THE AFOREMENTIONED AMOUNT OF RS.35 LACS WAS NOT OUTSTANDING IN THE BAL ANCE SHEET FOR A Y 2005-06. THEREFORE, THE ORDER PASSED BY THE LEARNED CIT(A) W AS SET ASIDE AND THE MATTER WAS RESTORED BACK TO THE FILE OF THE AO WITH THE FOLLOW ING OBSERVATIONS: 5. BEFORE US, THE LD A.R DEMONSTRATED THAT THE AS SESSEE HAS BEEN FILING PERSONAL BALANCE SHEET REGULARLY AL ONG WITH HER RETURN OF INCOME AND IN AY 2004-05, THE BREAK UP DE TAILS OF ADVANCE AMOUNT OF RS.35.00 LAKHS WERE DULY GIVEN. T HE LD A.R FURTHER SUBMITTED THAT THE PERSONAL BALANCE SHEET A S ON 31.3.2005 DOES NOT DISCLOSE THE ADVANCE AMOUNT OF RS.35.00 LA KHS AND ACCORDINGLY SUBMITTED THAT THE VIEW ENTERTAINED BY LD CIT(A) WAS WRONG. ACCORDINGLY HE SUBMITTED THAT THE EXPLANATIO N GIVEN BY THE 5 ITA NO. 407/MUM/2014 AY: 2005-06 ASSESSEE WAS NOT PROPERLY APPRECIATED BY THE TAX AU THORITIES BY CONSIDERING THE PERSONAL BOOKS OF ACCOUNT OF THE AS SESSEE. 6. ON THE CONTRARY, THE LD D.R STRONGLY SUPPORTED THE ORDER OF LD CIT(A). 7. HAVING HEARD RIVAL SUBMISSIONS, WE FIND MERIT I N THE SUBMISSION OF THE ASSESSEE THAT THE FACTUAL ASPECTS HAVE NOT B EEN PROPERLY APPRECIATED BY THE TAX AUTHORITIES. WE NOTICE THAT THE AO DID NOT REFER TO THE PERSONAL BOOKS/FINANCIAL STATEMENTS AN D THE LD CIT(A) HAS ENTERTAINED THE VIEW THAT THE BALANCE SHEET AS ON 31.3.2005 DISCLOSED THE ADVANCE AMOUNT OF RS.35.00 LAKHS. WE NOTICE THAT THE VIEW ENTERTAINED BY THE LD CIT(A) IS CONTRARY T O THE FACTS AVAILABLE ON RECORD. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THIS ISSUE REQUIRES FRESH EXAMINATION AT THE E ND OF THE ASSESSING OFFICER. ACCORDINGLY, WE SET ASIDE THE OR DER OF LD CIT(A) ON THIS ISSUE AND RESTORE THE SAME TO THE FILE OF T HE AO WITH THE DIRECTION TO EXAMINE THIS ISSUE AFRESH BY DULY CONS IDERING THE PERSONAL FINANCIAL STATEMENTS AND/OR BOOKS OF ACCOU NTS OF THE ASSESSEE AND TAKE APPROPRIATE DECISION IN LAW. 8. DURING THE COURSE OF HEARING, THE LD A.R ALSO P LACED RELIANCE ON CERTAIN CASE LAW TO CONTEND THAT THE REFUND OF ADVA NCE AMOUNT GIVEN IN EARLIER YEARS WOULD NOT ATTRACT THE PROVIS IONS OF SEC. 68 OF THE ACT. SINCE WE HAVE SET ASIDE THE MATTER TO THE FILE OF THE AO, THE ASSESSEE IS FREE TO BRING THOSE CASE LAWS TO TH E NOTICE OF THE ASSESSING OFFICER. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. (EMPHASIS IMPLIE D BY US) THUS, IT CAN BE SEEN THAT THE OBSERVATIONS OF THE C IT(A), THAT EVEN AS ON 31.03.2005, THERE WAS OUTSTANDING BALANCE OF RS.35 LACS, IS CON TRARY TO THE FACTS AVAILABLE ON RECORD. 4. THE LEVY OF PENALTY WAS CHALLENGED BY THE ASSESS EE BEFORE THE CIT(A), WHICH IS DECIDED BY THE IMPUGNED ORDER PASSED BY THE CIT(A). BEFORE HIM, IT WAS PLEADED THAT THE ASSESSEE HAD FURNISHED AMPLE EVIDENCE TO PROVE THAT WHAT WAS RECEIVED BY THE ASSESSEE FROM THE ABOVE MENTIONED SEVEN PERSONS WER E AMOUNTS PAID BY THE ASSESSEE IN EARLIER YEARS AND ON COMPLETION OF WORK THE AMOU NTS WERE RECEIVED BACK BY THE ASSESSEE. THE EVIDENCE FILED BEFORE THE AO, AS PER THE SUBMISSIONS RECORDED BY THE LEARNED CIT(A) IS AS UNDER: 6 ITA NO. 407/MUM/2014 AY: 2005-06 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS DURING THE COURSE OF APPELLANT PROCEEDINGS AND ALSO DURING THE PENALTY PROCEEDINGS THE APPELLANT HAD GIVEN PARTY WISE DETA ILS OF ADVANCE AS GIVEN ABOVE TO FOLLOWING PERSONS ALONG WITH NECE SSARY EVIDENCE AS UNDER:- 1. MOHAN SING RAJPUT: THE AMOUNT IS GIVEN TO SHRI M OHAN SING RAJPUT ON 10/01/98 TO CARRY OUT THE INITIAL WORKING AND THAT THEY WERE GIVEN MOBILIZATION ADVANCE IN TERM OF DEPOSIT AND SHRI MONHAN SINGH RAJPUT WAS REQUIRED HANDLE THE EXTRACT ION ACTIVITIES WHICH INTERALIA INCLUDE ARRANGEMENTS OF THE WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED HEREWITH FOR YOUR READY REFERENCE. THE APPELLANT HAS ALSO FILED CONFIRMATION OF ACCOUN TS APPEARING IN THE ASSESSEES BOOK DULY CONFIRMED BY THE SHREE MOH AN SINGH RAJPUT. APPELLANT HAD ALSO REQUESTED AO IF YOU NE ED YOU CAN ALSO VERIFY THE GENUINELY OF THE ABOVE TRANSACTION BY ISSUING THE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY 2. GORDHAN SING RAJPUT : THE AMOUNT WAS GIVEN TO HI M ON 05/1/98 TO CARRY OUT THE INITIAL WORKING AND THAT T HEY WERE GIVEN MOBILIZATION ADVANCE IN TERM OF DEPOSIT AND HE WERE REQUIRED TO HANDLE THE EXTRACTION WHICH INTERALIA INCLUDE ARRAN GEMENTS OF THE WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED H EREWITH FOR YOUR READY REFERENCE. THE APPELLANT HAS ALSO FILED CONFIRMATION OF ACCOUNTS APPEARING IN THE ASSESSEES BOOK DULY CONF IRM BY HIM. APPELLANT HAS ALSO REQUESTED AO IF YOU NEED YOU CAN ALSO VERIFY THE GENUINITY OF THE ABOVE TRANSACTION BY ISSUING T HE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY. 3. JAGDISH GAMETI : THE AMOUNT WAS GIVEN TO HIM ON 20/7/98 TO CARRY OUT THE INITIAL WORKING AND THAT THEY WERE GIVEN MOBILIZATION ADVANCE IN TERM OF DEPOSIT AND HE WERE REQUIRED TO HANDLE THE EXTRACTION ACTIVITIES WHICH INTERALIA IN CLUDE ARRANGEMENTS OF THE WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED HEREWITH FOR YOUR READY REFERENCE. THE AP PELLANT HAS ALSO FILED CONFIRMATION OF ACCOUNTS APPEARING IN TH E ASSESSEES BOOKS DULY CONFIRM BY HIM. APPELLANT HAS ALSO REQUE STED AO IF YOU NEED YOU CAN ALSO VERIFY THE GENUINITY OF THE ABOVE TRANSACTION BY ISSUING THE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY. 4. MOD SING RAJPUT : THE AMOUNT WAS GIVEN TO HIM ON 25/2/98 TO CARRY OUT INITIAL WORKING AND THAT THEY WERE GIV EN MOBILIZATION ADVANCE IN TERM OF DEPOSIT AND HE WERE REQUIRED HAN DLE THE EXTRACTION ACTIVITIES WHICH INTERALIA INCLUDE ARRAN GEMENTS OF THE 7 ITA NO. 407/MUM/2014 AY: 2005-06 WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED H EREWITH FOR YOUR READY REFERENCE. THE APPELLANT HAS ALSO FILED CONFIRMATION OF ACCOUNTS APPEARING IN THE ASSESSEES BOOKS DULY CON FIRM BY HIM. APPELLANT HAS ALSO REQUESTED AO IF YOU NEED YOU CAN ALSO VERIFY THE GENUINITY OF THE ABOVE TRANSACTION BY ISSUING T HE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY. 5. LAXMILAL GAMETI : THE AMOUNT WAS GIVEN TO HIM ON 19/7/97 TO CARRY OUT THE INITIAL WORKING AND THAT THEY WERE GIVEN MOBILIZATION ADVANCE IN TERM OF DEPOSIT AND HE WERE REQUIRED HANDLE THE EXTRACTION ACTIVITIES WHICH INTERALIA IN CLUDE ARRANGEMENTS OF THE WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED HEREWITH FOR YOUR READY REFERENCE. THE AP PELLANT HAS ALSO FILED CONFIRMATION OF ACCOUNTS APPEARING IN TH E ASSESSEES BOOKS DULY CONFIRM BY HIM. APPELLANT HAS ALSO REQUE STED AO IF YOU NEED YOU CAN ALSO VERIFY THE GENUINITY OF THE ABOVE TRANSACTION BY ISSUING THE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY. 6. VIJAY SING : THE AMOUNT WAS GIVEN TO HIM ON 15/7 /97 TO CARRY OUT THE INITIAL WORKING AND THAT THEY WERE GIVEN MO BILIZATION ADVANCE IN TERM OF DEPOSIT AND HE WERE REQUIRED TO HANDLE ACTIVITIES WHICH INTERALIA INCLUDE ARRANGEMENTS OF THE WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED HEREWITH FOR YOUR READY REFERENCE. THE APPELLANT HAS ALSO FILED CONF IRMATION OF ACCOUNTS APPEARING IN THE ASSESSEES BOOKS DULY CON FIRM BY HIM. APPELLANT HAS ALSO REQUESTED AO IF YOU NEED YOU CAN ALSO VERIFY THE GENUINITY OF THE ABOVE TRANSACTION BY ISSUING T HE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY. 7. RUPALAL MEGHWAL : THE AMOUNT WAS GIVEN ON 05/1/9 8 TO CARRY OUT THE INITIAL WORKING AND THAT THEY WERE GI VEN MOBILIZATION ADVANCE IN TERM OF DEPOSIT AND HE WERE REQUIRED HAN DLE THE EXTRACTION ACTIVITIES WHICH INTERALIA INCLUDE ARRAN GEMENTS OF THE WORKERS REQUIRED. THE COPY OF AGREEMENT ATTACHED H EREWITH FOR YOUR READY REFERENCE. THE APPELLANT HAS ALSO FILED CONFIRMATION OF ACCOUNTS APPEARING IN THE ASSESSEES BOOKS DULY CON FIRM BY HIM. APPELLANT HAS ALSO REQUESTED AO IF YOU NEED YOU CAN ALSO VERIFY THE GENUINITY OF THE ABOVE TRANSACTION BY ISSUING T HE SUMMONS OR NOTICE U/S. 131 OR 133(6) OF THE INCOME TAX ACT AND VERIFY ACCORDINGLY. APPELLANT ALSO REQUESTED THE AO THAT SHE HAD ATTAC HED ALL POSSIBLE DOCUMENTARY EVIDENCE AS REQUIRED FOR PROVI NG GENUINENESS OF ADVANCES AND REALIZATION OF ADVANCES . IN CASE IF 8 ITA NO. 407/MUM/2014 AY: 2005-06 HE GOODSELF NEEDED TO VERIFY OF SAID ADVANCES HE MA Y ISSUE SUMMONS UNDER SECTION 131 OF INCOME TAX ACT. AS PER THE DIRECTION OF AO AND UNDER THE SECTION 13 1 OR 133(6) THREE PERSON NAMELY SHRI VIJAY SINGH, SHRI MOD SING H AND SHRI MOHAN SINGH APPEARED BEFORE LEARNED DCIT CIR 23(1) ON 14/12/2009 AT R NO 108, C-10, 1 ST FLOOR BANDRA KURLA COMPLEX, BANDRA (EAST) MUMBAI- 51 AND GIVEN THE STATEMENT ON OATH AND CONFIRMED ALL THE TRANSACTIONS, THE COPIES OF THE S TATEMENT OF ALL THE THREE PARTIES ARE ATTACHED HEREWITH FOR YOUR RE ADY REFERENCE. DUE TO THE DETERMINATION OF MEMORANDUM OF UNDERSTAN DING WITH VARIOUS PARTIES THE APPELLANT COULD GET HER PRINCIP AL AMOUNT BACK WHICH SHE HAD DEPOSITED IN HER BANK ACCOUNT. DURIN G THE ASSESSMENT PROCEEDINGS THE APPELLANT WAS ASKED TO J USTIFY SUCH CASH DEPOSITS IN HER BANK ACCOUNT WHICH WAS DULY EX PLAINED. HOWEVER THE AO HAS DISREGARDED THE EXPLANATION GIVE N IN THIS REGARD AND HAS MADE ADDITION OF RS.36,80,000/- BEIN G 35,00,000/- RECEIVED FROM THOSE WHO WERE BEING GIVEN ADVANCES B Y HER IN THE F Y 97-98, WHICH WAS IN TURN GIVEN AS LOAN GIVEN TO SHRI K M SURYA. THE AO HAS ALSO MADE ADDITION ON ACCOUNT OF CAPITAL INTRODUCED IN THE PROPRIETARY CONCERN OUT OF HER PE RSONAL CASH BALANCE AS UNEXPLAINED CASH CREDIT. HOWEVER, IN DO ING SO THE AO HAS IGNORED VARIOUS FACTS SUCH AS COPIES OF THE CON FIRMATION OF THE ALL THE RESPECTIVE PARTIES WITH COPY OF AGREEMENTS ENTERED WITH THEM TO WHOM THE ADVANCES GIVEN. THE APPELLANT HAS ALSO SUBMITTED ALL THE MEMORANDUM OF UNDERSTANDING AND CONFIRMATIONS FROM THE PARTIES STATING THAT THEY HA D REPAID SUCH AMOUNT AS WELL AS THE APPELLANT COULD ALSO PRODUCE VARIOUS PARTIES BEFORE THE AO. HOWEVER, THE SAME HAS NOT BEEN CONS IDERED BY THE AO ON SOME TECHNICAL GROUNDS WITHOUT APPRECIATI NG THE ACTUAL FACTS OF THE CASE AND, THEREFORE, THE AO HAS VIOLAT ED THE PRINCIPLES OF NATURAL JUSTICE. SIMILARLY THE AO HAS ALSO FAILE D TO APPRECIATE THAT THE APPELLANT IS A LADY AND THAT CALLING HER T O PRODUCE THE PEOPLE WOULD NOT BE POSSIBLE WITHOUT ANY LEGAL RIGH TS AND THEREFORE IT WAS ON AO TO HAVE ISSUED SUMMONS OF CO MMISSION TO VERIFY THE GENUINENESS OF THOSE TRANSACTIONS FOR WH ICH DETAILED SUBMISSIONS WERE MADE. CONSIDERING THE AFOREMENTIONED EVIDENCE AND VARIOUS JUDICIAL PRONOUNCEMENTS, WHICH HAVE BEEN REFERRED IN DETAIL IN THE ORDER PASSED BY THE CIT(A), HE HAS RECORDED THE FOLLOWING CONCLUSION 6. I HAVE GONE THROUGH THE SUBMISSION OF THE APPE LLANT AS WELL AS ORDER OF THE A.O. LEVYING THE PENALTY AND F IND MERIT IN THE 9 ITA NO. 407/MUM/2014 AY: 2005-06 APPELLANTS CASE. IN THE PRESENT CASE, THE APPELLA NT HAD DEPOSITED CASH IN HER BANK ACCOUNT WHICH WAS STATED TO BE THE AMOUNT RECEIVED BACK BY THE APPELLANT FROM ADVANCES GIVEN BY HER IN EARLIER YEARS. IT IS ALSO TRUE THAT THE APPELLANT HAD BEEN SHOWING SUCH ADVANCES AS OUTSTANDING YEAR AFTER YEAR AND TH AT DURING THE YEAR UNDER CONSIDERATION THE APPELLANT HAS REDUCED THE AFORESAID DEBT AS OUTSTANDING. THUS, THERE IS A REDUCTION OF ADVANCES TO THE EXTENT OF AMOUNT SHOWN TO HAVE BEEN RECEIVED BY THE APPELLANT. THESE FACTS ARE NEITHER CONTROVERTED NOR DISPROVED. THE APPELLANT HAS ALSO EXPLAINED THE TRANSACTIONS OF RECEIPTS AND PAYMENTS IN CASH AS DUE TO NON AVAILABILITY OF BANK IN THE VICI NITY OF 15-30 KMS. FROM THE AFORESAID SITE WHERE THE TRANSACTIONS ACTU ALLY TOOK PLACE. THE APPELLANT HAS ALSO PRODUCED CONFIRMATIONS AND O THER EVIDENCES WHICH ARE NOT ESTABLISHED TO BE FALSE AND , THEREFORE, MERELY BECAUSE IN THE ASSESSMENT PROCEEDINGS ADDITI ONS WERE MADE OR CONFIRMED DOES NOT AUTOMATICALLY BECOMES TH E GROUND FOR LEVYING PENALTY. THE HONBLE ITAT ON THE SIMIL AR FACTS HAS DELETED THE PENALTY DESPITE ADDITIONS WERE CONFIRME D ON THE GROUND THAT IN THE BALANCE SHEETS OF 2004 AND 2005 THE AMOUNTS OF DEBTORS WERE FOUND TO BE REDUCED TO THE EXTENT O F SUCH CASH BEING DEPOSITED IN THE BANK ACCOUNT. IN THE APPELL ANTS CASE ALSO THE APPELLANT HAS EXPLAINED THE SOURCE TO BE REFUND OF ADVANCE WHICH ARE ALSO FOUND TO BE REDUCED FROM THE OUTSTAN DING APPEARING IN PRECEDING PREVIOUS YEAR. AS ALSO IN T HE INSTANT CASE, THE PARTIES FROM WHO, THE AMOUNT WERE SAID TO BE RE CEIVED BACK HAD ALSO CONFIRMED HAVING REPAID SUCH SUM AND THE T RANSACTIONS AS SUCH, THE EXPLANATION GIVEN BY THE APPELLANT CAN NOT BE BRUSHED ASIDE MERELY BECAUSE IN THE OPINION OF THE A.O. THE SAME WERE NOT FOUND FAVOUR IN THE ASSESSMENT PROCEEDINGS OR F OR THAT MATTER APPELLATE PROCEEDINGS WITHOUT PROVING THE EXPLANATI ON TO BE FALSE. THUS, CONSIDERING THE VARIOUS DOCUMENTS AND EXPLANA TIONS SUBMITTED BY THE APPELLANT AS ALSO APPRECIATING VAR IOUS JUDICIAL PRONOUNCEMENTS, IT DOES NOT APPEAR A FIT CASE TO CO NFIRM THE PENALTY AND, THEREFORE, PENALTY LEVIED BY THE A.O. IS DELETED. 7. IN THE RESULT, THE APPEAL IS ALLOWED. 5. THE DEPARTMENT HAS AGITATED THE DELETION OF PENA LTY BY FILING THE AFOREMENTIONED GROUNDS OF APPEAL. 6. THE LEARNED DR RELIED UPON THE ORDER PASSED BY T HE AO AND SUBMITTED THAT THE PENALTY HAS WRONGLY BEEN DELETED BY THE CIT(A) AND HIS ORDER SHOULD BE SET ASIDE AND THAT OF THE AO SHOULD BE RESTORED. 10 ITA NO. 407/MUM/2014 AY: 2005-06 7. ON THE OTHER HAND, IT WAS SUBMITTED BY THE LEARN ED AR THAT THE ASSESSEE HAD FILED ALL THE EVIDENCE AND CONSIDERING THE SAME, TH E LEARNED CIT(A) HAS DELETED THE PENALTY. REFERRING TO THE ORDER PASSED BY THE TRIB UNAL IN THE QUANTUM PROCEEDINGS, IT WAS SUBMITTED BY THE LEARNED AR THAT THE ADDITION W AS UPHELD BY THE CIT(A) ON THE BASIS OF WRONG FACTS. THEREFORE, ON SUCH ADDITION, PENALTY COULD NOT BE LEVIED. THUS, IT WAS PLEADED BY THE LEARNED AR THAT THE ORDER PASSED BY THE CIT(A) SHOULD BE CONFIRMED. 8. WE HAVE HEARD THE PARTIES AND THEIR CONTENTIONS HAVE CAREFULLY BEEN CONSIDERED. IN THE QUANTUM ORDER, IT HAS BEEN FOUND BY THE TRIB UNAL THAT THE CONFIRMATION OF THE ADDITION BY THE LEARNED CIT(A) WAS BASED ON INCORRE CT FACTS. THEREFORE, THE QUANTUM WAS SET ASIDE TO THE FILE OF THE AO. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL HAVE ALREADY BEEN REPRODUCED IN THE ABOVE PART OF THIS O RDER. THE ASSESSEE HAS FILED AMPLE EVIDENCE IN RESPECT OF EACH PERSON FROM WHOM SHE HA S RECEIVED HER AMOUNT BACK. CONSIDERING THE EXPLANATION OF THE ASSESSEE AND THE EVIDENCE FILED BY THE ASSESSEE AND ALSO THE FACT THAT THE ADDITION WAS WRONGLY SUSTAIN ED BY THE CIT(A) ON INCORRECT FACTS, WE ARE OF THE OPINION THAT THE LEARNED CIT(A) DID N OT COMMIT ANY ERROR IN DELETING THE PENALTY. WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JUNE, 2015. SD/- SD/- (N K BILLAIYA) (I P BANSAL) ACCOUNTANT MEMBER JUDICIAL ME MBER MUMBAI, DT :30 TH JUNE, 2015 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T, CONCERNED 4. THE CIT (A)-CONCERNED 5. THE DR, A BENCH, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI