M/s Union Tyre Moulding Supplier, Kolkata V. I.T.O Wd - 37(2),kolkata., Kolkata

ITA 416/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3384 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 1999-2000
• Appeal Filed On: 01-03-2013
• Court: TRIBUNAL
• Department Lawyers: S S ALAM
• Assessee Lawyers: V N DUTTA
• Keywords: Unexplained cash credit
• Section: 131

Judgement Text

1 ITA NO.416/KOL/2013 M/S. UNION TYRE MOULDING SUPP LIER ,A.Y.1999-2000 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI N.V.VASUDEVAN, JM & SHRI M.B ALAGANESH, AM ] ITA NO.416/KOL/2013 ASSESSMENT YEARS : 1999-2000 M/S. UNION TYRE MOULDING SUPPLIER -VERSUS- I.T.O., WARD-37(2), KOLKATA KOLKATA (PAN:AABFU 4035 E) (APPELLANT) (RESPONDENT) FOR THE ASSESSEE : SHRI V.N.DUTTA, ADVOCATE FOR THE RESPONDENT : SHRI S.S.ALAM, JCIT, SR.DR DATE OF HEARING : 09.12.2015. DATE OF PRONOUNCEMENT : 20.01.2016. ORDER PER N.V.VASUDEVAN, JM: THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE R DATED 03.05.2011 OF CIT(A)-XXIV, KOLKATA RELATING TO A.Y.1999-2000. 2. THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF DEALING IN SCRAPS. ORIGINALLY ORDER OF ASSESSMENT DATED 27.03.2002 WAS PASSED BY THE AO FOR A.Y.1999-2000. ULTIMATELY THIS ASSESSMENT ORDER WAS SET ASIDE BY I TAT. CONSEQUENT TO THE DIRECTIONS OF ITAT ORDERS OF ASSESSMENT WAS PASSED BY AO U/S 1 43(3) R.W.S..254 OF THE ACT DATED 31.03.2006. AO FOUND THAT THE ASSESSEE HAS RE CEIVED LOANS IN CASH FROM FIVE LOAN CREDITORS. THE ASSESSEE FILED CONFIRMATION LET TERS ONLY FROM TWO LOAN CREDITORS NAMELY THAT MRS. FARIDA KHATUN AND AFSAL HABIB. THE ASSESSEE COULD NOT PRODUCE THE CONFIRMATION OF THE OTHER THREE CREDITORS NAMELY KA AR AHMED, MD.SIDDHIKI AND MD.NASAD. THE LOANS RECEIVED FROM THESE PERSONS WER E TREATED AS UNEXPLAINED CASH CREDIT AND A SUM OF RS.1,05,000/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE U/S.68 OF THE INCOME TAX ACT, 1961 (ACT). 2 ITA NO.416/KOL/2013 M/S. UNION TYRE MOULDING SUPP LIER ,A.Y.1999-2000 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO HAD CALLED UPON THE ASSESSEE TO PRODUCE THE LOAN CREDITORS FOR HIS EXAMINATION. TH E ASSESSEE EXPRESSED HIS INABILITY IN THIS REGARD AS THEY REFUSED TO APPEAR BEFORE THE AO. SINCE THE ASSESSEE HAD NOT PRODUCED THE CREDITORS FOR EXAMINATION, THE ADDITI ON WAS MADE BY THE AO. IN RESPECT OF THE AFORESAID ADDITION MADE IN THE COURSE OF ASS ESSMENT PROCEEDINGS, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE INITIATED . ULTIMATELY BY AN ORDER DATED 31.03.2011 AO IMPOSED PENALTY ON THE ASSESSEE U/S 2 71(1)(C) OF THE ACT. 4. ON APPEAL BY THE ASSESEE CIT(A) CONFIRMED THE OR DER OF AO. AGGRIEVED BY THE ORDER OF CIT(A) ASSESSE PREFERRED AN APPEAL BEFORE THE TRIBUNAL. 5. THE MAIN SUBMISSION OF THE LEARNED COUNSEL FOR T HE ASSESEE BEFORE US WAS THAT THE ADDITION HAS BEEN MADE ONLY BECAUSE THE ASSESSE E COULD NOT PRODUCE THE CREDITORS FOR EXAMINATION BY THE AO. HE FURTHER SUBMITTED THA T THE ASSESSEE DID NOT KNOWN THE WHEREABOUTS OF THE LOAN CREDITORS AND HE COULD NOT PRODUCE THEM FOR AOS EXAMINATION. THE ASSESSEE DID NOT EVEN KNOW THE ADD RESSES OF THE CREDITORS AND THIS PLEA OF THE ASSESSEE HAS ALSO BEEN DISBELIEVED EITH ER IN THE ASSESSMENT PROCEEDINGS OR IN THE PENALTY PROCEEDINGS. THE ASSESSEE ALSO SUBMI TTED THAT NEITHER IN THE ORIGINAL ASSESSMENT NOR IN THE ORDER PASSED BY THE AO AFTER REMAND BY THE TRIBUNAL, WAS ANY SATISFACTION RECORDED FOR INITIATING PENALTY PROCEE DINGS U/S 271(1)(C) OF THE ACT BY THE AO IN THE COURSE OF ASSESSMENT PROCEEDINGS. HE PLAC ED RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MWP LTD 264 CTR 502 (KARNATAKA) WHEREIN THE HONBLE KARNATAKA HIGH COUR T HAS HELD THAT MERE OBSERVATION OF THE ASSESSING AUTHORITY THAT HE WAS SATISFIED THAT PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT HAVE TO BE INITIATED, CANN OT AMOUNT TO ARRIVING AT A SATISFACTION RECGARDING CONCEALMENT OF INCOME. 6. THE LEARNED DR PLACED RELIANCE ON THE ORDER OF C IT(A). 3 ITA NO.416/KOL/2013 M/S. UNION TYRE MOULDING SUPP LIER ,A.Y.1999-2000 7. WE HAVE GIVEN CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. WE ARE OF THE VIEW THAT IN THE FACTS AND CIRCUMSTANCES OF THE PRE SENT CASE PENALTY U/S 271(1)(C) OF THE ACT OUGHT NOT TO HAVE BEEN IMPOSED ON THE ASSES SEE. IT IS CLEAR FROM THE ORDER OF ASSESSMENT THAT THE ASSESSEE FURNISHED CONFIRMATION LETTERS FROM TWO OF THE CREDITORS AND EXPRESSED INABILITY TO FILE CONFIRMATION OF THE OTHER THREE CREDITORS. THE ASSESSEE EXPLAINED BEFORE THE CIT(A) THAT THE ADDRESSES OF T HE CREDITORS WERE NOT AVAILABLE WITH THE ASSESSEE. THE AO HAD DRAWN ADVERSE INFERENCE AG AINST THE ASSESSEE WITHOUT BRINING ANY MATERIAL ON RECORD TO SHOW THAT THE PLE A OF THE ASSESSEE WAS NOT BONA FIDE. THE INABILITY OF THE ASSESSEE TO PRODUCE THE CREDIT ORS CANNOT BE THE BASIS TO COME TO A CONCLUSION THAT THE ASSESSEE IS GUILTY OF CONCEALME NT OF PARTICULARS OF INCOME. THE AO HAD THE POWER TO ENFORCE THE ATTENDANCE OF THE CRED ITORS BEFORE HIM BY ISSUING SUMMONS U/S 131 OF THE ACT. THE AO HAS NOT DONE SO. IN THE GIVEN FACTS AND CIRCUMSTANCES WE ARE OF THE VIEW THAT THE AO OUGHT NOT TO HAVE IMPOSED PENALTY ON THE ASSESSEE U/S 271(1)(C) OF THE ACT. WE ALSO AGRE E WITH THE PLEA OF THE ASSESSEE THAT NO SATISFACTION HAS BEEN ARRIVED AT BY THE AO IN TH E COURSE OF ASSESSMENT PROCEEDINGS. WE, THEREFORE, CANCEL THE PENALTY SUSTAINED BY CIT( A). 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. O RDER PRONOUNCED IN THE COURT ON 20.01.2016. SD/- SD/- [M.BALAGANESH ] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 20.01.2016. [RG PS] 4 ITA NO.416/KOL/2013 M/S. UNION TYRE MOULDING SUPP LIER ,A.Y.1999-2000 COPY OF THE ORDER FORWARDED TO: 1.M/S. UNION TYRE MOULDING SUPPLIER, 170, KESAB CHA NDRA SEN STREET, KOLKATA- 700009. 2.I.T.O., WARD-37(2), KOLKATA. 3. CIT(A)-XXIV, KOLKATA 4. CIT-XIII, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, DEPUTY /ASST. REGISTRAR, ITAT, KOLKATA BENCHES