The Assistant Commr. of Income Tax, Cen. Circle-1, JAMNAGAR V. Shri Meraman H. Parmar, JAMNAGAR

ITA 42/RJT/2016

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9310 (ITAT-RAJKOT)
• Duration Of Justice: 5 year(s) 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-06-2021
• Assessment Year: 2012-2013
• Appeal Filed On: 29-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S S RATHI
• Keywords: Set aside
• Section: 143(3); 271D; 13; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI WASEEM AHMED, ACCOUNTANT MEMBER) [THROUGH VIRTUAL COURT] ITA. NO: 42/RJT/2016 (ASSESSMENT YEARS: 2012-13) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-1, JAMNAGAR SHRI MERAMAN H PARMAR 501, SHILP APARTMENT, INDIRA MARG, JAMNAGAR PAN NO. ACPPP6171L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI CHETAN AGARWAL, A.R. RESPONDENT BY : SHRI S. S. RATHI, SR. D.R. ( )/ ORDER DATE OF HEARING : 16 -06-2021 DATE OF PRONOUNCEMENT : 30 -07-2021 PER MAHAVIR PRASAD, J.M. 1. THIS APPEAL HAS BEEN FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (HEREINAFTER CALLED CIT(A)) ORDER NO. CIT(A)- JAM/144/2015-16 ORDER DATED 05/11/2015 ARISING OUT OF ASSESSMENT ORDER DATED 24.03.2015. THE REVENUE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: ITA NO. 42/RJT/2016 . A.Y. 2012-13 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN CANCELLING THE PENALTY LEVIED U/S 271D OF THE INCOME-TAX ACT, 1961 OF RS. 2,45,50,000/-. 2. ANY OTHER GROUND THAT THE REVENUE MAY RAISE BEFORE OR DURING THE PROCEEDINGS BEFORE THE HONBLE I.T.A.T. 3. ON THE FACTS OF THE CASE AND IN LAW, THE LD. CIT(A) OUGHT TO HAVE UPHELD THE PENALTY ORDER OF THE A.O. 4. IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE LD. CIT(A) MAY BE SET ASIDE AND THAT OF THE A.O. BE RESTORED TO THE ABOVE EXTENT. 2. FACTS OF THE CASE ARE THAT THE ASSESSEE CHALLENGED THE IMPOSITION OF PENALTY U/S. 271D FOR VIOLATION OF PROVISIONS OF SECTION 269SS. LD. AO HELD IN PENALTY ORDER THAT ASSESSEE HAS OBTAINED 2,45,50,000/- FROM SIXTEEN PERSONS AS MENTIONED ON PAGE 1 OF ORDER THROUGH PARTNERSHIP FIRM M/S. SHREENATHJI DEVELOPERS IN VIOLATION OF PROVISIONS OF SECTION 269SS. THE A.O. AS WELL AS JCIT HAS CONCLUDED IN PARTNERSHIP FIRM IN WHICH ASSESSEE IS PARTNER, REMAINING SIXTEEN PARTNERS HAVE MADE CAPITAL CONTRIBUTION IN CASH AND THE SAME WAS WITHDRAWN BY THE ASSESSEE. HENCE, THE SAID FIRM IS COLOURABLE DEVICE AND USED TO CHANNELIZE CASH LOAN IN VIOLATION OF PROVISIONS OF SECTION 269SS. 3. DURING THE HEARING, LD. A.R. STATED THAT PARTNERSHIP FIRM IS SEPARATE ENTITY GOVERN BY PARTNERSHIP DEED AND REGULARLY FILING RETURN OF INCOME AND ON THE BASIS OF VAGUE AND UNFOUNDED STATEMENT IT CANNOT BE HELD COLOURABLE DEVICE. THE LD. A.R. HAS FILED COPY OF THE ASSESSMENT ORDER IN THE CASE OF THE OTHER PARTNERS NAMELY SHRI AJITSINH BACHUBHA JADEJA WHEREIN NO ADDITION WAS MADE BY THE A.O. WITH FOLLOWING OBSERVATION: ITA NO. 42/RJT/2016 . A.Y. 2012-13 3 2. DURING THE F.Y.2011-12, THE ASSESSEE ALONGWITH OTHER 16 PERSONS ENTERED INTO A PARTNERSHIP DEED AND STARTED A PARTNERSHIP FIRM IN THE NAME OF M/S SHREENATHJI DEVELOPERS. THE HAS INTRODUCED A CAPITAL OF RS, 15,35,000/- IN THE FIRM IN CASH. THE SOURCE OF THE CAPITAL INTRODUCED BY THE ASSESSEE IS NOT VERIFIABLE. THE INVESTMENT MADE BY ASSESSEE THE IN THE PARTNERSHIP FIRM IS FROM UNACCOUNTED SOURCES AS IT IS NOT REFLECTED IN THE RETURN OF INCOME. 3. IN THIS CASE AN INFORMATION WAS RECEIVED FROM ACIT, CIR-1, JAMNAGAR THE ASSESSEE HAS INTRODUCED IN CASH IN THE CAPITAL TO THE TUNE OF RS. 15,35,000/. WITH VIEW TO VERIFY THE GENUINENESS OF THE CASH INTRODUCED IN CAPITAL, THE CASE WAS RE- OPENED. 4. WITHOUT PREJUDICE TO THE ABOVE, IT MAY BE FURTHER POINTED OUT THAT THE OFFICER HAS NOT TAKEN ONLY THE BEST POSSIBLE VIEW IN ABSENCE OF ANY MATERIAL ON RECORD. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF HON'BLE ITAT, KOLKATA IN THE CASE OF SOMDUTT BUILDERS (P) LTD V/S. DCIT (1TAT, KOLKATA) 98 ITD 78, IN FACT, THE HON'BLE APEX COURT IN THE CASE OF C1T V/S. P.V.S. BEEDIES P. LTD. (SC) 237 ITR 13 HAVE HELD THAT THE POSITION OF LAW POINTED OUT EVEN BY INTERNAL AUDIT PARTY CONSTITUTES VALID REASON FOR RE-OPENING THE ASSESSMENT. MOREOVER, THIS VIEW HAS ALSO BEEN UPHELD BY THE HONBLE SUPREME COURT IN THE CASE OF ITO V/S. PURUSHOTTAM DAS BANGUR & ANR. (SC) 224 ITR 362. 5. IN RESPONSE TO THE NOTICES ISSUED ON VARIOUS DATES, SHRI CHETAN AGARWAL, CHARTERED ACCOUNTANT AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED FROM TIME TO TIME AND SUBMITTED THE DETAILS AS CALLED FOR. THE DETAILS SUBMITTED BY THE A.R. HAVE BEEN VERIFIED. 6. SUBJECT TO THE ABOVE REMARKS, THE INCOME OF THE ASSESSEE IS RECOMPUTED AS BELOW: ITA NO. 42/RJT/2016 . A.Y. 2012-13 4 TOTAL RETURNED INCOME RS. 1,53,120/- TOTAL ASSESSED INCOME RS. 1,53,120/- ROUNDED OF U/S. 288 OF THE INCOME TAX ACT, 1961. RS. 1,53,120/- 7. ASSESSED U/S. 147 R.W.S. 143(3) OF THE ACT AT RS. 1,53,120/-. CHARGED INTEREST U/S. 234A, 234B, 234C AND 234D, AS APPLICABLE. ISSUED DEMAND NOTICE AND CHALLAN AFTER GIVING CREDIT FOR PREPAID TAXES. 4. IN THE CASE OF OTHER PARTNER SHRI BHARATSINH KALUBHAI JADEJA WHEREIN NO ADDITION WAS MADE BY THE A.O. WITH FOLLOWING OBSERVATION: 2. DURING THE F.Y.2011-12, THE ASSESSEE ALONGWITH OTHER 16 PERSONS ENTERED INTO A PARTNERSHIP DEED AND STARTED A PARTNERSHIP FIRM IN THE NAME OF M/S SHREENATHJI DEVELOPERS. THE HAS INTRODUCED A CAPITAL OF RS, 15,35,000/- IN THE FIRM IN CASH. THE SOURCE OF THE CAPITAL INTRODUCED BY THE ASSESSEE IS NOT VERIFIABLE. THE INVESTMENT MADE BY ASSESSEE THE IN THE PARTNERSHIP FIRM IS FROM UNACCOUNTED SOURCES AS IT IS NOT REFLECTED IN THE RETURN OF INCOME. 3. IN THIS CASE AN INFORMATION WAS RECEIVED FROM ACIT, CIR-1, JAMNAGAR THE ASSESSEE HAS INTRODUCED IN CASH IN THE CAPITAL TO THE TUNE OF RS. 15,35,000/. WITH VIEW TO VERIFY THE GENUINENESS OF THE CASH INTRODUCED IN CAPITAL, THE CASE WAS RE- OPENED. 4. WITHOUT PREJUDICE TO THE ABOVE, IT MAY BE FURTHER POINTED OUT THAT THE OFFICER HAS NOT TAKEN ONLY THE BEST POSSIBLE VIEW IN ABSENCE OF ANY MATERIAL ON RECORD. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF HON'BLE ITAT, KOLKATA IN THE CASE OF SOMDUTT BUILDERS (P) LTD V/S. DCIT (1TAT, KOLKATA) 98 ITD 78, IN FACT, THE HON'BLE APEX COURT IN THE CASE OF C1T V/S. P.V.S. BEEDIES P. LTD. (SC) 237 ITA NO. 42/RJT/2016 . A.Y. 2012-13 5 ITR 13 HAVE HELD THAT THE POSITION OF LAW POINTED OUT EVEN BY INTERNAL AUDIT PARTY CONSTITUTES VALID REASON FOR RE-OPENING THE ASSESSMENT. MOREOVER, THIS VIEW HAS ALSO BEEN UPHELD BY THE HONBLE SUPREME COURT IN THE CASE OF ITO V/S. PURUSHOTTAM DAS BANGUR & ANR. (SC) 224 ITR 362. 5. IN RESPONSE TO THE NOTICES ISSUED ON VARIOUS DATES, SHRI CHETAN AGARWAL, CHARTERED ACCOUNTANT AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED FROM TIME TO TIME AND SUBMITTED THE DETAILS AS CALLED FOR. THE DETAILS SUBMITTED BY THE A.R. HAVE BEEN VERIFIED. 6. SUBJECT TO THE ABOVE REMARKS, THE INCOME OF THE ASSESSEE IS RECOMPUTED AS BELOW: TOTAL RETURNED INCOME RS. 1,35,650/- TOTAL ASSESSED INCOME RS. 1,35,650/- ROUNDED OF U/S. 288 OF THE INCOME TAX ACT, 1961. RS. 1,35,650/- 7. ASSESSED U/S. 147 R.W.S. 143(3) OF THE ACT AT RS. 1,35,650/-. CHARGED INTEREST U/S. 234A, 234B, 234C AND 234D, AS APPLICABLE. ISSUED DEMAND NOTICE AND CHALLAN AFTER GIVING CREDIT FOR PREPAID TAXES. 5. IN THE CASE OF OTHER PARTNER SHRI BHIKHABHAI R. SHARMA WHEREIN NO ADDITION WAS MADE BY THE A.O. WITH FOLLOWING OBSERVATION: 2. DURING THE F.Y.2011-12, THE ASSESSEE ALONGWITH OTHER 16 PERSONS ENTERED INTO A PARTNERSHIP DEED AND STARTED A PARTNERSHIP FIRM IN THE NAME OF M/S SHREENATHJI DEVELOPERS. THE HAS INTRODUCED A CAPITAL OF RS, 15,35,000/- IN THE FIRM IN CASH. THE SOURCE OF THE CAPITAL INTRODUCED BY THE ASSESSEE IS NOT VERIFIABLE. THE ITA NO. 42/RJT/2016 . A.Y. 2012-13 6 INVESTMENT MADE BY ASSESSEE THE IN THE PARTNERSHIP FIRM IS FROM UNACCOUNTED SOURCES AS IT IS NOT REFLECTED IN THE RETURN OF INCOME. 3. IN THIS CASE AN INFORMATION WAS RECEIVED FROM ACIT, CIR-1, JAMNAGAR THE ASSESSEE HAS INTRODUCED IN CASH IN THE CAPITAL TO THE TUNE OF RS. 15,35,000/. WITH VIEW TO VERIFY THE GENUINENESS OF THE CASH INTRODUCED IN CAPITAL, THE CASE WAS RE- OPENED. 4. WITHOUT PREJUDICE TO THE ABOVE, IT MAY BE FURTHER POINTED OUT THAT THE OFFICER HAS NOT TAKEN ONLY THE BEST POSSIBLE VIEW IN ABSENCE OF ANY MATERIAL ON RECORD. RELIANCE IN THIS REGARD IS PLACED ON THE DECISION OF HON'BLE ITAT, KOLKATA IN THE CASE OF SOMDUTT BUILDERS (P) LTD V/S. DCIT (1TAT, KOLKATA) 98 ITD 78, IN FACT, THE HON'BLE APEX COURT IN THE CASE OF C1T V/S. P.V.S. BEEDIES P. LTD. (SC) 237 ITR 13 HAVE HELD THAT THE POSITION OF LAW POINTED OUT EVEN BY INTERNAL AUDIT PARTY CONSTITUTES VALID REASON FOR RE-OPENING THE ASSESSMENT. MOREOVER, THIS VIEW HAS ALSO BEEN UPHELD BY THE HONBLE SUPREME COURT IN THE CASE OF ITO V/S. PURUSHOTTAM DAS BANGUR & ANR. (SC) 224 ITR 362. 5. IN RESPONSE TO THE NOTICES ISSUED ON VARIOUS DATES, SHRI CHETAN AGARWAL, CHARTERED ACCOUNTANT AND AUTHORIZED REPRESENTATIVE OF THE ASSESSEE ATTENDED FROM TIME TO TIME AND SUBMITTED THE DETAILS AS CALLED FOR. THE DETAILS SUBMITTED BY THE A.R. HAVE BEEN VERIFIED. 6. SUBJECT TO THE ABOVE REMARKS, THE INCOME OF THE ASSESSEE IS RECOMPUTED AS BELOW: TOTAL RETURNED INCOME RS. 1,48,320/- TOTAL ASSESSED INCOME RS. 1,48,320/- ROUNDED OF U/S. 288 OF THE INCOME TAX ACT, 1961. RS. 1,48,320/- ITA NO. 42/RJT/2016 . A.Y. 2012-13 7 7. ASSESSED U/S. 147 R.W.S. 143(3) OF THE ACT AT RS. 1,48,320/-. CHARGED INTEREST U/S. 234A, 234B, 234C AND 234D, AS APPLICABLE. ISSUED DEMAND NOTICE AND CHALLAN AFTER GIVING CREDIT FOR PREPAID TAXES. 6. SINCE ALL PARTNERS PLEA HAVE BEEN ACCEPTED BY THE DEPARTMENT AND NO ADVERSE ACTION HAS BEEN TAKEN BY THE DEPARTMENT AND LD. A.O. HAS ACCEPTED CASH DEPOSITS AS GENUINE. IN THE CASE OF OTHER PARTNERS, THEREFORE, ON THE PRINCIPLE OF PARITY AND CONSISTENCY, WE ALLOW THE APPEAL OF THE ASSESSEE. 7. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 30 - 07- 2021 SD/- SD/- (WASEEM AHMED) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 30/07/2021 RAJESH COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,RAJKOT