The DCIT, Circle-6, Surat V. Shri Vasantbhai Nanjibhai Rampariya, Surat

ITA 438/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60587 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-06-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: VASANT SHAH
• Keywords: Unexplained cash credit
• Section: 68

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD , ! '#, $% $ & BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ./ I.T.A. NO.438/AHD/2012 ( ! ) ! ) ! ) ! ) / / / / ASSESSMENT YEAR : 2007-08) DY.CIT CIRCLE-6 SURAT ! ! ! ! / VS. SHRI VASANTBHAI NANJIBHAI RAMPARIYA B/H.MOTA KUMBHARWAD HANUMAN GALI MANDVI, SURAT * $% ./+, ./ PAN/GIR NO. : ACRPR 5882 Q ( *- / // / APPELLANT ) .. ( ./*- / RESPONDENT ) AND CO NO.79/AHD/2012 ( IN ITA NO.438/AHD/2012 ) SHRI VASWANTBHAI NANJIBHAI DY.CIT RAMPARIYA, SURAT VS. CIRCLE-6 SURAT [ CROSS OBJECTOR ] .. [ RESP ONDENT ] REVENUE BY : SHRI B.L.YADAV, SR.D.R. ASSESSEE BY : SHRI VASANT SHAH, ADV. !0 1 % / / / / DATE OF HEARING : 20/06/2012 23) 1 % / DATE OF PRONOUNCEMENT : 13/07/2012 $4 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE ARISING FRO M THE ORDER OF LEARNED CIT(APPEALS)-IV, SURAT DATED 14.10.2011 AND THE REVENUES ONLY GROUND OF APPEAL IS AS FOLLOWS:- 1) ON THE FACTS AND CIRCUMSTANCE OF THE CASE AND IN LAW, THE LD.CIT(A)-IV HAS ERRED IN DELETING THE PENALTY U/S.271(1)(C) OF THE ACT OF RS.3,54,741/- LEVIED BY THE ASSESSING OF FICER. ITA NO.438/AHD/2012(BY REVENUE) AND CO NO.79AHD/2012 (BY ASSESSEE) DCIT VS. SHRI VASANTBHAI NANJIBHAI RAMPARIYA ASSESSMENT YEAR - 2007-08 - 2 - 2. THE ASSESSEE IS IN CROSS OBJECTION BY RAIS ING FOLLOWING GROUNDS:- 1. WITHOUT PREJUDICE TO ANY OTHER CONTENTION RAIS ED DURING THE COURSE OF THE APPEAL THE MAIN GROUNDS OF APPEAL ARE AS UNDER. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LD.CIT(A) HAS RIGHTLY ALLOWED THE APPEAL AND CANCELLED THE PENALT Y LEVIED BY THE DY.CIT U/S.271(1)(C). 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE GROUND NO.1 TAKEN BY THE DY.CIT (APPELLANT) IN APPEAL TO THE TR IBUNAL BE NOT CONSIDERED AS GENUINE. 4. THE GROUND NO.2 TAKEN BY THE DY.CIT TO UPHELD THE ORDER OF THE ASSESSING OFFICER IS NOT PROPER & JUST. 3. FACTS IN BRIEF AS EMERGED FROM THE CORRESPONDING PENALTY ORDER PASSED U/S.271(1)(C) OF THE I.T.ACT DATED 30/06/201 0 AND THE ASSESSMENT ORDER PASSED U/S.143(3) DATED 22/12/2009 WERE THAT THE ASSESSEE IN INDIVIDUAL CAPACITY IS A CONTRACTOR OF CIVIL CONSTR UCTION WORK. THE ASSESSEE HAS SHOWN CERTAIN CREDITORS AND HE HAS AS KED TO ESTABLISH THE CREDITWORTHINESS AS ALSO THE GENUINENESS OF THE LOA N TRANSACTION. ON ACCOUNT OF PART COMPLIANCE, THE ASSESSING OFFICER H AS TREATED AN AMOUNT OF RS.10,74,935/- AS UNEXPLAINED CASH CREDIT AND TA XED BY INVOKING THE PROVISIONS OF SECTION 68 OF THE I.T.ACT. SIMULTANE OUSLY, PENALTY PROCEEDINGS HAVE ALSO BEEN INITIATED. DURING THE P ENALTY PROCEEDINGS, IT WAS CONTENDED THAT THE SAID AMOUNT WAS OFFERED FOR TAX PURPOSE TO BUY PEACE OF MIND AND ALSO TO AVOID PENALTY PROCEEDINGS . CASE LAWS RELIED UPON BY THE ASSESSEE WERE NATIONAL TEXTILES, BRIJBA LA CHOUDHARY 82 TTJ (LUCK TRIB), SURESHCHANDRA MITTAL 251 ITR 9 (SC) , NARAYANAN 244 ITA NO.438/AHD/2012(BY REVENUE) AND CO NO.79AHD/2012 (BY ASSESSEE) DCIT VS. SHRI VASANTBHAI NANJIBHAI RAMPARIYA ASSESSMENT YEAR - 2007-08 - 3 - ITR 528 (MAD.). AGAINST THE LEVY OF PENALTY, THE M ATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CONSIDERING THE FACTS OF THE CASE, LD.CIT( A) HAS DELETED THE PENALTY BY ASSIGNING FOLLOWING REASONS:- 2.2. I HAVE GONE THROUGH THE FACTS OF THE CASE. AS THE APPELLANT CLAIMED THAT THEY HAD FILED LETTER DATED 04.12.2009 AND AGREED TO THE ADDITION TO AVOID LITIGATION, PENALTY AND TO BU Y PEACE OF MIND WHEREAS THE A.O. MENTIONED THAT THERE WAS NOTHING E VIDENT FROM RECORD OF ANY SUCH AGREEMENT OR OFFER, IT WAS THOUG H PRUDENT TO REQUISITION THE RECORDS OF THE APPELLANT. VERIFIC ATION OF THE RECORDS SHOW THAT THE ASSESSEES LETTER DATED 04.12 .2009 IS IN THE FILE. THE SAID LETTER CLEARLY MENTIONS THAT THEY A GREE TO THE ADDITION IN RESPECT OF REMAINING CREDITORS TO BUY P EACE OF MIND AND AVOID PENALTY AND LITIGATION. IT IS ALSO SEEN THAT THE DEPARTMENT HAD NOT BROUGHT ANYTHING ON RECORD BY WA Y OF INDEPENDENT INVESTIGATION AND INQUIRY WHICH WOULD S HOW THAT THE CREDITORS WERE NOT GENUINE. WHAT THE A.O. HAS DONE IS ONLY REQUISIONING DETAILS AND ISSUING SHOW CAUSE IN ABSE NCE OF DETAILS EVEN AFTER THE APPELLANT AGREED TO THE ADDITION. I N ANY CASE, THE DEEMING FICTION OF SECTION-68 CANNOT BE EXTENDED TO PENALTY UNLESS THE CLAIM IS PROVED TO BE FALSE. PENALTY CANNOT BE LEVIED MERELY BECAUSE THE CLAIM OF THE APPELLANT REMAINED UNSUBST ANTIATED. THEREFORE, IN VIEW OF THE ASSESSEE AGREEING TO THE ADDITION TO BUY PEACE OF MIND, AVOID LITIGATION & PENALTY, AND THER E BEING NO OTHER POSITIVE EVIDENCE AGAINST HIM, AS ALSO BECAUSE THE CLAIM HAS NOT BEEN SHOWN TO BE FALSE, THE PENALTY LEVIED IS CANCELLED . 5. FROM THE SIDE OF THE ASSESSEE, LD.AR MR.VASANT S HAH APPEARED AND PLACED RELIANCE ON CIT VS. ASHOK TAKER 170 TAXMAN 4 71 (DEL) FOR THE LEGAL PROPOSITION THAT ASSESSEE HAVE SURRENDERED TH E AMOUNT OF CASH CREDITS FOR TAXATION, THEREFORE, THERE WAS NO ADVER SE MATERIAL ON RECORD TO ITA NO.438/AHD/2012(BY REVENUE) AND CO NO.79AHD/2012 (BY ASSESSEE) DCIT VS. SHRI VASANTBHAI NANJIBHAI RAMPARIYA ASSESSMENT YEAR - 2007-08 - 4 - SHOW THAT THE CONDUCT OF THE ASSESSEE HAD WARRANTED FOR CONCEALMENT PENALTY. 6. FROM THE SIDE OF THE REVENUE, LD.SR.DR MR.B.L.YA DAV APPEARED AND PLACED RELIANCE ON THE ORDERS OF THE ASSESSING OFFICER & LEARNED CIT(APPEALS) AND FURTHER CITED CIT VS. MOHD. MOHTRA M FAROOQUI 259 ITR 132 (RAJ.). 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE HAVE NOTED THAT THE INFORMATION IN RESPECT OF THOSE CASH CREDITORS WERE VERY MUCH PLACED ON RECORD AT THE TIME OF FILING OF THE RETURN. OUR ATTENTION HAS BEEN DRAWN THAT THE ACCOUNTS OF THE ASSESSEE WERE DULY MAINTAI NED AND NO DEFECT WAS FOUND IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. AN I MPORTANT FACT HAS BEEN BROUGHT ON RECORD THAT AS PER THE FUND FLOW STATEME NT IN SUBSEQUENT PROCEEDINGS THE ASSESSEE HAS RETURNED THE LOAN AMOU NT AND THE IMPUGNED AMOUNT WAS REPAID TO THOSE CREDITORS IN THE SUBSEQU ENT YEARS. HENCE, IT WAS CONTESTED THAT NO PENALTY IS LEVIABLE ON THE SA ID AMOUNT WHICH HAS ALREADY BEEN SQUARED UP BY MAKING REPAYMENT TO THOS E PERSONS. WE, THEREFORE, HEREBY HOLD THAT UNDER THE FACTS AND CIR CUMSTANCES OF THE CASE, THIS IS NOT A FIT CASE FOR LEVY OF CONCEALMENT PENA LTY. IN SUPPORT OF THIS LEGAL PROPOSITION, WE PLACE RELIANCE ON CIT VS. JAL ARAM OIL MILLS 253 ITR 192 (GUJ.). GROUND IS DISMISSED. 8. IN THE RESULT, REVENUES APPEAL STANDS DISM ISSED. ASSESSEES CO NO.79/AHD/2012 (IN ITA 438/AHD/2012) 9. ON PERUSAL OF THE GROUNDS (REPRODUCED ABOVE) OF THE CROSS OBJECTOR, WE HAVE NOTED THAT THE CROSS-OBJECTOR HAS SIMPLY SUPPORTED THE ITA NO.438/AHD/2012(BY REVENUE) AND CO NO.79AHD/2012 (BY ASSESSEE) DCIT VS. SHRI VASANTBHAI NANJIBHAI RAMPARIYA ASSESSMENT YEAR - 2007-08 - 5 - ORDER OF THE LEARNED CIT(APPEALS) AND PLEADED THAT THE ORDER OF THE LEARNED CIT(APPEALS) DESERVES TO BE CONFIRMED BECAU SE THE LEARNED CIT(APPEALS) HAS RIGHTLY ALLOWED THE APPEAL. WE, T HEREFORE, HOLD THAT IN THE LIGHT OF THE VIEW TAKEN HEREINABOVE, NO INDEPEN DENT ADJUDICATION IS REQUIRED IN RESPECT OF THE GROUNDS RAISED IN CROSS- OBJECTION, HENCE DISMISSED. 10. AS A RESULT, REVENUES APPEAL AND ASSESSEES C ROSS OBJECTION BOTH ARE DISMISSED. SD/- SD /- ( ! '# ) ( ) $% ( ANIL CHATURVEDI ) ( MUKU L KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 13/ 07 /2012 5..!, .!../ T.C. NAIR, SR. PS $4 1 .6 7$6) $4 1 .6 7$6) $4 1 .6 7$6) $4 1 .6 7$6)/ COPY OF THE ORDER FORWARDED TO : 1. *- / THE APPELLANT 2. ./*- / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-IV, SURAT 5. 6;< .! , , / DR, ITAT, AHMEDABAD 6. < =0 / GUARD FILE. $4! $4! $4! $4! / BY ORDER, /6 . //TRUE COPY// > >> >/ // / + + + + ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD