The DCIT, Central Circle-1, Surat V. M/s. Sarjan Corporation, Surat

ITA 444/AHD/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0770 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 10-08-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained cash credit; Onus to prove

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO.444/AHD/2012 ( / ASSESSMENT YEAR : 2005-06) THE DY.CIT CENTRAL CIRCLE-1 SURAT / VS. SARJAN CORPORATION O-8, PANCHRATNA TOWER L.H. ROAD, SURAT ./ ./ PAN/GIR NO. : AAXFS 2969 R ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI PRASOON KABRA, SR.DR / RESPONDENT BY : SHRI M.J. SHAH, AR / DATE OF HEARING 10/08/2016 / DATE OF PRONOUNCEMENT 16/08/2016 / O R D E R PER SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER : THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)- V, SURAT DATED 05/10/2011 FOR THE ASSESSMENT YEAR (AY) 2005-06. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI ALS ON RECORD ARE AS UNDER:- 2.1. ASSESSEE IS A PARTNER-SHIP FIRM STATED TO BE E NGAGED IN THE BUSINESS OF CONSTRUCTION. ASSESSEE FILED ITS RETURN OF INCO ME FOR AY 2005-06 ON 30/06/2005 DECLARING TOTAL INCOME OF RS.1,75, 35,320/-. THE CASE ITA NO.444/AHD/ 2012 THE DCIT VS.SARJAN CORPORATION ASST.YEAR 2005-06 - 2 - WAS SELECTED FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS FRAMED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFT ER REFERRED TO AS 'THE ACT') VIDE ORDER DATED 28/12/2007 AND THE TOTAL I NCOME WAS DETERMINED AT RS. 3,30,39,670/- BY INTER-ALIA MAKING ADDITIO N OF RS.20,76,537/- ON ACCOUNT OF DISCLOSURE OF INCOME IN THE RETURN AS CO MPARED TO THAT DECLARED DURING SURVEY, ADDITION OF RS.70,40,000 /- ON ACCOUNT OF UNACCOUNTED CASH CREDIT AND ADDITION OF RS.63,87,80 9/- ON ACCOUNT OF UNEXPLAINED UNSECURED LOAN U/S.68 OF THE ACT, THUS , MAKING AGGREGATE ADDITION OF RS.1,55,04,346/-. AGAINST THE QUANTUM ORDER, ASSESSEE PREFERRED AN APPEAL BEFORE THE LD.CIT(A) WHO GRANTE D PARTIAL RELIEF TO THE ASSESSEE BY CONFIRMING THE ADDITIONS TO THE EXTENT OF AGGREGATE ADDITION OF RS.1,44,35,219/-. ON THE AFORESAID ADDITION W HICH WERE CONFIRMED BY THE LD.CIT(A), AO VIDE ORDER DATED 29/03/2010 HE LD THAT ASSESSEE HAD FAILED TO DISCHARGE THE ONUS TO PROVE THAT THERE WA S NO CONCEALMENT OF INCOME AND THEREFORE HELD THAT ASSESSEE WAS LIABLE FOR PENALTY U/S.271(1)(C) OF THE ACT. HE ACCORDINGLY LEVIED PE NALTY OF RS.52,82,206/- . AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED T HE MATTER BEFORE LD.CIT(A), WHO DECIDED THE ASSESSEE IN FAVOUR OF AS SESSEE BY HOLDING AS UNDER:- 6. I HAVE CAREFULLY CONSIDERED THE PENALTY ORDERS AS WELL AS THE SUBMISSIONS OF THE APPELLANT. I AM INCLINED TO AGR EE WITH THE CONTENTION OF THE A.R. OF THE APPELLANT. IN MY OPI NION, THE ESTIMATED ADDITION DOES NOT NECESSARILY INDICATE TH AT EITHER THE ASSESSEE HAS CONCEALED HIS INCOME OR FURNISHED INAC CURATE PARTICULARS OF INCOME. FURTHER ESTIMATION IS ALWAY S ESTIMATION ITA NO.444/AHD/ 2012 THE DCIT VS.SARJAN CORPORATION ASST.YEAR 2005-06 - 3 - HOWSOEVER; IT MAY BE SCIENTIFIC OR LOGICAL. HENCE, ON THE ADDITION MADE ON ACCOUNT OF ESTIMATION, PENALTY PROCEEDINGS CANNOT BE INVOKED. THIS OPINION/OBSERVATION HAS BEEN HELD BY MANY HONBLE COURTS OF THE COUNTRY. ACCORDINGLY, THE PENALTY IM POSED ON THE ABOVE ESTIMATED ADDITION IS HEREBY DELETED AND THE APPEAL IS ALLOWED. 2.2. AGGRIEVED BY THE ORDER OF LD.CIT(A), REVENUE I S NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUNDS:- 1) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF RS.52,82,206/- EVEN THOUGH IT HAS BEEN CATEGORICALLY ANALYSED IN THE BODY OF THE ORDE R THAT THE ASSESSEE HAD KNOWINGLY FURNISHED INACCURATE DETAILS OF INCOME. 2) THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY LEVIED U/S.271(1)(C) OF RS.52,82,206/- EVEN THOUGH ALL THE ISSUES ON WHICH THE PENALTY HAS BEEN LEVIED HAS NOT BEEN DISCUSSED ON MERIT BY THE LD.CIT(A) IN HIS ORDER. 3. AT THE OUTSET, LD.AR SUBMITTED THAT AGAINST THE PARTIAL RELIEF GRANTED BY LD.CIT(A) IN QUANTUM PROCEEDINGS, ASSESSEE AS WE LL AS REVENUE CARRIED THE MATTER BEFORE THE TRIBUNAL (ITAT D BE NCH AHMEDABAD). TRIBUNAL VIDE ORDER DATED 21/10/2011 IN ITA NOS.304 0/AHD/2008, 3243/AHD/2008 AND 1586/AHD/2009 FOR AY 2005-06 ALLO WED THE APPEALS OF THE ASSESSEE AND DISMISSED THE APPEAL OF REVENUE AND THEREBY DELETING THE ADDITIONS. HE POINTED TO THE RELEVANT FINDING OF THE QUANTUM ORDER OF TRIBUNAL. HE THEREFORE SUBMITTED THAT SINCE THE AD DITION ON WHICH PENALTY HAS BEEN LEVIED ITSELF IS DELETED BY THE HO NBLE TRIBUNAL, THE ITA NO.444/AHD/ 2012 THE DCIT VS.SARJAN CORPORATION ASST.YEAR 2005-06 - 4 - PENALTY U/S.271(1)(C) OF THE ACT ON ACCOUNT OF CONC EALMENT OF INCOME DOES NOT SURVIVE. HE THEREFORE SUBMITTED THAT THE ORDER OF THE LD.CIT(A) BE UPHELD. LD.SR.DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO LE VY OF PENALTY U/S.271(1)(C) OF THE ACT ON THE AGGREGATE ADDITION OF RS.1,44,35,219/- THAT WERE CONFIRMED BY THE LD.CIT(A). WE FIND THAT AGAINST THE QUANTUM ADDITION, REVENUE AND ASSESSEE HAD PREFERRED APPEA LS BEFORE THE TRIBUNAL. THE COORDINATE BENCH OF TRIBUNAL VIDE OR DER DATED 21/10/2011 DISMISSED THE APPEAL OF THE REVENUE AND ALLOWED THE APPEAL OF THE ASSESSEE, WHEREBY THE ADDITIONS MADE BY AO WERE DELETED. IN SUCH SITUATION, WHEN THE ADDITION ITSELF HAS BEEN DELETED, THE QUESTION OF LEVY OF PENALTY U/S.271(1)(C) OF THE ACT ON ACCOUNT OF CONCEALMENT OF INCOME ON SUCH ADDITIONS DO NOT SURVIVE. WE THERE FORE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD.CIT(A). THUS, THIS GROUND OF REVENUE IS DISMISSED. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 16 /0 8 /2016 SD/- SD/- ( MAHAVIR PRASAD) ( ANIL CHATURVEDI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 16/ 08 /2016 &.., .(../ T.C. NAIR, SR. PS ITA NO.444/AHD/ 2012 THE DCIT VS.SARJAN CORPORATION ASST.YEAR 2005-06 - 5 - !'#$%$' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. )*+ , / CONCERNED CIT 4. , ( ) / THE CIT(A)-V, SURAT 5. /01 ((*+ , *+ , ) / DR, ITAT, AHMEDABAD 6. 145 6 / GUARD FILE. / BY ORDER, / ( //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 11.8.16 (DICTATION-PAD 5-P AGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 12.8.16 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.16.8.16 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 16.8.16 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER