Shri Bilkishbanu M. Anwar, Surat V. The Income tax Officer, Ward-9(1), Surat

ITA 498/AHD/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6155 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-06-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 16-02-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K MISHRA SRDR
• Assessee Lawyers: M K PATEL
• Keywords: Unexplained cash credit; Revised return; Reassessment proceedings
• Section: 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.498-500/AHD/2005 ASSESSMENT YEARS :1998-99 TO 2000-01 DATE OF HEARING:3.6.10 DRAFTED:3.6.10 BILKISHBANU M ANWAR, PROP. REGAL SYNTHETICS, WD.NO.11/966, MAIN ROAD, CHOWK BAZAR, SURA PAN NO.AADPW5423F V/S . INCOME TAX OFFICER, WARD-9(1), SURAT (APPELLANT) .. (RESPONDENT) ASSESSEE BY :- SHRI M.K. PATEL, AR REVENUE BY:- SHRI C.K. MISHRA, SR-DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE THREE APPEALS BY THE ASSESSEE ARE ARISING OU T OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VI, SURAT IN A PPEAL NOS. CAS-VI/097- 099/2004-05 DATED 30-11-2004. THE ASSESSMENTS WERE FRAMED BY ITO WARD-9(1), SURAT U/S.143(3) R.W.S. 147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDERS DATED 30-03-2004 FOR ASS ESSMENT YEARS 1998-99 TO 2000- 01 RESPECTIVELY. THE PENALTY UNDER DISPUTE WERE LE VIED BY ASSESSING OFFICER VIDE DIFFERENT ORDERS DATED 15-09-2004 FOR ALL THE THREE ASSESSMENT YEARS. 2. THE ONLY COMMON ISSUE IN THESE THREE APPEALS OF THE ASSESSEE IS AGAINST THE DIFFERENT ORDER OF CIT(A) CONFIRMING THE LEVY OF PE NALTY U/S.271(1)(C) OF THE ACT BY THE ASSESSING OFFICER AMOUNTING TO RS.20,000, 45,000/- & RS.4 LAKHS FOR ASSESSMENT YEARS 1998-99 TO 2000-01. ITA NO.498-500/AHD/2005 A.YS. 98-99 TO 00-01 BILKISHBANU M ANWAR V ITO WD-9(1), SRT PAGE 2 3. THE BRIEF FACTS LEADING TO ABOVE COMMON ISSUE AR E THAT IN ASSESSMENT YEAR 1998-99 THE ASSESSING OFFICER RECORDED THE REASONS FOR ISSUANCE OF NOTICE U/S.148 OF THE ACT ON 12-01-2004 AND SERVED THE NOTICE UPON AS SESSEE ON 14-01-2004. THE AO RECORDED THE FOLLOWING REASONS:- DURING THE ASSESSMENT PROCEEDINGS FOR THE AY 2001- 02, IT IS NOTICED THAT THE ASSESSEE HAS ACCEPTED LOAN FROM DIFFERENT PARTIES D URING THE PERIOD PERTAIN TO ASSESSMENT YEAR 1998-99, THE DETAILS OF WHICH ARE A S UNDER:- (I) FARIDA HAZI SATTAR RS. 75,000 (II) KALID M ANWAR RS. 80,000 (III) SURAJ YARN SILK IND. RS.200,000 RS.355,000 DURING THE ASSESSMENT PROCEEDINGS FOR THE A.Y 2001- 02, THE ASSESSEE HAS NOT PROVED THE GENUINENESS OF LOAN, CREDITWORTHINES S AND IDENTITY OF PARTIES FROM WHOM UNSECURED LOAN HAS BEEN ACCEPTED AND FURT HER THE REPAYMENT OF LOAN ALSO DEPOSITED IN THE BANK ACCOUNT OF M/S. A O NE TEXTILE. HENCE, IT IS CLEAR THAT THE ASSESSEE HAS NOT TAKEN LOAN FROM THE OUTSIDE PARTIES BUT THE ASSESSEE HAS INTRODUCED BOGUS NAME TO GENERATE CASH CREDIT. THEREFORE, THE AMOUNT OF UNEXPLAINED CASH CREDIT REQUIRED TO BE AD DED BACK ASSESSEES INCOME U/S.68 OF THE I.T. ACT. CONSIDERING THE FACTS, I HAVE REASONS TO BELIEVE TH AT THE INCOME OF RS.3,55,000/- CHARGEABLE TO TAX HAS ESCAPED ASSESSM ENT FOR A.Y. 1998-99, THEREFORE, NOTICE U/S.148 REQUIRES TO BE ISSUED IN THIS CASE. SIMILAR IN ASSESSMENT YEAR 1999-00, THE ASSESSING O FFICER ISSUED NOTICE U/S.148 ON 12-01-2004 AND SERVED UPON HE ASSESSEE ON 14-01-200 4 AND REASONS RECORDED, WHICH READS AS UNDER:- DURING THE ASSESSMENT PROCEEDINGS FOR THE AY 20010 92, IT IS NOTICED THAT THE ASSESSEE HAS ACCEPTED LOAN FROM DIFFERENT PARTIES D URING THE PERIOD PERTAIN TO ASSESSMENT YEAR 1999-00, THE DETAILS OF WHICH ARE A S UNDER:- 1. ALGYAZ ENTERPRISES RS.2,50,000 2. S.R. TEXTILES RS. 40,000 3. LUCKY FAB. RS. 20,000 4. RAJAN PRASAD RS. 20,000 5. SANEHAL TEXTILE RS. 50,000 TOTAL RS.3,80,000 DURING THE ASSESSMENT PROCEEDINGS FOR THE A.Y. 2001 -02, THE ASSESSEE HAS NOT PROVED THE GENUINENESS OF LOAN, CREDIT WORTHINE SS AND IDENTITY OF PARTIES FROM WHOM, UNSECURED LOAN HAS BEEN ACCEPTED AND FUR THER THE REPAYMENT OF LOAN ALSO DEPOSITED IN THE BANK ACCOUNT OF M/S. A O NE TEXTILE. HENCE, IT IS CLEAR THAT HE ASSESSEE HAS NO TAKEN LOAN FROM THE O UTSIDES PARTIES BUT THE ASSESSEE HAS INTRODUCED BOGUS SAME TO GENERATE CASH CREDIT. THEREFORE, THE AMOUNT OF UNEXPLAINED CASH CREDIT REQUIRED TO BE AD DED BACK ASSESSEES INCOME U/S.68 OF THE I.T ACT. ITA NO.498-500/AHD/2005 A.YS. 98-99 TO 00-01 BILKISHBANU M ANWAR V ITO WD-9(1), SRT PAGE 3 CONSIDERING THE FACT, I HAVE REASONS TO BELIEVE THA T THE INCOME OF RS.3,80,000/- CHARGEABLE TO TAX HAS ESCAPED ASSESSM ENT FOR A.Y 1999-00, THEREFORE, NOTICE U/S.148 REQUIRES TO BE ISSUED IN THIS CASE. SIMILAR IN ASSESSMENT YEAR 2000-01, ASSESSING OFFIC ER ISSUED NOTICE U/S.148 OF THE ACT ON 12-01-2004 WHICH WAS SERVED UPON THE ASSESSE E ON 14-01-2004 AND FOR THIS, REASONS ARE RECORDED AS UNDER:- DURING THE ASSESSMENT PROCEEDINGS FOR THE AY 2001- 02, IT IS NOTICED THAT THE ASSESSEE HAS ACCEPTED LOAN FROM DIFFERENT PARTIES D URING THE PERIOD PERTAIN TO ASSESSMENT YEAR 2000-01, THE DETAILS OF WHICH ARE A S UNDER:- 1. AMARNAH AGRAWAL 20,000/- 2. ANIL KUMAR 37,000/- 3. BHUPENDRA TEX 24,000/- 4. BIL ING TRADING CO. 50,000/- 5. KALAVATI FINANCE 1,60,000/- 6. LALIA TEXTILES 50,000/- 7. MUSHAQ ALI 50,000/- 8. PARVATI TEX 70,000/- 9. SUPER SYNTHETIC 37,000/- 10. S URKHA TEXTILES 35,000/- 11. SURYAPUR TEX 35,000/- 12. R .D.TEX 30,000/- 13.SIRHIND TEXTILES 25,000/- 14. SOLAPUR TRADING CO. 18,000/- 15. B.E.SILK MILLS 16,000/- 1 6. S.S. TEXTILES 13,000/- 17. SEHNAZ ENTERPRISES 10,000/- TOTAL 6,80,000/- DURING THE ASSESSMENT PROCEEDINGS FOR THE A.Y. 2001 -02, THE ASSESSEE HAS NOT PROVED THE GENUINENESS OF LOAN, CREDIT WORTHINE SS AND IDENTITY OF PARTIES FROM WHOM UNSECURED LOAN HAS BEEN ACCEPTED AND FURT HER THE REPAYMENT OF LOAN ALSO DEPOSITED IN THE BANK ACCOUNT OF M/S. A O NE TEXTILE. HENCE, IT IS CLEAR THAT THE ASSESSEE HAS NOT TAKEN LOAN FROM THE OUTSIDE PARTIES BUT THE ASSESSEE HAS INTRODUCED BOGUS NAME TO GENERATE CASH CREDIT. THEREFORE, THE AMOUNT OF UNEXPLAINED CASH CREDIT REQUIRED TO BE AD DED BACK ASSESSEES INCOME U/S. 68 OF THE I.T. ACT. CONSIDERING THE FACTS, I HAVE REASONS TO BELIEVE TH AT THE INCOME OF RS.6,80,000/- CHARGEABLE TO AX HAS ESCAPED ASSESSME NT FOR A.Y 2000-01, THEREFORE, NOTICE U/S.148 REQUIRES TO BE ISSUED IN THIS CASE. 4. DURING THE COURSE OF REASSESSMENT PROCEEDINGS IN ASSESSMENT YEAR 1998-99 ASSESSING OFFICER FOUND THAT ONLY CASH CREDIT IN TH E NAME OF KALID M ANWAR AMOUNTING TO RS.80,000/-, IN THE ASSESSMENT YEAR 19 99-00 AO FOUND THE CASH CREDITS IN THE NAME OF S.R. TEXTILES RS.40,000/-, L UCKY FAB RS.20,000/-, RAJAN PRASAD RS.20,000/- AND SANEHAL TEXTILE RS.50,000/- I.E. TOTAL AMOUNT OF RS.1.30 LAKH, IN ASSESSMENT YEAR 2000-01, AO FOUND UNEXPLAI NED CASH CREDIT OF RS.6.80 LAKH. THE DETAILS OF WHICH ARE AS UNDER:- 1. AMARNAH AGRAWAL 20,000/- 2. ANIL KUMAR 37 ,000/- 3. BHUPENDRA TEX 24,000/- 4. BILING TRADING CO. 50,000/- ITA NO.498-500/AHD/2005 A.YS. 98-99 TO 00-01 BILKISHBANU M ANWAR V ITO WD-9(1), SRT PAGE 4 5. KALAVATI FINANCE 1,60,000/- 6. LALIA T EXTILES 50,000/- 7. MUSHAQ ALI 50,000/- 8. PARV ATI TEX 70,000/- 9. SUPER SYNTHETIC 37,000/- 10. SURKHA TEXTILES 35,000/- 11. SURYAPUR TEX 35,000/- 12. R.D.TEX 30,000/- 13.SIRHIND TEXTILES 25,000/- 14. SOLAPU R TRADING CO. 18,000/- 15. B.E.SILK MILLS 16,000/- 16. S.S. TEXTILES 13,000/- 17. SEHNAZ ENTERPRISES 10,000/- TOTAL 6,80,000/- THESE CASH CREDITS WERE FOUND TO BE UNEXPLAINED AND ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271(1) OF THE ACT IN RESP ECT OF THESE CASH CREDITS IN ALL THREE ASSESSMENT YEARS. THE ASSESSING OFFICER ISSU ED SHOW CAUSE NOTICE AND THE ASSESSEE IN RESPONSE TO SHOW CAUSE NOTICE SATED THA T THE DETAILS AND EVIDENCE REGARDING CASH CREDIT AND GENUINENESS OF LOAN, CRED ITWORTHINESS AND IDENTITY OF THE PARTIES WERE PROVED BUT IN RESPECT OF ABOVE STATED BALANCE CASH CREDITS ADDED BY ASSESSING OFFICER THE SAME WAS SURRENDERED AS CASH CREDITS WITH CLEAR INSTRUCTIONS THAT NO PENALTY WILL BE LEVIED AND ON THE GROUND AN D AGREEMENT, ASSESSMENTS WERE COMPLETED. THE ASSESSEE CLAIMED THAT IN RESPECT OF THESE CASH CREDITS AN AGREEMENT TO THIS EFFECT THAT NO PENALTY U/S.271(1) OF THE ACT WILL BE LEVIED, WAS REACHED. THE ASSESSEE CONTENDED THAT MERE FACT THAT THIS ADDITION HAD BEEN AGREED COULD NOT ITSELF JUSTIFIED THE IMPOSITION OF PENALT Y OF CONCEALMENT OF INCOME. THE ASSESSEE CONTENDED THAT THE CASH CREDITS WERE OFFER ED WITH A VIEW TO PURCHASE PEACE OF MIND AND TO AVOID FURTHER LITIGATION BUT T HE ASSESSING OFFICER IN ALL THREE YEARS HELD THE ASSESSEE IS IN THE AMBIT OF PROVISIO N OF U/S.271(1) OF THE ACT BY STATING THAT ASSESSEE HAS FURNISHED INACCURATE PART ICULARS IN SO FAR AS IT RELATES TO CASH CREDIT IN THE NAME OF ABOVE REFERRED PERSONS. THE ASSESSING OFFICER LEVIED THE PENALTY AND RELEVANT FINDING IN PARA-3 FOR ASSESSMENT YEAR 1998-99 AS UNDER:- 3. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE ASSESSEE AND I DO NOT FIND ANY MERITS IN THEM. THE CASE LAWS RELIE D UPON BY THE ASSESSEE ARE QUITE DISTINGUISHABLE. IN THE CASE OF CIT VS. HAJI GAFFAR HAJI DADA CHINI 169 ITR 33, THERE WAS NO STATUTORY PROCEEDINGS PENDING AGAINST THE ASSESSEE WHEN CERTAIN ENQUIRIES WERE BEING MADE. IN THE SAID CASE, AFTER COMPLETION OF THE ASSESSMENT, THE A.O NOTICED THAT THE ASSESSEE H AD INTRODUCED SOME MONEY IN THE BOOKS AND WHEN THE EXPLANATION WAS SOU GH, THE ASSESSEE SENT A LETTER TO THE A.O OFFERING CREDITS IN RESPECT OF THE SAID MONEY AND HE ALSO MENTIONED HEREIN THAT THE PENALTY MAY BE DECIDED ON MERITS. THE QUESTION BEFORE THE HIGH COURT WAS WHETHER THE ASSESSEES SU BMISSION THAT THE PENALTY MAY BE DECIDED ON MERITS TENT AMOUNT TO ADM ISSION OF CONCEALMENT OF INCOME. IN THE CASE UNDER CONSIDERATION, THE FACTS ARE TOTALLY DIFFERENT. THE AO, WHILE COMPLETING THE ASSESSMENT PROCEEDINGS FOR THE SUBSEQUENT YEAR FOUND THAT THE ASSESSEES CLAIM OF REPAYMENT OF LOA N WAS SUSPICIOUS. HE ITA NO.498-500/AHD/2005 A.YS. 98-99 TO 00-01 BILKISHBANU M ANWAR V ITO WD-9(1), SRT PAGE 5 PROBED THE MATTER FURTHER AND HE FOUND THAT THE CHE QUES ALLEGEDLY ISSUED IN THE NAME OF SEVERAL DIFFERENT PERSONS WERE IN FACT DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEES HUSBAND. IN VIEW OF THE D ISCOVERY OF SUCH FACTS, IT WAS VERY OBVIOUS THAT THE DEPOSITS ITSELF WAS NOT G ENUINE AND THEREFORE, THERE WAS PRIMA FACIE CASE TO INVOKE THE PROVISIONS OF SE C.68 OF THE ACT. THE A.O, THEREFORE ISSUED NOTICE U/S.148 FOR THE YEAR IN WHI CH HE DEPOSIT S APPEARED IN THE BOOKS OF ACCOUNT. THE ASSESSEE WAS ALREADY AWAR E OF THE FACTS THAT THE DEPARTMENT HAD ALREADY FOUND SUFFICIENT EVIDENCE TO PROVE THAT THE DEPOSITS WERE NO GENUINE. ACCORDINGLY THE ASSESSEE WAS PERHA PS LEFT WITH NO ALTERNATIVE BUT TO ACCEPT THE FINDING WHICH WERE AL READY RECORDED IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR AY 01-02. UNDER SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ASSESSEE HAD EITHER VOLUNTA RILY FILED A REVISED RETURN OR HAD CONDITIONALLY OFFERED THE AMOUNT IN QUESTION AS HIS INCOME. THIS IS A CASE WHERE THE DEPARTMENT WAS ALREADY IN A POSITION OF SUFFICIENT MATERIAL TO RE-OPEN HE ASSESSMENT FOR AY 00-01 AND THE ASSESSEE HAD PRACTICALLY NO DEFENSE. IT IS NOT A CASE WHERE THE ASSESSEE HAS MA DE ANY CONDITIONAL OFFER. HE DEMAND CAME AS A RESULT OF NOTICE U/S. 148 AND N OT BECAUSE OF ANY EXPRESSED OR IMPLIED COMPROMISE FORMULATED AT THE T IME OF ASSESSMENT PROCEEDINGS. SIMILARLY THE FACTS IN THE CASE OF THE SUPREME COURTS DECISION IN THE CASE OF SIR SHADILAL SUGAR AND GENERAL MILLS LT D. ARE ALSO QUITE DIFFERENT. IN THE SAID CASE THE ASSESSEE HAD AGREED TO CERTAIN CONDITIONS TO MAINTAIN GOOD RELATION AND PENALTY LEVIED ONLY ON THE BASIS OF SUCH ADMISSIONS WAS NOT CONSIDERED JUSTIFIABLE AND THEREFORE, DELETED. IN T HE CASE UNDER CONSIDERATION, THERE WAS A POSITIVE PROOF ALREADY ON RECORD TO IND ICATE THAT THE CREDITS IN THE ASSESSEES BOOKS WERE NOT GENUINE. THE ASSESSEE WAS WELL AWARE THAT HE WAS NOT IN A POSITION TO OFFER ANY SATISFACTORY EXP LANATION AND THEREFORE, HE WAS LEFT WITH NO OTHER OPTION BUT TO ADMIT THE FACT THE FACT THAT THE CASH CREDITS WERE NOT GENUINE. SIMILAR ARE THE FINDINGS IN OTHER ASSESSMENT YEARS I.E. 1999-00 AND 2000-01. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A). THE CIT(A) CONFIRMED THE ACTION OF ASSESSING OFFICER. AGGRIEVED, ASSESSEE C AME IN SECOND APPEAL BEFORE US FOR ALL THREE YEARS. 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE THR OUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THE UNDISPUTED F ACTS ARE THAT THE ASSESSEE HAS AGREED FOR ASSESSMENT VOLUNTARILY BY FILING A REVIS ED RETURN AND SURRENDERED THESE CASH CREDITS. WE FIND FROM THE PENALTY ORDERS ALSO THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY JUST ON THE BASIS OF ASSESSMENT OF INCOME OF THESE CASH CREDITS ON THE BASIS OF SURRENDER. WE FIND THAT THE SURRENDER WAS A CONDITIONAL SURRENDER AND THE AO HAS NOT MADE ANY INQUIRY REGARDING THE GENUI NENESS OF CASH CREDITS. THE HONBLE APEX COURT IN THE CASE OF CHIKKAM KOTESWARA RAO V. CHIKKAM SUBBARAO AIR 1971 SC 542 HAS STATED THAT BEFORE THE RIGHT OF THE PARTY CAN BE CONSIDERED TO ITA NO.498-500/AHD/2005 A.YS. 98-99 TO 00-01 BILKISHBANU M ANWAR V ITO WD-9(1), SRT PAGE 6 HAVE BEEN DEFEATED N THE BASIS OF AN ALLEGED ADMISS ION BY HIM, THE IMPLICATION OF THE STATEMENT MADE BY HIM MUST BE CLEAR AND CONCLUS IVE. THERE SHOULD BE NO DOUBT OR AMBIGUITY ABOUT THE ALLEGED ADMISSION. THUS, THE MERE FACT THAT THE ASSESSEE HAS AGREED TO BE ASSESSED AT A HIGHER THAN A RETURNED I NCOME, IS NOT A PROVE OF ADMISSION OF CONCEALMENT BY ASSESSEE. THIS FACT CA NNOT GIVE A GOOD FOUNDATION TO THE IMPOSITION OF PENALTY AND ACCORDINGLY IN THE PR ESENT CASE ALSO, THE ASSESSING OFFICER IS UNABLE TO PROVE THE CONCEALMENT. ACCORD INGLY, THE PENALTY LEVIED AND CONFIRMED BY CIT(A) IS REVERSED. THESE THREE APPEA LS OF THE ASSESSEE ARE ALLOWED. 5. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 03/06/2010 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED :03/06/2010 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-VI, SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD