Sh. Aseem Kumar Prop. M/s. Aseem & Com., SRIGANGANAGAR V. ITO, SRIGANGANAGAR

ITA 525/JODH/2010

• Counselvise Citation: 52523314 RSA 2010
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-07-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 09-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MN MO RYA
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (JODH[PUR BENCH: JODHPUR) BEFORE SHRI RAJPAL YADAV AND SHRI K.D. RANJAN ITA NO. 525/JDP/2010 ASSESSMENT YEAR: 2005-06 SHRI ASEEM KUMAR, PROP. VS. INCOME-TAX OFFICER, M/S. ASEEM & CO.,135-L BLOCK, WARD-1, SRIGANGANAGAR. SRIGANGANAGAR. (PAN: AAPPW3118L) (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI MN MORYA, D R ORDER PER RAJPAL YADAV: JUDICIAL MEMBER THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE OR DER OF LEARNED CIT(APPEALS) DATED 20.09.2010 PASSED FOR ASSESSMENT YEAR 2005-06. THE GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT(APPEA LS) HAS ERRED IN CONFIRMING THE PENALTY IMPOSED UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT, 1961 QUA THE ADDITION OF RS.2,13,000 MADE UNDER SEC . 68 OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS RUNNING A PROPRIETARY CONCERN IN THE NAME OF M/S. ASEEM & CO. IT IS ENGA GED IN THE EXECUTION OF CIVIL CONTRACTS. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 25.10.2005 DECLARING AN INCOME OF RS.2,66,324. AN ASSESSMENT U NDER SEC. 143(3) WAS 2 FRAMED ON 26 TH SEPTEMBER 2007 WHEREBY INCOME OF THE ASSESSEE WAS DETERMINED AT RS.15,40,760. 3. DISSATISFIED WITH THE ADDITION, ASSESSEE CARRIED THE MATTER IN APPEAL. THE FACTS RELEVANT FOR THE PRESENT APPEAL ARE THAT INCOME OF THE ASSESSEE HAS BEEN COMPUTED BY APPLYING A NET PROFIT RATE OF 8% I N RESPECT OF CONTRACT RECEIPTS AND AT 3% IN RESPECT OF MATERIAL SUPPLY WO RK. APART FROM THIS ESTIMATED ADDITION, AN ADDITION OF RS.2,13,000 HAS ALSO BEEN MADE UNDER SEC. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDITS APPEARING AGAINST THE NAME OF THREE PERSONS, NAMELY, BAL KISHAN SOLANKI RS.90,000 , RUPENDER SINGH RS.25,000 AND SHRI MAHAVIR SINGH RS.98,000. 4. ASSESSING OFFICER HAS IMPOSED PENALTY OF RS.70,0 00. LEARNED CIT(APPEALS) HAS DELETED THE PENALTY QUA THE ESTIMA TED ADDITION MADE UNDER SEC. 145(3) OF THE ACT. LEARNED CIT(APPEALS), HOWEV ER, CONFIRMED THE PENALTY WITH REGARD TO THE ADDITION OF RS.2,13,000 WHICH WAS ADDED ON ACCOUNT OF UNEXPLAINED CASH CREDITS. 5. IN RESPONSE TO THE NOTICE OF HEARING, ASSESSEE F ILED WRITTEN SUBMISSIONS. HE HAS PLEADED THAT NOTICE ISSUED BY T HE ASSESSING OFFICER 3 UNDER SEC. 274 READ WITH SEC. 271(1)(C) OF THE ACT IS A DEFECTIVE NOTICE. IT DOES NOT DEMONSTRATE WHETHER PENALTY IS TO BE LEVIE D FOR FURNISHING INACCURATE PARTICULARS OR FOR CONCEALMENT OF INCOME . FOR BUTTRESSING HIS CONTENTIONS, HE RELIED UPON THE ORDER OF THE ITAT, JODHPUR IN THE CASE OF M/S. VERMA TRACTORS IN ITA NO. 1360/JP/96. LEARNED DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE LEARNED CIT(APPEALS). 6. WE HAVE GONE THROUGH THE RECORD CAREFULLY. WE HA VE PERUSED THE COPY OF NOTICE ISSUED ON 26 TH SEPTEMBER 2007. ASSESSING OFFICER HAD ISSUED NOTIC E UNDER SEC. 271(1)(C) ON THE GROUND THAT ASSESSEE HA S CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE P ARTICULARS. THE ASSESSEE HAS DRAWN SUPPORT FROM THE ORDER OF THE ITAT IN THE CASE OF VERMA TRACTORS. THE FACTS OF THAT CASE ARE QUITE DISTINGUISHABLE. T HE PENALTY HAS NOT BEEN DELETED ON ACCOUNT OF ANY DEFECTS IN THE NOTICE. AS SESSING OFFICER SOUGHT TO LEVY A PENALTY UNDER SEC. 273(2)(A) OF THE ACT ON A CCOUNT OF FAILURE OF THE ASSESSEE TO FURNISH AN ESTIMATE OF ADVANCE TAX PAYA BLE BY THE ASSESSEE WITHIN THE MEANING OF SUB-SECTION (4) OF SEC. 209A OF THE ACT. ITAT HAS HELD THAT NO NOTICE UNDER SEC. 210 WAS SERVED UPON THE ASSESS EE AND THERE IS NO DEFAULT AT THE END OF THE ASSESSEE UNDER SEC. 209A(4) OR SE C. 212 OF THE ACT. BECAUSE OF THIS REASON, THE PENALTY SOUGHT TO BE LEVIED BY THE ASSESSING OFFICER HAS 4 BEEN DELETED. THE ASSESSEE HAS NOT DEMONSTRATED AS TO WHAT PREJUDICE HAS BEEN CAUSED TO HIM IN DEFENDING HIMSELF BEFORE THE ASSESSING OFFICER IN CONNECTION WITH THE PENALTY IMPOSEABLE UNDER SEC. 2 71(10(C). WE DO NOT FIND ANY MERIT IN THIS CONTENTION OF THE ASSESSEE. LEARNED FIRST APPELLATE AUTHORITY HAS ALSO NOT GONE THROUGH THIS ISSUE IN T HE IMPUGNED ORDER. 7. THE ASSESSEE HAS FILED AFFIDAVIT FROM THE CREDIT ORS. HE HAS FILED THEIR ADDRESSES ALSO. THE ONLY LAPSE ON THE PART OF ASSES SEE IS THAT HE COULD NOT PRODUCE THE CREDITORS BEFORE THE ASSESSING OFFICER. IN OUR OPINION, FOR MAKING AN ADDITION, IT CAN BE CONSTRUED THAT ASSESS EE FAILED TO PROVE THE CASH CREDITS AVAILABLE IN THE BOOKS OF ACCOUNT. BUT, IT CANNOT BE SAID THAT ASSESSEE FAILED TO GIVE ANY EXPLANATION OR THE EXPLANATION G IVEN BY HIM IS FALSE. THE ASSESSEE HAS GIVEN EXPLANATION THAT AMOUNTS APPEARI NG IN THE BOOKS ARE LOANS TAKEN FROM THREE PERSONS. HE HAS FILED THE DETAILS OF SUCH CREDITS. HE HAS ALSO FILED THE AFFIDAVITS OF THE CREDITORS. THUS, IN A W AY, HE HAS GIVEN AN EXPLANATION IN SUPPORT OF THE CREDITS. ASSESSING OF FICER FAILED TO BRING ANY EVIDENCE WHICH CAN SUGGEST THAT EXPLANATION SUBMITT ED BY THE ASSESSEE IS FACTUALLY INCORRECT OR FALSE. THERE IS NO DELIBERAT E ATTEMPT DISCERNIBLE FROM THE RECORD WHICH CAN SUGGEST THAT ASSESSEE HAS ADOP TED A MODUS OPERANDI OF INTRODUCING HIS UNEXPLAINED MONEY. HE MERELY FAILED TO PROVE THE 5 INGREDIENTS OF SEC. 68 WHICH CAN BE SUFFICIENT FOR MAKING THE ADDITION BUT THE ASSESSEE DOES NOT DESERVE TO BE VISITED WITH THE PE NALTY. WE ALLOW THE APPEAL OF THE ASSESSEE AND DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON 29.08.201 1 SD/- SD/- ( K.D. RANJAN ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 29/08/2011 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR