Shri Brijesh Dilipbhai Patel, Anand V. The Dy.CIT Anand Range, Anand

ITA 527/AHD/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 67911 (ITAT-AHMEDABAD)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 29-10-2013
• Assessment Year: 2002-2003
• Appeal Filed On: 28-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: M G PATEL
• Keywords: Unexplained cash credit; Business income; Earning of tax free income
• Section: 143(3); 147; 131; 69; 148

Judgement Text

ITA NO 527/AHD/2013 . A.Y. 2002- 03 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 527 /AHD/2013 (ASSESSMENT YEAR:2002-03) BRIJESH DILIPBHAI PATEL SYAM BUNGLOW, KARAMSAD, TALUKA: ANAND 388325 V/S THE DY. COMMISSIONER OF INCOME TAX, ANAND, CIRCLE, ANAND. (APPELLANT) (RESPONDENT) PAN: AGPPP7481D APPELLANT BY : SHRI M.G. PATEL RESPONDENT BY : SHRI P.L. KUREEL, SR. D.R. ( )/ ORDER DATE OF HEARING : 29-10-201 3 DATE OF PRONOUNCEMENT : 01-11-2013 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), IV, BARODA DATED 21.01.2013 FOR A.Y. 2002-03. 2. THE FACT AS CULLED OUT FROM THE MATERIAL ON RECO RD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL AND A PARTNER IN THE F IRM NAME ABHISHEK POOJA CONSTRUCTION. IN RESPONSE TO NOTICE UNDER SECTION 148 OF THE ACT, ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2002-03 ON 20.05.20 05 DECLARING TOTAL INCOME ITA NO 527/AHD/2013 . A.Y. 2002- 03 2 OF RS. 50,000/- AND EXEMPT INCOME OF RS. 13,83,953/ -. ASSESSMENT WAS FINALIZED ON 22.12.2006 UNDER SECTION 143(3) READ W ITH SECTION 147 OF THE ACT AND THE TOTAL INCOME WAS DETERMINED AT RS. 13,09,00 0/-. ON THE ADDITIONS MADE WHILE FINALIZING ASSESSMENT A.O. LEVIED PENALT Y UNDER SECTION 271(1)(C) OF RS. 3,60,000/- VIDE ORDER DATED 16.03.2010. AGGR IEVED BY THE AFORESAID PENALTY ORDER, ASSESSEE CARRIED THE MATTER BEFORE C IT(A). CIT(A) VIDE ORDER DATED 21.01.2013 DISMISSED THE APPEAL OF THE ASSESS EE. AGGRIEVED BY THE AFORESAID ORDER OF CIT(A) THE ASSESSEE IS NOW IN AP PEAL BEFORE US AND HAS RAISED THE FOLLOWING GROUND:- 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -IV, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE BY CONFIRMING THE PENALTY OF RS. 3,60,000/- LEVIED U/S. 271(1)(C) OF THE I.T. ACT, 1961 BY THE ASSESSING OF FICER. 4. DURING THE COURSE OF RE-ASSESSMENT PROCEEDINGS, A.O. NOTICED THAT ASSESSEE HAD INTRODUCED A SUM OF RS. 56,70,991/- IN ABHISHEK POOJA CONSTRUCTION, THE FIRM IN WHICH HE WAS A PARTNER. THE CAPITAL INCLUDE D RS. 11,60,000/- INTRODUCED BY WAY OF CASH. THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF CASH DEPOSIT. ASSESSEE INTERALIA SUBMITTED THE BREA K UP AND EXPLANATION THAT RS. 4,00,000/-WAS RECEIVED ON ACCOUNT OF SALE CONSI DERATION OF THE VEHICLE AND RS. 7,60,000/- WAS OUT OF SALE PROCEEDS OF AGRI CULTURE PRODUCE OF THE FAMILY. THE SUBMISSION MADE BY THE ASSESSEE WAS NOT FOUND ACCEPTABLE TO THE ASSESSING OFFICER AND HE THEREFORE, CONCLUDED T HAT ASSESSEE HAS NOT SATISFACTORY EXPLAINED THE SOURCE OF CASH AND THERE FORE TREATED THE ADDITIONS MADE IN CASH AS UNEXPLAINED AND ADDED IT AS INCOME U/S 69 OF THE ACT. ON THE AFORESAID ADDITION MADE, PENALTY OF RS. 3,60,00 0/- WAS LEVIED VIDE ORDER DATED 16-03-2010 WHICH WAS ALSO CONFIRMED BY CIT (A ). 5. BEFORE US, THE LEARNED AR AT THE OUTSET SUBMITTE D THAT IDENTICAL ADDITIONS WERE MADE IN THE CASE OF ASSESSEE FOR A.Y: 01-02 AN D ON WHICH PENALTY UNDER SECTION 271 (1) (C) WAS ALSO LEVIED. THE PENA LTY WAS DELETED BY HONBLE TRIBUNAL VIDE ORDER DATED 21-09-2013 IN ITA NO. 1152/ AHD/2009. HE ALSO PLACED ON RECORD AT PAGE 25 TO 30 OF THE PAPER BOOK, THE COPY OF THE ITA NO 527/AHD/2013 . A.Y. 2002- 03 3 AFORESAID ORDER. HE THEREFORE SUBMITTED THAT SINCE THE FACT OF THE CASE THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF A.Y: 01- 02, FOLLOWING THE DECISION OF TRIBUNAL IN A.Y: 01-02 THE PENALTY IN YEAR UNDER AP PEAL BE ALSO DELETED. THE LEARNED DR ON THE OTHER HAND SUBMITTED THAT THE FAC TS OF THE CASE ARE DISTINGUISHABLE OF BOTH THE YEARS ARE DISTINGUISHAB LE AND THEREFORE THE ASSESSEES CONTENTION THAT THE CASE IS COVERED BY E ARLIER YEAR SHOULD NOT BE ACCEPTED. HE THUS SUPPORTED THE ORDER OF A.O. AND C IT(A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT IN A.Y. 01-02, ASSESSEE HAD INTRODUCED CA PITAL OF RS. 57 LACS AND THE SOURCE OF IT WAS CLAIMED TO BE OUT OF THE LOAN TAKE N FROM VARIOUS PERSONS. SINCE THE ASSESSEE COULD NOT PRODUCE THE CASH CREDI TOR OR THE CASH CREDITOR DID NOT RESPOND TO THE SUMMONS ISSUED U/S 131 OF TH E ACT ADDITION WAS MADE U/S. 68. IN THE APPELLATE PROCEEDINGS, THE ADDITIO N WAS WORKED OUT ON THE BASIS OF PEAK OF THE CASH INTRODUCED AT RS. 27 LACS AND ON THE AFORESAID ADDITION PENALTY WAS LEVIED. THE COORDINATE BENCH O F THE TRIBUNAL DELETED THE PENALTY IN A.Y: 01-02 BY HOLDING AS UNDER:- 6. WE HAVE PERUSED THE QUANTUM ADDITION, PENALTY O RDER AND CIT(A) ORDER AND ALSO GONE THROUGH THE CASE LAWS CITED BY THE LD. COUNSEL FOR THE ASSESSEE . THE FACTS IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (SUPRA) IS THAT THE ASSESSEE HAD OFFERED ADD ITIONAL INCOME TO BUY PEACE OF MIND AND TO AVOID THE LITIGATION WHICH WAS CONFIRMED BY THE CIT(A) BUT AP PELLANT TRIBUNAL HAD HELD THAT THE DEPARTMENT HAD NOT DISCHARGED ITS BURDEN OF PROVING CONCEALMENT AN D HAD SIMPLY RESTED ITS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE BY THE ASSESSEE IN GOOD FA ITH AND THAT PENALTY COULD NOT BE LEVIED. ON A REFERENCE, THE HIGH COURT HELD THAT NO PENALTY COUL D BE LEVIED FOR CONCEALMENT AND THE HON'BLE SUPREME COURT HAD ALSO DISMISSED THE APPEAL BY HOLDING THAT NO INTERFERENCE WITH THE ORDER OF T HE HIGH COURT WAS CALLED FOR. IN CASE OF CIT VS. JALARAM OIL MILLS (SUPRA) THE FA CT WAS THAT THE ADDITION U/S. 68 ON ACCOUNT OF UNEXPLAINED CASH CREDITORS WAS MAD E IN THIS CASE. THE HON. GUJARAT HIGH COURT HAS HELD THAT MERELY CONCEDED THE ENTRIES IN QUESTI ON MAY BE TREATED AS ITS INCOME BY VIRTUE OF PROVISIONS OF SECTION 68. THE TRIBUNAL RECORDED A FINDING THAT NO INSTANCE TO SHOW THAT THE ASSESSEE HAD BEEN EARNING BUSINESS INCOME OUTSIDE BOOKS IN T HE PAST OR IN THE YEAR UNDER CONSIDERATION. SIMILAR FACT IS ALSO FOUND IN CASE OF NATIONAL TEXTILES VS. CIT (SUPRA) WHERE THE ADDITION OF UNEXPLAINED CASH CREDITORS U/S. 68 MADE WHERE HON'BLE GUJARAT HIG H COURT HELD THAT THERE IS NO MATERIAL OR CIRCUMSTANCES LEADING TO THE REASONABLE CONCLUSION THAT THE AMOUNT DOES REPRESENT THE ASSESSEE'S INCOME. IT IS NOT ENOUGH FOR THE PURPOSE OF PENALTY THAT THE AMOUNT HAS BEEN ASSESSED AS INCOME. THE EXPLANATION 1 TO SECTION 271 (1)(C) DOES NOT MAKE T HE ASSESSMENT ORDER CONCLUSIVE EVIDENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE ASSES SEE. THUS, NO PENALTY CAN BE IMPOSED. WE HAVE ALSO CONSIDERED THE HON'BLE SUPREME COURT DECISION IN CASE OF UOI V. DHARAMENDRA TEXTILE PROCESSORS 306 ITR 277 IN WHICH THE HON'BLE SUPREME COURT HELD THAT WILLFUL C ONCEALMENT IS NOT ESSENTIAL FOR INGREDIENT ATTRACTING THE PENALTY U/S .271(1)(C) WHICH IS NOT SQUARELY APPLICABLE IN THE ASSESSEE'S CASE AS ASSESSEE HAS AGREED TO PAY TAX O N THE SAID AMOUNT TO BUY PEACE. THEREFORE, FOLLOWING THE ABOVE DECISIONS, THE PENALTY IMPOSED BY THE A.O. AND CONFIRMED BY THE CIT(A), IS HEREBY DELETED. ITA NO 527/AHD/2013 . A.Y. 2002- 03 4 7. IT IS SEEN THAT IN A.Y: 01-02, THE ADDITIONS WER E MADE ON ACCOUNT OF UNEXPLAINED INTRODUCTION OF CAPITAL THE PENALTY WAS LEVIED AND WHICH WAS DELETED BY CO-ORDINATE BENCH. IN THE PRESENT APPEA L ALSO THE ADDITION HAS BEEN MADE ON ACCOUNT OF UNEXPLAINED INTRODUCTION OF CAPITAL AND PENALTY U/S. 271(1)(C) HAS BEEN LEVIED. WE ARE THEREFORE OF THE VIEW THAT THE FACTS OF THE CASE IN THE YEAR UNDER APPEAL ARE IDENTICAL TO THAT OF EARLIER YEAR. BEFORE US, THE REVENUE ALSO COULD NOT DISTINGUISH AS TO HOW TH E FACTS IN BOTH THE YEARS ARE DISTINGUISHABLE. IN VIEW OF THE AFORESAID FACT S AND RESPECTFULLY FOLLOWING THE ORDER OF THE CO-ORDINATE BENCH FOR A.Y. 01-02. WE ARE OF THE VIEW THAT NO PENALTY CAN BE IMPOSED IN THE PRESENT CASE. WE THE REFORE DIRECT THE DELETION OF PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN OPEN COURT ON 01 -11 - 2013. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY 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, AHMEDABAD