GLOBE POLYMERS & CHEMICALS, MUMBAI V. ITO WD 12(2)(1), MUMBAI

ITA 5286/MUM/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7198 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-03-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 12-03-2010
• Assessment Year: 2003-2004
• Appeal Filed On: 19-08-2008
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: H S RAHEJA
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI. BEFORE SHRI J. SUDHAKAR REDDY,A.M. AND SMT.P.MADHA VI DEVI, J.M. I.T.A. NO. 5 286/MUM/2008. ASSESSMENT YEAR : 2003-04. M/S GLOBLE POLYMERS & CHEMICALS, THE INCOME TAX OFFICER, 303, MARINE CHAMBERS, VS. WARD-12(2)(1), 43, NEW MARINE LINES, MUMBAI. MUMBAI 400 020. PAN :AADFG3925B APPELLANT RESPONDENT APPELLANT BY : SHRI H.S. RAHEJA. RESPONDENT BY : SHRI MOHD. USMAN. O R D E R PER J. SUDHAKAR REDDY, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS)-XIII, MUMBAI DATED 26-06- 2008 FOR THE ASSESSMENT YEAR 2003-04. 2. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAG ED IN THE BUSINESS OF IMPORT AND EXPORT OF DYES, CHEMICALS AN D OTHER ITEMS. THE PENALTY IN QUESTION IS LEVIED ON ACCOUNT OF THE ADD ITION OF TWO LOANS AGGREGATING TO RS.18 LAKHS. BOTH THESE LOANS HAVE B EEN TAKEN FROM THE BROTHER OF THE ASSESSEE MR. SANJAY RUKSHANA. THE AS SESSEE CLAIMS THAT MR. SANJAY RUKSHANA HAD GIVEN AN AMOUNT OF RS.11 LA KHS ON 23 RD JUNE, 2002 AND THAT FURTHER MR. SANJAY RUKSHANA AS PROPRI ETOR OF M/S V. TULSIDAR & SONS GAVE A FURTHER LOAN OF RS.7 LAKHS O N THE SAME DATE I.E. 23-06-2002. THE ASSESSEE CLAIMS THAT THERE WERE FAM ILY DISPUTES AND THAT THE BROTHER HAS NOT COOPERATED DURING THE ASSESSMEN T PROCEEDINGS AND HAS 2 NOT CONFIRMED THE FACT OF GIVING LOANS AND AS THIS WAS A FAMILY MATTER AND TO AVOID FURTHER MIS-UNDERSTANDINGS AND NOT TO PROL ONG THE MATTER, THE ASSESSEE OFFERED VOLUNTARILY TO TAX THIS AMOUNT ,C ASH CREDIT, AS INCOME. 3. THE AOS CASE IS THAT ENQUIRIES WERE MADE WITH THE BROTHER WHO DENIED GIVING AMOUNT TO THE ASSESSEE. FURTHER, BOOKS OF ACCOUNT OF THE BROTHER MR. SANJAY RUKSHANA AS WELL AS M/S V. T ULSIDAS AND SONS WERE VERIFIED AND THE TRANSACTION DID NOT APPEAR IN THEIR BOOKS. FURTHER, MR. SANJAY RUKSHANA GAVE A LETTER TO THE REVENUE DE NYING GIVING THE LOAN AND HENCE THERE WAS CONCEALMENT OF INCOME. 4. THE AO LEVIED PENALTY U/S 271(`1)(C) AT 100% OF THE TAX SOUGHT TO BE EVADED. ON FIRST APPEAL, THE FIRST APP ELLATE AUTHORITY CONFIRMED THE SAME. FURTHER AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 5. MR. H.S. RAHEJA, LEARNED COUNSEL FOR THE ASSESS EE, SUBMITTED THAT IT WAS ONLY DUE TO A FAMILY DISPUTE THAT THE B ROTHER REFUSED TO COOPERATE AND IN FACT STATED THAT HE HAS NOT GIVEN THE LOAN WHICH IS FACTUALLY INCORRECT. HE SUBMITTED THAT THE ASSESSEE WAS NOT CONFRONTED WITH A COPY OF THE BALANCE SHEET OBTAINED BY THE AO DIRECTLY NOR WAS A COPY OF THE STATEMENT REFUSING THE FACT OF GIVING L OAN OBTAINED FROM THE CREDITOR SANJAY RUKSHANA. HE SUBMITTED THAT NO SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE NOR WAS THERE ANY COMMUNICAT ION TO THAT EFFECT. HE SUBMITTED THAT MERE DISALLOWANCE CANNOT LEAD TO LEV Y OF PENALTY. 6. MR. MOHD. USMAN, THE LEARNED DR, ON THE OTHER H AND, OPPOSED THE CONTENTIONS BY SUBMITTING THAT THE LOAN WAS TAKEN IN CASH AND THERE WAS NO PROOF OF DISPUTE BETWEEN THE BROTHERS. HE RELIED ON THE ORDER OF THE AO. 3 7. RIVAL CONTENTIONS HEARD. ON A CAREFUL CONSIDERA TION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND A PERUSAL O F THE PAPERS ON RECORD AND THE ORDERS OF THE AUTHORITIES BELOW, WE HOLD A FOLLOWS. 8. THE AO ON NOTICING TWO CASH LOANS, ASKED THE AS SESSEE TO FURNISH LOAN CONFIRMATION. THE ASSESSEE SUBMITTED C OPY OF LEDGER ACCOUNTS BUT HAD NOT FURNISHED CONFIRMATIONS. THE A O COLLECTED THE BALANCE SHEETS FROM THE RESPECTIVE AOS. OF MR. SANJ AY RUKSHANA AND M/S V. TULSIDAS & SONS. ON VERIFICATION, THESE AMOUNTS NEVER APPEARED IN THE BALANCE SHEET. SUMMONS WERE ISSUED TO SANJAY RUKSHA NA CALLING OF BOOKS OF ACCOUNT AND LOAN DETAILS. SANJAY RUKSHANA APPEARED AND PRODUCED THE BOOKS. THESE TRANSACTIONS WERE NOT FOU ND IN THE BOOKS OF SANJAY RUKSHANA OR IN THE BOOKS OF V. TULSIDAS & SO NS. SUBSEQUENTLY, MR. SANJAY RUKSHANA BY A LETTER TO THE AO DENIED TH E TRANSACTIONS VIDE LETTER 22-03-2006. THEREAFTER THE ASSESSEE SURRENDE RED BOTH THESE LOANS U/S 68. ON THESE FACTS THE PENALTY IS LEVIED U/S 27 1(1)(C). THERE IS NO EVIDENCE OR EVEN A SUBMISSION BEFORE THE LOWER AUTH ORITIES THAT THERE WAS A DISPUTE BETWEEN THE BROTHERS AND IT WAS ONLY DUE TO THIS THE ASSESSEE WAS NOT IN A POSITION TO PROVE THE LOAN.. IN FACT T HE AMOUNT IS RECEIVED IN CASH AND CREDITED INTO THE ASSESSEES BANK ACCOUNT. THUS WE ARE OF THE CONSIDERED OPINION THAT THIS IS A CLEAR CASE OF NOT ONLY CONCEALMENT OF INCOME BUT ALSO FURNISHING OF INACCURATE PARTICULAR S. THE ASSESSEE HAD ADMITTED TO THESE AMOUNTS SUBSEQUENT TO THE INVEST IGATION AND EVIDENCE COLLECTED BY THE REVENUE. IF THESE AMOUNTS WERE REC EIVED BY CROSSED CHEQUES, THEN THE ASSESSEE WOULD HAVE HAD AT LEAST A PRIMA FACIE CASE TO PROVE HIS INNOCENCE. BOOKS OF ACCOUNT AND BALANCE S HEETS OF THE CREDITOR WERE EXAMINED, AND IT WAS FOUND THAT WHAT IS STATED BY THE ASSESSEE IS NOT 4 TRUE. UNDER THESE FACTS AND CIRCUMSTANCES, WE UPHOL D PARA 3.5 OF THE ORDER OF THE CIT(APPEALS) WHERE IT IS HELD AS FOLLO WS : 3.5 I HAVE CONSIDERED THE CONTENTION OF THE APPEL LANT. THE LOAN WAS IN CASH AND CLAIMED TO BE FROM A RELATIVE. THE APPELLANT DID NOT HAVE ANY CONFIRMATION NEITHER ANY OTHER COR ROBORATIVE EVIDENCE TO SUPPORT THE FACT THAT THE LOAN WAS GENU INE. THE ASSESSMENT PROCEEDINGS TOOK PLACE LONG AFTER THE AC COUNTS WERE CLOSED AND RETURNS WERE FILED. THE APPELLANT, IF HE HAD CONFIRMATION, SHOULD HAVE THEM EVEN BEFORE THE ASSE SSMENT PROCEEDINGS. WHEN IT DID NOT GIVE WHEN SPECIFICALLY ASKED FOR, IT KNEW THAT IT DID NOT HAVE IT AND COULD NOT GIVE IT. BUT INSTEAD IT TRIED, IN VAIN, TO PROVE THE GENUINENESS BY SHOWING ITS OWN LEDGER. THE LOAN WAS IN CASH. SO, THE APPELLANT SHOULD HAVE PRODUCED SOME OTHER CORROBORATIVE EVIDENCE TO SUPPORT THE LOAN. C ONFIRMATION IS NOT THE ONLY THING TO PROVE THE GENUINENESS OF LOAN . BUT, THE APPELLANT NEITHER FILED CONFIRMATION NOR FILED ANY OTHER INDEPENDENT EVIDENCE TO PROVE IT CASE. THE APPELLANT FAILED TO DISCHARGE ITS PRIMARY ONUS. THE LOAN WAS IN CASH THERE WAS NO WAY , THE AO COULD HAVE ACCEPTED WHAT THE APPELLANT SAYS. HENCE, WHAT REMAINS IS THAT, IT IS ONLY APPELLANTS SAYING THAT SHRI SA NJAY RUKSHANA GAVE THE LOAN AND DUE TO FAMILY DIFFERENCES, HE IS NOT C OOPERATING. BUT THERE WAS NOT AN IOTA OF EVIDENCE TO BELIEVE THIS T HEORY. WHY SHOULD THE AO BELIEVE THE STORY OF THE APPELLANT? I F AT ALL THERE WAS A DISPUTE, THE APPELLANT VERY WELL KNEW THAT IT CAN NOT GET CONFIRMATION. BUT, THE APPELLANT NEVER OFFERED THE INCOME WHEN IT WAS ASKED TO FILE THE CONFIRMATION. WHEN IT KNOW TH AT IT CANNOT PROVE CASH CREDIT, IT SHOULD HAVE OFFERED THE SAME VOLUNTARILY MUCH BEFORE THE ASSESSMENT PROCEEDINGS. IN THAT CASE, TH E INTENTION OF THE APPELLANT COULD HAVE BEEN BELIEVABLE. BUT, THE APPE LLANT MADE THE OFFER AT THE FAG END OF ASSESSMENT PROCEEDINGS WHEN IT KNEW THAT IT HAS BEEN BADLY CORNERED. THE EVIDENCE COLLECTED BY THE AO ARE FOR ABUNDANT PRECAUTION AND WAS NOT THE ONLY EVIDENCE U SED AGAINST THE APPELLANT. THE APPELLANT DID NOT DISCHARGE THE PRIMARY ONUS CAST ON IT. HENCE, IT WILL BE NAVE TO ACCEPT THE APPELL ANTS CONTENTION THAT IT WAS NOT SHOW CAUSED ABOUT THE ADDITION. THE APPELLANT HAD TIME AFTER ASSESSMENT ORDER TO PROVE THE GENUINENES S OF THE LOAN. THIS WAS NOT DONE. HENCE, THE ONLY THING THAT IS PR OVED THAT THE LOANS WERE NOT GENUINE. AS DISCUSSED ABOVE, THE APP ELLANTS OFFER CANNOT BE TREATED AS NOT VOLUNTARY. IT WOULD NOT HA VE MATTERED MUCH WHETHER THE APPELLANT MADE THE OFFER OR NOT. T HERE WAS NEVER AN INTENTION TO VOLUNTARILY OFFER THE AMOUNT. IT WA S DONE AS A LAST- 5 DITCH ATTEMPT TO AT LEASE AVOID PENALTY. HENCE, I H AVE NO REASON TO ACCEPT THE CONTENTION OF THE APPELLANT AND DISAGREE WITH THE SATISFACTION OF THE AO. THE PENALTY LEVIED ON UNEXP LAINED CASH CREDIT OF RS.18,00,000/- IS, THEREFORE CONFIRMED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF MARCH, 2010. SD/- SD/- (P.MADHAVI DEVI) (J. SUDHAKAR REDDY) JUDICIAL MEMBER. ACCOUNTANT MEMBER. MUMBAI, DATED : 30 TH MARCH, 2010. COPY FORWARDED TO : 1. APPELLANT. 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, G-BENCH. (TRUE COPY) BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI BENCHES, MUMBAI. WAKODE