Shri Dhimant J. Kotecha, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-5(2), RAJKOT-GUJARAT

ITA 536/RJT/2013

• Counselvise Citation: 53624914 RSA 2013
• Duration Of Justice: 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 05-03-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 31-12-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT B JHAVERI
• Assessee Lawyers: DR ADHIA
• Keywords: Unexplained cash credit; Peak credit
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 536/RJT/2013 ASSESSMENT YEAR : 2008-09 DHIMAT J. KOTECHA, PROP. M/S. RADHIKA CANVASSING AGENT, 214 ROYAL COMPLEX, NR. BHADLA PETROL PUMP, RAJKOT PAN : AGFPK 9383 D ( / APPELLANT) THE INCOME-TAX OFFICER, WARD 5(2), RAJKOT / RESPONDENT / ASSESSEE BY SHRI D.R. ADHIA, AR / REVENUE BY DR. JAYANT B. JHAVERI, DR / DATE OF HEARING 05.03.2014 !'# / DATE OF PRONOUNCEMENT 07.03.2014 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 22.11.2013 OF CIT (A)- IV, RAJKOT CONFIRMING THE PENALTY OF RS.59,130/- LE VIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE INCOME-TAX ACT FOR THE ASSESSMENT YEAR 2008-09. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS AN INDIVIDUAL, DOING BUSINESS OF GRAIN BROKER. FOR THE ASSESSMENT YEAR UNDER APPEAL, HE FILED THE RETURN OF INCOME ON 27.11.2008 DECLARING TOTAL INCOME AT RS.1,34,300 /-. THE ASSESSING OFFICER FRAMED ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT ON 23.1 2.2010, WHEREIN HE MADE ADDITION OF RS.2,35,156/- IN RESPECT OF PEAK BALANC E IN SAVINGS ACCOUNT NO.624801041720 WITH ICICI BANK, KALAWAD ROAD, RAJ KOT. IN RESPECT OF THIS ADDITION, THE ASSESSING OFFICER ALSO INITIATED PENA LTY PROCEEDINGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. SUBSEQUENTLY THE ASSESSING O FFICER VIDE HIS ORDER DATED 22.06.2011 LEVIED PENALTY OF RS.59,130/- ON THIS AD DITION. ON APPEAL, IN THE IMPUGNED ORDER, LD. CIT(A) CONFIRMED THE PENALTY OF RS.59,130/-, LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE INCOME-TAX ACT, FOR THE DETAILED REASON GIVEN IN PARAGRAPH 3 OF THE IMPUGNED ORDER, WHICH READS A S UNDER:- 3. I HAVE CONSIDERED CAREFULLY THE SUBMISSIONS MAD E BY THE APPELLANT AND THE PENALTY ORDER PASSED U/S 271(1)(C) OF THE IT AC T 1961 BY THE ASSESSING OFFICER. HERE IS A CASE, WHERE THE APPELLANT HAS HI DDEN THE BANK ACCOUNT FROM THE DEPARTMENT, WHEREIN IT IS DISCOVERED THAT THE A PPELLANT HAS DEPOSITED CASH OF RS.26,90,711, WHICH HITHERTO UNDISCLOSED. WHEN Q UESTIONED BY THE ASSESSING OFFICER, THE APPELLANT SURRENDERED UNDISC LOSED INCOME OF RS.2,35,156 BASED ON THE PEAK CREDIT. THE SAME RS.2 ,35,156 WAS BROUGHT TO 2 536-RJT-2013 - DHIMAT J. KOTECHA (SMC) TAX. THE PENALTY ORDER PASSED U/S 271(1)(C) OF IT A CT BY THE A.O. IS SELF EXPLANATORY, WHEREIN, HE HAS DISCUSSED AT LENGTH AS TO HOW THE APPELLANT HAS WILLFULLY FURNISHED LOWER RETURNED INCOME BY NOT DI SCLOSING THE CASH DEPOSITS AMOUNTING TO RS.26,90,711/- IN THE SECRET BANK ACCO UNT. THE A.O. IN THE PENALTY ORDER HAS STATED THAT: THE ASSESSEE HAS RECEIVED CASH WHICH ARE NOT FULLY AND COMPLETELY RECORDED IN THE BOOKS OF ACCOUNT, AND HAS FAILED TO OFFER ANY SATISFACTORY AND CREDIBLE EXPLANATION ABOUT THE NAT URE AND SOURCE OF THE CASH CREDITS, THUS THE VALUE OF THE CASH ARE THE UN DISCLOSED INCOME OF THE ASSESSEE. THE INCOME EARNED IN UNDISCLOSED MANN ER HAS BEEN CHANNELED INTO THE UNEXPLAINED CASH CREDITS. THE AS SESSEE HAS DELIBERATELY CONCEALED THE PARTICULARS OF CASH AND IS GUILTY OF THE CONTUMACIOUS CONDUCT. HENCE, IN THE INSTANT CASE TH E ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF FURNISHING THE EXAC T SOURCES AND PARTICULARS OF CASH. THE A.O. HAS FURTHER STATED THAT THE RATIO AND TEXT LAID DOWN FOR LEVY OF PENALTY IN THE CASE OF NATIONAL TEXTILES VS. CIT, 249 ITR 1 25 (GUJ.) IS SQUARELY APPLICABLE TO THE FACTS OF THE APPELLANT. HE FURTHE R RELIED UPON THE JUDGMENT OF APEX COURT IN THE CASE OF UNION OF INIDA VS. DHARME NDRA TEXTILE PROCESSORS & OTHERS (2008) 306 ITR 277 (SC) TO SAY THAT THE CASE OF THE APPELLANT FALLS WITHIN THE MISCHIEF OF SECTION 271(1)(C) OF I.T. AC T, 1961. IN VIEW OF THE ABOVE FACTS AND DISCUSSION MADE THER EON, I AGREE WITH THE FINDINGS OF THE A.O. THAT THE APPELLANT IS HIT BY P ROVISIONS OF SECTION 271(1)(C) OF I.T. ACT, 1961. THE APPELLANT HAS WILLFULLY EVAD ED THE INCOME BY NOT DISCLOSING THE CASH DEPOSITS IN THE SECRET BANK ACC OUNT HELD BY HIM. THEREFORE, PENALTY LEVIED U/S 271(1)(C) OF I.T. ACT , 1961 AT RS.59,130/- IS IN ACCORDANCE WITH LAW, STANDS, CONFIRMED. AGGRIEVED WITH THE ORDER OF LD. CIT(A) CONFIRMING T HE PENALTY OF RS.59,130/-, THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 3. AT THE TIME OF HEARING, ON BEHALF OF THE ASSESSE E, SHRI D.R. ADHIA, AR, APPEARED AND POINTED OUT THAT PEAK AMOUNT OF RS.2,3 5,156/- OUT OF TOTAL DEPOSIT OF RS.26,90,711/- SHOWS THAT THERE IS NO CONCEALMENT F OR WHICH NO PENALTY U/S 271(1)(C) IS LEVIABLE. IN SUPPORT OF THIS, LD. AR RELIED UPON THE DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT V. P. ROSES, 356 ITR 703 ( MAD), WHEREIN IT WAS HELD THAT IN ORDER TO BRING THE CASE U/S 271(1)(C) THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASSESSEE AND THE ASSESSEE MUST HAVE F URNISHED INACCURATE PARTICULARS OF HIS INCOME. 4. AS AGAINST THE AFORESAID SUBMISSIONS OF LD. AR, LD. DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE FACTS NARRATED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER CLEARLY INDICATE THAT THE ASSESSEE HAS NOT DISCLOSED THE SAVINGS BANK ACCOUNT NO.624801041720 WITH ICICI BANK, KALA WAD ROAD, RAJKOT, WHEREIN HE HAS MADE DEPOSIT OF RS.26,90,711/-. ON BEING CON FRONTED AT THE TIME OF 3 536-RJT-2013 - DHIMAT J. KOTECHA (SMC) ASSESSMENT, THE ASSESSEE VOLUNTARILY ADMITTED THE P EAK BALANCE OF RS.2,35,156/- AS HIS INCOME WHICH IS NOT DISCLOSED IN THE RETURN OF INCOME. ON THESE CONSPICUOUS FACTS OF THE CASE, THE DECISION OF HONBLE MADRAS H IGH COURT IN THE CASE OF CIT V. P. ROSES (SUPRA), RELIED BY THE ASSESSEE, HAS NO APPLI CATION; THEREFORE, THE ORDER OF LD. CIT(A) CONFIRMING THE PENALTY BE UPHELD. 5. RIVAL SUBMISSIONS WERE CONSIDERED. I FOUND CONSI DERABLE FORCE IN THE SUBMISSIONS MADE BY LD. DR. ADMITTEDLY, THE ASSESSE E HAS NOT DISCLOSED THE DEPOSIT TO THE TUNE OF RS.2,35,156/- IN SAVINGS BANK ACCOUN T NO.624801041720 WITH ICICI BANK, KALAWAD ROAD, RAJKOT AND FOR THIS REASON THE ASSESSEES CASE WAS SELECTED THROUGH CASS TO VERIFY THE SOURCE OF CASH DEPOSITED IN BANK ACCOUNT. ON BEING CONFRONTED, THE ASSESSEE VOLUNTARILY ADMITTED THE C ONCEALED INCOME OF RS.2,35,156/- BEING PEAK BALANCE IN SAVINGS BANK ACCOUNT NO.62480 1041720 WITH ICICI BANK, KALAWAD ROAD, RAJKOT. I AM, THEREFORE, OF THE VIEW THAT THIS IS A FIT CASE FOR LEVYING PENALTY OF RS.59,130/- U/S 271(1)(C) OF THE INCOME- TAX ACT, 1961. I, THEREFORE, DECLINE TO INTERFERE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 07.03.2014 !$ /RAJKOT *BT / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- DHIMAT J. KOTECHA, PROP. M/S. RADHIKA CANVASSING AGENT, 214 ROYAL COMPLEX, NR. BHADLA PETROL PUMP, R AJKOT 2. / RESPONDENT- THE INCOME-TAX OFFICER, WARD 5(2), RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT-III, RAJKOT 4. * * 2- / CIT(A)-IV, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT