M/s J.B. Laminates, Ludhiana V. ITO, Ludhiana

ITA 591/CHANDI/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9791 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 17-05-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Assessee Lawyers: AJAY PAL SINGH
• Keywords: Unexplained expenditure
• Section: 69C; 133(6)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 591/CHD/2016 ASSESSMENT YEAR: 2007-08 M/S J.B LAMINATES, VS. THE ITO, WARD NO. III (2), HUMBRAN LUDHIANA LUDHIANA PAN NO. AIJPB2751L (APPELLANT) (RESPONDENT) APPELLANT BY : SH. AJAY PAL SINGH RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 13.07.2016 DATE OF PRONOUNCEMENT 19.07.2016 ORDER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAI NST THE ORDER OF LD. CIT(A)-1, LUDHIANA DATED 29.02.2016 FOR ASSESSMENT YEAR 2007-08 CHALLENGING THE LEVY OF PENALTY U/S 271(1)(C) OF TH E INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAD SHOWN LIABILITY OF RS. 3, 00,745/- OF M/S KAMAL KISHORE & SONS. THE ASSESSING OFFICER ISSUED NOTIC E U/S 133(6) OF ACT TO M/S KAMAL KISHORE GOEL & SONS FOR CONFIRMATION OF S UNDRY CREDIT LIABILITY SHOWN BY THE ASSESSEE IN ITS BOOKS OF ACCOUNT. M/S KAMAL KISHORE GOEL & SONS CONFIRMED THE CLOSING BALANCE OF RS. 6,82,374/ - WHILE ASSESSEE HAD SHOWN LESS LIABILITY OF RS. 3,81,629/-. THE ASSESSI NG OFFICER MADE ADDITION 2 OF THIS AMOUNT ON ACCOUNT OF UNEXPLAINED EXPENDITUR E U/S 69C OF THE ACT. THE ASSESSING OFFICER VIDE SEPARATE ORDER LEVIED TH E PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSION S ARE REPRODUCED IN THE APPELLATE ORDER IN WHICH ASSESSEE EXPLAINED THAT PE NALTY IS IMPOSED FOR DIFFERENCE IN THE CLOSING BALANCE ON M/S KAMAL KISH ORE GOEL & SONS. THE ASSESSEE HAS NOT FURNISHED ANY INACCURATE PARTICULA RS OF INCOME. THE ASSESSEE WAS SUFFERING LOSSES AND ALSO FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION AT NIL AMOUNT. THE ASSESSEE CLO SED ITS BUSINESS OPERATION AND STOPPED MANUFACTURING ACTIVITY AND, T HEREFORE, ASSESSEE HAD NO INTENTION TO EVADE TAX AS THE UNIT WAS RUNNING I NTO LOSSES. THE LD. CIT(A) DID NOT ACCEPT THE CONTENTION OF THE ASSESSE E AND DISMISSED THE APPEAL OF THE ASSESSEE. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, I DO NO T FIND ANY MERIT IN THE APPEAL OF THE ASSESSEE. IT IS ADMITTED FACT THAT AD DITION MADE BY THE ASSESSING OFFICER WAS NOT CHALLENGED IN FURTHER APP EAL, THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER HAS BECOME F INAL. IT IS WELL SETTLED LAW THAT FINDINGS GIVEN IN THE QUANTUM ORDER ARE RE LEVANT AND HAVE PROBATIVE VALUE. THE ASSESSING OFFICER HAS SPECIFIC ALLY RECORDED AFTER VERIFICATION FROM M/S KAMAL KISHORE GOEL & SONS THA T ASSESSEE HAS SHOWN LESS LIABILITY OF RS. 3,81,629/- IN THE BOOKS OF AC COUNT. THEREFORE, IT WAS RIGHTFULLY CONSIDERED AS UNEXPLAINED EXPENDITURE MA DE BY THE ASSESSEE U/S 69C OF THE I.T. ACT. THE ASSESSEE FAILED TO EXPLAI N FROM WHERE THE AMOUNT OF DIFFERENCE WAS SPENT. IN THE ABSENCE OF ANY EXPL ANATION FROM THE SIDE OF THE ASSESSEE, AUTHORITIES BELOW WERE JUSTIFIED IN H OLDING THAT ASSESSEE HAS 3 FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN T HE RETURN OF INCOME. HAD THE ASSESSMENT NOT TAKEN UP ON SCRUTINY BASIS AND H AD THE ASSESSING OFFICER HAD NOT HAVE ISSUED NOTICE U/S 133(6) OF THE I.T. A CT TO THE CONCERNED PARTY FOR VERIFICATION OF THE SUNDRY CREDIT OUTSTANDING A MOUNT, THE ABOVE FACTS WOULD NOT HAVE COME ON RECORD TO PROVE UNEXPLAINED EXPENDITURE. THUS, THE ASSESSEE HAS DELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME IN THE BOOKS OF ACCOUNT AS WELL AS IN THE RETURN OF IN COME. DURING THE COURSE OF ARGUMENTS, LD. COUNSEL FOR THE ASSESSEE WAS NOT ABLE TO EXPLAIN ANYTHING AS TO WHY THE PENALTY BE NOT CONFIRMED. IT WAS MERELY CONTENDED THAT SINCE THE ASSESSEE WAS RUNNING INTO LOSSES, TH EREFORE, IT IS NOT A CASE OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E CONTENTION OF THE ASSESSEE IS INCORRECT. MERELY RUNNING ON LOSSES WOU LD NOT PROVE THAT ASSESSEE HAD NOT FILED THE INACCURATE PARTICULARS O F INCOME. LD. DR HAS RIGHTLY RELIED UPON DECISIONS OF THE HON'BLE SUPREM E COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILES PROCESSORS AND OTHERS [2008] 306 ITR 277 (SC), AND CIT VS. ATUL MOHAN BINDAL [2009] 317 ITR 1 (SC) IN WHICH IT WAS HELD THAT PENALTY IS STRICTLY A CIVIL LIABILITY, THEREFORE, ASSESSING OFFICER WAS JUSTIFIED IN LEVYING THE PENA LTY U/S 271(1)(C) OF THE ACT. I, THEREFORE, NOT INCLINED TO INTERFERE WITH THE ORDERS OF THE AUTHORITIES BELOW. I CONFIRM THE LEVY OF PENALTY AND DISMISS TH E APPEAL OF THE ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 19 TH JULY, 2016 RKK 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR