ACIT 24(1), MUMBAI V. FAIRDEAL CONST. CO., MUMBAI

ITA 5970/MUM/2011

• Counselvise Citation: 597019914 RSA 2011
• Duration Of Justice: 1 year(s) 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 06-08-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 26-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 68

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI . .. . . . . . ! ! ! !, ,, , ' #$ ' #$ ' #$ ' #$ , , ,, , . .. . . . . . $ $ $ $ , % #$ % #$ % #$ % #$ & & & & BEFORE SHRI R.K.GUPTA JM AND SHRI R.S.SYAL, AM ITA NO. 5970 /MUM/2011 A.Y. 2005-06 DCIT CIRCLE-24(1), C-13, R.NO.503, PRATYAKSHAKAR BHAVAN BANDRA(EAST) MUMBAI-400051 ' ' ' ' / VS. M/S. FAIRDEAL CONST. CO. 6, MEHAR HOMES, NEXT TO KOHINOOR ART, NEAR JOGESHWARI STATION, JOGESHWARI(W), MUMBAI-400102 PAN-AABFF1884E ( )* / // / ASSESSEE) ( +,)* / RESPONDENT) )* - -- - . . . . / ASSESSEE BY : SHRI ANURAG SRIVASTAV +,)* - . - . - . - . / RESPONDENT : NONE ' - /% / / / / DATE OF HEARING :06.08.2013 012 - /% / DATE OF PRONOUNCEMENT : 14.08.2013 #3 #3 #3 #3 / / / / O R D E R PER R.S.SYAL ( AM) : THIS APPEAL BY THE REVENUE ARISES OUT OF THE ORDER PASSED BY THE LD. CIT(A) ON 09.06.2011 DELETING THE PENALT Y OF RS.6,58,665/- IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT IN RELATION TO THE ASSESSMENT YEAR 2005-06. ITA NO. 5970/MUM/2011 M/S. FAIRDEAL CONST. CO. 2 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E ASSESSEE IS PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRU CTION AND DEVELOPMENT OF PROPERTY. A SUM OF RS.62.25 LAKHS W AS SHOWN AS CREDIT IN THE BALANCE SHEET RECEIVED FROM DIFFER ENT PERSONS. IN THE ABSENCE OF THE ASSESSEE HAVING FURNISHED EVIDEN CE OF GENUINENESS OF THESE CREDITS TO THE SATISFACTION OF THE ASSESSING OFFICER, AN ADDITION FOR THE SIMILAR AMOUNT WAS MAD E U/S 68 OF THE ACT. IN THE FIRST APPEAL, THE LD. CIT(A) DELET ED THE ADDITION AMOUNTING TO RS.43.75 LAKHS BUT SUSTAINED THE REMAI NING ADDITION AMOUNTING TO RS.18.50 LAKHS IN RESPECT OF ADVANCES CLAIM TO HAVE BEEN RECEIVED FROM FOUR PARTIES. BOT H THE SIDES CHALLENGED THE ORDER OF THE FIRST APPELLATE AUTHORI TY BEFORE THE TRIBUNAL. VIDE ORDER DATED 18.06.2010 IN ITA NO. 56 59/MUM /2008, THE TRIBUNAL DISMISSED THE CROSS APPEALS. T HE ASSESSING OFFICER PASSED THE PENALTY ORDER IMPOSING PENALTY I N RESPECT OF THE ADDITION SUSTAINED IN THE FIRST APPEAL. THE LD . CIT(A) OVERTURNED THE PENALTY ORDER PASSED BY THE ASSESSIN G OFFICER AND DELETED THE PENALTY. THE REVENUE IS AGGRIEVED AGAINST THE DELETION OF PENALTY. 3. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIAL ON RECORD. THERE IS NO APPEARANCE FROM TH E SIDE OF ASSESSEE. WRITTEN SUBMISSIONS FILED ON BEHALF OF TH E ASSESSEE HAVE BEEN TAKEN INTO CONSIDERATION. IT IS OBSERVED THAT THE PENALTY HAS BEEN IMPOSED IN RESPECT OF THE ADDITION CONFIRMED BY THE TRIBUNAL U/S 68 IN RESPECT OF FOUR PARTIES A MOUNTING TO ITA NO. 5970/MUM/2011 M/S. FAIRDEAL CONST. CO. 3 RS.18.50 LAKHS. FINDING OF THE TRIBUNAL IN QUANTUM ORDER, WHICH IS RELEVANT FOR OUR PURPOSE, IS AS UNDER:- ` BOTH THE ASSESSEE AS WELL AS THE REVENUE ARE IN APP EAL BEFORE THE TRIBUNAL. WE HAVE CAREFULLY CONSIDERED THE FACTS A ND THE RIVAL CONTENTIONS. IT IS NOT IN DISPUTE THAT THE ASSESSE E WAS ENGAGED IN THE CONSTRUCTION OF PROPERTIES. THE ASSESSEE HAS A LSO NOT DISPUTED THAT ALL THE MONIES WERE TAKEN IN CASH AND WERE REP AID BY BEARER CHEQUES. THE FACTS RELATING TO ALL THE CREDITS ARE MORE OR LESS SIMILAR. THE PARTIES WERE ALL RESIDING IN PLACES O UTSIDE MUMBAI AND THEY WERE NOT AFFLUENT PERSONS IN ORDER TO BE A BLE TO BOOK FLATS IN POWAI AREA. SOME OF THEM STATED THAT THEY ADVAN CED THE MONIES OUT OF THEIR MEAGER EARNINGS AND SOME OF THEM HAVE STATED THAT THEY COLLECTED THE MONIES FROM THEIR CLOSE FAMILY M EMBERS AND MUSTERED THE REQUISITE MONEY TO BOOK THE FLAT BY PA YING THE INITIAL AMOUNT. SOME OF THE CREDITORS HAD ALSO FILED COPIE S OF THEIR INCOME TAX RETURNS SHOWING SOME INCOME AND ALSO SHO WING THE AMOUNTS ADVANCED TO THE ASSESSEE. MANY OF THE CRED ITORS HAD STATED THAT THEY WERE AGRICULTURISTS IN GUJARAT PRO DUCING MAKAI, BAJRI, MOONGFALI, ETC. AND THE AMOUNTS ADVANCED WE RE OUT OF THE AGRICULTURAL INCOME. THE CIT(A) HAS MADE A DISTINCT ION BETWEEN MONIES ADVANCED BY A CREDITOR ALL BY HIMSELF AND M ONIES ADVANCED BY HIM AFTER COLLECTING FUNDS FROM HIS CLO SE RELATIVES. HE HAS EXAMINED EACH CREDIT AND HAS ALSO GIVEN SOME WE IGHTAGE TO CASES WHERE THERE WAS SOME AGRICULTURAL INCOME. A PERUSAL OF THE REMAND REPORT OF THE ASSESSING OFFICER SUBMITTED BE FORE THE CIT(A) [PAGES 31 AND 32 OF THE PAPER BOOK] SHOWS TH AT SOME OF THE PARTIES WHO WERE STAYING IN GUJARAT AND RAJASTH AN HAVE RECEIVED THE SUMMONS ISSUED BY THE ASSESSING OFFICE R AND SIX PERSONS HAVE ALSO FILED EXTRACTS OF 7/12 TO SHOW TH EIR LAND HOLDINGS. ALL THESE FACTS HAVE BEEN DULY TAKEN INT O CONSIDERATION BY THE CIT(A) AND HE HAS EXAMINED EACH AND EVERY CR EDIT ITEM BY ITEM. AFTER GOING THROUGH HIS ORDER, WE ARE OF THE OPINION THAT THE CIT(A) HAS TAKEN A DECISION BASED ON THE EVIDENCE A DDUCED BEFORE HIM IN RESPECT OF EACH CREDIT. THE PARTIES HAVE RE LIED ON THE SAME EVIDENCE EVEN BEFORE US. HOWEVER, THEY HAVE NOT BE EN ABLE TO POINT OUT ANY SERIOUS INFIRMITY IN THE MANNER IN WH ICH THE EVIDENCE WAS APPRECIATED BY THE LD. CIT(A). IN THIS VIEW OF THE MATTER, WE HOLD THAT THE ORDER OF THE LD. CIT(A) DESERVES TO B E CONFIRMED. WE DO SO AND DISMISS THE APPEALS FILED BOTH BY THE ASS ESSEE AS WELL AS THE DEPARTMENT. ITA NO. 5970/MUM/2011 M/S. FAIRDEAL CONST. CO. 4 4. FROM THE PERUSAL OF THE ABOVE FINDING OF THE TRI BUNAL IN QUANTUM PROCEEDINGS, IT IS AMPLY BORNE OUT THAT THE ASSESSEES CLAIM ABOUT THE GENUINENESS OF THE CREDITS, IN RESP ECT OF WHICH ADDITION HAS BEEN SUSTAINED AND WHICH FORMS THE BED ROCK FOR THE IMPOSITION OF PENALTY, HAS REMAINED UNPROVED. THE A SSESSEE FURNISHED EVIDENCE TO SUBSTANTIATE THE SAME, BUT FA ILED TO CONVINCE THE AUTHORITIES. IT IS FURTHER FOUND OUT F ROM THE MATERIAL ON RECORD THAT THE ASSESSEE REPAID THE AMOUNT BY CH EQUES WHICH FACT ALSO NOT BEEN DENIED BY THE REVENUE. AT NO STA GE OF THE ASSESSMENT, THE EVIDENCE FURNISHED BY THE ASSESSEE TO PROVE THE GENUINENESS OF CREDITS WAS DISPROVED BY THE AO. THE RE IS DIFFERENCE IN A SITUATION IN WHICH THE EXPLANATION OF THE ASSESSEE IS NOT ACCEPTED AS NOT UP TO THE MARK AND THE SITUA TION IN WHICH SUCH EXPLANATION IS REJECTED AS WRONG. THE HONBLE JURISDICTIONAL HIGH COURT VIDE ITS JUDGMENT DATED 5 TH AUGUST 2009 IN CIT VS. UPENDRA V. MITHANI (INCOME-TAX APPEAL (L) NO.1860 OF 2009) HAS HELD NO PENALTY U/S 271(1)(C) CAN BE IMPOSED UNLESS THE EXPLANATION GIVEN BY THE ASSESSE E IS DISPROVED. THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF NATIONAL TEXTILE VS. CIT(2001) 249 ITR 125 (GUJ) HAS ALSO TAKEN SIMILAR VIEW. IN VIEW OF THE DECISIONS GIVEN BY TH E HONBLE HIGH COURTS, WE DO NOT FIND ANY REASON TO DISTURB T HE FINDING GIVEN BY THE LD. CIT(A) WHICH AMPLY DIVULGES THAT T HE GENUINENESS OF THE CREDITS WAS NEVER DISPROVED BY T HE AO. WE THEREFORE, UPHOLD THE IMPUGNED ORDER. ITA NO. 5970/MUM/2011 M/S. FAIRDEAL CONST. CO. 5 5. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST 2013 #3 - 012 % 4 5#'6 14 TH AUGUST .2013 1 - SD/- SD/- (R.K.GUPTA) (R.S.SYAL) ' #$ ' #$ ' #$ ' #$ / JUDICIAL MEMBER % #$ % #$ % #$ % #$ / ACCOUNTANT MEMBER / MUMBAI ; 5#' / DATED : 14 TH AUGUST , 2013 . SHEKHAR. P.S. #3 - +'/78 982/ #3 - +'/78 982/ #3 - +'/78 982/ #3 - +'/78 982// COPY OF THE ORDER FORWARDED TO : 1. )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. : ( ) / THE CIT , MUMBAI. 4. : / CIT(A)- , MUMBAI 5. 8= +'/'' , , / DR, ITAT, MUMBAI 6. > / GUARD FILE. #3' #3' #3' #3' / BY ORDER, ,8/ +'/ //TRUE COPY// ? ?? ?/ // /@ A @ A @ A @ A ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI