Sri Ram Prakash Ram, V. ACIT,

ITA 6/RAN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0362 (ITAT-RANCHI)
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 1994-1995
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHOUDHARY ORAON
• Keywords: Question of law
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RANCHI CIRCUIT BENCH, RANCHI BEFORE SHRI N.S. SAINI, HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 06/RAN/2014 (ASST. YEAR : 1994-95) SHRI RAM PRAKASH RAM, MADHUKAM, RATU ROAD, RANCHI. VS. ACIT, CENTRAL CIRCLE-1, RANCHI. PAN NO. AFBPR 2589 H (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI S.K. PODDAR WITH SHRI M.K. CHOUDHARY ADV. DEPARTMENT BY : SHRI CHOUDHARY ORAON - DR DATE OF HEARING : 28/10/2015. DATE OF PRONOUNCEMENT : 28/10/2015. O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), RANCHI, DATED 05/09/2013. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT TH E COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE PENALT Y LEVIED UNDER SECTION 271(1)(C) OF THE ACT OF RS. 15,000/-. 3 . WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE O RDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. 4. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE CLAIMED TO HAVE RECEIVED LOAN OF RS. 35,000/- FROM THE FOLLOWING 03 PERSONS:- 2 ITA NO. 06/RAN/2014 1 HARIHAR PRASAD MEHTA RS. 10,000 2 NANDKISHORE MEHTA RS. 10,000 3. PRADEEP KUMAR SINHA RS. 15,000 THE ASSESSEE FILED BEFORE THE ASSESSING OFFICER THE PARTICULARS OF LOANS WITH THEIR RESPECTIVE ADDRESSES OF THE LOAN CREDITO RS. THE ASSESSEE FURTHER SUBMITTED THAT THE LOANS WERE ACCEPTED BY A CCOUNT PAYEE DRAFTS AND REPAID SUBSEQUENTLY IN CASH. THE ASSESSING OFF ICER DID NOT ACCEPT THE LOAN AS GENUINE AND ADDED THE SAME TO THE INCOM E OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE WAS UNABLE TO PRODU CE THESE CREDITORS FOR ESTABLISHING THE GENUINENESS OF THE CLAIM. THE ADDITION MADE BY THE ASSESSING OFFICER WAS CONFIRMED IN APPEAL BY THE CO MMISSIONER OF INCOME TAX (APPEALS) AND THE TRIBUNAL. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF T HE ACT FOR RS.15,000/- ON THE GROUND OF CONCEALMENT OF INCOME. 5. ON APPEAL, COMMISSIONER OF INCOME TAX (APPEALS) CO NFIRMED THE ACTION OF THE ASSESSING OFFICER. 6 . AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITT ED THAT THE ASSESSEE FILED ALL THE PARTICULARS OF THE LOAN CRED ITORS BEFORE THE ASSESSING OFFICER AND THEREAFTER, THE ASSESSING OFF ICER HAD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT THE LOANS WERE NOT GENUINE OR WERE BOGUS. MERELY BECAUSE, THE ASSESSEE FAILED TO PRODU CE THE LOAN CREDITORS BEFORE THE ASSESSING OFFICER FOR HIS EXAM INATION, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN MAKING THE ADDITION TO THE INCOME OF THE ASSESSEE BY TREATING THE LOANS AS NOT GENUINE. THE ASSESSING OFFICER MADE THE ADDITION OF THE LOAN AMOUNT OF RS. 35,000/ - TO THE INCOME OF THE ASSESSEE AND THEREAFTER LEVIED PENALTY FOR CONC EALMENT OF INCOME UNDER SECTION 271(1)(C) OF RS. 15,000/-. HE SUBMIT TED THAT IN THE ABOVE FACTS, PENALTY LEVIED WAS NOT JUSTIFIED AND R EQUIRES TO BE DELETED. 3 ITA NO. 06/RAN/2014 7 . ON THE OTHER HAND, DEPARTMENTAL REPRESENTATIVE SU PPORTED THE ORDERS OF THE LOWER AUTHORITIES. 8 . WE FIND THAT THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF SHREE NIRMAL COMMERCIAL LTD. VS. CIT REPORTED IN 2008-TIOL-426-HC-MUM-IT WHILE DECIDING THE FOLLOWING QUESTION OF LAW:- 3. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE WHEN THE INCOME ASSESSED UNDER SECTION 68 OF THE ACT, PE NALTY UNDER SECTION 271(1)(C) CAN BE LEVIED IN LAW? THE HON'BLE HIGH COURT HELD AS UNDER:- WE HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE AND ALSO THE CASE LAW CITED BY MR. MEHTA. IN THE PRESE NT CASE IN THE REASSESSMENT FOR THE A.Y. 1966-67 AN AMOUNT OF RS. 50,000/- WAS ADDED AS INCOME OF THE ASSESSEE THROUGH UNDISCL OSED SOURCES. SIMILARLY, IN THE REASSESSMENT FOR THE A. Y. 1967-68 THE AMOUNT OF RS. 1,25,000/- WAS TREATED AS INCOME OF T HE ASSESSEE FROM UNDISCLOSED SOURCES. THE ASSESSEE AT NO POINT OF TIME HAS ADMITTED THAT THE INCOME TREATED BY THE AUTHORITIES FOR A.Y. 1996- 97 AND A.Y. 1967-68 AS INCOME FROM UNDISCLOSED SOUR CES IS CONCEALED INCOME. THE RATIO LAID DOWN BY THE DIVIS ION BENCH OF THIS COURT IN THE CASE OF COMMISSIONER OF INCOME TA X, POONA VS. BHIMJI BHANJEE AND CO. (SUPRA), THEREFORE, SQUARELY APPLIED TO THE FACTS OF THE INSTANCE CASE AND WE DO NOT FIND ANY H ESITATION IN COMING TO THE CONCLUSION THAT THE INCOME TAX AUTHOR ITIES WHO HAVE ASSESSED THE INCOME OF THE ASSESSEE FOR A.Y. 1 966-67 AND A.Y. 1967-68 UNDER SECTION 68 OF THE I.T. ACT OUGHT NOT TO HAVE LEVIED ANY PENALTY UNDER SECTION 271(1)(C) OF THE I .T. ACT, 1961. 9. FURTHER, THE HON'BLE KARNATAKA HIGH COURT IN THE CA SE OF CIT, GULBARGA AND OTHERS VS. M/S. MANJUNATHA COTTON AND GINNING FACTORY, BELLARY AND OTHERS REPORTED IN 2013-TIOL-536-HC-KAR-IT HELD THAT IF THE EXPLANATION OFFERED, EVEN THOUGH NOT SUBSTANTIA TED BY THE ASSESSEE, BUT IS FOUND TO BE BONAFIDE AND ALL FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, NO PENALTY COULD BE IMPOSED. 4 ITA NO. 06/RAN/2014 10 . IN THE INSTANT CASE, WE FIND THAT THE ASSESSEE G AVE ALL THE PARTICULARS OF THE LOAN CREDITORS TOGETHER WITH THE IR ADDRESSES TO THE ASSESSING OFFICER. THE ADDITION WAS MADE BY THE AS SESSING OFFICER ONLY ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE T HE LOAN CREDITORS BEFORE HIM FOR HIS EXAMINATION TO PROVE THE GENUINE NESS OF THE LOANS. NO MATERIALS WAS BROUGHT ON RECORD BY THE ASSESSING OFFICER AFTER EXAMINING THE MATERIAL PRODUCED BEFORE HIM TO SHOW THAT THE LOANS WERE NOT GENUINE OR BOGUS. IN THE ABOVE CIRCUMSTAN CES, RELYING ON THE DECISIONS OF THE HON'BLE BOMBAY HIGH COURT IN THE C ASE OF SHREE NIRMAL COMMERCIAL LTD. (SUPRA) AND THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF M/S. MANJUNATHA COTTON AND GINNING FACTORY, BELLARY AND OTHERS (SUPRA), WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AN D DELETE THE PENALTY OF RS. 15,000/- LEVIED UNDER SECTION 271(1) (C). 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING ON WEDNESDAY, THE 28 TH DAY OF OCTOBER, 2015 AT RANCHI. SD/- SD/- (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH OCTOBER, 2015. VR/- COPY TO: 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT 4. THE CIT(A) 5. THE D.R. 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., RANCHI 5 ITA NO. 06/RAN/2014 DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 28/10/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 29/10/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 29/10/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 29/10/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 29/10/2015 SR.PS 6. DATE OF PRONOUNCEMENT 28/10/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 29/10/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER