Sh. Arjun Singh, Prop. M/s. Sansar Palace, UDHAMPUR V. The Income-tax Officer, UDHAMPUR

ITA 631/ASR/2014

• Counselvise Citation: 63120914 RSA 2014
• Duration Of Justice: 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 17-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P N ARORA
• Keywords: Unexplained cash credit; Income from undisclosed sources; Application of stay; Valuation report
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D.JAIN, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.631(ASR)/2014 ASSESSMENT YEAR:2007-08 PAN :AZEPS1753M SH. ARJUN SINGH PROP. VS. INCOME TAX OFFICER, M/S. SANSAR PALACE, UDHAMPUR (J&K). JAKHANI, UDHAMPUR. (APPELLANT) (RESPONDENT) S.A.NO.72(ASR)/2014 (ARISING OUT OF I.T.A. NO.631(ASR)/2014) ASSESSMENT YEAR:2007-08 SH.ARJUN SINGH, VS. INCOME TAX OFFICER JAKHANI, UDHAMPUR. UDHAMPUR. APPELLANT BY:SH.P.N.ARORA, ADVOCATE RESPONDENT BY:SH.TARSEM LAL, DR DATE OF HEARING:25/02/2015 DATE OF PRONOUNCEMENT:26/02/2015 ORDER PER A.D.JAIN, JM: THIS IS ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2007-08 AGAINST THE ORDER DATED 28.08.2014 PASSED BY THE LD. CIT(A), JA MMU, CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCO ME TAX ACT, 1961 ( IN SHORT, THE ACT), ON THE ASSESSEE. 2. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSE E HAS SUBMITTED THAT POST PASSING OF THE IMPUGNED ORDER, THE TRIBUNAL, VIDE O RDER DATED 30.09.2014 (APB 11 TO 20) HAS DECIDED THE QUANTUM APPEAL FILED BY THE DEPARTMENT IN ITA NO. 631(ASR)/2014 2 FAVOUR OF THE ASSESSEE, UPHOLDING THE LD. CIT(A)S ACTION DELETING THE ADDITION FORMING THE BASIS OF THE PENALTY PRESENTL Y IN QUESTION; AND THAT THUS, WHEN THE DELETION BY THE LD. CIT(A) ON THE VE RY BASIS OF THE PENALTY STANDS CONFIRMED BY THE TRIBUNAL, THE PENALTY CANNO T STAND. 3. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, HA S DRAWN OUR ATTENTION TO THE FIRST SENTENCE AT PAGE-7 OF THE IMPUGNED ORDER, AS PER WHICH THE DELETION OF THE ADDITION WAS CONFIRMED BY THE TRIBUNAL. THE LD. CIT(A) IN THE IMPUGNED ORDER, HAS OBSERVED AS FOLLOWS: GROUND OF APPEAL NO. 3 RELATES TO THE PLEA OF THE APPELLANT THAT THE PENALTY IMPOSED IS NOT VALID AS THE APPELLANT H AS FILED AN APPEAL AGAINST THE ORDER OF THE APPELLATE TRIBUNAL BEFORE THE HONBLE HIGH COURT. IT IS OBSERVED THAT THE SECTIO N 275(1)9A0 PROVIDES FOR LEVY OF PENALTY WITHIN SIX MONTHS FROM THE END OF MONTH IN WHICH THE APPELLATE ORDER OF ITAT IS RECEI VED BY THE COMMISSIONER OF CHIEF COMMISSIONER OF INCOME TAX. F URTHER, SUB SECTION 1A OF SECTION 275 OF THE ACT PROVIDES F OR THE REVISION OF PENALTY ORDER BASED ON THE FINDINGS OF THE HIGH COURT. IT IS OBSERVED THAT MISC. APPLICATION FILED BY THE APPELLANT WAS DISPOSED OF THE HONBLE ITAT BENCH ON 20.02.2013 AND THE APPELLATE ORDER WAS RECEIVED IN THE OFFICE OF THE CIT ON 04.03.2013. THEREFORE, THE AO WAS REQUIR ED TO PASS THE PENALTY ORDER ON OR BEFORE 30 TH SEPT., 2014. THEREFORE, THE PENALTY ORDER PASSED BY THE AO ON 27 TH SEPT., 2014 IS A VALID ORDER. THIS GROUND OF APPEAL OF THE APPELLANT IS DI SMISSED. GROUND OF APPEAL NO.4 RELATES TO PENALTY OF RS.14,4 1,388/- IMPOSED BY THE AO ON ADDITION MADE U/S 40(A)(IA) OF THE ACT. IT IS FOUND THAT AN ADDITION OF RS.37,89,327/- ON ACCO UNT OF DIFFERENCE IN COST OF CONSTRUCTION OF BANQUET HALL ON THE BASIS OF VALUATION REPORT OF DVO AND RS.5,00,000/- ON ACC OUNT OF UNSECURED LOANS. THE ADDITION MADE BY THE AO HAS BE EN CONFIRMED BY THE HONBLE ITAT, AMRITSAR. THE APPELL ANT HAS ARGUED THAT THE VALUATION REPORT OF THE DVO IS VERY PRECISE AND ITA NO. 631(ASR)/2014 3 DOES NOT PROVIDE DETAILS OF COST OF CONSTRUCTION. I T IS OBSERVED THAT THE REPORT OF DVO HAS BEEN ACCEPTED BY THE ITA T BENCH AND CONFIRMED ADDITIONS ON THE BASIS ON SAID REPORT . FURTHER, THE DVO IS AN EXPERT IN VALUATION AND THE APPELLANT IS NOT TECHNICAL PERSON TO CHALLENGE SUCH REPORT BY JUST M AKING A GENERAL STATEMENT THAT THE REPORT IS VERY PRECISE. THE APPELLANT HAS NOT POINTED OUT ANY SPECIFIC DEFECT IN THE VALU ATION REPORT. FURTHER, SINCE THE ITAT BENCH HAS ALREADY CONSIDERE D THE VALUATION REPORT AND ACCEPTED THE SAME, IT IS NOT W ITHIN MY DOMAIN TO MAKE ANY ADJUDICATION ON THE SAME. THE A PPELLANT HAS NOT GIVEN ANY VALID REASON AS TO WHY THE PENALT Y U/S 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED ON THE A DDITIONS MADE BY THE AO ON THE BASIS VALUATION REPORT. IT IS ALSO OBSERVED FROM THE ORDER OF HONBLE TRIBUNAL THAT T HE APPELLANT HAS NOT EVEN MAINTAINED PROPER BOOKS OF ACCOUNT. IT IS CLEARLY ESTABLISHED THAT THE APPELLANT HAS UNDER STATED THE COST OF CONSTRUCTION OF BANQUET HALL AND IN MY OPINION, THE PENALTY FOR CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS IS ATTRACTED IN THIS CASE. THEREFORE, THIS PLEA OF THE APPELLANT IS REJECTED. REGARDING THE ADDITION OF RS.5,00,000/- ON ACCOUNT OF UNEXPLAINED CREDITORS, THE APPELLANT HAS PROVIDED S UBMISSION MAKING OBJECTION ON THE ADDITIONS MADE BY THE AO. IT IS OBSERVED THAT THE ADDITION HAS BEEN CONFIRMED BY T HE HONBLE ITAT BENCH AFTER CONSIDERING THE SUBMISSION OF THE APPELLANT. IT IS NOT WITHIN MY DOMAIN TO ADJUDICATE AS TO WHET HER THE ADDITION CONFIRMED BY THE ITAT WAS GENUINE OR NOT. FROM THE PERUSAL OF ORDER OF APPELLATE TRIBUNAL, IT IS OBSER VED THAT THE HONBLE TRIBUNAL HAS EXAMINED THE EXPLANATIONS GIVE N BY THE APPELLANT REGARDING THESE UNSECURED LOANS WHICH WER E NOT ACCEPTED BY THE HONBLE TRIBUNAL. REGARDING THE IMP OSITION OF PENALTY, THE APPELLANT HAS NOT PROVIDED ANY VALID A RGUMENTS AS TO WHY THE PENALTY U/S 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED ON THE ADDITION MADE U/S 68 OF THE ACT. THE EXPLANATION 1 OF THE SECTION 271(1)(C) IS REPRODUCE D HEREUNDER TO UNDERSTAND THE PROVISION OF THE ACT IN THIS REGA RD- EXPLANATION 1 WHERE IN RESPECT OF ANY FACTS MATER IAL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT, - ITA NO. 631(ASR)/2014 4 A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE AO OR THE CIT(A) OR THE COMMISSIONER TO BE FALSE, OR B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT A BLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONA FIDE AND THAT ALL THE FACTS RELATING TO THE SA ME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLO WED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAUSE(C) OF THI S SUB- SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPE CT OF WHICH PARTICULARS HAVE BEEN CONCEALED. THIS EXPLANATION PLACES THE ONUS OF PROOF ON THE AS SESSEE TO ESTABLISH THAT THE INCOME HAS NOT BEEN CONCEALED BY HIM AS THE ASSESSEE HAS TO OFFER AN EXPLANATION WHICH HE HAS T O SUBSTANTIATE AND PROVE THAT IS BONA FIDE AND PROVE THAT HE HAS DISCLOSED ALL FACTS WHICH ARE MATERIAL TO COMPUTATI ON OF TOTAL INCOME. THUS, IT IS CLEAR THAT THE ADDITION OF RS.5 ,00,000/- MADE BY THE AO AS THE APPELLANT FAILS TO PROVIDE COGENT EXPLANATION ABOUT THE CREDITS IN THE ACCOUNTS, IS DEEMED TO REP RESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CO NCEALED. THIS GROUND OF APPEAL IS DISMISSED AND PENALTY IS C ONFIRMED. 4. A PERUSAL OF THE TRIBUNAL ORDER DATED 30.09.2014 (SUPRA) SHOWS THAT THE ADDITION, WHICH WAS THE VERY BASIS ON WHICH THE PENALTY WAS IMPOSED WAS DELETED BY THE LD. CIT(A) AND THIS ACTI ON OF THE LD. CIT(A) HAS BEEN CONFIRMED BY THE TRIBUNAL WHILE DISMISSING THE DEPARTMENTS APPEAL. THE RELEVANT PORTION OF THE TRIBUNAL ORDER READS AS FOLLOWS: 8. THE DEPARTMENTS FIRST OBJECTION REGARDING THIS BEING A NO ACCOUNT CASE IS NOT SUSTAINABLE. THE ASSESSING OFF ICER HIMSELF DID NOT TREAT IT AS A NO ACCOUNT CASE. IN THIS RE GARD, IN PARA 2 OF THE ASSESSMENT ORDER, IT HAS BEEN OBSERVED AS FO LLOWS: ITA NO. 631(ASR)/2014 5 THE ASSESSEE HAS STATED THAT THIS IS A NO ACCOUNT CASE. THE ASSESSEE WAS REQUESTED TO EXPLAIN AS TO HOW HE HAS PREPARED THE BALANCE-SHEET AND THE PROFIT AND LOSS ACCOUNT I N RESPECT OF THE BANQUET BALL RECEIPTS. HE STATED THAT THESE WER E PREPARED ON THE BASIS OF A DIARY MAINTAINED FOR THIS PURPOSE. H E COULD NOT GIVE ANY SATISFACTORY EXPLANATION. THE ASSESSEE HAS ALSO FURNISHED A PHOTO COPY OF THE BOOKING REGISTER MARK ET AS ANNEXURE H IN WHICH THE ENTIRE RECEIPTS HAVE BEEN RECORDED. HE HAS ALSO FURNISHED DETAILS OF THE EXPENSES CLAIM ED ON ACCOUNT OF SALARY, GENERATOR POL, TRAVELLING, SANIT ATION AND CLEANING, GENERATOR RUNNING AND MAINTENANCE, TENTAG E AND WAITER ETC. THEREFORE, IT CANNOT BE TREATED AS A N O ACCOUNT CASE. 9. APROPOS THE DEPARTMENTS OBJECTION THAT NO BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER, AS AVAILABLE FROM PARA 2 OF THE ASSESSMENT ORDER, REPR ODUCED ABOVE, THE ASSESSEE MAINTAINED A DIARY, WHICH WAS THE VERY BASIS FOR PREPARATION OF ASSESSEES BALANCE-SHEET AND PROFIT AND LOSS ACCOUNT IN RESPECT OF THE BANQUET HALL REC EIPTS. THE ASSESSEE FILED A COPY OF THE BOOKING REGISTER IN WH ICH THE ENTIRE RECEIPTS STOOD RECORDED. THE ASSESSEE ALSO FURNISHE D DETAILS OF EXPENSES CLAIMED ON ACCOUNT OF SALARY, GENERATOR PO L, TRAVELING, SANITATION AND CLEANING, GENERATOR RUNNI NG AND MAINTENANCE, TENTAGE AND WAITER, ETC. ALL THESE DOC UMENTS WERE DULY FURNISHED BEFORE THE ASSESSING OFFICER BY THE ASSESSEE. IT WAS ON THIS BASIS ALONE THAT THE ASSESSING OFFICER REFUSED TO TREAT THE CASE AS A NO ACCOUNT CASE, THOUGH THE A SSESSEE HAD HIMSELF REQUESTED IT TO BE TREATED AS SUCH. THEN, S ECTION 44AA(3) OF THE ACT READS AS FOLLOWS: 44AA- (3) THE BOARD MAY, HAVING REGARD TO THE NATURE OF THE BUSINESS OR PROFESSION CARRIED ON BY ANY CLASS OF PERSON, PRESCRIBE, BY RULES, THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS (INCLUDING INVENTORIES, WHEREVER NECESSARY) TO BE K EPT AND MAINTAINED UNDER SUB-SECTION (1) OR SUB-SECTION (2) , THE PARTICULARS TO BE CONTAINED THEREIN AND THE FORM AN D THE MANNER IN WHICH AND THE PLACE AT WHICH THEY SHALL B E KEPT AND MAINTAINED. ITA NO. 631(ASR)/2014 6 10. RULE 6F OF THE INCOME TAX RULES, 1962 PROVIDES FOR BOOKS OF ACCOUNT AND OTHER DOCUMENTS TO BE KEPT AND MAINTAINED UNDER SECTION 44AA(3) OF THE ACT. THE RELEVANT PORTION OF THIS RULE READS AS FOLLOWS: 6F (1) EVERY PERSON CARRYING ON LEGAL, MEDICAL, ENGI NEERING OR ARCHITECTURAL PROFESSION OR THE PROFESSION OF AC COUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR AUT HORIZED REPRESENTATIVE OR FILM ARTIST SHALL KEEP AND MAINTA IN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS SPECIFIED IN SUB-RUL E (2) (2) THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS REFER RED TO IN SUB-RULE (1) SHALL BE THE FOLLOWING, NAMELY:- (I) A CASH BOOK; (II) A JOURNAL, IF THE ACCOUNTS ARE MAINTAINED ACC ORDING TO THE MERCANTILE SYSTEM OF ACCOUNTING; (III) A LEDGER; (IV) CARBON COPIES OF BILLS, WHETHER MACHINE NUMBE RED OR OTHERWISE SERIALLY NUMBERED, WHEREVER SUCH BILLS ARE ISSUED B Y THE PERSON, AND CARBON COPIES OF COUNTERFOILS OF MACHIN E NUMBERED OR OTHERWISE SERIALLY NUMBERED RECEIPTS ISSUED BY H IM: (V) ORIGINAL BILLS WHEREVER ISSUED TO THE PERSON A ND RECEIPTS IN RESPECT OF EXPENDITURE INCURRED BY THE PERSON OR, W HETHER SUCH BILLS AND RECEIPTS ARE NOT ISSUED AND THE EXPENDITU RE INCURRED DOES NOT EXCEED FIFTY RUPEES, PAYMENT VOUCHERS PREP ARED AND SIGNED BY THE PERSON; 11. FURTHER, EXPLANATION (B) TO RULE 6F (2) OF TH E INCOME TAX RULES, 1962 STATES THAT CASH BOOK MEANS A REC ORD OF ALL CASH RECEIPTS AND PAYMENTS, KEPT AND MAINTAINED FRO M DAY-TO- DAY AND GIVING THE CASH BALANCE IN HAND AT THE END OF EACH DAY OR AT THE END OF A SPECIFIED PERIOD NOT EXCEEDING A MONTH. 12. IT HAS NOT BEEN SHOWN BEFORE US BY THE DEPARTM ENT AS TO HOW THE RECORD MAINTAINED BY THE ASSESSEE, AS PRODU CED BY HIM BEFORE THE ASSESSING OFFICER AND NOTED BY THE ASSES SING OFFICER HIMSELF IN THE ASSESSMENT ORDER, DOES NOT FALL WITH IN RULE 6F (2) AND EXPLANATION (B) THEREOF. ITA NO. 631(ASR)/2014 7 13. THESE BOOKS OF ACCOUNT WERE NOT REJECTED BY THE ASSESSING OFFICER, RATHER HE CONSCIOUSLY TOOK THEM AS SUCH AND SUBSEQU ENTLY REJECTED THE ASSESSEES CONTENTION OF IT BEING TREATED AS A NO ACCOUNT CASE. 14. COMING TO THE APPLICABILITY OF M/S SARGAM CINE MA (SUPRA) BY THE LEARNED CIT(A), THE DEPARTMENT HAS N OT BEEN ABLE TO COME OUT OF THE RATIO CONTAINED THEREIN, I.E., WHER E BOOKS OF ACCOUNT ARE NOT REJECTED, NO REFERENCE CAN BE MADE TO THE V ALUATION CELL. THE LEARNED CIT(A) HAS DULY CONSIDERED THE POSITION OF LAW BY FOLLOWING M/S SARGAM CINEMA (SUPRA). ACCORDINGLY, WHEN NO R EFERENCE COULD ITSELF HAVE BEEN MADE TO THE VALUATION OFFICER, IN THE ABSENCE OF REJECTION OF BOOKS OF ACCOUNT, THE ADDITION MADE BY THE ASSESSING OFFICER WAS ENTIRELY UNCALLED FOR AND WAS RIGHTLY D ELETED BY THE LEARNED CIT(A). THEREFORE, GROUND NOS. 1 AND 2 RAIS ED BY THE DEPARTMENT ARE REJECTED. 15. REGARDING GROUND NOS. 3 AND 4, THE ASSESSING O FFICER MADE THE ADDITION OF RS. 5,00,000/-, OBSERVING THAT THE LOANS WERE NOT IN CASH; THAT THOUGH ALL THE FOUR CREDITORS HAD GIV EN THEIR STATEMENTS BEFORE THE ASSESSING OFFICER, ADMITTING TO HAVE ADV ANCED THE MONEY TO THE ASSESSEE FOR CONSTRUCTION OF A BANQUET HALL, TH EY COULD NOT JUSTIFY THE AVAILABILITY OF FUNDS WITH THEM AS THEY, ACCORD ING TO THE ASSESSING OFFICER, WERE NOT MEN OF MEANS. THE LEARNED CIT(A) DELETED THE ADDITION, OBSERVING THAT THE IDENTITY, SOURCE AND C ONFIRMATIONS IN WRITING AND ORAL DEPOSITIONS OF THE CREDITORS HAD NOT BEEN DISPUTED BY THE ASSESSING OFFICER, AND THAT, THEREFORE, THE ONU S CAST ON HIM HAD NOT BEEN DISCHARGED BY THE ASSESSING OFFICER AND TH AT IT HAD NOT SHIFTED ON TO THE ASSESSEE. THE LEARNED CIT(A) FOLL OWED THE CASES M/S ARAVALI TRADING CO., 220 CTR 622 (RAJ.) AND M/S F IRST POINT FINANCE LTD., 286 ITR 477 (RAJ.). 16. THE LEARNED DR HAS CONTENDED THAT THE LEARNED C IT(A) HAS NOT APPRECIATED THE FACT THAT THE CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTIONS REMAINED UN-ESTABLISHED IN RESPECT OF THE UNSECURED LOAN OF RS. 5,00,000/- AND IT IS THE PRIMARY ONUS O F THE ASSESSEE TO ESTABLISH ALL THE THREE COMPONENTS IN CASE OF LOANS , I.E., IDENTITY, CREDITWORTHINESS & GENUINENESS. HE FURTHER CONTENDE D THAT IF THE ASSESSEE FAILS TO ESTABLISH ANY ONE OF THE THREE CO MPONENTS, THE CASH CREDIT CANNOT BE ACCEPTED AS EXPLAINED. 17. THE LEARNED COUNSEL FOR THE ASSESSEE HAS PLACED ST RONG RELIANCE ON THE IMPUGNED ORDER. ITA NO. 631(ASR)/2014 8 18. IT REMAINS UNDISPUTED THAT THE ASSESSING OFFICER NE VER CHALLENGED EITHER THE IDENTITY, OR THE SOURCE, OR THE CONFIRMA TIONS GIVEN IN WRITING, OR EVEN THE ORAL STATEMENTS OF THE CREDITO RS OF THE ASSESSEE. THE ASSESSING OFFICER MADE THE ADDITIONS BY OBSERVI NG MERELY THAT SINCE THE CREDITORS COULD NOT JUSTIFY THE AVAILABIL ITY OF FUNDS WITH THEM, THEY BEING MEN OF NO MEANS, THE ADDITION WAS CALLED FOR. 19. IN M/S ARAVALI TRADING CO. (SUPRA), IT HAS BEE N OBSERVED, INTER ALIA, THAT MERELY BECAUSE THE DEPOS ITORS EXPLANATION ABOUT THE SOURCES OF MONEY WAS NOT ACCE PTABLE TO THE ASSESSING OFFICER, IT CANNOT BE PRESUMED THAT THE D EPOSIT MADE BY THE CREDITORS WAS MONEY BELONGING TO ASSESSEE ITSEL F; THAT IF THE CREDITORS EXPLANATION ABOUT THE SOURCE OF DEPOSITS IS NOT FOUND TO BE ACCEPTABLE, THE INVESTMENT OWNED BY SUCH PERSONS MAY BE SUBJECTED TO PROCEEDINGS FOR INCLUSION OF THE AMOUN TS AS THEIR INCOME FROM UNDISCLOSED SOURCES, OR IF THEY ARE FOU ND BENAMI, THE REAL OWNER CAN BE BROUGHT TO TAX; AND THAT IN THE A BSENCE OF ANYTHING TO ESTABLISH THAT THE SOURCES OF THE CREDI TORS DEPOSITS FLOWED FROM THE ASSESSEE, THE CASH CREDITS CANNOT B E TREATED AS UNEXPLAINED INCOME OF THE ASSESSEE. 20. IN M/S FIRST POINT FINANCE LTD. (SUPRA), THE T RIBUNALS FINDING THAT THE INVESTORS WERE GENUINELY EXISTING PERSONS AND THEY HAD FILED CONFIRMATIONS IN RESPECT OF INVESTMENTS M ADE BY THEM AND THEIR STATEMENTS HAD ALSO BEEN RECORDED, WAS CONFIR MED TO HOLD THAT THE AMOUNT DEPOSITED COULD NOT BE TREATED AS U NEXPLAINED CASH CREDITS. 21. BEFORE US, THE DEPARTMENT HAS NOT CITED ANY DECI SION OPPOSED M/S ARAVALI TRADING CO. (SUPRA) AND M/S FIRST POINT FINANCE LTD. (SUPRA). THE FACTS IN THE PRESENT CAS E, AS CORRECTLY NOTED BY THE LEARNED CIT(A), ARE IN PARI MATERIA WI TH THESE CASES INASMUCH AS, IT WAS NOWHERE ESTABLISHED THAT THE FL OW OF THE AMOUNTS UNDER CONSIDERATION ORIGINATED FROM THE ASS ESSEE. THEREFORE, THE LEARNED CIT(A) CORRECTLY HELD THAT N O ADDITION COULD HAVE BEEN MADE IN THE HANDS OF THE ASSESSEE. 22. IN VIEW OF THE ABOVE DISCUSSION, FINDING NO ERRO R THEREIN, THE ORDER OF THE LEARNED CIT(A) QUA GROUNDS NOS. 3 AND 4 BEFORE US IS CONFIRMED AND GROUND NOS. 3 AND 4 ARE REJECTED. 23. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. ITA NO. 631(ASR)/2014 9 5. THE SAID TRIBUNAL ORDER HAS NOT BEEN SHOWN EITHE R SET- ASIDE OR EVEN STAYED ON APPEAL. 6. SINCE THE TRIBUNAL ORDER WAS PASSED POST LD. CIT (A)S ORDER PRESENTLY UNDER APPEAL, THE LD. CIT(A) OBVIO USLY DID NOT HAVE THE BENEFIT THEREOF. THE CIT(A)S OBSERVATION THAT THE TRIBUNAL CONFIRMED THE ADDITION IS, APPARENTLY ERRONEOUS. 7. IN VIEW OF THE ABOVE, SINCE THE TRIBUNAL HAS DIS MISSED THE DEPARTMENTS APPEAL AGAINST LD. CIT(A)S ACTION OF DELETING THE ADDITION FORMING THE VERY BASIS OF THE PENALTY, OBVIOUSLY T HE PENALTY CANNOT STAND AND IT IS HEREBY CANCELLED. 8. SINCE WE HAVE ALLOWED THE APPEAL, THE STAY APP LICATION HAS BECOME INFRUCTUOUS AND THE SAME IS DISMISSED AS INFRUCTUOU S. 9. IN THE RESULT, THE APPEAL IS ALLOWED AND STAY APPLICATION IS DISMISSED AS INFRUCTUOUS. ORDER PRONOUNCED IN THE OPEN COURT ON 26TH FEBRUARY, 2015. SD/- SD/- (B.P. JAIN) (A.D.JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26TH FEBRUARY, 2015 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH.ARJUN SINGH PROP. SANSAR PALACE, JA KHANI, UDHAMPUR. 2. THE ITO, UDHAMPUR. 3. THE CIT(A), JAMMU 4. THE CIT, JAMMU. 5)THE SR DR, ITAT, AMRITSAR.