DASWANI CLASSES, Kota V. ACIT, Kota

ITA 68/JPR/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5484 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 21-01-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL JCIT DHK
• Assessee Lawyers: SHRAVAN KR GUPTA
• Keywords: Opportunity of being heard

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 68/JP/2013 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2004-05. DASWANI CLASSES, 467, DADABARI EXTN., KOTA CUKE VS. A.C.I.T., CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AACFD 5863 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAVAN KR. GUPTA (ADV) JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 13/02/2016. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 12/02/2016. VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26/11/2012 OF THE LEARNED C.I.T.(A), AJMER FOR A.Y. 2004-05. THE SOLE GROUND OF APPEAL IS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LD CIT(A) HAS ERRED IN CONFIRMING PENALTY O F RS. 123600/- U/S 271(1)(C) OF THE INCOME TAX ACT. THE APPELLANT PRAYS THAT PENALTY IMPOSED OF RS. 123600/- U/S 271(1)(C) OF THE INCOME TAX ACT BE DELE TED. 2 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT 2. THE ASSESSMENT IN THIS CASE WAS COMPLETED ON 28/12 /2006 WHEREIN THE ADDITION ON ACCOUNT OF BOGUS CASH CREDIT OR WAS MADE AT RS. 14,50,000/- BY THE ASSESSING OFFICER. PENALTY PROCE EDING U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) HAS B EEN INITIATED. THE ASSESSEE HAD SHOWN CASH CREDITOR FOR RS. 4 LACS IN THE NAME OF SMT. VEENA KHATRI. DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER ASKED TO PRODUCE CONFIRMATION FOR M SMT. VEENA KHATRI, WHICH WAS NOT PRODUCED BY THE ASSESSEE. AS PER THE AS SESSING OFFICER, THE ASSESSEE HAS NOT ABLE TO ESTABLISH THE GENUINEN ESS OF THE TRANSACTION, THE IDENTITY OF THE CREDITOR AND CREDI TWORTHINESS OF THE CREDITOR. 3. BEFORE IMPOSING PENALTY U/S 271(1)(C) OF THE ACT , THE ASSESSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD, WHICH WAS REPLIED BY THE ASSESSEE VIDE LETTER DATED 22/3/2010, WHICH H AS BEEN REPRODUCED BY THE ASSESSING OFFICER IN PENALTY ORDE R. IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAD SUBMITTED ALL THE DETAILS DURING THE COURSE OF ASSESSMENT PROCEEDINGS . THE ASSESSEE RECEIVED LOAN OF RS. 4 LACS FROM SMT. VEENA KHATRI OF INDORE. THE ASSESSEE HAD ALREADY SUBMITTED PROOF OF LAON RECEIV ED AND THE PROOF OF 3 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT REPAYMENT OF LOAN TO THE ABOVE PARTY. THE CONFIRMATI ON HAD NOT BEEN SUBMITTED BECAUSE SAME WAS NOT RECEIVED FROM THE PAR TY. THE ASSESSEE HAD DISCHARGED HIS ONUS OF PROOF OF TRANSACTION AND REPAYMENT OF LOAN, WHICH HAD DULY BEEN DEBITED IN THE ACCOUNT OF SMT. V EENA KHATRI. THERE IS NO CONCEALMENT IN THE ABOVE SAID TRANSACTIONS. M ERELY BECAUSE IT HAS BEEN DISALLOWED BY THE ASSESSING OFFICER AND CONFIRM ED BY THE LD CIT(A), DOES NOT MEAN THAT THE ASSESSEE HAS CONCEALE D ANY PARTICULARS OF INCOME. THERE BEING NOTHING TO SUGGEST THAT THE A SSESSEE HAD CONCEALED PARTICULARS OF INCOME. AFTER CONSIDERING THIS REPLY, THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE COULD NOT PRODUCE THE CONFIRMATION FROM THE CASH CREDITOR AND OTHER SUPPO RTING EVIDENCE LIME PAN, INCOME TAX RETURN, COMPUTATION TO PROVE GENUIN ENESS OF THE TRANSACTION. THE ADDITION HAS BEEN CONFIRMED BY THE LD CIT(A). THE EXPLANATION FILED BY THE ASSESSEE IS NOT RELIABLE. PENALTY BECOMES EXIGIBLE. HE RELIED ON THE DECISION OF HONBLE RAJA STHAN HIGH COURT IN THE CASE OF RAGHUVEER SONI VS ACIT (2002) 258 ITR 239 WHEREIN IT HAS BEEN HELD THAT IF IN ADDITION TO FAILURE TO SUBSTAN TIATE THE EXPLANATION, THE ASSESSEE ALSO FAILS TO PROVE THAT THE EXPLANATI ON FURNISHED BY HIM WAS BONAFIDE AND THAT HE HAS DISCLOSED ALL MATERIAL FACT NECESSARY FOR THE ASSESSMENT, THEN EXPLANATION-1 TO SECTION 271(1 )(C) OPERATES. 4 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT ACCORDINGLY, HE IMPOSED PENALTY AT RS. 1,23,600/-, WHICH IS 100% OF TAX SOUGHT TO BE EVADED ON CONCEALED INCOME. 4. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE THE MATTER BEFORE THE LD CIT(A), WHO HAD CON FIRMED THE PENALTY BY OBSERVING AS UNDER:- I HAVE CONSIDERED CONTENTIONS OF THE APPELLANT AS WE LL AS SUBMISSION OF THE ASSESSEE. IT IS SEEN THAT ASSE SSEES ONLY CONTENTION IS THAT THE AMOUNT WAS RECEIVED AND REPAYMENT WAS MADE THROUGH THE BANKING CHANNELS. HOWEVER NO CONFIRMATION OF SMT. VEENA KHATRI HAS BEE N SUBMITTED REGARDING THE LOAN OF RS. 4,00,000 CLAIME D IN HER NAME. ASSESSEE HAS ALSO NOT SUBMITTED SUPPORTIN G EVIDENCES LIKE PAN, INCOME TAX RETURN OR ANY OTHER EVIDENCE TO SHOW THE IDENTITY AND CREDITWORTHINESS O F THE CASH CREDITOR SMT. VEENA KHATRI. ALSO, GENUINEN ESS OF THE TRANSACTION HAS NOT BEEN PROVED. THE CLAIM TH AT THE TRANSACTION WAS THROUGH THE BANKING CHANNEL DOES NOT IN ANY CASE SHOW THAT ALL THE INGREDIENTS WHICH ARE TO BE PROVED IN RESPECT OF CASH CREDITS I.E. IDENTI TY AND CREDITWORTHINESS OF CASH CREDITOR AND GENUINENESS OF THE TRANSACTION HAVE BEEN PROVED. FURTHER THE ASSESSEE S CONTENTION THAT THERE HAS TO BE CONSCIOUS CONCEALME NT ON THE PART OF THE ASSESSEE FOR THE LEVY OF THE PEN ALTY IS 5 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT NOT ACCEPTABLE AS IT HAS BEEN HELD IN THE CASE OF U NION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS [2008] 16 6 TAXMAN 65 (SC) THAT PENALTY U/S 271(1)(C) IS CIVIL L IABILITY AND FOR ATTRACTING SUCH CIVIL LIABILITY WILLFUL CONC EALMENT IS NOT AN ESSENTIAL INGREDIENT. IN VIEW OF ABOVE DISCUS SION, PENALTY OF RS. 1,23,600 LEVIED BY THE AO IS CONFIRM ED AND THIS GROUND OF APPEAL IS DISMISSED. 5. NOW ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT PENALTY U/S 271(1)(C) OF THE ACT CAN BE LEVIED ONLY WHEN THERE IS ANY CONCEALMENT. IF THERE IS NO CONCEA LMENT, NO PENALTY IS LEVIABLE. THE LD ASSESSING OFFICER NEITHER IN THE ASSESSMENT ORDER NOR IN PENALTY ORDER, NO WHERE STATED OR ALLEGED OR PROV ED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF INCOME IN ITS RETURN OF INCOME. HE R ELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS RELIANC E PETRO PRODUCTS (P) LTD. 322 ITR 158 (SC) THE JUDGMENT OF HON'BLE SUPREM E COURT IS SQUARELY APPLICABLE ON THE FACTS OF THE ASSESSEES CASE. THE ASSESSEE HAD FURNISHED ITS RETURN OF INCOME ON THE BASIS OF ITS REGULAR AUDITED BOOKS OF ACCOUNT AND ON THE BASIS OF SUCH BOOKS FIL ED ITS RETURN WHERE HE HAS SHOWN ALL THE INCOME IN THE P&L ACCOUNT AND B ALANCE SHEET FILED WITH THE RETURN. THUS, THE ASSESSEE HAS FURNISHED AL L THE PARTICULARS IN 6 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT ITS RETURN OF INCOME AND NOTHING HAS BEEN CONCEALED . THE ASSESSEE HAD TAKEN THE LOAN OF RS. 4 LACS FROM SMT. VEENA KHATRI THROUGH BROKER, RESIDENT OF INDORE (MP) WHEREAS THE ASSESSEE IS FROM KOTA, RAJASTHAN. THE LOAN WAS TAKEN THROUGH ACCOUNT PAYEE CHEQUE AND S AME HAD BEEN REPAID IN LATER YEAR BY ACCOUNT PAYEE CHEQUE. THE AS SESSEE WAS NOT KNOWN ANY WHEREABOUT REGARDING SMT. VEENA KHATRI. DES PITE THE BEST EFFORTS, HE HAS FAILED TO GET DETAILS OF HER. HOWEVE R, THE ASSESSEE HAD ESTABLISHED THE GENUINENESS OF THE TRANSACTION. HEN CE ONLY DUE TO POSITION BEYOND CONTROL OF THE ASSESSEE, IT CANNOT BE SAID THAT THE SAID LOAN WAS BOGUS NOR BOTH THE LOWER AUTHORITIES HAS STA TED THE SAME. HE FURTHER RELIED ON THE FOLLOWING DECISION:- (I) MOD CREATIONS (P) LTD. VS. ITO 62 DTR 259 (DEL ). (II) UPHAR ALOYS (P) LTD. VS. ITO 37 CCH 154 (DEL) (2013). (III) CIT VS DHARAMPAL PREMCHAND LTD. 329 ITR 572 ( DEL). (IV) CIT VS. M.M. GUJAMGADI 290 ITR 160 (KAR.). (V) CIT VS CAREERS EDUCATION & INFOTECH (P) LTD. 336 ITR 0257 (P&H). (VI) CIT VS SAS PHARMACEUTICALS 335 ITR 259 (DEL). HE FURTHER ARGUED THAT THE ASSESSING OFFICER HAD LE VIED PENALTY FOR CONCEALMENT OF INCOME AND FURNISHED INACCURATE PART ICULARS OF INCOME AND ONLY ON THE BASIS OF FINDING RECORDED BY THE BO DY OF ASSESSMENT 7 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT ORDER, BOTH THE PROCEEDINGS ARE SEPARATE AND DISTIN CT. HE FURTHER RELIED ON THE FOLLOWING DECISIONS: (I) DILIP N SHROFF VS JCIT 291 ITR 519 (SC) (II) ANWAR ALI 76 ITR 696 (SC). (III) DURGA KAMAL RICE MILLS VS CIT 265 ITR 25 (CAL. ), CIT VS ISHTIAQU HUSSAIN 232 ITR 673 (ALL) & 11 TTJ 462 (JP), 21 TW 427 (JP). (IV) CIT VS SANTOSH FINANCIARIES 274 ITR 742 (KER). (V) UDAYAN MUKHERJEE VS CIT 291 ITR 318 (ALL) (VI) GOPAL D SHETTY VS ITO (2008) 298 ITR (AT) 49 (P UNE). THEREFORE, HE PRAYED TO DELETE THE PENALTY CONFIRMED BY THE LD CIT(A). 6. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A). 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSESS EE HAS SHOWN CASH CREDITOR OF RS. 4 LACS IN THE NAME OF SMT. VEENA KH ATRI, INDORE. THE ASSESSEE HAD NOT FURNISHED CONFIRMATION BEFORE THE ASSESSING OFFICER, AT THE TIME OF QUANTUM ADDITION AS WELL AS AT THE TIME OF IMPOSING PENALTY. THE PAYMENT RECEIVED AND REPAID THROUGH BANKING CHAN NEL DOES NOT MAKE THE TRANSACTION SACROSANCT. THE ASSESSEE ALSO HAD NOT FURNISHED COPY OF PAN, COPY OF RETURN TO PROVE THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CREDITOR. AS HELD BY THE HON 'BLE SUPREME COURT THAT PENALTY U/S 271(1)(C) IS A CIVIL LIABILITY, TH EREFORE, INTENTION/MENS 8 ITA NO. 68/JP/2013 DASWANI CLASSES VS ACIT REA NEED NOT TO BE REQUIRED TO PROVE BY THE ASSESSI NG OFFICER. THE CASE LAWS RELIED BY THE ASSESSEE ARE NOT SQUARELY APPLICA BLE ON THE FACTS OF THE ASSESSEES CASE. THEREFORE, WE UPHOLD THE ORDER O F THE LD CIT(A). 8. IN THE RESULT, THE ASSESSEES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON 12/02/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 TH FEBRUARY, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- DASWANI CLASSES, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ACIT, CIRCLE-1, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 68/JP/2013) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR