ITO 32 (1)(1), MUMBAI V. M/S AGNEL CORPORATION, MUMBAI

ITA 6881/MUM/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8646 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 08-11-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SHRI J P BAIRAGRA
• Keywords: Unexplained cash credit
• Section: 271(1)(c); 143(3); 142(1); 250; 13; 68; 27

Judgement Text

INTHEINCOMETAXAPPELLATETRIBUNAL(VIRTUALCOURT) ABENCH, MUMBAI BEFORESHRI SHAMIMYAHYA, HON'BLEACCOUNTANT MEMBERAND SHRI PAVAN KUMARGADALE, HON'BLEJUDICIAL MEMBER ITA.NO.6881/MUM/2019(A.Y. 2012-13) INCOME TAX OFFICER32(1)(1) ROOM NO. 703, 7 TH FLOOR KAUTILYA BHAVAN BANDRA KURLA COMPLEX BANDRA (E), MUMBAI 400051 V. M/S.AGNELCORPORATION 12-A,STARTRADECENTRE SODAWALALANE SVPROAD,BORIVALI(W) MUMBAI-400092 PAN: AAOFA7662C (APPELLANT) (RESPONDENT) ASSESSEEBY : SHRIJ.P. BAIRAGRA DEPARTMENT BY : SHRIBRAJENDRAKUMAR DATEOF HEARING : 08.07.2021 DATEOF PRONOUNCEMENT : 12.07.2021 ORD ER PER PAVAN KUMARGADALE .JM. 1. THE REVENUE HAS FILED THE APPEAL AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-44, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] PASSED U/S. 271(1)(C) OF THE ACT AND SECTION 250 OF THE INCOME-TAXACT(FORSHORTACT). 2 ITA.NO. 6881/MUM/2019 (A.Y. 2012-13) M/S. AGNEL CORPORATION 2. REVENUEHAS RAISEDFOLLOWINGGROUNDS IN ITS APPEAL:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A) ERRED IN DELETING THE PENALTY LEVIED BY THE AO U/S. 2 7 1 ( 1 ) ( C ) O F T H E I N C O M E - T A X A C T , 1 9 6 1 , O F . 6 0 , 0 5 , 9 8 4 / - W I T H O U T APPRECIATING THE FACTS THAT HE ASSESSEE HAD CLAIMED UNSECURED LOANS AND INTEREST THEREOF AS GENUINE IN THE RETURN OF INCOME FILED DESPITE THE FACT THAT THE ASSESSEE HAS FAILED TO PROVE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE SAID LOANS THEREBYMAKING HIMSELF LIABLE FOR PENALTY U/S. 271(1)(C) OF THE INCOME-TAX ACT, 1961. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT(A) ON THE GROUNDS BE SETASIDE ANDTHAT OF THE ASSESSINGOFFICERBE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD ANEWGROUNDWHICHMAYBE NECESSARY. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND BUILDERS. THE ASSESSEE HAS FILED RETURN OF INCOME ON 04.07.2012 WITH THE TOTAL INCOME O F . 1 0 , 9 8 , 9 0 0 / - . S U B S E Q U E N T L Y , T H E C A S E W A S S E L E C T E D F O R S C R U T I N Y A N D NOTICES U/S.143(2) AND 142(1) OF THE ACT ARE ISSUED. IN RESPONSE TO THE NOTICES, THE LD. AR OF THE ASSESSEE APPEARED FROM TIME AND TIME AND SUBMITTED THE DETAILS. ASSESSING OFFICER ON PERUSAL OF THE FINANCIAL STATEMENTS FOUND THAT THE ASSESSEE HAS DISCLOSED UNSECURED LOANS IN THE BALANCE SHEET AND THE ASSESSEE WAS CALLED TO EXPLAIN THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE PERSONS WHO HAVE ADVANCED LOANS TO THE ASSESSEE AND THE ASSESSEE HAS SUBMITTED THE DETAILS WITH THE EVIDENCES. THE ASSESSING OFFICER HAS DEALT ON THESE FACTS IN THE 3 ITA.NO. 6881/MUM/2019 (A.Y. 2012-13) M/S. AGNEL CORPORATION ASSESSMENT ORDER IN RESPECT OF EACH INDEPENDENT LOAN CREDITOR. SINCE THE ASSESSEE HAS NOT COMPLIED WITH THE CONDITIONS/INGREDIENTS NECESSARY IN RESPECT OF UNSECURED LOANS OBTAINED FROM 13 PARTIES, THE A.O. HAS TREATED THE AMOUNTS AS UNEXPLAINED CASH CREDITS U/S. 68 OF THE ACT AND M A D E A N A D D I T I O N O F . 1 , 7 6 , 9 2 , 1 4 4 / - . F U R T H E R , T H E A S S E S S I N G O F F I C E R M A D E DISALLOWANCE OF INTEREST ON UNSECURED LOANS DEBITED IN THE PROFIT AND L O S S A C C O U N T O F . 1 7 , 4 4 , 6 9 4 / - A N D A S S E S S E D T H E T O T A L I N C O M E O F . 1 , 9 4 , 3 6 , 8 4 0 / - A N D P A S S E D O R D E R U / S E C 1 4 3 ( 3 ) O F T H E A C T D T 3 1 - 0 3 - 2 0 1 5 . SUBSEQUENTLY, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT. IN THE PENALTY PROCEEDINGS THE ASSESSING OFFICER RELIED ON THE FINDINGS OF THE A.O. IN THE SCRUTINY PROCEEDINGS IN RESPECT OF UNSECURED LOANS AND INTEREST PAID. THE ASSESSEE WAS ALSO PROVIDED OPPORTUNITY TO MAKE SUBMISSIONS. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS SUBMITTED REPLY BUT COULD NOT PROVIDE OR FURNISH EVIDENCES TO PROVE THE GENUINENESS OF UNSECURED LOANS. IT WAS BROUGHT TO THE KNOWLEDGE OF THE A.O. IN THE PENALTY PROCEEDINGS THAT AGAINST THE ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT DATED 31.03.2015, ON APPEAL BY THE ASSESSEE THE LD.CIT(A) HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THEREFORE, THE ASSESSING OFFICER IN THE PENALTY PROCEEDINGS OBSERVED THAT THE ASSESSEE HAS FURNISHED INACCURATE 4 ITA.NO. 6881/MUM/2019 (A.Y. 2012-13) M/S. AGNEL CORPORATION PARTICULARS IN THE FINANCIAL YEAR 2011-12 AND LEVIED PENALTY OF . 6 0 , 0 5 , 9 8 4 / - A N D P A S S E D U / S . 2 7 1 ( 1 ) ( C ) O F T H E A C T D A T E D 2 3 . 0 3 . 2 0 1 8 . 4. AGGRIEVED BY THE PENALTY ORDER, THE ASSESSEE HAS PREFERRED AN APPEAL WITH THE LD.CIT(A). WHEREAS LD.CIT(A) HAS DEALT ELABORATELY ON THE FINDINGS OF THE ASSESSING OFFICER AND THE ASSESSEES SUBMISSIONS. FURTHER THE APPELLATE AUTHORITY, FIND THAT AGAINST ORDER OF THE LD.CIT(A) CONFIRMING THE ADDITION MADE BY THE ASSESSING OFFICER, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE TRIBUNAL. THE HON'BLE TRIBUNAL IN ITA.NO. 1814/MUM/2017 IN ASSESSEES CASE FOR THE A.Y. 2012-13 HAS DELETED THE ADDITION, THE LD.CIT(A) CONSIDERING THE FACT THAT THE ADDITIONS MADE BY THE ASSESSING OFFICER ARE DELETED BY THE HON'BLE TRIBUNAL OBSERVED THAT THE LEVY OF PENALTY IS NOT SUSTAINABLE AND HAS RELIED ON THE JUDICIAL DECISIONS. THE LD.CIT(A) FIND THAT THE HON'BLE ITAT HAS DELETED THE IMPUGNED ADDITION OF UNEXPLAINED CASH CREDITS AND THE DISALLOWANCE OF INTEREST ON LOANS MADE BY THE ASSESSING OFFICER. ACCORDINGLY, THE CIT(A) HAS DELETEDTHEPENALTY ANDPARTLY ALLOWEDTHE APPEALOF THE ASSESSEE. 5. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE REVENUE HAS FILED THE APPEALBEFORETHEHONBLE TRIBUNAL. 5 ITA.NO. 6881/MUM/2019 (A.Y. 2012-13) M/S. AGNEL CORPORATION 6. AT THE TIME OF HEARING, THE LD. DR SUBMITTED THAT THE LD.CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) OF THE ACT IRRESPECTIVE OF THE FACT THAT THE ASSESSEE HAS NOT PROVED THE GENUINENESS, CREDITWORTHINESS AND IDENTITY OF LOANS OBTAINED AND SUPPORTED THE ORDER OF THE ASSESSING OFFICER. CONTRA, THE LD. AR SUBMITTED THAT THE ADDITION MADE BY THE ASSESSING OFFICER IN RESPECT OF UNSECURED LOANS AND INTEREST ON LOANS WAS DELETED BY THE HON'BLE TRIBUNAL AND THE LD.CIT(A) HAS RIGHTLY CONSIDERED THE DECISION OF THE HON'BLE TRIBUNAL AND DELETED THE PENALTY .THE LD. AR SUPPORTED THE ORDEROF THE LD.CIT(A). 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. PRIMA FACIE, THE LD.CIT(A) HAS DELETED THE ADDITION RELYING ON THE DECISION OF THE HON'BLE TRIBUNAL IN ASSESSEES OWN CASE. WE FOUND THAT THEHON'BLE TRIBUNAL HAS GRANTED RELIEF TO THE ASSESSEE IN THE QUANTUM APPEAL. THE LD.CIT(A) RELIED AND REFERRED TO THE OBSERVATIONS OF HONBLE ITAT AT PAGE NO. 4 PARA 6.4 OF THE ORDER AND DELETED THE PENALTY. THE LD.DR FAIRLY ACCEPTED THE FACT THAT ITAT HAS DELETED THE ADDITIONS OF UNSECURED LOANS AND INTEREST ON LOANS. THE LD. DR COULD NOT CONTROVERT THE OBSERVATIONS OF THE LD.CIT(A) WITH ANY NEW COGENT EVIDENCES OR INFORMATION ACCORDINGLY, WE FOUND THAT THE 6 ITA.NO. 6881/MUM/2019 (A.Y. 2012-13) M/S. AGNEL CORPORATION LD.CIT(A) HAS RELIED ON THE JUDICIAL DECISIONS OF THE HON'BLE HIGH COURT AND THE COORDINATE BENCH OF HONBLE TRIBUNAL IN ASSESSEES OWN CASE AND GRANTED THE RELIEF. WE FOLLOW THE JUDICIAL PRECEDENCE AND WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD.CIT(A) AND UPHOLD THE SAME AND DISMISSTHEGROUNDS OFAPPEALOFTHEREVENUE. 8. IN THERESULT,REVENUES APPEALISDISMISSED. ORDERPRONOUNCEDON ASPERRULE34(4)OF ITATRULESBYPLACING THE PRONOUNCEMENTLISTIN THE NOTICEBOARD. SD/- SD/- ( SHAMIMYAHYA ) ( PAVAN KUMARGADALE) ACCOUNTANT MEMBER JUDICIALMEMBER MUMBAI / DATED 12/07/2021 GIRIDHAR,SR.PS COPY OFTHEORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A),MUMBAI. 4. CIT 5. DR,ITAT,MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT.REGISTRAR) ITAT,MUMBAI