The ACIT,(OSD)Circle-8, Ahmedabad V. Shri Jayshankar S. Vaid, Ahmedabad

ITA 741/AHD/2012

• Counselvise Citation: 74120514 RSA 2012
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1994-1995
• Appeal Filed On: 30-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P TALATI
• Section: 143(3); 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD B BENCH BEFORE: SHRI D.K. TYAGI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTAN T MEMBER I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 A.C.I.T.(OSD), CIRCLE-8 AHMEDABAD APPELLANT VS. SHRI JAYSHANKAR VAID 29, RAMYAKUNJ SOCIETY OPP. GALAXY CINEMA, NARODA, AHMEDABAD PAN-AAUPV5951D RESPONDENT DEPARTMENT BY : SHRI S.P. TALATI, SR. D.R. ASSESSEE BY : NONE DATE OF HEARING : 24.05.2012 DATE OF PRONOUNCEMENT : 31.05.2012 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER THESE ARE REVENUES APPEAL AGAINST SEPARATE ORDER O F LD. CIT(A) DATED 27.01.2012 PASSED IN APPEAL NO.CIT(A) XIV/DCI T. CIR.8/41/10-11 AND ANOTHER ORDER DATED 27.01.2012 PASSED IN APPEAL NO. CIT(A) XIV/DCIT. CIR.8/42/10-11. SINCE BOTH THE APPEALS BELONG TO T HE SAME ASSESSEE, FOR I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 2 THE SAKE OF CONVENIENCE THESE ARE DISPOSED OF BY PA SSING A CONSOLIDATED ORDER. I.T.A. NO.741/2012 2. REVENUE IS AGGRIEVED BY THE ORDER OF LD. CIT(A) DELETING THE PENALTY OF RS.6,99,273/- LEVIED BY THE A.O. U/S 271 (1)(C) OF THE I.T. ACT. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,13,287/-. TH E ASSESSMENT WAS COMPLETED U/S 143(3) READ WITH SECTION 147 DETERMIN ING THE INCOME OF THE ASSESSEE AT RS.19,08,840/- AFTER MAKING FOLLOWING A DDITION:- HEAD AMOUNT ON ACCOUNT OF PERQUISITES 48652 ON ACCOUNT OF PAYMENT BY EMPLOYER (PERQUISITES) 210 00 BALANCE SHEET DIFFERENCE 53028 BOGUS CREDIT OF BENAMI DEPOSITS 1400000 INTEREST PAYMENT ON ABOVE BOGUS DEPOSITS 64125 INTEREST PAYMENT TO INGENIOUS DEPOSITOR 64052 ON ACCOUNT OF HOUSEHOLD EXPENSES 44700 TOTAL 1695557 THE ASSESSEE FILED AN APPEAL AGAINST THIS ORDER OF A.O. AND IN THE APPEAL LD. CIT(A) ALLOWED DEDUCTION OF RS.21,417/- OUT OF THE ELECTRICITY EXPENSES, RS.27,235/- OUT OF TELEPHONE EXPENSES, RS.21,000/- OUT OF PAYMENT OF MEMBERSHIP FEES TO KARNAVATI CLUB, RS.53,028/- OUT OF BALANCE SHEET DIFFERENCE AND RS.6000/- OUT OF HOUSEHOLD EXPENSES TOTALING TO RS.1,28,680/-. THE ASSESSEE WENT IN FURTHER APPEAL BEFORE THE I.T.A.T. AND HONBLE I.T.A.T. VIDE ITS ORDER DATED 08.02.2008 SE T ASIDE THE ISSUE OF HOUSEHOLD EXPENSE TO THE FILE OF THE A.O. CONSEQUEN T TO THIS ORDER U/S I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 3 143(3) READ WITH SECTION 254 OF THE ACT WAS FINALIZ ED ON 19.11.2009 ALLOWING THE ASSESSEE FURTHER RELIEF OF RS.6000/- O UT OF HOUSEHOLD EXPENSES. 4. AS THE ADDITION MADE ON ACCOUNT OF BOGUS CREDIT OF BENAMI DEPOSITS OF RS.14 LAKHS, ADDITION ON ACCOUNT OF INT EREST PAYMENT OF BENAMI BOGUS DEPOSITS RS.64,125/-, ON ACCOUNT OF INTEREST PAYMENT TO INGENIOUS DEPOSITORS RS.64,052/- AND HOUSEHOLD EXPENSES OF RS .32,700/-, A NOTICE U/S 271 (1)(C) OF THE I.T. ACT WAS ISSUED TO THE ASSESS EE BY THE A.O. TO SHOW CAUSE AS TO WHY AN ORDER IMPOSING PENALTY U/S 271(1 ) (C ) SHOULD NOT BE PASSED. AFTER GETTING REPLY OF THE ASSESSEE WHICH WAS NOT ACCEPTABLE TO THE A.O., THE A.O. IMPOSED A PENALTY OF RS.6,99,273/- @ 100% OF TAX SOUGHT TO BE EVADED U/S 271 (1) (C) OF THE ACT. AGGRIEVED B Y THIS ORDER OF THE A.O. ASSESSEE WENT IN APPEAL BEFORE LD. CIT(A) WHO AFTER TAKING INTO CONSIDERATION THE SUBMISSIONS OF THE ASSESSEE MADE BEFORE HIM DEL ETED THIS PENALTY. FURTHER AGGRIEVED, NOW THE REVENUE IS IN APPEAL BEF ORE US. 5. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD WE FIND THAT PENALTY HAS BEEN IMPOSED BY THE A.O. ON THE AD DITION MADE BY HIM WHICH WERE UPHELD BY THE I.T.A.T. THE MAIN ADDITI ON IN RESPECT OF WHICH PENALTY U/S 271(1)(C ) HAS BEEN IMPOSED RELATES TO CASH CREDIT OF RS.14 LAKHS. WHILE MAKING THIS ADDITION OF RS.14 LAKHS, THE A.O. WAS OF THE VIEW THAT SINCE ASSESSEE FAILED TO FILE PERMANENT ACCOUN T NUMBER OR CONFIRMATION IN RESPECT OF THE DEPOSITORS, THE ASSESSEE HAS INTE NTIONALLY EVADED THE DETAILS SO AS TO SUBSTANTIATE THE SOURCE OF DEPOSIT TO THE SATISFACTION OF THE A.O. THE ASSESSEES CONSISTENT STAND HAS BEEN THAT SINCE THE ASSESSEE ACCEPTED THESE DEPOSITS BY ACCOUNT PAYEE CHEQUE FRO M THE DEPOSITORS AND I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 4 THE A.O. HAS NOT BROUGHT ANY MATERIAL OR EVIDENCE T HAT THESE DEPOSITS WERE NOT GENUINE, PENALTY FOR CONCEALMENT CANNOT BE IMPO SED. FOR MAKING THIS SUBMISSION HE PLACED RELIANCE ON THE JUDGMENT OF HO NBLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TAXTILES VS. CIT (2001) 249 ITR 125 . THERE IS NO DISPUTE ABOUT THE FACT THAT ASSESSEE CO ULD NOT SUBSTANTIATE THE SOURCE OF DEPOSITS TO THE SATISFACTION OF THE A.O., THEREFORE, AN ADDITION WAS MADE WHICH WAS ALSO UPHELD BY HONBLE ITAT. HOWEVE R, THE LAW IS NOW WELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENAL PROCE EDINGS ARE SEPARATE AND ADDITION DOES NOT AUTOMATICALLY LEADS TO IMPOSI TION OF PENALTY FOR CONCEALMENT. BEFORE IMPOSING PENALTY THE A.O. IS R EQUIRED TO BRING ON RECORD CERTAIN FACTS WHICH LEAD TO REASONABLE CONCL USION THAT THE AMOUNT DOES REPRESENT THE ASSESSEES INCOME WHICH WAS SHOW N AS DEPOSIT FROM OTHER PERSONS. IN THIS CASE THE DEPOSITS OF RS.14 LAKHS WERE ACCEPTED BY THE ASSESSEE BY ACCOUNT PAYEE CHEQUES FROM THE DEPOSITO RS AND COPIES OF ACCOUNTS OF THESE DEPOSITORS WERE ALSO FURNISHED TO THE A.O. DURING ASSESSMENT PROCEEDINGS. THE A.O. NEITHER ESTABLISH ED THAT THE MONEY IN FACT BELONGED TO ASSESSEE NOR PROVED THAT THE EXPLA NATION/EVIDENCE ADDUCED BY ASSESSEE WAS FALSE. UNDER THESE UNDISPUTED FACT S OF THIS CASE PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME OR FOR FILING I NACCURATE PARTICULARS OF INCOME CANNOT BE LEVIED. THIS VIEW OF OURS GETS SU PPORT FROM THE JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF NATIONAL TEXTILES VS. CIT (SUPRA) ON SIMILAR FACTS. IN VIEW OF THIS, LD. CIT (A) HAS RIGHTLY DELETED THE PENALTY IMPOSED BY THE A.O. I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 5 6. THE OTHER ADDITION ON WHICH THE PENALTY HAS BEE N IMPOSED ARE ON ACCOUNT OF INTEREST OF RS.64,125/- PAID TO THE D EPOSITORS OF RS.14 LAKHS WHICH WAS TREATED AS UNEXPLAINED AND FURTHER DISALL OWANCE OF RS.64,052/- TO SOME OTHER DEPOSITORS AS BEING NON-GENUINE EXPENDIT URE. SINCE WE HAVE UPHELD THE ORDER OF LD. CIT(A) DELETING THE PENALTY ON THE ADDITION OF RS.14 LAKHS FOR THE SAME REASONS THE ORDER OF LD. CIT(A) DELETING THE PENALTY ON THESE AMOUNTS IS ALSO UPHELD. 7. THE REMAINING ADDITION ON WHICH THE PENALTY HAS BEEN LEVIED WAS ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS OF RS.3 2,700/-. WE FIND THAT THE ADDITION WAS MADE BY THE A.O. ON THE BASIS OF E STIMATING THE HOUSEHOLD EXPENSES OF THE ASSESSEE AND NO COGENT FINDING WAS GIVEN BY THE A.O. THE A.O. HAS ALSO NOT GIVEN ANY FACTUAL FINDING WHILE I MPOSING THE PENALTY ON THIS ADDITION. IN THE ABSENCE OF THIS, PENALTY IMP OSED BY THE A.O. ON ESTIMATED ADDITIONS HAS RIGHTLY BEEN DELETED BY LD. CIT(A) AND THE ORDER PASSED BY HIM IS HEREBY UPHELD. 8. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. I.T.A. NO.742/2012 9. THIS IS REVENUES APPEAL AGAINST THE ORDER DAT ED 27.01.2012 PASSED IN APPEAL NO. CIT(A) XIV/DCIT. CIR.8/42/10-1 1. 10. THE REVENUE IS AGGRIEVED BY THE ACTION OF LD. CIT(A) DELETING PENALTY OF RS.4,45,400/- LEVIED BY THE A.O. U/S 271 (1) (C) OF THE ACT 11. THE BRIEF FACTS OF THE CASE ARE THAT A PENALTY OF RS.4,45,400/- @ 100% OF TAX SOUGHT TO BE EVADED WAS IMPOSED U/S 271 (1)(C) OF THE ACT ON I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 6 THE FOLLOWING ADDITIONS MADE BY THE A.O. WHICH WERE CONFIRMED BY HONBLE ITAT:- (I) ON ACCOUNT OF CASH CREDIT AND INTEREST DISALLOW ANCE OF RS.4,58,179/- AND RS.5,46,896/-. (II) ON ACCOUNT OF LOW HOUSEHOLD WITHDRAWALS OF R S.48,530/-. (III) ADDITION OF RS.68,912/- BEING PERQUISITES OUT OF LTC AND RS.2784/- AS PERQUISITES OF PF CONTRIBUTION. 12. AFTER HEARING BOTH THE PARTIES AND PERUSING TH E RECORDS, WE FIND THAT PENALTY IMPOSED ON ACCOUNT OF CASH CREDIT AND INTEREST DISALLOWANCE OF RS.4,58,179/- AND RS.5,46,896/- INVOLVED SIMILAR IS SUES. THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF DEPOSITS AND CON FIRMATION OF TRANSACTIONS AND THEREFORE, THE ADDITION WAS MADE AND THE A.O. H AS ALSO IMPOSED PENALTY ON THIS AMOUNT. WE FURTHER FIND THAT ASSESSEE HAD GIVEN CERTAIN INFORMATION REGARDING THE DEPOSITS BUT THE SAME COULD NOT BE SU BSTANTIATED FURTHER BY THE ASSESSEE AND THEREFORE THE ADDITION WAS UPHELD EVEN AT THE LEVEL OF HONBLE ITAT. THESE FACTS ARE SIMILAR TO THE FACTS FOR THE ASSESSMENT YEAR 1994-95 WHERE THE PENALTY WAS IMPOSED ON ADDITION O F RS.14 LAKHS. WHILE DECIDING THE ISSUE FOR THAT YEAR WE HAVE HELD THAT ON THE BASIS OF THE FACTS AVAILABLE ON RECORD THE IMPOSITION OF PENALTY WAS N OT JUSTIFIED. THEREFORE, FOLLOWING OUR DECISION IN ITA NO.741/AHD/2012 AND F OR THE REASONS GIVEN THEREIN, WE HOLD THAT THE PENALTY IMPOSED IN RESPEC T OF THESE TWO AMOUNTS HAS RIGHTLY BEEN DELETED BY LD. CIT(A) AND THE ORDE R PASSED BY HIM IS HEREBY UPHELD. I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 7 13. AS FAR AS THE PENALTY ON ADDITION ON ACCOUNT O F LOW HOUSEHOLD WITHDRAWAL IS CONCERNED, WE FIND THAT ADDITION HAS BEEN MADE BY THE A.O. ON THE BASIS OF ESTIMATE WITHOUT GIVING ANY CONCRET E FINDING FOR THE BASIS OF ESTIMATING THE HOUSEHOLD EXPENSES OF THE ASSESSEE. ON SIMILAR FACTS LD. CIT(A) ORDER DELETING THE PENALTY HAS BEEN UPHELD B Y US FOR THE ASSESSMENT YEAR 1994-95. FOR THE REASONS GIVEN BY US IN ITA N O.741/AHD/2012, THE ORDER PASSED BY LD. CIT(A) IN DELETING THIS PENALTY IS ALSO HEREBY UPHELD. 14. AS FAR AS THE ADDITION ON ACCOUNT OF PERQUISIT ES OF LTC AND PF CONTRIBUTIONS IS CONCERNED, WE FIND THAT THE DETAIL S IN RESPECT OF AMOUNT RECEIVED ON LTC AND PF CONTRIBUTIONS WERE GIVEN BY THE ASSESSEE IN THE RETURN OF INCOME AND THE SAME WERE NOT FOUND TO BE INACCURATE BY THE A.O. IT IS ONLY THE TREATMENT WHICH HAS BEEN TAKEN DIFFE RENTLY BY THE A.O. THE A.O. CONSIDERED THAT ONLY CERTAIN AMOUNT WOULD BE A VAILABLE AS DEDUCTION AND REST WAS ADDED BY HIM TO THE INCOME OF THE ASSE SSEE. THIS DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF IN ACCURATE PARTICULARS OF INCOME BY THE ASSESSEE. THEREFORE, LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY ON THIS AMOUNT ALSO AND THE ORDER PASSED BY HIM IS HEREBY UPHELD. 15. IN THE RESULT, BOTH THE APPEALS, FILED BY THE REVENUE ARE DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 31.05.2012 SD/- SD/- (A. MOHAN ALANKAMONY) ( D.K. TYAGI) ACCOUNTANT MEMBER JU DICIAL MEMBER I.T.A. NO.741/AHD/2012 A. Y. 1994-95 WITH I.T.A. NO.742/AHD/2012 A.Y.1996-97 8 TRUE COPY N.K. CHAUDHARY, SR. P.S. / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. / CONCERNED CIT 4. - / CIT (A) 5. ! , ' , #$ / DR, ITAT, AHMEDABAD 6. %& '( / GUARD FILE. BY ORDER/ , ) / # * ' , #$ +