A.Shanmugasundaram, Salem V. DCIT, Salem

ITA 762/CHNY/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7945 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-02-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2001-2002
• Appeal Filed On: 18-04-2013
• Court: TRIBUNAL
• Assessee Lawyers: T VASUDEVAN
• Keywords: Onus to prove

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI . . . , . !' , # $ % [ BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ] ./ I.T.A.NO. 762/MDS/2013 / ASSESSMENT YEAR : 2001-02 (LATE) SHRI A. SHANMUGASUNDARAM THRU LEGAL HEIR, SHRI A.S. GANESAN 44-A SECOND AGRAHARAM SALEM 636 001 VS. THE DY. COMMISSIONER OF INCOME-TAX CIRCLE III SALEM [PAN AIQPS 8137 C ] ( &' / APPELLANT) ( ()&' /RESPONDENT) / APPELLANT BY : SHRI T.VASUDEVAN, ADVOCATE /RESPONDENT BY : SHRI GURU BASHYAM, JCI T / DATE OF HEARING : 20 - 01 - 2016 ! / DATE OF PRONOUNCEMENT : 19 - 0 2 - 2016 / O R D E R PER N.R.S.GANESAN, JUDICIAL MEMBER THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), SALEM, D ATED 31.1.2013 AND PERTAINS TO ASSESSMENT YEAR 2001-02. 2. THE ONLY ISSUE ARISES FOR CONSIDERATION IS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. ITA NO.762/13 :- 2 -: 3. SHRI T.VASUDEVAN, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT DURING THE PENDENCY OF THIS APPEAL, THE ASSES SEE EXPIRED AND SON OF THE ASSESSEE, SHRI A.S.GANESAN HAS FILED AN APPLICATION TO BRING ON RECORD THE LEGAL HEIR OF THE ASSESSEE. AFTER H EARING THE LD. DR AND THE LD. COUNSEL FOR THE ASSESSEE, SHRI A.S.GANESAN IS BROUGHT ON RECORD AS LEGAL REPRESENTATIVE OF THE DECEASED ASS ESSEE. 4. COMING TO THE MERIT OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ASSESS MENT PROCEEDINGS, THE ASSESSING OFFICER MADE AN ADDITION OF ` 17,82,398/- AS CASH CREDIT. ON APPEAL BY THE ASSESSEE, THE CIT(A) DELETED THE ADDITION. THE REVENUE FILED FURTHER APPEAL BEFORE THIS TRIBUNAL. THIS TRIBUNAL REMITTED BACK THE ENTIRE ISSUE TO THE FILE OF THE A SSESSING OFFICER. ON SECOND ROUND OF LITIGATION, THE ASSESSING OFFICER A CCEPTED THE CASH CREDIT OTHER THAN ` . 2,50,000/-. THIS ` 2,50,000/- RELATES TO CREDIT IN RESPECT OF M/S RAMESH & CO. ACCORDING TO THE LD. C OUNSEL, THE ASSESSEE RECEIVED ` 2,50,000/- THROUGH CHEQUE. SINCE THE ASSESSEE COULD NOT OBTAIN THE CONFIRMATION LETTER, ADDITION WAS MADE BY THE ASSESSING OFFICER. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS IN RESPECT OF THIS ADDITION OF ` 2,50,000/- AND LEVIED PENALTY OF ` 75,000/-. ACCORDING TO THE LD. COUNSEL, THE CHEQUE WAS RECEIVED AND CLEARED THROUGH BANKING CHANNEL, THEREFORE, THERE M AY NOT BE ANY DIFFICULTY TO VERIFY THE IDENTITY OF THE CREDITOR. WHEN THE ASSESSEE HAS ITA NO.762/13 :- 3 -: FURNISHED THE DETAILS OF THE PERSON FROM WHOM ` 2,50,000/- WAS RECEIVED, THE BURDEN OF PROOF SHIFTS ON THE SHOULDE RS OF THE REVENUE, THEREFORE, IT IS FOR THE REVENUE TO EXAMINE THE GEN UINENESS OF THE TRANSACTION ON THE BASIS OF MATERIAL AVAILABLE ON R ECORD. MERELY BECAUSE CONFIRMATION LETTER WAS NOT FILED THAT CANN OT BE A REASON FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT. 5. ON THE CONTRARY, SHRI GURU BASHYAM, LD. DEPARTMENTA L REPRESENTATIVE SUBMITTED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE COULD NOT FURNISH ANY EX PLANATION FOR RECEIVING ` 2,50,000/- FROM M/S RAMESH & CO. ACCORDING TO THE LD. DR, THE ASSESSEE COULD NOT PROVE THE CREDITWORTHIN ESS OF THE CREDITOR, IDENTITY OF THE CREDITOR AND GENUINENESS OF THE TRA NSACTION, THEREFORE, THE ASSESSEE SURRENDERED THE CREDIT FOR WANT OF EV IDENCE. THE LD. DR FURTHER SUBMITTED THAT TO THAT EXTENT, THE ASSESSE E HAS FURNISHED INACCURATE PARTICULARS, THEREFORE, THE ASSESSING OF FICER HAS RIGHTLY LEVIED MINIMUM PENALTY OF ` 75,000/-. THE CIT(A), AFTER CONSIDERING THE MATERIAL FACTS OF THE CASE FOUND THAT THE ASSE SSEE HAS CONCEALED THE PARTICULARS OF INCOME AND ACCORDINGLY, CONFIRME D THE PENALTY LEVIED BY THE ASSESSING OFFICER. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITHER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THOU GH THERE WAS AN ITA NO.762/13 :- 4 -: ADDITION OF ` 17,82,398/-, THE ULTIMATE ADDITION SUSTAINED BY TH E ASSESSING OFFICER IS ` 2,50,000/-. THE ASSESSEE CLAIMED BEFORE THE ASSESSING OFFICER THAT THE SUM OF ` 2,50,000/- WAS RECEIVED THROUGH CHEQUE. THEREFORE, THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION WERE ESTABLISHED. SINCE THE ASSES SEE HAS OFFERED THE SUM OF ` 2,50,000/- VOLUNTARILY FOR TAXATION, THE ASSESSEE CONTENDED BEFORE THE ASSESSING OFFICER THAT NO PENALTY COULD BE LEVIED. THE FACT REMAINS THAT OUT OF ` 17,82,398/-, THE ASSESSEE COULD NOT FILE ANY CONFIRMATION LETTER IN RESPECT OF ` 2,50,000/-. THE FACT ALSO REMAINS THAT THE MONEY WAS 5RECEIVED FROM M/S RAMESH & CO. AND THE ASSESSEE HAS FURNISHED THE DETAILED PARTICULARS OF M/S RAMESH & CO. WHEN THE ASSESSEE HAS FILED THE DETAILS OF M/S RAM ESH & CO., IT IS FOR THE REVENUE TO EXAMINE THE CASE AND FIND OUT THE GE NUINENESS OF THE TRANSACTION AND THE CREDITWORTHINESS OF THE CREDITO R. UNFORTUNATELY, THE ASSESSING OFFICER HAS NOT EXAMINED THE CREDITWO RTHINESS OF THE CREDITOR AND GENUINENESS OF THE TRANSACTION. PROBA BLY, THE ASSESSING OFFICER MIGHT NOT HAVE INVESTIGATED THE MATTER FURT HER BECAUSE THE ASSESSEE SURRENDERED THE CREDIT FOR WANT OF EVIDENC E. THERE MAY BE A JUSTIFICATION FOR SURRENDERING THE CREDIT IN THE AB SENCE OF THE MATERIAL. HOWEVER, PENALTY PROCEEDINGS ARE DIFFERENT FROM AS SESSMENT PROCEEDINGS, THEREFORE, THE ASSESSING OFFICER IS EX PECTED TO INDEPENDENTLY EXAMINE THE CREDITWORTHINESS OF THE C REDITOR AND ITA NO.762/13 :- 5 -: GENUINENESS OF THE TRANSACTION. SINCE SUCH AN EXER CISE WAS NOT DONE BY THE ASSESSING OFFICER, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT LEVY OF PENALTY IS NOT JUSTIFIED. ACCORDINGLY , THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND THE PENALTY OF ` 75,000/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH FEBRUARY, 2016, AT CHENNAI. SD/- SD/- ( . !' ) (A. MOHAN ALANKAMONY) # / ACCOUNTANT MEMBER ( . . . ' ) (N.R.S. GANESAN) / JUDICIAL MEMBER #$ / CHENNAI %& / DATED: 19 TH FEBRUARY, 2016 RD &' ()*) / COPY TO: 1 . / APPELLANT 4. + / CIT 2. / RESPONDENT 5. ),- . / DR 3. +/' / CIT(A) 6. -01 / GF