B.R. STEEL PRODUCTS P. LTD, NAVI MUMBAI V. ITO 2(1)(1), NAVI MUMBAI

ITA 7659/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 4225 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-07-2015
• Assessment Year: 1998-1999
• Appeal Filed On: 08-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHCHIDANAND DUBE
• Assessee Lawyers: M SUBRAMANIAN
• Keywords: Unexplained cash credit
• Section: 143(3); 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL,MUMBA I BENCH B, MUMBAI BEFORE SHRI B.R.BASKARAN, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.7659/MUM/2010 ASSESSMENT YEAR: 1998-99 B. R.STEEL PRODUCTS PVT. LTD. PLOT NO. C-39/B, TTC INDUSTRIAL AREA, TURBHE MAHPE ROAD, NAVI MUMBAI-400705. PAN: AAACB4757G VS. ITO-2(1)(1), AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI M. SUBRAMANIA N (AR) REVENUE BY : SHRI SACHCHIDANAND DUBE (DR) DATE OF HEARING : 02.02.2016 DATE OF PRONOUNCEMENT : 10.02.2016 O R D E R PER PAWAN SINGH, JM: 1. THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-4, MUMBAI DATED 27.08.2010 CONFIRMING THE ORDER OF PENALTY ORDER DA TED 27.11.2003 PASSED U/S. 271(1)(C) OF THE I.T. ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE F ILED RETURN OF INCOME FOR ASSESSMENT YEAR (AY) 1998-99 ON 30.11.1998 DECLARING TOTAL LOSS OF RS. 11,30,760/- AND THE ASSESSMENT ORDER DATED 15.03.2011 U/S 143(3) OF THE ACT WAS PA SSED AFTER SCRUTINY OF THE RETURN, TOTAL INCOME OF ASSESSEE WAS ASSESSED AT RS. 27,04,525/-. WHILE COMPUTING THE TOTAL INCOME, THE ASSESSING OFFICER (AO) ADDED A SUM OF RS. 26,00,000 /- AS UNEXPLAINED CASH CREDIT. 3. THE ASSESSEE PREFERRED AN APPEAL IN RESPECT OF QUAN TUM BEFORE THE CIT(A) AND THE SAME IS DISMISSED VIDE ORDER DATED 25.07.2003. AFTER DISMIS SAL OF APPEAL, THE ASSESSEE WAS ISSUED SHOW CAUSE NOTICES TO APPEAR BEFORE THE AO WITHIN T HREE DAYS OF RECEIPT OF THE SAID NOTICE AND MAKE SUBMISSION AS TO WHY THE PENALTY SHOULD NO T BE IMPOSED, SINCE NO REPLY COULD BE FILED, THE AO INFLICTED THE PENALTY OF RS. 9,10,000 /- VIDE ORDER DATED 27.11.2003. AGAINST THE 2 ITA NO. 7659/M/2010 B. R.STEEL PRODUCTS PVT. LTD. ORDER OF AO DATED 27.11.2003, ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) AND THE SAME WAS DISMISSED VIDE ORDER DATED 27.08.2010, AGAINST WHICH THE PRESENT APPEAL IS FILED BEFORE US. 4. LD. AUTHORISED REPRESENTATIVE (AR) OF THE ASSESSEE HAS ARGUED THAT NO OPPORTUNITY FOR EXPLAINING OR MAKING SUBMISSION WAS GIVEN BY AO AND THE ORDER OF AO ITSELF REVEALED THAT A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE EITH ER TO APPEAR OR SEND WRITTEN SUBMISSION WITHIN THREE DAYS OF RECEIPT OF NOTICE AND FURTHER ARGUED THAT EVEN THE CIT(A) HAS NOT GIVEN PROPER AND FAIR OPPORTUNITY TO THE ASSESSEE. DURING THE COURSE OF SUBMISSION, WE RAISED THE QUERY FROM AR OF THE ASSESSEE ABOUT THE RESULT OF S ECOND APPEAL BEFORE THE ITAT. HOWEVER, THE AR FAIRLY CONCEDED THAT 2 ND APPEAL AGAINST THE QUANTUM HAS BEEN DISMISSED BUT NO ORDER IS AVAILABLE WITH THE ASSESSEE AND FURTHER DISCLOSE D THAT THE ASSESSEE HAS DIED AND HIS LRS ARE NOT AWARE ABOUT THE DETAILED OF THE ORDERS PASS ED BY THE ITAT IN QUANTUM APPEAL AND DOES NOT KNOW IF THE APPEAL WAS DISMISSED ON MERIT OR IN DEFAULT. 5. THE AR OF THE ASSESSEE FURTHER ARGUED THAT ADDITION WAS MADE U/S 68 OF THE ACT AS THE CONFIRMATION OF LOAN AVAILED BY ASSESSEE COULD NOT BE FILED FROM THE CERTAIN LENDERS DURING THE ASSESSMENT PROCEEDINGS, THOUGH THE ASSESSEE HAS NOT CONCEALED ANY INCOME NOR FILED ANY INACCURATE PARTICULARS AND RELIED UPON THE FOLLOWIN G JUDGMENTS. 1. [2014] 32 ITR (TRIB.) 206 (LUCKNOW) TITLED AS VIKRA M BHATIA VS. ITO. 2. [2008] 218 CTR (BOM HC) 581 TITLED AS SHREE NIRMAL COMMERCIAL LTD. VS. CIT. 3. [2014] 147 ITD 686 (DEL. TRIB.) TITLED AS SAKET AGA RWAL VS. ITO. 6. THE DR OF THE REVENUE HAS RELIED UPON THE ORDERS OF AUTHORITIES BELOW: IN CASE OF VIKRAM BHATIA VS. ITO, THE CO-ORDINATE B ENCH OF ITAT, LUCKNOW HAS HELD THAT EXPLANATION OF ASSESSEE REGARDING CASH CREDIT NOT E STABLISHED TO BE NOT BONAFIDE PENALTY CANNOT BE IMPOSED. IN SHREE NIRMAL COMMERCIAL LTD. VS. CIT, THE TRIBUNAL HAS HELD THAT ADDITION U/S 68, ASSESSEE NOWHERE ADMITTED THAT AMO UNT ADDED U/S. 68 WAS IS CONCEALED INCOME, NO PENALTY U/S 271(1)(C) COULD BE LEVIED AN D FURTHER THE CO-ORDINATE BENCH OF DELHI TRIBUNAL IN CASE OF SAKAT AGARWAL VS. ITO, IT WAS H ELD BY CO-ORDINATE BENCH OF DELHI TRIBUNAL THAT ASSESSMENT ORDER IS NOT CONCLUSIVE EV IDENCE THAT THE AMOUNT ASSESSED WAS INFACT THE INCOME OF THE ASSESSEE AND CANNOT BE PRE SUMED THAT THERE WAS A CONSCIOUS CONCEALMENT OR ACT OF FURNISHING INACCURATE PARTICU LARS OF INCOME BY THE ASSESSEE, THEREFORE, THE PENALTY WAS NOT IMPOSABLE AND THE PENALTY IMPOS ED BY THE AO WAS ERRONEOUS ASSUMPTION. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS OF THE PAR TIES AND THE MATERIAL AVAILABLE ON RECORD AND THE ASSESSMENT ORDER INCLUDING OF THE STATEMENT OF BANK ACCOUNT OF ASSESSEE FROM 25.09.1997 TO 16.10.1997 AND THE DEPOSIT SLIP WITH THE BANKERS OF THE ASSESSEE SHOWN THE 3 ITA NO. 7659/M/2010 B. R.STEEL PRODUCTS PVT. LTD. CREDIT IN THE ACCOUNT OF ASSESSEE IN RESPECT OF ADD ITION MADE IN THE ASSESSMENT ORDER, WHICH IS FILED IN THE FORM OF PAPER BOOK. 8. PERUSAL OF THE STATEMENT OF ACCOUNT, DEPOSIT SLIPS AND THE SUBMISSIONS MADE TO THE AO DATED 03.03.2003 ONE CAN EASILY CONCLUDE THAT THERE WAS N O CONCEALMENT ON THE PART OF ASSESSEE OR REASON OF FILING INACCURATE PARTICULAR. PENALTY U /S 271(1)(C) CAN ONLY BE INFLICTED WHEREIN THE ASSESSEE INTENTIONALLY AND DELIBERATELY CONCEAL ED THE INCOME OR SUBMITS THE INACCURATE PARTICULARS. HOWEVER, IN THE PRESENT CASE, THE ELE MENT OF INTENTIONAL CONCEALMENT IS MISSING. MOREOVER, THE ADDITION WAS MADE BY THE AO DUE TO NO N-CONFIRMATION BY THE CREDITORS. THE RATIO LAID DOWN IN CASE(S) OF SHREE NIRMAL COMMERC IAL LTD. VS. CIT., VIKRAM BHATIA VS. ITO. & SAKET AGARWAL VS. ITO ARE SQUARELY COVERED T HE FACTS OF ASSESSEE CASE . 9. HENCE, IN OUR OPINION THE ORDER PASSED BY CIT(A) VI DE ITS ORDER DATED 27.08.2010, CONFIRMING THE ORDER OF PENALTY IS NOT SUSTAINABLE IN LAW, HENCE, THE SAME IS SET-ASIDE. IN THE RESULT, APPEAL FILED BY T HE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 10 TH FEBRUARY, 2016. SD/- SD/- ( B.R.BASKARAN ) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI; DATED 10/02/2016 S.K.PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER, / (ASSTT.REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. !'# / GUARD FILE. $ //TRUE COPY/