Suresh Chand Agrawal, Mathura V. A.C.I.T.-3, Mathura

ITA 78/AGR/2011

• Counselvise Citation: 7820314 RSA 2011
• Duration Of Justice: 1 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-03-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 08-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K SHARMA
• Assessee Lawyers: M M AGARWAL
• Keywords: Wrong claim

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE : SHRI BHAVNESH SAINI, JUDICIAL MEMBER & SHRI A. L. GEHLOT, ACCOUNTANT MEMBER ITA NO. 78/AGRA/2011 ASST. YEAR : 2002-03 SH. SURESH CHAND AGARWAL, VS. A.C.I.T. 3, MATH URA SHREE GIRRAJ SUPARI TRADERS, BHARGAVA STREET, GHIA MANI, MATHURA (PAN : AAVPA 3257C). (APPELLANT) (RESPONDENT) FOR ASSESSEE : SH. M.M. AGARWAL, C.A. FOR REVENUE : SH. A.K. SHARMA, JR. DR DATE OF HEARING : 12.03.2012 DATE OF PRONOUNCEMENT : 16.03.2012 ORDER PER BHAVNESH SAINI, J.M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-I, AGRA DATED 10.01.2011 FOR THE ASSESSMENT YEAR 2002- 03, CHALLENGING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT IN RESPECT OF RS.15,000/- RECEIVED FROM SRI SATYA NARAIN AGARWAL AND RS.8546/- ADDED AS INCOME OF THE ASSESSEE TOWARDS INTEREST ON FDRS IN THE NAME OF THE CHILDREN (NOT B EING MINOR). 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT WHILE FI NALISING THE ASSESSMENT, CERTAIN ADDITIONS WERE MADE, BUT IN THE QUANTUM APPEAL, SOM E ADDITIONS HAVE BEEN DELETED. PENALTY PROCEEDINGS WERE INITIATED U/S. 271(1)(C) O F THE IT ACT. THE LD. CIT(A) IN ITA NO. 78/AGRA/2011 2 THE IMPUGNED ORDER CANCELLED THE PENALTY ON SOME OF THE ISSUES. HOWEVER, HE CONFIRMED THE LEVY OF PENALTY IN RESPECT OF ADDITIO NS MADE OF RS.15,000/- ON ACCOUNT OF CASH CREDIT AND RS.8546/- ON ACCOUNT OF INTEREST ON FDRS AND, THUS, THE PENALTY APPEAL WAS PARTLY ALLOWED. 3. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.15,000/- WAS FOUND CREDITED IN THE BOOKS OF ACCOUNT OF THE A SSESSEE IN THE NAME OF SHRI SATYA NARAIN AGARWAL. IN THIS CASE, CONFIRMATION FR OM THE CREDITOR WAS FILED AND LATER ON, HIS STATEMENT WAS RECORDED ON OATH, COPY OF WHICH IS FILED AT PAGE 73 OF THE PAPER BOOK, IN WHICH HE HAS CONFIRMED GIVING OF CASH CREDIT TO THE ASSESSEE. HE HAS, HOWEVER, SUBMITTED THAT THE TRIBUNAL CONFIRMED THE ADDITION BECAUSE THE CREDITOR HAD STATED IN HIS STATEMENT THAT THE AMOUN T WAS BROUGHT IN THE MONTH OF AUGUST WHILE THE MONEY WAS DEPOSITED IN THE BANK BY THE ASSESSEE IN JUNE & JULY. HE HAS FURTHER SUBMITTED THAT THE TRIBUNAL ALSO CON FIRMED THE ADDITION BECAUSE THE EXPLANATION OF THE ASSESSEE WAS NOT FOUND TO BE PLA USIBLE. IT WAS ALSO SUBMITTED THAT THE TRIBUNAL ALSO CONFIRMED THE ADDITION BECAU SE THE STATEMENT OF THE CREDITOR WAS NOT CORROBORATED THROUGH THE EVIDENCE OF THE PE RSONS WHO HAD BROUGHT MONEY, NAMELY SHRI DILIP KUMAR AGARWAL AND ACCOUNTANT SHRI ONKAR NATH AGARWAL. HE HAS SUBMITTED THAT SHRI ONKAR NATH AGARWAL REMAINED PRESENT BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. THEREFORE, THERE IS NO QUESTION OF CONCEALMENT OF ANY INCOME OR FILING OF ANY INACCURATE PARTICULARS. ITA NO. 78/AGRA/2011 3 3.1 AS REGARDS THE INTEREST ON FDRS, HE HAS SUBMITT ED THAT FDRS WERE ISSUED IN THE NAMES OF MINORS. THE COPY OF THE STATEMENT OF F DRS IS FILED AT PAGE 76 & 77 OF THE PAPER BOOK. THESE WERE ISSUED IN THE NAME OF MI NORS WHO HAVE ATTAINED MAJORITY IN THE ASSESSMENT YEAR UNDER APPEAL. THERE FORE, FOR ACCRUAL OF INTEREST, NO ADDITION CAN BE MADE IN THE HANDS OF THE ASSESSEE. HE HAS SUBMITTED THAT MERELY BECAUSE THE ADDITION WAS CONFIRMED BY THE TRIBUNAL BY ITSELF IS NO GROUND TO LEVY PENALTY. HE HAS SUBMITTED THAT THE ASSESSEE GAVE PR OPER EXPLANATION TO BOTH THE ISSUES AND EXPLANATION OF THE ASSESSEE WAS NOT FOUN D TO BE FALSE, INCORRECT OR BOGUS. HE HAS SUBMITTED THAT THE EXPLANATION OF ASS ESSEE WAS BONA FIDE. RELIANCE IS PLACED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF BANARAS TEXTORIUM VS. CIT, 169 ITR 782 (ALL.), IN WHICH IT WAS HELD THAT APPLICATION OF EXPLANATION TO SECTION 271(1)(C) IS AUTOMATIC. FIND INGS IN THE ASSESSMENT PROCEEDINGS ARE RELEVANT, BUT NOT CONCLUSIVE IN THE PENALTY PROCEEDINGS. FINDINGS GIVEN IN THE ASSESSMENT PROCEEDINGS ARE RELEVANT AN D HAVE PROBATIVE VALUE, BUT SUCH FINDINGS ARE MATERIAL ALONE AND MAY NOT JUSTIF Y THE IMPOSITION OF PENALTY IN A GIVEN CASE BECAUSE THE CONSIDERATIONS THAT ARISE IN PENALTY PROCEEDINGS ARE DIFFERENT FROM THOSE THAT ARISE IN ASSESSMENT PROCE EDINGS. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT BOTH THE ADDITIONS HAVE BEEN CONF IRMED BY THE TRIBUNAL. THEREFORE, PENALTY MAY BE CONFIRMED. ITA NO. 78/AGRA/2011 4 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD. HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIAN CE PETROPRODUCTS PVT. LTD., 322 ITR 158 (SC) HELD THAT A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME- TAX ACT, 1961, SUGGEST THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASS ESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICU LARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTI ON 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INA CCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PART ICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVO KED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAM OUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS AR E FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EX ACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTIO N OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. DECISION OF THE GUJRAT HIGH COURT AFFI RMED. 4.1 HONBLE SUPREME COURT IN THE CASE OF M/S. RAJAS THAN SPINNING & WEAVING MILLS, 2009-TIOL 63 SC, HELD THAT ON EVERY DEMAND PENALTY IS NOT AUTOMATIC. ITA NO. 78/AGRA/2011 5 5. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F EXPLANATION OF THE ASSESSEE AND THE DECISIONS ABOVE, WE ARE OF THE VIEW THAT TH E PENALTY IS NOT LEVIABLE ON THE MATTER IN ISSUE. IT IS NOT IN DISPUTE THAT BOTH THE ADDITIONS HAVE BEEN CONFIRMED BY THE TRIBUNAL ON APPRECIATION OF EVIDENCE AND MATERI AL ON RECORD. HOWEVER, IT IS EQUALLY A FACT THAT IN RESPECT OF CREDIT OF RS.15,0 00/- RECEIVED FROM SHRI SATYA NARAIN AGARWAL, THE ASSESSEE FILED CONFIRMATION OF THE CREDITOR, IN WHICH HE HAS CONFIRMED GIVING OF LOAN TO THE ASSESSEE. LATER ON, THE DEPOSITOR WAS ALSO PRODUCED BEFORE THE AO FOR EXAMINATION ON OATH AND IN STATEM ENT, HE HAS CONFIRMED GIVING OF LOAN TO THE ASSESSEE. HE HAS EXPLAINED IN STATEM ENT ABOUT THE SOURCE OF HIS INCOME AND HOUSEHOLD EXPENDITURE ETC. HE HAS ALSO E XPLAINED IN STATEMENT THAT AMOUNT WAS GIVEN TO THE ASSESSEE THROUGH SMT. USHA AGARWAL. HE HAS CONFIRMED GIVING OF LOAN TO THE ASSESSEE, BUT COULD NOT GIVE THE CORRECT MONTH OF GIVING OF THE LOAN BECAUSE IN THE STATEMENT HE HAS STATED THAT LO AN WAS GIVEN IN AUGUST, BUT ACCORDING TO THE ASSESSEE THE LOAN AMOUNT WAS DEPOS ITED IN THE BANK IN JUNE/JULY. ON THE BASIS OF THE CONTRADICTION IN THE STATEMENT OF THE CREDITOR, THE TRIBUNAL CONFIRMED THE ADDITION. THE ADDITION WAS ALSO CONFI RMED BECAUSE CORROBORATIVE EVIDENCE OF ONKAR NATH AGARWAL, ACCOUNTANT AND DILI P KUMAR WAS NOT FILED. BUT THE EVIDENCES ON RECORD CLEARLY SUGGEST THAT THE EX PLANATION OF THE ASSESSEE WAS BONA FIDE AND WAS NOT FOUND TO BE BOGUS OR FALSE. THE CREDIT IN QUESTION WAS DISCLOSED IN THE BOOKS OF ACCOUNT AND WAS ALSO EXPL AINED BEFORE THE AO AT ITA NO. 78/AGRA/2011 6 ASSESSMENT AS WELL AS PENALTY STAGE. AS REGARDS THE INTEREST ON FDR, THE DETAILS FURNISHED IN THE PAPER BOOK SHOW THAT THOSE RECURRI NG DEPOSITS WERE IN THE NAME OF MINOR CHILDREN. THE DEPOSITS WERE EN-CASHED AND CON VERTED INTO FDRS. IT WOULD, THEREFORE, SHOW THAT THE DEPOSITS IN FDRS WERE MADE IN EARLIER YEARS AND ACCORDING TO THE EXPLANATION OF THE ASSESSEE, THE MINORS BECA ME MAJOR IN THE ASSESSMENT YEAR UNDER APPEAL. HOWEVER, FOR THE SAME, NO EVIDENCE CO ULD BE FURNISHED BEFORE THE AUTHORITIES BELOW. THE ASSESSEE ALSO EXPLAINED BEFO RE THE LD. CIT(A) THAT THE ASSESSEE WAS INFORMED AT THE TIME OF FILING THE BLO CK RETURN AS A RESULT OF SEARCH OPERATION, CERTAIN PRESUMPTIONS WERE AVAILABLE TO T HE AUTHORITIES AND ACCORDINGLY, THE ASSESSEE WAS ADVISED TO ADMIT INTEREST INCOME O N SUCH FDR AS UNDISCLOSED INCOME. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMI TTED THAT IN THIS CASE, THE ASSESSEE PREFERRED PETITION BEFORE THE HIGH COURT W HERE SEARCH PROCEEDINGS WERE HELD TO BE INVALID. CONSIDERING THE FACTS AND CIRCU MSTANCES, NOTED ABOVE, WE FIND THAT THOUGH ASSESSEE MADE A WRONG CLAIM BUT SAME CO ULD NOT BE TREATED AT PAR WITH CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME, WHICH MAY CALL FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE IT ACT. WE RELY UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SHAHABAD CO-OP. SUGAR MILL, 322 ITR 73 (P&H). 6. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE EXPLANATION OF THE ASSESSEE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS OFFERED EXPLANATION BEFORE THE ITA NO. 78/AGRA/2011 7 AUTHORITIES BELOW AND THE EXPLANATION OF THE ASSESS EE WAS NOT FOUND TO BE FALSE. EXPLANATION OF THE ASSESSEE APPEARS TO BE BONA FIDE . THEREFORE, THE FACTS OF THE CASE WOULD CLEARLY SUGGEST THAT THE ASSESSEE MAY NOT BE GUILTY OF FILING INACCURATE PARTICULARS OR CONCEALMENT OF INCOME. WE ACCORDINGL Y, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY ON THE ABO VE TWO ITEMS SUBJECTED TO APPEAL BEFORE THE TRIBUNAL. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (A.L. GEHLOT) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE ASSISTANT REGISTRAR TRUE COPY