Yogendra Nath Pahwa, V. ITO,

ITA 79/LKW/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 59651 (ITAT-LUCKNOW)
• Duration Of Justice: 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-01-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 14-02-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P K B AJAJ
• Assessee Lawyers: M P MISHRA; SHAILENDRA MISHRA S
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW SMC BENCH, LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER ITA NO. 79/LKW/2011 ASSESSMENT YEAR: 2001 - 02 SHRI. YOGENDRA NATH PAHWA PROP. M/S PAHWA MACHINERY STORES ANAND BAGH, BALRAMPUR V. INCO ME - TAX OFFRICER GOND A PAN: AEGPP3327R (APPELLANT) (RESPONDENT) APPELLANT BY: S/SHRI. M.P. MISHRA AND SHAILENDRA MISHRA, ADVOCATES RESPONDENT BY: SHRI. P. K. BAJAJ, D.R. DATE OF HEARING: 10.01.2012 DATE OF PRONOUNCEMENT: 11.01.2012 O R D E R THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A) CONFIRM ING THE PENALTY OF ` 81,000 UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED IN SHORT THE ACT) LEVIED BY THE ASSESSING OFFICER. 2 . THE FACTS IN BR IEF BORNE OUT FROM THE RECORD ARE THAT THE ASSESSEE IS A WHOLESALE DEALER IN MACHINERY, PUMPING SETS AND TRACTOR PARTS. RETURN OF INCOME SHOWING TOTAL INCOME OF ` 1,52,900 WAS FILED ON 31.10.2001 AND THE ASSESSMENT WAS FRAMED ON A TOTAL INCOME OF ` 3,87,000 . AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE ADDITIONS BY MODIFYING THE SECTIONS AND ALSO ISSUED DIRECTIONS : - 2 - : TO VERIFY THE DEPOSITS TO THE TUNE OF ` 60,000 AND ALLOWED CERTAIN RELIEF IF THE SAME WAS OUT OF EXPLAINED SOURCE OF INCOME. IN THE FIRST APPEAL, THE ASSESSEE WAS ALLOWED RELIEF OF ON L Y ` 4,308. THE ASSESSEE COULD NOT EVEN SUCCEED BEFORE THE ITAT SMC BENCH AND THE ADDITIONS WERE CONFIRMED. HOWEVER, IN THE SECOND APPEAL BEFORE THE TRIBUNAL, THE IS SUE REGARDING ADDITION OF ` 78,834 WAS RESTORED TO THE ASSESSING OFFICER FOR RECONSIDERATION AS TO WHETHER THE PURCHASES HAD BEEN INCLUDED IN SALES/CLOSING STOCK WHILE THE OTHER ADDITIONS WERE SUSTAINED BY THE TRIBUNAL. IN THE SECOND ASSESSMENT MADE IN COM PLIANCE TO THE DIRECTIONS OF THE TRIBUNAL, TOTAL INCOME WAS WORKED OUT AT ` 3,83,090 WHICH WAS THE SAME AS ASSESSED IN THE ORIGINAL ASSESSMENT AFTER GIVING APPEAL EFFECT TO THE ORDER OF THE LD. CIT(A). CONSEQUENT TO THE ORDER OF THE LD. CIT(A), THE ASSESSI NG OFFICER HAS LEVIED PENALTY OF ` 81,000 UNDER SECTION 271(1)(C) OF THE ACT, AGAINST WHICH AN APPEAL WAS FILED BEFORE THE LD. CIT(A) WITH THE SUBMISSIONS THAT THE DEPOSIT OF ` 60,000 WAS EXPLAINED BEFORE THE ASSESSING OFFICER AS THIS AMOUNT WAS CREDITED TO THE SB ACCOUNT VIDE CHEQUE DRAWN ON CURRENT ACCOUNT OF PUNJAB NATIONAL BANK, MAIN BRANCH, BARLAMPUR AND THE OTHER ADDITIONS WERE MADE ON ESTIMATE BASIS OR ON AD - HOC BASIS. THE LD. CIT(A) WAS NOT CONVINCED WITH THE CONTENTIONS OF THE ASSESSEE AND HE CONFIR MED THE PENALTY. 3 . AGGRIEVED, THE ASSESSEE HAS PREFERRED AN APPEAL BEFORE THE TRIBUNAL WITH THE SUBMISSION THAT THOUGH THE LD. CIT(A) HAS RECORDED IN HIS ORDER THAT IN SECOND APPEAL , ADDITION OF ` 74,834 WAS RESTORED TO THE ASSESSING OFFICER FOR RECONSIDERATI ON, BUT WHILE CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT, HE DID NOT GIVE ANY CREDIT OF THE SET - ASIDE ADDITION. IT WAS FURTHER CONTENDED WITH REGARD TO THE ADDITION OF ` 60,000 THAT IT WAS DULY EXPLAINED BEFORE THE ASSESSING OFFICER THAT THI S AMOUNT WAS CREDITED TO THE SB ACCOUNT THROUGH CHEQUE NO.261014 DATED 10.11.2000 DRAWN ON CURRENT ACCOUNT NO.2138 OF PUNJAB NATIONAL BANK, : - 3 - : MAIN BRANCH, BARLAMPUR. SINCE THIS DEPOSIT WAS EXPLAINED TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS AND ALSO IN THE PENALTY PROCEEDINGS, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS CALLED FOR. WITH REGARD TO THE ADDITION OF ` 87,043, IT WAS SUBMITTED THAT ALL THE PAYMENTS TO DIFFERENT PARTIES WERE DULY RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AND THE BOOKS OF ACCOUNT WERE PRODUCED BEFORE THE ASSESSING OFFICER WHO HAS SIGNED ON EACH WRITTEN PAGE OF THE CASH BOOK AND LEDGER. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE HAS CONCEALED ANY INCOME OR FURNISHED INACCURATE PARTICULARS W HICH WARRANTS PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WITH REGARD TO THE ADDITION OF ` 6,000, IT WAS CONTENDED THAT THIS ADDITION WAS MADE ON AD - HOC BASIS OUT OF WAGES AND CARTAGE. THEREFORE, FOR AD - HOC ADDITION, PENALTY IS NOT SUSTAINABLE. 4 . THE LD. D. R., ON THE OTHER HAND, HAS PLACED HEAVY RELIANCE UPON THE ORDER OF THE LD. CIT(A). 5 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE MATERIALS AVAILABLE ON RECORD, I FIND THAT THE PENALTY OF ` 81,000 WAS LEVI ED TOWARDS FOUR ADDITIONS, WHICH ARE AS UNDER: - I ) ` 60,000 ADDITION UNDER SECTION 69C OF THE ACT. II ) ` 87,043 ADDITION UNDER SECTION 69C OF THE ACT. III ) ` 74,834 ADDITION UNDER SECTION 69C OF THE ACT. IV ) ` 6,000 AD - HOC ADDITION 6 . WITH REGARD TO THE ADDITION OF ` 60, 000 UNDER SECTION 69C OF THE ACT, IT HAS BEEN EXPLAINED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WELL AS PENALTY PROCEEDINGS THAT THIS AMOUNT OF ` 60,000 WAS CREDITED TO THE SB ACCOUNT NO. 31498 VIDE CHEQUE NO.261014 DATED 10.11.2000 DRAWN ON CURRENT ACCOUNT NO.2138 OF PUNJAB NATIONAL BANK, MAIN BRANCH, BARLAMPUR. COPIES : - 4 - : OF THE AFORESAID ACCOUNTS WERE ALSO FURNISHED BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS. IN THE LIGHT OF THESE F ACTS, I AM OF THE VIEW THAT THE DEPOSITS IN THIS ACCOUNT WERE DULY EXPLAINED BY THE ASSESSEE. I RESERVE MY VI EWS WITH REGARD TO THE IMPUGNED ADDITION MADE/ SUSTAINED BY THE LOWER AUTHORITIES. SINCE THE ADDITION IS NOT BEFORE ME, I DO NOT WISH TO MAKE ANY COMMENT. BUT SO FAR AS THE PENALTY IS CONCERNED, I AM OF THE VIEW THAT ONCE THE DEPOSITS ARE DULY EXPLAINED, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT CALLED FOR. ACCORDINGLY, PENALTY RELEVANT TO THIS ADDITION IS DELETED. 7 . WITH REGARD TO THE ADDIT ION OF ` 87,043, IT IS NOTICED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS PLACED THE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFICER IN WHICH ALL PAYMENTS MADE TO DIFFERENT PARTIES TOTALING TO ` 87,043 WAS MENTIONED AND THE BOOKS OF ACCO UNT WERE DULY VERIFIED BY THE ASSESSING OFFICER. THOUGH THERE MAY BE SOME DISCREPANCIES FOR WHICH ADDITIONS WERE MADE BUT ONCE ALL THE PAYMENTS WERE DULY RECORDED IN THE BOOKS OF ACCOUNT, IT CANNOT BE SAID THAT THE ASSESSEE HAS EITHER CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS FOR WHICH PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE. ACCORDINGLY, I SET ASIDE THE ORDER OF THE LD. CIT(A) IN THIS REGARD AND DELETE THE PENALTY WITH RESPECT TO THIS ADDITION. 8 . WITH REGARD TO ADDITION OF ` 74 ,835, IT IS OBSER VED BY THE LD. CIT(A) THAT IN SECOND APPEAL BEFORE THE TRIBUNAL, THE TRIBUNAL HAS SET ASIDE THE ADDITION AND RESTORED THE ISSUE TO THE FILE OF THE ASSESSING OFFICER FOR RECONSIDERATION . WHILE THE ADDITION ITSEL F I S SUBJUDICE BEFORE THE AS SESSING OFFICER, HOW PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED IN RESPECT TO THIS ADDITION. I, THEREFORE, FIND NO MERIT IN LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WITH RESPECT TO THIS ADDITION. ACCORDINGLY, I SET ASIDE THE ORDER OF THE LD. CIT(A) IN THIS REGARD AND DELETE THE PENALTY. : - 5 - : 9 . SO FAR AS ADDITION OF ` 6,000 IS CONCERNED, I FIND THAT THIS IS AN AD - HOC DISALLOWANCE AND FOR AD - HOC DISALLOWANCE, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. I, THEREFORE, DELETE T HE SAME. 10 . SINCE NONE OF THE ADDITIONS SUSTAINED IN THE ASSESSMENT PROCEEDINGS WARRANT S ANY PENALTY, I SET ASIDE THE ORDER OF THE LD. CIT(A) AND DELETE THE ENTIRE PENALTY OF ` 81,000. 11 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.1.2012. SD/ - [ S UNIL KUMAR Y ADAV ] JUDICIAL MEMBER DATED: 11.1.2012 JJ: 1001 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR