Mahaluxmi Silk Store, Ludhiana V. ACIT, Ludhiana

ITA 794/CHANDI/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2516 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 21-12-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S R CHHABRA
• Section: 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. RANO JAIN, ACCOUNTANT MEMBER ITA NO.794/CHD/2015 (ASSESSMENT YEAR : 2007-08) MAHALUXMI SILK STORE, VS. THE A.C.I.T., B-19/534/22, CIRCLE 3(1), CEMETRY ROAD, LUDHIANA. CIVIL LINES, LUDHIANA. PAN: AAIFM5167A (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R. CHHABRA RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 28.12.2015 DATE OF PRONOUNCEMENT : 06.01.2016 O R D E R PER RANO JAIN, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INC OME TAX (APPEALS)-1, LUDHIANA DATED 20.8.2015 FOR ASSES SMENT YEAR 2007-08. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN DECLARING INCOME OF RS.16,57 ,460/- FOR THE YEAR UNDER CONSIDERATION. DURING THE YEAR, THE ASSESSEE HAD RAISED LOAN OF RS.3,50,000/- FROM ONE 2 SMT.CHAMAN LATA. TO SUBSTANTIATE THE LOAN, THE ASS ESSEE FILED COPY OF BANK ACCOUNT OF THE CREDITOR, SOURCE OF DEPOSIT IN THE BANK ACCOUNT BEFORE GIVING LOAN TO T HE ASSESSEE, PAN CARD, ACKNOWLEDGEMENT OF RETURN, COMPUTATION OF INCOME, CONFIRMATION AND BALANCE SHE ET. SUMMONS UNDER SECTION 131 OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) WERE ISSUED BUT CAME BACK UNSE RVED DUE TO NON-AVAILABILITY OF THE CREDITOR AS SHE HAD LEFT THE HOUSE WITHOUT TELLING ANYBODY AND WAS NOT TRACEABLE DUE TO HER MENTAL DISTURBANCE. SINCE THE ASSESSMENT WA S GETTING TIME BARRED, THE ASSESSEE AGREED TO THE ADD ITION OF RS.3,50,000/- SUBJECT TO NO PENALTY BEFORE THE ASSE SSING OFFICER. THE ASSESSEE PREFERRED NO APPEAL AGAINST THE QUANTUM OF ADDITION. 3. DURING THE PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THAT IT HAD FILED EVERY EVIDENCE IN THE F ORM OF CONFIRMATION, ITR, BANK ACCOUNT, BALANCE SHEET, ETC . TO PROVE THE LOAN RECEIVED FROM SMT.CHAMAN LATA. THE CREDITOR COULD NOT BE PRODUCED DUE TO PRACTICAL REA SONS AS SHE WAS UNTRACEABLE TO HER OWN FAMILY MEMBERS. THE ASSESSEE HAD PROVIDED THE LAST KNOWN ADDRESS OF SMT.CHAMAN LATA. FURTHER AN AFFIDAVIT OF SMT.JINDE R RANI, MOTHER OF SMT.CHAMAN LATA WAS FILED TO THE EF FECT THAT THE SAID SUM OF MONEY WAS GIVEN TO ASSESSEE BY SMT.CHAMAN LATA, WHO WAS UNTRACEABLE DUE TO HER MEN TAL HEALTH. A COPY OF ADVERTISEMENT PUBLISHED IN THE NEWSPAPER WAS ALSO FILED IN THIS REGARD. THE ASSES SING 3 OFFICER AFTER CONSIDERING THE SAME, IMPOSED A PENAL TY AMOUNTING TO RS.1,17,810/- UNDER SECTION 271(1)(C) OF THE ACT FOR FURNISHING OF INACCURATE PARTICULARS. 4. BEFORE THE LEARNED CIT (APPEALS), THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSIN G OFFICER AND DURING THE PENALTY PROCEEDINGS, HOWEVER , LEARNED CIT (APPEALS) CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 5. AGGRIEVED BY THIS ORDER, THE ASSESSEE HAS COME IN APPEAL BEFORE US. THE LEARNED COUNSEL FOR THE A SSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES AND STRESSED THAT THE ASSESSEE HAS DISC HARGED ITS ONUS BY PRODUCING AMPLE DOCUMENTARY EVIDENCES W ITH REGARD TO THE LOANS. THE PERSONAL ATTENDANCE OF TH E CREDITOR COULD NOT BE MATERIALIZED DUE TO CERTAIN PRACTICAL PROBLEMS, IN WHICH REGARD, COPY OF AFFIDAVIT OF MOT HER OF THE CREDITOR HAS BEEN FILED. THE ADDITION WAS AGRE ED TO BE MADE BEFORE THE ASSESSING OFFICER IN ORDER TO AVOID THE LITIGATION, WHICH DOES NOT MEAN THAT THE CREDITOR I S NOT GENUINE. THE ASSESSING OFFICER HAS NOWHERE BEEN AB LE TO DISPROVE THE EVIDENCES FILED BY THE ASSESSEE. IN S UCH A SCENARIO, IT WAS PRAYED THAT THE PENALTY LEVIED BY THE ASSESSING OFFICER MAY BE DELETED. 6. THE LEARNED D.R. RELYING ON THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF MAK DATA (P) LTD. VS. CIT (2013) 358 ITR 593(SC), SUBMITTED THAT THIS IS A CASE 4 WHERE AFTER BEING CAUGHT BY THE DEPARTMENT THE ASSE SSEE HAD SURRENDERED THE INCOME. THEREFORE, THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE. 7. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE FINDINGS OF THE AUTHO RITIES BELOW AND CONSIDERED THE MATERIAL AVAILABLE ON RECO RD. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSES SEE HAD SUBMITTED AMPLE EVIDENCES TO PROVE THE CREDIT RECEI VED FROM SMT.CHAMAN LATA. COPY OF CONFIRMATION, ITR, B ANK ACCOUNT, BALANCE SHEET, CERTIFICATE OF THE BROKER, ETC. ALL SHOW THAT THE CREDITOR ACTUALLY EXISTED. THE ONLY REASON DUE TO WHICH THE ASSESSEE AGREED WITH THE ASSESSING OFFICER TO MAKE ADDITION WAS THAT IT WAS NOT ABLE T O PRODUCE THE CREDITOR IN PERSON. IT HAD EXPLAINED T HE REASON FOR NON-PRODUCTION OF THE CREDITOR DURING TH E PENALTY PROCEEDINGS AS WELL AS BEFORE THE LEARNED C IT (APPEALS). THE COPY OF AFFIDAVIT OF SMT.JINDER RAN I, MOTHER OF SMT.CHAMAN LATA AND COPY OF ADVERTISEMENT PUBLISHED IN THE NEWSPAPER, WHICH ARE ALL PART OF P APER BOOK FILED BEFORE US, ALL GO TO PROVE THE FACTS REG ARDING THE MENTAL CONDITION OF SMT.CHAMAN LATA, AS CORREC T. THE ASSESSING OFFICER DURING THE PENALTY PROCEEDING S AS WELL THE LEARNED CIT (APPEALS) KEPT ON ENFORCING TH E PERSONAL ATTENDANCE OF THE CREDITOR WITHOUT COMMENT ING ON THE TRUTHFULNESS OF THE EXPLANATION AND EVIDENCE S FILED BY THE ASSESSEE. IN THIS PECULIAR SET OF CIRCUMSTA NCES, WHAT ELSE CAN AN ASSESSEE BE EXPECTED TO DO. IT HA S MADE 5 ALL THE EFFORTS TO PROVE THE GENUINENESS OF THE TRA NSACTION AND ALSO TO PROVE THE FACTS OF THE CASE. THE ASSES SING OFFICER AS WELL AS THE LEARNED CIT (APPEALS) WITHOU T POINTING OUT ANY FALLACY OR DEFECT IN SUCH EXPLANAT ION AND EVIDENCES FILED BY THE ASSESSEE JUST CONFIRMED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE RELIANCE P LACED BY THE LEARNED D.R. ON THE CASE OF MAK DATA (P) LTD. (SUPRA) IS MISPLACED AND DISTINGUISHABLE ON FACTS AS IN THA T CASE ON BEING COUNTERED BY THE DEPARTMENT, THE ASSESSEE SURRENDERED THE UNDISCLOSED INCOME. IN THE PRESENT CASE, AFTER GIVING PROPER EXPLANATION AND EVIDENCES WITH REGARD TO THE CREDIT ENTRY, ONLY DUE TO INABILITY IN PRODU CING THE CREDITOR, THE ASSESSEE JUST AGREED TO THE ADDITION. 8. IN VIEW OF THE ABOVE, WE SET ASIDE THE ORDER OF THE LEARNED CIT (APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 6 TH DAY OF JANUARY, 2016. SD/- SD/- (BHAVNESH SAINI) (RANO JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6 TH JANUARY, 2016 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/THE CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH