ZUBERI ENGINEERING CO., Jaipur V. DCIT, Jaipur

ITA 826/JPR/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5035 (ITAT-JAIPUR)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2005-2006
• Appeal Filed On: 01-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DHK
• Keywords: Unexplained cash credit; Unexplained investment; Unexplained expenditure; Opportunity of being heard; Period of limitation
• Section: 69C; 142(1); 133(6); 246; 69; 263; 144; 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH HKKXPAN] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF;D LN L; DS LE{K BEFORE: SHRI BHAGCHAND, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NO. 826/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2005-06 M/S ZUBERI ENGINEERING CO., 2835, JOGIYON KA TIBA PHUTA KHURRA, JAIPUR. CUKE VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAFZ 2103 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ANIL SHARMA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 09/08/2016 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 28/09/2016 VKNS'K@ ORDER PER: LALIET KUMAR, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 01/10/2015 PASSED BY THE LD. CIT(A)-I, JAIPUR FOR T HE A.Y. 2005-06, CONFIRMING THE PENALTY OF RS. 9,61,000/- IMPOSED U/ S 271(1)(C) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) ON ACCOUNT OF ADDITION OF RS. 9,61,000/- MADE U/S 68 OF THE ACT. ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 2 2. THE BRIEF FACTS OF THE PRESENT CASE ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 25/5/2006 DECLARING TOTAL INCOM E OF RS. 4,97,868/-. THE NOTICE U/S 142(1) OF THE ACT ALONGWITH QUESTIONNA IRE WERE ISSUED TO THE ASSESSEE AND THE ASSESSEE WAS GIVEN OPPORTUNITY TO FILE THE RESPONSE. HOWEVER, AFTER CONSIDERING THE REPLY ETC. AND THE MATERIAL ON RECORD, THE ASSESSMENT ORDER DATED 28/12/2007 WAS PA SSED WHEREBY THE FOLLOWING FOUR ADDITIONS WERE MADE: (I) UNSECURED LOAN U/S 68 OF THE ACT FOR RS. 14,61 ,000/-. (II) ADDITION U/S 69 OF THE ACT AS EXPLAINED IN FI XED ASSET OF RS. 29,04,656/- (III) TRADING ADDITION OF RS. 43,99,937/- AND (IV) DISALLOWANCE OUT OF P&L ACCOUNT EXPENSES OF RS. 10.00 LACS. THUS, A TOTAL ADDITION OF RS. 97,65,593/- WERE MADE I N THE ORIGINAL RETURN OF INCOME THEREBY THE TOTAL INCOME OF THE AS SESSEE WAS ASSESSED AT RS. 1,02,63,461/-. 3. AGAINST THE SAID ASSESSMENT ORDER DATED 28/12/20 07, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE LD. CIT(A) O N THE FOLLOWING GROUNDS:- 1 THAT THE LD. ASSESSING OFFICER ERRED IN MAKING A N ADDITION OF RS. 14,61,000/- BY TREATING THE SAME AS UN EXPLAINED CASH CREDIT U/S 68 OF THE IT ACT, 1961. ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 3 2. THAT THE LD. ASSESSING OFFICER HAS ERRED IN MAKIN G AN ADDITION OF RS. 29,04,656/- INCURRED ON PURCHASE OF HYDRA CRANES, BY TREATING THE SAME AS UNEXPLAINED EXPENDITURE U/S 69 OF THE IT ACT, 1961. 3. THAT THE LD. ASSESSING OFFICER HAS ERRED IN MAKIN G A TRADING ADDITION OF RS. 43,99,937/- BY APPLYING A G P RATE OF 11%. 4. THAT THE LD ASSESSING OFFICER HAS ERRED IN MAKING A LUMP SUM ADDITION OF RS. 10,00,000/- ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE DEBITED IN THE PROFIT AN D LOSS ACCOUNT. 5. THAT THE LD ASSESSING OFFICER HAS ERRED IN PASSIN G THE ORDER U/S 144 OF THE IT ACT 1961 WITHOUT CONSIDERING THE FACTS AND DETAILS OF THE CASE. 6. THAT THE ADDITIONS MADE BY THE LD ASSESSING OFFIC ER ARE BAD IN LAW AS WELL AS ON FACTS, WITHOUT PREJUDIC E TO ABOVE THE ADDITIONS MADE BY THE ASSESSING OFFICE R ARE VERY MUCH EXCESSIVE. THE LD. CIT (A) AFTER CONSIDERING THE MATERIAL ON RE CORD HAS PARTLY ALLOWED THE APPEAL OF THE ASSESSEE TO THE FOLLOWING E FFECT: (I) OUT OF ADDITION OF RS. 14,61,000/- MADE BY THE ASSE SSING OFFICER U/S 68, THE LD. CIT(A) HAS ONLY SUSTAINED T HE ADDITION OF RS. 9,61,000/- AND HAS THEREBY GRANTED RELIEF FOR REMAINING AMOUNT OF RS 5,00,000/. ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 4 (II) SIMILARLY, THE LD. CIT(A) HAS DELETED THE ENTIRE AD DITION OF RS. 29,04,656/- MADE U/S 69C (AS EXPENDITURE OF FIX ED ASSETS AND HAS ALSO DELETED THE ENTIRE TRADING ADD ITION OF RS. 43,99,937/-. (III) THE LD. CIT(A) HAS ALSO DELETED THE LUMP SUM ADDITION OF RS. 10.00 LACS AND ONLY SUSTAINED THE LUMP SUM ADDI TION OF RS. 5.00 LACS ON ACCOUNT OF DISALLOWANCE OF EXPENDITURE DEBITED IN P&L ACCOUNT. THUS, AGAINST THE TOTAL ADDITION OF RS. 97,65,593/-, THE ADDITION OF RS. 9,61,000/- AND RS. 5.00 LACS WERE ON LY SUSTAINED AND THE REMAINING ADDITION MADE BY THE ASSESSING OFFICER WERE DELETED. 5. FEELING AGGRIEVED BY THE ORDER PASSED BY THE LD. CIT(A), THE REVENUE HAS FILED THE APPEAL BEFORE THE TRIBUNAL FOR THE FOLLOWING GROUNDS:- 1. THE CIT(A), ALTHOUGH UPHELD THE APPLICABILITY OF PROVISION OF SECTION 144 VIDE LAST GROUND OF APPEAL (PAGE NO. 4) , YET ADMITTED FOLLOWING FACTS/DOCUMENTS ARBITRARILY AND W ITHOUT AFFORDING AN OPPORTUNITY TO THE A.O. TO EXAMINE THE M, THUS DELETION OF VARIOUS ADDITIONS BASING ON SUCH MATERI AL IS BAD ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 5 IN LAW, NOT ONLY ON THE GROUND OF PRINCIPLE OF NATUR AL JUSTICE BUT ALSO ON ACCOUNT OF VIOLATION OF PROVISION OF RU LE 46A. (I) CLAIM OF MAINTENANCE OF BOOKS OF ACCOUNTS (IN G ROUND NO. 3- PAGE NO. 3). WHEREAS NO SUCH BOOKS OF ACCOUNTS WERE PRODUCED BEFORE THE A.O. IN SPITE OF AMPLE OPPORTUNITIES. IN FACT THERE IS NO BOOKS OF ACCOUNTS. (II) GENUINENESS OF CASH CREDIT OF RS. 5,00,000/- O UT OF RS. 14,61,000/- WITHOUT CONFRONTING THE A.O. (III) GENUINENESS OF EXPENDITURE OF RS. 29,04,656/- ONLY ON THE BASIS OF CERTAIN STATEMENT GIVEN BY THE ASSESSEE. 2. THE CIT(A), SINCE THE ASSESSMENT BEING FRAMED U/S 144, OUGHT TO HAVE CONSIDERED DEFIANT ATTITUDE OF THE AS SESSEE BEFORE THE A.O. IN NOT COOPERATING AND FURNISHING T HE INFORMATION BEFORE THE A.O.. ADMISSION IN THIS MANN ER MAY MAKE THE INSTITUTION OF THE A.O. INEFFECTIVE IN SO FAR AS HIS POWER TO ENQUIRY AND INVESTIGATION IS CONCERNED. 3. IN THE ABOVE BANK GROUND, THE FOLLOWING GROUNDS R ELATING TO SPECIFIC DELETION ARE TAKEN:- A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(APPEALS)-I, JAIPUR HAS ERRED IN REDUCING THE ADDITION OF RS. 14,61,000/- TO RS. 9,61,000/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE IT ACT, 1961. B. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A)-I, JAIPUR HAS ERRED IN DELETI NG THE ADDITION OF RS. 29,04,656/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED EXPENDITURE U/S 69 OF THE IT ACT, 1961. ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 6 C. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A)-I, JAIPUR HAS ERRED IN DELETI NG THE ENTIRE TRADING ADDITION OF RS. 43,99,937/- MADE BY THE A.O. BY APPLYING GP RATE OF 11% INSTEAD OF 9% DECLARED BY THE ASSESSEE. D. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A)-I, JAIPUR HAS ERRED IN REDUCIN G THE ADDITION OF RS. 10,00,000/- TO RS. 5,00,000/- MADE BY THE A.O. BY DISALLOWANCE OF EXPENDITURE DEBITED IN P&L ACCOUNT. 6. THE TRIBUNAL VIDE A COMPOSITE ORDER DATED 28/8/200 9 HAD PASSED THE FOLLOWING ORDER: AFTER HAVING GONE THROUGH THE ORDERS OF THE LOWER A UTHORITIES, WE FIND SUBSTANCE IN THE ABOVE CONTENTION OF THE LD. D/R. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT R EMANDING THE MATTER TO THE FILE OF THE A.O. WILL MEET THE END S OF JUSTICE. WE THUS WHILE SETTING ASIDE FIRST APPELLATE ORDER IN QUESTION REMAND THE MATTER TO THE FILE OF THE A.O. TOP DECID E THE ISSUES RAISED IN THE GROUNDS OF APPEALS AFRESH AFTER VERIF YING THE CORRECTNESS OF THE DOCUMENTS FILED BEFORE THE LD. C IT(A) ON BEHALF OF THE ASSESSEE AND AFTER AFFORDING ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE ON THOSE ISSUES. THE APPEALS ARE THUS ALLOWED FOR STATISTICAL PURPOSES . THE ASSESSING OFFICER HAS COMPLETED THE REMAND PROCE EDINGS PURSUANT TO THE DIRECTION OF THE HONBLE TRIBUNAL ON 01/10/20 10. IN RESPECT OF ISSUE NO. 1 I.E. DISALLOWANCE OF RS. 14,61,000/-, WH ICH WAS SET ASIDE BY ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 7 THE TRIBUNAL, THE ASSESSING OFFICER HAS ONLY UPHELD THE AMOUNT OF RS. 9,61,000/- ONLY. THE ORDER OF THE ASSESSING OFFICER IN THIS REGARD IS AS UNDER:- THE ASSESSEE HAS SHOWN UNSECURED LOAN OF RS. 14,61,0 00/-, RS.5 LAC FROM M/S BAKLIWAL & BROTHERS AND RS.9,61,00 0/- FROM M/S PROPERTY PVT. LTD. THE ASSESSEE WAS ASKED TO FIL E THE CONFIRMATION DURING THE COURSE OF ORIGINAL ASSESSME NT PROCEEDINGS BUT NO CONFIRMATION WAS FILED AND THEREF ORE THE SAME WERE CONSIDERED AS UNEXPLAINED CASH CREDITS AND ADDITION OF RS.14,61,000/- WAS MADE. AS PER THE ORDER OF ID.CIT(A), THE ASSESSEE HAS FIL ED CONFIRMATION FROM M/S BAKLIWAL AND BROTHERS WHO HAS ADMITTED THAT RS.5 LACS WAS GIVEN BY CHEQUE DATED 20 -07- 2004 TO THE ASSESSEE. COPY OF ACCOUNT OF MR. BAKLIWA L IN THE BOOKS OF ASSESSEE WAS ALSO GIVEN. HOWEVER, NO CONFIR MATION WAS FILED IN RESPECT OF OTHER CREDITOR M/S PROPERTY PVT. LTD. HENCE, ONLY 5 LACS IS CONSIDERED BY ID.CIT(A) AS EXP LAINED AND BALANCE AMOUNT OF RS.9,61,000/- APPEARING IN TH E NAME OF M/S PROPERTY PVT.LTD REMAINS UNEXPLAINED. HENCE, THE ADDITION OF RS.14,61,000/- MADE U/S 68 IS REDUCED T O RS.9,61,000/- BY ID.CIT(A). THE ASSESSEE SUBMITTED COPY OF CONFIRMATION OF M/S B AKLIWAL & BROTHERS PRODUCED BEFORE THE CIT(APPEAL). ON PERUS AL OF THE SAME IT WAS NOTICED THAT THE CONFIRMATION HAS BE EN SIGNED BY SIGNATORY OF M/S ANAMIKA CONDUCTORS LTD. WHEREAS ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 8 THE ASSESSEE HAS SHOWN LOAN FROM M/S BAKLIWAL & BROTH ERS. IN THIS REGARD, IT WAS SUBMITTED BY THE ASSESSEE THA T THE LOAN WAS GIVEN BY M/S ANAMIKA CONDUCTORS LTD BUT DUE TO T HE MISTAKE OF ACCOUNTANT, IT WAS SHOWN IN THE NAME OF M /S BAKLIWAL & BROTHERS. TO VERIFY THE GENUINENESS OF THE CONFIRMATION PRODUCED BEFORE CIT(APPEAL) AND TO VERI FY THE CORRECTNESS OF THE SUBMISSION OF THE ASSESSEE, INFO RMATION WAS CALLED U/S 133(6) FROM CASH CREDITOR. M/S ANAMIK A CONDUCTORS LTD. SUBMITTED CONFIRMATION VIDE LETTER DATED 6- 09-2010. IT SUBMITTED COPY OF ITS INCOME-TAX RETURN FOR RELEVANT ASSESSMENT YEAR AND ALSO FILED COPY OF BAN K ACCOUNT SHOWING PAYMENT OF RS.5 LAC TO THE ASSESSEE ON 21-07 -2004 VIDE CHEQUE NO. 372252. SINCE, THE AMOUNT OF RS. 9,61,000/- SHOWN IN THE NAME OF M/S PROPERTY PVT. LTD. REMAINS UNEXPLAINED, ADDITION OF RS. 9,61,000/- IS MADE U/S 68 OF IT ACT. 1961. HOWEVER, FOR THE OTHER AMOUNTS, THE ASSESSING OFFICE R HAS AGREED FOR DELETION OF RS. 29,04,656/- AND HAS FURTHER MADE AN ADDITION OF RS. 8,00,000/- ON ACCOUNT OF TRADING ADDITION OF RS. 43 ,99,937/- AND HAS FURTHER SUSTAINED THE AMOUNT OF RS. 5.00 LACS ON AC COUNT OF LUMP SUM DISALLOWANCE OF EXPENDITURE DEBITED IN P&L ACCOUNT. 7. THE ASSESSING OFFICER HAD ALSO ISSUED PENALTY PRO CEEDINGS AGAINST THE ASSESSEE BY ISSUING SHOW CAUSE NOTICE ON 31/3/20 11. THE ASSESSEE ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 9 FILED WRITTEN SUBMISSIONS ON 24/2/2011, THE ASSESSIN G OFFICER WAS NOT CONVINCED BY THE EXPLANATION GIVEN BY THE ASSESSEE AND HAS CONFIRMED THE PENALTY OF RS. 8,27,357/- AND THE CALCULATION M ADE BY THE ASSESSING OFFICER WAS AS UNDER:- MINIMUM PENALTY WORKS OUT @ 100% RS. 8,27,357/- (TAX ON RS. 22,61,000/- (9,61,000 + 8,00,000 + 5,00 ,000) @ 35% PLUS SURCHARGE & E.C.) MAXIMUM PENALTY WORKS OUT @ 300% RS. 24,82,071/- HENCE, PENALTY OF RS. 8,27,357/- @ 100% IS IMPOSED U/S 271(1)(C) THIS PENALTY ORDER IS PASSED WITH THE PRIOR APPROVAL OF THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-2, JAIP UR COMMUNICATED VIDE HIS LETTER NO. 174 DATED 28/04/2011. 8. FEELING AGGRIEVED BY THE ORDER, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAD DELETED THE PENALTY IMPOSED ON ACCOUNT OF TRADING ADDITION OF RS. 8.00 LACS AND DI SALLOWANCES OF EXPENSES OF RS. 5.00 LACS. HOWEVER, HAS SUSTAINED TH E ADDITION OF PENALTY OF RS. 9,61,000/- U/S 68 OF THE ACT. 9. AGAINST THE SAID ORDER PASSED BY THE LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUB MITTED THAT THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ORDER OF LD. CIT(A) DATED 23/09/2008, THEREFORE, THE ADDITION OF RS. 9,61,000 /- SUSTAINED BY THE ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 10 LD. CIT(A) REACHED TO THE FINALITY. IT WAS FURTHER C ONTENDED THAT THE TRIBUNAL WHILE REMANDING THE MATTER ON 28/8/2009 HAS NOT DISTURBED THE ADDITION SUSTAINED BY THE LD. CIT(A) AND HAS ONLY D IRECTED TO DECIDE THE ISSUE RAISED BY THE DEPARTMENT IN RESPECT OF THE AD DITION DELETED BY THE LD. CIT(A). FURTHER IT WAS SUBMITTED THAT AS PER PROV ISO TO SECTION 275(1)(A) OF THE ACT, THE PENALTY ORDER IS LIABLE T O THE PASSED WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH TH E ORDER OF THE LD. CIT(A) HAS BEEN RECEIVED BY THE CHIEF COMMISSIONER O F INCOME TAX. ON THE BASIS OF THE ABOVE, THE SAID LEGAL CLAUSE, IT WA S CONTENDED THAT THE ORDER DATED 23/09/2008 WAS RECEIVED IN THE OFFICE OF THE COMMISSIONER ON 31/3/2010 AND THEREFORE, THE PENALTY ORDER PASSE D BY THE ASSESSING OFFICER ON 29/7/2011 WAS CLEARLY BARRED BY LIMITATIO N. LASTLY, THE AR OF THE ASSESSEE RELIED ON THE DECISION OF THIS TRIBUNAL IN THE CASE OF GRASS FILED FARMS AND RESORTS PVT. LTD., ITA NO. 415/JP/2 015 ON THE ISSUE THAT THE ORDER PASSED BY THE ASSESSING OFFICER IS BARRED BY LIMITATION U/S 275 (1)(A) OF THE ACT. ON MERIT, IT WAS SUBMITTED THAT T HE ADDITION OF RS. 9,61,000/- WAS NOT DISPROVED AND HAS SUBMITTED THAT THERE IS DISTINCTION BETWEEN THE FACTS NOT PROVED, FACTS DISPROVED AND FA CTS PROVED. IT WAS SUBMITTED THAT IN QUANTUM PROCEEDINGS, THE AUTHORIT IES HAVE NOT COME TO THE CONCLUSION THAT THE FACT HAS NOT BEEN PROVED AND THEREFORE, THE ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 11 ASSESSEE IS ENTITLED TO THE BENEFIT OF THE EXPLANAT ION TO SECTION 271(1)(C) OF THE ACT. THE LD. AR HAS FURTHER RELIED ON THE DEC ISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS VIDHYAGAUR I NATVER LAL (1999) 238 ITR 91 (GUJ). IT WAS PRAYED THAT THE PENALTY ORDE R MAY KINDLY BE QUASHED. 10. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE ORDER PASSED BY THE AUTHORITIES BELOW AND HAS FURTHER SUBMITTED THAT THE JUDGMENT PASSED BY THIS TRIBUNAL IN THE CASE OF GRASS FILED FARMS AND RESORTS PVT. LTD., (SUPRA), IS NOT APPLICABLE TO THE FACTS AND C IRCUMSTANCES OF THE PRESENT CASE AND HAS FURTHER SUBMITTED THAT THE SAI D JUDGMENT WAS PASSED BY THE TRIBUNAL, IGNORING THE BINDING JUDGMEN T OF THE HONBLE THIRD MEMBER IN THE CASE OF THE SAID ASSESSEE ITSEL F. 11. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. THE GR OUND OF APPEAL FOR THE ASSESSMENT YEAR 2005-06 HAVE BEEN REPRODUCED HE REINABOVE, WHICH WE ARE REPRODUCING THE SAME HEREINBELOW FOR THE PURP OSES OF CLARITY: A. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT(APPEALS)-I, JAIPUR HAS ERRED IN REDU CING THE ADDITION OF RS. 14,61,000/- TO RS. 9,61,000/- MADE BY THE ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 12 A.O. ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 O F THE IT ACT, 1961. THE READING OF THE GROUND ALONGWITH ORDER PASSED BY T HE TRIBUNAL, CLEARLY SUGGEST THAT THE ENTIRE GROUND HAS BEEN SET ASIDE BY THE TRIBUNAL VIDE ITS ORDER DATED 28/8/2009. THE GROUND AS FRAMED BY THE REVENUE BEFORE THIS TRIBUNAL, CLEARLY INDICATE THAT THE ADDI TION OF RS. 14,61,000/- WAS MADE AND OUT OF THE SAID AMOUNT OF RS. 9,61,000/ - WAS CONFIRMED BY THE LD. CIT(A) AND FOR THE REMAINING AMOUNT, THE REVENUE WAS IN APPEAL BUT THE GROUND AS FRAMED BEFORE THE TRIBUNAL AND AS PER THE FACTS, BOTH I.E SUSTAINED ADDITION AND DELETED ADD ITION WERE FORMING PART AND PARCEL OF THE SAME TRANSACTION AND ARE INTERWOV EN AND INTERCONNECTED WITH EACH OTHER. THEREFORE, THE ASSES SING OFFICER IN THE REMAND PROCEEDINGS HAD ADJUDICATE THE ENTIRE AMOUNT OF RS. 14,61,000/- AND HAD AFTER ELABORATE ORDER HAD AGAI N REITERATED THE ADDITION OF RS. 9,61,000/-. THE ASSESSING OFFICER HA S NOT RESTRICTED THE SCOPE OF THE TRIBUNAL ORDER TO THE REMAINING AMOUNT RATHER , HE HAD ELABORATELY DISCUSSED THE GROUND AFRESH AND THEREAF TER HAD COME TO THE CONCLUSION THAT THE AMOUNT OF RS. 9,61,000/- SHOWN I N THE NAME OF M/S PROPERTY PVT. LTD. REMAINED UNEXPLAINED. THE SAID OR DER OF THE ASSESSING OFFICER ADJUDICATING AND REAFFIRMING THE ADDITION O F RS. 9,61,000/-, WAS ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 13 PASSED ON 01/10/2010, THEREFORE, TO SAY THAT THE PE NALTY ORDER WHICH WAS PASSED ON 29/4/2011 WAS BARRED BY LIMITATION U/S 275(1)(A) OF THE ACT, IN OUR VIEW, WAS INCORRECT AS THE REMAND ORDER, WHICH AGAIN REITERATED/REAFFIRMED AND DISCUSSED THE ADDITION OF RS. 9,61,000/- WAS PASSED ON 01/10/2010. THE CONTENTION OF THE LD AR OF THE ASSESSEE THAT THE TRIBUNAL HAS NOT DISTURBED THE ADDITION SUSTAINED BY THE LD. CIT(A), IN OUR VIEW, WAS WHOLLY INCORRECT AND WITHOUT ANY MERIT. THE TRIBUNAL A ND THE AUTHORITIES BELOW WERE CONSCIOUS OF THE FACT THAT THE ADDITION SU STAINED BY THE LD. CIT(A) FOR A SUM OF RS. 9,61,000/- WAS PART AND PARCE L OF THE TOTAL ADDITION OF RS. 14,61,000/- ON ACCOUNT OF UNEXPLAIN ED INVESTMENT AND, THEREFORE, THE PENALTY ORDER IS NOT BARRED BY LIMIT ATION. 12. THE JUDGMENT CITED BY THE LD AR IN THE CASE OF G RASS FILED FARMS AND RESORTS PVT. LTD., (SUPRA), IN WHICH ONE OF US (JM) WAS A MEMBER, IN OUR VIEW, HAS NOT LAID DOWN THE CORRECT LAW AS NEITHER THE ASSESSEE NOR THE REVENUE IN THE SAID MATTER, HAS BROUGHT TO BENC H NOTICE THE BINDING JUDGMENT IN THE CASE OF GRASS FILED FARMS AND RESOR TS PVT. LTD. [2016] 70 TAXMANN.COM 176 (JAIPUR - TRIB.) (TM) OF THE THIRD MEMBER WHERE BY THE THIRD MEMBER HAS ELABORATELY DISCUSSED T HE SCOPE OF ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 14 SECTION 275 AND THE PERIOD OF LIMITATION IN COMPLET ING THE ASSESSMENT PROCEEDINGS. SINCE THE FACTS OF THE PRESENT CASE ARE NOT SIMILAR TO THE FACTS OF GRASS FILED FARMS AND RESORTS PVT. LTD., (SUPRA), THEREFO RE, WE ARE NOT ELABORATELY DISCUSSING THE OTHER ASPECTS OF THE SAI D JUDGMENT, ON THE BASIS OF WHICH GRASS FILED FARMS AND RESORTS PVT. LT D., (SUPRA) IS NOT BINDING AND WAS NOT CORRECT LAW. FOR THE SAKE OF COMP LETENESS, WE WOULD LIKE TO REPRODUCE RELEVANT PARAGRAPH OF THE TH IRD MEMBERS JUDGMENT IN THE CASE OF GRASS FILED FARMS AND RESOR TS PVT. LTD. [2016] 70 TAXMANN.COM 176 (JAIPUR - TRIB.) (TM) WHICH CLEARLY SETTLED THE LAW WITH RESPECT TO APPLICATION OF SECTION 275(1)(A) OF THE ACT, WHICH READS AS UNDER:- 31. IT WAS ALSO CONTENDED BY THE LEARNED COUNSEL FOR T HE ASSESSEE THAT THE LEVY OF PENALTY U/S 271(L)(C) IS BARRED BY LIMI TATION, BECAUSE THE ASSESSING OFFICER HAS INITIATED THE PENALTY PROCEED ING VIDE NOTICE U/S 271(L)(C) DATED 31.03.2008 AND FINALLY, THE PENALTY IS IMPOSED ON 26.03.2010. HE CONTENDED THAT THE PROVISION OF SECT ION 275(L)(A) WOULD NOT BE APPLICABLE BECAUSE IN THE APPEAL FILED BEFOR E THE CIT (A), THE ASSESSEE HAS NOT DISPUTED THE QUANTUM OF ADDITION M ADE BY THE ASSESSING OFFICER AND THEREFORE, THE PERIOD OF LIMITATION WOU LD BE COVERED BY SECTION 275(L)(C), BY WHICH THE PENALTY IS TO BE LE VIED WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOS ITION OF PENALTY IS INITIATED. SECTION 275(1) READS AS UNDER: '275 [(1)] NO ORDER IMPOSING A PENALTY UNDER THIS C HAPTER SHALL BE PASSED - ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 15 [( A ) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTHER ORDER IS THE SUBJECT MATTER OF AN APPEAL TO THE COMMISSIONER (APPEALS) U NDER SECTION 246 [OR SECTION 246A] OR AN APPEAL TO THE APPELLATE TRIBUNA L UNDER SECTION 253, AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALT Y HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE END OF THE MO NTH IN WHICH THE ORDER OF THE COMMISSIONER (APPEALS) OR, AS THE CASE MAY BE, THE APPELLATE TRIBUNAL IS RECEIVED BY THE [PRINCIPAL CH IEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] C OMMISSIONER, WHICHEVER PERIOD EXPIRES LATER: [ PROVIDED THAT IN A CASE WHERE THE RELEVANT ASSESSMENT OR OT HER ORDER IS THE SUBJECT MATTER OF AN APPEAL TO THE COMMISSIONER (APPEALS) UNDER SECTION 246 OR SECTION 246A, AND THE COMMISSIONER ( APPEALS) PASSES THE ORDER ON OR AFTER THE 1ST DAY OF JUNE, 2003 DISPSIN G OF SUCH APPEAL, AN ORDER IMPOSING PENALTY SHALL BE PASSED BEFORE THE E XPIRY OF THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHI CH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPL ETED, OR WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH TH E ORDER OF THE COMMISSIONER (APPEALS) IS RECEIVED BY THE [PRINCIPA L CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER O R] COMMISSIONER, WHICHEVER IS LATER;] ( B ) IN A CASE WHERE THE RELEVANT ASSESSMENT OR OTHER ORDER IS THE SUBJECT MATTER OF REVISION UNDER SECTION 263 [OR SECTION 26 4], AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH SUCH ORDER OF REVISION IS PASSED; ( C ) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINANC IAL YEAR IN WHICH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED, ARE COMPLETED, OR SIX MONTHS FR OM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED, WHICHEVER PERIOD EXPIRES LATER.]' 32. FROM THE ABOVE, IT IS EVIDENT THAT AS PER SECTION 275(1)(A), THE ASSESSING OFFICER CAN LEVY THE PENALTY WITHIN SIX M ONTHS FROM THE END OF THE MONTH IN WHICH ORDER OF THE CIT (A) IS RECEIVED PROVIDED THE ASSESSMENT ORDER WAS SUBJECT MATTER OF THE APPEAL T O THE CIT (A) U/S 246/246A OF THE INCOME-TAX ACT. AS PER PROVISO TO C LAUSE (A) WHICH IS ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 16 INSERTED BY FINANCE ACT, 2003 WITH EFFECT FROM 01.0 6.2003, WHERE THE RELEVANT APPELLATE ORDER IS PASSED BY THE CIT (A) O N OR AFTER THE FIRST DAY OF JUNE 2003, THEN THE ASSESSING OFFICER CAN LEVY T HE PENALTY WITHIN ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH TH E ORDER OF THE CIT (A) IS RECEIVED BY THE COMMISSIONER. ADMITTEDLY, THE ORDER OF THE CIT (A) IS DATED 16.10.2008. THE EXACT DATE OF THE RECEIPT OF THIS ORDER OF THE CIT (A) IN THE OFFICE OF THE CIT IS NOT FURNISHED BEFORE ME , BUT IT HAS TO BE AFTER THE DATE OF THE ORDER OF THE CIT (A). THEREFORE, PR ESUMING THE SERVICE OF THE ORDER WITHIN REASONABLE TIME, THE SAME WOULD BE RECEIVED IN THE OFFICE OF THE CIT (A) DURING THE FINANCIAL YEAR 200 8-09 AND ONE YEAR FROM THE END OF THIS FINANCIAL YEAR ENDED ON 31.03.2010. THE PENALTY ORDER IS DATED 26.03.2010. THUS, THE SAME IS WITHIN THE PERI OD OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OF THE FIRST APPELLATE AUTHORITY WAS RECEIVED IN THE OFFICE OF THE CIT. THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE WAS THAT SUB-SECTI ON (A) TO SECTION 275(1) IS NOT APPLICABLE ON THE GROUND THAT IN THE APPEAL FILED BY THE ASSESSEE, IT HAS NOT DISPUTED THE ADDITION MADE BY THE ASSESSING OFFICER. HOWEVER, THE CONDITION FOR APPLICABILITY OF CLAUSE (A) TO SECTION 275(1) IS FILING OF THE APPEAL AGAINST THE RELEVANT ASSESSMEN T ORDER BEFORE THE CIT (A) U/S 246/246A. WHAT IS IN DISPUTE BEFORE THE CIT (A) IS NOT RELEVANT. ADMITTEDLY, THE ASSESSEE HAD FILED THE APPEAL AGAIN ST THE RELEVANT ASSESSMENT ORDER BEFORE THE CIT (A) U/S 246 OF THE INCOME-TAX ACT. THEREFORE, I REJECT THE CONTENTION OF THE LEARNED C OUNSEL FOR THE ASSESSEE THAT THE CLAUSE (A) TO SECTION 275(1) WAS NOT APPLI CABLE. ( EMPHASIS SUPPLIED BY US) 13. NOW COMING TO THE MERIT OF THE CASE IN THE ASSES SMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THE COPY OF CON FIRMATION OF M/S BAKLIWAL & BROTHERS, WHICH WAS PRODUCED BEFORE THE LD. CIT(A). IT WAS NOTICED THAT THE CONFIRMATION WAS SIGNED BY M/S ANAM IKA CONDUCTORS LTD. WHEREAS THE LOAN WAS SHOWN FROM M/S BAKLIWAL & BR OTHERS. IT WAS SOUGHT TO BE CLARIFIED THAT DUE TO MISTAKE OF THE A CCOUNTANT, THE LOAN ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 17 WAS SHOWN TO BE IN THE ACCOUNT OF M/S BAKLIWAL & BROT HERS INSTEAD OF M/S ANAMIKA CONDUCTORS LTD. AND THE SAID ANAMIKA CO NDUCTORS LTD. HAD ALSO SUBMITTED THE CONFIRMATION LETTER IN THIS REGA RD. HOWEVER, THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS AND THE REMA ND PROCEEDINGS HAVE FAILED TO EXPLAIN THE AMOUNT OF RS. 9,61,000/- FROM M/S PROPERTY PVT. LTD. AND SOME AMOUNT REMAINED UNEXPLAINED. 14. IT WAS THE CASE OF THE ASSESSEE THAT THE AMOUNT OF RS. 9,61,000/- WAS TAKEN THROUGH THE ACCOUNT PAYEE CHEQUE AND THE F ULL PARTICULARS OF THE LENDERS WERE PROVIDED BY THE ASSESSEE. IT WAS SUB MITTED THAT THE ASSESSEE HAS PROVIDED ONE OF ITS EXPLANATION IN RES PECT OF THE LOAN OF RS. 9,61,000/- AND, THEREFORE, THE EXPLANATION GIVEN BY THE ASSESSEE COMES WITHIN THE PURVIEW OF THE LAW AS BONAFIDE EXPLANATION AND THEREFORE, THE PENALTY SHOULD NOT BE IMPOSED FOR FURNISHING THE IN CORRECT PARTICULARS THEREOF. WE HAVE ALSO GONE THROUGH THE PENALTY ORDE R AS WELL AS ORDER OF THE LD. CIT(A). IN THE PENALTY ORDER OF THE ASSESSI NG OFFICER, HAS NOTICED THAT THE ASSESSEE WAS GIVEN FRESH OPPORTUNITY OF BE ING HEARD AND THE ASSESSEE AGAIN FAILED TO EXPLAIN THE SOURCE OF UNEX PLAINED SOURCE OF CASH CREDIT OF RS. 9,61,000/-. THEREAFTER, THE ASSESSING OFFICER HAD ONLY DISCUSSED ABOUT THE CONDUCT OF THE ASSESSEE TO EXPL AIN THE GENUINENESS ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 18 OF THE EXPENSED CLAIMED BY HIM. THE ASSESSING OFFICE R IN THE PENALTY ORDER HAS MENTIONED AS UNDER:- 6. THE ABOVE PROVISIONS OF SECTION 271(L)(C) READ WITH ITS EXPLANATION-1 MAKE IT CLEAR THAT IF THE ASSESSING O FFICER IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICU LARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME OR WHERE IN RESPECT OF ANY FACTS MATERIAL TO THE COMPUT ATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT. SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANAT ION WHICH IS FOUND BY THE ASSESSING OFFICER TO BE FALSE, OR SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTA NTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFID E AND THAT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAVE BEEN DISCLOSED BY HIM, THEN THE CASE OF THE ASSESSEE COMES WITHIN THE PURVI EW OF SECTION 271(1)(C). IN THIS CASE ASSESSEE FAILED TO ESTABLISH THE GENUINENESS OF CASH CREDITS WHICH TANTAMOUNT TO FURNISHING OF WRONG PARTICULARS AND HENCE CONCEALMEN T OF INCOME. FURTHER, ASSESSEE ALSO FAILED TO ESTABLISH TRADING RESULTS SHOWN BY HIM, NOR COULD HE PROVE GENUINENESS OF EXPENSES CLAIMED BY HIM DESPITE REPEATED OPPORTUNIT IES PROVIDED TO HIM. SINCE EXPENSES CLAIMED LEADS TO RE DUCTION OF INCOME AND CONSEQUENT DIMINUTION OF TAX LIABILIT Y. THEREFORE ANY NON GENUINENESS EXPENSES TANTAMOUNT TO FURNISHING OF WRONG PARTICULARS AND CONCEALMENT OF I NCOME. THEREFORE NON GENUINENESS CASH CREDITS AS WELL AS EXP ENSES ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 19 TANTAMOUNT TO FURNISHING OF WRONG PARTICULARS AND CONCEALMENT OF INCOME, THEREBY ATTRACTING PENAL PRO VISIONS BY VIRTUE OF SECTION 271 (1)(C). FURTHER, THE EXPLA NATION PUT FORTH BY THE ASSESSEE IN HIS DEFENSE HAVE NOT BEEN FOUND SATISFACTORY AND IN THIS WAY ALSO THE CASE OF THE AS SESSEE FALLS IN THE CATEGORY OF EXPLANATION-1 TO SECTION 2 71(1)(C). THE SAME WAS REITERATED BY THE LD. CIT(A) WHILE CONFIR MING THE PENALTY ORDER. IN OUR VIEW, THE ASSESSEE HAS GIVEN NAME OF T HE CASH CREDITOR, THE ASSESSEE HAS ALSO PROVIDED DETAILS OF BANK ACCO UNT AND BANK NAME THROUGH WHICH THE AMOUNT WAS RECEIVED BY HIM. THE ASS ESSEE HAD ALSO SUBMITTED THE DETAILS OF AMOUNT, WHICH WAS RECEIVED BY HIM THROUGH BANKING CHANNEL. HOWEVER, WE HAVE FAILED TO FIND THAT NEITHER IN THE ASSESSMENT PROCEEDINGS NOR IN THE REMAND PROCEEDING S, THE ASSESSING OFFICER, HAS CALLED UPON M/S PROPERTY PVT. LTD. BY ISSUING NOTICE U/S 133(6) OF THE ACT TO SEEK CONFIRMATION FROM IT. IT IS A CASE WHERE THE ASSESSING OFFICER OR THE LD. CIT(A) HAS NOT BROUGHT ON RECORD THAT M/S PROPERTY PVT. LTD. WAS A FAKE COMPANY OR ITS ADDRESS WAS NOT REAL AND THE SUMMONS COULD NOT HAVE BEEN SERVED UPON IT. IT IS A CASE WHERE THE ASSESSEE HAS DISCHARGED ITS INITIAL BURDEN OF G IVING THE NAME, ACCOUNT NUMBER AND NAME OF THE BANK OF THE CASH CRE DITORS. HOWEVER, THE ASSESSING OFFICER HAS FAILED TO EXERCISE ITS PO WER BESTOWED ON HIM ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 20 UNDER THE ACT. IN OUR VIEW, THE EXPLANATION GIVEN BY THE ASSESSEE, IN OUR VIEW IS A BONAFIDE EXPLANATION AND THEREFORE, FOR TH E FAILURE OF THE ASSESSING OFFICER TO BRING ON RECORD SUFFICIENT MAT ERIAL TO SUBSTANTIATE THE LEVY OF PENALTY IS NOT CALLED FOR. WE ALSO FAIL TO APPRECIATE THE RATIONAL BEHIND RECORDING THE STATEMENT OF M/S ANAM IKA CONDUCTORS LTD. ONLY WITH A VIEW TO SATISFY THE ASSESSING OFFICER FOR UNEXPLAINED INVESTMENT OF RS. 5.00 LACS. HOWEVER, THERE IS NO SU CH NOTICE WAS ISSUED U/S 133(6) OF THE ACT TO M/S PROPERTY PVT. LTD.. NO EXPLANATION HAS BEEN GIVEN OR FURNISHED FOR NOT ISSUING THE NOTICE TO TH E OTHER PARTY BY THE ASSESSING OFFICER. WE, THEREFORE, DELETE THE PENALT Y SUSTAINED BY THE LD. CIT(A). 15. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28/09/2016. SD/- SD/- HKKXPAN YFYR DQEKJ (BHAGCHAND) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 28 TH SEPTEMBER, 2016 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- M/S ZUBERI ENGINEERING CO., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE DCIT, CIRCLE-2, JAIPUR. ITA 826/JP/2015_ M/S ZUBERI ENGINEERING CO. VS DCIT 21 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 826/JP/2015) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR