R.M. INVESTMENT & TRADING P. LTD, KOLKATTA V. ASST CIT CEN CIR 2, MUMBAI

ITA 826/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4870 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Corroborative evidences; Set aside
• Section: 271(1)(c); 142(1); 271D; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH, JM / I.T.A. NO. 826 /MUM/2017 ( / ASSESSMENT YEARS: 20 09 - 10 ) R. M. INVESTMENT & TRADING PVT. LTD. 9, ROWDON STR EET, UDYANCHAL BLDG, FLAT NO. 20, 5 TH FLOOR, KOLKATA - 700017 . / VS. ACIT CENTRAL CIRCLE - 2 MUMBAI. ./ ./ PAN/GIR NO. : AABCR6026P ( / APPELLANT ) .. ( / RESPONDENT ) / DAT E OF HEARING: 07/ 0 5/ 2019 /DATE OF PRONOUNCEMENT: 22 /05/ 2019 / O R D E R PER AMARJIT SINGH, JM: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 27 . 11 .201 2 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 3 6 , MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2009 - 10 WHERE IN THE PENALTY L EVIED BY THE AO HAS BEEN ORDER TO BE C ONFIRM ED . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) - 47, MUMBAI CIT (APPEALS) ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING UPON THE FOLLOWING GROUND NO. 2 TO 5 OF THE APPEAL PREFERRED BY THE APPELLANT BEFORE HIM : '2. YOUR APPELLANT SUBMITS THAT THE ASSESSING OFFICER WHILE PASSING THE ORDER U/S 271(1)(C) OF THE ACT OUGHT TO HAVE GIVEN FINDING AS TO WHETHER APPELLANT HAD CONCEALED PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME AND IN ABSENCE OF SUCH FINDING THE IMPUGNED ORDER IS BAD, ILLEGAL. VOID IN LAW AND THEREFORE SHOULD BE CANCELLED 3. THE LEARNED ASSESSING OFFICER FAILED TO APPRECIATE THAT THE APPELLANT COMPANY WAS PREVENTED BY REASONABLE AND SUFFICIENT CAUSE FROM THE SUBMISSION OF FURNISHING SUPPORTING EVIDENCES. ASSESSEE BY: SHRI CHETAN A. KARIA REVEN UE BY : SHRI S.K. MITRA ITA NO. 826 /M/2017 A. Y. 2 0 09 - 10 2 4. THE LEARNED ASSESSING OFFICER FAILED TO PROVIDE REASONABLE AND SUFFICIENT OPPORTUNITY TO ENABLE THE APPELLANT COMPANY TO FURNISH REQUISITE DOCUMENTS AND EVIDENCES DURING THE PENALTY PROCEEDINGS. 5. THE LEARNED ASSESSING OFFICER ERRED IN NOT TAKING THE COGNIZANCE OF THE REPLY FAILED TO PENALTY NOTICE VIDE ITS SUBMISSION DATED 19/03/2014.' 2. THE LEARNED CIT (APPEALS) ERRED IN LAW AND ON FACTS IN UPHOLDING THE PENALTY LEVIED OF RS. 5,69,147/ - BY THE ASSES SING OFFICER VIDE ORDER U/S. 271(1)(C) OF THE ACT. 3. THE LEARNED CIT (APPEALS) ERRED IN LAW AND ON FACTS IN HOLDING ALL THE GROUND RAISED BY APPELLANT BEFORE HIM HAVE BECOME INFRUCTUOUS SINCE THE MATTER IS TO BE RE - EXAMINED AFRESH BY THE ASSESSING OFF ICER ON ACCOUNT OF SETTING ASIDE OF ASSESSMENT PROCEEDING. 4. THE LEARNED CIT(APPEALS) ERRED IN LAW AND ON FACTS IN UPHOLDING THAT THE APPELLANT HAS CONCEALED THE PARTICULARS OF INCOME BY REDUCING THE TAXABLE INCOME BY RS.18,41,901/ - . YOUR APPELLANT C RAVES LEAVE TO ADD, TO AMEND. TO ALTER, TO SUBSTITUTE, TO MODIFY AND OR TO WITHDRAW ANY OR ALL OF THE FOREGOING GROUNDS OF APPEAL HEREIN AND TO SUBMIT SUCH STATEMENTS, DOCUMENTS AND PAPERS AS MAY BE CONSIDERED NECESSARY ON OR BEFORE THE TIME OF HEARING RELIEF: YOUR APPELLANT THEREFORE RESPECTFULLY PRAYS TO DIRECT THE ASSESSING OFFICER TO: A) DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.5,69,147/ - . B) GRANT OTHER RELIEF DEEMED NECESSARY. ' 3 . THE BRIEF FACTS OF THE C ASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 19 . 01 .201 1 DECLARING TOTAL INCOM E TO THE TUNE OF RS. NIL . THEREAFTER, THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE HAS SHOWN THE FOLLOWING SUNDRY CREDITORS IN HIS P & L ACCOUNT . THE DETAILS ARE AS UNDER: - SUNDRY CREDITORS A) NEW LIABILITIES INCURRED DURING THE YEAR RS.28,280 B) KASHINATH TAPURIAH RS.13,21,606 C) RAGHAV CORPORATION RS.2,50,000 RS.15,99,886 THE ASSESSEE FAILED TO PROVE THE IDENTITY, CAPACITY AND GENUINENESS OF THE LOAN TRANSACTION. THE SAME WAS ADDED TO THE INCOME OF THE ASSESSEE. THE ITA NO. 826 /M/2017 A. Y. 2 0 09 - 10 3 ASSESSEE HAS ALSO CLAIMED THE EXPENSES OF RENT IN SUM OF RS.2400, SALARY IN SUM OF RS.111600 AND THE MISC. EXPENSES IN SUM OF RS.8015/ - , THE TOTAL IN SUM OF RS.122015/ - . THE ASSESSEE FAILED TO ADDUCE T HE EVIDENCE IN SUPPORT OF THE CLAIM, THEREFORE, THE EXPENSES WERE ALSO DECLINED AND ADDED TO THE INCOME OF THE ASSESSEE. THE TOTAL INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.18,41,901/ - . THEREAFTER, THE PENALTY PROCEEDING U/S 271(1)(C) OF THE AC T WAS INITIATED AND THE AO LEVIED THE PENALTY IN SUM OF RS.5,69,147/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE PENALTY, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4. WE HAVE HEARD THE ARGUMEN T ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. AT THE VERY OUTSET, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE QUANTUM PROCEEDING HAS BEEN SET ASIDE BY THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y.2009 - 10 IN ITA. NOS.731 & 732/M/2013 AND THE ISSUE HAS BEEN REMANDED BEFORE THE AO, THEREFORE, IN THE SAID CIRCUMSTANCES, THE PENALTY IS NOT LIABLE IN SUSTAINABLE IN THE EYES OF LAW. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFU TED THE SAID CONTENTION. THE COPY OF THE ORDER DATED 09.09.2015 IN ITA. NOS.731 & 732/M/2013 FOR THE A.Y.2009 - 10 IS ON THE FILE IN WHICH THE RELEVANT FINDING HAS BEEN GIVEN IN PARA NO. 5 TO 10 WHICH IS HEREBY REPRODUCED AS UNDER.: - 5. THE ASSESSING OFFIC ER ALSO LEVIED PENALTY U/S. 271D OF THE ACT ON THE GROUND THAT THE ASSESSEE RECEIVED LOANS AGGREGATING TO RS. 1,20,000/ - FROM MR. KASHINATH TAPURIAH, WHICH IS IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269 - SS OF THE ACT, AND SUFFICIENT EXPLANATION WAS N OT GIVEN FOR RECEIVING THE AMOUNT IN CASH. AT THE SAME TIME THE ASSESSING OFFICER ALSO TREATED CASH LOAN AS UNEXPLAINED CASH CREDIT, BUT ALSO LEVIED PENALTY U/S. 271D OF THE ACT, WHICH WAS CONFIRMED BY LEARNED CIT(A). 6. FURTHER AGGRIEVED THE ASSESSEE PRE FERRED APPEALS BEFORE THE TRIBUNAL. 7. LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT PROVISIONS OF SECTION 68 OF THE ACT HAVING BEEN INVOKED BY THE ASSESSING OFFICER, BY TREATING THE LOAN AS NON - GENUINE, SUCH ITA NO. 826 /M/2017 A. Y. 2 0 09 - 10 4 ALLEGED RECEIPTS WOULD NO T BE COVERED U/S. 269 - SS OF THE ACT; IN WHICH EVENT, PENALTY CANNOT BE LEVIED U/S. 271D OF THE ACT. IT WAS ALSO SUBMITTED THAT OUT OF THE THREE SUNDRY CREDITORS, TWO ARE OLD LIABILITIES WHICH WERE NOT ADDED BY THE ASSESSING OFFICER IN A.Y. 2008 - 09 BUT SOUG HT TO MAKE ADDITION WITHOUT GIVING ANY REASONS. IT WAS ALSO SUBMITTED THAT DURING THE RELEVANT POINT OF TIME THE DIRECTOR OF THE ASSESSEE - COMPANY WAS IN JUDICIAL CUSTODY OF THE ENFORCEMENT DIRECTORATE AND HENCE INFORMATION COULD NOT BE SUPPLIED. LEARNED CO UNSEL REQUESTED FOR ONE MORE OPPORTUNITY TO THE ASSESSEE TO ENABLE THE ASSESSEE - COMPANY TO FURNISH REQUIRED DETAILS. 8. LEARNED DEPARTMENTAL REPRESENTATIVE HAS NOT RAISED ANY SERIOUS OBJECTION WITH REGARD TO THE REQUEST OF THE ASSESSEES COUNSEL I.E., TO ENABLE THE ASSESSEE TO FURNISH PROPER EVIDENCE BEFORE THE ASSESSING OFFICER AT THIS STAGE. 9. HAVING REGARD TO THE SUBMISSIONS OF THE RESPECTIVE PARTIES, WE ARE OF THE OPINION THAT THE ASSESSEE HAS BONAFIDE REASONS FOR NOT FURNISHING COMPLETE DETAILS BEFO RE THE TAX AUTHORITIES. THEREFORE IN THE INTEREST OF SUBSTANTIAL JUSTICE, THE MATTER DESERVES TO BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER, WHO IS DIRECTED TO RECONSIDER THE MATTER AFRESH, IN ACCORDANCE WITH LAW. IN SO FAR AS PENALTY PROCEEDINGS U/ S. 271D ARE CONCERNED, IF AN ADDITION IS MADE U/S. 68 OF THE ACT, BY TREATING IT AS NON - GENUINE CASH CREDIT, IT NEEDS TO BE RECONSIDERED AS TO WHETHER THE ASSESSING OFFICER CAN INVOKE PROVISIONS OF SECTION 269SS OF THE ACT SO AS TO LEVY PENALTY. HOWEVER, S INCE THE QUANTUM PROCEEDINGS ARE SET ASIDE THE ASSESSING OFFICER IS AT LIBERTY TO INITIATE PENALTY PROCEEDINGS AFRESH, AFTER MAKING A FRESH ASSESSMENT. 10. WITH THESE OBSERVATIONS, APPEALS FILED BY THE ASSESSEE - COMPANY ARE TREATED AS ALLOWED FOR STATISTIC AL PURPOSES . 5. ON APPRAISAL OF THE ABOVE MENTIONED FINDING, WE NOTICED THAT THE QUANTUM IS NOWHERE IN EXISTENCE, THEREFORE, THE PENALTY HAS NO LEG TO STAND. TAKING INTO CONSIDERATION, ALL THE FACTS AND CIRCUMSTANCES, SPECIFICALLY THE QUANTUM ORDER IS NO WHERE IN EXISTENCE, THEREFORE, WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND DELETE THE PENALTY. ITA NO. 826 /M/2017 A. Y. 2 0 09 - 10 5 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22 /05/ 2019 SD/ - SD/ - ( SHAMIM YAHYA) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBAI; DATED : 22 /05/ 2019 VIJAY / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI