Smt. Ishrat Begum, Meerut V. ITO, Meerut

ITA 926/DEL/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6686 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 16-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT BHUSHAN GARG
• Assessee Lawyers: V K GOEL
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH MEERUT CAMP MERERUT ) BEFORE SHRI I.C. SUDHIR AND SHRI P RASHANT MAHARISHI ITA NO. 926 /DEL/201 5 ASSESSMENT YEAR: 200 9 - 1 0 ISHRAT BEGUM, VS. ITO, C/O. SH. V.K. GOEL, ADV. WARD 1(3), 282 - BOUNDARY ROAD, CIVIL LINES, MEERUT. MEERUT. (PAN: A IRPB8927G) (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI V.K. GOEL, ADV. DEPARTM ENT BY: SHRI BHARAT BHUSHAN GARG , SR. DR DATE OF HEARING : 1 8 . 1 2 .201 5 DATE OF PRONOUNCEMENT: 10 : 0 3 .201 6 ORDER PER I.C. SUDHIR : JUDICIAL MEMBER THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER WHEREBY THE LEARNED CIT(APPEA LS) HAS UPHELD THE PENALTY OF RS.3,12,477 LEVIED UNDER SEC. 271(1)(C) OF THE INCOME - TAX ACT, 1961. 2. HEARD AND CONSIDERED THE ARGUMENTS ADVANCED BY THE PARTIES IN VIEW OF ORDERS OF THE AUTHORITIES BELOW, MATERIAL AVAILABLE ON RECORD AND THE DECISIONS REL IED UPON. 4. THE RELEVANT FACTS ASSESSEE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE WAS ASKED TO EXPLAIN THE SOURCE OF DEPOSIT OF RS.10,80,303 IN HER BANK ACCOUNT. THE ASSESSEE TRIED TO EXPLAIN BY STATING 2 THAT SHE IS ENGAGED IN THE BUS INESS OF PURCHASE AND SALE OF CLOTH. SHE HAD PURCHASED CLOTHES FROM ONE MR. AZHAR KHAN TO WHOM PAYMENT OF RS.7 LACS THROUGH CHEQUE WAS MADE. THE CASH RECEIVED FROM SALE PROCEEDS WAS THUS DEPOSITED IN HER BANK ACCOUNT. THE ASSESSING OFFICER SUMMONED MR. AZH AR KHAN WHO IN HIS STATEMENT STATED THAT HE NEVER SOLD ANY CLOTH TO THE ASSESSEE. THEREAFTER, THE ASSESSEE REVISED HER RETURN OF INCOME AND OFFERED RS.5 LACS AS ADDITIONAL INCOME FROM GIFTS. THE ASSESSING OFFICER THUS TREATED RS. 5 LACS SURRENDERED BY THE ASSESSEE AS HER UNACCOUNTED INCOME AND INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY UNDER SEC. 271(1)(C) OF THE INCOME - TAX ACT, 1961 AT THE RATE OF 300% RESULTING INTO RS.3,12,477. THE LEARNED CIT(APPEALS) HAS RESTRICTED THE SAME AT THE RATE OF 100% SU STAINING THE PENALTY AT RS.1,04,159. 5. IN SUPPORT OF THE GROUND, THE LEARNED AR SUBMITTED THAT THE ASSESSEE IS AN ILLITERATE LADY DOING PURCHASE AND SALE OF POWER LOOM CLOTH BUSINESS ON RETAIL BASIS SINCE FINANCIAL YEAR 2003 - 04. SHE HA D BEEN FILING HER INCOME - TAX RETURN FOR THE ASSESSMENT YEAR S 2005 - 05 & 2007 - 08. DURING THE YEAR, HER ACCOUNTANT PREPARED STATEMENT OF AFFAIRS ON ESTIMATED BASIS. IN THE STATEMENT OF AFFAIRS, THE ASSESSEE HAD SHOWN ONLY BUSINESS TRANSACTION. HOWEVER, PAYMENT THROUGH CHEQUES OF RS.3 LACS ON 21.2.2009 AND RS. 4 LACS ON 3 12.3.2009 WERE RELATED TO CAPITAL NATURE BECAUSE THE ASSESSEE HAD ADVANCED THE ABOVE CHEQUE AMOUNT TO HER HUSBAND SHRI KHURSHID ALAM WHO HAD PURCHASED A HOUSE PROPERTY IN HIS OWN NAME. BOTH THE ABOVE CHEQUES WERE DULY REFLECTED IN HER SAVING ACCOUNT WITH ICICI BANK LTD., MEERUT. DUE TO MISINTERPRETATION, THE ASSESSEE, HOWEVER, EXPLAINED THAT THE ABOVE TWO CHEQUES PROBABLY RELATED TO PURCHASE OF CLOTH. IN ABSENCE OF REGULAR BOOKS OF ACCOUNT, THIS MISTAKE WAS DONE BY ASSESSEES ACCOUNTANT BY GIVING IRRELEVANT EXPLANATION. THE ASSESSEE, THEREAFTER, CORRECTED THE MISTAKE BY FILING REVISED COMPUTATION OF INCOME , CAPITAL ACCOUNT, BALANCE SHEET AND DEPOSITED CHALLAN OF RS.1,67,350. THE LEARNED AR SUBMITTED THAT OUT OF SA LE - PROCEEDS OF CLOTH, BROUGHT FORWARD OF CAPITAL AND LOAN TAKEN FROM MR. IQBAL MAHMOD AT RS.1,50,000, THE ASSESSEE DEPOSITED RS.10,80,303 IN CASH IN HER SAVING BANK ACCOUNT WITH ICICI BANK LTD., MEERUT. HE SUBMITTED THAT THE ASSESSEE ALSO WITHDREW MOST OF THE CASH AMOUNT FROM HER SAVING BANK ACCOUNT FOR PURCHASE OF CLOTH. THUS, THE ASSESSEE WAS NOT HAVING ANY UNEXPLAINED CASH CREDIT. IT WAS THUS REQUESTED THAT THE RETURN OF THE YEAR MAY BE TREATED AS REVISED AND ACCORDINGLY INCOME OF THE ASSESSEE SHOWN AT R S.6,63,750 BE ACCEPTED. THE ASSESSING OFFICER ACCEPTED THE REVISED RETURN AND ASSESSED THE TOTAL INCOME AT RS.6,63,750 AS OFFERED BY THE ASSESSEE. SINCE THE ASSESSEE HERSELF HAD REVISED ITS RETURN OF INCOME AND HAD VOLUNTARILY SURRENDERED RS. 4 5 LACS ON ACC OUNT OF GIFT, HENCE, THE ASSESSED INCOME SHOULD NOT BE SUBJECTED TO THE LEVY OF PENALTY UNDER SEC. 271(1)(C) OF THE ACT. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS: I) CIT VS. RELIANCE PETRO - PRODUCTS PVT. LTD. 322 ITR 158 (SC); II) CIT VS. BALBIR SI NGH 164 TAXMAN 65 ( P&H ); III) K.C. BUILDERS VS. ACIT (2004) 265 ITR 512 (SC); IV) CIT VS. SARAN KHANSARI SUGAR WORKS - 246 ITR 216 (P&H); V ) CIT VS. GANESH RICE MILLS 12 TAXMANN.COM 274 (ALL.). VI) NORTHLAND DEV. & HOTEL CORPORATION VS. CIT (20 12) 25 TAXMANN.COM 369 (SC). 6. THE LEARNED SENIOR DR ON THE OTHER HAND PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW WITH THIS SUBMISSION THAT ONLY ON DETECTION THAT THE EXPLANATION OF THE ASSESSEE REGARDING THE SOURCE OF AMOUNT FOUND DEPO SITED IN HER BANK ACCOUNT WAS NOT CORRECT , THE ASSESSEE SURRENDERED RS.5 LACS AND OTHER INCOME BY REVISING ITS RETURN, HENCE, IT IS AN APPARENT CASE OF CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE AS SESSEE TO JUSTIFY THE LEVY OF PENALTY MADE AND SUSTAINED BY THE AUTHORITIES BELOW. 7. CONSIDERING THE ABOVE SUBMISSIONS, WE FIND THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSMENT HAS BEEN FRAMED IN THE PRESENT CASE ON THE BASIS OF REVISED RETURN OF INCOME AND THE INCOME DECLARED THEREIN HAS BEEN ACCEPTED 5 BY THE ASSESSING OFFICER, HENCE, IT CANNOT BE SAID THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME O R FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TO JUSTIFY THE LEVY OF PENALT Y ON THE INCOME OF RS.1,04,159 . TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS, THUS, WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RET URN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE, THERE IS NO QUESTION OF INVITING PENALTY UNDER SEC. 271(1)(C) OF THE ACT. WE THUS WHILE SETTING ASIDE THE ORDERS OF THE AUTHORITIES BELOW DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY SUSTAINED BY T HE LEARNED CIT(APPEALS) AT RS.1,04,159 UNDER SEC. 271(1)(C) OF THE ACT. THE GROUND IS ACCORDINGLY ALLOWED. 8 . IN RESULT, THE APPEAL IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 10 . 0 3 . 201 6 S D/ - SD/ - ( PRASHANT MAHARISHI ) ( I.C. SUDHIR ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 10 / 0 3 /201 6 MOHAN LAL COPY FORWARDED TO: 1) APPELLANT 2) RESPONDENT 3) CIT 4) CIT(APPEALS) 5) DR:ITAT ASSISTANT REGISTRAR 6 DATE DRAFT DI CTATED DIRECTLY ON COMPUTER 1 0 . 0 3 .201 6 DRAFT PLACED BEFORE AUTHOR 1 0 . 0 3 .2016 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 10 . 0 3 .2016 APPROVED DRAFT COMES TO THE SR.PS/PS 10 . 0 3 .2016 KEPT FOR PRONOUNCEMENT ON 10 . 03. 2016 FILE SENT TO THE BENCH CLERK 11 . 0 3 .2016 DATE ON WHICH FILE GOES TO THE AR DATE ON WHICH FILE GOES TO THE HEAD CLERK. DATE OF DISPATCH OF ORDER.