Rajinder Kumar, Mandi Gobindgarh V. ACIT, Mandi Gobindgarh

ITA 972/CHANDI/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6883 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 16-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 12-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: RAJIV DUTTACA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER AND DR.B.R.R.KUMAR, ACCOUNTANT MEMBER ITA NOS. 972 & 973/CHD/2016 A.Y : 2007-2008 & 2008-2009 SHRI RAJINDER KUMAR VS. THE ACIT, PROP. ASHOK KUMAR RAJINDER KUMAR, CIRCLE, MOTIA KHAN, MANDI GOBINDGARH. MANDI GOBINDGARH. PAN NO. AIOPK6622Q (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJIV DUTTA,CA RESPONDENT BY : SHRI MANJIT SINGH, SR.DR DATE OF HEARING : 04.07.2017 DATE OF PRONOUNCEMENT : 07.09.2017 ORDER PER DIVA SINGH,JM THE PRESENT APPEALS HAVE BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE SEPARATE ORDERS DATED 08.06.2016 OF CIT (APPEALS) PATIALA PERTAINING TO 2007-08 AND 2008-09 ASSESSMENT YEAR. IT WAS THE SUBMISSION OF THE PARTIES BEFORE THE BENCH THAT THE ARGUMENTS ASS AILING THE TWO RESPECTIVE ORDERS OF THE CIT(A) WHEREIN PENALTY IMPOSED U/ S 271(1)(C) OF THE INCOME TAX ACT AMOUNTING TO RS. 22,880/- AND RS. 42,000/ - HAS BEEN UPHELD BY THE CIT(A ) ARE IDENTICAL AS FACTS, CIRCUMSTANCES ON THE ISSUE IN THE TWO APPEALS REMAIN THE SAME. 2. THE LD. AR INVITING ATTENTION TO THE PENALTY ORDERS SUB MITTED THAT THE ADDITIONS HAVE BEEN CONFIRMED IN THE RESPECTIVE YEARS ON ACCOUNT OF THE FACT THAT THE ASSESSEE COULD NOT PRODUCE THE PARTIES WHO H AD ADVANCED SMALL LOANS TO THE ASSESSEE. IN 2007-08, SIX PARTIES HAD AD VANCED AN AMOUNT OF RS. 1,10,000/- AND IN 2008-09 ASSESSMENT YEAR, EIGHT PARTIES HAD ADVANCED RS. 1,52,000/-. THE ASSESSEE, IT WAS SUBMITTED, WAS REQUIRED TO PROVE THE IDENTITY AND CREDIT WORTHINESS OF THE PERSONS. IN SUPPORT OF HIS CASE, THE ASSESSEE HAD FURNISHED AFFIDAVITS ADMITTEDLY IN BOTH THE YE ARS BY THESE PERSONS AND IT WAS A FACT THAT THE AMOUNTS ALSO HAD BE EN REPAID BACK IN THE RESPECTIVE YEARS ITSELF. THE SAID CLAIM IS CONSISTENTLY ON RECORD AND HAS NOT BEEN OPPOSED BY THE REVENUE. ONLY BECAUSE THE PARTIES COULD NOT BE ITA NOS. 972&973/CHD/2016 A.Y. 2007-08 & 2008-09 PAGE 2 OF 2 PRODUCED, THE ADDITIONS WERE MADE. IN THE CIRCUMSTANCES , IT WAS HIS SUBMISSION THAT THE INABILITY OF THE ASSESSEE TO PRODUCE T HESE PERSONS WHO HAD ADVANCED LOANS AND HAD ALSO BEEN REPAID BACK CANNO T BE THE BASIS OF LEVYING AND CONFIRMING PENALTY. IT WAS ALSO HIS SUBMISSION TH AT THE ASSESSEE IS NOT A HABITUAL DEFAULTER. THESE PERSONS WERE NOT INCO ME TAX ASSESSEES AND THESE WERE FRIENDLY LOANS FROM FRIENDS AND RELATIVES WHO RE FUSED TO COME BEFORE THE AO. THUS, ON THIS GROUND THE PENALTY IMPOSED, IT WAS SUBMITTED, MAY BE QUASHED. 3. THE LD. SR.DR HAS PLACED RELIANCE UPON THE ORDERS OF TH E AUTHORITIES BELOW. 4. WE HAVE HEARD THE SUBMISSIONS AND PERUSED THE MATE RIAL AVAILABLE ON RECORD. WE FIND THAT IN THE PECULIAR FACTS AND CIRCUMSTAN CES OF THE CASE, THOUGH ON FACTS THE ADDITION WAS JUSTIFIED AS THE ASSESSE E, DESPITE AN OPPORTUNITY, DID NOT PRODUCE THE PARTIES WHO HAD ADVANC ED SHORT TERM FRIENDLY LOANS, HOWEVER, AS FAR AS THE PENALTY PROCEEDINGS ARE CONCERNED, THE LAW IS WELL SETTLED THAT SIMPLY BECAUSE ADDITION IS SUSTAINED , THAT FACT ITSELF CANNOT BE A GROUND FOR LEVY OF PENALTY. THE FACT REMAINS THAT FRIENDLY LOANS WERE TAKEN FROM THE STATED PARTIES IN TWO YEARS WHICH W ERE RETURNED BACK TO THE PARTIES IN THE RESPECTIVE YEARS. THE ASSESSEE CLAIMS ITS INABILITY TO PRODUCE THE PARTIES IN SUPPORT OF ITS CLAIM. IN THE CIRC UMSTANCES CONSIDERING THE FACT THAT THE ASSESSEE ADMITTEDLY WAS NOT A HABITUAL DEFAULTE R, THE CLAIM OF THE ASSESSEE IS ALLOWABLE. WE NOTE THAT APART FROM THAT REASON, THERE IS NO OTHER REASON AVAILABLE ON RECORD FOR LEVY OF PENALTY. AC CEPTING THE EXPLANATION, CONSISTENTLY ON RECORD AS REASONABLE AND B ONAFIDE, PENALTY IS DIRECTED TO BE DELETED. 5. IN THE RESULT, BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 07.09.2017. SD/- SD/- ( DR.B.R.R.KUMAR) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 07 TH SEPTEMBER,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR ASSTT. REGISTRAR ITAT,CHANDIGARH.