M/s. Manorath Hotels Pvt.Ltd., Ahmedabad V. The ACIT.,Cent.Circle-1(4), Ahmedabad

ITSSA 236/AHD/2013

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 0795 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 29 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 24-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 16-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 25-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA SINGH
• Keywords: Unexplained cash credit

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI S. S. GODARA, JUDICIAL MEMBER IT(SS)A NOS. 236 & 237/AHD/2013 / ASSESSMENT YEAR: 2005-06 & 2006-07 MANORATH HOTELS PVT LTD, 2 ND FLOOR, NARAYAN CHAMBERS, NEAR PATANG HOTEL, ASHRAM ROAD, AHMEDABAD PAN : AABCM 0506 D VS. ACIT, CENTRAL CIRCLE-1(4), AHMEDABAD / // / (APPELLANT) / // / (RESPONDENT) ASSESSEE(S) BY : SHRI PRITESH SHAH, AR REVENUE BY : SHRI NARENDRA SINGH, SR. DR ! '#$/ // / DATE OF HEARING : 16/07/2015 %& ! '#$ / // / DATE OF PRONOUNCEMENT: 24/07/2015 '( '( '( '(/ // / O R D E R PER G.D. AGRAWAL, VICE PRESIDENT: THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST TWO SEPARATE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX (A PPEALS)-I, AHMEDABAD, BOTH DATED 12.04.2013, FOR ASSESSMENT YEARS 2005-06 AND 2006-07. IT(SS)A NO. 236/AHD/2013 BY ASSESSEE FOR AY 2005-06 2. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE LEVY OF PENALTY OF RS.36,519/- U/S 271(1)(C) WHICH IS SUSTAINED BY THE CIT(A). 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. THE ASSESSING OFFICER HAS LEVIED THE PE NALTY ON ACCOUNT OF IT(SS)A NOS. 236 & 237/AHD/2013 MANORATH HOTELS PVT LTD VS. ACIT FOR AY 2005-06 & 2006-07 2 ADDITION OF RS.99,800/- MADE BY HIM BY TREATING INC REASE IN THE SHARE CAPITAL AS UNEXPLAINED CASH CREDIT. IT WAS SUBMITTED BY TH E LD. COUNSEL THAT THE ASSESSEE HAD RECEIVED A SUM OF RS.99,800/- ON ACCOU NT OF SHARES ALLOTTED TO SEVEN PARTIES. THE MAXIMUM AMOUNT OF SHARE CAPITAL INVESTED BY ONE PERSON IS RS.15,000/-. HE SUBMITTED THAT DUE TO DI SPUTE AMONGST THE SHAREHOLDERS, THE ASSESSEE COULD NOT PRODUCE THE NE CESSARY EVIDENCES IN SUPPORT OF THE SHARE CAPITAL; BUT THE FACT REMAINS THAT ALL THE SEVEN SHAREHOLDERS REMAINED THE MAIN SHAREHOLDERS OF THE ASSESSEE-COMPANY BECAUSE, OUT OF THE SHARE CAPITAL OF RS.1 LAC, RS.9 9,800/- WAS INVESTED BY THOSE SEVEN PERSONS. HE, THEREFORE, SUBMITTED THAT THERE WAS NO CONCEALMENT OF INCOME. OUT OF SEVEN SHAREHOLDERS, FIVE ARE ASSESSED TO INCOME-TAX AND THEIR PERMANENT ACCOUNT NUMBERS ARE SUBMITTED BY THE ASSESSEE IN HIS WRITTEN SUBMISSION. 4. THE LD. DEPARTMENTAL REPRESENTATIVE, ON THE OTHE R HAND, RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. AFTER CONSIDERING THE ARGUMENTS OF BOTH THE SIDE S AND FACTS OF THE CASE, ESPECIALLY THE SMALLNESS OF THE AMOUNT OF INV ESTMENT OF EACH SHAREHOLDER WHICH WAS ONLY RS.15,000/-; IN OUR OPIN ION, IT IS NOT A FIT CASE FOR LEVY OF PENALTY FOR CONCEALMENT OF INCOME U/S 2 71(1)(C). WE, THEREFORE, CANCEL THE PENALTY OF RS.36,519/- LEVIED U/S 271(1) (C) OF THE ACT. IT(SS)A NO. 237/AHD/2013 BY ASSESSEE FOR AY 2006-07 6. THE ONLY GROUND RAISED IN THIS APPEAL BY THE ASS ESSEE IS AGAINST THE LEVY OF PENALTY OF RS.1,89,451/- U/S 271(1)(C) WHIC H IS SUSTAINED BY THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL PLACED BEFORE US. WE FIND THAT THE ITAT IN ITS ORDER DATED 21.04.2015 IN IT(SS)A IT(SS)A NOS. 236 & 237/AHD/2013 MANORATH HOTELS PVT LTD VS. ACIT FOR AY 2005-06 & 2006-07 3 NO.16/AHD/2011 SET ASIDE THE ADDITION OF RS.5,62,83 8/- MADE BY THE ASSESSING OFFICER FOR UNEXPLAINED CASH CREDIT AND R ESTORED THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER. THE PENALTY U/S 271(1)(C) HAS BEEN LEVIED IN RESPECT OF ABOVE ADDITION FOR CASH CREDIT . ONCE THE ADDITION ITSELF HAS BEEN SET ASIDE, THE PENALTY BASED UPON SUCH ADD ITION CANNOT BE SUSTAINED. ACCORDINGLY, THE SAME IS DELETED. 8. WE MAY OBSERVE THAT THE ASSESSING OFFICER IS AT LIBERTY TO RE-INITIATE THE PENALTY PROCEEDINGS, IF THE FACTS OF THE CASE S O WARRANT, AFTER THE COMPLETION OF SET ASIDE ASSESSMENT. 9. IN THE RESULT, ASSESSEES APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 24 TH JULY, 2015 AT AHMEDABAD. SD/- SD/- (S. S. GODARA) JUDICIAL MEMBER (G.D. AGRAWAL) VICE-PRESIDENT AHMEDABAD; DATED 24/07/2015 BIJU T., PS '( ! ') *')' '( ! ') *')' '( ! ') *')' '( ! ') *')'/ COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ++ ' , / CONCERNED CIT 4. , ( ) / THE CIT(A) 5. )/0 ' , , / DR, ITAT, AHMEDABAD 6. 02 3 / GUARD FILE . '( '( '( '( / BY ORDER, TRUE COPY 4 44 4/ // / +5 +5 +5 +5 ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD