Shri Yogesh Chand Shah, GANJBASODA V. The ACIT, 3(1), Bhopal

ITSSA 33/IND/2011

• Counselvise Citation: [2012] 124 COUNSELVISE.COM (IT) 7615 (ITAT-INDORE)
• Duration Of Justice: 8 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 19-03-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: misc
• Appeal Filed On: 27-06-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: KESHAV SAXENA
• Assessee Lawyers: H P VERMA; ASHISH GOYAL S
• Keywords: Unexplained investment; Peak credit

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : ADAPS8416K I.T (SS) .A.NO. 33/IND/2011 BLOCK PERIOD : 1.4.1995 TO 3.01.2002 SHRI YOGESH CHAND SHAH, ACIT,3(1), BHOPAL. PROP. M/S.SUBHASH TRADERS, GEONDA ROAD, GANJ BASODA VS APPELLANT RESPONDENT APPELLANT BY : SHRI H.P.VERMA AND SHRI ASHISH GOYAL, ADVOCATES RESPONDENT BY : SHRI KESHAV SAXENA, CIT DR DATE OF HEARING : 01 . 0 3 .201 2 DATE OF PRONOUNCEMENT : 19 . 0 3 .201 2 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 29.11.2010 FOR THE BLOCK PERIOD 01. 04.1995 TO 31.01.2002 IN THE MATTER OF IMPOSITION OF PENALTY U /S 158BFA(2) OF THE INCOME-TAX ACT, 1961. -: 2: - 2 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS OF THE CASE ARE THAT THERE WAS A SEA RCH AT ASSESSEES BUSINESS PREMISES. AFTER SEARCH, THE ASS ESSEE HAS FILED THE RETURN U/S 158BC FOR THE BLOCK PERIOD SHO WING UNDISCLOSED INCOME OF RS. 2,50,000/- WHICH INCLUDES THE FOLLOWING : S.NO. PARTICULARS AMOUNT ( RS. ) 1. SUPPRESSION OF PROFIT BY UNDER INVOICING 39,000/ - 2. UNEXPLAINED SALES AND PURCHASE 10,56,280/- UNEXPLAINED SALES AND PURCHASES 17,55,466/- 49,209/ - 3. UN RECORDED INVESTMENT IN PURCHASE OF FOODGRAINS 58,969/ - 4. UNEXPLAINED LOAN ADVANCED 85,000/ - 5. UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS 92,209/ - TOTAL ( RS.) 3,24,387/ - 3. WHILE FRAMING ASSESSMENT U/S 158BC READ WITH SECTION 143(3), THE INCOME WAS ASSESSED BY THE ASSE SSING OFFICER AT RS. 1,46,99,917/-. IN AN APPEAL FILED BE FORE THE CIT(A) AND THE TRIBUNAL, A RELIEF OF RS. 1,34,24,61 4/- WAS -: 3: - 3 GIVEN AND THE ADDITION WAS RETAINED TO THE TUNE OF RS. 13,64,512/- IN RESPECT OF FOLLOWING ADDITIONS :- RS. BOG US CASH CREDITS OF FARMERS 8,34,865/ - SUPPRESSION OF NET PROFIT BY UNDER INVOICING 39,000/ - UNEXPLAINED SALES & PURCHASES 49,209/ - UNRECORDED INVESTMENT IN PURCHASE OF FOOD GRAINS 58,969/ - UNRECORDED INVESTMENT IN DEPOSITS 2,05,360/ - UNEXPLAINED L OAN ADVANCED 85,000/ - UNEXPLAINED INVESTMENT IN GOLD ORNAMENTS 92,209/ - 4. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/ S 158BFA(2) AMOUNTING TO RS. 10 LAKHS, WHICH WAS REDU CED BY THE LD.CIT(A) TO THE EXTENT OF RS. 9,57,887/- WHICH WAS EQUAL TO THE AMOUNT OF TAX LEVIABLE ON THE ADDITIONS SO R ETAINED IN QUANTUM APPEAL. 5. WITH REGARD TO THE MAIN ADDITION OF RS. 8,34,765/- MADE ON ACCOUNT OF BOGUS CASH CREDIT OF FARMERS, TH E CONTENTION OF THE LD. AUTHORIZED REPRESENTATIVE WA S THAT ADDITION WAS MADE ON THE BASIS OF PEAK FOUND DURING THE -: 4: - 4 BLOCK PERIOD STARTING FROM 1995-96 TO 2000-01. HE S UBMITTED THAT IMMEDIATELY PRIOR TO THE BLOCK PERIOD THERE WA S A PEAK OF RS. 8,79,267/-, WHICH OUGHT TO HAVE BEEN REDUCED OU T OF THE PEAK WORKED OUT BY THE ASSESSING OFFICER DURING THE BLOCK PERIOD, WHICH RESULTED IN TO NO ADDITION ON ACCOUNT OF PEAK. AS PER LD. AUTHORIZED REPRESENTATIVE, THE PEAK OF RS. 8,79,267 FOR THE FINANCIAL YEAR 94-95 WAS NOT FOUND TO BE FALSE. IT WAS NOT CONSIDERED BECAUSE IT DID NOT FALL DURING THE BLOCK PERIOD. BUT THE FACT THAT THIS AMOUNT WAS AVAILABLE TO THE ASSE SSEE WAS NOT DENIED. THIS FACT THAT EACH EARLIER YEARS PEAK WAS AVAILABLE TO THE SUCCEEDING YEAR WAS FOLLOWED BY TH E LD.CIT(A) IN THE CHART ABOVE. THIS PROCEDURE WAS APPROVED BY THE HON'BLE INDORE BENCH OF THE A.T. ON THE SAME PRINCI PLE, FOR PENALTY PROCEEDINGS THE PEAK OF RS. 8,79,267/- FOR FINANCIAL YEAR 1994-95 WAS AVAILABLE TO THE ASSESSEE FOR THE BLOCK PERIOD. THEREFORE, FOR PENALTY, THE EXPLANATION IS GENUINE AND TRUE THAT SHOULD NOT ATTRACT PENALTY. 6. ON THE OTHER HAND, IT WAS CONTENDED BY THE LD. CIT DR THAT THERE IS NO REASON FOR GIVING CREDIT OF THE AM OUNT OF PEAK, WHICH BELONGS TO THE PERIOD FALLING PRIOR TO THE BL OCK PERIOD IN -: 5: - 5 SO FAR AS, NO ADDITION WAS CONSIDERED BY THE ASSESS ING OFFICER WITH RESPECT TO SUCH PEAK CREDIT. HE FURTHER SUBMIT TED THAT SINCE THE ASSESSEE HAS NOT FILED APPEAL AGAINST THE ADDITIONS CONFIRMED BY THE TRIBUNAL, THE IMPOSITION OF PENALT Y WITH SUCH ADDITION IS AUTOMATIC. 7. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND DO NO T FIND ANY MERIT IN THE CONTENTION OF LD. AUTHORIZED REPRESENTATIVE FOR GIVING CREDIT OF PEAK FOUND DURI NG THE PERIOD WHICH IS FALLING OUTSIDE THE BLOCK PERIOD FO R WHICH NO ADDITION WAS MADE BY THE ASSESSING OFFICER. WE ALSO FOUND THAT IN THE LEDGER ACCOUNT, THE ASSESSEE HAS MAINTA INED ACCOUNT UNDER THE NAME KISAN UDRAT PARCHI. IN THI S ACCOUNT, THE CREDITS AND DEBIT ENTRIES WERE LEDGERI ZED FROM CASH BOOK. HOWEVER, AT THE CLOSE OF EVERY FINANCIAL YEAR, ALL CREDITS WERE SQUARED UP. THEREFORE, THE ASSESSING O FFICER HAS CONSIDERED PEAK OF ALL THE YEARS AS SUITABLE FOR MA KING ADDITION. EVEN IN THE FINANCIAL YEAR 1994-95, FALLI NG IMMEDIATELY PRIOR TO THE BLOCK PERIOD, THE ALLEGED CASH CREDIT WAS SQUARED UP BY THE ASSESSEE, THEREFORE, THERE IS NO MERIT IN THE CONTENTION OF LD. AUTHORIZED REPRESENTATIVE THA T CASH -: 6: - 6 CREDIT WAS AVAILABLE TO THE ASSESSEE AT THE BEGINNI NG OF THE BLOCK PERIOD. WE, ACCORDINGLY, DO NOT FIND ANY INFI RMITY ON THE PART OF THE LOWER AUTHORITIES FOR LEVYING AND CONFI RMING PENALTY ON THE AMOUNT OF THE PEAK CREDIT OF RS. 8,34,865/- WITHOUT GIVING ANY CREDIT FOR THE AMOUNT, WHICH WAS EVEN TH OUGH ALLEGED TO BE TAKEN FOR THE FINANCIAL YEAR 1994-95, BUT WAS REPAID BEFORE THE END OF THE YEAR. ACCORDINGLY, LEV Y OF PENALTY WITH RESPECT TO THE BOGUS CASH CREDIT OF RS. 8,34,8 65/- IS HEREBY CONFIRMED. 8. WE ALSO FOUND THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY WITH RESPECT TO THE AMOUNT DISCLOSED BY THE ASSESSEE IN THE BLOCK RETURN FILED U/S 158BC AMOUNTING TO RS . 2,50,000/-, WHICH WAS DISCLOSED UNDER VARIOUS HEADS AS NARRATED AT PARA 2 HEREINABOVE. SECOND PROVISO TO S ECTION 158BFA(2) CLEARLY PROVIDES THAT PENALTY SHALL BE IM POSED ON THAT PORTION OF UNDISCLOSED INCOME DETERMINED, WHIC H IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. MEANING THEREBY WHATEVER THE ASSESSEE HAS O FFERED IN THE RETURN FILED U/S 158BC, NO PENALTY CAN BE IMPOS ED FOR SUCH UNDISCLOSED INCOME, WHICH IS DISCLOSED THROUGH THE -: 7: - 7 RETURN. PENALTY CAN BE IMPOSED FOR THE ASSESSMENT F RAMED IN EXCESS OF THE INCOME DECLARED IN THE RETURN FILED U /S 158BC. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DEL ETE PENALTY WITH RESPECT TO THE INCOME OF RS. 2.50 LAKHS, WHICH WAS OFFERED BY THE ASSESSEE IN THE RETURN FILED U/S 158 BC. 9. THE ASSESSING OFFICER HAS ALSO LEVIED PENALTY WITH RESPECT TO THE ADDITIONS MADE ON ACCOUNT OF SMALL D EPOSIT IN THE ACCOUNT OF MINOR CHILDREN AMOUNTING TO RS. 2,05 ,360/-. THERE IS NO DISPUTE TO THE WELL SETTLED LEGAL PROPO SITION THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE SEPARATE AND ASSESSEE CAN PRODUCE EVIDENCE DURING THE PENALT Y PROCEEDINGS TO SHOW THAT THE AMOUNT OF ADDITIONS SO MADE IN QUANTUM PROCEEDINGS IS NOT LIABLE FOR FURTHER PENAL TY ON ACCOUNT OF CONCEALMENT. FINDINGS IN ASSESSMENT PROC EEDINGS CANNOT OPERATE AS RES JUDICATA FOR THE ASSESSING OF FICER WHEN HE IS DEALING WITH THE QUESTION OF IMPOSITION OF PE NALTY AS THE TWO PROCEEDINGS ARE QUITE DIFFERENT TO EACH AND OTH ER AS HELD IN AZAD BHARAT FINANCE COMPANY BY DELHI HIGH COURT REPORTED AT 75 ITR 40, DWARKA PRASAD, 24 ITR 410, B Y ALLAHABAD HIGH COURT. -: 8: - 8 10. IN THE INSTANT CASE, PENALTY WAS LEVIED WITH RESPEC T TO THE SMALL DEPOSIT MADE IN THE BANK ACCOUNT OF MINOR CHILDREN IN SAHARA INDIA RECURRING DEPOSIT ACCOUNT. IT WAS E XPLAINED TO THE ASSESSING OFFICER THAT THESE DEPOSITS WERE MADE BY MOTHER-IN-LAW OF THE ASSESSEE SMT. BHAIYANA BAI, WH O HAD IRRIGATED AGRICULTURAL LAND OF 3.30 HECTARE IN GANJ SINCE 28.3.1995. TWO CROPS WERE GROWN AND HER ANNUAL AGRI CULTURAL INCOME WAS RS. 60,000/-. SMT. BHAIYANA BAI, GRAND M OTHER OF MINOR CHILDREN HAS ALSO FILED AFFIDAVIT TO PROVE TH E AGRICULTURAL PRODUCE. MERELY BECAUSE THE EXPLANATION OF THE ASSE SSEE WAS NOT ACCEPTED AT THE TIME OF MAKING QUANTUM ADDITION , WE FOUND THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 158BFA(2) MERELY BY REJECTING BONA FIDE EXPLANATION OF THE AS SESSEE DULY SUPPORTED BY DOCUMENTARY EVIDENCES, WHICH WERE NOT FOUND TO BE FALSE. ACCORDINGLY, WE DIRECT THE ASSESSING OFFI CER TO DELETE THE PENALTY IMPOSED WITH RESPECT TO THE SMALL DEPOS IT IN THE MINOR CHILDREN ACCOUNT WITH SAHARA INDIA RECURRING DEPOSIT MADE BY GRAND MOTHER OF THE ASSESSEE SMT. BHAIYANA BAI. WE DIRECT ACCORDINGLY. -: 9: - 9 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D IN PART. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 19 TH MARCH, 2012. SD/ - SD/ - (JOGINDER SINGH) ( R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 19 TH MARCH, 2012. CPU* 193