Raj Kumar Jain, New Delhi V. DCIT, New Delhi

ITSSA 81/DEL/2009

• Counselvise Citation: [2010] 124 COUNSELVISE.COM (IT) 9486 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 05-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 02-02-2010
• Assessment Year: misc
• Appeal Filed On: 30-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Keywords: Block assessment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : F: NEW DELHI BEFORE SHRI G.E. VEERABHADRAPPA, VICE PRESIDENT AND SHRI I.P. BANSAL, JUDICIAL MEMBER IT (SS) A NO.81/DEL/2009 BLOCK ASSESSMENT PERIOD ENDING 30.07.1997 RAJ KUMAR JAIN, A-1/20, VARUN APARTMENTS, SECTOR-9, ROHINI, DELHI 110 085. PAN : ADCPJ3822C VS. DCIT, CIRCLE 21 (1), VIKAS BHAWAN, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GURJEET SINGH, CA REVENUE BY : SHRI H.K. LAL, SR. DR ORDER PER : I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DI RECTED AGAINST THE ORDER OF THE CIT (A) DATED 9 TH OCTOBER, 2009 FOR BLOCK ASSESSMENT PERIOD ENDING 30.07.1997. GROUNDS OF APPEAL READ AS UNDER:- 1. BECAUSE THE ACTION FOR UPHOLDING THE PENALTY LE VY IS BEING CHALLENGED ON FACTS AND LAW WHICH IS EVEN PERVERSE SPECIFICALLY IGNORING TO OVERLOOK THE ORDERS OF THE CASE PROCEEDINGS. 2. BECAUSE THE ACTION OF CIT (A) FOR UPHOLDING THE PENALTY OF RS.1,50,000/- ON ACCOUNT OF UNEXPLAINED CASH FOUND AT PREMISES OF ASSESSEE WHEREAS AS PER ASSESSEE THE SA ID AMOUNT WAS REFLECTED IN CASH BOOK ITSELF. 2. THE IMPUGNED PENALTY WAS LEVIED BY AO ON AN ADDI TION OF RS.1,50,000/- FOUND DURING THE COURSE OF SEARCH. IN QUANTUM, REL IEF HAS BEEN GIVEN TO THE ASSESSEE FOR AN AMOUNT OF RS.1,05,000/- AND THE ORD ER OF THE CIT (A) FOR GIVING IT (SS) A NO.81/DEL/2009 2 RELIEF UPTO THE QUANTUM OF RS.1,05,000/- HAS BECOME FINAL WHEREIN THE ADDITION TO THE EXTENT OF RS.45,000/- WAS SUSTAINED AND OUT OF RS.1,50,000/- RS.1,05,000/- WAS FOUND TO HAVE BEEN EXPLAINED. ALL THESE FACTS ARE MENTIONED IN THE ORDER OF THE CIT (A) IN THE GROUNDS TAKEN BEFORE HIM I.E., G ROUND NO.2. HOWEVER, THE CIT (A) HAS SUSTAINED THE PENALTY BY REFERRING TO THE E ARLIER ORDER OF THE TRIBUNAL DATED 23 RD JUNE, 2006 IN WHICH ADDITION REGARDING RS.1,50,000 /- WAS SUSTAINED. IT CAN BE MENTIONED HERE THAT THE SAID ORDER OF THE TRIBUNAL WAS AN EX PARTE ORDER WHICH WAS RECALLED AND LATER ON VIDE ORDER DA TED 26 TH FEBRUARY, 2009 ITAT HAS CONFIRMED THE ORDER OF THE CIT (A) VIDE WHICH A DDITION OF RS.1,05,000/- WAS DELETED. IN THIS VIEW OF THE SITUATION, THE ISSUE TO BE CONSIDERED IN THE PRESENT APPEAL IS REGARDING LEVY OF PENALTY ON THE BALANCE ADDITION OF RS.45,000/-. 3. IT HAS BEEN THE SUBMISSION OF THE ASSESSEE RIGHT FROM THE BEGINNING THAT THE SAID AMOUNT OF RS.1,50,000/- WHICH WAS FOUND AS CASH DURING THE SEARCH PROCEEDINGS BELONGS TO HIS PROPRIETARY CONCERN M/S RISHAB INDUSTRIES AND DUE TO MISFORTUNE THE ASSESSEE COULD NOT COMPLETE THE CASH BOOK AT THAT TIME AND THE SAME WAS CONSIDERED TO BE UNEXPLAINED. LATER ON, T HE ASSESSEE EXPLAINED THE SAID CASH OUT OF CASH AVAILABLE IN THE HANDS OF M/S RISHAB INDUSTRIES AND THE CASH BOOK COMPLETED AFTER SEARCH PROCEEDINGS CLEARL Y SHOWS THAT THE SAID AMOUNT OF RS.1,50,000/- WAS AVAILABLE TO THE ASSESS EE AS ON THE DATE OF THE SEARCH. THIS POSITION HAS BEEN EXPLAINED BY THE AS SESSEE IN THE SUBMISSIONS MADE BEFORE THE CIT (A) AS UNDER:- THAT IT WAS EXPLAINED TO THE AO THAT THE CASH REPR ESENTED CASH IN HAND OF M/S RISHAB INDUSTRIES OF WHICH THE APPELLAN T IS THE PROPRIETOR. THAT OUT OF THE ABOVE RS.1,50,000/-, R S.70,000/- HAD BEEN WITHDRAWN FROM BANK IN APRIL, 97 AND ANOTHER R S.35,000/- HAD BEEN SIMILARLY WITHDRAWN IN JULY, 97. THE REST OF THE MONEY HAD BEEN COLLECTED FROM CASH SALES AND FROM DEBTORS. T HAT THE CASH BOOK DID SHOW THE FOLLOWING WITHDRAWALS FROM THE BA NK RS.40,000/- ON 4.4.97, RS.30,000/- ON 8.4.97, RS.20,000/- ON 4. 7.97 AND RS.15,000/- ON 7.7.97. PHOTOCOPIES FROM THE SEIZED CASH BOOK HAVE BEEN FURNISHED THEY SHOW THE CASH WITHDRAWAL. THAT UPDATION OF THE CASH BOOK AFTER THE SEARCH ON THE BASIS OF V OUCHERS, SEIZED AND NON SEIZED, SHOWS AN OPENING BALANCE OF RS.1,37 ,087/- ON 30.7.97. IT (SS) A NO.81/DEL/2009 3 4. LD. AR AFTER NARRATING THE FACTS, SUBMITTED THAT A CASH BOOK WAS PREPARED AND ACCORDING TO WHICH THE AMOUNT OF RS.1,50,000/- WAS AVAILABLE TO THE ASSESSEE. IT WAS SUBMITTED THAT TO THE EXTENT OF R S.1,05,000/- THE CIT (A) HAS ACCEPTED THE CONTENTION OF THE ASSESSEE ON THE GROU ND THAT THESE AMOUNTS WERE WITHDRAWN FROM BANK IN APRIL, 1997 AND JULY, 1007. HE CONTENDED THAT TO THE EXTENT THE CONTENTION OF THE ASSESSEE THAT THE REST OF THE MONEY WAS COLLECTED FROM CASH SALES AND FROM DEBTORS WAS NOT ACCEPTED. HE, THUS, SUBMITTED THAT CASH IN HAND BEING AVAILABLE WITH THE ASSESSEE, THE EXPLANATION OF THE ASSESSEE WAS BONA FIDE AND ASSESSEE ALSO COULD SUBSTANTIATE THE EXPLANATION, THEREFORE, IT WAS NOT A FIT CASE WHERE LEVY OF PENALTY COULD BE H ELD JUSTIFIED. 5. ON THE OTHER HAND, LD. DR RELIED UPON THE ORDER OF THE AO AND CIT (A). 6. WE HAVE CAREFULLY CONSIDERED RIVAL CONTENTIONS I N THE LIGHT OF THE MATERIAL PLACED BEFORE US. THE ASSESSEE HAS SUBMITTED AN EX PLANATION THAT THE SAID CASH IN HAND WAS AVAILABLE WITH THE ASSESSEE FROM HIS PR OPRIETARY BUSINESS, NAMELY, M/S RISHAB INDUSTRIES. THE CIT (A) HAS ACCEPTED TH E SAID EXPLANATION OF THE ASSESSEE TO THE EXTENT OF RS.1,05,000/- BY OBSERVIN G THAT THERE WERE BANK WITHDRAWALS. THE OTHER EXPLANATION OF THE ASSESSEE THAT THE BALANCE MONEY WAS COLLECTED FROM CASH SALES AND DEBTORS WAS NOT ACCEP TED. HOWEVER, THE ASSESSEE, WITH THE HELP OF CASH BOOK MAINTAINED, HA S SHOWN THAT THE SAID CASH WAS AVAILABLE WITH THE ASSESSEE. THUS, THE EXPLANA TION FURNISHED BY THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE AND IT ALSO CANNOT BE SAID THAT THE EXPLANATION OF THE ASSESSEE WAS NOT BONA FIDE AS NO MATERIAL HAS BEEN BROUGHT ON RECORD TO SUGGEST THAT THE CASH BOOK LATER ON CO MPLETED CONTAINED ANY ENTRY WHICH COULD NOT BE SUPPORTED BY THE ASSESSEE. IN T HIS VIEW OF THE SITUATION, WE ARE OF THE OPINION THAT IT IS NOT A FIT CASE WHERE LEVY OF PENALTY COULD BE HELD JUSTIFIED IN RESPECT OF BALANCE AMOUNT. THEREFORE, WE DELETE THE PENALTY. IT (SS) A NO.81/DEL/2009 4 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. . THE ORDER PRONOUNCED IN THE OPEN COURT ON 05.02.201 0. SD/- SD/- [G.E. VEERABHADRAPPA] [I.P. BANSAL] VICE PRESIDENT JUDICIAL MEMBER DATED, , 2010. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES