JOYS VARGHESE, v. ITO 25(3),

CO 45/MUM/2013 | 2006-2007
Pronouncement Date: 12-07-2013 | Result: Dismissed

Appeal Details

RSA Number 4519923 RSA 2013
Assessee PAN ACZPV3704B
Bench Mumbai
Appeal Number CO 45/MUM/2013
Duration Of Justice 4 month(s) 13 day(s)
Appellant JOYS VARGHESE,
Respondent ITO 25(3),
Appeal Type Cross Objection
Pronouncement Date 12-07-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 12-07-2013
Assessment Year 2006-2007
Appeal Filed On 28-02-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I MUMBAI BEFORE SHRI P.M. JAGTAP ACCOUNTANT MEMBER & SHRI SANJAY GARG JUDICIAL MEMBER ITA NO. 979 /MUM/2011 ASSESSMENT YEAR: 2006-07 ITO 25(3)(2) C-11 R. NO. 306 PRATYAKSHA KAR BHAVAN BANDRA KURLA COMPLEX BANDRA (EAST) MUMBAI-400 051 VS. SHRI JOYS VARGHESE B-605 KARTIKEYA CHS LTD. PLOT NO. 16 RSC-25 SECTOR 8 CHARKOP KANDIVALI (W) MUMBAI-400 067 PAN: ACZPV3704B (APPELLANT) (RESPONDENT) AND C.O. NO. 45 /MUM/2013 (ARISING OUT OF ITA NO. 979/MUM/2011 FOR ASSESSMEN T YEAR: 2006-07) SHRI JOYS VARGHESE B-605 KARTIKEYA CHS LTD. PLOT NO. 16 RSC-25 SECTOR 8 CHARKOP KANDIVALI (W) MUMBAI-400 067 PAN: ACZPV3704B VS. ITO 25(3)(2) C-11 R. NO. 306 PRATYAKSHA KAR BHAVAN BANDRA KURLA COMPLEX BANDRA (EAST) MUMBAI-400 051 (CROSS OBJECTOR) (RESPONDENT) REVENUE BY : MR. O.P. SINGH ASSESSEE BY : SHRI SHEKHAR KADAM DATE OF HEARING : 08.07.2013 DATE OF PRONOUNCEMENT : 12.07.2013 O R D E R PER SANJAY GARG JM: THIS APPEAL FILED BY THE REVENUE AND THE CROSS OBJE CTIONS FILED BY THE ASSESSEE ARE DISPOSED OF WITH THIS COMMON ORDER. T HE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER OF THE CIT(A) DATED 26.11. 2010 DELETING THE PENALTY ITA NO. 979 /MUM/2011 & C.O. NO. 45 /MUM/2013 ( ARISING OUT OF ITA NO. 979/MUM/2011) THE ITO 25(3)(2) V. SHRI JOYS VARGHESE ASSESSMENT YEAR: 2006-07 2 IMPOSED UPON THE ASSESSEE BY THE ADDL. CIT UNDER SE CTION 271-D OF THE INCOME TAX ACT 1961. 2. DURING THE ASSESSMENT PROCEEDINGS THE AO NOTICE D THAT THE ASSESSEE HAD RECEIVED CASH LOANS EXCEEDING RS. 20 000/- TOTALING TO RS. 4 75 000/-. HE THUS SUBMITTED PROPOSAL TO ADDL. CIT FOR INITIATION OF P ENALTY PROCEEDING UNDER SECTION 271-D OF THE INCOME TAX ACT 1961. THE ADDL. CIT AF TER CALLING FOR EXPLANATION FROM THE ASSESSEE IMPOSED PENALTY UPON THE ASSESSEE UND ER SECTION 271-D OF THE INCOME TAX ACT. ON APPEAL THE LEARNED CIT(A) DELET ED THE SAID PENALTY. REVENUE IS THUS IN APPEAL BEFORE US. 3. THE ASSESSEE HAS ALSO FILED CROSS OBJECTIONS WHI CH ARE ALMOST SIMILAR TO THE GROUNDS OF APPEAL TAKEN BEFORE THE CIT(A). IN FACT THE ASSESSEE HAS TRIED TO JUSTIFY THE ORDER OF THE LEARNED CIT(A) THROUGH THESE CROSS OBJECTIONS. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES AND HAVE ALSO GONE THROUGH THE RECORD. THE CASE OF THE ASSESSEE IS THA T THE ASSESSEE IS A SMALL BUSINESS MAN AND IS NOT CONVERSANT WITH THE KNOW-HOW OF PREP ARATION OF ACCOUNTS ETC. AND GENERALLY DEPENDS UPON THE SKILL OF THE TAX CONSULT ANT. DURING THE RELEVANT ASSESSMENT YEAR HIS CONSULTANT CAME ACROSS THE FAC T THAT SOME ASSETS AND LIABILITIES OF THE ASSESSEE COULD NOT BE SHOWN IN THE BALANCE S HEET IN EARLIER YEARS DUE TO OVERSIGHT. THE ASSESSEE THUS FILED A REVISED BALA NCE SHEET VIDE WHICH HE SHOWED ONE FLAT AND A TWO-WHEELER PURCHASED IN THE YEAR 19 99 ON ASSETS SIDE OUT OF THE LOANS TAKEN FROM FRIENDS AND RELATIVES TO THE EXTEN T OF RS. 4 75 000/- WHICH SUM WAS SHOWN IN THE LIABILITY SIDE OF THE BALANCE SHEE T. THE REVISED BALANCE SHEET WAS FILED ONLY TO SHOW THE CORRECT STATEMENT OF AFFAIRS OF THE ASSESSEE. THE SAID LOANS WERE TAKEN BY THE ASSESSEE IN THE YEAR 1999 AND FRO M THE SAID LOANS THE ASSESSEE HAD PURCHASED THE FLAT IN QUESTION IN THE YEAR 1999 ITSELF. HOWEVER THE AO CALLED FOR CONFIRMATIONS OF THE LOAN AMOUNT. INADVERTENTLY IN THE CONFIRMATION SLIPS SO OBTAINED THE LOANS WERE SHOWN TO BE AVAILED DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR IN QUESTION. THE AO THOUGH DID NOT RECORD ANY FINDING REGARDING THE DATE OF OBTAINING OF LOANS IN THE ASS ESSMENT ORDER YET SENT THE ITA NO. 979 /MUM/2011 & C.O. NO. 45 /MUM/2013 ( ARISING OUT OF ITA NO. 979/MUM/2011) THE ITO 25(3)(2) V. SHRI JOYS VARGHESE ASSESSMENT YEAR: 2006-07 3 PROPOSAL TO THE ADDL. CIT FOR LEVY OF PENALTY UNDER SECTION 271-D OF THE INCOME TAX ACT. IN REPLY TO THE PENALTY NOTICE UNDER SECTION 2 71-D OF THE ACT THE ASSESSEE SUBMITTED THAT THE DATES MENTIONED IN THE CONFIRMAT ION LETTERS WERE MENTIONED WRONGLY BY MISTAKE. IN FACT THE LOANS WERE TAKEN I N THE YEAR 1999 AND OUT OF THAT AMOUNT THE FLAT IN QUESTION WAS PURCHASED. THE LEA RNED ADDL. CIT WAS NOT SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE AND HEN CE IMPOSED PENALTY UNDER SECTION 271-D OF THE ACT. THE LEARNED CIT(A) IN AP PEAL FOUND THAT THE ASSESSEE HAD MENTIONED THE NECESSARY DETAILS IN HIS BALANCE SHEET AND IT WAS NOT A CASE OF TAKING OF LOANS IN CASH DURING THE RELEVANT ASSESSM ENT YEAR I.E. 2006-07 BUT IT WAS A CASE OF TAKING LOANS IN THE YEAR 1999. HENCE HE D ELETED THE PENALTY. 5. LEARNED DR BEFORE US HAS VEHEMENTLY CONTENDED THAT IN THE CONFIRMATION SLIPS THE DATES OF LOANS AS MENTIONED ARE PERTAINI NG TO THE PREVIOUS YEAR. THE ASSESSEE HAS NOT GIVEN ANY CORROBORATIVE EVIDENCE T O PROVE THAT THE LOANS IN FACT WERE TAKEN IN THE YEAR 1999 EXCEPT SOME AFFIDAVITS OF THE CREDITORS MENTIONING THAT THE DATES IN THE CONFIRMATION LETTERS WERE WRITTEN WRONGLY DUE TO INADVERTENCE. ON THE OTHER HAND LEARNED AR HAS RELIED UPON THE ORDE R OF THE LEARNED CIT(A). 6. A PERUSAL OF THE ASSESSMENT ORDER DATED 19.12.20 08 REVEALS THAT THE AO HAS NOT DISCUSSED ANY FACT REGARDING OBTAINING OF LOANS BY THE ASSESSEE AND WHETHER THE SAID LOANS WERE OBTAINED BY THE ASSESSEE IN THE YEA R 1999 OR IN THE PREVIOUS YEAR RELEVANT TO A.Y. 2006-07. THOUGH A PERUSAL OF SECT ION 271-D OF THE INCOME TAX ACT REVEALS THAT THE PENALTY IS ATTRACTED IF A PERSON T AKES OR ACCEPTS ANY LOAN OR DEPOSIT IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS WHICH PROVIDES THAT THE LOANS ABOVE RS. 20 000/- TO BE ACCEPTED IN THE FORM OF AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT. THOUGH THERE IS NO SPECIFIC REQUIREMENT OF L AW THAT THE AO SHOULD GIVE A SPECIFIC FINDING IN THE ASSESSMENT ORDER IN RESPECT OF OBTAINING OF LOANS IN CASH OR THE CASE INVITING PENALTY UNDER SECTION 271-D OF TH E ACT BUT AT LEAST HE SHOULD HAVE MADE SOME MENTION OF THIS FACT IN THE ASSESSME NT ORDER. LEARNED ADDL. CIT FAILED TO APPRECIATE THE FACT ON THE FILE THAT IN THE BALANCE SHEET THE ASSESSEE HAS NOT SHOWN ANY CASH IN HAND OR ANY ASSET PURCHASED D URING THE YEAR IN QUESTION OUT ITA NO. 979 /MUM/2011 & C.O. NO. 45 /MUM/2013 ( ARISING OUT OF ITA NO. 979/MUM/2011) THE ITO 25(3)(2) V. SHRI JOYS VARGHESE ASSESSMENT YEAR: 2006-07 4 OF LOAN AMOUNT IN QUESTION. IF THE ASSESSEE WOULD H AVE OBTAINED THE LOANS IN QUESTION DURING THE PREVIOUS YEAR RELEVANT TO ASSES SMENT YEAR IN QUESTION THEN DEFINITELY IN THE ASSETS COLUMN HE SHOULD HAVE SHOW N SOME ASSETS ACQUIRED DURING THE RELEVANT YEAR. LOANS SHOWN IN THE LIABILITY COL UMN HAVE BEEN SHOWN TO BE CORRESPONDING TO THE ASSETS PURCHASED IN THE YEAR 1 999 INCLUDING ONE ROOM (FLAT) AT CHARKOP WORTH RS. 4 75 000/-. THE ASSESSEE HAS PROD UCED BEFORE THE LOWER AUTHORITY THE DOCUMENTS IN THE SHAPE OF COPY OF AGR EEMENT/ALLOTMENT LETTER TO SHOW THAT THE SAID FLAT WAS PURCHASED BY THE ASSESSEE I N THE YEAR 1999 ITSELF WHICH FACT IS NOT DISPUTED BY THE REVENUE. WHEN THE ASSESSEE H AD NOT SHOWN ANY ASSETS OBTAINED DURING THE PREVIOUS YEAR IN QUESTION THER E WAS NO QUESTION OF SHOWING ANY LIABILITY IN THE SHAPE OF LOANS OBTAINED DURING THE YEAR IN QUESTION. THE CONFIRMATION OF LOANS WERE SUBMITTED BY THE ASSESSEE ONLY TO PRO VE THE FACT THAT THE CONSIDERATION FOR THE PURCHASE OF FLAT IN THE YEAR 1999 WAS ARRANGED BY THE ASSESSEE BY WAY OF LOANS. ONLY BECAUSE DUE TO INADVERTENCE THE DATES OF LOANS HAVE BEEN MENTIONED AS THAT OF PREVIOUS YEAR RELEVANT TO ASSE SSMENT YEAR IN QUESTION I.E. YEAR 2006-07 IT DOES NOT MEAN THAT THE ASSESSEE HAS OBT AINED LOANS IN QUESTION DURING THE RELEVANT YEAR ONLY. THE SAID CONFIRMATIONS WERE SUBMITTED BY THE ASSESSEE ONLY TO SHOW THE SOURCE OF PURCHASE MONEY BY THE ASSESSE E BY WAY OF LOANS. IF THE AO WOULD NOT HAVE AGREED WITH THE DETAILS GIVEN BY THE ASSESSEE HE WOULD HAVE ADDED BACK THE VALUE OF THE FLAT AS UNEXPLAINED INCOME OF THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS ITSELF. BUT THE AO DID NOT ADOPT SUCH A COURSE WHICH MEANS HE WAS SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSE E REGARDING THE SOURCE OF PURCHASE MONEY OF THE FLAT WHICH WAS PURCHASED BY THE ASSESSEE IN THE YEAR 1999. WHEN THE AO WAS SATISFIED WITH THE EXPLANATION GIVE N BY THE ASSESSEE THERE WAS NO QUESTION TO PRESUME THAT SAID LOANS WERE TAKEN BY T HE ASSESSEE DURING THE ASSESSMENT YEAR IN QUESTION ESPECIALLY WHEN THE A SSESSEE HAS NOT SHOWN ANY ASSET OR CASH IN HAND IN HIS BALANCE SHEET ACQUIRED DURIN G THE RELEVANT PREVIOUS YEAR IN QUESTION. 7. WE THEREFORE AGREE WITH THE FINDINGS GIVEN BY THE LEARNED CIT(A) AND DO NOT FIND ANY INFIRMITY IN THE SAME. HENCE THE APPEAL O F THE REVENUE IS HEREBY DISMISSED. ITA NO. 979 /MUM/2011 & C.O. NO. 45 /MUM/2013 ( ARISING OUT OF ITA NO. 979/MUM/2011) THE ITO 25(3)(2) V. SHRI JOYS VARGHESE ASSESSMENT YEAR: 2006-07 5 8. SO FAR AS THE CROSS OBJECTIONS FILED BY THE ASSE SSEE ARE CONCERNED IT MAY BE OBSERVED THAT THE SAME ARE NOT VALID CROSS OBJECTIO NS BECAUSE THE ASSESSEE HAS NOT DISPUTED ANY FINDING OF THE LEARNED CIT(A). HENCE T HE CROSS OBJECTIONS FILED BY THE ASSESSEE DO NOT FALL WITHIN THE DEFINITION OF CROSS OBJECTIONS AND THE SAME ARE HEREBY DISMISSED. 9. IN THE RESULT THE APPEAL FILED BY THE REVENUE A S WELL AS THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 12TH DAY OF JULY 2013. SD/- SD/- (P.M. JAGTAP) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI DATED: 12.07.2013. *KKM COPY TO: THE APPELLANT THE RESPONDENT THE CIT CONCERNED MUMBAI THE CIT (A) CONCERNED MUMBAI THE DR I BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT MUMBAI.