Shri Bherulal P Lavti, JAMNAGAR v. The Income Tax Officer, Ward 1 (3), JAMNAGAR

ITA 1223/RJT/2010 | 1993-1994
Pronouncement Date: 18-03-2011 | Result: Allowed

Appeal Details

RSA Number 122324914 RSA 2010
Assessee PAN AAIPL4960E
Bench Rajkot
Appeal Number ITA 1223/RJT/2010
Duration Of Justice 5 month(s)
Appellant Shri Bherulal P Lavti, JAMNAGAR
Respondent The Income Tax Officer, Ward 1 (3), JAMNAGAR
Appeal Type Income Tax Appeal
Pronouncement Date 18-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 18-03-2011
Assessment Year 1993-1994
Appeal Filed On 18-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH SMC RAJKOT BEFORE SHRI A.L. GEHLOT (AM) I.T.A. NO.1223/RJT/2010 (ASSESSMENT YEAR 1993-94) BHERUAL PANNALAL LAVTI VS ITO WD.1(3) PROP OF KK ENTERPRISE JAMNAGAR SPL SHED NO.430 UDYOGNAGAR JAMNAGAR PAN : AAIPL4960E (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI JC RANPURA RESPONDENT BY : SHRI AVINASH KUMAR O R D E R THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A) JAMNAGAR DATED 04-08-2010 FOR THE ASSESSMENT YEAR 1 993-94 WHEREBY HE CONFIRMED THE PENALTY OF RS.1 20 000 IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ADDITION OF RS.3 LAKHS U/S 68 OF THE ACT ON ACCOUNT OF DEPOSIT IN THE NAME OF SHRI HANSRAJ M EGHJI PATEL HAS BEEN CONFIRMED AT THE ITAT LEVEL. THE ASSESSING OFFICER LEVIED PENALTY OF RS. 1 20 000 U/S 271(1)(C) ON THAT ADDITION BEING 100% OF TAX SO UGHT TO BE EVADED. THE CIT(A) CONFIRMED THE PENALTY AFTER REJECTING ASSESS EES CONTENTION THAT ON IDENTICAL SET OF FACTS THE CIT(A) IN ASSESSMENT YEA R 1994-95 HAS CANCELLED THE PENALTY U/S 271(1)(C) BY OBSERVING THAT FACTS IN TH AT YEAR WERE ENTIRELY DIFFERENT. IN THE YEAR 1994-95 THE AMOUNT OF ADDITION WAS IN T HE NAME OF SHRI BHAVANJI HIRJI PATEL. HOWEVER IN THE YEAR UNDER CONSIDERATION T HE CREDIT IS IN THE NAME OF SHRI SHRI HANSRAJ MEGHJI PATEL AND THE ASSESSEE FAILED T O PRODUCE ANY EVIDENCE IN RESPECT OF TRANSACTION LIKE CREDITWORTHINESS OF THE DEPOSITOR CAPACITY OF THE DEPOSITOR AND ALSO THE GENUINENESS OF THE TRANSACTI ON. ITA NO.1223/RJT/2010 2 3. THE LD.AR SUBMITTED THAT THE FACTS OF THE CASE U NDER CONSIDERATION ARE SIMILAR TO EARLIER YEAR 1994-95 WHEREIN THE CIT(A) CANCELLED THE PENALTY AND ON APPEAL FILED BY THE REVENUE THE ITAT HAS DISMISSED REVENUES APPEAL CONFIRMING THE ORDER OF THE CIT(A) VIDE ORDER DATED 23-09-2010 IN ITA NO.111/RJT/2009. THE LD.AR FURTHER SUBMITTED THAT THE ASSESSEE HAS FURNI SHED ALL THE RELEVANT DETAILS BUT THE ADDITION WAS SUSTAINED ONLY ON THE STATEMEN TS OF SHRI HANSRAJ MEGHJI PATEL. IN EARLIER YEAR AS WELL AS IN THE YEAR UNDE R CONSIDERATION THE QUANTUM MATTER HAS BEEN DECIDED BY THE CIT(A) BY A COMMON O RDER FOR BOTH THE ASSESSMENT YEARS 1993-94 AND 1994-95. HE SUBMITTED THAT THE REVENUE IS NOT CORRECT IN ADOPTING DUAL STEPS ON SAME SET OF FACTS WHEN IN ASSESSMENT YEAR 1993-94 ON SAME SET OF FACTS THE PENALTY CANCELLED BY CIT(A) HAS BEEN UPHELD BY THE ITAT. THEREFORE THERE IS NO QUESTION OF SU STAINING PENALTY FOR THE YEAR UNDER CONSIDERATION FOR ASSESSMENT YEAR 1994-95. T HE LD.AR SUBMITTED THAT DURING THE ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED ALL THE RELEVANT DETAILS IN RESPECT OF IDENTITY CREDITWORTHINESS AN D GENUINENESS OF THE TRANSACTION IN THE FORM OF CONFIRMATION AND OTHERS. HE SUBMITT ED THAT SHRI HANSRAJ MEGHJI PATEL IS ASSESSED TO TAX. THE LD.AR SUBMITTED THAT PENALTY U/S 271(1)(C) CANNOT BE LEVIED MERELY ON THE GROUND THAT ADDITION WAS MA DE U/S 68 OF THE ACT. THE LD.AR IN SUPPORT OF HIS CONTENTION RELIED UPON THE JUDGMENTS OF THE GUJARAT HIGH COURT IN THE CASE OF JALARAM OIL MILLS 253 ITR 192 (GUJ) NATIONAL TEXTILES VS CIT 249 ITR 125 (GUJ). 4. THE LD.DR ON THE OTHER HAND RELIED UPON THE OR DER OF THE CIT(A) AND SUBMITTED THAT THE CIT(A) HAS VERY CLEARLY HELD THA T THE ASSESSEE DID NOT PRODUCE ANY EVIDENCE TO SHOW THAT THE TRANSACTION WAS GENUI NE. 5. I HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES RECORD PERUSED. IN QUANTUM MATTER ADDITION OF RS.3 LAKHS WAS MADE BY ASSESSING OFFICER ON THE BASIS OF STATEMENT OF SHRI MAGANLAL HIRJI PATEL REC ORDED U/S 131 OF THE ACT WHEREIN SHRI MAGANLAL HIRJI PATEL AFFIRMED THAT HE IS DOING BOGUS HAWALA DEALINGS AND MAINTAINS BOOKS OF ACCOUNT BANK ACCOUNT AND FI LES BOGUS RETURNS OF INCOME ITA NO.1223/RJT/2010 3 IN THE NAMES OF SEVERAL PERSONS INCLUDING SHRI HANS RAJ MEGHJI PATEL IN WHOSE NAMES DEPOSIT OF RS.3 LAKHS WAS ACCEPTED BY THE ASS ESSEE. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE SHRI HANSRAJ MEGHJI PATEL. THE ASSESSEE TRIED TO C ONTACT THE TAXPAYER BUT UNFORTUNATELY IT WAS INFORMED TO THE ASSESSING OFFI CER THAT THE PARTY WAS OUT OF STATION AND WILL BE ATTENDING THE OFFICE OF THE ASS ESSING OFFICER IMMEDIATELY ON HIS RETURN. WHILE MAKING THE ORIGINAL ASSESSMENT THE S AID DEPOSIT WAS ACCEPTED AS GENUINE DEPOSITS. THE CASE WAS REOPENED AND THE IM PUGNED ADDITION WAS MADE FOR WHICH THE PENALTY IS LEVIED U/S 271(1)(C) OF TH E ACT. 6. MERELY BECAUSE AN ADDITION HAS BEEN MADE BY INVO KING PROVISIONS OF S.68 PENALTY UNDER S. 271(1)(C) COULD NOT BE LEVIE D. THE SETTLED LEGAL POSITION IS THAT THE EXPLANATION TO S. 271(1)(C) RAISES A REBUT TABLE PRESUMPTION AND THE BURDEN WHICH IS CAST ON AN ASSESSEE IS AKIN TO A CI VIL BURDEN WHICH MAY BE DISCHARGED ON A PREPONDERANCE OF PROBABILITIES. KE EPING THIS LEGAL POSITION IN MIND IT IS NOT POSSIBLE TO STATE WITH CERTAINTY TH AT THE ASSESSEE FAILED TO RETURN THE CORRECT INCOME DUE TO ANY FRAUD OR ANY GROSS OR WIL LFUL NEGLECT ON ITS PART. CERTAIN ENTRIES WERE FOUND CREDITED IN THE BOOKS OF THE ASS ESSEE MAINTAINED FOR THE PREVIOUS YEAR AND THE EXPLANATION OFFERED BY THE AS SESSEE ABOUT THE NATURE AND SOURCE OF SUCH ENTRIES WAS NOT SATISFACTORY IN THE OPINION OF THE ITO AND ACCORDINGLY IN THE ASSESSMENT PROCEEDINGS THE SAI D SUMS WERE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE FOR THE AS SESSMENT YEAR UNDER CONSIDERATION. IT IS A CASE WHERE THE ASSESSEE HAS CONCEDED THAT THE ENTRIES IN QUESTION MAY BE TREATED AS HIS INCOME AND ADDED BY VIRTUE OF PROVISIONS OF S. 68 OF FOR THE PURPOSES OF ASSESSING THE TOTAL INCOME O F THE ASSESSMENT YEAR. FROM THIS CONCESSION IT IS AN ENTIRELY DIFFERENT MATTER WHETHER THE SAID SUM COULD BE TREATED AS CONCEALED INCOME OF THE YEAR UNDER CONSI DERATION. ON THE BASIS OF THE ASSESSEE AGREEING TO HAVE CREDIT ENTRIES IN ITS BOOKS OF ACCOUNTS TREATED AS ITS INCOME BY VIRTUE OF PROVISIONS OF S. 68 THE S AID SUMS SHALL BE DEEMED TO BE INCOME OF THE YEAR UNDER CONSIDERATION. HOWEVER D E HORS THE SAID PROVISION IT ITA NO.1223/RJT/2010 4 IS NOT POSSIBLE TO STATE WITH CERTAINTY THAT THE SA ID SUMS WOULD BE CONCEALED INCOME OF THE ASSESSEE FOR THE YEAR UNDER CONSIDER ATION. 7. IN THE CASE UNDER CONSIDERATION THE ENTIRE FOCUS OF THE ADDITION IS ON THE STATEMENT OF SHRI MAGANLAL HIRJI PATEL. THE LEARNE D AR POINTED OUT THAT ON SIMILAR CIRCUMSTANCES THE ADDITION WAS MADE IN ASS ESSEES OWN CASE FOR ASSESSMENT YEAR 1994-95 ON THE BASIS OF STATEMENT O F SHRI MAGANLAL HIRJI PATEL BUT THE CIT(A) VIDE ORDER DATED 03-09-2009 CANCELLE D THE PENALTY BY OBSERVING THAT THE ASSESSING OFFICER DID NOT MAKE ANY INDEPEN DENT ENQUIRY BEFORE LEVYING PENALTY U/S 271(1)(C). THE REVENUE FILED APPEAL AG AINST THE ORDER OF CIT(A) FOR ASSESSMENT YEAR 1994-95 WHICH HAS BEEN DISMISSED BY THE ITAT VIDE ORDER DATED 23-09-2010 IN ITA NO.111/RJT/2009. THE ITAT WHILE UPHOLDING THE ORDER OF THE CIT(A) FOR ASSESSMENT YEAR 1994-95 OBSERVED THA T MERE CONFIRMATION OF ADDITION BASED ON A THIRD PARTY STATEMENT WHICH WAS NOT CONFRONTED TO THE ASSESSEE WOULD NOT ENTAIL THE ASSESSEE TO CONCEALME NT PENALTY. I FOLLOW THE ABOVE ORDER OF ITAT DATED 23-09-2010 IN ITA NO.111R JT/2009 AND TO MAINTAIN THE CONSISTENCY ON IDENTICAL SET OF FACTS I CANCEL THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT. 8. IN THE RESULT APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18- 03-201 1. SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER RAJKOT DT : 18 TH MARCH 2011 PK/- ITA NO.1223/RJT/2010 5 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) JAMNAGAR 4. THE CIT JAMNAGAR 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT