Madanlal M.Khanna, Surat v. The Dy.CIT.,Cent.Circle-2,, Surat

ITA 2854/AHD/2009 | 2002-2003
Pronouncement Date: 05-02-2010 | Result: Allowed

Appeal Details

RSA Number 285420514 RSA 2009
Assessee PAN ADTPK8859M
Bench Ahmedabad
Appeal Number ITA 2854/AHD/2009
Duration Of Justice 3 month(s) 20 day(s)
Appellant Madanlal M.Khanna, Surat
Respondent The Dy.CIT.,Cent.Circle-2,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 05-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 05-02-2010
Assessment Year 2002-2003
Appeal Filed On 15-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD. BEFORE: HON'BLE SHRI T.K. SHARMA JUDICIA L MEMBER AND HON'BLE SHRI D.C. AGRAWAL ACCOUNTANT MEMBER ITA NOS.2850 2852 2854 2856 2858 2860 & 2874/A HD/2009 ASSESSMENT YEARS : 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 & 2006-2007 MADANLAL M. KHANNA SURAT (PAN : ADTPK 8859 M) VERSUS DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 SURAT (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI C.K. MISHRA SR. D.R. FOR THE RESPONDENT : S/SHRI RASESH SHAH AND HARD IK VORA ORDER PER BENCH :- THESE ARE THE SEVEN APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-II AHMEDAB AD DATED 01.07.2009. THE FIRST FIVE APPEALS FOR THE ASSESSMENT YEARS 2000-01 TO 2005-06 ARE THROUGH A COMMON ORDER WHEREAS APPEAL BEING ITA NO. 2874/AHD/2009 F OR THE ASSESSMENT YEAR 2006- 07 IS THROUGH A SEPARATE ORDER. ALL THESE APPEALS I NVOLVED COMMON FACTS AND COMMON ISSUES AND HENCE THEY ARE TAKEN UP TOGETHER FOR TH E SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 18.01.2006. NOTICE UNDER SECTION 153A(A) WAS ISSUED TO THE ASSESSEE ON 09.11.2006. THE RETURN OF INCOME WAS FILED ON 27.11.2006 GIVING DETAILS AS UNDER :- A.Y. DECLARED INCOME DATE OF RETURN FILED DATE OF ASSESSMENT ASSESSED INCOME ADDITION PENALTY LEVIED 2000- 01 RS.1 06 730/- 27.11.06 28.12.2007 RS.1 61 830/- RS.51 100/- RS.12 203/- 2001- 02 RS.1 31 020/- 27.11.06 28.12.2007 RS.1 86 560/- RS.45 540/- RS.17 309/- 2002- 03 RS.1 49 070/- 27.11.06 28.12.2007 RS.2 00 075/- RS.51 005/- RS.15 589/- 2003- 04 RS.1 46 890/- 27.11.06 28.12.2007 RS.8 33 290/- RS.6 86 400/- RS.2 16 060/- 2004- 05 RS.1 41 920/- 27.11.06 28.12.2007 RS.3 47 520/- RS.2 05 600/- RS.58 256/- 2005- 06 RS.3 28 210/- 27.11.2006 28.12.2007 RS.4 34 921/- RS.1 06 711/- RS.32 654/- 2006- 07 RS.1 95 830/- 28.03.2007 28.12.2007 RS.3 47 830/- RS.1 52 000/- RS.53 627/- 2 ITA NOS.2850 2852 2854 2856 2858 2860 & 2874AHD/2 009 THE REASONS FOR ADDITION IN RESPECT OF YEARS ARE SU MMARIZED AS UNDER :- ASSESSMENT YEAR : 2000-2001 : DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. FOUND THAT ASSESSEE HAS GIVEN LOANS TO MRINAL DYES & CHEMICALS OF RS.16 500/- KAUSHAL KHANNA OF RS.33 000/- AND PAID SUNDRY ADVAN CES OF RS.5 600/- AGGREGATING TO RS.51 100/-. NO EXPLANATION OF THIS LOAN AND ADV ANCES WAS GIVEN. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ALSO NOTED THAT NO EXPLANATION BEFORE HIM HAS BEEN GIVEN. ASSESSMENT YEAR : 2001-2002 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS GIVEN A LOAN TO TALING TO RS.45 540/- TO MRINAL DYES & CHEMICALS OF RS.15 180/- AND KAUSHAL KHANNA OF RS.30 360/- . THE ASSESSEE DID NOT FURNISH ANY EXPLANATION OF THIS INVESTMENT EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 3. THE LD. A.R. SUBMITTED THAT SUNDRY LOAN OF RS.51 100/- AND 45 540/- WERE REFLECTED IN THE BALANCE-SHEET AND WAS EXPLAINABLE FROM THE AMOUNT OF CAPITAL AND SUNDRY CREDITS STANDING IN THE BALANCE-SHEET. THE A .O. HAS NOT DOUBTED THE FINANCIAL STATEMENTS FILED WITH THE RETURN OF INCOME. THIS AM OUNT CANNOT BE TREATED AS UNEXPLAINED. THE ASSESSEE HAS ACCEPTED THE ADDITION TO BUY PEACE. 4. ASSESSMENT YEAR : 2002-2003 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS GIVEN A LOAN AGGREGATING TO RS.51 005/- TO MRINAL DYES & CHEMICALS OF RS.17 002 /- AND KAUSHAL KHANNA OF RS.34 003/- OUT OF UNACCOUNTED INCOME. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION OF THIS INVESTMENT EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 5. IN THIS YEAR ALSO IT WAS EXPLAINED BY THE LD. A .R. THAT SUNDRY LOANS OF RS.65 800/- ARE REFLECTED IN THE BALANCE-SHEET FILE D WITH THE RETURN OF INCOME THEREFORE IT CANNOT BE TREATED AS UNEXPLAINED. 3 ITA NOS.2850 2852 2854 2856 2858 2860 & 2874AHD/2 009 6. ASSESSMENT YEAR : 2003-2004 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS DEPOSITED A SUM OF RS.6 86 400/- IN BANK A/C.. THE ASSESSEE DID NOT F URNISH ANY EXPLANATION OF THIS INVESTMENT EITHER BEFORE THE A.O. OR BEFORE THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS). ASSESSMENT YEAR : 2004-2005 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS DEPOSITED A SUM OF RS.2 05 600/- IN A BANK A/C. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION OF THI S INVESTMENT EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(AP PEALS). 7. THE LD. A.R. SUBMITTED THAT IN RESPECT OF ASSESS MENT YEARS 2003-04 AND 2004- 05 ADDITION HAS BEEN MADE ON ACCOUNT OF UNACCOUNTE D CASH DEPOSIT IN THE BANK. THE BANK A/CS. ARE REFLECTED IN THE BALANCE-SHEET. THE CASH WAS DEPOSITED OUT OF CURRENT YEARS INCOME AND IS REFLECTED IN THE BOOKS OF ACCO UNTS. THE ADDITION WAS AGREED TO BUY PEACE AND TO AVOID LITIGATION. 8. ASSESSMENT YEAR : 2005-2006 : DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT THE ASSESSEE HAS DEPO SITED UNACCOUNTED CASH OF RS.10 000/- AND MADE AN INVESTMENT IN FIXED DEPOSIT IN BANK OF RS.96 711/- AGGREGATING TO RS.1 06 711/-. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). IT WAS EXPLAINED THAT THESE DEPOSITS WERE MADE BY HIS FATH ER WHO IS AN ELDERLY PERSON OUT OF HIS SAVINGS. THE A.O. DID NOT ACCEPT THE EXPLANATIO N AND IMPOSED THE PENALTY. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRM ED THE SAME. 9. IT WAS EXPLAINED BY THE LD. A.R. THAT UNACCOUNTE D FIXED DEPOSIT IN THE BANK AND CASH DEPOSIT IN THE ICICI BANK A/C. WAS FOUND D URING THE COURSE OF SEARCH. IT WAS EXPLAINED THAT IT IS COMING OUT OF CASH SAVINGS OF HIS FATHER. FURTHER EXPLANATION COULD NOT BE SUBMITTED ON ACCOUNT OF SENTIMENTAL VALUE AN D ADDITION WAS AGREED TO BUY PEACE. 4 ITA NOS.2850 2852 2854 2856 2858 2860 & 2874AHD/2 009 10. ASSESSMENT YEAR : 2006-2007 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS DEPOSITED UNACCOUNTED CASH IN BANK AMOUNTING TO RS.1 52 000/-. THE ASSESSEE DID N OT FURNISH ANY EXPLANATION EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). 11. IT WAS EXPLAINED BY THE LD. A.R. THAT THERE WAS SUFFICIENT CASH BALANCE IN THE BOOKS OF THE ASSESSEE ON THE DATE OF SEARCH. NO ADD ITION IS CALLED FOR BUT CERTAINLY NO PENALTY CAN BE LEVIED. 12. SINCE NO EXPLANATION WAS FURNISHED IN RESPECT O F ABOVE ADDITIONS BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE LE ARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE PENALTY PROCEEDIN GS. HE REJECTED THE CONTENTION OF THE ASSESSEE THAT HER CASE IS COVERED BY THE DEC ISION OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS.- CIT [(2006) 282 ITR 642] (GUJ.). IN THIS REGARD HE OBSERVED THAT A.O. HAS I NITIALLY PENALTY PROCEEDINGS BOTH FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PAR TICULARS OF INCOME. IN THIS REGARD WE RE-PRODUCE PARA 6 FROM THE ORDER OF LEARNED COMM ISSIONER OF INCOME TAX(APPEALS) AS UNDER :- 6. THE RATIO OF THE CASE LAW RELIED UPON BY THE AP PELLANT IS NOT APPLICABLE IN THIS CASE. IN THAT CASE (NEW SORA THIA ENGINEERING VS.- CIT) THE A.O. LEVIED THE PENALTY FOR USING THE WORD CONCEALMENT OF INCOME OR FURNISHING INACCURAT E PARTICULARS OF INCOME. IT WAS UPHELD BY THE C.I.T. (A) AND TRIBUNAL AND ON THOSE FACTS THE HON'BLE HIGH COURT HELD THAT LOWER AUTHORITY HAS NOT DISCUSSED WHETHER PENALTY I S FOR CONCEALMENT OF INCOME OR IT IS FOR INACCURATE PARTI CULARS OF INCOME AND THE PENALTY WAS NOT SUSTAINED. HOWEVER IN THE PRESENT CASE THE FACT IS THAT PENA LTY IS LEVIABLE BOTH FOR CONCEALMENT OF INCOME AND FOR FIL ING INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE THE A.O . HAS USED THE WORDS CONCEALMENT OF INCOME/FURNISHING INACCURATE PARTICULARS OF INCOME. IN ENGLISH LANGUAGE THE / IS ALSO USE D FOR CONJUNCTION AND FOR EXAMPLE HE IS INTELLIGENT/ HANDSOME PERSON MEANS HE IS INTELLIGENT AND ALSO HANDSOME P ERSON. THE FACTS OF THE PRESENT CASE SUGGESTS THAT THE A.O. HA S USED THE / FOR DENOTING AND. THEREFORE PENALTY IS LEVIED BOTH F OR CONCEALMENT OF INCOME AND FURNISHED INACCURATE PARTICULARS OF I NCOME. THE PENALTY IS ALSO LEVIABLE UNDER EXPLANATION 5 TO SEC TION 271(1)(C) OF THE ACT. 5 ITA NOS.2850 2852 2854 2856 2858 2860 & 2874AHD/2 009 IN VIEW OF THESE FACTS IT IS HELD THAT LEVY OF PEN ALTY IS JUSTIFIED AND THE SAME IS CONFIRMED. THIS PARA IS COMMON IN BOTH THE APPELLATE ORDERS. 13. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIAL AVAILABLE ON RECORD. THE LD. A.R. SUBMITTED THAT THE FACTS OF TH E CASE ARE SQUARELY COVERED BY THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF NEW SORATHIA ENGINEERING CO. (SUPRA). IT IS INCORRECT ON THE PART OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) TO HOLD OTHERWISE. THE A.O. IS REQUIRE D TO GIVE SPECIFIC FINDING AS TO WHETHER THE CASE IS COVERED BY MAIN PROVISION OR BY EXPLANATION. HE HAS TO SPECIFICALLY MENTION WHETHER THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THI S REGARD SIMILAR DECISION DATED 17.09.2009 HAS BEEN TAKEN BY THE HON'BLE ITAT B BENCH AHMEDABAD IN THE CASE OF SHREEJI GAS AGENCY VS.- ACIT IN ITA NO. 1518/AH D/2009. IN OUR CONSIDERED VIEW NO PENALTY CAN BE LEVIED IN EITHER OF THESE T HREE YEARS BECAUSE IN THE ASSESSMENT YEAR PRIOR TO SEARCH AMOUNTS OF INVESTMENT ARE REF LECTED IN THE BALANCE-SHEET AND IN OTHER YEARS THE A.O. DID NOT CONSIDER THE EXPLANAT ION OF THE ASSESSEE THAT MONEY WAS OUT OF CASH SAVINGS OF HIS FATHER OR THAT CASH WAS REFLECTED IN THE BOOKS. IN VIEW OF THE FACT THAT EXPLANATION (1B) TO SECTION 271(1)(C) HAS NOT BEEN FULLY INVOKED BY THE A.O. THEREFORE PENALTY CANNOT BE LEVIED. IT IS NOT PROV ED THAT EXPLANATION OF THE ASSESSEE IS NOT BONAFIDE OR THAT SOME MATERIAL FACT HAS BEEN OM ITTED. WE ACCORDINGLY CANCEL THE PENALTY. 14. IN THE RESULT ALL THE SEVEN APPEALS FILED BY T HE ASSESSEE ARE ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 5 TH FEBRUARY 2010. SD/- SD/- S (T.K. SHARMA) ( D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER DATED: 05/02/2010 6 ITA NOS.2850 2852 2854 2856 2858 2860 & 2874AHD/2 009 COPY OF THE ORDER IS FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER // TRUE COPY // ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT AHMEDABAD BENCHES AHMEDABAD. LAHA/SR. P.S.