Suryodaya Market Creators Pvt.Ltd., Baroda v. The Income tax Officer,Ward-4(3),, Baroda

ITA 2874/AHD/2012 | 2001-2002
Pronouncement Date: 11-10-2013 | Result: Dismissed

Appeal Details

RSA Number 287420514 RSA 2012
Assessee PAN AAECS9182J
Bench Ahmedabad
Appeal Number ITA 2874/AHD/2012
Duration Of Justice 9 month(s) 21 day(s)
Appellant Suryodaya Market Creators Pvt.Ltd., Baroda
Respondent The Income tax Officer,Ward-4(3),, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 11-10-2013
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 11-10-2013
Date Of Final Hearing 13-08-2013
Next Hearing Date 13-08-2013
Assessment Year 2001-2002
Appeal Filed On 21-12-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMADABAD BEFORE SHRI D.K.TYAGI JUDICIAL MEMBER AND SHRI T.R. MEENA ACCOUNTANT MEMBER ITA NO. 2874/AHD/2012 ASSESSMENT YEAR :2001-02 SURYODAYA MARKET CREATORS PVT LTD. C-24 SAHYOG SOCIETY GORWA REFINERY ROAD BARODA. V/S . THE INCOME TAX OFFICER WARD 4(3) AYAKAR BHAVAN RACE COURSE CIRCLE BARODA. PAN NO. A A ECS9182J (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI D. K. PARIKH A.R. /BY RESPONDENT SHRI P. L. KUREEL SR. D.R. /DATE OF HEARING 14.08.2013 /DATE OF PRONOUNCEMENT 11.10.2013 O R D E R PER : SHRI T.R.MEENA ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF ASSESSEE WHICH H AS EMANATED FROM THE ORDER OF CIT(A)-III BARODA DATED 05.09.2012 F OR ASSESSMENT YEAR 2001- 02. THE SOLE GROUND OF APPEAL IS AGAINST CONFIRMIN G THE PENALTY U/S. 271(1)(C) AT RS. 1 77 975/-. 2. THE A.O. PASSED ORDER U/S. 271(1)(C) ON 21.07.20 10 FOR A.Y. 2001-02. THE ASSESSEE FILED RETURN ON 31.10.2001 DECLARING B USINESS LOSS AT RS.44 97 302/-. THE ASSESSMENT U/S. 144 WAS COMPLE TED ON 26.12.2003 COMPUTING TOTAL INCOME AT RS. 46 20 309/-. PENALTY PROCEEDING U/S.271(1)(C) ITA NO. 2874/AHD/12 A.Y. 01-02 PAGE 2 HAS BEEN INITIATED ON ACCOUNT OF ADDITIONS MADE ON ISSUE I.E. UNEXPLAINED LOANS AMOUNTING TO RS.6 83 733/- U/S. 68 OF THE IT ACT. THE ASSESSEE HAD SHOWN UNSECURED LOAN FROM FRIENDS AND RELATIVES WH ICH WERE SHOWN AS ON 31.03.2000 AT RS.1 81 000/- WHICH HAS BEEN INCREAS ED TO RS.8 64 733/- IN THE YEAR UNDER CONSIDERATION. THUS HE RECEIVED FR ESH LOAN OF RS.6 83 733/- DURING YEAR UNDER CONSIDERATION. THE ASSESSEE WAS GIVEN REASONABLE OPPORTUNITY OF BEING HEARD IN QUANTUM ADDITION BUT A.O. WAS NOT SATISFIED WITH THE EXPLANATION. THUS HE MADE ADDITION OF RS. 6 8 3 733/- AND INITIATED PENALTY U/S. 271(1)(C). AGAINST THE ADDITION MADE THE ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A) WHO HAD CONFIRMED THE ADDITION OF RS.6 83 733/- VIDE HIS ORDER NO. CAB/III/217/2003-04 DATED 06.10. 2006. THEREAFTER THE ASSESSEE HAD FILED APPEAL BEFORE THE HONBLE ITAT V IDE HIS ORDER DATED 08.01.2010 HAS CONFIRMED THE ADDITION OF RS.4 50 0 00/- OUT OF TOTAL ADDITION OF RS.6 83 733/-. THE ASSESSEE WAS GIVEN A FRESH OPPO RTUNITY BEFORE IMPOSING THE PENALTY WHICH WAS REPLIED BY THE ASSESSEE AND CONSIDERED BY THE A.O. AND HELD THAT THE ASSESSEE HAD WILLFULLY KNOWINGLY AND WITHOUT REASONABLE CAUSE FURNISHED INACCURATE PARTICULARS OF ITS INCOM E AND THUS TRIED TO CONCEAL THE INCOME SO AS TO EVADE PAYMENT OF TAX THEREON. THUS EXPLANATION-1 TO SECTION 271 OF THE IT ACT 1961 IS CLEARLY APPLICAB LE TO THE CASE OF ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND CONCEALING THE INCOME. HE LEVIED 100% PENALTY ON ADDITION OF RS.4 50 000/- AN D TAX OF RS.1 77 975/- AT RS.1 77 975/-. ITA NO. 2874/AHD/12 A.Y. 01-02 PAGE 3 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A ) WHO HAD CONFIRMED THE PENALTY BY CONSIDERING GUJARAT HIGH COURT DECIS ION IN CASE OF NATIONAL TEXTILES VS. CIT (2000) 249 ITR 125 (GUJ) & CIT VS. JALARAM OIL MILLS (2002) 253 ITR 192 (GUJ.) AND HELD THAT HONBLE GUJARAT HIGH COURT HAS CONSID ERED THE ISSUE OF DEEMING PROVISIONS OF SECTION 68 AND U PHELD THE PENALTY IMPOSED U/S. 271(1)(C) OF IT ACT BY THE A.O. THE LD. CIT(A ) ALSO ANALYZED FOLLOWING JUDGMENTS: SAYAJI IRON & ENGG. CO. VS. CIT (2002) 253 ITR 749 (GUJ) CIT VS . JALARAM OIL MILLS (2002) 253 ITR 192 (GUJ) T.ASHOK PAI V. CIT (2007) 292 ITR 11 (SC) AND IN THE CASE OF DILIP N. SHROFF V. KIT (2007) 291 ITR 51 (SC) CIT V. P.K. NARAYANAN 238 I TR 905 (KER) SHIVLAL TAK V. CIT (2001) 251 ITR 272 (RAJ) GOLD C OIN HEALTH FOOD 304 ITR 308 (SC) CIT VS. VEGETABLE PRODUCTS LTD. 1 973 CTR (SC) 177: (1972) 88 ITR 192 (SC) HINDUSTAN STEEL LTD. V S. STATE OF ORISSA 83 ITR 26 CIT VS SURESHCHANDRA MITTAL 251 ITR 9 (SC) USHA FERTILISERS VS. CIT 142 TAXMAN 414 (GUJ) CIT VS VIDYAGAURI NATVERLAL 238 ITR 91 (GUJ) KANTILAL MANILAL V. CIT [1981] 130 ITR 411 (GUJ); (2) CIT V. SULEMAN ABDUL SATTAR [1983] 1 39 ITR 8 (GUJ); (3) CIT V. NAMLABHAI BHANABHAI [1987] 165 WR 189 (G UJ); (4) CIT V. VILASBEN HASMUKHLAL SHAH (SMT.) [1991] 192 ITR 214 (GUJ); AND (5) CIT V. ABDULGAFUR AHMED WAGMAR [1993] 199 ITR 827 ( GUJ). ITA NO. 2874/AHD/12 A.Y. 01-02 PAGE 4 LD. CIT(A) HAS FINALLY HELD THAT IN THE PRESENT CAS E THE APPELLANT FAILED TO ESTABLISH THE IDENTITY OF LOAN CREDITORS AND GENUIN ENESS OF THE TRANSACTION BEFORE THE A.O. AS WELL AS BEFORE HIM. MAY BE THE AMOUNT WAS SMALL AND MIGHT HAVE BEEN DEPOSITED BY THE SEVERAL DEPOSITORS /MEMBERS BUT SUCH THING WOULD NOT ABSOLVE THE ASSESSEE FROM DISCHARGING ITS INITIAL ONUS TO PROVE THE IDENTITY CREDITWORTHINESS OF CREDITORS AND GENUINE NESS OF THE TRANSACTION IN THE MATTER. 4. NOW THE ASSESSEE IS BEFORE US. LD. COUNSEL FOR THE APPELLANT SUBMITTED AS UNDER: PENALTY OF RS. 1 77 975/- UNDER SECTION 271(1)(C) IS LEVIED IN RESPECT OF SMALL DEPOSITS RANGING FROM RS. 450 TO RS. 1000 ACCEPTED FROM THE MEMBERS FOR WHICH DETAILS WERE FURNISHED IN REMAND PROCEEDINGS. (GROUND NO. 1.2) AS STATED IN STATEMENT OF FACTS THE NAMES ADDRESSES OF MEMBERS AND DEPOSIT AMOUNT RECEIVED WAS APPEARING IN THE MEMBERSHIP CARDS PROD UCED BEFORE AO DURING REMAND PROCEEDINGS HOWEVER CONFIRMATION COULD NOT BE PRODUCED DUE TO CLOSURE OF BUSINESS. P ROCEEDINGS BEFORE CIT (APPEALS) TOOK PLACE IN THE YEAR 2006 RE LATING TO F.Y. 2000-01. THESE FACTS WERE BROUGHT TO NOTICE OF CIT( A) IN PENALTY PROCEEDINGS AND NOTED BY HIM AT PARA 2.5 OF HIS ORDER ON PENALTY WHICH MAY BE KINDLY TAKEN NOTE OF. CASE LAWS AT PARA 2.18 NOTED BY CIT(A) IN HIS ORDER SUPPORT THE CASE OF APPELLANT. THE CASE OF USHA FERTILISERS 142 TAXMAN 414 IS DISTINGUISHABLE ON FA CTS AS IN THAT CASE EVEN THE NAMES OF PERSONS FROM WHOM THE AMOUNT WAS BORROWED AND DETAILS OF AMOUNT WAS NOT GIVEN BY ASS ESSEE. SIMILARLY CASE OF VIDYAGAURI NATEVERLAL 238 ITR 91 IS ON DIFFERENT FACTS THAT IF ENTRIES MADE IN THE BOOKS WERE FOUND TO BE BOGUS MERE ITA NO. 2874/AHD/12 A.Y. 01-02 PAGE 5 SHOWING THE RECEIPT AS CREDITS WILL NOT ABSOLVE FRO M PENALTY. SUCH ARE NOT THE FACTS OF APPELLANT. THE JUDGMENT OF NATIONAL TEXTILES 249 ITR 125 SUPPO RTS THAT EVEN IF ADDITION U/S 68 IS MADE THAT WOULD NOT LEAD TO PENA LTY U/S 271(1)(C). HON'BLE AHMEDABAD TRIBUNAL IN THE CASE OF RAMESH IN DUSTRIES VS ITO ITA NO. 209/AHD/2013 HAS ALSO HELD FOLLOWING GUJARAT HIGH COURT JUDGMENT IN NATIONAL TEXTILES AND DELETE D PENALTY EVEN WHERE ADDITION U/S 68 WAS CONFIRMED BY ITAT . HE FURTHER RELIED UPON THE CO-ORDINATE A BENCH DE CISION IN CASE OF M/S. RAMESH INDUSTRIES VS. ITO WARD-2 GODHARA WHEREIN AFTER CONSIDERING THE DECISION OF HONBLE GUJARAT HIGH COURT IN CASE OF N ATIONAL TEXTILES (SUPRA) ALLOWED THE APPEAL IN FAVOUR OF THE ASSESSEE. AT T HE OUTSET LD. SR. D.R. RELIED UPON THE ORDER OF THE CIT(A) AND ARGUED THAT HONBL E GUJARAT HIGH COURT IN CASE OF USHA FERTILISERS VS. CIT 142 TAXMAN 414 (GUJ) BY CONSIDERING THE ORDER OF THE NATIONAL TEXTILES AS WELL AS OTHER CAS ES OF HONBLE GUJARAT HIGH COURT ON THIS ISSUE CITED BY THE ASSESSEE BEFORE HO NBLE GUJARAT HIGH COURT HAS HELD THAT THE EXPLANATION WAS NOT FANTASTIC OR UNACCEPTABLE. IT SHOULD NOT BE ANY OR EVERY EXPLANATION BY THE ASSESSEE MUST BE ACCEPTED. THUS HE PRAYED TO CONFIRM THE PENALTY. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE TOTAL ADDITION CONFIRMED BY THE ITAT A T RS.4 50 000/- OUT OF TOTAL ADDITION OF RS. 6 83 733/-. IN THIS CASE NO PLOSI VE REPLY COULD BE OFFERED BY THE ASSESSEE BY ADDUCING ANY CORROBORATIVE EVIDENCE . THE SAME AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME. TH E CO-ORDINATE D BENCH IN ITA NO. 2874/AHD/12 A.Y. 01-02 PAGE 6 ITA NO. 2912/AHD/2009 FOR A.Y. 2001-02 IN QUANTUM A PPEAL HAS DECIDED AS UNDER: 8.1 FOR THE REST OF THE AMOUNT OF APPROXIMATELY RS . 4 50 000/- BEING DEPOSIT FROM MEMBERS DURING THE YEAR THE FAC T REMAIN THAT THE ASSESSEE DID NOT FURNISH ANY CONFIRMATION BEFORE TH E AO AS WELL AS BEFORE THE LEARNED CIT(A). MAY BE THE AMOUNT WAS S MALL AND MIGHT HAVE BEEN DEPOSITED BY SEVERAL DEPOSITORS/MEMBERS BUT SUCH THING WOULD NOT ABSOLVE THE ASSESSEE FROM DISCHARGING ITS INITIAL ONUS TO PROVE THE CREDIT WORTHINESS OF THE CREDITORS AND GE NUINENESS OF THE TRANSACTIONS IN THE MATTER. WE ACCORDINGLY CONFIR M THE ADDITION ON THIS COUNT BEING THE AMOUNT RECEIVED FROM SEVERAL MEMBERS/DEPOSITORS. WE CONFIRM THE FINDINGS OF THE AUTHORITIES BELOW ON THIS ISSUE AND CONFIRM THEIR ORDERS. AS A RESULT PART OF THIS GROUND OF APPEAL IS DISMISSED. THE ASSESSEE DID NOT FURNISH ANY NAME AND ADDRESS O F THE DEPOSITORS WITH CONFIRMATION BEFORE THE A.O. THEREFORE THE ASSESS EE HAD NOT DISCHARGED HIS BURDEN TO PROVE THE GENUINENESS OF THE TRANSACTION. THE HONBLE GUJARAT HIGH COURT IN CASE OF USHA FERTILISERS VS. CIT (SUPRA) IS SQUARELY APPLICABLE AS IT HAS BEEN DELIVERED AFTER CONSIDERING THE VARI OUS CASE LAWS REFERRED BY THE ASSESSEE BEFORE US AGAINST ASSESSEE. THE CO-O RDINATE A BENCH DECISION IN CASE OF RAMESH INDUSTRIES (SUPRA) THE ADDITION WAS U/S. 68 BUT ASSESSEE HAS FURNISHED THE CONFIRMATION AFFIDAVITS 7-12 FARMERS AND GRAM PANCHAYAT CERTIFICATES AND SOME OF THE CASH CREDITO RS WERE PRODUCED BEFORE THE A.O. FOR EXAMINATION. THEREFORE CO-ORDINATE A BENCH DECISION IN CASE ITA NO. 2874/AHD/12 A.Y. 01-02 PAGE 7 OF RAMESH INDUSTRIES (SUPRA) IS NOT SQUARELY APPLIC ABLE. THUS WE CONFIRM THE ORDER OF THE CIT(A) AND DISMISS THE APPEAL OF THE A SSESSEE. 6. IN THE RESULT THE ASSESSEES APPEAL IS DISMISSE D. THIS ORDER PRONOUNCED IN OPEN COURT ON 11.10.2013 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ) ) 12( / DR ITAT AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ 8/ 1 ': ) 12( ;