JAMUNA GRANITE UDYOG, Jaipur v. ITO, BEHROR

ITA 728/JPR/2010 | 1999-2000
Pronouncement Date: 28-07-2011 | Result: Partly Allowed

Appeal Details

RSA Number 72823114 RSA 2010
Assessee PAN AADFJ1138M
Bench Jaipur
Appeal Number ITA 728/JPR/2010
Duration Of Justice 1 year(s) 1 month(s) 13 day(s)
Appellant JAMUNA GRANITE UDYOG, Jaipur
Respondent ITO, BEHROR
Appeal Type Income Tax Appeal
Pronouncement Date 28-07-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 28-07-2011
Assessment Year 1999-2000
Appeal Filed On 14-06-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH B JAIPUR (BEFORE SHRI R.K.GUPTA AND SHRI N.L.KALRA) ITA NO.728 729 & 811/ JP/2010 ASSESSMENT YEAR 1999-2000 2000-01 & 2001-02 PAN: AADFJ 1138 M M/S. JAMUNA GRANITE UDYOG VS THE ITO INDUSTRIAL AREA SHAHPURA WARD BEHROR JAIPUR BEHROR (APPELLANT ) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL DEPARTMENT BY : SHRI K.C. MEENA ORDER PER N.L. KALRA AM:- THE ASSESSEE HAS FILED APPEALS AGAINST RESPECTIVE ORDERS OF THE LD. CIT(A) ALWAR DATED 08-03-10 05-03-10 AND 25-03-10 FOR THE ASSESSMENT YEARS 1999-2000 TO 2001-02. IN ALL THE APPEALS THE ASSESSEE IS AGGRIEVED AGAINST CONFIRMING THE PENALTY U/S 271(1)(C) OF THE ACT. 2.0 FIRST OF ALL WE WILL TAKE UP THE APPEAL OF THE ASSESSEE FOR THE ASSESSMENT YEAR 1999-2000. 2.1 THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANU FACTURING AND SALE OF GRANITE TILES. A SURVEY U/S 133A OF THE ACT WAS CON DUCTED ON 9-8-2000. THE COPY OF LOOSE PAPERS AND OTHER DOCUMENTS WERE OBTAI NED DURING SURVEY. THE 2 STATEMENT OF ONE SHRI SUBHASH GUPTA MANGER OF THE ASSESSEE FIRM AND BROTHER OF ONE OF THE PARTNER WAS GOT RECORDED. DUR ING THE COURSE OF SURVEY A NOTE BOOK BEARING ANNEXURE NO. B-3 WAS FOUND. THE COPY OF THIS DOCUMENT WAS OBTAINED BY THE SURVEY PARTY. THIS NOT E BOOK WAS IN THE FORM OF LEDGER. AT PAGE 82 OF THIS NOTE BOOK THERE WAS AN ACCOUNT OF SHRI SAYAR SINGH . THE ENTRIES IN THIS DOCUMENT WERE FOUND TO BE IN HANDWRITING OF SHRI SUBHASH GUPTA. SHRI SUBHASH GUPTA IN THE STATEMENT ADMITTED THAT WHEN THE FIRM NEED THE CASH BALANCE THE SAME WAS DEPOSITED IN THE NAME OF SHRI SAYAR SINGH. SHRI SAYAR SINGH IS NON-EXISTENT PERSO N. THE TOTAL CREDIT ENTRIES FOR THE ASSESSMENT YEAR 1999-2000 WERE TO THE EXTEN T OF RS. 1.40 LACS. THE PEAK CREDIT BALANCE DURING THE YEAR WAS RS. 75 000 /- AND CLOSING BALANCE IN THE ACCOUNT OF SHRI SAYAR SINGH WAS ZERO. HENCE TH E ADDITION OF RS. 75 000/- WAS MADE. 2.2 BEFORE THE AO THE ASSESSEE CONTENDED THAT THE PEAK CREDIT IN THE CASE OF SHRI SAYAR SINGH FROM FINANCIAL YEAR 1998-99 TO 2000-01 WAS OF RS. 2 96 564/- AND THE SAME HAS BEEN OFFERED FOR TAXATI ON DURING THE ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2001-02. HENCE THE SUM OF RS. 75 000/- STANDS INCLUDED IN THE PEAK AND THEREFORE PENALTY IS NOT LEVIABLE. THE AO AFTER CONSIDERING THE CONTENTION OF THE ASSESSEE HE LD THAT THE SUM WAS CREDITED IN THE ACCOUNTS AND IN THE NAME OF THE NON -EXISTENT PERSON AND IT HAS 3 BEEN ADMITTED THAT THE SUM BELONGED TO THE FIRM. TH EREFORE THE PENALTY WAS IMPOSED. 2.3 THE LD. CIT(A) CONFIRMED THE PENALTY. 2.4 WE HAVE HEARD BOTH THE PARTIES. THERE HAVE BEEN ADDITIONS ON ACCOUNT OF CREDIT OF RS. 75 000/-. THERE ARE ALSO DISALLOWA NCES U/S 40A(3) TO THE EXTENT OF RS. 1.05 LACS. IN RESPECT OF CASH PAYMENT S THE ENTRIES ARE AVAILABLE IN THE BOOKS OF ACCOUNT AND IT IS NOT THE CASE OF T HE REVENUE THAT SUCH PAYMENTS ARE NON-GENUINE. THE PAYMENTS IN CASH HAVE BEEN MADE FOR PURCHASING THE RAW MATERIAL. THE GENUINENESS OF THE TRANSACTIONS HAVE NOT BEEN DOUBTED. HENCE THE PENALTY IN RESPECT OF ADDI TION U/S 40A(3) IS NOT LEVIABLE. IN RESPECT OF ADDITION OF RS. 75 000/- T HERE ARE EVIDENCE ON THE RECORD THAT THE SUM WAS CREDITED IN THE NAME OF THE NON-EXISTENT PERSON AND THE ENTRIES WERE MADE BY THE MANAGER OF THE FIRM. H ENCE THE AO WAS JUSTIFIED IN IMPOSING THE PENALTY ON THE ADDITION O F RS. 75 000/-. PENALTY IS HELD ON THE ADDITION OF RS. 75 000/-. THE AO WILL R ECOMPUTE THE MINIMUM PENALTY. ITA NO. 729/JP/2010 (ASSESSMENT YEAR 2000-01) 3.1 IN THIS ASSESSMENT YEAR THE ADDITION ON WHICH PENALTY HAS BEEN IMPOSED IS TO THE EXTENT OF RS. 2.85 LACS WHICH REP RESENTED PEAK CREDIT ENTRIES IN THE NAME OF SHRI SAYAR SINGH. 4 3.2 BEFORE US THE LD. AR HAS STATED THAT THE ADDIT ION OF RS. 75 000/- AS PEAK CREDIT IN THE NAME OF SHRI SAYAR SINGH WAS MAD E AND THEREFORE THE AMOUNT TO THAT EXTENT WAS AVAILABLE WITH THE ASSESS EE DURING THE YEAR UNDER CONSIDERATION. THE LD. AR FURTHER SUBMITTED THAT PE AK OF RS. 2 96 564/- INCLUDING THE PEAK OF THIS YEAR HAS BEEN OFFERED FO R TAXATION IN THE ASSESSMENT YEAR 2001-02. THE ASSESSEE HAS ALREADY P AID TAX ON THE ADDITION WHICH IS MORE THAN THE PEAK AS PEAK CREDIT OF ONE Y EAR HAS NOT BEEN GIVEN CREDIT IN THE SUBSEQUENT YEAR. 3.3 WE HAVE HEARD BOTH THE PARTIES. IT IS MENTIONED IN THE ASSESSMENT ORDER OF EARLIER YEAR THAT CLOSING BALANCE IN THE N AME OF SHRI SAYAR SINGH WAS NIL. THUS PEAK CREDIT WHICH HAS BEEN ADDED IN T HE IMMEDIATELY PRECEDING YEAR IS TO BE CONSIDERED AS AVAILABLE WIT H THE ASSESSEE. HENE THE PENALTY U/S 271(1)( C) IS TO BE IMPOSED IN RESPECT OF ADDITION TO THE EXTENT OF RS. 2.10 LACS. THE AO WILL RECOMPUTE THE PENALTY AS THE LD. CIT(A) HAS ALREADY DIRECTED THAT MINIMUM PENALTY IS TO BE IMPO SED AS AGAINST 200% OF TAX SOUGHT TO BE EVADED IMPOSED BY THE AO. 4.1 IN THE ASSESSMENT YEAR 2001-02 THE AO HAS IMPO SED THE PENALTY ON THE FOLLOWING ADDITIONS. 1. ADDITION IN RESPECT OF ENTRIES IN THE NAME SHRI SAYAR SINGH PALSANIA RS. 2 96 554/- 5 2. ADDITION U/S 68 ON ACCOUNT OF DHARTI DHAN ENTERPRISES RS. 48 900/- 3. DISALLOWANCE MADE U/S 40A(3) RS. 46 240/- 4.2 IN THE ORIGINAL ASSESSMENT THE ADDITION MADE U/S 68 ON ACCOUNT OF SHRI SAYAR SINGH PALSANIA WAS RS. 3.10 LACS. THE IS SUE WAS RESTORED ON THE FILE OF THE AO AND THE AO VIDE ORDER DATED 31-10-20 07 ASCERTAINED THE PEAK AT RS. 2 96 564/-. THE LD. AR HAS SUBMITTED THAT TH E PEAK CREDIT OF THE TRANSACTION RELATING TO THREE YEARS IS TO THE EXTEN T OF RS. 2 96 564/-. CONSIDERING THE AMOUNT ADDED IN THE ASSESSMENT YEAR 1999-2000 2000-01 IT IS CLEAR THAT THE BALANCE OF PEAK CREDIT SHOULD BE CONSIDERED FOR THE PENALTY BECAUSE THE ASSESSEE HAD THE FUNDS AVAILABLE FROM E ARLIER YEARS. WE THEREFORE FEEL THAT THE CONTENTION OF THE LD. AR I S CORRECT. HENCE FOR THE PURPOSE OF PENALTY THE AMOUNT WHICH IS TO BE CONSI DERED FOR THE PURPOSE OF PENALTY WILL BE RS. 11 564/-. THE ADDITION OF RS. 4 8 900/- WAS MADE ON ACCOUNT OF CREDIT IN THE NAME OF DHARTI DHAN ENTERP RISES. THE ADDITION HAS BEEN CONFIRMED BY THE LD. CIT(A). THE ACCOUNT OF DH ARTI DHAN ENTERPRISES IS AVAILABLE AT PAGE NO 9 F ANNEXURE NO. B-2. THE A SSESSEE WAS REQUIRED TO PRODUCE THE CONFIRMATION WITH M/S. DHARTI DHAN ENTE RPRISES. THE ASSESSEE DID NOT FILE ANY CONFIRMATION IN SPITE OF VARIOUS O PPORTUNITIES PROVIDED. THE AO DIRECTED THE INSPECTOR TO MAKE ENQUIRY AT THE AD DRESS GIVEN BY THE 6 ASSESSEE AND IT WAS FOUND THAT NO SUCH CONCERN IS AVAILABLE AT THE ADDRESS GIVEN BY THE ASSESSEE. THE ASSESSEE SHOWED THE SALE TO M/S. DHARTI DHAN ENTERPRISES AND MENTIONED THAT THE CONCERN M/S. DHA RTI DHAN ENTERPRISES IS AT JAIPUR. THE INSPECTOR MADE ENQUIRY AND FOUND THA T THERE WAS A CONCERN NAMELY M/S. DHARTI DHAN ENTERPRISES IN SHAHPURA. TH E PROPRIETOR OF M/S. DHARTI DHAN ENTERPRISES SHAHPURA STATED THAT THEY HAVE NOT MADE ANY PURCHASES FROM M/S. JAMUNA GRANITE UDYOG AS PER THE IR BILL DATED 01-09- 2000. SUCH LETTER WAS CONFRONTED TO THE ASSESSEE ON 27-03-04 BUT NO REPLY WAS FILED. THUS THE DEPOSIT OF CREDIT IN THE NAME O F DHARTI DHAN ENTERPRISES WAS HELD AS NOT VERIFIABLE AND THEREFORE THE ADDIT ION OF RS. 48 900/- WAS MADE. 4.3 IN THE SHOW CAUSE NOTICE ISSUED BY THE AO IN RE SPECT OF IMPOSITION OF PENALTY THE ASSESSEE HAS NOT GIVEN ANY EXPLANATION IN RESPECT OF SUCH ADDITION. HENCE THE AO WAS JUSTIFIED IN IMPOSING T HE PENALTY. 4.4 FOLLOWING OUR FINDINGS FOR THE ASSESSMENT YEAR 1999-2000 WE HOLD THAT PENALTY IS NOT IMPOSABLE IN RESPECT OF THE DIS ALLOWANCE MADE U/S 40A(3). HENCE FOR THE ASSESSMENT YEAR 2001-02 THE PENALTY IS TO BE IMPOSED ON UNDISCLOSED INCOME OF RS. 60 460/- THE AO WILL RECO MPUTE THE MINIMUM PENALTY IMPOSABLE ON CONCEALED INCOME OF RS. 60 464 /-. 7 5. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE P ARTLY ALLOWED.. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 28-07 -2011. SD/- SD/- (R.K. GUPTA) (N.L. KALRA) JUDICIAL MEMBER ACCOUNTANT MEMBER JAIPUR DATED; 28/07/2011 *MISHRA COPY FORWARDED TO :- 1. M/S. JAMUNA GRANITE UDYOG INDL. AREA SHAHPURA JA IPUR 2. THE ITO WARD - BEHROR 3. THE LD. CIT BY ORDER 4. THE LD. CIT(A) 5. THE LD.DR 6. THE GUARD FILE (ITA NO.728/JP /10) A.R ITAT JAIPUR 8 9