Income Tax Appellate Tribunal - Ahmedabad
Purshottam H.Madan, Surat vs Department Of Income Tax on 27 March, 2015
आयकर अपील
य अ धकरण, अहमदाबाद यायपीठ 'सी', अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL
" C " BENCH, AHMEDABAD
सम ी जी.डी.अ वाल, उपा य एवं ी कुल भारत, या यक सद य ।
BEFORE SHRI BEFORE SHRI G.D. AGARWAL,VICE PRESIDENT (AZ) And
SHRI KUL BHARAT, JUDICIAL MEMBER
आयकर अपील सं./I.T.A. No.2398/Ahd/2011
( नधा रण वष / Assessment Year : 2005-06)
The ITO बनाम/ Shri Purshottam H.Madan
Ward-2(4) Vs. A-71, Lav Kush Apartment
Surat Opp. Jay Ambe Nagar
Thaltej
Drive-in-Road, Ahmedabad
थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : ACPHM 2556 Q
(अपीलाथ% /Appellant) .. (&'यथ% / Respondent)
अपीलाथ% ओर से / Appellant by : Shri M.K. Singh, Sr.DR
&'यथ% क) ओर से/Respondent by : Shri Umaidsingh Bhati, AR
ु वाई क) तार,ख /
सन Date of Hearing 16/03/2015
घोषणा क) तार,ख /Date of Pronounce ment 27/03/2015
आदे श / O R D E R
PER SHRI KUL BHARAT, JUDICIAL MEMBER :
This appeal by the Revenue is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-II, Surat ('CIT(A)' in short) dated 04/07/2011 pertaining to Assessment Year (AY) 2005-06. The Revenue has raised the following grounds of appeal:-
[1] On the facts and circumstances of the case and in law, the Ld.CIT(A)-II, Surat has erred in deleting the penalty imposed ITA No.2398/Ahd/2011 ITO vs. Shri Purshottam H.Madan Asst.Year - 2005-06 -2- u/s.271(1)(c) of the I.T.Act of Rs.8,73,748/- addition made on account of unexplained credit u/s.68 of the I.T.Act as the assessee has not furnished any evidences or details in support of his claim. [2] On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have upheld the order of the Assessing Officer. [3] It is, therefore, prayed that the order of the CIT(A) may be set-aside and that of Assessing Officer may be restored to the above extent.
2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.144 r.w.s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 17/12/2007, thereby the Assessing Officer (AO in short) made addition on account of unexplained cash credit amounting to Rs.16,45,726/- and unexplained creditors u/s.68 of the Act amounting to Rs.26,10,087/-. The AO while making the assessment had also initiated penalty proceedings u/s.271(1)(c) of the Act. Against the addition, the matter travelled upto the stage of this Tribunal (ITAT 'B' Bench Ahmedabad") and the Tribunal in ITA No.1568/Ahd/2009(By Assessee) and ITA No.1711/Ahd/2009 (by Revenue) for AY 2005-06, order dated 16/12/2011, was pleased to allow the ground raised by the assessee against the impugned addition. Meanwhile, on the basis of the confirmation of addition made by the ld.CIT(A), the AO levied penalty u/s.271(1)(c) of the Act amounting to Rs.8,73,748/-. The penalty so levied was challenged before the ld.CIT(A), who after considering the submissions of the assessee allowed the appeal by cancelling the penalty ITA No.2398/Ahd/2011 ITO vs. Shri Purshottam H.Madan Asst.Year - 2005-06 -3- order. Aggrieved by the order of the ld.CIT(A), now the Revenue is in appeal before us.
3. At the outset, the ld.counsel for the assessee pointed out that in quantum proceeding, this Tribunal in ITA No.1568/Ahd/2009 for the AY 2005-06 in assessee's own case, the issue against addition u/s.41(1) or u/s.68 has been decided in favour of the assessee. Therefore, he submitted that even otherwise also, the penalty would not survive in view of the order dated 16/12/2011 in ITA No.1568/Ahd/2009. 3.1. On the contrary, ld.Sr.DR supported the order of the AO. However, he did not controvert the submission of ld.AR for the assessee.
4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. We find that this Tribunal in quantum proceedings in ITA No.1568/Ahd/2009 in assessee's own case has held as under:-
"These are the salient features for the application of Sec.41(1) of the Act. If we accept the argument as raised from the side of the revenue, then the intention for which the provisions of section 41(1) of the IT Act were introduced shall be defeated. In case any liability is in doubt, which pertains to that very financial year, or the assessee is unable to establish the genuineness of the expenditure, then the same can be disallowed under the general provisions of the Statute i.e. section 37(1) of the IT Act or likewise any other provision while computing the profits & gains u/s 28 of the IT Act. But as far as applicability of section 41 (1) of the IT Act is concerned, the same is to be applied in those cases where a benefit had already been taken or a deduction was claimed and subsequently it was found that the said benefit was no more ITA No.2398/Ahd/2011 ITO vs. Shri Purshottam H.Madan Asst.Year - 2005-06 -4- permissible, then in that situation the said already availed benefit is deemed to be the profit of the assessee. As far as the ascertainment of the liability is concerned, we are of the view that there should be either remission of the liability by the concerned creditor or that there was no hope left to make the impugned payment and the liability had come to an end. However, in the present case the assessee as well as those creditors has affirmed the existence of the liability. Requisite certificates in this regard are also on record. Rather, the AO has made the impugned addition merely on the basis of the difference shown in the balance sheet in the outstanding opening balance and the closing balance of the current liabilities. The said basis was patently wrong for invoking the provisions of section 68 of the IT Act. We, therefore, held that the impugned addition was wrongly made either u/s 68 or u/s 41(1) of the IT Act. This ground of appeal of the assessee is allowed."
4.1. In view of the above decision, the penalty does not survive, hence the ground of Revenue's appeal is rejected.
5. Ground Nos.2 & 3 are general in nature which require no independent adjudication.
6. In the result, the appeal of the Revenue is dismissed.
Order pronounced in the Court on Friday, the 27th day of March, 2015 at Ahmedabad.
Sd/- Sd/-
(जी.डी.अ वाल) (कुल भारत)
उपा य या यक सद य
( G.D. AGARWAL ) ( KUL BHARAT )
VICE PRESIDENT (AZ) JUDICIAL MEMBER
Ahmedabad; Dated 27/ 03 /2015
ट,.सी.नायर, व. न.स./T.C. NAIR, Sr. PS
ITA No.2398/Ahd/2011
ITO vs. Shri Purshottam H.Madan
Asst.Year - 2005-06
-5-
आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :
1. अपीलाथ% / The Appellant
2. &'यथ% / The Respondent.
3. संबं6धत आयकर आयु8त / Concerned CIT
4. आयकर आयु8त(अपील) / The CIT(A)-II, Surat
5. 9वभागीय & त न6ध, आयकर अपील,य अ6धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड< फाईल / Guard file.
आदे शानुसार/ BY ORDER, स'या9पत & त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of dictation .. 20.3.2015 (dictation-pad 4 - pages attached at the end of this File)
2. Date on which the typed draft is placed before the Dictating Member ..23.3.2015
3. Other Member...
4. Date on which the approved draft comes to the Sr.P.S./P.S.................
5. Date on which the fair order is placed before the Dictating Member for pronouncement......
6. Date on which the fair order comes back to the Sr.P.S./P.S.......27.3.15
7. Date on which the file goes to the Bench Clerk.....................27.3.15
8. Date on which the file goes to the Head Clerk..........................................
9. The date on which the file goes to the Assistant Registrar for signature on the order..........................
10. Date of Despatch of the Order..................