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Income Tax Appellate Tribunal, “ B ” BENCH, AHMEDABAD
Before: SHRI KUL BHARAT & SHRI AMARJIT SINGH
आदेश / O R D E R
PER AMARJIT SINGH - AM: The captioned appeals have been filed at the instance of the Assessee against the separate orders of the Commissioner of Income Tax (Appeals)–XX, Ahmedabad [CIT(A) in short] vide appeal no.CIT(A)- XV/DCIT. Cir-9/139/12-13 and CIT(A)-XXI/493/11-12 dated 21/03/2014 & 26/05/2014 arising in the assessment order passed under s.143(3) r.w.s.254 of the Income Tax Act, 1961(hereinafter referred to as "the Act") and penalty order passed u/s.271(1)(c) of the Act dated 26/12/2008 and 14/03/2012 respectively relevant to Assessment Year (AY) 1998-99.
ITA Nos.1632 and 2065/Ahd/2014 Shree Parshwanath Corporation vs. ACIT (OSD) AY 1998-99 2 2. First, we shall take up the assessee’s appeal in ITA No.1632/Ahd/2014 for AY 1998-99.
The solitary ground of appeal of the assessee is against the order of Ld.CIT(A)-XX, Ahmedabad dated 21/03/2014 in confirming the addition of Rs.16,24,622/- made by the Assessing Officer u/s.68 of the Act.
The brief facts of the case are that the assessee has had filed its return of income on 08/12/1998 declaring total income of Rs.NIL. The original assessment u/s.143(3) of the Act was passed on 30/03/2001 determining total income of Rs.82,52,686/-. The Assessing Officer has treated deposits of Rs.84,75,610/- from Hariraj Society, Posun Society and Sundry Depositors as unexplained on the basis of unsigned confirmation letters from the aforesaid two parties and non-furnishing of confirmation from the Sundry depositors. Thereafter, the ld.CIT(A) vide order dated 08/07/2002 has deleted the aforesaid addition holding that Assessing Officer had not made any inquiry nor examined the creditors and the deposits were received by account payee cheque. Subsequently, the ITAT Ahmedabad Bench vide order dated 11/06/2007 has restored the matter back to the file of Assessing Officer with a direction to decide the assessment afresh after affording adequate opportunity to the assessee.
Thereafter, the Assessing Officer has completed assessment u/s.143(3) r.w.s. 254 of the Act on 26/12/2008 and reiterated the same addition to the amount of Rs.84,75,610/- which were made at the time of original assessment u/s.143(3) of the Act on 30/03/2001 stating that
ITA Nos.1632 and 2065/Ahd/2014 Shree Parshwanath Corporation vs. ACIT (OSD) AY 1998-99 3 genuineness of transactions and creditworthiness of the persons were not proved.
5.1. Further, the Ld.CIT(A) vide order dated 13/01/2009 has deleted the addition to the amount of Rs.25 lakhs of deposits received from two societies; namely, (i) Hariraj Society and (ii) Posun Society and restricted the addition in respect of deposits received from sundry depositors to the amount of Rs.30,05,518/-. Thereafter, the ITAT Ahmedabad Bench vide order dated 07/09/2012 has set aside the issue of unexplained deposit received from Hariraj Society to the amount of Rs.10 lakhs and deposits received from sundry depositors to the extent of Rs.16,24,622/- to the file of Ld.CIT(A) to be decided after taking into consideration the additional evidences furnished by the assessee. Thereafter, the Ld.CIT(A) vide order dated 21/03/2014 has restricted the addition to the extent of Rs.16,24,622/- in respect of deposits received from sundry depositors stating that in all the cases of 140 sundry depositors, the assessee could not establish the identity, genuineness and creditworthiness.
During the course of hearing before us, the Ld.counsel for the assessee has furnished paper-book containing details of submission and information furnished before the Assessing Officer and the CIT(A) in the course of assessment proceedings and appellate proceedings. She has also contended that during the course of original assessment proceedings, the Assessing Officer has not called for any information and confirmation in respect of sundry deposits received from 140 parties and per party quantum of deposits received was less than Rs.20000/-. She has further
ITA Nos.1632 and 2065/Ahd/2014 Shree Parshwanath Corporation vs. ACIT (OSD) AY 1998-99 4 submitted that confirmation from these sundry parties were submitted during the course of set aside assessment proceedings. However, the Assessing Officer in the set aside proceedings has only issued summons to 20 depositors. Out of these depositors in the seven cases the depositors have attended in pursuance to summons issued u/s.131 of the Act and confirmed the deposits with other details like identification, date of return of deposit, mode of payment/repayment by cheque , etc. These details have been mentioned at page Nos.17 to 19 of the CIT(A)’s order. In the seven cases, the depositors has not attended personally but the similar details as above in compliance to the summons have been filed. She further stated that because of old matter, six of the depositors had left the places as per the addresses available on record. It is further contended that Ld.CIT(A) has treated the total deposits of Rs.16,24,622/- pertaining to 140 depositors as unexplained on the basis of deficiency in the information collected in the case of 20 depositors, however, total deposits of Rs.3,78,135/- was only obtained from the 20 depositors to whom the summons u/s.131 of the Act were issued.
On the other hand, the Ld.DR vehemently supported the orders of the authorities below.
We have heard both the sides and perused the material available on record. In the light of the facts mentioned as above in this order pertaining to the issue of confirming the addition of Rs.16,24,622/- as unexplained deposits u/s.68 of the Act, it is clear that during the course of original assessment proceedings the Assessing Officer has not called for any confirmation from the assessee in respect of deposits received
ITA Nos.1632 and 2065/Ahd/2014 Shree Parshwanath Corporation vs. ACIT (OSD) AY 1998-99 5 less than Rs.20,000/- per person. Subsequently, during the course of appellate proceedings the assessee has filed confirmation of deposit from such sundry depositors before the Ld.CIT(A), however, Ld.CIT(A) has not admitted these evidences under Rule 46A of the Act without considering the material fact that Assessing Officer has not called for any such information at the time of original assessment proceedings. Thereafter, the ITAT vide order dated 07/09/2012 has directed the ld.CIT(A) to admit such additional evidences confirmations in respect of 140 parties furnished by the assessee. In pursuance of the order of the ITAT, during the course of set aside proceedings, the Assessing Officer has issued summons to only 20 depositors out of 140 depositors from whom the assessee has obtained deposits to the amount of less than Rs.20,000/- per party. It is observed after perusal of material on record, that Assessing Officer has not called for confirmation/evidences from the sundry depositors at the time of assessment proceedings. After a gap of 14 years, in the set aside proceedings, the Assessing Officer has issued summons to only 20 depositors who had partly made compliance as mentioned above in this order. However, the Assessing Officer has not accepted the information on the ground that details of cheque numbers and copy of passbook etc. have not been furnished. The Assessing Officer has treated the whole amount of deposits of Rs.16,24,622/- as unexplained on the reasoning that 20 of the depositors to whom the summons issued had made partial compliance as elaborated above in this order.
In the light of the above facts and circumstances, we consider that it is not justified to treat the whole deposits of Rs.16,24,622/- received from
ITA Nos.1632 and 2065/Ahd/2014 Shree Parshwanath Corporation vs. ACIT (OSD) AY 1998-99 6 140 persons on the basis of partial information received from 20 depositors as unexplained without considering the material fact it was 14 years old matter and verification in any other form were not carried out from the remaining depositors. Therefore, we restrict the disallowance as unexplained deposits to the extent of Rs.3,78,135/- pertaining to 20 persons and delete the remaining additions of Rs.12,46,487/-.
In the result, assessee’s appeal in ITA No.1632/Ahd/2014 for AY 1998-99 is partly allowed.
Now we take up the assessee’s appeal in ITA No.2065/Ahd/2014 for AY 1998-99.
In the captioned appeal, the assessee is aggrieved by the order of the CIT(A)-XXI, Ahmedabad whereby the penalty under s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as "the Act") amounting to Rs.10,51,930/- levied by the Assessing Officer (AO) was confirmed by the CIT(A).
Vide above mentioned order passed in assessee’s appeal in ITA No.1632/Ahd/2014 the substantial quantum addition to the extent of Rs.12,46,487/- out of Rs.16,24,622/- has been deleted by restricting the disallowance to the extent of deposit of Rs.3,78,135/- pertaining to 20 persons to whom summons were issued by the Assessing Officer u/s.131 of the Act. The other major part of addition were detected in the appellate proceedings.
ITA Nos.1632 and 2065/Ahd/2014 Shree Parshwanath Corporation vs. ACIT (OSD) AY 1998-99 7 14. In respect of sustaining partial addition to the extent of Rs.3,78,135/- on the basis of incomplete information furnished by the parties to whom the summons u/s.131 were issued by the Assessing Officer, we consider force in the contention of the assessee that because of quite old matter, some of the information, in respect of the aforesaid parties could not be furnished. Considering these material fact, it is appropriate to sustain the quantum addition for want of complete information but it is not justified to levy penalty u/s.271(1)(c) of the Act as the Assessing Officer has not established with any relevant material that the assessee has furnished inaccurate particulars of income.
In the combined result, appeal of the assessee in ITA No.1632/Ahd/2014 for AY 1998-99 is partly allowed, whereas appeal of the assessee in ITA No.2065/Ahd/29014 for AY 2008-99 is allowed. This Order pronounced in Open Court on 25/ 04/2019
Sd/- Sd/- (AMARJIT SINGH ) ( KUL BHARAT ) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad; Dated 25/ 04 /2019 ट�.सी.नायर, व.�न.स./T.C. NAIR, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True //Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad