Mohan Lal Swarnkar v. The ACIT, Circle-7, Jaipur
[Citation -2019-LL-0930-89]

Citation 2019-LL-0930-89
Appellant Name Mohan Lal Swarnkar
Respondent Name The ACIT, Circle-7, Jaipur
Court ITAT-Jaipur
Relevant Act Income-tax
Date of Order 30/09/2019
Assessment Year 2002-03
Judgment View Judgment
Keyword Tags furnishing of inaccurate particulars of income • disallowance of interest • unexplained cash credit • documentary evidence • return of income • levy of penalty • revised return • genuineness of transaction • identity of creditor • concealment of particulars of income
Bot Summary: The assessee filed his return of income on 31st October, 2002 declaring a loss of Rs. 80,90,669/-. Subsequently, the assessee filed revised return of income declaring loss of Rs. 29,77,789/-. A/R of the assessee has submitted that all the loan transactions were through account payee cheques reflected in the bank account maintained by the assessee which prove the genuineness of the transaction and identity of the creditor. CIT in the first round has accepted the claim of the assessee and deleted the addition. The AO has made the addition in respect of the loan creditor in respect of whom the assessee has not filed any confirmation and those parties have not responded to the notice issued by the AO. Thus it is a case of furnishing inaccurate particulars of income attracting the provisions of section 271(1)(c) of the IT Act. In the set aside proceedings, the AO accepted the claim of the assessee to the extent of Rs. 13,00,000/- as the loan creditors responded to the notice issued by the AO under section 131 of the Act. Thus in the facts and circumstances of the case when the addition was made only because the explanation of the assessee was not found to be satisfactory and not due to the reason that the claim of the assessee was bogus or absolutely false, the said addition made in the second round of litigation would not ipso facto lead to the conclusion that the assessee has furnished inaccurate particulars of income or concealed particulars of income.


IN INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC , JAIPUR Jh BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA No. 144/JP/2017 Assessment Year : 2002-03. Dr. Mohan Lal Swarnkar, cuke ACIT, 40,Sindhi Colony, Bank Park, Vs. Circle-7, Jaipur. Jaipur. PAN No. ACZPS 7410 Appellant Respondent Assessee by : Shri Manish Agarwal (CA) Revenue by: Smt. Neena Jeph (JCIT) Date of Hearing : 16.09.2019. ? Date of Pronouncement : 30/09/2019. ORDER PER VIJAY PAL RAO, JM : This appeal by assessee is directed against order dated 21.10.2016 of ld. CIT (Appeals) arising from penalty order passed under section 271(1)(c) of IT Act for assessment year 2002-03. assessee has raised following grounds of appeal :- 1. On facts and in circumstances of case and in law ld. CIT (A) erred in confirming levy of penalty of Rs. 6,03,240/- u/s 271(1)(c). 2. That appellant craves right to add, delete, amend or abandon any of grounds of appeal either before or at time of hearing of appeal. 2 ITA No. 144/JP/2017 Shri Mohan Lal Swarankar, Jaipur. 2. assessee is Doctor by profession and also proprietor of M/s. Jaipur Institute of Medical General & Radiology. assessee filed his return of income on 31st October, 2002 declaring loss of Rs. 80,90,669/-. Subsequently, assessee filed revised return of income declaring loss of Rs. 29,77,789/-. assessment under section 143(3) was completed on 23rd March, 2005 at loss of Rs. 4,57,972/- thereby AO made addition of Rs. 76,32,697/-. assessment order was challenged by assessee before ld. CIT (A) and vide order dated 13th May, 2008 ld. CIT (A) deleted addition and granted part relief. Since penalty is levied against addition made by AO on account of unexplained cash credits, therefore, addition made by AO on this account is relevant for these proceedings. AO made addition of Rs. 41,00,000/- as unexplained cash credit and ld. CIT (A) deleted Rs. 31,00,000/- out of Rs. 41,00,000/- and sustained Rs. 10,00,000/-. interest of Rs. 1,40,634/- which is proportionate to addition sustained by ld. CIT (A) was also sustained. Against order dated 13.05.2008, both assessee as well as department preferred appeals before Tribunal and this Tribunal vide order dated 29th October, 2010 confirmed order of ld. CIT (A) sustaining addition of Rs. 10,00,000/- and restored matter as regards remaining amount of Rs. 31,00,000/- which was deleted by ld. CIT (Appeals) to file of AO. In set aside proceedings, AO has repeated addition on account of unexplained cash credit to extent of Rs. 18,00,000/- and corresponding disallowance of interest of Rs. 28,000/-. Thus total addition made by AO in set aside/remand proceedings was Rs. 18,28,000/-. penalty proceedings under section 271(1)(c) were initiated in respect of addition 3 ITA No. 144/JP/2017 Shri Mohan Lal Swarankar, Jaipur. of Rs. 18,28,000/- and consequently AO levied penalty of Rs. 6,03,240/- being 100% of tax sought to be evaded. assessee challenged levy of penalty before ld. CIT (A) but could not succeed. 3. Before Tribunal, ld. A/R of assessee has submitted that all loan transactions were through account payee cheques reflected in bank account maintained by assessee which prove genuineness of transaction and identity of creditor. However, due to lapse of time, assessee was unable to furnish confirmations and documentary evidence in respect of certain loan creditors. He has further contended that out of unsecured loans which were disallowed by AO in second round, sum of Rs. 16,00,000/- were repaid during financial year 2002-03 and details of which were furnished during quantum proceedings. Thus ld. A/R submitted that once transaction was through banking channel and assessee has also repaid said amount which was not disputed by AO while completing assessment for assessment year 2003-04, then addition made for want of furnishing confirmation and other documentary evidence as well as production of loan creditor before AO would not constitute furnishing of inaccurate particulars of income or concealment of particulars of income. All necessary facts and details were furnished by assessee during assessment proceedings itself, however, not accepting claim by AO would not ipso facto attract provisions of section 271(1)(c) of Act. This is only in second round of appeal, AO has repeated addition. Otherwise, ld. CIT (A) in first round has accepted claim of assessee and deleted addition. Therefore, this is not bogus or false claim but disallowance was 4 ITA No. 144/JP/2017 Shri Mohan Lal Swarankar, Jaipur. made due to non compliance or non satisfaction of AO of explanation furnished by assessee. In support of his contention, he has relied upon decision of Hon ble Supreme Court in case of CIT vs. Reliance Petroproducts (P) Ltd. 322 ITR 158 (SC) as well as decision of Hon ble Jurisdictional High Court in case of CIT vs. Smt. Chandralata Goswami, 125 ITR 700 (Raj.). ld. A/R has also referred series of decisions on this point. Hence ld. A/R submitted that penalty levied by AO and confirmed by ld. CIT (A) may be deleted. 4. On other hand, ld. D/R has relied upon orders of authorities below and submitted that assessee has failed to discharge his onus to prove creditworthiness of creditor and genuineness of transaction. AO conducted due enquiry and issued summons under section 131, however, out of 12 parties, only 8 parties have responded to summons. Therefore, AO has made addition in respect of loan creditor in respect of whom assessee has not filed any confirmation and those parties have not responded to notice issued by AO. Thus it is case of furnishing inaccurate particulars of income attracting provisions of section 271(1)(c) of IT Act. 5. I have considered rival submissions as well as relevant material on record. penalty was levied by AO in respect of addition made on account of unexplained cash credits which were shown by assessee as loan taken from various parties. In original assessment, AO made addition of Rs. 41,00,000/- out of which ld. CIT (A) deleted addition to extent of Rs. 31,00,000/-. On further appeal by department against said relief granted by 5 ITA No. 144/JP/2017 Shri Mohan Lal Swarankar, Jaipur. ld. CIT (A) of Rs. 31,00,000/-, Tribunal remanded matter to record of AO for adjudicating afresh after conducting enquiry. In set aside proceedings, AO accepted claim of assessee to extent of Rs. 13,00,000/- as loan creditors responded to notice issued by AO under section 131 of Act. However, some of loan creditors have not responded to notice issued by AO, therefore, amount of Rs. 18,00,000/- was treated by AO as unexplained cash credit. Thus it is clear that in first round of litigation ld. CIT (A) deleted this addition and even in second round when matter was remanded by Tribunal to record of AO, AO accepted part of claim of assessee. Thus it is not case of bogus or false claim but due to non response to notice issued under section 131 as well as not furnishing confirmation from these loan creditors, AO has repeated addition to extent of Rs. 18,00,000/- and corresponding disallowance of interest of Rs. 28,000/-. It is also not in dispute that assessee has claimed to have repaid sum of Rs. 16,00,000/- in very next year i.e. financial year 2002-03 relevant to assessment year 2003-04 and AO has not doubted said transaction of repayment. Thus in facts and circumstances of case when addition was made only because explanation of assessee was not found to be satisfactory and not due to reason that claim of assessee was bogus or absolutely false, said addition made in second round of litigation would not ipso facto lead to conclusion that assessee has furnished inaccurate particulars of income or concealed particulars of income. Hence in facts and circumstances of case as 6 ITA No. 144/JP/2017 Shri Mohan Lal Swarankar, Jaipur. discussed above, penalty levied by AO under section 271(1)(c) is not sustainable and same is deleted. 6. In result, appeal of assessee is allowed. Order is pronounced in open court on 30/09/2019. Sd/- (fot; iky jkWo (VIJAY PAL RAO) U;kf;d lnL;@Judicial Member Jaipur Dated:- 30/09/2019. Das/ vkns'k dh izfrfyfi vxzfs "kr@Copy of order forwarded to: 1. Appellant- Shri Mohan Lal Swarankar, Jaipur. 2. Respondent ACIT, Circle-7, Jaipur. 3. CIT(A). 4. CIT, 5. DR, ITAT, Jaipur 6. Guard File (ITA No. 144/JP/2017) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar Mohan Lal Swarnkar v. ACIT, Circle-7, Jaipur
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