Ita/367/2011 Of Shri Basayya R Nandegol v. The Additional Commissioner Of Income Tax

® IN THE HIGH COURT OF KARNATAKADHARWAD BENCH DATED THIS THE 28 DAY OF AUGUST 2013 PRESENT THE HON’BLE MR. JUSTICE K. L. MANJUNATHAND THE HON’BLE MR. JUSTICE S.N. SATYANARAYANA I.T.A. No.367/2011 BETWEEN# ohri Basayya R Nandegol,Civil Contractor, Shastrinagar,Athni Road, Bijapur. (by Sri A. Shankar, Advocate) Appellant AndThe Additional Commissioner ofIncome Tax, Range-2,Feroz Khimjibhai Commercial Complex,Dr. B.R. Ambedkar Road,Opp. District Civil Hospital,Belgaum-590 OO1, (by Sri Y.V. Raviraj, Advocate) Respondent This appeal is filed u/S 260-A of the I.T. Act, 1961,arising out of order dated 09.00.2011 passed in ITANo.89/PNJ/2011 for the assessment year 2007-08 prayingto allow the appeal and set aside the order passed by IncomeTaxAppellate|Tribunal,PanajiBenchGoa|1n ITANo.89/PNJ/2011 dated 09.06.2011 and etc, This appeal coming for admission on this day,K.L.MANJUNATH, J,delivered the following:- JUDGMENT 1)The concurrent findings of the Assessing Officerwhich has been confirmed by the Commissioner ofIncome Tax Appeals, Belgaum and further confirmed bythe Income Tax Appellate Tribunal, Panaji Bench in ITANo. 89/PNJ/2011 dated 9.6.2011 is called in questionin this appeal by the assessee in respect of theassessment dated 29.12.2009 for the assessment year2007-08. a2The assessee is a registered contractor engaged inthe business of executing civil work of Public WorksDepartment. For the assessment year 2007-08 returnwas filed by him on 31.10.2007 declaring a total incomeof Rs.40,94,690/-. The returns of income wasprocessed u/S 143(1) of the Act and case of theappellant was selected for scrutiny and statutory noticewas issued on the appellant directing the appellant tofurnish the detalls. 3.According to the appellant, the appellant hadborrowed loan of Rs.40.00 lakhs out of which, Rs.20.00lakhs from one $.G. Shahapur and another Rs.20.00lakhs from Pundalik Lamby Parashuram. According tohim the accountant instead of mentioning PundalikLamby Parashuram as creditor wrongly mentioned asG.K. Rathod. The Assessing Officer did not agree withthe explanation offered by the appellant and by hisorder dated 299.129.2009 added a sum of Rs.40.00 lakas unexplained cash credit u/S 68 of the Act.Accordingly, an order u/S 143(3) of the Act was passed. 4Agerieved by the order passed by the AssessingofficerallappealCarneCO befiled betoretheCommissioner of Income Tax Appeals, Bangalore. TheCommissioneroT|IncomeTax|AppellateTribunaldismissed the appeal on 27.12.2011 by confirming theorder passed by the Assessing Officer. Aggrieved by thesame an appeal came to be filed before the Income Tax Appellate Tribunal, Belgaum. The Appellate Tribunalaccepted the case of the assessee in regard to the loanadvanced by S.G. Shahapur to an extent of Rs.20.00lakhs and rejected the claim of the appellant for havingborrowedRs.20.00.lakhsfromPundalik|LambyParashuram on the ground that the appellant has failedto establish the advancement of loan by PundalikLamby Parashuram. Therefore, the present appeal is|filed. 5.We have heard Sri A. Shankar, learned counselappearing for the appellant and Sri Y.V. Raviraj, learnedcounsel appearing for the Revenue. Having heard thecounsel for both the parties we do not see anysubstantial questions of law arise in this appeal for thefollowing reasons, 6.As per the books of accounts maintained by theassessee one Rathod has advanced loan ot Rs.20.00lakhs. When the assessee was called upon to explain by 5.We have heard Sri A. Shankar, learned counselappearing for the appellant and Sri Y.V. Raviraj, learnedcounsel appearing for the Revenue. Having heard thecounsel for both the parties we do not see anysubstantial questions of law arise in this appeal for thefollowing reasons, 6.As per the books of accounts maintained by theassessee one Rathod has advanced loan ot Rs.20.00lakhs. When the assessee was called upon to explain by producing books of account, he changed the version asif he borrowed loan from Pundalik Lamby Parashuramand his Accountant has wrongly mentioned the name ofRathod due to oversight and that Rs.20.00 lakhs hasbeen borrowed by him Pundalik Lamby Parashuram.The statement of Pundalik Lamby Parashuram has alsobeen recorded by the Assessing Officer. We haveperused the statement of Pundalik Lamby Parashuram.According to his statement he does not possess anyimmovable property either in his name or in the name ofhis family. His family consists of his wife, 4 children,younger brother, his wife and 2 children, two widowedsisters and an aged mother. His father was a sweeperin the Municipality. He is no more. His father had sixsons. According to the creditor he is supplyingagricultural labourers and that he is also doingagriculture by taking the lands on lease. There are nodocuments produced to show that he has taken landson lease and in view of the Karnataka Land Reforms Act after 01.03.1974 no lease can be created in respect ofagricultural lands and there is a statutory bar foranyone to give lands on lease. Even if it is accepted thathe was doing agricultural operations by taking lands onlease, no material is produced to show that he wascultivating the lands as a tenant. He has not givendetails of the survey numbers or the village or the ownerof the lands who have given the lands on lease. It isalso difficult to accept the statement of Pundalik LambyParashuram because he has stated that income fromthe agricultural lands for the year 2005-06 and 2006-07alter excluding the family expenditure is Rs.4 to 9lakhs. He further stated that all the income is receivedfrom the agricultural source. He has also stated thathis father had given him jewels and by selling the jewelshe advanced the loan to the appellant. No man ofprudence can accept the explanation offered by thecreditor in the background of his family. Admittedly, heis the son of a sweeper who had six sons apart from daughters. He does not have a residential house of his|own and he does not have any other movable orimmovableproperty,|whethersuch|persofncouldadvance loan of Rs.20.00 lakhs has to be considered bythis Court. T For the sake of arguments even if we consider thearguments that he had jewels and he sold the same andadvanced the loan to the appellant, tor having sold thejewels no document is produced. Therefore, it isdifticult to believe the version of the creditor that he hadgold worth Rs.20.00 lakhs to sell and even if he hasproduced any receipt for having sold the jewel. In thecircumstances, we are of the view that no substantialquestion of law arises in this appeal for consideration.Accordingly, the appeal is dismissed without cost. SD/- JUDGE Per SNSJ: This appeal by the assessee under Section 260A ofthe Income Tax Act, 1961, is rightly dismissed by thesenior Member of this Bench. I am in full agreementwith the reasoning rendered for dismissal of this appealfiled by the assessee in challenging the concurrentfinding of the assessing officer, appellate authority andas well as the Income Tax Appellate Tribunal in refusingTObelieve that|he.hasborrowedaaSUTMofRs.20,00,000/-.eachas|handloan.fromone».G.ShahapurandanotherPundalikLambyParashuram and treating the same as income, escapedassessment. oD Afterhearingthe|learnedCounsel]fortheappellant, it is seen that the ingenious manner in whichthe appellanthastriedTOprojectaaSUITofRs.40,00,000/- which is seen to be his unaccounted SD/- JUDGE Per SNSJ: This appeal by the assessee under Section 260A ofthe Income Tax Act, 1961, is rightly dismissed by thesenior Member of this Bench. I am in full agreementwith the reasoning rendered for dismissal of this appealfiled by the assessee in challenging the concurrentfinding of the assessing officer, appellate authority andas well as the Income Tax Appellate Tribunal in refusingTObelieve that|he.hasborrowedaaSUTMofRs.20,00,000/-.eachas|handloan.fromone».G.ShahapurandanotherPundalikLambyParashuram and treating the same as income, escapedassessment. oD Afterhearingthe|learnedCounsel]fortheappellant, it is seen that the ingenious manner in whichthe appellanthastriedTOprojectaaSUITofRs.40,00,000/- which is seen to be his unaccounted income as loan, is nothing but an attempt to launderhis black money into white money by projecting as if itis a loan, so that over a period of time he can somehowregularise it as his income. I am of the opinion thatmerely dismissing such frivolous appeal holding thatthere is no merit, would only render the procedure ofthe Court nothing short of a joke. If such act of moneylaundering to convert black money into white money isnot viewed seriously, the frivolous assessee wouldcontinue to evolve similar tacticand may even succeedin hoodwinking the Court. Therefore, this kind ofappeals should not be viewed lightly and such act ofassessee also should not be ignored by dismissing theappeals without imposing any cost. It would be a futileexercise if the same is dismissed without imposing anypunitive cost and may render repetition of such act,without any kind of check or control. Therefore, I am ofthe view that when the intention of assessee in filingthis kind of appeal is to defraud the exchequer, the Court will have to be serious in dealing with the same tocurtail repetition of such acts in future. 3.|Hence, in my considered opinion it is just andNneCessa lTO IMPOSEpunitiveCOSTOT]theappellant/assessee. Considering the fact that in thisappeal the attempt of the assessee is to convert a sumof Rs.40,00,000/- from black money to white money,the enormity of the same would be lost if appeal isdismissed in casual manner. In the tacts andcircumstances of the case, it is just and necessary thatheavy cost is required to be imposed on the assessee forwasting the time of the assessing authority, Income Taxappellate authority, Income Tax Appellate Tribunal andin addition to that the valuable time of this Court onthis unscrupulous appeal. Accordingly, it is felt by methat cost of at least Rs.1,00,000/- is required to beimposed on the appellant. 4By expressing aforesaid view regarding cost andin agreement with the finding rendered by the SeniorMember of this Bench in dismissing the appeal of theassessee, it is made clear that the appeal is dismissedby imposing cost of Rs.1,00,000/-, which the appellant-assessee Shall deposit in the registry within threemonths from this day. SD/- JUDGE DVV Per KLMJ 1.The appeal was dismissed at the stage ofadmission, my brother Justice $.N. Satyanarayanadictated a separate order agreeing with the findings ofme, however, he has levied a cost of Rs.1,00,000/-.While dismissing the appeal I have not levied the costbecause the appeal filed by the appellant is underSection Y6OO-A of the Income Jax Act which is statutory appeal. The learned counsel appearing for theappellant Mr. Shankar has only narrated the factswithout wasting Court time. Since we did not find anysubstantial question of law, even without call upon theAdvocate for the Revenue dismissed the appeal. a2The Court cannot say that the litigant shall notexercise his right to file an appeal provided under thestatute. A litigant will always be under the impressionthat he has a case on merits and it is for the Court to decide the same. Whenever a statutory appeal isdismissed the Court is not expected to levy the cost.More so, in the present case because the arguments areconcluded and judgment is also dictated within tenminutes. 3.The Hon’ble Supreme Court in the case ofAshok a2The Court cannot say that the litigant shall notexercise his right to file an appeal provided under thestatute. A litigant will always be under the impressionthat he has a case on merits and it is for the Court to decide the same. Whenever a statutory appeal isdismissed the Court is not expected to levy the cost.More so, in the present case because the arguments areconcluded and judgment is also dictated within tenminutes. 3.The Hon’ble Supreme Court in the case ofAshok Kumar Mittal Vs. Ram Kumar Gupta and Another(2009) 2 Supreme Court Cases 656)’ and also i(2012) 1 Supreme Court Cases (Sanjeev Kumar JainVs. Raghubir Saran Charitable Trust and Others)has considered the matter in detail how the Courtshall levy cost. 4In the circumstances, I am of the view that thematter has to be referred to Third Judge to decidewhether the case in hand calls for dismissal withoutcost or with cost of Rs.1,00,000/-. Registry is directed �������������"��������#����,��C����!�������#�7�������#�� �������������� ������������������������"% ������������������������������������������������������������ bvv ����"����#��%&%���& ������������������ *���+�,�� $�����9��#�����������������������������������7����� ������������������"������9������������� ��3�7D*:B E��� ��3�7D*:B