Itl/22/2016 Of The Pr. Commissioner Of Income Tax-3, Nagpur v. Mr. Brijkishore B. Agrawal

1 itl22-16 IN THE HIGH COURT OF JUDICATURE AT BOMBAYNAGPUR BENCH AT NAGPUR INCOME TAX APPEAL No.22 of 2016The Pr. Commissioner of Income Tax-3, Civil Lines, Nagpur. Versus. Mr. Brijkishor B. Agrawal. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Office Notes, Office Memoranda of Coram, Court's or Judge's ordersappearances, Court's orders of directionsand Registrar's orders - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Shri S.N. Bhattad, Advocate for petitioner CORAM : SMT. VASANTI A. NAIK ANDKUM. INDIRA JAIN, JJDATED:31st August, 2016 By this income tax appeal, the appellant incometax department has challenged the order of Income TaxAppellate Tribunal dated 6.11.2015 allowing the appeal filedby respondent assessee and setting aside the order levyingpenalty under section 271(1)(c) of the Income Tax Act. The respondent-assessee who is a contractor haddeclared an income of Rs.1,07,24,040/- for the relevantassessment year. The assessee had shown the liability in thebalance sheet to the extent of Rs.71,50,000/-. After theassessee filed the copies of accounts for the purpose ofsubstantiating the liabilities, a question was raised whetherthe outstanding balance represented the loan or theoutstanding balance was a trade credit. According to theassessee, he had entered into agreements with some personsfor sale of agricultural land and in pursuance of the saidagreements he had received advance in cash. The details ofthe said transactions were furnished by the respondent-assessee to the Department. A survey was conducted by thedepartment and some persons were also sought to be 2 itl22-16 examined on commission. The department was not able totrace all the persons who had entered into the agreementsand had examined only Smt. Kanta Chhabariya who admittedthat she had entered into an agreement for purchase of landfrom the assessee. The department, however, did not believethe case of the assessee as according to it, Smt. KantaChhabariya was not able to prove the source of herinvestment. In a statement of the assessee, that was recordedsubsequently, it was stated that the amount was received incash by him and on cancellation of the agreement, the samewas repaid to the concerned persons. Since the AssessingOfficer was not convinced with the explanation of theassessee, the assessee voluntarily offered a sum ofRs.72,00,000/- to be taxed for the relevant assessment year2009-10 with a condition that no penalty proceedings wouldbe initiated. The assessee pointed out that the aforesaid offerwas with a view to buy peace of mind and with a view toovercome the discrepancies and mistakes that might haveinadvertently occurred in the books of account anddocuments. The Assessing Officer, however, levied a penaltyon the assessee under Section 271(1)(c) of the Act. The orderof the Assessing Officer was challenged by the assessee beforethe Commissioner of Income Tax. The Commissioner ofIncome Tax dismissed the appeal filed by the assessee afterholding that all the persons with whom the agreements wereallegedly executed were not to be found and it was doubtfulwhether Smt. Kanta Chhabariya could have advanced anamount of Rs.4,50,000/- to the assessee towards purchase ofthe plot on the basis of income from tuitions. Being aggrievedby the order of the Commissioner of Income Tax (Appeals),the respondent-assessee filed an appeal before the IncomeTax Appellate Tribunal. The Tribunal, on a consideration of 3 itl22-16 3 itl22-16 the material on record by the order dated 6.11.2015 reversedthe findings recorded by the Commissioner of Income Tax(Appeals) and directed the deletion of the penalty. The orderof the Income Tax Appellate Tribunal dated 6.11.2015 ischallenged by the department in this appeal. On hearing the learned counsel for thedepartment and on a perusal of the order of Commissioner ofIncome Tax ( Appeals) and the impugned order, it appearsthat there is no scope for interference with the order of theTribunal as no substantial question of law arises in thisappeal. The Tribunal recorded a finding of fact that since theassessee is a contractor and was dealing in real estate, theexecution of agreements of sale could not have been ruledout. The copies of the agreements were filed by the assesseeand those agreements were also found, at the time of survey.Though some of the parties to the agreements could not beidentified, some others were identified in view of their PANnumbers. It was held by the Tribunal that since some of thepersons with whom the agreements were executed hadmentioned their PAN numbers, their investment in the landcould not have been doubted. The Tribunal found, afterconsidering the law laid down in the judgments reported in240 ITR 880 and 253 ITR 192, and the material on record,that the assessee had taken the cash from certain parties withwhom the agreements of sale were executed. We do not findany illegality or perversity in the findings of facts recorded bythe Tribunal. In fact, the finding of the Commissioner ofIncome Tax (Appeals) that it is difficult to believe that Smt.Chhabariya, who was taking tuitions would not be in aposition to pay a sum of Rs.4,50,000/- for immovableproperty appears to be unreasonable. The judgment reportedin 2014 (1) SCC 674 and relied upon by the learned counsel Hirekhan 4 itl22-16 for the appellant cannot be made applicable to the facts ofthis case, specially when a finding of fact is recorded by theTribunal that the case of the assessee that he had entered intoagreements with the parties and the cash was received fromthem towards advance. Since no substantial question of law arises fordetermination in this appeal, the appeal is dismissed with noorder as to costs. JUDGE JUDGE CERTIFICATE I certify that this Judgment uploaded is a true and correctcopy of original signed Order. Uploaded by : R.B. Hirekhan. Uploaded on:01-09-2016. P.A.