9911796707
TMI Blog2010 (6) TMI 649X X X X Extracts X X X X X X X X Extracts X X X X ..... the amounts taken from them as loan are as under : Sl.No. Name Amount Rs. 1. Pawan Kumar Mishra 18,500 2. Satya Prakash 17,500 3. Surender Kumar 18,800 4. Ram Babu 19,800 5. Ravir Singh 16,700 6. Subhash Kumar 18,500 7. Manoj Kumar 17,800 8. Sameer Kumar 19,200 9. Bhola Prasad 18,500 10. R K Chaudhary 16,800 11. Sushil Nagar 17,600 12. Jitender Singh 15,800 13. Ram Vir 18,900 14. Nadim 19,500 15. Jamaluddin 18,500 16. Ashok Kumar 19,700 17. BNJha 15,900 18. Jibacha Jha 15,900 19. S.K. Jha 18,500 20. Hari Narain 15,6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epted by the A.O. as the A.O. was of the view that this plea cannot be accepted for the reason that that the income surrendered by the assessee company was not voluntary but the said amount was surrendered because of the detection made by the department by making necessary enquiries. The A.O. was, therefore, satisfied that the assessee company has not disclosed the true particulars of its income and initiated penalty proceedings u/s 271(1)(c) of the Act in the course of assessment made by the A.O. wherein the aforesaid income of Rs. 6 lakhs was added to the assessee s total income. In the course of penalty proceedings before the A.O. the assessee submitted vide letter dt. 22.3.2009 that the amount was surrendered just to buy peace of mind and on the condition that no penal action shall be initiated against the assessee. But this explanation of the assessee was not accepted by the A.O. by giving the reason that income surrendered by the assessee was not voluntary but the assessee surrendered the income because of the detection made by the department through enquiries conducted by it. The AO, therefore, had taken a view that the assessee had concealed particulars of its income making ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed either in assessment proceedings or penalty proceedings to establish identity and credit worthiness of the payer and the genuineness of the transaction. Whatever few evidences that has been furnished by the assesee, which are placed at page nos. 11, 12 and 13 of the paper book filed by the assessee before the Tribunal, do not inspire any confidence. He further submitted that the assessee has not given the details about the creditors so as to give the names of the organization whether the creditors were working or their PAN no. or other evidences to establish their identity and existence. He further submitted that the argument of the ld.counsel for the assessee that the sum was surrendered voluntarily does not hold any water as the surrender was made subsequent to the detection made by the A.O. and after a show cause notice issued by the A.O to the assessee. He, therefore, submitted that since the surrender was not voluntary and the addition has been made by the A.O. as a result of enquiry conducted by him, the various decisions relied upon by the assessee would be of no assistance to the assessee s case rather they support the revenue s case. In support of the revenue s case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utation of assessee s total income has been disclosed. 12. In the light of the position of law discussed above, we now proceed to examine and appreciate the facts and circumstances of the present case. It is not in dispute that in the course of assessment proceedings an addition of Rs. 6 lacs on account of unexplained cash credit has been made by the AO and that stands final. Now, therefore, question arises as to whether the assessee has offered any explanation with regard to the aforesaid addition of Rs. 6 lacs on account of unexplained credit introduced by the assessee in its books of accounts. The assessee has given an explanation that the aforesaid amount of Rs. 6 lacs has been surrendered voluntarily as assessee found it difficult to substantiate the cash credit inasmuch as number of creditors were involved and there whereabouts could not be ascertained at the time when the assessment proceedings had taken up. The assessee has also given an explanation that the assessee has surrendered this income with the condition that no penalty under sec.271(1)(c) shall be initiated by the AO. In other words, it is the case of the assessee that the assessee has surrendered the amount v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the outcome of his enquiry and then to show cause as to why the amount of Rs. 6 lacs should not be added as unexplained cash credit under sec.68 of the Act. In the present case it is not in dispute that the assessee has received various amounts below Rs. 20,000 in each case in cash from 34 persons. The assessee has given just the names and incomplete addresses of the persons without furnishing any details or particulars or evidences as to their identity, nature of their business or profession or employment and the source of their income from which the amount was claimed to have been advanced to the assessee. The assessee is a private limited company, and it is beyond imagination that the 34 persons without having any close relation or connection to the business of the assessee company would advance amount in cash to the assessee. The assessee has not been able to explain as to under what circumstances the amount was received in cash from 34 persons in the denomination of below Rs. 20,000 in each case. The very transaction of receiving money from respective persons has not been established. The assessee has also not given any details as to when and by what mode this amount has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In these circumstances, it is very difficult to believe that the amount was surrendered by the assessee just to buy peace. It is the case where the assessee had no other option than to agree to the additions under compulsion, being cornered by revenue. Of course, things would have been different in case before the enquiry conducted by the AO by issuing notices to the creditors u/s 133(6) of the Act, the assessee would have disclose the income in the nature of unexplained credit. 14. The meaning of word "Voluntarily" has recently been deliberated upon by the Hon ble Allahabad High Court in the case of CIT v. Shri Rakesh Suri IT Appeal No. 38 of 2005, dated 13-5-2010 as under:- "41. A Full Bench of the Allahabad High Court in the case reported in (1998) 230 ITR 855 : Bhairav Lal Verma v. Union of India [1998] 230 ITR 855 , while interpreting the word vonutarily given in Section 273(A) of the Act held that voluntarily means out of free will without any compulsion. When the assessee concealed the incriminating material with regard to income so disclosed cannot be held to be voluntarily. It shall be appropriate to reproduce the relevant portion from the judgment of Bhai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing merely nominal consideration -voluntariness, n. . 43. In the Law Lexicon by P. Ramanatha Aiyar, meaning of Voluntary has been given as, to quote:- Voluntary - Of one s free will, impulse of choice; not constringed by another; acting voluntarily or willingly [S. 2(2), Sale of Goods Act]; [Art. 101(3), prov., Const.] Voluntary The expression voluntary is used in this section to mome states have adopted at different times. T.E. Mohomed Usman v. State of Madras , AIR 1961 Mad 129, 138. [Citizenship Act, 1955, S. 9(1)] Means doing of something as the result of the free exercise of the will but not something done under a legal duty." "Where a person obtained a passport acted on his own volition and knew the nature of his act and did not act in performance of a legal duty, nor due to coercion or fraud or misrepresentation or mistake he has acted voluntarily. Abdul Salam v. Union of India , AIR 1969 All. 223 at 228. [Citizenship Rules (1956) R. 30]" 15. From the said decision it is thus clear that voluntarily means out of free will without any compulsion. It is also observed therein that when the assessee concealed incriminating material with regard to the incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the said amount was surrendered because of detection made by the Department through enquiries conducted by it. Thus, on facts, this contention of the assessee also fails. Moreover, mere because the assessee had agreed to the addition subject to the condition that penalty under sec. 271(1)(c) would not be levied shall not preclude the department from proceeding to levy the penalty in view of the settled position of law that there cannot be estoppel against the Statute and the assessee s explanation regarding the addition had to be considered by the AO independently as so observed by the Hon ble Kerala High Court in the case of CIT v. D.K.B. Co. [2000] 243 ITR 618 (Ker.). Since, in the present case, the addition has been made on the basis of the enquiry conducted by the AO and not merely on the basis of disclosure made by the assessee agreeing to the addition, the condition imposed by the assessee that no penalty under sec. 271(1)(c) should be levied, has no force in the eyes of law. Hence, this contention of the assessee is also rejected. The various decisions cited by the learned counsel for the assessee in support of the contention that no penalty under sec. 271(1)(c) shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived by account payee cheque and deposited in the assessee s bank account. In the present case, the addition has been made on the basis of incriminating material collected by the Assessing Officer and not merely on the basis of the surrender made by the assessee. Therefore, this case is also of no help to the assessee rather it supports revenue s case. 20. Similar is the position with regard to some other decisions cited by the learned counsel for the assessee inasmuch as in those cases the additions were made purely on the basis of surrender made by the assessee and not on the basis of any sort of incriminating material brought on record by the AO. In the case of Kumar Agencies (India) ( supra ) transactions were made through banks and parties were assessed to tax, and the assessee surrendered the amount to buy peace and avoid litigation as the assessee expressed its inability to produce creditors, who were not directly known persons nut the transactions were made through brokers. The loan was received and repaid by account payee cheques, confirmations from creditors were filed which bore P.A. No. of the depositors. However, in the present case, no such facts are available w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
