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TMI Blog2003 (9) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 - Judge(s) : S. K. KESHOTE., K. S. RATHORE. JUDGMENT The judgment of the court was delivered by S. K. Keshote J.- This is an income-tax appeal under section 260A of the Income-tax Act, 1961 (for short, "the Act, 1961"), and is directed against the order dated October 31, 2001 of the learned Income-tax Appellate Tribunal, Jaipur Bench, Jaipur (for short, "the Tribunal"), in I.T. Appeal No. 2143/JP of 1992 for the assessment year 1985-86 titling Man Mohan Gupta v. Asst. CIT, Circle I (1), Jaipur. The appeal was placed on the Board for preliminary hearing on July 4, 2002. The court was pleased to admit the appeal in terms of the following question: "Whether, on the facts and in the circumstances of the case, the statutory provisions of section 271(1)(c) as existing during the relevant year were correctly applied by the learned Income-tax Appellate Tribunal in arriving at the findings and upholding the penalty in relation to trade advances of Rs. 3,20,000 received from various traders, against supply of goods and in pursuance of which goods were duly supplied to them?" Briefly stated the facts of the case are that the assessee is an individual engaged in trading in preci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was partly allowed by the Tribunal under its order dated October 31, 2001, and thus this appeal is before us. The learned Tribunal held that the explanation furnished by the assessee of receipt of the amount of Rs. 1,00,000 as deposited from M/s. Amit Enterprises, proprietor Shri Sudhir Kumar, Rs. 50,000, Shri Om Prakash Ghiya Rs. 25,000 and Shri Kamal Kumar Kasliwal Rs. 25,000, is bona fide and thus no penalty is leviable on this count. Shri T. C. Jain, learned counsel for the appellant, submitted that Rs. 3,20,000 has been taken as advance against the sale of goods from the four parties named in para. No. 10 of the order of the learned Tribunal. The goods have been sold to these parties in the subsequent assessment year, 1986-87, the details of which are given in para. No. 10 of the judgment of the learned Tribunal. In his submission the purchasers are duly registered under the Rajasthan Sales Tax Act, and they provided declaration ST 17 and, therefore, no sales tax was charged. Sales tax registration number is duly mentioned. It is urged that confirmation of letters duly signed by the proprietor with addresses were submitted. The sales were made through brokers. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellate authority as to why the returns have been revised by him. The amounts which were the subject-matter of enquiry by the Assessing Officer stand included as income in these revised returns. Learned counsel for the appellant vehemently contended that Rs. 3,20,000 was received by the assessee in advance from different persons against the sale of the goods but we find from the order of the learned Tribunal that it was not the case before the Assessing Officer. There the case of the assessee was that these amounts of the deposits received by him from the firms, namely, M/s. Sethi Jems, R. C. Jewellers, Jain Traders and Shri Gem Traders, on interest through brokers. The assessee has taken a somersault before the learned Tribunal that this amount was the advance receipt against the sale of the goods. It is contended by learned counsel for the appellant that the material produced on record by the assessee was more than sufficient to accept that this amount was advance receipt of the money against the supply of the goods. It is not in dispute that the appellant has not produced any person out of the four persons from whom these amounts were taken, either before the Assessing Offi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellate authority and the Tribunal in the second appeal. Either of two pleas has to be established to the satisfaction of the Assessing Officer. Either he would have established the genuineness of the loan or advance received for the sale of the goods to the alleged purchasers. The appellant has failed to prove both and thus the learned Tribunal was correct in its approach to uphold the order of the Commissioner of Income-tax (Appeals). The contention of learned counsel for the appellant that on the same material the Tribunal has accepted the transaction to the extent of Rs. 1,00,000, is devoid of any merit and substance. That goes to show how fairly, impartially and reasonably the matter has been considered by the Assessing Officer, the Commissioner of Income-tax (Appeals) and the learned Tribunal. Where the appellant has produced the material and established the genuineness of the transactions of Rs. 1,00,000 that has been accepted and to that extent the penalty imposed has been set aside by the learned Tribunal. It is not correct to contend by learned counsel for the appellant that the finding of the Tribunal on these two amounts was based on the same material. We find from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Assessing Officer as normal business expenses. For some of the creditors the tax was deducted at source out of the interest paid to their accounts. If we compare the facts of this case with the facts of the case before the Gujarat High Court, here the appellant has not produced any evidence to establish these credits as genuine. It is the case of the assessee that confirmation of these deposits is produced but GIR or PAN are not given nor anybody has been examined nor an affidavit has been filed. There in the case before the Gujarat High Court, in the presence of the material and sufficient evidence, non-service of summons on the creditors was not taken seriously but here only credit entries are there and the appellant has failed to establish the repayment thereof by the supply of the goods to them. In these facts the non-service of the summons on these creditors is an important circumstance which has reasonably been taken adverse to the assessee. In CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC), the explanation furnished by the assessee for the alleged concealing income was accepted. There also the Tribunal accepted the explanation furnished by the assessee for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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