Mr. Nitin Manaktala, New Delhi V. ITO, New Delhi

ITA 100/DEL/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3373 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 13-04-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ARUNA MITTAL
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. AMIT SHUKLA , JM IT A NO. 100 /DEL/201 7 : ASSTT. YEAR : 2006 - 07 MR. NIT IN MANAKTALA, C - 1, STREET, 6 - F, SAINIK FARMS, NEW DELHI VS INCOME TAX OFFICER, WARD - 47 (2), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. A AGPM5423M ASSESSEE BY : MS. ARUNA MITTAL, CA REVENUE BY : SH. ANIL KUMAR SHARMA , SR. DR DATE OF HEARING : 13 .0 4 .201 7 DATE OF PRONOUNCE MENT : 27 .04. 201 7 ORDER PER N. K. SAINI, AM : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 17.11.2016 OF LD. CI T(A) - 28 , NEW DELHI . 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL RELATES TO THE CONFIRMATION OF PENALTY OF RS.8,48,000/ - LEVIED BY THE AO U/S 271(1)(C) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ), ON THE BASIS THAT ADDITION ON AC COUNT OF UNEXPLAINED JEWELLARY WAS SUSTAINED BY THE LD. CIT(A). 3 . DURING THE COURSE OF HEARING THE LD. COUNSEL FOR THE ASSESSEE AT THE VERY OUTSET STATED THAT THE ADDITION ON THE BASIS OF WHICH THE ITA NO. 100/DEL/2017 NITIN MANAKTALA 2 IMPUGNED PENALTY WAS LEVIED BY THE AO AND SUSTAINED BY T HE LD. CIT(A) HAS BEEN DELETED BY THE ITAT VIDE ORDER DATED 17.02.2017 IN ITA NO. 1778/DEL/2012 FOR THE ASSESSMENT YEAR 2006 - 07 IN ASSESSEE S OWN CASE (COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD). 4 . IN HIS RIVAL SUBMISSIONS THE LD. D R ALTHOUGH SUPPORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) BUT COULD NOT CONTROVERT THE AFORESAID CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. 5 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AV AILABLE ON THE RECORD. IN THE PRESENT CASE, I T IS NOTICED THAT THE ADDITION ON THE BASIS OF WHICH IMPUGNED PENALTY WAS LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A) HAS BEEN ORDERED TO BE DELETED BY THE ITAT DELHI BENCH F , NEW DELHI VIDE AFORESAID REF ERRED TO ORDER DATED 17.02.2017 AND THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 6 OF THE SAID ORDER WHICH READ AS UNDER: 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS. DURING THE COURSE OF SEARCH JEWELLERY WEIGHING 1036 GM WAS ADDED IN THE HANDS OF THE A SSESSEE AMOUNTING TO RS. 923000/ - AND JEWELLERY 1330 GMS AMOUNTING TO RS. 1050000/ - WAS ADDED IN THE HANDS OF THE WIFE OF THE ASSESSEE. DURING THE COURSE OF SEARCH THE STATEMENT OF THE ASSESSEE WAS RECORDED WHEREIN IT WAS SUBMITTED THAT THE LOCKER NO. 375 CONTAINS THE JEWELLERY RECEIVED BY WIFE OF THE ASSESSEE DURING THE COURSE OF SEARCH. FOR THIS, THE ITA NO. 100/DEL/2017 NITIN MANAKTALA 3 ASSESSEE SUBMITTED ITEM WISE LIST OF JEWELLERY AND ALSO THE NAME OF THE RELATIVES, THEIR RELATIONSHIP WITH THE ASSESSEE WHO GAVE THE GIFT AT THE TIME OF MARRIAGE. REGARDING THE GIFT RECEIVED FROM THE MOTHER OF THE ASSESSEE CONFIRMATORY AFFIDAVIT WITH THE QUANTITY OF GOLD GIFTED WAS ALSO MENTIONED. THE ID LOWER AUTHORITIES HAVE HAS NOT LOOKED AT THE CONFIRMATION LETTERS BUT HAS SIMPLY PROCEEDED TO MAKE AND CONFIRMED THE ADDITIONS. IN VIEW OF THE FACT THAT ASSESSEE HAS RECEIVED GOLD JEWELLERY ON OCCASION OF HIS MARRIAGE WHICH IS CONFIRMED BY THE PERSONS WHO GIFTED THE SAME AND FURTHER LOOKING TO THE FAMILY STATUS OF THE ASSESSEE WHO IS BELONGING TO A BUSI NESS MAN FAMILY RESIDING AT SAINIK FARMS AND WIFE OF THE ASSESSEE BELONGING TO NON - RESIDENT INDIAN FAMILY BASED IN NAIROBI AND WHOSE FATHER IS GARMENT EXPORTER AND GRANDFATHER WAS IN THE MINISTRY OF HIMACHAL PRADESH, IT IS NOT UNREASONABLE TO HAVE THE QUAN TITY OF GOLD IN HIS POSSESSION. FURTHER, IT WAS UNEXPECTED TO REJECT THE CONTENTION OF THE ASSESSEE MERELY FOR NON - FILING OF RETURN OF WEALTH TAX AS WELL AS THE STATEMENT OF AFFAIRS UNDER THE INCOME TAX ACT WHEN ASSESSEE IS NOT LEGALLY OBLIGED TO. IN VIEW OF THIS, WE DELETE THE ADDITION MADE BY THE ID AO AND REVERSE THE ORDER OF LD CIT (A) . IN THE RESULT GROUND NO 2 OF THE APPEAL OF THE ASSESSEE IS ALLOWED. 6 . NOW IT IS AN ADMITTED FACT THAT THE ADDITION ON THE BASIS OF WHICH IMPUGNED PENALTY WAS LEVIED IS NOT IN EXISTENCE. THEREFORE, THE PENALTY LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A) DESERVES TO BE DELETED. 7. ON A SIMILAR ISSUE THE HON BLE SUPREME COURT IN THE CASE OF K. C. BUILDERS & OTHERS VS ACIT (2004) 265 ITR 562 WHEREIN IT HAS BEEN HEL D AS UNDER: ITA NO. 100/DEL/2017 NITIN MANAKTALA 4 WHERE THE ADDITIONS MADE IN THE ASSESSMENT ORDER ON THE BASIS OF WHICH PENALTY FOR CONCEALMENT IS LEVIED, ARE DELETED, THERE REMAINS NO BASIS AT ALL FOR LEVYING PENALTY FOR CONCEALMENT AND, THEREFORE, IN SUCH A CASE NO PENALTY CAN SURVIVE AND THE PENALTY IS LIABLE TO BE CANCELLED. ORDINARILY, PENALTY CANNOT STAND IF THE ASSESSMENT ITSELF IS SET ASIDE. 7 . IN THE PRESENT CASE ALSO SINCE THE ADDITION ON THE BASIS OF WHICH THE IMPUGNED PENALTY WAS LEVIED HAS BEEN DELETED. WE, THEREFORE, BY KEEP ING IN VIEW THE RATIO LAID DOWN BY THE HON BLE SUPREME COURT IN THE AFORESAID REFERRED TO CASE, DELETE THE PENALTY LEVIED BY THE AO AND SUSTAINED BY THE LD. CIT(A). 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . (O RDER PRONOUNCED IN THE OPEN C OURT ON 27 /0 4 /2017 ) SD/ - SD/ - (AMIT SHUKLA ) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 /04 /2017 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR