Lilaben Mangilal Shah, Deesa V. The Income tax Officer,Ward-2, Palanpur

ITA 1084/AHD/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5772 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2010
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 08-04-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: M J SHAH
• Keywords: Gift; Income from undisclosed sources; Source of fund; Reassessment proceedings
• Section: 271(1)(c); 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' [BEFORE S/SHRI MUKUL SHRAWAT,JM & A N PAHUJA,AM] ITA NO.1084/AHD/2010 (ASSESSMENT YEAR:-2004-05) SMT. LILABEN MANGILAL SHAH, AT & PO: VASAN, TALUKA: DEESA [PAN: AFQPS1239E] V/S INCOME-TAX OFFICER, WARD-2, PALANPUR [APPELLANT] [RESPONDENT] ITA NO.1085/AHD/2010 (ASSESSMENT YEAR:-2004-05) SMT. MADHUBEN SUMERMAL SHAH, VARDHMAN SOCIETY, NR. JAIN TEMPLE, NR. JAIN BAG, TALUKA DEESA [PAN: AIJPS6546G] V/S INCOME-TAX OFFICER, WARD-2, PALANPUR [APPELLANT] [RESPONDENT] ITA NO.1086/AHD/2010 (ASSESSMENT YEAR:-2004-05) SMT. VIMLABEN KANTILAL SHAH, AT: RAMSAN TALUKA: DEESA, DIST. BK [PAN: AIJPS0133R] V/S INCOME-TAX OFFICER, WARD- 2,PALANPUR [APPELLANT] [RESPONDENT] ASSESSEES BY :- SHRI M J SHAH, AR REVENUE BY:- SHRI M C PANDIT,. DR O R D E R AN PAHUJA: THESE APPEALS FILED BY THREE DIFFERENT ASSESSEES AGAINST THREE SEPARATE ORDERS DATED 29-01-2010, 28- 01-2010 AND 28- 01-2010 OF THE LD. CIT(APPEALS)-XV, AHMEDABAD, FOR THE ASSESSMENT YEAR 2004-05, RAISE THE FOLLOWING IDENTI CAL GROUNDS: : ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 2 1 THAT THE LEARNED CIT(A) ERRED IN LAW AND ON FACT S IN CONFIRMING THE PENALTY OF RS.28,674/- IN THE CASE OF LILABEN M SHA H,RS.78,397/- IN THE CASE OF SMT. MADHUBEN S SHAH & RS.51,372/- IN T HE CASE OF SMT. VIMLABEN K SHAH, MADE BY THE AO WITHOUT APPRECIATIN G THE EXPLANATION AND SUBMISSION MADE BY THE APPELLANT. 2 THAT THE PENALTY LEVIED U/S 271(1)(C) MAY BE DELE TED AFTER APPRECIATION OF THE CORRECT FACTS AND THE LAW ON THE SUBJECT. 3 YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEN D THE GROUNDS OF APPEAL. SINCE THESE APPEALS RAISE SIMILAR ISSUES, ON THE R EQUEST OF THE LD. AR, THESE WERE HEARD SIMULTANEOUSLY FOR THE SAKE OF CONVENIENCE AND ARE BEING DISPOSED OF THROUGH THIS COMMON ORDER . 2. FACTS, IN BRIEF AS PER RELEVANT ORDERS IN THE CA SE OF SMT. LILABEN MANGILAL SHAH ARE THAT RETURN DECLARING INC OME OF RS48,914/- FILED ON 8.6.2005 BY THE ASSESSEE, WAS P ROCESSED ON 22- 7-2005 U/S.143(1) OF THE INCOME-TAX ACT,1961[HEREIN AFTER REFERRED TO AS THE ACT]. THEREAFTER, THE ITO (OSD) GANDHIDH AM INTIMATED THE ASSESSING OFFICER[AO IN SHORT] IN THIS CASE ON 29.3.2006 THAT THE ASSESSEE GIFTED A SUM OF RS.1,50,000/- TO SMT. SORA THIA BHAVNABEN MAHESHKUMAR, OF GANDHIDHAM AND CAPITAL ACCOUNT FILE D BY THE ASSESSEE BEFORE ITO(OSD) GANDHIGRAM REVEALED SUCH GIFT. HOWEVER, ON VERIFICATION OF RETURN, IT TRANSPIRED T HAT CAPITAL ACCOUNT FILED WITH HER RETURN OF INCOME BY THE ASSESSEE DID NOT REFLECT ANY SUCH GIFTED AMOUNT. ACCORDINGLY, THE AO, AFTER RECO RDING REASONS REOPENED THE ASSESSMENT WITH THE ISSUE OF A NOTICE U/S 148 OF THE ACT ON 24-5-2006. IN RESPONSE, THE ASSESSEE SUBMIT TED VIDE HER LETTER DATED 14.7.2006 THAT RETURN FILED ORIGINALLY BE TREATED AS RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. DURIN G THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE REVEALED THA T SHE HAD RECEIVED GIFT OF RS. 1,50,000/- FROM SHRI RABARI MO HANBHAI ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 3 CHELABHAI OF VAGDOD,TALUKA PATAN. THEREFORE, THE AO ISSUED SUMMONS TO THE SAID PERSON AS ALSO THE ASSESSEE FO R VERIFICATION OF SOURCE OF THE AMOUNT GIFTED BY THE ASSESSEE. HOWEVE R, NEITHER THE ALLEGED DONOR SHRI RABARI MOHANBHAI CHELABHAI NOR T HE ASSESSEE RESPONDED TO THE SUMMONS. EVEN THE SUBSEQUENT LETTE R DATED 28.11.2006 ADDRESSED TO THE ASSESSEE, SEEKING VERIF ICATION OF THE SOURCE OF THE AMOUNT OF GIFT MADE BY THE ASSESSEE, WENT UNRESPONDED. ACCORDINGLY, THE AO SHOWCAUSED THE AS SESSEE AS TO WHY THE AMOUNT OF RS. 1,50,000/- SHOWN IN THE CAPIT AL ACCOUNT FILED WITH ITO(OSD) GANDHIDHAM BE NOT TREATED AS INCOME FROM UNDISCLOSED SOURCES. IN RESPONSE, THE ASSESSEE STAT ED VIDE LETTER DATED 26.12.2006 THAT DETAILS FILED WITH ITO(OSD) G ANDHIDHAM WERE BASELESS AND WERE FILED DUE TO THE MISTAKE OF THE ACCOUNTANT . HOWEVER, THE AO FOUND THAT SUBMISSIONS FILED WITH I TO(OSD) GANDHIDHAM WERE SIGNED BY THE ASSESSEE HERSELF WHIL E THE BOOKS WERE WRITTEN ON THE INSTRUCTIONS OF THE ASSESSEE AN D ACCOUNTANT CAN NOT BE FAULTED. IN THESE CIRCUMSTANCES, THE ASSESSE E DID NOT ESTABLISH THE GENUINENESS OF GIFT RECEIVED IN CASH FROM THE AFORESAID PERSON WHILE THE CAPITAL ACCOUNT OF THE ASSESSEE FI LED WITH HER RETURN DID NOT DISCLOSE THE AMOUNT OF GIFT RECEIVED AND MA DE. MOREOVER, THE ENQUIRIES WITH ADDL. SUPERINTENDENT OF STAMPS, GAND HINAGAR REVEALED THAT THE STAMPS AFFIXED ON EVEN THE GIFT DEED WERE BOGUS SINCE ON THE SAME SL. NO. 9738 STAMPS WERE ACTUALLY PURCHASED BY SMT. TIVARI SUSHILABEN ASHOKBHAI ON 18.12.2003 FOR RS. 100/- AND AS PER GIFT DEED STAMPS WERE PURCHASED ON 21.10.2 003 FOR RS. 50/- BY RABARI MOHANBHAI CHELABHAI. THEREFORE, THE AO CO NCLUDED THAT AMOUNT OF RS.1,50,000/- CREDITED IN THE BOOKS OF TH E ASSESSEE AND CORRESPONDING CASH DEPOSITED IN THE BANK FOR THE SA ID GIFT MADE BY THE ASSESSEE, REMAINED UNEXPLAINED AND ACCORDINGLY , ADDED THE AMOUNT U/S 68 OF THE ACT. CONSEQUENTLY, THE ASSESSM ENT U/S. 143 (3) R.W.S. 147 OF THE ACT WAS COMPLETED ON 15-2-200 7, DETERMINING ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 4 INCOME OF RS.1,98,914/-.INTER ALIA, PENALTY PROCEED INGS U/S 271(1)(C) OF THE ACT WERE ALSO INITIATED FOR FURNISHING INACC URATE PARTICULARS OF INCOME OF RS.1,50,000/-. ON APPEAL, THE LD. CIT(A) UPHELD THE FINDINGS OF THE AO VIDE HIS ORDER DATED 15.11.2007, HOLDING THAT THE ASSESSEE FAILED TO ESTABLISH THE IDENTITY AND CRED ITWORTHINESS OF THE DONOR NOR EVEN ESTABLISHED THE GENUINENESS OF TRANS ACTION IN THE LIGHT OF ENQUIRIES FROM STAMP DUTY OFFICE. THE ASSE SSEE DID NOT PREFER FURTHER APPEAL AGAINST THE FINDINGS OF THE C IT(A). 2.1 ON RECEIPT OF ORDER OF THE LD. CIT(A), IN RE SPONSE TO A SHOWCAUSE NOTICE ISSUED BEFORE LEVY OF PENALTY, TH E ASSESSEE PLEADED VIDE HER LETTER DATED 2/2/2008 THAT GIFT RE CEIVED AND GIFT GIVEN WERE GENUINE AND SUPPORTED BY EVIDENCES. THE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE GIFT IS PROVED BY FILING MEMORAN DUM OF GIFT, 7 X 12 UTARA, AND HER BANK STATEMENT ETC. BESIDE AFFIDAVIT OF THE A CCOUNTANT . HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT DESPITE SUMMONS ISSUED AND ADEQUATE OPPORTUNITY GIVEN TO THE ASSES SEE FOR EXPLAINING THE SOURCE OF THE GIFT RECEIVED, THE GENUINENESS OF THE AMOUN T WAS NOT PROVED BY THE ASSESSEE WHILE THE ENQUIRIES WITH ADDL. SUPERINTEN DENT OF STAMPS, GANDHINAGER REVEALED THAT EVEN THE STAMPS AFFIXED ON THE GIFT DEED WERE BOGUS. ACCORDINGLY, THE AO IMPOSED A PENALTY OF RS.28,674/- @ 100% OF T HE TAX SOUGHT TO BE EVADED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OF RS.1,50,000/-. 3. LIKE WISE IN THE CASE OF SMT. MADHUBEN SUMERM AL SHAH, FACTS, IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DEC LARING INCOME OF RS.64,656/- FILED ON 19.8.2004 BY THE ASSESSEE, WAS PROCESSED ON 19-10-2004 U/S.143(1) OF THE ACT. THEREAFTER, THE ITO (OSD) GANDHIDHAM INTIMATED THE ASSESSING OFFICER[AO IN SHORT] IN THIS CASE ON 29.3.2006 THAT THE ASSESSEE BEFORE US GIFT ED A SUM OF RS.3,00,000/- TO SMT. SORATHIA DIWALIBEN DHARAMSHIB HAI OF ANJAR AND CAPITAL ACCOUNT FILED BY THE ASSESSEE BEFORE I TO(OSD) GANDHIGRAM REVEALED SUCH GIFT. HOWEVER, ON VERIFIC ATION, CAPITAL ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 5 ACCOUNT FILED WITH HER RETURN OF INCOME BY THE ASSE SSEE, DID NOT REFLECT ANY SUCH GIFTED AMOUNT. ACCORDINGLY, THE AO , AFTER RECORDING REASONS REOPENED THE ASSESSMENT WITH THE ISSUE OF A NOTICE U/S 148 OF THE ACT ON 24-5-2006. IN RESPONSE, THE ASSESSEE SUBMITTED VIDE HER LETTER DATED 14.7.2006 THAT RETURN FILED ORIGIN ALLY BE TREATED AS RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE REVEALED IN HER LETTER DATED 23.9.2006 THAT SHE HAD RECEIVED GIFT OF RS. 1 ,50,000 FROM RABARI JIVABHAI DEVJIBHAI, OF VAGDOD,TALUKA PATAN A ND RS. 1,50,000/- FROM PATEL AMBALAL RANCHODBHAI,CHANSAMA. ACCORDINGLY, THE AO ISSUED SUMMONS TO THESE TWO PERSONS AS ALSO THE ASSESSEE FOR VERIFICATION OF SOURCE OF AMOUNT GIFTED BY THE ASSESSEE. HOWEVER, SUMMONS ISSUED TO THE ALLEGED DONOR SHRI PATEL AMBA LAL RANCHODBHAI,CHANSAMA WERE RETURNED UNSERVED WITH TH E REMARKS BY THE POSTAL AUTHORITIES INCOMPLETE ADDRESS WHILE R ABARI JIVABHAI DEVJIBHAI, OF VAGDOD,TALUKA PATAN ATTENDED BEFORE T HE AO. AFTER RECORDING HIS STATEMENT ,IT WAS FOUND BY THE AO THA T HE DID NOT HAVE CAPACITY TO MAKE THE GIFT AND CAME TO KNOW THE ASSE SSEE THROUGH HER ACCOUNTANT ALONE. SINCE THE ASSESSEE DID NOT RE SPOND TO THE SUMMONS NOR TO LETTER DATED 28.11.2006, SEEKING VER IFICATION OF THE SOURCE OF THE AMOUNT GIFTED BY THE ASSESSEE, ACCORD INGLY, THE AO SHOWCAUSED THE ASSESSEE AS TO WHY THE AMOUNT OF RS. 3,00,000/- SHOWN IN THE CAPITAL ACCOUNT FILED WITH ITO(OSD) GA NDHIDHAM BE NOT TREATED AS INCOME FROM UNDISCLOSED SOURCES. IN RES PONSE, THE ASSESSEE STATED VIDE HER LETTER DATED 26.12.2006 TH AT DETAILS FILED WITH ITO(OSD) GANDHIDHAM WERE BASELESS AND WAS DUE TO THE MISTAKE OF THE ACCOUNTANT. HOWEVER, THE AO FOUND T HAT SUBMISSIONS FILED WITH ITO(OSD) GANDHIDHAM WERE SIGNED BY THE A SSESSEE HERSELF WHILE THE BOOKS WERE WRITTEN ON THE INSTRUC TIONS OF THE ASSESSEE AND ACCOUNTANT CAN NOT BE FAULTED. IN THES E CIRCUMSTANCES, THE ASSESSEE DID NOT ESTABLISH THE G ENUINENESS OF ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 6 GIFT RECEIVED IN CASH FROM THE AFORESAID PERSONS WH ILE THE CAPITAL ACCOUNT OF THE ASSESSEE FILED WITH RETURN DID NOT D ISCLOSE THE AMOUNT OF GIFT RECEIVED OR MADE. MOREOVER, ENQUIRIES WITH ADDL. SUPERINTENDENT OF STAMPS, GANDHINAGAR REVEALED THAT NO STAMPS WERE ACTUALLY SOLD ON 2.10.2003 BY THE STAMP VENDOR , 2 ND OCTOBER BEING A NATIONAL HOLIDAY. EVEN THE STAMPS AFFIXED O N THE GIFT DEED WERE BOGUS SINCE ON THE SAME SL. NO. 9738 STAMPS WE RE ACTUALLY PURCHASED BY ONE SMT. SUSHILABEN ASHOKBHAI TRIPATHI WHERE AS IN THE GIFT DEED FILED BEFORE THE AO , SL. NO 9738 WAS REFLECTED IN THE NAME OF MOHANBHAI CHELABHAI RABARI. LIKEWISE SL NO. 7830 WAS ACTUALLY IN THE NAME OF SMT. SHAINABEN ABBASBHAI KA LGIWALA WHILE IN THE GIFT DEED FILED BEFORE THE AO ,SL NO. 7830 WAS REFLECTED IN THE NAME OF PATEL AMBALAL RANCHODBHAI. ACCORDINGLY, THE AO CONCLUDED THAT SOURCE OF CASH OF RS. 3 LACS STATED TO HAVE BE EN RECEIVED THROUGH GIFT REMAINED UNEXPLAINED AND THEREFORE, AD DED THE AMOUNT U/S 68 OF THE ACT. CONSEQUENTLY, THE ASSESSMENT U/S . 143 (3) R.W.S. 147 OF THE ACT WAS COMPLETED ON 28-6-2007, DETERMIN ING INCOME OF RS.3,64,656/-.INTER ALIA, PENALTY PROCEEDINGS U/S 2 71(1)(C) OF THE ACT WERE ALSO INITIATED FOR FURNISHING INACCURATE PARTI CULARS OF INCOME OF RS.3,00,000/-. ON APPEAL, THE LD. CIT(A) UPHELD THE FINDINGS OF THE AO VIDE HIS ORDER DATED 30.11.2007,HOLDING THAT THE ASSESSEE FAILED TO ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE D ONOR NOR ESTABLISHED THE GENUINENESS OF TRANSACTIONS IN THE LIGHT OF ENQUIRIES FROM STAMP DUTY OFFICE. THE ASSESSEE DID NOT PREFER FURTHER APPEAL AGAINST THE FINDINGS OF THE CIT(A). 3.1 ON RECEIPT OF ORDER OF THE LD. CIT(A), IN RE SPONSE TO A SHOWCAUSE NOTICE ISSUED BEFORE LEVY OF PENALTY, TH E ASSESSEE PLEADED VIDE HER LETTER DATED 2/2/2008 THAT GIFT RE CEIVED AND GIFT GIVEN WERE GENUINE AND SUPPORTED BY EVIDENCES. THE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE GIFT IS PROVED BY FILING MEMORAN DUM OF GIFT, 7 X 12 UTARA, AND ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 7 HER BANK STATEMENT ETC. BESIDE AFFIDAVIT OF THE A CCOUNTANT . HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE G ROUND THAT DESPITE SUMMONS ISSUED AND ADEQUATE OPPORTUNITY GIVEN TO THE ASSES SEE FOR EXPLAINING THE SOURCE OF GIFT RECEIVED, THE GENUINENESS OF THE GIFT WAS N OT PROVED BY THE ASSESSEE WHILE THE ENQUIRIES WITH ADDL. SUPERINTENDENT OF STAMPS, GANDHINAGER , REVEALED THAT EVEN THE STAMPS ON THE GIFT DEED WERE BOGUS. ACCOR DINGLY, THE AO IMPOSED A PENALTY OF RS.78,397/- @ 100% OF THE TAX SOUGHT TO BE EVADED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OF RS.3,00,000/-. 4. AS REGARDS SMT. VIMLABEN KANTILAL SHAH, FACTS, IN BRIEF AS PER RELEVANT ORDERS ARE THAT RETURN DECLARING INCOME OF RS.74,574/- FILED ON 19.8.2004 BY THE ASSESSEE, WAS PROCESSED ON 19-7 -2005 U/S.143(1) OF THE ACT. THEREAFTER, THE ITO (OSD) GANDHIDHAM INTIMATED THE ASSESSING OFFICER[AO IN SHORT] IN TH IS CASE ON 29.3.2006 THAT THE ASSESSEE GIFTED A SUM OF RS.2,00 ,000/- TO SMT. SORATHIA GANGABEN VELJIBHAI, OF ANJAR AND CAPITAL A CCOUNT FILED BY THE ASSESSEE BEFORE ITO(OSD) GANDHIGRAM REVEALED SUCH GIFT. HOWEVER, ON VERIFICATION, CAPITAL ACCOUNT FILED WIT H HER RETURN OF INCOME BY THE ASSESSEE, DID NOT REFLECT ANY SUCH GI FTED AMOUNT. ACCORDINGLY, THE AO, AFTER RECORDING REASONS REOPEN ED THE ASSESSMENT WITH THE ISSUE OF A NOTICE U/S 148 OF TH E ACT ON 12-6- 2006. IN RESPONSE, THE ASSESSEE REPLIED THAT VIDE HER LETTER DATED 14.7.2006 THAT RETURN FILED ORIGINALLY BE TREATED A S RETURN IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSEE REVEALED THAT SHE HAD REC EIVED GIFT OF RS. 2,00,000 FROM THAKOR JAYANTIJI CHATURJI OF MALA RPUR,TALUKA PATAN. ACCORDINGLY, THE AO ISSUED SUMMONS TO THE SA ID PERSON AS ALSO THE ASSESSEE FOR VERIFICATION OF SOURCE OF AMO UNT GIFTED BY THE ASSESSEE. HOWEVER, NEITHER THE ALLEGED DONOR SHRI T HAKOR JAYANTIJI CHATURJI OF MALARPUR NOR THE ASSESSEE RESPONDED TO THE SUMMONS. EVEN THE LETTER DATED 28.11.2006 ISSUED TO THE ASSE SSEE, SEEKING ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 8 VERIFICATION OF THE SOURCE OF THE GIFT WENT UNRESPO NDED. THEREFORE, THE AO SHOWCAUSED THE ASSESSEE AS TO WHY THE AMOUNT OF RS. 2,00,000/- SHOWN IN THE CAPITAL ACCOUNT FILED WITH ITO(OSD) GANDHIDHAM BE NOT TREATED AS INCOME FROM UNDISCLOS ED SOURCES. IN RESPONSE, THE ASSESSEE STATED VIDE LETTER DATED 26. 12.2006 THAT DETAILS FILED WITH ITO(OSD) GANDHIDHAM WERE BASELES S AND WAS DUE TO THE MISTAKE OF THE ACCOUNTANT . HOWEVER, THE AO FOUND THAT SUBMISSIONS FILED WITH ITO(OSD) GANDHIDHAM WERE SIG NED BY THE ASSESSEE HERSELF WHILE THE BOOKS WERE WRITTEN ON TH E INSTRUCTIONS OF THE ASSESSEE AND ACCOUNTANT CAN NOT BE FAULTED. IN THESE CIRCUMSTANCES, THE ASSESSEE DID NOT ESTABLISH THE G ENUINENESS OF GIFT RECEIVED IN CASH FROM THE AFORESAID PERSON WHI LE THE CAPITAL ACCOUNT OF THE ASSESSEE FILED WITH HER RETURN DID N OT DISCLOSE THE AMOUNT OF GIFT RECEIVED AND MADE. MOREOVER, ENQUIRI ES WITH ADDL. SUPERINTENDENT OF STAMPS, GANDHINAGAR REVEALED TH AT THE STAMPS AFFIXED ON EVEN THE GIFT DEED WERE BOGUS SINCE ON THE SAME SL. NO. 7834 STAMPS WERE ACTUALLY PURCHASED BY INTER CONTIN ENTAL(INDIA) LTD. ON 21.10.2003 FOR RS. 500/- WHEREAS THE IN THE GIFT DEED FILED BEFORE THE AO STAMPS WERE PURCHASED BY THAKOR JAYAN TIJI CHATURJI ON 2.10.2003 FOR RS. 50/-, EVEN WHEN 2 ND OCTOBER WAS A NATIONAL HOLIDAY AND ADDL. SUPERINTENDENT OF STAMPS INFORMED THAT NO SUCH STAMPS WERE SOLD ON 2.10.2003.ACCORDINGLY , THE AO CONCLUDED THAT CASH OF RS. 2 LACS CREDITED IN THE BOOKS OF THE ASS ESSEE REMAINED UNEXPLAINED AND THEREFORE, ADDED THE AMOUNT U/S 68 OF THE ACT. CONSEQUENTLY, THE ASSESSMENT U/S. 143 (3) R.W.S. 1 47 OF THE ACT WAS COMPLETED ON 15-2-2007, DETERMINING INCOME OF RS.2, 74,574/-.INTER ALIA, PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT WERE ALSO INITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OF RS.2,00,000/-. ON APPEAL, THE LD. CIT(A) UPHELD THE FINDINGS OF THE A O VIDE HIS ORDER DATED 29.11.2007,HOLDING THAT THE ASSESSEE FAILED T O ESTABLISH IDENTITY AND CREDITWORTHINESS OF THE DONOR NOR ESTA BLISHED THE ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 9 GENUINENESS OF TRANSACTION IN THE LIGHT OF ENQUIRIE S FROM STAMP DUTY OFFICE. THE ASSESSEE DID NOT PREFER FURTHER APPEAL AGAINST THE FINDINGS OF THE CIT(A). 4.1 ON RECEIPT OF ORDER OF THE LD. CIT(A), IN RE SPONSE TO A SHOWCAUSE NOTICE ISSUED BEFORE LEVY OF PENALTY, TH E ASSESSEE PLEADED VIDE HER LETTER DATED 2/2/2008 THAT GIFT RE CEIVED AND GIFT GIVEN WERE GENUINE AND SUPPORTED BY EVIDENCES. THE IDENTI TY, CREDITWORTHINESS AND GENUINENESS OF THE GIFT IS PROVED BY FILING MEMORAN DUM OF GIFT, 7 X 12 UTARA, AND HER BANK STATEMENT ETC. BESIDE AFFIDAVIT OF THE A CCOUNTANT . HOWEVER, THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE ON THE GROUND THAT DESPITE SUMMONS ISSUED AND ADEQUATE OPPORTUNITY GIVEN TO THE ASSES SEE FOR EXPLAINING THE GIFT RECEIVED, THE GENUINENESS OF THE GIFT WAS NOT PROVE D BY THE ASSESSEE WHILE THE ENQUIRIES WITH ADDL. SUPERINTENDENT OF STAMPS, GAN DHINAGER , REVEALED THAT EVEN THE STAMPS ON THE GIFT DEED WERE BOGUS. ACCOR DINGLY, THE AO IMPOSED A PENALTY OF RS.51,372/- @ 100% OF THE TAX SOUGHT TO BE EVADED FOR FURNISHING INACCURATE PARTICULARS OF INCOME OF RS.2,00,000/-. 5. ON APPEAL, THE LD. CIT(A) UPHELD THE LEVY OF PENALTY IN THE CASE OF SMT. LILABEN MANGILAL SHAH VIDE HER ORDER DATED 29.1.2010 IN THE FOLLOWING TERMS: 4 AFTER GOING THROUGH RIVAL SUBMISSIONS THE PENALTY IMPOSED BY THE AO IS UPHELD BECAUSE IN THE SUBMISSION FILED DURING THE APPELLATE PROCEEDINGS AGAINST PENALTY IT HAS BEEN CONCEDED TH AT THE DONOR WHO MADE THE GIFT OF RS.1,50,000 RABARI MOHANBHAI CHELA BHAI OF VILLAGE VAGDOD, TAL.PATAN AND PATEL AMBALAL RANCHHODBHAI OF CHANSMA TA. CHANSMA DID NOT FILE RETURN OF INCOME. THE SAID GIF T WAS RECEIVED BY THE APPELLANT UNDER A GIFT DEED EXECUTED ON STAMP PAPER OF RS.50 PURCHASED ON 18-12-2003. ON ENQUIRIES MADE BY THE AO FROM THE STAMP OFFICE IT WAS FOUND THAT THE STAMP PAPER WITH SR.NO.9738 WAS OF R S.100 AND THE SAME WAS PURCHASED BY ONE SHRI TIVARI SUSHILABEN ASHOKBH AI ON 18-12-2003. THIS CREATED SUSPICION IN THE MIND OF THE AO AND HE REQUESTED THE ASSESSEE TO PRODUCE THE DONOR, WHO WAS NEVER PRODUC ED NEITHER AT THE TIME OF ASSESSMENT NOR AT THE TIME OF APPELLATE PRO CEEDINGS WHERE THE GIFT ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 10 ADDITION OF RS.1,50,000 WAS CONFIRMED BY CIT(A) VID E ORDER DATED 15-11- 2007. THE DONOR WAS NOT PRODUCED AT THE PENALTY PRO CEEDING STAGE EITHER. THIS IS A FACT THAT THE AO WANTED THE DONOR TO BE P RODUCED TO CONFIRM THE GIFT BUT THE DONOR WAS NEVER PRODUCED BY THE APPELL ANT. SECONDLY THIS IS ALSO A FACT THAT AGAINST QUANTUM ADDITION CONFIRMED BY CIT(A) I.E. GIFT ADDITION, NO APPEAL HAS BEEN FILED BY THE APPELLANT BEFORE HON'BLE ITAT. THIRDLY THE CONFIRMATION OF QUANTUM ADDITION OF GIF T BY CIT(A) IS BASED ON THE DECISION OF DELHI HIGH COURT IN THE CASE OF CIT VS. ANILKUMAR (292 ITR 552) WHEREIN IT HAS BEEN HELD THAT THE ONUS LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY OF THE PERSON MAKING THE GIF T BUT ALSO FOR HIS CAPACITY TO MAKE SUCH A GIFT. LAST BUT NOT THE LEAST THE DON OR WAS NOT PRODUCED BEFORE THE AO AND NEITHER AT APPELLATE STAGE. THE P ENALTY U/S 271(1)(C) IMPOSED BY THE AO IN THE LIGHT OF THE AFORESAID DIS CUSSION IS THEREFORE CONFIRMED. 5.1 SIMILARLY IN THE CASE OF SMT. MADHUBEN SUMERMA L SHAH, TH ELD. CIT(A) VIDE HER ORDER DATED 28.1.2010 CONCLUDED AS UNDER : 4 AFTER GOING THROUGH RIVAL SUBMISSIONS THE PENALT Y IMPOSED BY THE AO IS UPHELD BECAUSE IN THE SUBMISSION FILED DURING THE APPELLATE PROCEEDINGS AGAINST PENALTY IT HAS BEEN CONCEDED TH AT THE DONOR WHO MADE THE GIFT OF RS.3,00,000 RABARI JIVABHAI DEVJIB HAI OF VILLAGE VAGDOD, TAL.PATAN AND PATEL AMBALAL RANCHHODBHAI OF CHANSMA TA. CHANSMA WHO DID NOT FILE RETURNS OF INCOME BUT THEY CONFIRM ED GIFTS BY FILING THE AFFIDAVITS. THIS IS A FACT THAT THE AO WANTED THE D ONORS TO BE PRODUCED TO CONFIRM THE CONTENTS OF THE AFFIDAVITS BUT THE DONO RS WERE NEVER PRODUCED BY THE APPELLANT. SECONDLY THIS IS ALSO A FACT THAT AGAINST QUANTUM ADDITION CONFIRMED BY CIT(A) I.E. GIFTS ADDITION, NO APPEAL HAS BEEN FILED BY THE APPELLANT BEFORE HONBLE ITAT. THIRDLY THE CONFIRMA TION OF QUANTUM ADDITION OF GIFTS BY CIT(A) IS BASED ON THE DECISIO N OF DELHI HIGH COURT IN THE CASE OF CIT VS. ANILKUMAR (292 ITR 552) WHEREIN IT HAS BEEN HELD THAT THE ONUS LIES ON THE ASSESSEE TO ESTABLISH THE IDEN TITY OF THE PERSON MAKING THE GIFT BUT ALSO FOR HIS CAPACITY TO MAKE S UCH A GIFT. LAST BUT NOT THE LEAST THE DONORS WERE NOT PRODUCED BEFORE THE A O AND NEITHER AT APPELLATE STAGE. THE PENALTY U/S 271(1)(C) IN THE L IGHT OF THE AFORESAID DISCUSSION IS THEREFORE CONFIRMED. 5.2 LIKEWISE IN THE CASE OF SMT. VIMLABEN KANTILAL SHAH, THE LD. CIT(A) VIDE HER ORDER DATED 29.1.2010 HELD AS UNDER : 5. AFTER GOING THROUGH RIVAL SUBMISSIONS IT IS SEE N THAT THE AO WANTED THE DONOR TO BE PRODUCED TO CONFIRM GIFT BUT THE DO NOR WAS NEVER PRODUCED BY THE APPELLANT. SECONDLY THIS IS ALSO A FACT THAT AGAINST QUANTUM ADDITION ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 11 CONFIRMED BY CIT(A) I.E. GIFT ADDITION, NO APPEAL H AS BEEN FILED BY THE APPELLANT BEFORE HONBL ITAT. THIRDLY THE CONFIRMAT ION OF QUANTUM ADDITION OF GIFTS BY CIT(A) IS BASED ON THE DECISION OF DELH I HIGH COURT IN THE CASE OF CIT VS. ANILKUMAR (292 ITR 552) WHEREIN IT HAS B EEN HELD THAT THE ONUS LIES ON THE ASSESSEE TO ESTABLISH THE IDENTITY OF T HE PERSON MAKING THE GIFT BUT ALSO FOR HIS CAPACITY TO MAKE SUCH A GIFT. BUT THESE POINTS REMAINED UNCOMPLIED WITH BY THE APPELLANT. LAST BUT NOT THE LEAST THE DONOR WAS NOT PRODUCED BEFORE THE AO AND NEITHER AT APPELLATE STA GE. THE PENALTY IMPOSED BY THE AO U/S 271(1)(C) IN THE LIGHT OF THE AFORESAID DISCUSSION IS THEREFORE CONFIRMED. 6. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A). THE LD. AR WITHOUT DISP UTING THE FINDINGS OF THE LD. CIT(A) ON MERITS IN THE AFORESAID THREE IMPUGNED ORDERS CONTENDED THAT SINCE THE PENALTY HAS BEEN INITIATE D BOTH FOR CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THEREOF, THE IMPUGNED ORDERS BE QUASHED IN VIEW OF DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF CIT VS. LAKHDHIR LALJI,85 ITR 77(GUJ),CIT V. MANU ENGIN EERING WORKS [1980] 122 ITR 306 ,NEW SORATHIA ENGINEERING CO. VS. CIT,282 ITR 642(G UJ),DILIP N SHROFF VS. JCIT,291 ITR 519(SC) AND DECISION OF THE ITAT AGRA BENCH IN THE CASE OF ITO VS. CHHAIL BEHANI (2010) 3 6 DTR (AGRA) (TRIB) 453.ON THE OTHER HAND, THE LD. DR VEHEMENTLY DISPUTED THE SUBMISSIONS OF THE LD. AR, CONTENDING THAT PENALTY U/S 271(1)(C) OF THE ACT HAS BEEN IMPOSED IN THESE THREE CASES ONLY SINCE THESE ASSESSEES FURNISHED INACCURATE PARTICULARS OF INCOM E. NOWHERE THE AO OR THE LD. CIT(A) CONCLUDED THAT PENALTY HAS BEE N INITIATED OR IMPOSED FOR CONCEALMENT OF PARTICULARS OF INCOME, T HE LD. DR ARGUED. 7. WE HAVE HEARD BOTH THE PARTIES AND GONE THROU GH THE FACTS OF THE CASE AS ALSO THE DECISIONS RELIED UPON. AT THE OUTSET , WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF SECTION 271(1)(C ) OF THE ACT, WHICH READ AS UNDER: 271. FAILURE TO FURNISH RETURNS, COMPLY WITH NOTICES, CO NCEALMENT OF INCOME, ETC. ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 12 (1) IF THE ASSESSING OFFICER OR THE COMMISSIONER (A PPEALS) OR THE COMMISSIONER IN THE COURSE OF ANY PROCEEDINGS UNDE R THIS ACT, IS SATISFIED THAT ANY PERSON- .. (C) HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY,- (III) IN THE CASES REFERRED TO IN CLAUSE (C) , IN ADDITION TO ANY TAX PAYABLE BY HIM, A SUM WHICH SHALL NOT BE LESS THAN, BUT WHICH SHALL NOT EXCEED THREE TIMES, THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE CONCEALMENT OF PARTICULARS OF HIS INC OME OR THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER THIS ACT,- (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OF FERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFICER OR THE DEPUTY COMMISSIONER (APPEALS) OR THE COMMISSIONER (APPEALS) TO BE FALSE, OR (B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS N OT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAM E AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING T HE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE P URPOSES OF CLAUSE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED. 7.1 IN SECTION 271 OF THE INCOME-TAX ACT, AFTE R SUB-SECTION (1A), THE FOLLOWING SUB-SECTION HAS BEEN INSERTED BY FINANCE ACT,2008 W ITH EFFECT FROM THE 1ST DAY OF APRIL, 1989, :- '(1B) WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN CO MPUTING THE TOTAL INCOME OR LOSS OF AN ASSESSEE IN ANY ORDER OF ASSESSMENT OR R EASSESSMENT AND THE SAID ORDER CONTAINS A DIRECTION FOR INITIATION OF PENALT Y PROCEEDINGS UNDER CLAUSE (C) OF SUB-SECTION (1), SUCH AN ORDER OF ASSESSMENT OR REA SSESSMENT SHALL BE DEEMED ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 13 TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATION OF THE PENALTY PROCEEDINGS UNDER THE SAID CLAUSE (C).'. 7.2 AS IS EVIDENT FROM THE AFORESAID CL. (C) OF S. 271(1) OF THE ACT, THE WORDS USED ARE 'HAS CONCEALED THE PARTICULARS OF HIS INCO ME' OR FURNISHED 'INACCURATE PARTICULARS OF SUCH INCOME'. THUS, BOTH IN CASE OF CONCEALMENT AND INACCURACY, THE PHRASE 'PARTICULARS OF INCOME' HAS BEEN USED. T HE LEGISLATURE HAS NOT USED THE WORDS 'CONCEALED HIS INCOME'. FROM THIS IT WOUL D BE APPARENT THAT PENAL PROVISION WOULD OPERATE WHEN THERE IS A FAILURE TO DISCLOSE FULLY OR TRULY ALL THE PARTICULARS. THE WORDS 'PARTICULARS OF INCOME' REFE R TO THE FACTS WHICH LEAD TO THE CORRECT COMPUTATION OF INCOME IN ACCORDANCE WITH TH E PROVISIONS OF THE ACT. SO WHEN ANY FACT MATERIAL TO THE DETERMINATION OF AN I TEM AS INCOME OR MATERIAL TO THE CORRECT COMPUTATION IS NOT FILED OR THAT WHICH IS FILED IS NOT ACCURATE, THEN THE ASSESSEE WOULD BE LIABLE TO PENALTY UNDER S. 271(1) (C) OF THE ACT. IN THE INSTANT CASES, THE AO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME ON ACCO UNT GIFTS HAVING BEEN MADE OUT OF UNDISCLOSED SOURCES OF INCOME. NOWHERE IN TH E ASSESSMENT ORDERS, THE AO WHILE INITIATING THE PENALTY PROCEEDINGS, USED THE WORDS 'HAS CONCEALED THE PARTICULARS OF HER INCOME'. SUBSEQUENTLY, THE AO IM POSED THE PENALTY ONLY ON THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTI CULARS OF INCOME OF RS. 1,50,000 IN THE CASE OF SMT. LILABEN MANGILAL SHAH, RS. 3 LACS IN THE CASE OF SMT. MADHUBEN SUMERMAL SHAH AND RS. 2LACS IN THE CASE OF VIMLABEN KANTILAL SHAH. ON APPEAL, THESE THREE ASSESSEES UNDISPUTEDLY, IN T HE GROUND NOS. 1 & 3 OF THEIR RESPECTIVE APPEALS BEFORE THE LD. CIT(A) ADMITTED T HAT PENALTY HAS BEEN IMPOSED FOR THE DEFAULT OF FURNISHING INACCURATE PARTICULAR S OF INCOME. NOT EVEN A WHISPER HAS BEEN MADE EITHER IN THESE GROUNDS OR EVEN DURI NG THE COURSE OF HEARING BEFORE THE LD. CIT(A) THAT PENALTY PROCEEDINGS HAVE BEEN INITIATED OR PENALTY HAS BEEN IMPOSED FOR DEFAULT OF CONCEALMENT OF PARTICUL ARS OF INCOME. IN THESE CIRCUMSTANCES, PLEA NOW RAISED BY THE LD. AR BEFORE US THAT PENALTY PROCEEDINGS HAVE BEEN INITIATED BOTH FOR CONCEALMEN T OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS THE REOF, IS NOT BACKED BY FACTS ON RECORD NOR ANY SUCH ISSUE ARISES OUT OF THE ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 14 IMPUGNED ORDERS. THUS, RELIANCE BY THE LD. AR ON TH E DECISIONS OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F CIT VS. LAKHDHIR LALJI,85 ITR 77(GUJ),CIT V. MANU ENGINEERING WORKS [1980] 122 ITR 306 ,NEW SORATHIA ENGINEERING CO. VS. CIT,282 ITR 642(G UJ), AND DECISION OF THE ITAT AGRA BENCH IN THE CASE OF ITO VS. CHHAIL BEHANI (2010) 36 DTR (AGRA) (TRIB) 453, IS TOTALLY MISPLACED. SINCE THE LD. AR DID NO MAKE ANY OTHER ARGUMENT ON THE ME RITS OF PENALTY UPHELD BY THE LD. CIT(A) IN THESE THREE CASES NOR D EMONSTRATED AS TO HOW THE DECISION OF HONBLE APEX COURT IN THE CASE OF DILIP N SHROFF VS. JCIT,291 ITR 519(SC) IS OF ANY HELP, WE HAVE NO ALTERNATIVE BUT TO UPHOLD THE FINDINGS OF THE LD. CIT(A). WE MA Y POINT OUT THAT THE EXPRESSION 'HAS CONCEALED THE PARTICULARS OF IN COME' AND 'HAS FURNISHED INACCURATE PARTICULARS OF INCOME' HAVE NOT BEEN DEF INED EITHER IN SECTION 271 OR ELSEWHERE IN THE ACT. HOWEVER, NOTWITHSTANDING THE DIFFERENCE IN THE TWO CIRCUMSTANCES, IT IS NOW WELL ESTABLISHED THAT THEY LEAD TO THE SAME EFFECT NAMELY, KEEPING OFF A CERTAIN PORTION OF THE INCOME FROM THE RETURN. ACCORDING TO LAW LEXICON, THE WORD 'CONCEAL' MEANS: 'TO HIDE OR KEEP SECRET. THE WORD 'CONCEAL' IS C ON+CELARE WHICH IMPLIES TO HIDE. IT MEANS TO HIDE OR WITHDRAW FROM OBSERVATION; TO C OVER OR KEEP FROM SIGHT; TO PREVENT THE DISCOVERY OF ; TO WITHHOLD KNOWLEDGE OF . THE OFFENCE OF CONCEALMENT IS, THUS, A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOM E OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME-TAX AUTHORITIES.' IN WEBSTER'S DICTIONARY, 'INACCURATE' HAS BEEN DEFI NED AS : 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS ; AS AN INACCURATE STATEMENT, COPY OR TRANSCRIPT.' 7.3 IF THE DISCLOSURE OF FACTS IS INCORRECT OR FA LSE TO THE KNOWLEDGE OF THE ASSESSEE AND IT IS ESTABLISHED, THEN SUCH DISCLOSUR E CANNOT TAKE IT OUT FROM THE PURVIEW OF THE ACT OF CONCEALMENT OF PARTICULARS OR FURNISHING INACCURATE PARTICULARS THEREOF FOR THE PURPOSE OF LEVY OF PENA LTY. IN THE CASE OF NEW BIJLI ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 15 FOUNDRY VS. CIT,135 ITR 593, HONBLE PUNJAB AND HAR YANA HIGH COURT HAVE HELD THAT THE FINDINGS RECORDED IN THE ASSESSMENT PROCEE DINGS ARE CERTAINLY RELEVANT IN THE PENALTY PROCEEDINGS. IN THE INSTANT CASES, THE ASSESSEE INITIALLY DID NOT DISCLOSE THE FACTS OF EITHER HAVING RECEIVED THE GI FTS OR MADE THE GIFTS IN THEIR CAPITAL ACCOUNTS ENCLOSED WITH THE RETURNS. IT WAS ONLY IN THEIR COPY OF CAPITAL ACCOUNT FILED WITH ITO(OSD) GANDHINAGAR, THE ASSESS EE MENTIONED THE FACT OF GIFTS RECEIVED AND MADE. DESPITE REQUEST MADE, THE ASSESSEE DID NOT PRODUCE THE SAID DONORS EITHER BEFORE THE AO OR EVEN BEFORE THE LD. CIT(A) NOR ESTABLISHED EITHER THE CREDITWORTHINESS OF THE SAID DONORS DUR ING THE ASSESSMENT OR PENALTY PROCEEDINGS AND EVEN THE GENUINENESS OF THE TRANSAC TIONS. ENQUIRIES WITH THE ADDL. SUPERINTENDENT OF STAMPS REVEALED THAT EVEN S TAMPS AFFIXED ON THE SAID GIFT DEEDS WERE BOGUS , STAMPS HAVING BEEN ISSUED T O DIFFERENT PERSONS AND OF DIFFERENT DENOMINATIONS AND IN SOME CASES EVEN ON D IFFERENT DATES. THE FACTS NARRATED HEREINABOVE REFLECT THE MALAFIDE CONDUCT O F THE PART OF THESE ASSESSEES. SINCE THE ASSESSEE DELIBERATELY MISLED THE AO BY FILING ONE CAPITAL ACCOUNT WITH THEIR RETURN AND DIFFERENT WITH ITO(OSD),GANDHINAGA R AND FAILED TO ESTABLISH THE SOURCES OF AMOUNT GIFTED BY THEM WITH PROPER EVIDE NCE TO THE SATISFACTION OF THE AO AND ALSO FAILED TO DISCHARGE THE ONUS PLACED ON THEM IN TERMS OF EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT, APPARENTLY, IT IS W ELL ESTABLISHED THAT THESE ASSESSEES FURNISHED INACCURATE PARTICULARS OF INCOM E. MOREOVER, DESPITE SUFFICIENT OPPORTUNITY ALLOWED BY THE AO AND THE LD . CIT(A) DURING THE PENALTY PROCEEDINGS, THESE ASSESSEES FAILED TO DISCHARGE TH E ONUS LAID DOWN UPON THEM IN TERMS OF EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT WHILE THE LD. AR APPEARING BEFORE US DID NOT ASSAIL AT ALL, THE FINDINGS OF TH E LD. CIT(A), UPHOLDING THE LEVY OF PENALTY, WE ARE NOT INCLINED TO INTERFERE. WHEN THE ASSESSING AUTHORITY FOUND THAT THERE HAS BEEN MANIPULATION OF ACCOUNTS AND THE ASS ESSEE'S EXPLANATION WAS FOUND TO BE WHOLLY UNTRUE, LEVY OF PENALTY WAS HELD TO BE VALID IN THE CASE OF KANTILAL MANILAL V. CIT [1981] 130 ITR 411 (GUJ) & CIT VS.VIDYAGAURI NATVARLAL & OTHERS,238 ITR 91(GUJ). LEVY OF PENALTY U/S 271(1)( C) ON ACCOUNT OF ADDITIONS U/S 68 OF THE ACT HAS BEEN UPHELD ONCE THE ASSESSEE FA ILED TO DISCHARGE THE BURDEN PLACED UPON IT BY THE AFORESAID EXPLANATION TO SEC. 271(1)(C) IN THE CASE OF CIT ITA NO.1084, 1085 & 1086/AHD/2010 SMT. LILABEN M SHAH, S MT. MADHUBEN S SHAH AND SMT. VIMLABEN K SHAH 16 VS. JAMNADAS & COMPANY,210 ITR 218(GUJ). IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE PENALTY PROCEEDINGS HAVE BEEN INITIATED O NLY ON THE GROUND THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME AND SUBSEQUENTLY PENALTY HAS BEEN IMPOSED ON THAT SCORE ONLY ,AS IS EVIDENT FROM THE GROUNDS RAISED BEFORE THE LD. CIT(A) WHILE FINDINGS OF THE LD. CIT (A) ON MERITS OF PENALTY HAVE NOT BEEN DISPUTED BEFORE US, CONSIDERING THE MALAFIDE C ONDUCT OF THESE THREE ASSESSEES, THERE IS NO BASIS BEFORE US TO TAKE A DI FFERENT VIEW IN THE MATTER. IN VIEW THEREOF, WE UPHOLD THE LEVY OF PENALTY AND THE REFORE, GROUND NOS. 1 & 2 IN THESE THREE APPEALS ARE DISMISSED. 8. NO ADDITIONAL GROUND HAVING BEEN RAISED IN TER MS OF THE RESIDUARY GROUND NO.23 IN THESE APPEALS, ACCORDINGL Y, THE SAID GROUND IS ALSO DISMISSED. 9. IN THE RESULT, THESE THREE APPEALS ARE DISMISS ED. ORDER PRONOUNCED IN THE COURT TODAY ON 25-6-2010 SD/- SD/- (MUKUL SHRAWAT) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATE : 25-6 -2010 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE CONCERNED 2. THE INCOME-TAX OFFICER, WARD-2, PALANPUR 3. CIT CONCERNED 4. CIT(A)XV, AHMEDABAD 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER DEPUT Y REGISTRAR/ASSISTANT REGISTRAR ITAT, AHMEDABAD