SMT. RAGINI JAIN, KOTA V. INCOME TAX OFFICER, WARD-1-2, KOTA

ITA 1130/JPR/2018

• Counselvise Citation: [2019] 113 COUNSELVISE.COM (IT) 6338 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 01-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K MAHALA JCIT DHK
• Keywords: Salary income; Tangible material; Wrong claim; Corroborative evidences; Capital Gains
• Section: 271(1)(c); 273B; 143(3); 201

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 1130/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2014-15. SMT. RAGINI JAIN 5-E-10, MAHAVEER NAGAR EXT. SCHEME, KOTA. CUKE VS. THE INCOME TAX OFFICER, WARD 1(2), KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AJWPG 2871 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SHRAWAN KUMAR GUPTA (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI A.K. MAHALA (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25.09.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 01/11/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 14.08.2018 OF LD. CIT (APPEALS), KOTA ARISING FROM THE PENALTY OR DER PASSED UNDER SECTION 271(1)(C) OF THE IT ACT FOR THE ASSESSMENT YEAR 201 4-15. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THE IMPUGNED PENALTY ORDER U/S 271(1)(C) DATED 27.06.2017 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JU RISDICTION AND VARIOUS OTHER REASONS AND HENCE THE SAME MAY KINDLY BE QUASHED. 2. RS. 2,72,550/-: THE LD. CIT (A) HAS GROSSLY ERRE D IN LAW AS WELL AS ON THE FACTS OF THE CASE IN CONFIRMING THE PENAL TY OF RS. 2,72,550/- U/S 271(1)(C) IMPOSED BY THE AO. THE PE NALTY SO IMPOSED BY THE LD. AO AND CONFIRMED BY THE CIT (A) IS TOTALLY CONTRARY TO THE PROVISIONS OF LAW AND FACTS ON THE RECORD AND HENCE THE ADDITIONS MAY KINDLY BE DELETED IN FULL. 2 ITA NO. 1130/JP/2018 SMT. RAGINI JAIN, KOTA. 3. THE APPELLANT PRAYS YOUR HONOUR INDULGENCES TO A DD, AMEND OR ALTER OF OR ANY OF THE GROUNDS OF THE APPEAL ON OR BEFORE THE DATE OF HEARING. 2. THE ASSESSEE IS A PARTNER OF M/S. PARSHWANATH AS SOCIATES, KOTA AND RECEIVED INCOME AS PROFIT SHARE AND INTEREST FROM THE PARTNE RSHIP FIRM. SHE IS ALSO HAVING INCOME FROM SALARY, CAPITAL GAINS AND OTHER SOURCES . ASSESSEE FILED HER RETURN OF INCOME ON 16.03.2015 DECLARING TOTAL INCOME OF RS. 7,54,740/-. THE ASSESSMENT WAS COMPLETED BY THE AO UNDER SECTION 143(3) OF THE IT ACT ON 2 ND DECEMBER, 2016 WHEREBY THE ADDITION OF RS. 9,76,750/- ON ACCOUNT O F LONG TERM CAPITAL GAIN WAS MADE. THE AO THEREAFTER INITIATED THE PROCEEDINGS UNDER SECTION 271(1)(C) AND LEVIED PENALTY OF RS. 2,72,551/- BEING 100% OF TAX SOUGHT TO BE EVADED IN RESPECT OF THE LONG TERM CAPITAL GAIN ADDED TO BY THE AO. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COULD NOT SUCC EED. 3. BEFORE THE TRIBUNAL, THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THERE IS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME ON THE PART OF THE ASSESSEE WHEN THE ASSESSEE DISCLOSED ALL REL EVANT FACTS AND DETAILS IN RESPECT OF PURCHASE AND SALE OF SHARES RESULTING IN LONG TE RM CAPITAL GAIN EXEMPT UNDER SECTION 10(38) OF THE IT ACT. THE AO HAS TREATED T HE SAID TRANSACTION OF PURCHASE AND SALE OF SHARES AS BOGUS AND MADE THE ADDITION T O THE TOTAL INCOME OF THE ASSESSEE. THE ADDITION WAS MADE BY THE AO ON THE B ASIS OF REPORT OF THE INVESTIGATION WING, KOLKATA, HOWEVER, NO SPECIFIC F INDING WAS GIVEN REGARDING THE BOGUS TRANSACTIONS IN CASE OF PURCHASE AND SALE OF SHARES BY THE ASSESSEE. HE HAS FURTHER SUBMITTED THAT DURING THE COURSE OF ASSESSM ENT PROCEEDINGS, THE ASSESSEE 3 ITA NO. 1130/JP/2018 SMT. RAGINI JAIN, KOTA. FILED THE REVISED COMPUTATION AND SURRENDERED THE S AID AMOUNT TO TAX ON THE GROUND THAT IT WAS NOT FEASIBLE FOR THE ASSESSEE TO PRODUC E ALL THE SUPPORTING EVIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTION. THE LD. A/R HAS SUBMITTED THAT THE PENALTY LEVIED UNDER SECTION 271(1)(C) IS NOT SUSTA INABLE IN LAW WHEN THE ASSESSEE PRODUCED ALL THE RELEVANT PARTICULARS AS WELL AS DO CUMENTARY EVIDENCE IN SUPPORT OF THE CLAIM OF LONG TERM CAPITAL GAIN ARISING FROM PU RCHASE AND SALE OF SHARES. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE D ECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158 (SC). THE LD. A/R HAS THUS CONTENDED THAT MERELY BECAUSE THE CLAIM OF LON G TERM CAPITAL GAIN WAS DISALLOWED BY THE AO AND CONSEQUENTLY THE ADDITION WAS MADE DOES NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE HAS CONCEALED THE PART ICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE MERE FACT TH AT THE AMOUNT HAS BEEN ASSESSED IS NOT SUFFICIENT FOR THE PURPOSE OF LEVYING THE PE NALTY BUT THE CIRCUMSTANCES MUST SHOW THAT THERE WAS CONSCIOUS CONCEALMENT OF INCOME OR CONSCIOUS FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE HAS RELIED UPO N THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF CIT VS. HIRALAL DOSHI, 383 IT R 19 (BOM.). 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE ASSESSEE MADE A BOGUS CLAIM OF LONG TERM CAPITAL GAIN EXEMPT UNDER SECTION 10(38) OF THE ACT IN THE RETURN FILED. THE AO CONDUCTED AN ENQUIRY AND REFER RED THE INVESTIGATION CARRIED OUT BY THE INVESTIGATION WING OF THE DEPARTMENT, KOLKAT A WHERE THESE TRANSACTIONS WERE FOUND TO BE BOGUS IN THE NATURE OF ENTRIES PROVIDED BY VARIOUS PERSONS. THE CASE OF THE ASSESSEE ALSO FALLS IN ONE OF THE CASES WHERE T HE SHARES OF THESE PARTICULAR COMPANIES WERE USED FOR THE PURPOSE OF PROVIDING TH E BOGUS ENTRIES OF LONG TERM CAPITAL GAIN EXEMPT UNDER SECTION 10(38) OF THE ACT . IT IS NOT A VOLUNTARY SURRENDER 4 ITA NO. 1130/JP/2018 SMT. RAGINI JAIN, KOTA. OF INCOME BY THE ASSESSEE BUT ONLY WHEN THE AO ASKE D THE ASSESSEE TO EXPLAIN THE GENUINENESS OF THE CLAIM THE ASSESSEE SURRENDERED T HE SAID INCOME. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS CLAIMED LONG TERM CAPITAL GAIN OF RS. 9,76,750/- FROM SALE OF SHARES OF TURBO TECH ENGG. LTD. AND CLAIMED THE SAME EXEMPT UNDER SECTION 10(38) OF THE ACT. DURING THE ASSESSMENT PROCEEDIN GS, THE AO NOTED THAT THE CLAIM OF LONG TERM CAPITAL GAIN SHOWN BY THE ASSESSEE IS FROM PENNY STOCK COMPANIES AND THE ASSESSEE WAS ASKED TO FURNISH THE DETAILS AND E VIDENCE TO PROVE THE GENUINENESS OF THE TRANSACTIONS. THE ASSESSEE THEN FILED A REV ISED COMPUTATION IN WHICH THE SAID INCOME OFFERED TO TAX. THE AO ACCORDINGLY HELD THE TRANSACTIONS OF LONG TERM CAPITAL GAIN IN RESPECT OF PURCHASE AND SALE OF 5000 SHARES OF M/S. TURBO TECH ENGG. LIMITED AS BOGUS TRANSACTIONS IN VIEW OF THE REPORT OF THE INVESTIGATION WING, KOLKATA. THUS THERE IS NO DISPUTE THAT IN THE ASSES SMENT PROCEEDINGS ASSESSEE ACCEPTED THE FACT THAT THE TRANSACTION IS NOT GENUI NE AND OFFERED THE INCOME TO TAX. IN THE PENALTY PROCEEDINGS, THE ASSESSEE HAS CONTEN DED THAT THE ADDITION MADE BY THE AO WOULD NOT IPSO FACTO ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE PRODUCED ALL THE RELEVANT EVIDENCE IN SUPPORT OF THE CLAIM. HOWEVER , ALL THESE EVIDENCES FILED BY THE ASSESSEE ARE NOT FREE FROM MANIPULATION OR CREATING SELF SERVING DOCUMENTS. THE ASSESSEE HAS NOT FILED A SINGLE PIECE OF EVIDENCE W HICH CAN BE VERIFIED INDEPENDENTLY AND FROM INDEPENDENT SOURCE. THERE IS NO DEMATERIA LIZATION OF THE SHARES AND EVEN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-1 4 WAS FILED ONLY ON 23.03.2014 AFTER THE ALLEGED TRANSACTION OF SALE OF SHARES. TH EREFORE, THE SAID RETURN OF INCOME 5 ITA NO. 1130/JP/2018 SMT. RAGINI JAIN, KOTA. FOR THE ASSESSMENT YEAR 2013-14 AND SHOWING THE SHA RES IN THE BALANCE SHEET WILL NOT HELP THE CASE OF THE ASSESSEE AS THE SAID RETUR N WAS FILED BELATEDLY ONLY AFTER THE ALLEGED TRANSACTION OF SALE. HENCE IN THE FACTS AN D CIRCUMSTANCES WHEN THE ASSESSEE HAS NOT PRODUCED ANY TANGIBLE MATERIAL WHICH CAN BE VERIFIED INDEPENDENTLY AND FREE FROM ANY MANIPULATION, THE SAME WILL NOT CONSTITUTE A REASONABLE AND BONAFIDE EXPLANATION IN TERMS OF SECTION 273B OF THE ACT. 5.1. AS REGARDS THE LEGAL OBJECTION RAISED BY THE A SSESSEE REGARDING THE VALIDITY OF ORDER PASSED UNDER SECTION 271(1)(C), IT IS A CLEAR CASE OF FURNISHING INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE WHEN THE ASSE SSEE HAS CLAIMED THE LONG TERM CAPITAL GAIN EXEMPT UNDER SECTION 10(38) AND SUBSEQ UENTLY THIS CLAIM OF THE ASSESSEE WAS FOUND TO BE WRONG. THE AO IN THE PENAL TY ORDER HAS GIVEN A DEFINITE FINDING IN PARA 5.2 OF THE PENALTY ORDER THAT THE A SSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AND PENALTY UNDER SECTION 271 (1)(C) IS LEVIABLE. ACCORDINGLY, I DO NOT FIND ANY MERIT OR SUBSTANCE IN THE LEGAL GRO UND RAISED BY THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DIS MISSED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 01/11/2 019. SD/- ( FOT; IKY JKWO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 01/11/2019. DAS/ 6 ITA NO. 1130/JP/2018 SMT. RAGINI JAIN, KOTA. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SMT. RAGINI JAIN, KOTA. 2. THE RESPONDENT THE ITO WARD 1(2), KOTA. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 1130/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR