Ram Kumar Singh, Dhanbad V. ITO, Dhanbad

ITA 123/RAN/2016

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9975 (ITAT-RANCHI)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 18-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY PAL AL REPRESENTATIVE
• Assessee Lawyers: M K CHOUDHURY
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 123 /RAN/2016 ASSESSMENT YEAR : 2005 - 06 RAM KUMAR SINGH, RAJPUT BHAWAN, DHANSAR, DHANBAD VS. ITO, WARD 2(3), DHANBAD PAN/GIR NO. AHGPS 6927 B (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI M.K.CHOUDHURY , AR REVENUE BY : SHRI SANJAY PAL , DEPARTMENTAL REPRESENTATIVE DATE OF HEARING : 9 /12/ 2016 DATE OF PRONOUNCEMENT : 9 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - DHANBAD , DATED 15.2.2016, FOR THE ASSESSMENT YEAR 2005 - 06. 2. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN LEVYING PENALTY OF RS.1,38,307/ - U/ S.271(1)(C) OF THE ACT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD . IN THE INSTANT CASE, THE ASSESSEE WAS COMPLETED U/S.143(3) OF THE ACT, WHEREIN, THE AS SESSING 2 ITA NO. 123/RAN/2016 ASSESSMENT YEAR :2005 - 06 OFFICER MADE ADDITION ON GIFT RECEIVED BY THE ASSESSEE OF RS.3 LAKHS AND ADDITION OF RS .39,953/ - OF INTEREST ACCRUED ON THE FIXED DEPOSIT. THEREAFTER, THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) OF THE ACT FOR CONCEALMENT OF INCOME OF RS.1,38,307/ - . 4. ON APPEAL, LD CIT(A ) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 5. BEFORE ME, THE ARGUMENT OF THE LD A.R. OF THE ASSESSEE IS THAT THE ADDITION OF GIFT OF RS.3 LAKH U/S.68 OF THE ACT WAS MADE ON THE GROUND THAT THE DONORS DID NOT HAVE THE CAPACITY TO GIVE THE GIFT TO THE ASSESSEE. FURTHER, ADDITION OF INTEREST ON FIXED DEPOSIT OF RS.39,953/ - WAS MADE ON THE GROUND THAT ACCRUED INTEREST WAS NOT SHOWN BY THE ASSESSEE IN THE RETURN OF INCOME. HE ARGUED THAT THE ADDITION ON GIFT RECEIVED BY THE ASSESSEE WAS MADE U/S.68 OF TH E ACT, WHICH IS A DEEMING PROVISION AND FOR ADDITION MADE U/S.68 OF THE ACT, THERE CANNOT BE PENALTY FOR CONCEALMENT OF INCOME. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS OASIS HOSPITALITIES ( P ) LTD. (2011) 333 ITR 119 (DEL), WHEREIN, IT WAS HELD THAT THE ASSESSEE COMPANY HAD PRODUCED CERTAIN DOCUMENTS TO PROVE THE IDENTITY AND CREDITWORTHINESS OF THE SHARE APPLICANTS BUT THE SAME COULD NOT BE PROVED BECAUSE OF SUBSTANTIAL TIME GAP AND SHOWED INABILITY TO PRODUCE THOSE PERSONS. THUS, THOUGH THE ASSESSEE COULD NOT DISCHARGE ITS ONUS U/S.68 OF THE ACT, IT CANNOT BE SAID THAT IT IS A CASE OF CONCEALMENT OF INCOME BY THE ASSESSEE. THEREFORE, THE PENALTY U/S.271(1)(C) IS NOT LEVIABLE. 3 ITA NO. 123/RAN/2016 ASSESSMENT YEAR :2005 - 06 6. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 7. I FIND THAT IN THE INSTANT CASE, INTEREST ON FIXED DEPOSIT OF RS.39,953/ - WAS NOW SHOWN BY THE ASSESSEE AS THE ASSESSEE CLAIMED THAT IT WAS FOLLOWING CASH SYSTEM OF ACCOUNTING. THE ASSESSING OFFICER H AS MADE THE ADDITION ON THE BASIS OF ACCRUAL SYSTEM OF ACCOUNTING TO THE INCOME OF THE ASSESSEE. THUS, FOR DIFFERENT METHOD OF ACCOUNTING FOLLOWED BY THE ASSESSEE, IT CANNOT BE HELD THAT THE ASSESSEE HAD CONCEALED THE INCOME. HENCE, I DELETE THE LEVY OF P ENALTY U/S.271(1)(C) OF ACCRUED INTEREST ON FIXED DEPOSIT. 8. REGARDING LEVY OF PENALTY OF RS.3 LAKHS U/S.271(1)(C) BY THE ASSESSING OFFICER, THE ASSESSEE PRODUCED ALL THE THREE DONORS BEFORE THE ASSESSING OFFICER WHO ADMITTED THE FACT OF GIVING GIFT TO TH E ASSESSEE. THUS, THE IDENTITY OF THE DONORS AND THE GENUINENESS OF THE GIFT WERE ESTABLISHED BY THE ASSESSEE. THE ASSESSING OFFICER DOUBTED THE CAPACITY OF THE DONORS OF GIVING GIFT TO THE ASSESSEE. IN THE ABOVE CIRCUMSTANCES, THE DECISION OF HON'BLE DE LHI HIGH COURT IN THE CASE OF OASIS HOSPITALITIES (P VT ) LTD., APPLIES TO THE FACTS OF THE ASSESSEES CASE. RESPECTFULLY FOLLOWING THE SAME, I DELETE THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT ON THE GIFT RECEIVED BY THE ASSESSEE OF RS.3,00,000/ - . HENCE , I DELETE THE PENALTY OF RS.1,38,307/ - LEVIED U/S.271(1)(C) OF THE ACT AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 4 ITA NO. 123/RAN/2016 ASSESSMENT YEAR :2005 - 06 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 8 /12/2016 IN THE PRESENCE OF PART IES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 9 /12 /2016 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : RAM KUMAR SINGH, RAJPUT BHAWAN, DHANSAR, DHANBAD 2. THE RESPONDENT. ITO, WARD 2(3), DHANBAD 3. THE CIT(A) DHANBAD 4. CIT , DHANBAD 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//