P.Radha Ramesh, CHENNAI V. ACIT, CHENNAI

ITA 1262/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7733 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 26-05-2015
• Court: TRIBUNAL
• Department Lawyers: DR B NISCHALJCIT
• Assessee Lawyers: G BASKAR
• Keywords: Unexplained cash credit; Gift
• Section: 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI , ! ' #! ' $ . %& ' () BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1262 /MDS./2015 ( / ASSESSMENT YEAR :2006-07) SMT.P.RADHA RAMESH , AH2,IV AVENUE,SHANTI COLONY, ANNANAGAR, CHENNAI 600 040. VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-II(4), CHENNAI. PAN AAEPR 1000 R ( *+ / APPELLANT ) ( ,-*+ / RESPONDENT ) / APPELLANT BY : MR.G.BASKAR,ADVOCATE / RESPONDENT BY : DR.B.NISCHAL,JCIT, D.R / DATE OF HEARING : 29.02.2016 ! /DATE OF PRONOUNCEMENT : 18.03.2016 . / O R D E R ITA NO.1262/MDS/2015 2 PER CHANDRA POOJARI, ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A)- 19, CHENNAI DATED 16.02.2015 PERTAINING TO THE ASSESSMENT YEAR 2006-07 IN CONFIRMING THE LEVY OF PENALTY UNDER SEC.271(1)(C) OF THE ACT. 2. BRIEF FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 27.12.2007 DECLARING THE INCOME OF ` 2,37,231/- AND THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 27.11.2008 A DDING A SUM OF 4,30,374/- AS UNEXPLAINED CASH DEPOSITS. AGAINST TH IS THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A). ON APPEAL, THE LD.CIT(A) DELETED A SUM OF ` 2,85,374/- OUT OF ` 4,30,374/- ADDED BY THE AO AS UNEXPLAINED CASH DEPOSITS, BUT SUSTAINED THE ADDITI ON OF ` 1,45,000/- WHICH WAS CLAIMED TO HAVE BEEN RECEIVED AS GIFT FRO M THE MOTHER-IN LAW OF THE ASSESSEE. HENCE, THE AO WAS OF THE OPINI ON THAT THE ASSESSEE HAD CONCEALED AN INCOME OF ` 1,45,000/- AND THE PENALTY TO THE TUNE OF ` 43,339/- WAS LEVIED U/S.271(1)(C) OF THE ACT. HENC E, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.1262/MDS/2015 3 3. IN THIS CASE, THE ADDITION WAS MADE ON TREATING A SUM OF ` 1,45,000/- AS UNEXPLAINED CASH CREDIT U/S.68 OF TH E ACT. THE SAID AMOUNT WAS TAKEN AS A LOAN BY ASSESSEE FROM HER MOT HER-INLAW. ACCORDING TO THE AO, THE ASSESSEE COULD NOT PROVIDE THE SOURCE OF THE LOAN AND ALSO COULD NOT PROVIDE THE DEPOSIT OF SAID AMOUNT INTO ASSESSEES BANK ACCOUNT AND FURTHER, AO OBSERVED TH AT SINCE CIT(A) CONFIRMED THE ADDITION IN QUANTUM APPEAL, THE PENAL TY IS TO BE LEVIED. IN OUR OPINION, THE LEVY OF PENALTY U/S.271(1)(C) O F THE ACT IS NOT AUTOMATIC. THE ASSESSEE HAS GIVEN THE EXPLANATION THAT HE HAS TAKEN A LOAN FROM HER MOTHER-IN-LAW. THIS EXPLANAT ION GIVEN BY THE ASSESSEE, THOUGH UNPROVED, BUT NOT DISPROVED, I.E. IT IS NOT ACCEPTED, BUT CIRCUMSTANCES DID NOT LEAD TO REASONABLE AND PO SITIVE INFERENCE THAT THE ASSESSEES CASE IF FALSE. IN THE PRESENT C ASE, THOUGH ADDITION CONFIRMED BY THE CIT(A) THAT ITSELF CANNOT BE A REA SON FOR LEVY OF PENALTY. FURTHER, IN THE CASE OF NATIONAL TEXTILES V. CIT REPORTED IN [2001] 249 ITR 125 (GUJ) HELD THAT THE PROVISIONS O F THE SECTION 68 ARE ENABLING PROVISIONS FOR MAKING ADDITIONS WHERE THERE IS FAILURE BY THE ASSESSEE TO GIVE AN EXPLANATION OR WHERE THE EX PLANATION IS NOT TO THE SATISFACTION OF THE ASSESSING OFFICER. IT W AS FURTHER HELD THAT ITA NO.1262/MDS/2015 4 SUCH ADDITION WOULD NOT AUTOMATICALLY JUSTIFY THE I MPOSITION OF PENALTY U/S.271(1)(C) OF THE ACT READ WITH EXPLANATION 1 T O SEC.271(1)(C) OF THE ACT. FURTHER, IT WAS ALSO HELD THAT IN ORDER T O JUSTIFY OF LEVYING PENALTY, THERE MUST BE SOME MATERIAL OR CIRCUMSTANC ES LEADING TO A REASONABLE CONCLUSION THAT THE AMOUNT DOES NOT REPR ESENT ASSESSEES INCOME AND THE CIRCUMSTANCES MUST SHOW T HAT THERE WAS A CONSCIOUS CONCEALMENT OR ACT OF FURNISHING OF INACC URATE PARTICULARS ON THE PART OF THE ASSESSEE. FROM THE BARE READING OF THE SEC.271(1)(C) OF THE ACT, IT IS CLEAR THAT PROVISIO NS OF EXPLANATION-1 TO SEC.271(1)(C) OF THE ACT DOES NOT MAKE THE ASSESSME NT ORDER CONCLUSIVE EVIDENCE THAT THE AMOUNT ASSESSED WAS IN FACT THE INCOME OF THE ASSESSEE, THAT THE ASSESSEE DID NOT SATISFAC TORILY EXPLAINED THE CASH CREDIT BY PROVIDING EVIDENCE AND DOCUMENTS. I N THE CASE IN HAND, IT IS OBSERVED THAT THE ASSESSEE HAS GIVEN AN EXPLANATION THAT SHE HAS RECEIVED MONEY FROM HER MOTHER-IN-LAW AND T HE EXPLANATION FOUND TO BE NOT BONA FIDE BY THE AO THAT ITSELF CAN NOT BE REASON TO IMPOSE PENALTY AND THERE IS NO CONCLUSIVE MATERIAL BROUGHT ON RECORD BY AO TO SHOW THAT THE EXPLANATION IS NOT REASONABL E OR FALSE SO AS TO ITA NO.1262/MDS/2015 5 LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. IN VIEW OF THE ABOVE, WE ARE INCLINED TO DELETE THE PENALTY. 4. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON FRIDAY, THE 18 TH OF MARCH, 2016 AT CHENNAI. SD/- SD/- ' # $ . % & ' ( DUVVURU RL REDDY ) ) ( ( ( ) * + ) ) ' CHANDRA POOJARI ', JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 18 TH MARCH,2016 . K S SUNDARAM. -.,, /0,10 /COPY TO: , 1. /APPELLANT 2. /RESPONDENT 3. , 2,'' /CIT(A) 4. , 2 /CIT 5. 034, 5 /DR 6. 4,6 /GF