Mahananda G. Pawar, Pune V. Income-tax Officer,

ITA 1270/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5105 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-10-2018
• Assessment Year: 2004-2005
• Appeal Filed On: 10-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV GHAI
• Keywords: Gift; Tangible material
• Section: 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO.1270/PUN/2016 '% & '& / ASSESSMENT YEAR : 2004-05 SMT. MAHANANDA G. PAWAR, PLOT NO.4, SAI PARK, SURVEY NO. 204, BEHIND ASHIYANA PARK 2, BANER, PUNE-411 045 PAN : AKHPP2090E ........ / APPELLANT (% / V/S. THE INCOME TAX OFFICER, WARD 3(2), PUNE. . / RESPONDENT ASSESSEE BY : SHRI C.H. NANIWADEKAR REVENUE BY : SHRI SANJEEV GHAI / DATE OF HEARING : 15.10.2018 / DATE OF PRONOUNCEMENT : 17.10.2018 ) / ORDER PER D. KARUNAKARA RAO, AM : THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF CIT (APPEALS)- 3, PUNE DATED 23.03.2016 FOR THE ASSESSMENT YEAR 2004-05. 2. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.5,41,300/-. IN THE ASSESSMENT P ROCEEDINGS 2 ITA NO. 1270/PUN/2016 A.Y.2004-05 U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRE D TO AS THE ACT), THE ASSESSING OFFICER ASSESSED THE TOTAL INCOME OF ASSESSEE AT RS.18,81,300/- AND IN THE PROCESS, ASSESSING OFFICER MADE ADDITION OF RS.13,40,000 /- ON ACCOUNT OF BOGUS GIFTS U/S.68 OF THE ACT. RELEVANT DISCUSSION IS GIVE N IN PARA 3.4 AND 3.5 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER MADE AD DITION U/S.68 OF THE ACT AFTER REJECTING THE ASSESSEES CLAIM OF GENUINE GIFTS OF (I) SUM OF RS.10,00,000/- RECEIVED FROM HER MOTHER AND (II) SUM OF RS.5,0 0,000/- AS GIFT FROM HER BROTHER-IN-LAW. THE ASSESSING OFFICER INITIATED PENALT Y PROCEEDINGS SEPARATELY U/S.271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY OF RS.4,02,000/- ON THE SAID ADDIT ION OF RS.13,40,000/- VIDE ORDER DATED 19.06.2009. THE ASSESSING OFFICER DISCUSSED THIS FACT VIDE PARA 3.4 AND 3.5 OF THE ASSESSMENT ORDER A ND THE SAME ARE EXTRACTED AS UNDER: 3.4 THE SALE DEED EXECUTED ON 16.01.2003 BY THE MO THER OF THE ASSESSEE WITH SHRI OMPRAKASH LAXMICHAND SAHDEO HUF OF AHMEDNAGAR OF THE LAND SITUATED AT MAUJE MALKAPUR BEARING S. NO. 76 A DMEASURING 2.64 HECTARE WAS FOR A TOTAL CONSIDERATION OF RS. 1,60,000/-. AS FOR THE BALANCE AMOUNT IT IS STATED THAT SHE HAS EXTENDED THE GIFT OUT OF THE SALE OF LANDS THAT BELONGED TO THE HUF OF WHICH THE MOTHER OF THE ASSESSEE ALSO IS A MEMBER. HOWEVER, IT IS SEEN THAT THE SAID HUF HAS NOT BEEN PARTITIONED AND THAT THE SHARE IN THE PROPERTY OF THE HUF MEMBE RS ARE UNDIVIDED. MOREOVER, THE ASSESSEE COULD NOT ESTABLISH THAT THE SAID SUM WAS ACTUALLY IN THE POSSESSION OF HER MOTHER. THERE IS ABSOLUTEL Y NO EVIDENCE FOR THIS AND THE ASSESSEE COULD NOT PRODUCE OR CAUSE TO BE P RODUCED ANY SUCH EVIDENCE THAT WOULD SUPPORT HER CLAIM. IN ABSENCE O F ANY EVIDENCE IN THIS REGARD, IT IS HELD THAT THE GIFT: TRANSACTION REPOR TED BY THE ASSESSEE IS ACTUALLY A SHAM TRANSACTION AND THAT THE SAID MONEY ACTUALLY BELONGED TO HER. OUT OF TOTAL GIFT' GIVEN BY THE MOTHER ONLY RS . 1,60,000/- IS ALLOWABLE AND BALANCE AMOUNT I.E. RS. 8,40,000/- FOR WHICH THE ASSESSEE COULD NOT PRODUCE A REASONABLE EXPLANATION OR ANY EVIDENCE, I S TREATED AS THE ASSESSEE'S OWN MONEY AND IS BROUGHT TO TAX U/S. 68 OF THE IT ACT, 1961. PENALTY PROCEEDINGS U/S.271(1)( C) OF THE ACT FOR F URNISHING INACCURATE PARTICULARS OF INCOME IS INITIATED SEPARATELY. 3.5. THE ASSESSEE HAS ALSO STATED THAT HER BROTHER IN LAW HAS GIFTED HER AMOUNT OF RS.5 LACS. AS THE SAID GIFT WAS GIVEN BY MEANS OF CASH AND AS THERE WAS NO EVIDENCE OF THE TRANSACTION OF THIS AM OUNT FURNISHED BY THE ASSESSEE, THE BANK ACCOUNT OF SHRI MAHADEV R.VITHOL E WAS EXAMINED. A PERUSAL OF THE BANK ACCOUNTS AS WELL AS THE REPLY S UBMITTED BY THE ASSESSEE REVEALS THE DETAILS OF WITHDRAWAL MADE BY SHRI MAHADEV R. VITHOLE AS UNDER: DATE AMOUNT 11/09/2002 RS.40,000/- 3 ITA NO. 1270/PUN/2016 A.Y.2004-05 18/01/2003 RS.51,000/- 12/03/2003 RS.32,000/- IT IS CLEAR FROM THE ABOVE DETAILS THAT THE WITHDRAWAL S MADE FROM THESE ACCOUNTS ARE ON DATES WHICH ARE MUCH PRIOR TO THE D ATE (29.08.2003) ON WHICH THE GIFT HAS BEEN GIVEN. MOREOVER, EVEN IF TH E TOTAL WITHDRAWALS MADE FROM THE BANK ACCOUNT IS TAKEN, IT WORKS OUT T O RS. 1,23,000/-. IN HIS WRITTEN UNDERTAKING SHRI MAHADEV R. VITHOLE HAS STA TED THAT THE SAID GIFT HAS BEEN GIVEN OUT OF HIS SAVINGS IN AMRAVATI ZILLA MADHYAVARTI SAHAKARI BANK SHIRSA BR. ACCOUNT NUMBER 9689. BUT THE AMOUNT S WITHDRAWN FROM THIS BANK ACCOUNT DO NOT SUFFICIENTLY COVER UP THE AMOUNT DONATED BY HIM. FOR THE BALANCE AMOUNT, SHRI VITHOLE HAS STATED THA T HE HAS GIVEN THE SAME OUT OF MONIES RECEIVED FROM SALE OF HIS LAND. HOWEVER, THERE IS NO EVIDENCE EITHER WITH THE ASSESSEE OR WITH SHRI VITO LE TO ESTABLISH THE GIFT TRANSACTION THAT WAS MADE IN CASH ON THE SAID DATE. HENCE, AN AMOUNT OF RS. 5,00,000/- FOR WHICH THE ASSESSEE COULD-NOT PRODUCED REASONABL E EXPLANATION OR ANY EVIDENCE, IS TREATED AS THE ASSE SSEE'S OWN MONEY AND IS BROUGHT TO TAX U/S.68 OF THE 1.T. ACT, 1961. PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PARTICULARS OF INCOME IS INITIATED SEPARATELY. 3. DURING FIRST APPELLATE PROCEEDINGS, THE CIT(A) CONFIRMED THE PENALTY OF RS.4,02,000/- ON THE SAID ADDITION RS.13,40,000/-. 4. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING FOLLOWING GROUNDS: 1. THE LEARNED CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING PENALTY OF RS.4,02,000/- ON GIFTS OF RS.13,40,000/- RECEIVED F ROM CLOSE RELATIVES ONLY ON THE GROUND THAT ADDITION HAS BEEN UPHELD BY CIT( A) IN QUANTUM PROCEEDINGS. SHE FAILED TO APPRECIATE THE SUBMISSIO NS OF THE ASSESSEE IN THIS REGARD. SHE ALSO ERRED IN STATING THAT NO EVID ENCES WERE FILED EITHER IN QUANTUM PROCEEDINGS OR PENALTY PROCEEDINGS, WHEN AL L THE DOCUMENTS AND EVIDENCES WERE ALREADY ON RECORD WITH THE AO. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ALL OR ANY OF THE ABOVE GROUNDS OF APPEAL. 5. BEFORE US, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THERE IS NO DEFAULT OF DISCLOSING OF FULL DETAILS BY THE ASSESSEE IN THE RETURN O F INCOME FILED IN REGULAR COURSE. IN THE ASSESSMENT PROCEEDINGS ALSO, ALL T HE DETAILS PERTAINING TO THE GIFT TRANSACTIONS WERE SUBMITTED TO THE ASSESSIN G OFFICER AND CIT(A). HOWEVER, LOWER AUTHORITIES HAVE TAKEN A DIFFERENT VIEW IN THE MATTER AND REJECTED THE CLAIM OF THE ASSESSEE. FURTHER, IT IS NOT TH E CASE OF THE REVENUE THAT ANY INCRIMINATING /TANGIBLE MATERIAL IS FOUND WHICH IS C APABLE OF PROVING 4 ITA NO. 1270/PUN/2016 A.Y.2004-05 THE INCRIMINATION NATURE OF THE SAID GIFT TRANSACTIONS INVOLV ING MOTHER AND BROTHER IN LAW. WE FIND, THE ISSUE OF GENUINENESS OF THE GIFT S IS DEBATABLE ON THE FACTS OF THE PRESENT CASE. THEREFORE, ON THE GROUND OF DEBATABILITY OF ISSUE, LD. COUNSEL SUBMITTED THAT THE PENALTY LEVIED BY THE ASSE SSING OFFICER AND APPROVED BY THE CIT(A) SHOULD NOT BE CONFIRMED. FURTHER, L D. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ADDITION ON MERITS WAS NOT AGITA TED BY THE ASSESSEE BEFORE THE TRIBUNAL. THE ASSESSEE ACCEPTED THE DECISION O F THE CIT(A) AND PAID TAXES ON THE SAID ADDITION OF RS.13,40,000/-. THEREFORE, AS PER LD. A.R., THE PENALTY SHOULD NOT BE SUSTAINED. 6. THE LD. DR FOR THE REVENUE PLACED RELIANCE ON THE PEN ALTY ORDER AS WELL AS ORDER OF THE CIT(A) IN CONFIRMING THE SAID PENALTY. 7. WE HAVE HEARD BOTH THE PARTIES ON THE ISSUE OF CORR ECTNESS OF LEVY OF PENALTY U/S.271(1)(C) OF THE ACT FOR FURNISHING INACCURATE PAR TICULARS OF INCOME. A PERUSAL OF THE FACTS PLACED BEFORE US, WE FIND THAT THE P ARTICULARS OF INCOME FURNISHED BY THE ASSESSEE ARE FREE FROM ANY INACCURACY. A LTHOUGH, THE PARTICULARS OF INCOME FURNISHED BY THE ASSESSEE RELATING TO THE CLAIM OF GIFTS FROM MOTHER/BROTHER-IN-LAW, WERE NOT ACCEPTED BY THE AS SESSING OFFICER AND THE CIT(A). WE FIND THE CLAIM OF THE ASSESSEE IS NOT FREE FRO M THE DISPUTE OR DEBATE. WE FIND THAT THERE IS NO DISCREPANCY OF FURNISHING PARTICULARS OF INCOME, PER-SE . THE ASSESSING OFFICER DID NOT BRING ANY INCRIMINATING/TANGIB LE MATERIAL AGAINST THE CLAIM OF THE ASSESSEE WHICH REVEALS TH E INACCURACY OF FURNISHING PARTICULARS OF INCOME. ASSESSEE CLAIMS THAT THEY A RE GENUINE GIFTS AND THE REVENUE CLAIMS THAT THEY ARE NOT GENUINE ON T HE GROUND OF NON- DISCHARGE OF ONUS BY THE ASSESSEE. THE VIEW TAKEN BY TH E REVENUE AUTHORITIES ON MERITS IS ONE PLAUSIBLE VIEW AND THEREFORE, WE ARE OF THE OPINION THAT ON THE GROUND OF DEBATABILITY AND FULL DISCLOSURE OF THE RELEVANT FAC TS, IT IS NOT A FIT 5 ITA NO. 1270/PUN/2016 A.Y.2004-05 CASE FOR LEVYING PENALTY U/S. 271(1)(C) OF THE ACT. ACCORDINGL Y, GROUND RAISED BY THE ASSESSEE IS ALLOWED. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 17 TH DAY OF OCTOBER, 2018. SD/- SD/- ( ! /VIKAS AWASTHY) ( . / D. KARUNAKARA RAO ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; !' / DATED : 17 TH OCTOBER, 2018. SB ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT (APPEALS)-3, PUNE. 4. THE PR. CIT-2, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY // * 2 / BY ORDER, 3 (- /PRIVATE SECRETARY * () , / ITAT, PUNE.