AMAR R. SONI, MUMBAI V. ITO WD 19(3(1), MUMBAI

ITA 1309/MUM/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2280 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-11-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 15-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PANKAJ M PARIKH
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI A BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 1309/MUM/2013 (ASSESSMENT YEAR:2005-06) SHRI AMAR R. SONI B-56/537, GANDHI NAGAR, M.I.G. COLONY, 12 TH ROAD, BANDRA (EAST), MUMBAI 400051 APPELLANT VS. THE INCOME-TAX OFFICER, WARD-19(3)(1), MUMBAI RESPONDENT PAN: AIHPS4927K /BY APPELLANT : SHRI PANKAJ M. PARIKH, A.R. /BY RESPONDENT : SHRI SATYA PAL KUMAR, D.R. /DATE OF HEARING :05.11.2015 /DATE OF PRONOUNCEMENT :07.12.2015 ITA NO.1309/MUM/13 A.Y. 05-06 [SHRI AMAR R. SONI VS . ITO] PAGE 2 ORDER PER RAJESH KUMAR, A.M: THIS APPEAL HAS BEEN FILED BY ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-18, MUMBAI, DA TED 03.12.2012 FOR A.Y. 2005-06 ON FOLLOWING GROUNDS: 1) PENALTY OF RS.2,82,355/- UNDER SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961 1.01 THE LEARNED HONBLE COMMISSIONER OF INCOME-TAX (APPEAL) ERRED IN CONFIRMING PENALTY OF RS.2,82,355 /- LEVIED BY THE ASSESSING OFFICER UNDER EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT ON INCOME OF RS.9,55,0 00/- BEING RECEIPT OF GIFT FROM NON-RESIDENT. 1.02 THE LEARNED HONBLE COMMISSIONER OF INCOME-TAX (APPEAL) BEFORE CONFIRMING PENALTY UNDER SECTION 271(1)(C) FAILED TO PROVE THAT EXPLANATION OFFERED BY THE APPELLANT FOR RECEIPT OF GIFT IS FOUND TO BE FALSE. 1.03 THE LEARNED HONBLE COMMISSIONER OF INCOME-TAX (APPEAL) BEFORE CONFIRMING PENALTY UNDER SECTION 271(1)(C) FAILED TO ESTABLISH THAT THE EXPLANATION OFFERED BY THE APPELLANT IS NOT SUBSTANTIATED OR SUCH EXPLANATION IS NOT BONA FIDE AND FACTS RELATING TO THE RECEIPT OF GIFT FROM NRI AND MATERIAL TO THE COMPUTATION OF INCOME HAVE BEEN NOT DISCLOSED BY TH E APPELLANT. 2. THE COMMON ISSUE IN ALL THE GROUNDS OF APPEAL RE LATES TO CONFIRMATION OF PENALTY OF RS.2,82,355/- BY CIT(A) BY NOT PROVING THE EXPLANATION OFFERED BY THE ASSESSEE QUA THE SAID GIFT TO BE FALSE AND WITHOUT SUBSTANTIATING THAT TH E EXPLANATION OF THE ASSESSEE IS NOT BONAFIDE. ITA NO.1309/MUM/13 A.Y. 05-06 [SHRI AMAR R. SONI VS . ITO] PAGE 3 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IN T HE ASSESSMENT ORDER MADE AN ADDITION OF RS.9,55,000/- U/S.68 ON ACCOUNT OF GIFT RECEIVED BY THE ASSESSEE FROM TEJPA L MEHTA A NON RESIDENT WHO WAS FAMILY FRIEND OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO PROVE THE GENUIN ENESS OF THE GIFT. THE LD. CIT(A) DELETED THE ADDITION. HOWEVER , ON SECOND APPEAL FILED BY THE DEPARTMENT, THE TRIBUNAL REVERS ED THE ORDER OF CIT(A) AND UPHELD THE ORDER OF A.O. BY HOLDING T HAT THE GENUINENESS OF THE GIFT, CAPACITY AND CREDITWORTHIN ESS WERE NOT PROVED BY THE ASSESSEE. THUS, THE A.O. LEVIED A PE NALTY OF RS.2,82,355/- U/S.271(1)(C) OF THE ACT. 4. THE LD. CIT(A) CONFIRMED THE PENALTY BY REJECTIN G THE SUBMISSION OF THE ASSESSEE THAT HE HAD SHOWN THE AM OUNT OF GIFT RECEIVED BY THE FILING OF AMOUNT IN RETURN WHI CH MEANS THAT ADDITION IS NOT ON ACCOUNT OF THE FACT THAT ASSESSE E HAD CONCEALED THE PARTICULARS OF INCOME OR FURNISHED IN ACCURATE PARTICULARS OF INCOME. THE SUBMISSION OF THE ASSES SEE FURTHER FORTIFIED BY THE ORDER OF CIT(A) WHO DELETED THE QU ANTUM ADDITION BY MAKING THE FOLLOWING OBSERVATIONS, NAME LY, IDENTITY OF THE DONOR IS NOT IN DOUBT. CIT(A) DELETED THE AD DITION BASED ON THE DECLARATION OF GIFT, COPY OF PASSPORT, CERTI FICATE FROM THE DONORS BANK, CONFIRMATION FROM DONOR, FINANCIAL ST ATEMENT OF THE DONOR THEREBY DISCHARGING THE INITIAL BURDEN ON THE ASSESSEE AND THUS, THE ACTION OF A.O. IS BASED ON T HE SUSPICION AND WITHOUT ANY MATERIAL. ITA NO.1309/MUM/13 A.Y. 05-06 [SHRI AMAR R. SONI VS . ITO] PAGE 4 5. THE LD. A.R. SUBMITTED BEFORE US THAT ASSESSEE H AD DISCLOSED ALL THE PARTICULARS RELATING TO THE GIFT RECEIVED FROM THE NON-RESIDENT FRIEND IN HIS RETURN OF INCOME. A LL THE NECESSARY EVIDENCES COMPRISING THE DECLARATION OF G IFT, COPY OF PASSPORT, CERTIFICATE FROM THE DONORS BANK, CONFIR MATION FROM DONOR, FINANCIAL STATEMENT OF THE DONOR THEREBY DIS CHARGING THE INITIAL BURDEN ON THE ASSESSEE AND THUS, THE ACTION OF A.O. IS BASED ON THE SUSPICION AND WITHOUT ANY MATERIAL. M OREOVER, THE LD. COUNSEL SUBMITTED THAT PENALTY U/S.271(1)(C ) COULD NOT BE IMPOSED AND SUSTAINED ON THE GROUND THAT QUANTUM ADDITION IS CONFIRMED BY THE TRIBUNAL. THE FACTS O F THE MATTER IS THAT THE QUANTUM WAS FIRST DELETED BY THE CIT(A) AND THEREAFTER, CONFIRMED BY THE TRIBUNAL, THIS PROVED BEYOND DOUBT THAT THE ISSUE ON WHICH THE PENALTY IMPOSED W AS DEBATABLE WITH REGARD TO WHICH THE DIFFERENT INFER ENCES WERE DRAWN. THE LD. COUNSEL STRONGLY PLACED RELIANCE ON THE CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (2010) 230 CTR 320 , DEVSONS P. LTD. VS. CIT (2011) 196 TAXMAN 21 (DELHI) & ITO VS. DR. SAMEER KANT AGARWAL (2009) 34 SOT 12. THE LD. D.R. , ON THE OTHER HAND, RELIED ON THE ORDERS OF AUTHORITIES BEL OW. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT THE ASSESSEE RECE IVED GIFT OF RS.9,55,000/- FROM MR. TEJPAL MEHTA, A NON RESIDENT FAMILY FRIEND OF THE ASSESSEE AND THE FACTS OF RECEIVING T HE SAID GIFT WAS DULY DISCLOSED IN THE RETURN OF INCOME BY THE A SSESSEE. ITA NO.1309/MUM/13 A.Y. 05-06 [SHRI AMAR R. SONI VS . ITO] PAGE 5 THE QUANTUM ADDITION WAS FINALLY SUSTAINED BY THE T RIBUNAL BY REVERSING THE ORDER OF CIT(A) WHICH DELETED THE ADD ITION OF RS.9,55,000/-. WE ALSO NOTE THAT THE ASSESSEE FILE D BEFORE THE A.O. AND THE CIT(A) THE NECESSARY EVIDENCES COMPRIS ING THE DECLARATION OF GIFT, COPY OF PASSPORT, CERTIFICATE FROM THE DONORS BANK, CONFIRMATION FROM DONOR, FINANCIAL STATEMENT OF THE DONOR THEREBY DISCHARGING THE INITIAL BURDEN ON THE ASSESSEE AND THUS, THE ACTION OF A.O. IS BASED ON THE SUSPIC ION AND WITHOUT ANY MATERIAL. WE ARE OF THE VIEW THAT THE PENALTY U/S.271(1)(C) CANNOT BE IMPOSED WHERE DIFFERENT CON CLUSION AND INFERENCES ARE POSSIBLE. IN THE PRESENT CASE, THE FACT THAT THE ADDITION OF RS.9,55,000/- WAS DELETED BY CIT(A) AND THEREAFTER THE REVERSAL OF ORDER OF CIT(A) BY THE T RIBUNAL ITSELF PROVES THAT THE ISSUE INVOLVED IS LIABLE FOR DIFFER ENT INFERENCES. THE BONAFIDES OF THE ASSESSEE ARE NOT IN DOUBT AS H E HAD FILED ALL THE NECESSARY EVIDENCES QUA THE SAID GIFT WITH THE IT AUTHORITIES. IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCTS (P) LTD. (2010) 322 ITR 158, THE HONBLE SUPREME COURT HAS HELD AS UNDER: WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS O R FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271( 1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITS ELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FU RNISHING INACCURATE PARTICULARS. IN OUR CONSIDERED VIEW, THE PENALTY IS NOT AUTOMATI C IN THE CASE WHERE THE ADDITION IS CONFIRMED. IN THIS CASE, THE ASSESSEE HAS SUFFICIENTLY DISCHARGED THE ONUS CAST ON HIM BY FIL ING THE ITA NO.1309/MUM/13 A.Y. 05-06 [SHRI AMAR R. SONI VS . ITO] PAGE 6 NECESSARY PROOF AND THEREFORE, PENALTY IS NOT LEVIA BLE. IN VIEW OF THESE FACTS, WE ARE OF THE CONSIDERED VIEW THAT THE ORDER OF CIT(A) CONFIRMING THE PENALTY CANNOT BE SUSTAINED A ND THE SAME IS HEREBY REVERSED BY DELETING THE PENALTY. A .O. IS DIRECTED ACCORDINGLY. 7. AS A RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS THE 07 TH DAY OF DECEMBER, 2015. SD/- SD/- (SHAILENDRA KUMAR YADAV) (RAJESH KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: DATED 07/12/2015 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE $ %&%'( ) / CONCERNED CIT 4 )- / CIT (A) ,-./00'(1 '( 1 %& / DR, ITAT, MUMBAI 3/4567 / GUARD FILE. BY ORDER / 1 / % 1 '( 1 %&