Rameshchandra Vadilal Shah, Ahmedabad V. The Income tax Officer,Ward-2(2), Ahmedabad

ITA 1333/AHD/2011

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8902 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 10 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 25-01-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 04-05-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Gift
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, AHMEDABAD BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ ITA NO.1333/AHD/2011 / A.Y. 2005-06 SHRI RAMESHCHANDRAVADILAL SHAH PROP: OF M/S.RAMESH& CO. MARCHI POLE, RATAN POLE AHMEDABAD PAN : ARCPS4758C VS THE INCOME TAX OFFICER, WARD-2(2), AHMEDABAD (APPELLANT) (RESPONDENT) BY APPELLANT : SHRI DHIREN SHAH, A.R BY RESPONDENT : SHRI OM PRAKASH MEENA, SR DR / DATE OF HEARING : 25/01/2017 /DATE OF PRONOUNCEMENT: 20/03/2017 / O R D E R PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE FOR T HE ASSESSMENT YEAR 2005-06 AGAINST THE ORDER OF LD.CIT(A) FOR LEVYING/CONFIRMI NG THE PENALTY U/S . 271(1)(C) OF THE INCOME TAX ACT, 1961 OF RS.5,19,62 9/- 2. FACTS OF THE CASE ARE DURING THE ASSESSMENT PROC EEDINGS IT WAS NOTICED THAT THE ASSESSEE HAD CLAIMED TO HAVE TAKEN GIFTS FROM EIGHT PERSONS TOTALING TO RS.15,00,000/-WHICH WAS CREDITE D IN HIS CAPITAL ACCOUNT. THE ASSESSEE SUBMITTED CONFIRMATION OF THE SO CALLE D DONORS IN THE CERTAIN CASES ALONG WITH COPY OF CONVEYANCE DEED AND COPY O F THEIR PAN CARDS. 3. TO VERIFY THE GENUINENESS OF THESE GIFTS LETTE RS U/S.133(6) OF THE ACT WERE ISSUED TO THE DONORS. HOWEVER, LETTERS IN THE NAMES MENTIONED OF SEVEN PERSON WERE RETURNED BACK BY THE POSTAL AUTHO RITIES WITH THE REMARK LEFT/NOT KNOWN WHEREAS SO CLAIMED DONOR SHRI KAML ESH PATEL, WHEREIN SUBMITTED THAT HE HAS NOT MADE ANY GIFT TO THE ASSE SSEE. AGAIN, THE ASSESSEE WAS REQUESTED TO PRODUCE THE DONORS FOR VE RIFICATION/EXAMINATION BUT NOBODY ATTENDED ON THE GIVEN DATE. THEREAFTER, SUMMONS U/S. 131 OF THE ACT, WERE ALSO ISSUED TO ALL THOSE SO CALLED DO NORS AND AN INSPECTOR WAS DEPUTED TO FIND OUT THE WHEREABOUTS OF DONORS, WHO GAVE HIS REPORT BY STATING THAT DONORS WERE NOT AVAILABLE ON THE GIVEN ADDRESSES. THEREAFTER, IN THIS REGARD, DETAILS OF THE BANK ACCOUNTS OF THE DONORS WERE CALLED FOR U/S.133(6) FROM THE CONCERNED BANK. IN RESPONSE, TH E BRANCH MANAGER, SUBMITTED THAT THE DONORS HAD NOT MAINTAINED THEIR ACCOUNT WITH THIS BANK, BUT PAY ORDERS HAD BEEN ISSUED TO THEM FROM VARIOUS OTHER ACCOUNTS HOLDERS ACCOUNT, SO INQUIRIES WERE MADE FROM THE A CCOUNT HOLDERS FROM WHOSE ACCOUNT THE PAY ORDER WERE ISSUED. IN RESPONS E, ALL PERSONS SUBMITTED IN WRITING THAT ONE STAFF MEMBER SHRI RAM ESH VADILAL SHAH FROM RAMESH & CO., HAD COME WITH CASH AND ON REQUEST MA DE BY HIM, THE BANKER CHEQUES WERE ISSUED TO HIM. HOWEVER, DURING THE ASSESSMENT PROCEEDING ON 04/12/2017, THE ASSESSE SURRENDERED H IMSELF AND SUBMITTED THAT IN ORDER TO BUY PEACE WITH DEPARTMENT, TO AVO ID LENGTHY AND COSTLY LITIGATION EXPENSES HE IS PAYING TAX AMOUNTS WHICH HAD BEEN CLAIMED AS GIFTS. THUS, THE ASSSESSEE WAS NOT ABLE TO ESTABLIS H EITHER THE CREDITWORTHINESS OF THE DONORS OR THE GENUINENESS O F THE TRANSACTION. 4. IN VIEW OF THE ABOVE FACTS, CASH CREDIT IN FORM OF GIFTS SHOWN TO HAVE BEEN RECEIVED FOR RS.15 LAKHS WAS HELD AS UNEXPLAIN ED AND ADDED TO THE RETURNED INCOME U/S.68 OF THE I.T. ACT. 5. HOWEVER, THE ASSESSE WENT IN APPEAL BEFORE CIT(A )-VII, AHMEDABAD. THE APPEAL BEFORE THE LD.CIT(A), THE CIT(A) CONFIRM ED THE ABOVE ADDITION OF RS.15,00,000/- MADE U/S.68 OF THE ACT. HOWEVER, SHOW CAUSE NOTICE U/S.274 R.W.S. 271 WAS ISSUED TO THE ASSESSE ON 17/ 12/2008. THE ASSESSEE FILED SUBMISSION DATED 08/01/2009 PLEADING TO DROP THE PENALTY PROCEEDINGS OR TO KEEP THE PENAL PROCEEDING IN ABEY ANCE TILL THE DECISION OF THE APPEAL FILED BEFORE THE ITAT AGAINST THE ORDER OF CIT(A). 6. UNDER THE CIRCUMSTANCES AS ABOVE, MATTER WAS ADJ UDICATED ON THE BASIS OF SUBMISSION DATED 08/01/2009 FILED BY THE A SSESSEE. 7. THE LD.CIT(A) FURTHER HELD THAT I AM CONVINCED THAT THE ASSESSEE HAS CANDIDLY ADMITTED THAT THE PARTICULARS REGARDIN G GIFTS FILED BY HIM DURING THE ASSESSMENT PROCEEDING WERE FALSE. THIS I S AN EXEMPLARY CASE IN WHICH THE ASSESSEE, ON ONE HAD HAD CANDIDLY ADMITTE D TO HAVE FILED INACCURATE PARTICULARS AND ON THE OTHER HAND PLEADE D NOT TO LEVY PENALTY THE PENAL PROCEEDINGS IN ANY STATUTE ARE PROVIDED A S MEASURE OF DETERRENCE. IN A CASE WHERE DEFAULT IS PROVED, OR IN THE CASE WHERE THERE IS CANDID ADMISSION, PENAL PROCEEDINGS ARE TOTALLY WAR RANTED. THIS HAVING CONVINCED THAT THE ASSESSEE HAS FILED INACCURATE PA RTICULARS AND THEREBY CONCEALED HIS INCOME, LD.CIT(A) HAS LEVY A PENALTY OF RS.15,58,997/- 8. WE HAVE HEARD RIVAL SUBMISSION OF BOTH THE PARTI ES AND GONE THROUGH THE IMPUGNED ORDER PASSED BY THE AUTHORITIES BELOW: IT HAS BEEN HELD IN THE CASE OF SHOBHATRADING C O.P.LTD., VS ITO (1995) (52 ITD 188). IN THIS CASE IT WAS HELD THA T IT IS AN UN AMBIGUOUS AND ADMITTED FACT THAT ASSESSE MADE FAKE CLAIM OF GIFTS FOR WHICH HE HAD TO ACCEDE THAT THOSE SO CLAIMED FAKE GIFTS WERE PART O F THIS UNDECLARED OR CONCEALED INCOME. THAT IS WHY HE HAD SURRENDERED TH E FAKE GIFTS. IN OTHER CASE ADDL.CIT VS. DELHI CLOTH AND GENER AL MILLS (157 ITR, 822) IT WAS HELD THAT ASSESSEE HAD MADE THE FAKE CLAIM OF GIFTS OF RS.15 LAKHS AND ADMITTED THAT SAME AS HIS UNDECLARED AND CONCEALED INCOME. NEXT IN CASE OF J.K. JAIOO VS. CIT (MP) (181 ITR 410) IN THIS CASE IT WAS HELD THAT ASSESSEE HAD MADE THE CLAIM OF GIFTS AND ASSESSEE COULD NOT PROVE THE GENUINENESS OF TRANSACTIONS AND CREDITWOR THINESS OF THE DONORS. IN THE CASE OF MAK DATA (P) LTD., VS COMMISIONER O F INCOME TAX [2013] 38 TAXMANN.COM 448 (SC) WHERE OFFER OF SU RRENDER OF CERTAIN AMOUNT RECEIVED AS SHARE APPLICATION MONEY MADE BY THE ASSESSEE IN VIEW OF THE DETECTION MADE BY THE ASSESSING OFFICER IN S EARCH CONDUCTED IN CASE OF ASSESSEES SISTER CONCERN, SAID SURRENDER OF IN COME NOT BEING VOLUNTARY IN NATURE, AUTHORITIES BELOW WERE JUSTIFIED IN LEVY ING PENALTY UNDER SECTION 271(1)(C). 9. THEREAFTER, RESPECTFULLY FOLLOWING THE ABOVE JU DGMENTS WE NOTE THAT THE ASSESSEE HAS MADE FAKE CLAIM OF THE GIFTS AND W HEN POINTED OUT BY THE DEPARTMENT, HE SURRENDERED THE CLAIM. IN OUR CONSID ERED OPINION, THIS IS A FIT CASE FOR LEVY OF PENALTY. IN THE RESULT WE ARE NOT INCLINE TO INTERFERE IN THE ORDER PASSED BY LD.CIT(A). 10. THUS, APPEAL FILED BY THE ASSESSEE IS DISMISSED . ORDER PRONOUNCED IN THE COURT ON 20TH MARCH , 2017 AT AHMEDABAD. SD/- SD/- (N.K.BILLAIYA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 20/03/2017 MANISH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. #$#% ' ' & / CONCERNED CIT 4. ' ' & ( ) / THE CIT(A) 5. )*+' % , ' ' % , ,-$ / DR, ITAT, AHMEDABAD 6. +. / / GUARD FILE. TRUE COPY / BY ORDER, / (DY./ASSTT.REGISTRAR) !' , #$ / ITAT, AHMEDABAD TRUE COPY 1. DATE OF DICTATION 14/03/2017DIRECTLY ON COMPUTER O N .. 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER- ... OTHER MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT .. 5. DATE ON WHICH THE FAIR ORDER COMES TO THE SR.P.S. 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK- . 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER