THE ITO, Ward 4(2), Indore V. SHRI GOPAL BANKE, Indore

ITA 174/IND/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1929 (ITAT-INDORE)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 02-07-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S GAUTAM
• Assessee Lawyers: S N AGRAWAL; PANKAJ MOGRA CAS
• Keywords: Gift; Question of law
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, J.M. AND SHRI B.C.MEENA, A.M. I.T.A.NO. 174/IND/2015 A.Y. : 2005-06 ITO, 4(2) SHRI GOPAL BANKE, INDORE VS INDORE. APPELLANT RESPONDENT P.A.N. NO A FPPB3765H APPELLANT BY SHRI G. S. GAUTAM, DR RESPONDENT BY SHRI S. N. AGRAWAL, & SHRI PANKAJ MOGRA, CAS DATE OF HEARING : 28 .0 7 .2015 DATE OF PRONOUNCEMENT : 09 .09.2015 -: 2: - 2 O R D E R PER GARASIA, J.M. THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, INDORE, DATED 28.11.2014 FOR THE ASSE SSMENT YEAR 2005-06. 2. THE SHORT FACTS OF THE CASE ARE THAT THE ASSESSEE H AS RECEIVED A GIFT OF RS. 4 LACS FROM ONE KASHIRAM PAT IDAR AND RS 1 LAC FROM SHRI ASHOK PATIDAR. THE AO HAS TRIED TO VERIFY THE CLAIM OF THE ASSESSEE THAT HE HAS RECEIVED THE GIFT OR NOT. THE ASSESSEE COULD NOT PROVE THE GENUINENESS, CREDITWOR THINESS OF THE DONOR. THEREFORE, THE ADDITION WAS MADE THE PEN ALTY WAS IMPOSED FOR CONCEALING ITS TAXABLE INCOME. 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS ALLOWED THE APPEAL BY OBSERVING AS UNDER :- - 3.3 I HAVE CONSIDERED THE TOTALITY OF THE FACTS BROUGHT OUT IN THE RELEVANT ASSESSMENT ORDER, -: 3: - 3 PENALTY ORDER AND THE WRITTEN SUBMISSIONS FILED BY THE APPELLANT WHICH ARE DULY REPRODUCED ABOVE. AFTER CONSIDERING THE SAME AND IN VIEW OF THE ABOVE DISCUSSION, I FIND SUFFICIENT MERIT IN THE ARGUMENT PUT FORTH BY THE APPELLANT. IT IS UNDISPUTED FACT THAT IN THE APPELLANTS OWN CASE, THE HONBLE M.P. HIGH COURT HAS ADMITTED A SUBSTANTIAL QUESTION OF LAW ON THE ISSUE OF GENUINENESS OF GIFT, THEREFORE, MAKING THE ISSUE DEBATABLE. IT IS NOW A SETTLED POSITION OF LAW THAT ONCE WHEN THE ISSUE BECOMES DEBATABLE, PENALTY CANNOT BE LEVIED. THE JURISDICTIONAL ITAT JUDGMENT IN THE CASE OF KUSUM OSWAL HAS UPHELD THIS VIEW AND IT HAS BEEN HELD THAT WHEN A SUBSTANTIAL QUESTION OF LAW HAS BEEN ADMITTED, PENALTY CANNOT BE LEVIED SINCE THE ISSUE HAS BECOME DEBATABLE. 3.4 IN THE CASE OF RUPAM MERCANTILES LTD. VS. DC1T (ITAT AHMEDABAD BENCH) 91 ITD 273, IT -: 4: - 4 HAS BEEN HELD THAT THE HONBLE HIGH COURT HAVING ADMITTED APPEAL OF THE ASSESSEE FINDING A SUBSTANTIAL QUESTION OF LAW INVOLVED IN THE MATTER, THE CLAIM OF ASSESSEE WAS NOT FOUND MALA FIDE AND PENALTY UNDER S. 271(1 )(C) WAS NOT ATTRACTED. 3.5 SIMILARLY IN CIT VS. LIQUID INVESTMENT LTD. (DELHI HIGH COURT)O (1TA 240/2009 DATED 05.10.2010) IT HAS BEEN HELD THAT WHERE THE HIGH COURT HAS ACCEPTED SUBSTANTIAL QUESTION OF LAW U/S 260A THIS ITSELF SHOWS THAT THE ISSUE IS DEBATABLE AND ACCORDINGLY IT WAS HELD THAT NO PENALTY WAS IMPOSABLE U/S 271(L)(C) OF THE INCOME TAX ACT 1961. 3.6 HONBLE BOMBAY HIGH COURT VIDE ORDER DATED 8 TH JULY 2014 IN THE CASE OF NAY AN BUILDERS AND DEVELOPERS HAS DISMISSED THE APPEAL OF REVENUE UPHOLDING THE ORDER OF TRIBUNAL HOLDING THAT THE APPEAL CANNOT BE ENTERTAINED AS IT DOES NOT RAISE ANY -: 5: - 5 SUBSTANTIAL QUESTION OF LAW. THE IMPOSITION OF PENALTY WAS FOUND NOT TO BE JUSTIFIED AND THE APPEAL WAS ALLOWED AND HELD THAT AS A PROOF THAT THE PENALTY WAS DEBATABLE AND ARGUABLE ISSUE, THE TRIBUNAL REFERRED TO THE ORDER ON ASSESSEES APPEAL IN QUANTUM PROCEEDINGS AND THE SUBSTANTIAL QUESTIONS OF LAW WHICH HAVE BEEN FRAMED THEREIN. 3.7 KEEPING IN VIEW THE ABOVE PROPOSITIONS LAID DOWN NOT ONLY BY JURISDICTIONAL ITAT BUT ALSO BY THE HONORABLE HIGH COURTS OF MUMBAI AND DELHI, IT IS SETTLED POSITION OF LAW AND THERE IS NO REASON TO DEVIATE FROM THE SAME AND THE PENALTY OF RS. 4,53,450/- IS HEREBY DIRECTED TO BE DELETED. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT IN THE INSTANT CASE, THE APP EAL AGAINST -: 6: - 6 THE QUANTUM APPEAL IS ALREADY ADMITTED BY THE HON'B LE HIGH COURT AND NO PENALTY CAN BE LEVIED U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. WE FIND THAT WHEN THE MAIN AP PEAL IS ADMITTED, NO PENALTY CAN BE LEVIED. WE FIND THAT TH IS ISSUE IS COVERED BY THE DECISION IN THE CASE OF CIT VS. LIQU ID INVESTMENT LIMITED, (DELHI HIGH COURT). WE, RESPECT FULLY FOLLOWING THE ABOVE DECISION, DISMISS THE DEPARTMEN TAL APPEAL. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 9 TH SEPTEMBER, 2015. SD/- (B. C. MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED :9 TH SEPTEMBER, 2015. CPU* 282