Mudresh J.Purohit, Ahmedabad V. The ACIT.,Circle-7, Ahmedabad

ITA 18/AHD/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 60434 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-05-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 03-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAHUL KUMAR
• Assessee Lawyers: TUSHAR HIMANI
• Keywords: Gift; Wrong claim
• Section: 69C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH AHMEDABAD (BEFORE SHRI G. C. GUPTA, VP AND SHRI A. MOHAN ALAN KAMONY, AM) ITA NO.18/AHD/2012: A. Y.: 2003-04 SHRI MUDRESH J. PUROHIT, C/O. SURYA OFFSET, AMBLI VILLAGE, TALUKA DASKROI, AHMEDABAD PA NO. ABOPP 5822 G VS THE A. C. I.T., CIRCLE-7, AAYAKAR BHAVAN, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI TUSHAR HIMANI, AR RESPONDENT BY SHRI RAHUL KUMAR, SR. DR DATE OF HEARING: 07-05-2012 DATE OF PRONOUNCEMENT: 25-05-2012 O R D E R PER A. MOHAN ALANKAMONY: THIS APPEAL IS PREFERRED BY THE ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED CIT( A)-XI, AHMEDABAD IN APPEAL NO. CIT(A) XI/420/APR-08/08-09 DATED 21-1 0-2011, FOR ASSESSMENT YEAR 2003-04 PASSED U/S 271 (1) (C) RE AD WITH SECTION 250 OF THE IT ACT. 2. THE ASSESSEE HAS RAISED 5 GROUNDS IN HIS APPEAL WHEREIN GROUNDS NO.2, 3, 4 AND 5 ARE GENERAL IN NATURE AND DO NOT S URVIVE FOR ADJUDICATION AND THE LONE SURVIVING GROUND NO.1 IS REPRODUCED HE REIN BELOW FOR ADJUDICATION:- ITANO.18/AHD/2012(AY-2003-04) SHRI MUDRESH J. PUROHIT VS THE ACIT, CIR-7, AHMEDAB AD 2 1. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING THE ACTION OF LD. AO IN LEVYING PENALTY U/S 271 (1) ( C ) OF THE ACT, ON ADDITION OF RS.12,00,0 00/- MADE U/S 69C OF THE ACT AND ON DISALLOWANCE OF TRAVELLIN G EXPENDITURE OF RS.56,571/- WHICH IS WHOLLY UNSUSTAI NABLE IN LAW AND ON FACTS AND AS SUCH THE APPELLANT COULD NO T BE CHARGED WITH ANY GUILT OF FURNISHING INACCURATE PAR TICULARS OF INCOME OR CONCEALING PARTICULAR OF INCOME WITHIN MI SCHIEF OF SECTION 271(1) (C) OF THE ACT. THE LEVY OF PENALTY BEING WITHOUT JURISDICTION AND TOTALLY UNCALLED FOR, DESE RVES TO BE QUASHED. 3. BRIEF FACTS:- THE ASSESSEE IS ENGAGED IN THE BUS INESS OF PRINTING FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2003-04 ON 29-11- 2003 DECLARING TOTAL INCOME OF RS.11,03,10/-. THE C ASE WAS TAKEN UP FOR SCRUTINY ASSESSMENT WHEREIN ADDITIONS WERE MADE DI SBELIEVING THE GIFT OF A HIGH SPEED SCANNER VALUED AT RS.12,00,000/- RE CEIVED FROM HIS BROTHER RAJESH A. GOHIL DURING HIS VISIT TO INDIA I N AUGUST, 1999 AND FOR WRONG CLAIM OF TRAVELLING EXPENSES AMOUNTING TO RS. 56,571/- APART FROM OTHER DISALLOWANCES. THE ASSESSEE CLAIMED THAT HE H AD INTRODUCED THIS HIGH SPEED SCANNING MACHINE IN THE BOOKS OF ACCOUNT S ONLY DURING THE ASSESSMENT YEAR 2003-04 SINCE THE MACHINE REMAINED IDLE FROM AUGUST, 1999 TO MARCH, 2002. ACCORDINGLY ADDITION OF RS.12 ,00,000/- WAS MADE U/S 69C OF THE ACT BY THE LEARNED AO FOR THE ASSESS MENT YEAR 2003-04 CONSIDERING THE GIFT NOT TO BE GENUINE. SIMILARLY T HE LD.AO DISALLOWED AN AMOUNT OF RS.56,571/- TOWARDS FOREIGN TRAVEL EXPENS E INCURRED BY THE APPELLANT AND HIS WIFE BEING EXPENSE RELATED TO JOU RNEY FROM AHMADABAD TO USA AND BACK. ON APPEAL BOTH THE ADDIT IONS WERE CONFIRMED BY THE LEARNED CIT(A) AND THE TRIBUNAL. THE LEARNED AO LEVIED PENALTY ON THESE ADDITION WITH THE FOLLOWING OBSERVATIONS: (A) THE ASSESSEE HAS SUBMITTED THAT THE MACHINE WAS PURCHASED BY HIS BROTHER AND PAYMENT WAS MADE BY HI S BROTHER AS SUBMITTED BY CONFIRMATIONS AND OTHER CONSEQUENTIAL EVIDENCES. ITANO.18/AHD/2012(AY-2003-04) SHRI MUDRESH J. PUROHIT VS THE ACIT, CIR-7, AHMEDAB AD 3 THEREFORE THERE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN THIS REGARD THE LD. CIT (A) HAS HELD THAT THE D OUBT RAISED BY THE LD. ASSESSING OFFICER THAT IF THE SCANNER WA S GENUINELY GIFTED IN JUNE 1999 THEN WHY WAS IT NOT PUT TO USE IN SUCCEEDING THREE YEARS, ALSO COSTS A SHADOW ON THE GENUINENESS OF THE TRANSACTION. IN THIS BACKGROUND WHERE THE APPELLANT COULD PROVIDE ALL THE NECESSARY EVIDENCE IN SUPPORT OF HIS CLAIM BEING IN POSSESSION OF ALL THE DOCUMENTS, THE WITHHOLDING OF THESE DOCUMENTS ONLY CONFIRMS THAT APPARENT IS NOT REAL A ND WHAT IS REAL IS DELIBERATELY NOT BEING MADE APPARENT. I HAVE THE REFORE NO HESITATION TO HOLD THAT IT IS NOT A GENUINE GIFT TR ANSACTION AND IT IS THE APPELLANT WHO ONLY HAS PURCHASED THE SCANNER UN DER CONSIDERATION. SINCE THE APPELLANT HAS NOT INTEREST ED TO PROVE HIS CLAIM BY BRINGING ALL THE NECESSARY EVIDENCE. THE F INDINGS OF THE LD. ASSESSING OFFICER THAT THE SCANNER HAS BEEN PUR CHASED BY THE APPELLANT OUT OF HIS UNKNOWN SOURCES IS REQUIRED TO BE UPHELD. ADDITION OF RS.12 LACS CONFIRMED. IN VIEW OF THE ABOVE CONCLUSION OF THE LD. CIT(A), ASSESSEES CONTENTION THAT THERE IS NO CONCEALMENT OF INCOME I N PURCHASE OF SCANNER IS NOT TENABLE. (B) THUS IT IS PROVED AND ESTABLISHED THAT THE AS SESSEE HAS WRONGLY CLAIMED EXPENDITURE ON ACCOUNT OF - ---- ---- ---- (IV) TRAVELLING EXPENDITURE RS.56571/- BY REASON OF WRONGFUL AND FRAUDULENT CLAIM OF DEDU CTION OF THESE EXPENDITURES THE ASSESSEE HAS UNDERSTATED COR RECT INCOME TO THE ABOVE EXTENT, THUS THE ASSESSEE HAS COMMITTE D THE DEFAULT OF CONCEALMENT OF INCOME AND ALSO THAT FURNISHING I NACCURATE PARTICULARS OF INCOME. THE CONDUCT IS DELIBERATE AN D WILFUL. THE CONDUCT OF THE ASSESSEE IS DISHONEST AND CONTUMACIO US WITH THE INTENTION TO DEFRAUD THE REVENUE THAT AMOUNT OF LEG ITIMATE TAX DUE. THUS, PENAL PROVISIONS OF SECTION 271(1) (C ) READ WITH EXPLANATION THERE UNDER ARE CLEARLY ATTRACTED. ITANO.18/AHD/2012(AY-2003-04) SHRI MUDRESH J. PUROHIT VS THE ACIT, CIR-7, AHMEDAB AD 4 (C) IN VIEW OF THE ABOVE DISCUSSION, I AM OF THE OPINION THAT THIS IS A FIT CASE FOR LEVY OF PENALTY U/S 271 (1) ( C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME IN RESP ECT OF ALL THE DISALLOWANCES CONFIRMED BY THE LD. CIT(A) AS DISCUS SED ABOVE. 4. THE LEARNED CIT(A) CONFIRMED THE ADDITION. AGGR IEVED BY THE ORDER OF THE LEARNED CIT(A), THE ASSESSEE IS IN APPEAL BE FORE US. 5. THE LEARNED AR SUBMITTED A PAPER BOOK CONTAINING 1 TO 114 PAGES WHEREIN CONFIRMATION OF GIFT TO THE ASSESSEE FROM H IS BROTHER WAS ON RECORD ALONG WITH DELIVERY CHALLAN FOR THE PURCHASE OF THE HIGH SPEED SCANNER. FURTHER, THE LEARNED AR SUBMITTED THAT ASS ESSEES BROTHER RAJESH JITENDRA PUROHIT CAME TO INDIA IN AUGUST, 19 99 WHO CARRIED THE SCANNER WITH HIM AND GIFTED THE SAME TO THE ASSESSE E. THE LEARNED AR SUBMITTED THAT TO ESTABLISH THIS FACT THE CONFIRMAT ION LETTER AND XEROX COPY OF THE PASSPORT OF HIS BROTHER WAS PLACED ON R ECORD TO PROVE HIS ENTRY AND EXIT FROM INDIA DURING THAT PERIOD. IT WA S FURTHER CONTENDED THAT HIS BROTHER HAD PURCHASED THE MACHINE IN THE N AME OF THE APPELLANT SINCE IT WAS PURCHASED WITH THE INTENTION FOR APPEL LANTS USE. IT WAS FURTHER SUBMITTED THAT THIS TYPE OF MACHINE WAS NOT AVAILABLE IN INDIA AND THE APPELLANT COULD NOT HAVE PURCHASED THIS MACHINE FROM INDIA BECAUSE THE PAYMENT HAD TO BE MADE IN FOREIGN EXCHANGE. WIT H THE ABOVE SUBMISSION THE LEARNED AR PRAYED THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY AND THE SAME MAY BE DELETED. FURTHER IT WA S SUBMITTED BY THE LD.AR THAT IT WOULD NOT BE APPROPRIATE TO LEVY PENA LTY FOR THE CLAIM OF GENUINE FOREIGN TRAVEL EXPENSE INCURRED BY THE APPE LLANT CONSIDERING IT TO BE AN ALLOWABLE EXPENSES. THE LEARNED DR STOUTLY OP POSED TO THE SUBMISSION OF THE LEARNED AR AND RELIED UPON THE OR DERS OF THE REVENUE AUTHORITIES. ITANO.18/AHD/2012(AY-2003-04) SHRI MUDRESH J. PUROHIT VS THE ACIT, CIR-7, AHMEDAB AD 5 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE RECORDS AVAILABLE BEFORE US. THE ASSESSEE HAS PRODU CED THE COPIES OF THE INVOICE AND THE CONFIRMATION LETTER FOR RECEIPT OF THE GIFT. IT IS APPARENT THAT THE MACHINE HAD BEEN PURCHASED ABROAD ON 07-06 -1999 AND ON THE SAME DAY DELIVERY WAS ALSO OBTAINED OBVIOUSLY BY TH E BROTHER OF THE APPELLANT. THE APPELLANT HAD ALSO PLACED ON RECORD XEROX COPIES OF THE PASSPORT OF HIS BROTHER TO ESTABLISH THAT THE ASSES SEES BROTHER HAD TRAVELLED TO INDIA SUBSEQUENT TO 07-06-1999. FURTH ER, IT IS EVIDENT THAT THE PAYMENT FOR THE PURCHASE OF MACHINE WAS PAID IN DOLLARS AND THERE WAS NOTHING ON RECORD TO SHOW THAT THE ASSESSEE HAD CARRIED SUCH A LARGE SUM TO USA IN CASH WHICH IS NOT IN ACCORDANCE WITH LAW, APPARENTLY IMPLYING THAT THE PAYMENT FOR THE MACHIN E COULD HAVE BEEN MADE BY THE BROTHER OF THE APPELLANT. THEREFORE, FR OM THESE FACTS, EVEN THOUGH THE CASE MAY BE A FIT CASE FOR MAKING THE AD DITION, WE ARE OF THE CONSIDERED VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271 (1) (C) OF THE ACT. FURTHER, IN REGARD TO DISALLOWANCE OF F OREIGN TRAVEL EXPENSES, APPLYING THE RATIO HELD IN CIT VS RELIANCE PETROPRO DUCTS PVT. LTD. 323 ITR 158 WE HEREBY DELETE THE PENALTY LEVIED BY THE LEARNED AO WHICH WAS FURTHER UPHELD BY THE LEARNED CIT(A). THUS TO S UM UP THE PENALTY LEVIED ON ACCOUNT OF ADDITIONS MADE FOR (A) RS.12,0 0,000/- DISBELIEVING THE GIFT AND (B) WRONG CLAIM OF FOREIGN TRAVEL EXPE NSE OF RS.56,571/- IS HEREBY DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 25-05-2012 SD/- SD/- (G. C. GUPTA) VICE PRESIDENT (A. MOHAN ALANKAMONY) ACCOUNTANT MEMBER LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/ LAKSHMIKANT DEKA/- -- - ITANO.18/AHD/2012(AY-2003-04) SHRI MUDRESH J. PUROHIT VS THE ACIT, CIR-7, AHMEDAB AD 6 COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 14-05-2012/17-05-2012(DIRECT DICTATION): 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 17-05-2012 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 T HE DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P. S./ 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 REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: