Shri Laxmandas Sujandas Dalpat, Ahmedabad V. The Income tax Officer,Ward-9(2), Ahmedabad

ITA 2168/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9380 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-02-2016
• Assessment Year: 2002-2003
• Appeal Filed On: 01-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R P MAURYA
• Assessee Lawyers: S N DIVETIA
• Keywords: Gift
• Section: 143(3); 131

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI S.S. GODARA, JUDICIAL MEMBER) ITA. NO: 2168/AHD/2011 (ASSESSMENT YEAR: 2002-03) LAXMANDAS SUJANDAS DALPAT C-28, C-32, RANI KA GHAR STERLING CO-OP HOUSING SOCIETY, OPP. DENA BANK, BOPAL, AHMEDABAD-380058 V/S INCOME TAX OFFICER, WARD- 9 (2), AHMEDABAD (APPELLANT) (RESPONDENT) PAN: ABEPD5940K APPELLANT BY : SHRI S. N. DIVETIA, AR RESPONDENT BY : SHRI R. P. MAURYA, SR. D.R. ( )/ ORDER DATE OF HEARING : 25 -02-201 6 DATE OF PRONOUNCEMENT : 29 -02-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF LD. CIT(A)-XV, AHMEDABAD DATED 27.06.2011 PERTAINING TO A.Y. 2002-03. ITA NO2168/A HD/2011 . A.Y. 2002-0 3 2 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSES SEE IS THAT THE LD. CIT(A) ERRED IN UPHOLDING THE PENALTY LEVIED U/S. 2 71(1)(C) OF THE ACT. 3. THE ROOTS FOR THE LEVY OF PENALTY LIE IN THE ASSESS MENT ORDER MADE U/S. 143(3) DATED 15.03.2005, THE A.O FOUND THAT RS. 7.0 2 LACS WAS CREDITED IN THE CAPITAL ACCOUNT OF THE ASSESSEE AS FRESH CAPITAL INTRODUCED. THE ASSESSEE EXPLAINED THE SOURCE OF TH E SAME AS HAVING RECEIVED GIFTS FROM 9 PERSONS; DECLARATIONS OF THE GIFTS WERE FILED. THE ASSESSEE WAS ASKED TO VERIFY THE IDENTITY, CREDITWO RTHINESS AND GENUINENESS OF THE GIFTS MADE BY VARIOUS PERSONS. O UT OF NINE PERSONS, ASSESSEE COULD PRODUCE ONLY TWO PERSONS, W HOSE STATEMENTS WERE RECORDED U/S. 131 OF THE ACT. THE A.O FOUND TH AT THESE PERSONS DO NOT HAVE ANY CAPACITY, MOREOVER, THEY HAVE DEPOS ITED CASH IN THEIR BANK ACCOUNTS BEFORE ISSUING CHEQUE OR GIFT. THE A. O FOUND THAT THESE PERSONS WERE NOT RELATED WITH THE ASSESSEE, THE A.O ALSO EXAMINED THE ASSESSEE AND CAME TO THE CONCLUSION THAT SINCE THE DONORS ARE NOT RELATED WITH THE ASSESSEE THEY DO NOT HAVE ANY CAPA CITY FOR MAKING THE GIFT. THE A.O CONSIDERED THE AMOUNT OF RS. 7.0 2 LACS AS UNEXPLAINED GIFT AND MADE THE ADDITION TO THE INCOM E OF THE ASSESSEE. 4. ASSESSEE WAS UNSUCCESSFUL IN APPELLATE PROCEEDINGS. 5. THE A.O INITIATED PENALTY PROCEEDINGS U/S. 271(1)( C) OF THE ACT, ONCE AGAIN, THE ASSESSEE WAS ASKED TO SHOW CAUSE WHY PEN ALTY SHOULD NOT BE LEVIED IN RESPECT OF THE ADDITION OF RS. 7.02 LA CS TOWARDS UNEXPLAINED GIFTS. ASSESSEE FILED A DETAILED REPLY EXPLAINING THAT THE DONORS HAD CONFIRMED THE GIFTS AND MERELY BECAUSE T HE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED WOULD NOT AMOUNT TO C ONCEALMENT OF INCOME OR FILING OF INACCURATE PARTICULARS OF INCOM E TO LEVY PENALTY U/S. ITA NO2168/A HD/2011 . A.Y. 2002-0 3 3 271(1)(C) OF THE ACT. THIS EXPLANATION OF THE ASSES SEE DID NOT FIND FAVOUR WITH THE A.O WHO LEVIED PENALTY OF RS. 2,17, 876/-. 6. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) B UT WITHOUT ANY SUCCESS. BEFORE US, THE LD. COUNSEL FOR THE ASSESSE E VEHEMENTLY SUBMITTED THAT THE PENALTY HAS BEEN LEVIED ONLY BEC AUSE THE EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR WIT H THE TRIBUNAL IN THE QUANTUM PROCEEDINGS. IT IS THE SAY OF THE LD. COUNS EL THAT EXCEPT FOR THIS, THERE IS NO OTHER EVIDENCE BROUGHT ON RECORD WHICH COULD SUGGEST THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. THE ADDITIONS HAVE BEEN MADE UNDER THE DEEMING PROVISIO N OF THE ACT WHICH CANNOT JUSTIFY THE LEVY OF PENALTY U/S. 271(1 )(C) OF THE ACT. PER CONTRA, THE LD. D.R. STRONGLY RELIED UPON THE ORDER S OF THE LOWER AUTHORITIES. WE HAVE CAREFULLY CONSIDERED THE ORDER S OF THE AUTHORITIES BELOW. WE HAVE ALSO GONE THROUGH THE ASSESSMENT ORD ER WHEREIN THE IMPUGNED ADDITIONS HAVE BEEN MADE. WE FIND THAT THE FIRST APPELLATE AUTHORITY HAS DELETED THE IMPUGNED ADDITIONS AGAINS T WHICH THE DEPARTMENT HAD PREFERRED APPEAL BEFORE THE TRIBUNAL AND THE TRIBUNAL REVERSED THE FINDINGS OF THE LD. CIT(A) AND CONFIRM ED THE ADDITIONS MADE BY THE A.O. 7. IN OUR CONSIDERED OPINION, THIS ITSELF SHOWS THAT T HE APPELLATE AUTHORITIES WERE NOT AD IDEM. WE ALSO FIND THE AD DITIONS HAVE BEEN SUSTAINED FOR WANT OF FINANCIAL CAPACITY OF THE DON OR. THEREFORE IT CAN BE SAFELY CONCLUDED THAT THE GIFTS HAVE NOT BEEN RE CEIVED FROM UNIDENTIFIED PERSONS, THE IMPUGNED GIFTS TREATED AS INCOME MERELY BECAUSE THE DONORS HAD NO FINANCIAL CAPACITY. ITA NO2168/A HD/2011 . A.Y. 2002-0 3 4 8. IN OUR CONSIDERED OPINION SINCE THE ASSESSEE HAD GI VEN FULL DETAILS OF THE DONORS AT THE TIME OF ASSESSMENT PROCEEDINGS IT SELF AND SINCE THE AMOUNT OF RS. 7.02 LACS WAS DULY CREDITED IN THE CA PITAL ACCOUNT MERELY BECAUSE THE EXPLANATION FURNISHED BY THE APP ELLANT WAS DISBELIEVE BY THE AUTHORITIES DOES NOT TANTAMOUNT T O CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF NATIONAL TEXTILES 249 ITR 125. WE DO N OT FIND THIS TO BE A FIT CASE FOR THE LEVY OF PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME IN THE LIGHT OF THE AFOREMENTIONED DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT AS NECESSARY DISCLOSURE WAS MADE BY THE ASSESSEE. WE, THEREFORE, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE A.O TO DELETE THE PENALTY. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 29 - 02 - 2016. SD/- SD/- (S. S. GODARA) (N. K. BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,A HMEDABAD