Sh Anil Singla, Rudrapur V. ITO, Rudrapur

ITA 2278/DEL/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3783 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 25-05-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 26-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BANITA DEVI
• Keywords: Reopening of assessment; Gift; Income from undisclosed sources; Wrong claim
• Section: 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL [ DELHI BENCH A DELHI ] BEFORE SHRI R. P. TOLANI, JM AND SHRI K. D. RA NJAN, AM I. T. APPEAL NO. 2278 (DEL) OF 2009 ASSESSMENT YEAR : 2003-04. SHRI AMIT SINGLA, THE INCOME-TAX OFFICER, S/O. SHRI KESHAV SINGLA, VS. R U D R A P U R, 3 M O D E L T O W N, U T T R A K H A N D . R U D R A P U R [UTTRAKHAND]. PAN / GIR NO. ADFPS 3468G. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI K. SAMPATH, ADV.; DEPARTMENT BY : MS. BANITA DEVI, SR. D. R.; O R D E R. PER K. D. RANJAN, AM : THIS APPEAL BY THE ASSESSEE FOR ASSESSMENT YEAR 20 03-04 ARISES OUT OF ORDER OF THE LD. CIT (APPEALS)II, DEHRADUN. 2. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS A S FOLLOWS :- THAT ON FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE AUTHORITIES BELOW ERRED IN HOLDING THE ASSESSEE GUI LTY OF CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INC OME AND IN IMPOSING PENALTY UNDER SECTION 271(1)(C) OF THE I. T. ACT, 1 961 IN A SUM OF RS.3,16,154/-. THE ORDER BEING PALPABLY ERRONEOUS, MOST ARBITRARY AND GROSSLY UNLAWFUL, MUST BE QUASHED. 2 I. T. APPEAL NO. 2278 (DEL) OF 2009 3. THE ONLY ISSUE FOR OUR CONSIDERATION RELATES TO CONFIRMING THE PENALTY OF RS.3,16,154/- MADE UNDER SECTION 271(1)(C) OF THE I. T. ACT, 1961 . THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE RECEIVED GIFT OF RS.10,02,000/- FROM F OUR PERSONS I.E. SHRI SATISH KUMAR SHARMA [RS.2,51,000/-]; SHRI YASH PAL SHARMA [RS.2,50,000/ -]; SHRI DEEPAK KUMAR CHANGIA [RS.2,50,000/-]; AND SHRI SHYAM LAL [RS.2,51,000/-] . THE ASSESSEE FILED COPIES OF GIFT DEEDS, AFFIDAVITS, COPIES OF PAN CARDS AND THE ASSESSMENT RELATED PAPERS AND BANK ACCOUNT OF THE ASSESSEE. HOWEVER, NO COPIES OF BANK ACCOUNTS OF D ONORS WERE FILED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS WHEN THE ASSESSING OFFICER W AS VERIFYING THE GENUINENESS OF GIFTS, THE ASSESSEE SURRENDERED THE GIFT OF RS.10,02,000/- TAK EN FROM FOUR PERSONS. THE ASSESSING OFFICER, THEREFORE, OBSERVED THAT THE ASSESSEE WAS WELL AWAR E THAT HE WOULD NOT BE ABLE TO PROVE THE GENUINENESS OF THE TRANSACTION. BECAUSE OF THAT TH E ASSESSEE HAD SURRENDERED THE GIFT AMOUNT OF RS 10,02,000/-. THE ASSESSING OFFICER, THEREFORE, ADDED THE AMOUNT OF RS.10,02,000/- AND INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)( C) OF THE ACT. 4. DURING THE COURSE OF PENALTY PROCEEDINGS IT WAS SUBMITTED THAT THE ASSESSEE SURRENDERED THE AMOUNT OF RS.10,02,000/-, SUBJECT TO THE CONDIT ION THAT NO PENALTY WAS LEVIED. HOWEVER, THE ASSESSING OFFICER NOTED THAT THE ENQUIRIES WERE CON DUCTED FROM STATE BANK OF BIKANER & JAIPUR, NEW DELHI, FROM WHERE SHRI SHYAM LAL ONE OF THE DON ORS HAD PURCHASED BANK DRAFT FOR GIVING IT TO THE ASSESSEE. THE AFORESAID BANK FURNISHED THE COPY OF THE BANK ACCOUNT OF SHRI SHYAM LAL WHEREIN HUGE CASH DEPOSITS WERE MADE AND ON THE NEX T DAY THE AMOUNT WAS WITHDRAWN FOR PURCHASING DRAFTS. 5. IT WAS SUBMITTED BY THE ASSESSEE THAT WHEN THE A SSESSEE TRIED TO CONTACT THE DONORS, IT WAS FOUND THAT THE DONORS COULD NOT BE CONTACTED AND TH E ASSESSEE PREFERRED TO SURRENDER THE GIFTS, TO BE TAXED AS INCOME FROM OTHER SOURCES. THE ASSESSE E HAD NEVER FURNISHED INACCURATE PARTICULARS OF HIS INCOME OR CONCEALED ANY PARTICULARS OF INCOM E. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN TH E CASE OF CIT VS. SURESH CHAND MITTAL 241 ITR 124 (MP) FOR THE PROPOSITION THAT THE INITI AL BURDEN LIED ON THE REVENUE TO ESTABLISH THAT THE ASSESSEE HAD CONCEALED THE INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE 3 I. T. APPEAL NO. 2278 (DEL) OF 2009 BURDEN SHIFTS TO THE ASSESSEE ONLY IF HE FAILS TO O FFER ANY EXPLANATION FOR THE UNDISCLOSED INCOME OR OFFERS AN EXPLANATION, WHICH WAS FOUND TO BE FAL SE BY THE ASSESSING AUTHORITY. HOWEVER, PROVISO TO EXPLANATION 1 TO SECTION 271(1) PROVIDES FOR SHIFTING OF THIS BURDEN AGAIN WHERE EXPLANATION OFFERED BY THE ASSESSEE WAS NOT FOUND T O BE BONAFIDE. THE AO CONSIDERED THE SUBMISSIONS OF THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE HAD SURRENDERED THE GIFT, AS A RESULT OF THE INVESTIGATION CARRIED OUT BY THE DEPARTMENT. S INCE THE ASSESSEE SURRENDERED HIMSELF THE INCOME, THERE WAS NOTHING MORE TO PROVE THAT WHETHE R A PARTICULAR INCOME WAS CONCEALED INCOME OR NOT. HE PLACED RELIANCE ON THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF DURGA TIMBER WORKS VS. CIT 79 ITR 63 (DEL). HE ALSO REFE RRED TO THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SAJAN DASS & SONS VS. CIT 264 ITR 435 (DEL.) FOR THE PROPOSITION THAT MERE IDENTIFICATION OF THE DONOR AND SHOWING THE MO VEMENT OF THE GIFT THROUGH BANKING CHANNELS WAS NOT SUFFICIENT TO PROVE THE GENUINENESS OF THE GIFT. SINCE THE CLAIM OF THE GIFT WAS MADE BY THE ASSESSEE, THE ONUS WAS ON HIM NOT ONLY TO ES TABLISH THE IDENTITY OF THE PERSONS MAKING THE GIFTS, BUT ALSO HIS CAPACITY TO PAY GIFTS AND T HAT IT HAS ACTUALLY BEEN RECEIVED AS GIFT FROM THE DONOR. SINCE THE ASSESSEE FAILED TO DISCHARGE THE ONUS BY PROVING THE IDENTITY, CREDITWORTHINESS OF THE DONOR AND GENUINENESS OF TH E TRANSACTION, THE AO IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 6. BEFORE THE LD. CIT (APPEALS) THE LD. AR OF THE A SSESSEE ASSAILED THE PENALTY ORDER ON THE GROUND OF SATISFACTION AS WELL AS ON MERITS. IT WA S SUBMITTED THAT THE ASSESSEE HAD SURRENDERED THE AMOUNT, SUBJECT TO NO PENALTY. THEREFORE, THE PENALTY IMPOSED BY THE ASSESSING OFFICER WAS NOT VALID. IT WAS FURTHER SUBMITTED THAT THE DECIS ION RELIED UPON BY THE AO IN THE CASE OF DURGA TIMBER WORKS (SUPRA) HAS BEEN DISTINGUISHED BY SEVE RAL COURTS. HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. MANSA RAM & SONS 106 ITR 307 (ALL.) HAS HELD THAT A CONDITIONAL SURRENDER OF CASH CREDIT OR AGREEMENT TO CERTAIN AS SESSMENT DOES NOT ATTRACT PENALTY PROCEEDINGS. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT T HE FINDINGS GIVEN BY THE AO RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF SAJAN DASS & SONS (SUPRA) IS NOT CORRECT. THE DECISION OF SAJAN DASS & SONS RELATED TO ASSESS MENT PROCEEDINGS AND NOT TO THE PENALTY PROCEEDINGS. THE LD. AR OF THE ASSESSEE RELIED ON SEVERAL DECISIONS IN SUPPORT OF HIS CONTENTION THAT IN A CASE WHERE SURRENDER HAS BEEN ACCEPTED UN CONDITIONALLY, PENALTY UNDER SECTION 271(1)(C) 4 I. T. APPEAL NO. 2278 (DEL) OF 2009 OF THE ACT WAS NOT LEVIABLE. THE LD. CIT (APPEALS ) HOWEVER, OBSERVED THAT IMPUGNED GIFTS AGGREGATING TO RS.10,02,000/- HAD BEEN VOLUNTARILY OFFERED FOR TAXATION IN ORDER TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION. HOWEVER, THE AO HAD NOT BEEN CONVINCED WITH THE AFORESAID EXPLANATION OF THE ASSESSEE BECAUSE THE A SSESSEE HAS SURRENDERED THE GIFTS AS A RESULT OF INVESTIGATION CARRIED OUT BY THE DEPARTMENT AND AFT ER ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. SINCE THE ASSESSEE HIMSELF HAS SURRENDERED TH E INCOME, THERE WAS NOTHING MORE TO PROVE AS TO WHETHER THE SURRENDERED INCOME WAS CONCEALED INC OME OR NOT. FURTHER HE NOTED THAT IN THE CASE OF SAJAN DAS & SONS (SUPRA) HONBLE DELHI HIGH COURT HAS HELD THAT MERE IDENTITY OF THE DONOR AND SHOWING MOVEMENT OF GIFTED AMOUNT THROUGH BANKING CHANNELS WAS NOT SUFFICIENT TO PROVE GENUINENESS OF THE GIFTS. SINCE THE ASSESSEE HAD FAILED TO DISCHARGE HIS ONUS TO ESTABLISH THE CREDITWORTHINESS OF THE DONOR TO MAKE THE IMPUG NED GIFTS, THE GIFTS HAVE BEEN RIGHTLY TREATED AS INCOME FROM UNDISCLOSED SOURCES IN THE HANDS OF THE ASSESSEE AND PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIABLE. HE ACCORDINGLY UPHELD THE LEVY OF PENALTY AS THE ASSESSEE HAS MADE BOGUS CLAIM FOR PURPORTED GIFTS OF RS.10,02,00 0/-. 7. BEFORE US THE LD. AR OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE AGREED FOR THE ADDITION TO BUY PEACE. RE-OPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT IS BASED ON TENTATIVE INFORMATION RECEIVED AND NO CONCLUSION IS DRAWN AT THE TIME OF RE-OPENING OF ASSESSMENT. THEREFORE, REOPENING OF ASSESSMENT ON THE BASIS OF THE INFORMATION RECEIVED WOULD NOT CONCLUSIVELY PROVE THAT THE ASSESSEE HAD CONCEALED INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THE DECISION OF HONBLE DELHI HIGH CO URT IN THE CASE OF SAJAN DASS (SUPRA) IS NOT APPLICABLE AS THE SAME DOES NOT RELATE TO LEVY OF P ENALTY UNDER SECTION 271(1)(C) OF THE ACT. HE FURTHER SUBMITTED THAT THE AO HAVING ACCEPTED TH E OFFER MADE BY THE ASSESSEE TO ASSESS THE INCOME, PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS NOT LEVIABLE. HE PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF SU DARSHAN SILK & SAREES VS. CIT 300 ITR 205 (SC) FOR THE PROPOSITION THAT IN VIEW OF THE DEPOSI TION GIVEN UNDER SECTION 132(4) FOLLOWING BY CO-OPERATIVE ATTITUDE OF THE ASSESSEE IN PAYING THE TAX, NO PENALTY WOULD BE LEVIABLE UNDER SECTION 271(1)(C) OF THE ACT. HE ALSO PLACED RELIANCE ON T HE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SHREE NIRMAL COMMERCIAL LTD. VS. CIT 30 8 ITR 406 (BOM). HE FURTHER SUBMITTED THAT THE EXPLANATION OFFERED BY THE ASSESSEE IS BON AFIDE AND FALSITY OF THE EXPLANATION HAS NOT 5 I. T. APPEAL NO. 2278 (DEL) OF 2009 BEEN PROVED BY THE ASSESSING OFFICER. HE ALSO PLAC ED RELIANCE ON THE DECISION OF HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF SURESH CHA ND MITTAL 241 ITR 124 (MP) WHICH HAS BEEN AFFIRMED BY THE HONBLE SUPREME COURT IN 251 I TR 9. THE LD. AR OF THE ASSESSEE FURTHER SUBMITTED THAT HONBLE GUJARAT HIGH COURT IN THE CA SE OF NEW SORATHIA ENGG. CO. VS. CIT 292 ITR 642 (GUJ.) HAS HELD THAT IT IS INCUMBENT UPON T HE AO TO STATE WHETHER PENALTY WAS BEING LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME BY THE ASSESSEE OR ANY INACCURATE PARTICULARS INCOME HAVE BEEN FURNISHED BY THE ASSESSEE. IN THIS CASE NO SUCH FINDINGS HAD BEEN RECORDED BY THE AO. HE ALSO PLACED RELIANCE ON THE DECISION OF SMT. VEENA SINGLA PASSED BY ITAT, DELHI BENCH A IN ITA. 2277 (DEL) OF 2009 FOR AY 2004-05 DATED 11 TH MARCH, 2011 WHEREIN ON IDENTICAL FACTS PENALTY HAS BEEN CANCELLED. ON THE OTHER HAND, THE LD. SR. DR SUBMITTED THAT THE ASSESSEE HAD RECEIVED BOGUS GIFTS FROM FOUR PERSONS . THERE IS NO VAGUENESS IN THE ORDER PASSED BY THE AO. WHEN THE ASSESSEE WAS CONFRONTED HE MAD E SURRENDER. HE FURTHER SUBMITTED THAT THE AO HAD NOT ACCEPTED THE SURRENDER UNCONDITIONALLY. THERE IS NO VAGUENESS IN THE ORDER PASSED BY THE AO. IT IS A CASE OF CONCEALMENT OF INCOME A S WELL AS FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. 8.1 WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE INSTANT CASE THE ASSESSEE HAD RECEIVED GIFTS FROM FOUR PERSONS. THE ASSESSEE VIDE ORDER SHEET ENTRY DATED 1/11/2007 WAS ASKED TO FURNISH CO PIES OF BANK ACCOUNT IN WHICH GIFTS WERE CREDITED AND COPIES OF GIFT DEED, AFFIDAVITS, COPIE S OF BANK ACCOUNT OF THE DONORS. THE ASSESSEE IN RESPONSE TO THIS QUERY SUBMITTED THAT THE ASSESSEE HAD RECEIVED GIFTS OF A TOTAL AMOUNT OF RS.10,02,000/- FROM FOUR PARTIES. HE WAS TRYING TO LOCATE THOSE DONORS. HAVING FAILED HE SURRENDERED THE AMOUNT AS HE COULD NOT SEARCH OUT T HE NEW ADDRESSES OF THE DONORS. THE ASSESSING OFFICER HAD COLLECTED THE COPY OF BANK ST ATEMENT OF SHRI SHYAM LAL GOYAL, ONE OF THE DONORS, FROM WHICH IT WAS NOTICED THAT CASH WAS DEP OSITED AND IDENTICAL AMOUNT OR SO WAS TRANSFERRED BY WAY OF CHEQUE / DRAFTS. ON THE BASI S OF THE TRANSACTIONS APPEARING IN THE BANK STATEMENT OF ONE OF THE DONORS THE AO HAD CONCLUDED THAT THE ASSESSEE HAD RECEIVED BOGUS GIFTS. NO OTHER INQUIRY EITHER AT THE STAGE ASSESSMENT OR AT THE TIME OF LEVY OF PENALTY WAS MADE. ITAT, DELHI BENCH A IN THE CASE OF VEENA SINGLA ( SUPRA) HAS DECIDED THE CASE WHEREIN IDENTICAL FACTS ARE INVOLVED. SMT. VEENA SINGLA IS WIFE OF SHRI KESHAV SINGLA AND THE ASSESSEE IS 6 I. T. APPEAL NO. 2278 (DEL) OF 2009 SON OF SHRI KESHAV SINGLA, RUDRAPUR. IN THIS CASE ALSO THE ASSESSEE SURRENDERED GIFTS OF RS.10,02,000/- RECEIVED FROM FIVE PERSONS. ITAT, C ANCELLED THE PENALTY BY OBSERVING AS UNDER :- 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. 8. FROM THE PERUSAL OF THE AOS ORDER, IT IS CLEAR THAT THE ASSESSING OFFICER HAS MADE THE ADDITION BECAUSE THE ASSESSEE HAS SURR ENDERED THE GIFTS AND THE ADDITION WAS MADE ON AGREED BASIS. AT THE SAME TIM E, THE ASSESSING OFFICER HAS ALSO STATED THAT SINCE THE ASSESSEE HAS FAILED TO P ROVE THE CREDITWORTHINESS OF THE DONORS AND GENUINENESS OF THE TRANSACTION, THE ASSE SSEE HAD NO ALTERNATIVE THAN TO SURRENDER THE INCOME. WHEN WE LOOK TO THE REASON F OR SURRENDERING A GIFT AMOUNT, WE FIND THAT THE ASSESSEE COULD NOT CONTACT ALL THE AFORESAID DONORS SO AS TO PRODUCE THEM BEFORE THE AO. HOWEVER, ALL THE OT HER DETAILS, SUCH AS, COPIES OF GIFT DEEDS, AFFIDAVITS, COPIES OF PAN CARDS AND ASS ESSMENT RELATED PAPERS AND BANK ACCOUNT OF THE ASSESSEE WERE DULY FILED. THE AO HAS REJECTED THE ASSESSEES CLAIM BECAUSE THE DONORS HAD MADE DEPOSIT OF CERTAI N CASH AMOUNT IN THEIR BANK ACCOUNT BEFORE THE DRAFT OR CHEQUE WAS ISSUED BY TH EM TO THE ASSESSEE. THIS PARTICULAR REASON CANNOT BE A CRITERIA TO HOLD THAT THE GIFTS ARE NOT GENUINE. THE ASSESSEE IS NOT SUPPOSE TO PROVE THE SOURCE OF SOUR CE AND NO PENALTY IS LEVIABLE, WHERE ADDITION HAS BEEN MADE DOUBTING THE SOURCE OF SOURCE, AS SO HELD BY THE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C IT VS. BHARTESH JAIN (2010) 323 ITR 358 (DELHI), WHERE THE HONBLE HIGH COURT HAS H ELD THAT WHEN THE AO WAS DOUBTING THE SOURCE OF SOURCE, THAT CANNOT BE THE B ASIS FOR IMPOSING THE PENALTY. 9. IF WE READ THE ASSESSMENT ORDER AS A WHOLE, IT I S MORE THAN CLEAR THAT THE AO HAS ALSO MADE THE ADDITION ON AGREED BASIS. HE DID NOT MAKE ANY FURTHER ENQUIRY INTO THE ISSUE. THOUGH THE ASSESSING OFFIC ER HAS MADE A REFERENCE TO SOME INVESTIGATION COMPLETED BY THE INVESTIGATION W ING BUT HE HAS NOWHERE STATED THAT WHAT SORT OF INVESTIGATION WAS MADE BY THE INVESTIGATION WING AND WHAT WAS THE MATERIAL OR EVIDENCE ON THE BASIS OF W HICH IT COULD BE SAID THAT THE GIFTS RECEIVED BY THE ASSESSEE WERE PRIMA FACIE NON -GENUINE. THE AO HAS NOT 7 I. T. APPEAL NO. 2278 (DEL) OF 2009 DISCUSSED DETAILS OF THE REPORT OF INVESTIGATION WI NG. IT IS NOT THE CASE OF THE AO THAT ALL THE DONORS HAVE DENIED OF HAVING MADE GIFT S TO THE ASSESSEE BEFORE THE INVESTIGATION WING. 10. IN SUPPORT OF THE PROPOSITION THAT NO PENALTY O N MERE SURRENDER OF GIFTS CAN BE LEVIED, THE ASSESSEE HAS RELIED UPON THE FOL LOWING DECISIONS:- (1) RATAN LAL CHAWLA VS. ITO (ITA NO.5454/DEL/04). (2) SMT. SANDHYA VERMA VS. ITO (2008 114 TTJ 933. (3) ITO VS. DR. SAMEER KANT AGARWAL (2008) 113 TTJ (LUC KNOW) 252. (4) ACIT VS. VISHAN NARAYAN KHANNA , 171 TAXMAN (MAG.) 136 (DELHI). (5) CIT VS. ASHOK TAKER (2008) 170 TAXMAN 471(DELHI). 11. IN THE CASE OF ACIT VS. VISHAN NARAYAN KHANNA R EPORTED IN 171 TAXMAN (MAG.) 136, THE ITAT DELHI BENCH `H HAS HELD THAT SINCE NOTHING WAS BROUGHT ON RECORD BY THE AO TO SHOW THAT AMOUNT OF GIFT BELONG ED TO THE ASSESSEE HIMSELF, MERE SURRENDER OF AMOUNT OF GIFT OF THE ASSESSEE DID NOT TILT SCALES IN FAVOUR OF REVENUE THAT AMOUNT OF GIFT WAS INCOME OF ASSESSEE. HENCE, LEVY OF PENALTY UPON THE ASSESSEE WAS NOT JUSTIFIED AND DESERVE TO BE DELETED. 12. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ASHOK TAKER (2008) 170 TAXMAN 471 (DELHI) HAS HELD THAT WHEN TH E ASSESSING OFFICER HAS FAILED TO BRING ANY OTHER MATERIAL ON RECORD TO SHOW THAT SURRENDERED INCOME WAS CONCEALED INCOME, THE IMPOSITION OF PENALTY WAS NOT WARRANTED IN LAW. IN THAT CASE, THE ASSESSEE FILED A LETTER BEFORE THE AO STATING T HAT THE AMOUNT OF RS.31,95,530/- WAS SURRENDERED FOR TAXATION TO BUY PEACE AND THE ASSES SEE ALSO FILED AN AFFIDAVIT THAT SINCE THE LOANS FOR SUNDRY CREDITORS WERE MORE THAN 3 YEARS OLD AND TIME-BARRED, THE ASSESSEE WANTED TO ADD BACK THE AMOUNT OF SUNDRY CR EDITORS TO HIS INCOME. IN THAT SITUATION, IT WAS HELD THAT NO PENALTY WAS LEVIABLE . 13. SIMILAR VIEW HAS BEEN TAKEN IN OTHER DE CISIONS REFERRED TO ABOVE. 8 I. T. APPEAL NO. 2278 (DEL) OF 2009 14. IN THE PRESENT CASE, SINCE THE ASSESSEE H AS SURRENDERED THE GIFT AMOUNT ON THE VERY FIRST OCCASION IMMEDIATELY AFTER THE AO ASKED THE ASSESSEE TO PRODUCE DETAILS AND SINCE THE ASSESSMENT WAS ALSO MADE ON THE BASIS OF SURRENDER MADE BY THE ASSESSEE ON AGREED BASIS, AND SINCE NO COGENT OR AD EQUATE MATERIAL HAS BEEN BROUGHT ON RECORD BY THE AO THAT THE GIFTED AMOUNT WAS ACTU ALLY THE INCOME OF THE ASSESSEE OR THAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOU NT OF THE DONORS WAS ACTUALLY DEPOSITED BY THE ASSESSEE, WE HOLD THAT NO PENALTY UNDER SEC. 271(1)( C) IN THE PRESENT CASE IS CALLED FOR. THE ASSESSEE HAS BEEN ABLE TO GIVE A BONA FIDE EXPLANATION AS TO WHY THE ASSESSEE HAS TO SURRENDER THE GIFT AM OUNT TO TAX AND THUS, THE ASSESSEE HAS DISCHARGED HER BURDEN WITHIN THE MEANING OF EXP LANATION 1 TO SEC. 271(1)(C) OF THE ACT. WE, THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY. 8.2 SINCE THE FACTS OF THE CASE OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE OF SMT. VEENA SINGLA, RESPECTFULLY FOLLOWING THE PRECE DENT, IT IS HELD THAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE WHEN THE ASSES SEE HAS SURRENDERED THE AMOUNT TO BUY PEACE. WE THEREFORE CANCEL THE PENALTY IMPOSED BY A SSESSING OFFICER AND CONFIRMED BY LD CIT(A). 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON : 17 TH JUNE, 2011. SD/- SD/- [ R. P. TOLANI ] [ K. D. RANJAN ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 17 TH JUNE, 2011. *MEHTA * 9 I. T. APPEAL NO. 2278 (DEL) OF 2009 COPY OF THE ORDER FORWARDED TO : - 1. APPELLANT. 2. RESPONDENT. 3. CIT, 4. CIT (APPEALS), 5. DR, ITAT, NEW DELHI. TRUE COPY. BY ORDER. ASSISTANT REGISTRAR, ITAT.