Smt Sarita Banka, Howrah V. DCIT-Circle-47, Kolkata, Kolkata

ITA 2491/KOL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 87680 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 25-10-2013
• Court: TRIBUNAL
• Department Lawyers: D MUKHOPADHYAY ACIT
• Keywords: Unexplained cash credit; Gift; Income from undisclosed sources

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: KOLKATA [BEFORE HON BLE SHRI MAHAVIR SINGH, JM & HON BLE SHRI SHAMIM YAHYA AM ] I.T.A NO S.2491 & 2492/KOL/2013 ASSESSMENT YEAR: 2004 - 05 SMT.SARITA BANKA VS. D.C.I.T., CIRCLE - 47, HOWRAH KOLKATA (APPELLANT) ( RESPONDENT) (PAN: ADUPB 6335 J) FOR THE APPELLANT : SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT : SHRI D.MUKHOPADHYAY, ACIT DATE OF HEARING : 03.02 .2015. DATE OF PRONOUNCEMENT: 06.02.2015. ORDER PER SHRI SHAMIM YAHYA, AM : THESE APPEAL S BY THE ASSESSEE ARE DIRECTED AGAINST RESPECTIVE ORDER S OF LD. CIT(A) - XXX , KOLKATA CONFIRMING THE ADDITION ON ACCOUNT OF GIFT AND LEVY OF PENALTY RESPECTIVELY AND PERTAIN TO ASSESSMENT YEAR 2004 - 05. ITA NO.2491/KOL/2013 2. THE GROUNDS OF APPEAL READ AS UNDER : - 1. FOR THAT THE LD.COMMISSIONE OF INCOME TAX (APPEAL) - XXX/KOL HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE & ADDITION MAD BY THE LD.ASSESSING OFFICER OF GIFTS OF RS.2,00,000/ - GIVEN BY SMT.RUPA S HARMA TO THE APPELLANT ON THE GROUNDS WHICH ARE NOT CORRECT. 2. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) - XXX/KOL HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN CONFIRMING THE DISALLOWANCE AND ADDITION MADE BY THE LD.ASSESSING OFFICER OF G IFT OF RS.2,00,000/ - GIVEN BY SMT. SEEMA PODDAR TO THE APPELLANT ON THE GROUNDS WHICH ARE NOT CORRECT. 3. FOR THE OBSERVATIONS AND CONTENTIONS OF THE LD. COMMISSIONER OF INCOME TAX (A) - XXX/KOL IN CONFIRMING THE ORDER OF THE LD.ASSESSING OFFICER IN DISALLOW ANCE & ADDITION OF TWO GIFTS EACH OF RS.2,00,000/ - TOTALING RS.4,00,000/ - IS NOT CORRECT, JUSTIFY & PROPER. 4. FOR THAT THE APPELLANT CRAVES LEAVE TO ADDUCE, MODIFY AND/OR ALTER THE GROUNDS AT OR BEFORE HEARING. 3. IN THIS CASE THE AO NOTED THAT THE A SSESSEE HAS SHOWN RECEIVING GIFT FROM MRS.RUPA SHARMA AMOUNTING TO RS.2,00,000/ - . AO ASKED THE ASSESSEE TO PRODUCE HER. ITA NOS.2491&2492/KOL/2013 SMT.SARITA BANKA A.YR. 2004 - 05 2 HOWEVER ASSESSEE FAILED TO PRODUCE HER. AO DEPUTED AN INSPECTOR TO EXAMINE INCOME TAX RECORDS OF MRS.RUPA SHARMA. AFTER PERUSING THE INC OME TAX RECORDS AO CAME TO THE CONCLUSION THAT THE FACTS DO NO JUSTIFY THE GIFT TO THE TUNE OF RS.2,00,000/ - DURING THE FINANCIAL YEAR 2003 - 04. HENCE AO ADDED A SUM OF RS.2,00,000/ - AS ASSESSEE S INCOME FROM UNDISCLOSED SOURCES. 3.1. AS REGARDS GIFT FROM MRS.SEEMA PODDAR, AO NOTED THAT THE ENTRIES WITH THE BANK ACCOUNT FOR THE RELEVANT PERIOD REFLECTED THAT A SUM OF R S.2,00,000/ - WAS CREDITED BEFORE ISSUING OF CHEQUE FOR GIFT. ON QUERY IT WAS CLARIFIED THAT THE SAID CHEQUE WAS RECEIVED FROM DONALD VYAPPAR PVT. LTD, O N SALE OF SHARES. SUPPORTING PAPERS FROM DONALD VYAPPAR PVT. LTD WAS ALSO FILED HOWEVER, AO WAS NOT SATISFIED. HE REFERRED TO THE DRAWINGS OF THE ASSESSE AND OBSERVED THAT THE S AME WAS VERY LOW. HENCE HE OPINED THAT GIFT OF RS.2,00,000/ - APPEA RS TO BE NOT IN CONSUMERATE WITH THE TOTALITY OF THE CASE . HENCE HE TREATED A SUM OF RS.2,00,000/ - AS UNEXPLAINED CASH CREDIT BEING CHANNELIZED INTO HER OWN ACCOUNT BY WAY OF GIFT FROM OTHERS. 3.2. UPON ASSESSEE S APPEAL THE LD.CIT(A) CONFIRMED THE ADDI TIONS. AGAINST THE ABOVE ORDER ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE COUNSEL AND CAREFULLY PERUSED THE RECORDS. AS REGARDS GIFT FROM MRS.RUPA SHARMA OF RS.2,00,000/ - WE NOTE THAT THE ASSESEE HAD EVEN FAILED TO PRODUCE HER OR EVEN SUPP LY THE ADDRESS OF MRS.RUPA SHAR MA. HER BALANCE SHEET FILED FOR A.YR.2003 - 04 REFLECTED HER MEAGER FINANCIAL POSITION. NO RETURN FOR A.YR.2003 - 04 SUBSEQUENTLY WAS FILED. IN THIS CIRCUMSTANCES IN OUR CONSIDERED OPINION AO IS CORRECT IN HOLDING THAT CREDITWOR THINESS OF THE TRANSACTIONS IS NOT ESTABLISHED. HENCE WE CONFIRM THE ADDITION OF RS.2,00,000/ - IN THIS REGARD. 4.1. AS REGARDS GIFT FROM MRS.SEEMA PODDAR WE NOTE THAT THE SAME HAS BEEN DISALLOWED ON THE PLEA THAT THERE WAS ENTRY OF RS.2,00,000/ - IN THE BA NK ACCOUNT IMMEDIATELY AFTER ISSUING OF CHEQUE FOR GIFT. THIS HAS BEEN EXPLAINED THAT RECEIPT FROM M/S.DONALD VYAPAR PVT. LTD THROUGH CHEQUE ON SALE OF SHARES. SUPPORTING ITA NOS.2491&2492/KOL/2013 SMT.SARITA BANKA A.YR. 2004 - 05 3 PAPERS IN THIS REGARD WAS SUBMITTED TO THE AO. AO DID NOT FIND ANY DISCREPANCY IN THE SAME. THUS THE SOURCE OF AMOUNT IS DULY DISCLOSED AND THE PAPERS PERTAINING TO THE DEPOSIT IN THE BANK ACCOUNT HAS ALSO BEEN PRODUCED BEFORE THE AO. AO HAS NOT FOUND ANY SHORT COMING IN THE SAME. IN THESE CIRCUMSTANCES THERE IS NO COGENT REASON TO TREA T THE SUM OF RS.2,00,000/ - AS UNEXPLAINED CASH CREDIT. HENCE WE DELETE THIS ADDITION IN THE HANDS OF THE ASSESSEE. 5. IN THE RESULT THIS APPEAL FILED BY THE ASSESSEE STANDS PARTLY ALLOWED. ITA NO.2492/KOL/2013 6. GROUNDS OF APPEAL READ AS UNDER : - 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL) - XXX/KOL HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE IN CONFIRMING THE PENALTY AMOUNTING TO RS.1,20,000/ - IMPOSED BY THE LD. ASSESSING OFFICER U/S 271(1)(C)OF THE I.T.ACT, 1961 ON THE GROUNDS WHICH ARE NOT CORRECT. 2. FOR THAT THE OBSERVATIONS & CONTENTIONS OF TH E LD. COMMISSIONER OF INCOME TAX (A) - XXX/KOL IN CONFIRMING THE ORDER OF THE LD. ASSESSING OFFICER IN IMPOSING PENALTY U/S 271(1)(C) OF THE I.T.ACT, 1961 IS NOT CORRECT , JUSTIFY AND PROPER. 3. FOR THAT THE APPELLANT CRAVES LEAVE TO ADDUCE, MODIFY AND/OR ALT ER THE GROUNDS AT OR BEFORE HEARING. 7. THIS APPEAL PERTAINS TO CONFIRMATION OF PENALTY ON ACCOUNT OF DISALLOWANCE OF GIFT OF RS.4,00,000/ - DEALT WITH IN THE ABOVE SAID APPEAL. IN THE PENALTY ORDER AO HAS STATED THE FACTS AND HAS CONCLUDED AS UNDER : - H ENCE I AM SATISFIED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME AS MENTIONED ABOVE AND I DIRECT THAT THE ASSESSEE SHALL PAY BY WAY OF PENALTY A SUM OF RS.1,20,000/ - (RUPEES ONE LAKH TWENTY THOUSAND ONLY) THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF THE FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. 7.1. UPON ASSESSEE S APPEAL THE LD. CIT(A) HAS ALSO CONFIRMED THE PENALTY. AGAINST THE ABOVE ORDER ASSESEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE COUNSEL AND CAREFU LLY PERUSED THE RECORDS. AS REGARDS GIFT FROM SMT.SEEMA PODDAR IS CONCERNED WE NOTE THAT WE HAVE ALREADY DELETED THE ADDITION IN THIS REGARD. WHEN THE ADDITION HAS BEEN DELETED THERE IS NO SCOPE OF ITA NOS.2491&2492/KOL/2013 SMT.SARITA BANKA A.YR. 2004 - 05 4 PENALTY ON THE SAID ADDITION. HENCE PENALTY LEVIED AGAINST SMT. SEEMA PODDAR IS DELETED ON THIS ACCOUNT. 8.1. AS REGARDS PENALTY ON THE ADDITION OF GIFT FROM MRS.RUPA SHARMA OF RS.2,00,000/ - WE NOTE THAT THE SAID GIFT WAS DISALLOWED BY AO ON THE PLEA THAT THE BALANCE SHEET OF THE ASSESSEE FILED FOR A.YR.2003 - 04 REFLECTED VERY LOW FINANCIAL POSITION. WE FIND THAT SECTION 271(1)(C) OF THE ACT POSTULATES LEVY OF PENALTY FOR FURNISHING INACCURATE PARTICULARS AND CONCEALMENT OF INCOME. IN THIS REGARD WE FIND THAT THE ASSESSE HAS DULY DISCLOSED THE RECEIPT OF GIFT. AS SESSEE S INCOME TAX RECORDS WERE ALSO TRACED BY THE AO. THE DISALLOWANCE WAS MADE ON THE GROUND THAT HER FINANCIAL POSITION HAD NOT JUSTIFIED GIVING OF GIFT OF RS.2,00,000/ - AND THE ASSESSEE COULD NOT COGENTLY REBUT THIS FINDING . IN OUR CONSIDERED OPINION THIS GROUND OF DISALLOWANCE CANNOT LEAD TO THE CONCLUSION THAT ASSESSEE S CONDUCT HAS BEEN CONTUMACIOUS SO AS TO LEVY OF PENALTY U/.S 271(1)(C) OF THE ACT. HENCE IN OUR CONSIDERED OPINION NECESSARY INGREDIE NTS FOR LEVY OF PENALTY U/S 271( 1)(C) OF THE ACT I N THIS CASE ARE NOT PRESENT . HENCE IN OUR CONSIDERED OPINION ASSESSEE SHOULD NOT BE VISITED WITH THE RIGOUR OF PENALTY U/S 271(1)(C) OF THE ACT. IN THIS REGARD WE PLACE RELIANCE UPON THE ORDER OF THE HON BLE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD VS STATE OF ORISSA 83 ITR 26 (SC) WHEREIN IT WAS HELD THAT : AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI - CRIMINAL PROCEEDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PART Y OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE I MPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATU TE. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE LEVY OF PENALTY. ITA NOS.2491&2492/KOL/2013 SMT.SARITA BANKA A.YR. 2004 - 05 5 9. IN THE RESULT THE APPEAL OF THE ASSESSEE STANDS ALLOWED 10. IN THE RESULT ITA NO.2491/KOL/2013 OF THE ASSES SEE STANDS PARTLY ALLOWED AND ITA NO.2492/KOL/2013 OF THE ASSESSEE STANDS ALLOWED. ORDE R PRONOUNCED IN THE COURT ON 0 6.02.2015. SD/ - SD/ - [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 06.02.2015. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . SMT.SARITA BANKA, 249/H, G.T.ROAD, HOWRAH - 711 204. 2 D.C.I.T., CIRCLE - 47, KOLKATA. 3 . CIT(A) - XXX , KOLKATA 4. CIT - KOLKATA. 5. CIT - DR, KOLKATA BENCHES, KOLKATA TR UE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES