Shri Dwarkesh Trikamlal Maniar, Mehsana V. The Income Tax Officer, Patan Ward-3, Mehsana

ITA 2635/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9350 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-02-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANTOSH KARNAMI
• Assessee Lawyers: M J SHAH
• Keywords: Unexplained cash credit; Gift

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER ./ ITA.NO.2635/AHD/2015 / ASSTT. YEAR: 2008-2009 SHRI DWARKESH TRIKAMLAL MANIAR 1/11/38, SANKDI SHERI, TOWER BAZAR VISNAGAR, DIST. MEHSANA 384 315. PAN : AIVPM 3556 E VS ITO, PATAN WARD-5 MEHSANA. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI M.J. SHAH, AR REVENUE BY : SHRI SANTOSH KARNAMI, SR.DR / DATE OF HEARING : 23/02/2016 / DATE OF PRONOUNCEMENT: 23/02/2016 $%/ O R D E R THIS APPEAL OF THE ASSESSEE AROSE FROM ORDER OF THE LD.CIT(A), GANDHINAGAR DATED 17.7.2015 FOR THE ASSTT.YEAR 2008 -2009. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: IN THE CIRCUMSTANCES AND FACTS OF THE CASE UPON TH E PROVISIONS OF LAW THE LEARNED COMMISSIONER OF INCOME TAX (A) ,GANDHIN AGAR HAS ERRED IN CONFIRMING THE PENALTY LEVIED BY INCOME TAX OFFI CER U/S.271(1) (C) OF THE INCOME TAX ACT WHEN THERE IS NEITHER CONCEALMEN T OF ANY INCOME NOR FURNISHING OF ANY INACCURATE PARTICULARS OF INC OME AND THAT ORDER PASSED BY CIT (A) IS NOT A SPEAKING ORDER. PRAYER: APPELLANT, THEREFORE PRAY THAT THE ENTIRE P ENALTY BE HELD TO BE ILLEGAL AND BE DELETED.: 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTICED THAT IN THE BALANCE SHEET T HAT THERE WERE FRESH ITA NO.2635/AHD/2015 2 UNSECURED LOAN OF RS.8,51,580/-. ASSESSEE HAD RECEI VED IDENTICAL AMOUNT OF RS.19,000/- FROM 43 PERSONS IN CASH. ASSESSEE FAILE D TO OFFER ANY EXPLANATION ABOUT THE NATURE AND SOURCE THEREOF OR ANY-SATISFACTORY REPLY. ASSESSEE FAILED TO PROVE THE GENUINENESS OF.THE TRA NSACTIONS, IDENTITY AND CREDITWORTHINESS OF THE UNSECURED LOAN. THEREFORE, THE AMOUNT OF RS.8,51,580/- WAS ADDED TO THE TOTAL INCOME. FURTHE R, ADDITION WAS ALSO MADE OF AN AMOUNT OF RS.2,50,000/- RECEIVED FROM 5 PERSONS, WHICH ALSO REMAINED UNPROVED BY THE ASSESSEE AS THE DONORS CHO SE NOT TO ATTEND BEFORE THE AO. THE CLAIM OF THE ASSESSEE THAT RS.2, 50,000/- WAS RECEIVED AS GIFT WAS ALSO ADDED BY THE AO TO THE TOTAL INCOM E AS UNEXPLAINED CASH CREDIT. ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A) , WHO VIDE HIS ORDER DATED 1/6/2012 PARTLY ALLOWED THE APPEAL. OUT OF TH E TOTAL ADDITION OF RS.10,70,115/-, ADDITION TO THE EXTENT OF RS.2,69,8 55/- WAS CONFIRMED BY THE CIT(A).AO INITIATED AND IMPOSED PENALTY ON THE ADDI TION CONFIRMED BY THE CIT(A). RELYING ON THE DISCUSSION MADE BY THE CIT(A ) WHILE CONFIRMING THE ADDITIONS MADE, AO LEVIED PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED OF RS.83,390/- U/S 271(1)(C) OF THE ACT. 4. THE LD.COUNSEL FOR THE ASSESSEE, SHRI M.J. SHAH, ADVOCATE ARGUED THAT THE ASSESSEE HAS RECEIVED GIFTS FROM DIFFERENT PERS ONS WHO ARE FRIENDS AND RELATIVES OF THE ASSESSEE AND THE ASSESSEE HAS SUBM ITTED DECLARATION OF GIFTS, COPY OF PAN, RETURN OF INCOME FOR VARIOUS YEARS, ST ATEMENT OF TOTAL INCOME/ COMPUTATION OF INCOME , FORM NO.16 WHEREVER NECESSA RY AND CALCULATION OF TAX ETC. ALL THE DONORS ARE REGULARLY ASSESSED AND HAVE DECLARED GIFTS IN THE RETURN OF INCOME. NO DEFECTS IN THE SAME HAS BEEN POINTED OUT BY THE AO, AND ACCORDINGLY, RELIED ON DECISIONS OF THE HONBLE GUJ ARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILES VS. CIT, 249 ITR 125 (GUJ). H E ALSO RELIED ON THE DECISION OF THE ITAT, AHMEDABAD BENCH IN THE CASE O F RUCHI DEVELOPERS VS. ITO, IN ITA NO.3348/AHD/2010 AND ITA NO.1170/AHD/20 14 ORDER DATED 5.6.2014 WHERE THE DECISION OF THE HONBLE GUJARAT HIGH COURT (SUPRA) HAS ITA NO.2635/AHD/2015 3 BEEN RELIED UPON AND ALSO THE DECISION OF ITAT, AHM EDABAD BENCH IN THE CASE OF ACIT VS. MANISH ORGANICS INDIA LTD, 17 TAXM ANN.COM 25 (AHD), AND THE PENALTY HAS BEEN CANCELLED BY THE ITAT, AHMEDAB AD. 5. THE LD.DR, ON THE OTHER HAND, RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE UNDISPUTED FACTS OF THE CASE ARE THAT THE ASSES SEE HAS RECEIVED GIFTS FROM VARIOUS RELATIVES AND FRIENDS FOR WHICH NECESSARY D OCUMENTARY EVIDENCES HAVE BEEN PLACED ON RECORD BEFORE BOTH THE AUTHORITIES B ELOW IN THE ASSESSMENT AS WELL AS PENALTY PROCEEDINGS. NO DEFECT IN THE SAME HAS BEEN POINTED BY THE REVENUE. IT IS A SETTLED LAW THAT THE ASSESSMENT A ND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT. IN THE PRESENT CASE, THE A SSESSEE HAS SUBMITTED EXPLANATION IN THE PENALTY PROCEEDINGS BY WAY OF VA RIOUS DOCUMENTARY EVIDENCES, AS MENTIONED HEREINABOVE. THE RELIANCE ON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT CITED SUPRA BY THE LD.CO UNSEL FOR THE ASSESSEE GOES IN FAVOUR OF THE ASSESSEE, AND ACCORDINGLY, IN VIEW OF MY FINDINGS HEREINABOVE AND THE DECISION RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, I DIRECT THE AO TO CANCEL THE PENALTY AND REVERSE THE ORDER OF THE LD.CIT(A). ACCORDINGLY, ALL THE GROUNDS OF APPEAL OF THE ASSES SEE ARE ALLOWED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 23 RD FEBRUARY, 2016 AT AHMEDABAD. SD/- ( B.P. JAIN ) ACCOUNTANT MEMBER AHMEDABAD; DATED 23/02/2016