K.A. MALANI, MUMBAI V. ITO 22(2)-1, NAVI MUMBAI

ITA 3312/MUM/2009

• Counselvise Citation: 331219914 RSA 2009
• Duration Of Justice: 5 year(s) 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 13-10-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 19-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVAN KUMAR BEER LA
• Assessee Lawyers: A L SHARMA
• Keywords: Gift

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI . . , , , BEFORE SHRI B.R. BASKARAN , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER . / ITA NO. 3312 /MUM./ 2009 ( / ASSESSMENT YEAR : 20 0 4 05 ) SHRI K.A. MALANI 17, JAYSHREE, 65 PESTOM SAGAR ROAD NO.2, CHAMBUR, MUMBAI 400089 . . / APPELLANT V/S INCOME TAX OFFICER WA RD 22(2) 1 NAVI MUMBAI .. . . / RESPONDENT ./ PERMANENT ACCOUNT NUMBER AABPM7979B / ASSESSEE BY : SHRI A.L. SHARMA / REVENUE BY : SHRI PAVAN KUMAR BEERLA / DATE OF HEARING 13 . 10 .2014 / DATE OF ORDE R 21.10.2014. / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HA S BEEN PREFERRED BY THE ASSESSEE , CHALLENGING THE IMPUGNED ORDER D ATE D 17 TH FEBRUARY 2009 , PASSED BY THE LEARNED COMMISSIONER (APPEALS) X X II , MUMBAI, FOR THE ASSESSMENT YEAR 20 04 05. THE SOLE DISPUTE IN THIS APPEAL IS WHETHER OR NOT THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN CONFIRMING THE PENALTY SHRI K.A. MALANI 2 OF RS. 1.20 LA KHS LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C). 2 . FACTS IN BRIEF : T HE ASSESSEE HAD SHOWN GIFTS OF SUMS AGGREGATING TO RS. 4 LAKHS FROM FOUR PERSONS WHICH WERE CREDITED TO THE CAPITAL ACCOUNT. BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAD SUB MITTED GIFT CONFIRMATION, COPY OF BANK STATEMENT OF THE DONORS, COPY OF AFFIDAVIT, COPY OF CASH FLOW STATEMENT TO PROVE THE GENUINENESS OF THE GIFT. HOWEVER, THE SAID GIFT WAS TREATED AS UNEXPLAINED ON THE GROUND THAT THE ASSESSEE COULD NOT PROVE THE CREDI TWORTHINESS OF THE DONORS AND ALSO COULD NOT PRODUCE THEM. IN THE QUANTUM PROCEEDINGS UP TO THE STAGE OF TRIBUNAL OUT OF GIFTS OF RS. 4 LAKHS, THE GIFT FROM 3 DONORS AGGREGATING TO RS. 3 LAKHS WAS CONFIRMED. IN THE PENALTY ORDER, THE ASSESSING OFFICER HAS LEVIED THE PENALTY OF RS. 1.20 LAKHS ON ACCOUNT OF GIFT RECEIVED FROM THE FOLLOWING THREE DONORS: KASTURBAI R. SAMPAT RS. 1.00 LAKH LALITABEN M. PARMAR RS. 1.00 LAKH TUSHAR R. SAMPAT RS. 1.00 LAKH 3 . BEFORE THE LEARNED COMMISSIONER (APPEALS), THE ASSESS EE SUBMITTED THAT THE PRIMA FACIE EVIDENCE TO PROVE THE GENUINENESS OF THE GIFT WAS GIVEN WHICH IS EVIDENT FROM THE FACT THAT THE ASSESSEE HAS FURNISHED COPY OF BANK PASS BOOK OF THE DONORS, COPY OF PAN CARD , CONFIRMATION COPY, AFFIDAVIT AND IN SOME CASES COPY OF FORM NO.2D I.E., SHRI K.A. MALANI 3 ACKNOWLEDGMENT OF FILING OF RETURN OF INCOME. THE DETAILS OF SUCH EVIDENCE HAVE BEEN INCORPORATED IN PAGE 3 OF THE APPELLATE ORDER. BESIDES THIS, THE ASSESSEE HAD SUBMITTED THAT , DURING THE COURSE OF REMAND PROCEEDINGS, THE DONORS HAVE ATTENDED BEFORE THE ASSESSING OFFICER, HOWEVER, THE ASSESSING OFFICER HAS NOT RECORDED THE STATEMENT AND ALL THE DETAILS WERE FURNISHED WITH REGARD TO THE GENUINENESS OF THE GIFT DURING THE REMAND PROCEEDINGS. HOWEVER, THE LEARNED COMMISSIONER (APPEAL S) HAVE CONFIRMED THE PENALTY ON THE GROUND THAT THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE DONOR S RELATIONSHIP WITH THE DONOR AND THE OCCASION OF GIFT. ACCORDINGLY, AFTER RELYING UPON THE DECISION OF THE HON'BLE SUPREME COURT IN DHARMEN DRA TEXTILES V/S CIT, CONFIRMED THE SAID PENALTY. 4 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND THEREFORE, THE EVIDENCE S FILED BY THE ASSESSEE SHOULD HA VE BEEN RE EXAMINED FOR THE PURPOSE OF LEVY OF PENALTY UNDER SECTION 271(1)(C). INSOFAR AS THE ASSESSEE IS CONCERNED, HE HAS DISCHARGED HIS ONUS BY GIVING ALL THE NECESSARY EVIDENCE EXCEPT FOR PROD UCING THE DONORS WHICH WAS DONE DURING THE COURSE OF THE PE NALTY PROCEEDINGS AND ALSO BY THE FACT THAT THE LETTER FROM THE DONORS WERE FILED DIRECTLY BEFORE THE ASSESSING OFFICER WHICH WERE ADDRESSED TO THE ASSESSING OFFICER. THUS, HE SUBMITTED THAT ON SUCH FACTS AND SHRI K.A. MALANI 4 CIRCUMSTANCES NO PENALTY SHOULD BE LEVIED. LD. DR ON THE OTHER HAND RELIED UPON THE ORDER OF THE CIT(A). 5 . WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. OUT OF GIFTS RECEIVED FROM 4 PERSONS FOR SUMS AGGREGATING TO RS. 4 LAKHS, THE GIFT FROM 3 PERSONS FOR RS. 3 LAKHS STANDS CONFIRMED FROM THE STAGE OF THE TRIBUNAL . IT IS A SETTLED LAW THAT THE PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND FOR THE PURPOSE OF PENALTY UNDER SECTION 271(1)(C ) THE EVIDENCE AND THE EXPLANATIONS HAVE TO BE RE APPRAISED TO SEE , WHETHER THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OR NOT. FR OM THE RECORDS IT IS SEEN THAT THE ASSESSEE HAS FILED THE COPY OF GIFT CONFIRM ATION ALONG WITH THE PAN OF THE DONORS; IN SOME CASES COPY OF ACKNOWLEDGMENT OF THEIR RETURN OF INCOME ; COPY OF BANK STATEMENT OF DONORS ; AFFIDAVIT OF THE DONORS GIVING THE PARTICULARS OF THEIR INCOME TAX ASSESSMENT AND THE CASH FLOW STATEMENT FROM WHERE S UCH AMOUNT WAS GIVEN TO THE ASSESSEE. IN ALL THESE CASES, THE AMOUNT WAS GIVING THROUGH ACCOUNT PAYEE CHEQUE. THE ADDITION HAS BEEN CONFIRMED BY THE TRIBUNAL ON THE GROUND THAT BEFORE GIVING THE GIFT CERTAIN CASH WERE DEPOSITED IN THE BANK ACCOUNT. SUCH A FINDING IN THE QUANTUM PROCEEDINGS MAY BE QUITE RELEVANT , H OWEVER THE SAME IS NOT CONCLUSIVE FOR PROVING THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OF SHRI K.A. MALANI 5 INCOME , UNLESS IT IS BROUGHT ON RECORD THAT MONEY DEPOSITED DOES NOT BELONG TO THE DONORS. 6 . THE ADDITION HAS BEEN CONFIRMED SOLELY ON THE CIRCUMSTANTIAL EVIDENCE S AND ON THE PRESUMPTION THAT THE CASH DEPOSITED BY THE DONOR BELONG S TO THE ASSESSEE . E VEN THAT IS ALSO BELIEVED, THEN THE DONORS HAVE UNDERTAKEN THE RISK THAT THE CASH DEPOSIT ED IN THE BANK ACCOUNT BELONG S TO THEM ON WHICH THEY ARE LIABLE TO BE TAXED. IN SUCH A SITUATION, THE SOURCE SHOULD HAVE BEEN ENQUIRED FROM THEM WHEN THEY ARE SEPARATELY ASSESSED TO TAX. INSOFAR AS THE ASSESSEE IS CONCERNED, THE PRIMA FACIE ONUS WHICH LIES UPON THE ASSESSEE HAS BEEN DISCHARGED BY PROVING THE IDENTITY OF THE DONORS AND SOURCE FROM WHERE THE ASSESSEE HAS RECEIVED GIFTS . THE EXPLANATION 1 TO SECTION 271(1)(C) RAISES A REBUTTAL PRESUMPTION I.E., SUCH A PRESUMPTION CAN BE REBUTTED BY ADDUCING EVIDENCES ALONG WITH THE EXPLANATION. IF SUCH AN EXPLANATION HAS NOT BEEN FOUND TO BE FALSE , THEN THERE CANNOT BE A CASE FOR LEVYING THE PENALTY UNDER SECTION 271(1)(C) EITHER FOR CONCEALMENT OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THUS, UNDER THE FACTS AN D CIRCUMSTANCES, WE DO NOT FIND ANY REASON TO CONFIRM THE PENALTY. ACCORDINGLY, THE PENALTY LEVIED U / S 271(1)(C) IS DELETED. 7 . 7. IN THE RESULT, ASSESSEE S APPEAL IS ALLOWED. SHRI K.A. MALANI 6 ORDER PRONOUNCED IN THE OPEN COURT O N 21 ST OCTOBER, 2014. SD/ - SD/ - . . B.R. BASKARAN ACCOUNTANT MEMBER SD/ - SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 21.10.2014. / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR ) , / ITAT, MUMBAI