Sandeep Kumar Gupta, Haryana V. ITO, Panipat

ITA 3357/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65908 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 14-11-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 28-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGHDR
• Assessee Lawyers: RANO JAINAR
• Keywords: Gift; Accommodation entries
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI G BENC H BEFORE SHRI A.N. PAHUJA, AM & SHRI C.M.GARG, JM ITA NOS 3357 & 3358 /DEL/2011 ASSESSMENT YEAR: 2001-02 1.SHRI SANDEEP KUMAR GUPTA & 2. SHRI SANJAY GUPTA SONS OF SHRI DHARM PAL GUPTA, HOUSE NO. 313,SECTOR- 11,HUDA,PANIPAT V/S . ITO WARD-2,PANIPAT [PAN : ABTPG1103E &AARPG1576A] (APPELLANTS) (RESPONDENT) ASSESSEE BY MS. RANO JAIN,AR REVENUE BY SHRI SATPAL SINGH,DR DATE OF HEARING 14-11-2012 DATE OF PRONOUNCEMENT 14-11-2012 O R D E R A.N.PAHUJA:- THESE TWO APPEALS FILED ON 28.06.2011 BY THE RESPE CTIVE ASSESSEES AGAINST A COMMON ORDER DATED 18.3.2011 OF THE LD. CIT(A)-KARNAL, RAISE THE FOLLOWING SIMILAR GROUNDS:- 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER PASSED BY THE LEARNED CIT(A) IS BAD BOTH IN T HE EYE OF LAW AND ON FACTS. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING PENALTY OF ` 26,250/- IN THE CASE OF SHRI SANDEEP KUMAR GUPTA & ` 26,180/- IN THE CASE OF SHRI SANJAY GUPTA UNDER SECTION 271(1)(C) OF THE ACT. ITA N O.1988 /DEL./2012 2 3. (I) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N IGNORING THE CONTENTION OF THE ASSESSEE THAT THE ASSESSEE HAVING DISCLOSED ALL THE FACTS AND AS SUCH IT IS NEITHER A CASE OF CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS. (II) THAT THE ASSESSEE HAS ALSO SUBMITTED ALL DOCUMENTS AND EVIDENCE TO PROVE THE GENUINENESS OF THE GIFTS AND THE ASSESSING OFFICER HAS NOT GIVEN A NY ADVERSE REMARKS ON THE SAME. AS SUCH NO PENALTY ON CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS IS LEVIABLE. 4. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE ABOVE PENALTY DESPITE THE FACT THAT THE ASSESSEE HAS MADE FULL AND TRUE DISCLOSURE WITH ALL THE FACTS AND FIGURES AND AS SUCH THERE WAS NO CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE. 5. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE PENALTY DESPITE THE FACT THAT THE APPELLANT HAS SUBMITTED EXPLANATION IN SUPPORT OF I TS CONTENTION THAT THERE IS NEITHER CONCEALMENT NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. 6. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED BOTH ON FACTS AND IN LAW I N CONFIRMING THE PENALTY U/S 271(1)(C) AS NO FINDING HAS BEEN GIVEN ON MERIT REGARDING CONCEALMENT IN THE ORDER PASSED BY THE ASSESSING OFFICER. 7. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTE R ANY OF THE GROUNDS OF APPEAL. 2. FACTS, IN BRIEF, AS PER RELEVANT ORDERS IN THE SE CASES ARE THAT THESE TWO ASSESSEES VIZ. SHRI SANDEEP GUPTA & SHRI SANJAY GUPTA FILED ORIGINAL RETURNS ON 28.3.2002 DECLARING INCOME OF ` 73,360/- & ` 73,050/- RESPECTIVELY. SUBSEQUENTLY, ON RECEIPT OF INFORMATION FROM THE D IT (INVESTIGATION) THAT THESE ASSESSEES ALONG WITH THEIR FATHER SHRI DHARM PAL GU PTA, WERE BENEFICIARY OF ITA N O.1988 /DEL./2012 3 ACCOMMODATION ENTRIES OF ` 1 LAC EACH , THE AO ,AFTER RECORDING REASONS IN WRITING, REOPENED THE ASSESSMENT U/S 147 OF THE INC OME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) WITH THE SERVI CE OF A NOTICE U/S 148 OF THE ACT ISSUED ON 31.3.2008. IN RESPONSE, THESE TWO ASSESSE ES FILED RETURNS DECLARING INCOME OF ` 1,73,360 & ` 1,73,050 RESPECTIVELY ON 30.4.2008. EVEN THOUGH TH E ASSESSEES SURRENDERED AMOUNT OF ` 1 LAC IN THE RESPECTIVE RETURNS FILED IN PURSUANCE TO NOTICE U/S 148 OF THE ACT, THE AO WHIL E REFERRING TO QUESTIONNAIRE DATED ISSUED ON 8.7.2008 AND REPLY DATED 26.8.2008 OF THESE ASSESSES CONCLUDED THAT THE ASSESSEES SURRENDERED THE AMOUN T IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT ONLY AFTER DE TECTION OF CONCEALMENT BY THE DEPARTMENT AND THUS, THE SURRENDER WAS NOT VOLUNT ARY. ACCORDINGLY, THE AO ADDED THE AMOUNT OF ` 1,10,000/- IN THE ASSESSMENTS OF THESE ASSESSEES HO LDING THAT THE GIFT OF ` 1 LAC EACH WAS NOT PROVED TO BE GENUINE BESIDES A DDITION OF AN AMOUNT OF ` 10,000/- EACH ON ACCOUNT OF COMMISSION FOR OBTAININ G THE ACCOMMODATION ENTRIES. INTER ALIA, PENALTY PROCEEDI NGS U/S 271(1)( C) OF THE ACT WERE ALSO INITIATED. ON APPEAL, THOUGH THE LD. CIT( A) UPHELD THE ADDITION OF ` 10,000/- IN RESPECT OF COMMISSION, THE ITAT VIDE TH EIR COMMON ORDER DATED 15.5.2009 IN ITA NOS.741 TO 743/DEL./2009 IN THE CA SE OF SHRI SANJAY GUPTA,SHRI DHARM PAL GUPTA & SHRI SANDEEP GUPTA, DELETED THE A DDITION, HOLDING AS UNDER; 7. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE LEARNED DR. THE FACTS HAVE ALREADY BEEN STATED. IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 148 THE AMOUNT OF GIFT WAS S HOWN AS INCOME OF THE RESPECTIVE ASSESSES. WHAT HAS BEEN DONE BY THE ASS ESSING OFFICER IS THAT HE HAS REDUCED THE SUM OF ` `1 LAC THE AMOUNT OF GIFT FROM THE RETURN OF INCOME AND THEREAFTER THE GIFT AND 10% ALLEGED COMM ISSION WAS AGAIN ADDED TO MAKE THE NET ADDITION OF ` `10,200/-. THUS, THE EFFECTIVE ADDITION IN THE PRESENT CASE IS ONLY ON ACCOUNT OF ALLEGED COMMISSION. WE HAVE CAREFULLY GONE THROUGH THE ASSESSMENT ORDER AS WELL AS ORDER OF THE CIT(A). NO MATERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO SHOW THAT THE ASSESSEE IN FACT HAS PAID ANY COMMISSION TO RECEIVE THAT AMOUNT OF GIFT. AS AGAIN ST THAT IT WAS CLEARLY SUBMITTED BY ASSESSEE BEFORE THE ASSESSING OFFICER THAT NO SUCH COMMISSION WAS PAID. THE ASSESSEE HAS ALSO SUBMITT ED ALL THE RELEVANT DOCUMENTS TO PROVE THE GENUINENESS OF THE GIFT. HO WEVER, MAY BE FOR AVOIDANCE OF LITIGATION, THE ASSESSEE MAY HAVE DISC LOSED THE SAID GIFT AS ITA N O.1988 /DEL./2012 4 THEIR INCOME IN THEIR RESPECTIVE RETURNS FILED IN R ESPONSE TO NOTICE U/S 148. IN THESE CIRCUMSTANCES, IT CANNOT BE SAID THAT ANY ADDITION WAS MADE BY THE ASSESSING OFFICER EXCEPT THE ALLEGED COMMISSION E.G. IN THE CASE OF SHRI SANJAY GUPTA WHOSE COMPUTATION MADE BY THE ASS ESSING OFFICER HAS BEEN REPRODUCED ABOVE, THE RETURN WAS FILED AT A SU M OF ` ` 1,73,050/- AND WHAT HAS BEEN ASSESSED BY THE ASSESSING OFFICER AS TAXABLE INCOME IS AN AMOUNT OF ` ` 1,83,250/-. SIMILARLY, IN THE CASE OF SHRI DHARAM PAL GUPTA THE RETURN WAS FILED AT A SUM OF ` `4,00,900/- AND TAXABLE INCOME COMPUTED BY THE ASSESSING OFFICER IS A SUM OF ` `4,11,100/-. IN THE CASE OF SANDEEP GUPTA THE RETURN WAS FILED AT A SUM OF ` ` 1,73,360/- AND IT IS ASSESSED AT A SUM OF ` ` 1,83,660/-. THUS, THE ONLY EFFECTIVE ADDITION IS WITH RESPECT TO ALLEGED COMMISSION FOR WHICH NO MAT ERIAL WHATSOEVER HAS BEEN BROUGHT ON RECORD BY THE ASSESSING OFFICER TO PROVE THAT ANY SUCH COMMISSION WAS PAID BY THE ASSESSEE. 8. IN THIS VIEW OF THE SITUATION, WE FIND NO JUSTI FICATION IN THE ORDER OF THE CIT(A) VIDE WHICH IT HAS BEEN HELD THA T THE ADDITION ON ACCOUNT OF COMMISSION WAS JUSTIFIED. WE DELETE THE SAME. 9. IT HAS ALREADY BEEN POINTED OUT THAT THE GIFT A MOUNTS WERE DULY SHOWN AS INCOME BY THE RESPECTIVE ASSESSEE IN THE RETURN FILED BY THEM IN RESPONSE TO NOTICE U/S 148, HENCE, THERE IS NO QUESTION OF ADDITION OF DELETION THEREOF BY THE ASSESSING OFFICER SO AS TO EFFECT THE RETURN OF INCOME FILED BY THE ASSESSEE . 3. SUBSEQUENTLY, THE AO IMPOSED A PENALTY OF ` 26,250/- & ` 26,180/- RESPECTIVELY @ 100% OF THE TAX SOUGHT TO EVADED ON THE AMOUNT OF ` 1 LAC EACH U/S 271(1)( C) OF THE ACT ON THE GROUND THAT THE SE ASSESSES FURNISHED INACCURATE PARTICULARS OF INCOME, SURRENDER OF INCO ME BEING NOT VOLUNTARY. ON APPEAL, THE LD. CIT(A) UPHELD THE LEVY OF PENALTY , RELYING INTER ALIA, ON THE DECISIONS IN RAVI & CO& RANI & CO. VS. ACIT,271 ITR 286(MAD.) & G.C. AGGARWAL VS. CIT,186 ITR 571(SC) AND DECISION DATED 20.3.2009 OF THE ITAT IN KU NEHAL GOYAL VS. ITO IN ITA NO. 325/IND./08 BESID ES RELYING UPON DECISIONS IN MAHAVIR METAL WORKS VS. CIT,92 ITR 513(P&H);ADDL. C IT VS.BHARTIA BHANDAR,122 ITR 622(MP); BEDRI PAL OM PARKASH VS. CIT,1623 ITR 440(RAJ.) & CIT VS. K MAHIM,149 ITR 737,232 ITR 115(KER). ITA N O.1988 /DEL./2012 5 4. THESE ASSESSES ARE NOW IN APPEAL BEFORE US AGA INST THE AFORESAID FINDINGS OF THE LD. CIT(A).,AT THE OUTSET, THE LD. AR WHILE REL YING UPON DECISION DATED 29.8.2011 IN THE CASE OF FATHER OF THESE TWO ASSES SEES SHRI DHARM PAL GUPTA IN ITA NO.3356/DEL./2011 CONTENDED THAT THE ITAT HAVIN G CANCELLED THE PENALTY U/S 271(1)(C) OF THE ACT ON SIMILAR FACTS AND CIRCUMSTA NCES IN THAT CASE, PENALTY SHOULD BE CANCELLED IN THE CASE OF THESE TWO ASSESS EES. THE LD. DR DID NOT OPPOSE THESE SUBMISSIONS OF THE LD. AR. 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. WE FIND THAT THE ITAT VIDE THEIR DECISION DAT ED 29.8.2011 IN ITA NO.3356/DEL/2011 ON SIMILAR FACTS AND CIRCUMSTANCES CANCELLED THE PENALTY IN THE CASE OF FATHER OF THESE ASSESSEES, IN THE FOL LOWING TERMS: . 3. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE FACTS AND CONTENDS THAT IT IS NEITHER A CASE OF CONCEALMENT OF INCOME NOR F URNISHING OF INACCURATE PARTICULARS OF SUCH INCOME. IN THE ORIGINAL RETURN OF INCOME, THE STATEMENTS FILED CONTAINED DETAILS ABOUT GIFT RECEIVED BY THE ASSESSEE WHICH WAS CONFIRMED BY THE GIFT DEED. BESIDES, THE PRESUMPTIO N OF LOWER AUTHORITIES THAT THE ASSESSEE OFFERED THE GIFT ON THE KNOWLEDGE WHEN 148 NOTICE WAS ISSUED TO TAX THIS GIFT, IS NOT A PROPER PRESUMPTIO N AS ASSESSEE FILED RETURN CONSEQUENT TO NOTICE U/S 148 ON 30-4-08 WHEREAS THE FIRST NOTICE OF HEARING U/S 143(2)/148 WAS ISSUED ON 8-7-2008. IT CANNOT BE HELD THAT THE ASSESSEE FILED RETURN U/S 148 OFFERING THE AMOUNT OF GIFT OF RS. 1,00,000/- TO INCOME AFTER THE INQUIRIES WERE CONDUCTED, AS THE NOTICE U /S 148 DOES NOT CONTAIN REASONS. THE ASSESSEE IN THE NOTE HAD CLAIMED THAT THE GIFT THOUGH GENUINE, THE AMOUNT WAS BEING OFFERED FOR TAXATION TO AVOID LITIGATION AND TO BUY PEACE OF MIND. THE ASSESSEES EXPLANATION IS PROPER AND BASED ON ABOVE FACTS, WHICH HAS NOT BEEN REFUTED. 3.1. APROPOS COMMISSION, THE LEARNED COUNSEL CONTEN DS THAT THE ITAT VIDE ITS ORDER DATED 15-5-09, IN QUANTUM APPEAL, DELETED THIS ADDITION AS BEING MADE ON PRESUMPTION. IT IS PLEADED THAT THE PENALTY SHOULD NOT BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. THE ASSESSEE HAVING FURNISHED A PROPER EXPLANATION AND NOT HAVING CONCEALED ANY PARTICULAR S THE ABOVE PENALTY BE DELETED. ITA N O.1988 /DEL./2012 6 4. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE ORDER OF AUTHORITIES BELOW. 5.. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE GONE T HROUGH THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE FACTS MENTIONED A BOVE HAVE NOT BEEN DISPUTED BY THE LEARNED DR, WHO CONTENDS THAT THE P ENALTY BEING A CIVIL LIABILITY, THE SAME HAS BEEN RIGHTLY LEVIED ON THE ASSESSEE. 5.1. THOUGH, THE PENALTY IS A CIVIL LIABILI TY, IT IS TO BE ASCERTAINED THAT WHETHER THE PARTICULARS WERE CONCEALED, INACCURATE PARTICULARS WERE FURNISHED OR WHETHER THE EXPLANATION OF THE ASSESSE E WAS FALSE. PENALTY U/S271(1)(C) CANNOT BE IMPOSED AUTOMATICALLY. THE A SSESSEES ORIGINAL RETURN CONTAINED DETAILS ABOUT GIFT WHICH WAS ACCEP TED BY THE DEPARTMENT U/S 143(1). THEREAFTER, IN RESPONSE TO NOTICE U/S 1 48 ASSESSEE FILED THE SAME VOLUNTARILY, OFFERING THE AMOUNT TO TAX. THE INFERE NCE BY LOWER AUTHORITIES THAT THE ASSESSEE OFFERED THE AMOUNT AFTER IT WAS D ETECTED, DOES NOT EMERGE FROM THE RECORD INASMUCH AS THE FIRST NOTICE OF HEARING WAS ISSUED 3 MONTHS AFTER FILING OF RETURN BY THE ASSESSEE. UNDE R THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ASSESSEE DID NOT CONCEAL O R FURNISHED ANY INACCURATE PARTICULARS. ANY SUBSEQUENT CHANGE IN AS SESSEES MIND BEFORE ISSUE OF NOTICE OF INQUIRY OF ASSESSMENT GENERALLY CANNOT BE HELD AGAINST ASSESSEE SO AS TO FASTEN PENALTY U/S 271(1)(C). IN VIEW OF ABOVE FACTS AND THE ASSESSEES EXPLANATION BEING NOT FOUND TO BE FALSE, WE SEE NO JUSTIFICATION IN IMPOSING PENALTY U/S 271(1)(C) AND THE SAME IS DELE TED. 6. SINCE THE LD. DR DID NOT DISPUTE THAT THE FAC TS AND CIRCUMSTANCES IN THE CASE UNDER CONSIDERATION ARE SIMILAR TO THE FACTS AND CI RCUMSTANCES IN THE AFORESAID DECISION IN THE CASE OF SHRI DHARM PAL, FATHER OF T HESE ASSESSEES WHILE IN QUANTUM APPEAL, A CO-ORDINATE BENCH CONCLUDED THAT NO MATERIAL WHATSOEVER HAD BEEN BROUGHT ON RECORD BY THE AO TO SHOW THAT T HESE ASSESSEES IN FACT PAID ANY COMMISSION TO RECEIVE THE AMOUNT OF GIFT AND TH ESE ASSESSEES SUBMITTED ALL THE RELEVANT DOCUMENTS TO PROVE THE GENUINENESS OF THE GIFT , IN THE ABSENCE OF ANY BASIS, WE ARE NOT INCLINED TO TAKE A DIFFERENT VIEW IN THE MATTER. CONSEQUENTLY, IN THE LIGHT OF VIEW TAKEN IN THE AFO RESAID DECISION IN THE CASE OF ITA N O.1988 /DEL./2012 7 SHRI DHARM PAL(SUPRA), WE HAVE NO ALTERNATIVE BUT T O CANCEL THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT IN THE CASE OF THESE TWO ASSES SEES. THEREFORE, GROUND NOS.2 TO 6 IN THESE APPEALS ARE ALLOWED. 7. GROUND NO.1 IN THESE APPEALS BEING GENERAL IN N ATURE, DOES NOT REQUIRE ANY SEPARATE ADJUDICATION WHILE NO ADDITIONAL GROUND HA VING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.7 IN THESE APPEALS, AC CORDINGLY, THESE GROUNDS ARE DISMISSED. 8. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 9. IN THE RESULT, BOTH THESE APPEALS ARE ALLOWED. SD/- SD/- (C.M.GARG) (A.N. PAHUJA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) NS COPY OF THE ORDER FORWARDED TO :- 1. ASSESSEES 2. ITO WARD-2,PANIPAT 3. CIT CONCERNED. 4. CIT(A)-KARNAL 5. DR, ITAT,G BENCH, NEW DELHI 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, DELHI ORDER PRONOUNCED IN OPEN COURT