DCIT RG 8(2), MUMBAI V. RASHILA R OSWAL, MUMBAI

ITA 3420/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8301 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-12-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BEHARILAL
• Keywords: Gift; Accommodation entries
• Section: 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BE NCH, MUMBAI , !' #$% , !& ! ' BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./I .T.A. NO.3420/MUM/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2005-06 THE ACIT (OSD)-8(2), AAYAKAR BHAVAN, MUMBAI-400 020 / VS. MRS. RASHILA R OSWAL, 81/81, SOLITARE, CENTRAL AVENUE, SANTACRUZ(W), MUMBAI-400 054 ./I .T.A. NO.3334/MUM/2013 ( ( ( ( ( / ASSESSMENT YEAR : 2005-06 MRS. RASHILA R OSWAL, 81/81, SOLITARE, CENTRAL AVENUE, SANTACRUZ(W), MUMBAI-400 054 / VS. THE ACIT (OSD)-8(2), AAYAKAR BHAVAN, MUMBAI-400 020 ) !& ./ * ./ PAN/GIR NO. : ( )+ / APPELLANT ) .. ( ,-)+ / RESPONDENT ) )+ . ! / ASSESSEE BY: SHRI BEHARILAL ,-)+ / . ! / REVENUE BY: SHRI LOVE KUMAR SHRI S.D. SRIVASTAVA / 0& / DATE OF HEARING :03.12.2014 12( / 0& / DATE OF PRONOUNCEMENT :10.12.2014 !3 / O R D E R ITA NOS. 3334 & 3420/M/13 2 PER BENCH: THESE ARE CROSS APPEALS BY THE REVENUE AND THE ASSE SSEE AGAINST THE ORDER OF THE LD. CIT(A)-17, MUMBAI DT.28.2.2013 PERTAINING TO A.Y.2005-06. BOTH THESE APPEALS WERE HEARD TOGETHE R AND ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE . ITA NO. 3420/M/2013- REVENUES APPEAL 2. THE REVENUE IS AGGRIEVED BY THE DELETION OF THE PENALTY IMPOSED U/S. 271(1)(C) OF THE ACT IN RESPECT OF LONG TERM C APITAL GAIN ON SALE OF SHARES OFFERED BY THE ASSESSEE FOR TAX AS INCOME F ROM OTHER SOURCES PURSUANT TO A SURVEY ACTION U/S. 133A OF THE ACT. 3. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSE SSEE STATED THAT ON IDENTICAL SET OF FACTS, THE HONBLE JURISDICTIONAL HIGH COURT IN INCOME TAX APPEAL NO. 1111 OF 2011 HAS CONFIRMED THE DELET ION OF THE PENALTY IN THE CASE OF ONE OF THE GROUP MEMBER SHRI RISHI R. O SWAL HUF, 4. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT BR ING ANY DISTINGUISHING FACTS/DECISION ON RECORD. RESPECTFUL LY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT ( SUPRA) WHICH HAS BEEN FOLLOWED BY THE LD. CIT(A), THE APPEAL FILED BY THE REVENUE IS DISMISSED. ITA NO. 3334/M/2013 ASSESSEES APPEAL 5. THE SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE L D. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF TH E ACT. ITA NOS. 3334 & 3420/M/13 3 6. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT TH E RETURN OF INCOME FOR THE YEAR WAS FILED ON 12.8.2005 DECLARING TOTAL INC OME OF RS. 9,54,828/-. A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED ON 28.6 .2006 AT THE OFFICE PREMISES OF M/S. MAHASAGAR SECURITIES PVT. LTD. IT WAS FOUND IN THE COURSE OF SURVEY THAT SHRI MUKESH M. CHOKSI, DIRECT OR OF THE SAID COMPANY WAS GIVING ACCOMMODATION ENTRIES OF LONG TE RM CAPITAL GAINS, BUSINESS LOSS ETC AS PER THE REQUIREMENTS OF HIS CL IENTS AGAINST RECEIPT OF CASH AND HIS COMMISSION. ENQUIRIES WERE CONDUCTED TO TRACE OUT THE ACTUAL BENEFICIARIES WHO HAD TAKEN THE ACCOMMODATIO N ENTIRES. IT WAS FOUND THAT THE ASSESSEE, HER HUSBAND SHRI RATANCHAN D J. OSWAL & HER SON SHRI RISHI R. OSWAL WERE FOUND TO BE TAKEN ACCOMMO DATION ENTRIES 6.1. A SURVEY U/S. 133A OF THE ACT WAS CONDUCTED AT THE BUSINESS PREMISES OF M/S. HILDEN PACKAGING MACHINES PVT. LTD OF WHICH ASSESSEE IS A DIRECTOR AND ALSO A SHARE HOLDER. THE SURVEY ACTION REVEALED THAT AN AMOUNT OF RS. 20 LAKHS WAS RECEIVED BY THE ASSESSEE FROM VARIOUS PERSONS IN THE PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR UNDER CONSIDERATION. THE ASSESSEE OFFERED TO REVISE HER TOTAL INCOME FOR THE YEAR AND ACCORDINGLY A REVISED STATEMENT OF INCOME WAS FILED BY THE ASSESSEE ON 18.1.2007 DECLARING TOTAL INCOME OF RS. 66,38,096/- AS AGAINST THE RETURNED INCOME OF RS. 9,54,828/- WHICH ALSO INCLUDED GIFT OF RS. 12,00,000/-. THE ASSESSEE WAS ASKED TO EXPLAIN WHY SHE HAS NOT ADDED 20 LAKHS WHICH WAS OFFERED BY HER DURING THE COURSE OF THE SURVEY. 6.2. ON RECEIVING NO PLAUSIBLE REPLY, THE AO COMPLE TED THE ASSESSMENT BY ALSO MAKING THE ADDITION OF RS. 20,00,000/- AS G IFT AS INCOME OF THE ASSESSEE AND INITIATED PENALTY PROCEEDINGS. ITA NOS. 3334 & 3420/M/13 4 7. DURING THE COURSE OF THE PENALTY PROCEEDINGS, TH E ASSESSEE STATED THAT NO INCRIMINATING DOCUMENTS OR OTHER MATERIAL W AS FOUND TO THE NOTICE OF THE AUTHORIZED OFFICER AND THERE WAS NO EVIDENCE OR MATERIALS GATHERED IN RESPECT OF VARIOUS GIFTS RECEIVED BY THE ASSESSE E AND HER FAMILY MEMBERS SO AS TO ESTABLISH THAT THE GIFTS ARE NOT G ENUINE. IT WAS EXPLAINED THAT THE ASSESSEE HAS OFFERED THE AMOUNT VOLUNTARIL Y TO AVOID LITIGATION AND CLAIMED THAT THE GIFTS WERE GENUINE. AFTER CON SIDERING THE FACTS AND SUBMISSIONS, THE AO WAS CONVINCED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND LEVIED PENALTY U/S. 271(1 )(C) OF THE ACT AT RS. 21,39,480/-. 8. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATT ER BEFORE THE LD. CIT(A). IT WAS STRONGLY CONTENDED BEFORE THE LD. C IT(A) THAT DURING THE COURSE OF THE SURVEY, NO INCRIMINATING DOCUMENT OR ANY OTHER MATERIAL WAS FOUND AND IT WAS FURTHER CLAIMED THAT TO AVOID UNNECESSARY LITIGATION, THE ASSESSEE OFFERED THE GIFT RECEIVED FOR TAXATION . AFTER CONSIDERING THE FACTS AND THE SUBMISSIONS AND FOLLOWING THE DECISIO N OF THE TRIBUNAL IN ITA NOS. 1441 TO 1444/M/08, THE LD. CIT(A) DELETED THE PENALTY LEVIED IN RESPECT OF THE INCOME OFFERED UNDER THE HEAD LO NG TERM CAPITAL GAINS. IN SO FAR AS THE INCOME OFFERED AS GIFTS, THE LD. C IT(A) RELYING UPON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT VS MAK DATA LTD. IN ITA NO. 415/2012 CONFIRMED THE PENALTY LEVIED REGARDING GIFT. 9. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEF ORE US. THE LD. COUNSEL FOR THE ASSESSEE REITERATED WHAT HAS BEEN SUBMITTED BEFORE THE LOWER AUTHORITIES. ITA NOS. 3334 & 3420/M/13 5 10. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SU PPORTED THE ORDERS OF THE AUTHORITIES BELOW. 11. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUT HORITIES BELOW. IT IS AN UNDISPUTED FACT THAT IN THE ORIGINAL RETURN OF I NCOME FILED ON 12.8.2005, THE ASSESSEE HAS RETURNED ONLY RS. 954,8 28/-. IT IS ALSO AN UNDISPUTED FACT THAT AFTER THE SURVEY OPERATION CON DUCTED AT THE PREMISES OF THE ASSESSEE, THE ASSESSEE AGREED FOR DECLARING LONG TERM CAPITAL GAINS OF RS. 44,83,268/- AND RS. 20,00,000/- ON ACC OUNT OF GIFTS RECEIVED AS INCOME FROM OTHER SOURCES. IT IS ALSO AN UNDISP UTED FACT THAT THE REVISED COMPUTATION OF INCOME, THE ASSESSEE HAS OFF ERED ONLY RS. 12,00,000/- AS GIFTS AND DURING THE COURSE OF THE A SSESSMENT PROCEEDINGS, THE ASSESSEE FURTHER AGREED FOR THE ADDITION OF RS. 2,00,000/- OUT OF THE BALANCE GIFT AMOUNT. THE EXPLANATION OF THE ASSESS EE THAT THE AMOUNT HAS BEEN OFFERED TO PURCHASE PEACE OF MIND AND TO AVOID UNNECESSARY LITIGATION IS NOT A VALID REASON AS PER THE DECISIO N OF THE HONBLE DELHI HIGH COURT IN THE CASE OF MAK DATA LTD. (SUPRA) WH ICH HAS BEEN SUBSEQUENTLY CONFIRMED BY THE HONBLE SUPREME COURT IN 358 ITR 593. CONSIDERING ALL THESE FACTS IN TOTALITY, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH DECEMBER, 2014 SD/- SD/- (VIJAY PAL RAO ) (N.K. BILLAIYA) /JUDICIAL MEMBER !& / ACCOUNTANT MEMBER MUMBAI; 4 DATED : 10 TH DECEMBER, 2014 . . ./ RJ , SR. PS ITA NOS. 3334 & 3420/M/13 6 !3 !3 !3 !3 / // / ,0 ,0 ,0 ,0 5!(0 5!(0 5!(0 5!(0 / COPY OF THE ORDER FORWARDED TO : 1. )+ / THE APPELLANT 2. ,-)+ / THE RESPONDENT. 3. 6 ( ) / THE CIT(A)- 4. 6 / CIT 5. 78 ,0 , , / DR, ITAT, MUMBAI 6. 8 9 / GUARD FILE. !3 !3 !3 !3 / BY ORDER, -0 ,0 //TRUE COPY// : :: : / ; ; ; ; (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI