ITO, New Delhi V. Sh. N.Motilal Nalluri, New Delhi

ITA 388/DEL/2010

• Counselvise Citation: [2010] 119 COUNSELVISE.COM (IT) 5808 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 29-03-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 28-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H K LAL
• Assessee Lawyers: WG CDR TVE NARAYANA

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI I.P.BANSAL, JM AND SHRI R.C.SHARMA, AM ITA NO.388/DEL/2010 ASSESSMENT YEAR : 2006-07 INCOME TAX OFFICER, WARD-46(4), NEW DELHI. VS. SHRI N.MOTILAL NALLURI, C/O WG.CDR. TVE NARAYANA, D-2/2098, VASANT KUNJ, NEW DELHI 110 070. PAN NO.AACPN6360L. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI H.K.LAL, SR.DR. RESPONDENT BY : WG.CDR. TVE NARAYANA, AR. ORDER PER R.C.SHARMA, AM : THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) DATED 5.11.2009 FOR THE AY 2006-07, IN THE MATTER OF IMPO SITION OF PENALTY U/S 271(1)(C) OF THE IT ACT. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED. FACTS IN BRIEF ARE THAT ON THE BASIS OF AIR INFORMATION, ASSESSEES CA SE WAS SELECTED FOR SCRUTINY AND HE WAS CALLED UPON TO EXPLAIN DEPOSIT OF RS.11 LAKH S IN HIS SAVINGS BANK ACCOUNT. THE ASSESSEE HAS DEPOSED BEFORE THE AO AND FILED AF FIDAVIT WHEREIN IT WAS STATED THAT OUT OF TOTAL AMOUNT DEPOSITED INITIALLY, RS.5 LAKHS WAS GIVEN BY HIS FATHER ON 8 TH /9 TH AUGUST, 2005 FOR DEPOSITING IN THE BANK ACCOUNT WH ILE APPLYING FOR VISA FOR HIS SON TO GO ABROAD FOR HIGHER STUDIES. THE SAID AMOUNT WAS PAID BACK TO THE ASSESSEES FATHER ON 20.8.2005 ONCE THE VISA INTERV IEW WAS SUCCESSFULLY COMPLETED. IN RESPECT OF THE SECOND ADDITION OF RS .6 LAKHS, IT WAS SUBMITTED THAT ASSESSEES FATHER HAS BUILT A HOUSE IN HIS NAME DUR ING THE YEAR 1986-87 AND THE SAME WAS DISPOSED IN THE YEAR 2002. THE SALE PROCE EDS OF THE PROPERTY WAS HANDED OVER TO THE ASSESSEE FOR DEPOSIT IN THE BANK ACCOUNT. THE ASSESSEE HAS ALSO ITA-388/DEL/2010 2 FURNISHED VISA APPLICATION OF HIS SON TO EXPLAIN TH E REASON FOR DEPOSIT. HOWEVER, THE AO DID NOT AGREE WITH THE ASSESSEES CONTENTION AND MADE ADDITION IN RESPECT OF THE AMOUNT DEPOSITED IN THE BANK ACCOUNT. THE A O ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) WHICH WAS DELETED BY THE CIT(A) AFTER OBSERVING THAT IT IS A COMMON PRACTICE THAT AT THE TIME OF OBTAINING VISA, PEOPLE MAKE TEMPORARY DEPOSITS IN THE BANK AND FUNDS ARE USUALLY ARRANGED FROM THE FAMILY MEMBERS FOR A SHORT DURATION AND RETURN THEREAFTER. THE CIT(A) A LSO OBSERVED THAT TEMPORARY LOANS FROM RELATIVES ALTHOUGH NOT BACKED BY PAPER W ORK MAY BE ACCEPTED CONSIDERING THE CIRCUMSTANTIAL EVIDENCE. CONSIDERI NG THE FACT THAT ASSESSEE HAS ALREADY PAID TAX AND INTEREST IN RESPECT OF BANK DE POSIT WHICH IN ANY CASE STANDS EXPLAINED NOW, ACCORDINGLY HE DELETED THE PENALTY. AGAINST THIS ORDER OF CIT(A), THE REVENUE IS IN FURTHER APPEAL BEFORE US. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND FOU ND THAT ASSESSEE HAS GIVEN BONA-FIDE REASON FOR ACCEPTING TEMPORARY LOANS FROM HIS FATHER FOR DEPOSIT IN THE BANK ACCOUNT WHILE APPLYING THE VISA FOR HIS SON. AT THE RELEVANT POINT OF TIME, THE ASSESSEE WAS WORKING IN AIR FORCE AND IN THE RETURN FILED HAS SHOWN TAXABLE INCOME OF RS.5.58 LAKHS. TO EXPLAIN THE SOURCE OF DEPOSIT AND THE REASONS FOR SUCH DEPOSIT, THE ASSESSEE HAS FILED AFFIDAVIT WHICH WAS NOT FOUND TO BE WRONG BY THE AO. SINCE THE FATHER OF THE ASSESSEE HAS ALREADY E XPIRED, THE DOCUMENTARY EVIDENCE WITH REGARD TO HOW THE FATHER HAS GOT THE MONEY COULD NOT BE PRODUCED, THIS CANNOT BE MADE THE REASON FOR LEVYING THE PENA LTY IN THE HANDS OF THE ASSESSEE. SINCE FATHER OF THE ASSESSEE WAS AGRICULTURIST, HE WAS NOT EXPECTED TO FILE IT RETURNS. WE ALSO FOUND THAT AT THE RELEVANT POINT, THE ASSESSEE HIMSELF WAS SUFFERING FROM SEVERE HEART PROBLEM WITH A PACEMAKE R AND WAS FORCED TO LEAVE THE AIR FORCE PREMATURELY LOSING A WHAT WOULD HAVE BEEN A PROMISING FUTURE BUT DID NOT WANT TO RISK HIS LIFE BY UNDERGOING UNDUE STRES S AND TENSION, ACCORDINGLY AGREED TO SURRENDER SINCE THE AO WAS NOT WILLING TO ACCEPT ASSESSEES CONTENTION REGARDING RECEIPT OF MONEY FROM FATHER. MERELY BEC AUSE THE ASSESSEE HAS ACCEPTED THE ADDITION OF RS.11 LAKHS, THE SAME IS NOT SUFFIC IENT FOR LEVY OF PENALTY U/S ITA-388/DEL/2010 3 271(1)(C). THE ASSESSEE HAS PRIMA-FACIE DISCHARGED ITS BURDEN OF RECEIPT OF AMOUNT AND ITS DEPOSIT IN THE BANK, ACCORDINGLY AS PER OUR CONSIDERED VIEW, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 4. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 31 ST MARCH, 2010. SD/- SD/- (I.P.BANSAL) (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 31.03.2010. VK. COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR ITA-388/DEL/2010 4