PRAJWAL ARVIND KAMATH, THANE V. DCIT CIR 3, THANE

ITA 3979/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7572 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 13-05-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T C SUBRAMANIAM
• Assessee Lawyers: C N VAZE
• Keywords: Gift; Revised return

Judgement Text

ITA NO.3979 OF 2011 PRAJAMAL ARVIND KAMATH,THANE PAGE 1 OF 5 IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ITA NO. 3979/MUM/2011 (ASSESSMENT YEAR: 2005-06) PRAJAMAL ARVIND KAMATH DCIT, CIRCLE-3 2004 FIONA, HIRANANDANI ESTATE THANE GHODBUNDER ROAD PATLIPADA, THANE VS PAN AIVPK 5845 K APPELLANT RESPONDENT APPELLANT BY: SHRI C.N. VAZE RESPONDENT BY: SHRI T.C. SUBRAMANIAM, DR DATE OF HEARING: 14/03/2012 DATE OF PRONOUNCEMENT: 21/03/2012 O R D E R PER V.DURGA RAO, J.M. THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDE RS OF THE CIT (A)-1 THANE, DATED 31/01/2011. 2. THE FACTS ARE IN BRIEF THAT THE ASSESSEE HAD REC EIVED A GIFT OF RS. 3.00 LAKHS FROM ONE PERSON NAMELY SMT. RAJES HWARI OJHA, RESIDENT OF LITTLE FLOWER, SECTOR-9, VASHI, NAVI MU MBAI. DURING THE ASSESSMENT PROCEEDINGS, A COPY OF THE GIFT DEED WAS FILED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER ASKED THE ASSESSEE TO PRODUCE THE DONOR FOR CROSS EXAMINATION . THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE DONOR HAD SHIFTED TO AYODHYA, WHICH IS IN UTTAR PRA DESH AND SHE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER WHICH IS A FAR WAY PLACE FROM UP. IN THOSE CIRCUMSTANCES, THE ASSESSEE AGREED TO SURRENDER THE GIFT SUM OF RS. 3.00 LAKHS AS AN INCO ME WITH A CONDITION THAT NO PENALTY CAN BE LEVIED. AO HAVING ACCEPTED THE CONDITIONAL SURRENDER MADE BY THE ASSESSEE, INITIAT ED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. DURING THE CO URSE OF THE ITA NO.3979 OF 2011 PRAJAMAL ARVIND KAMATH,THANE PAGE 2 OF 5 PENALTY PROCEEDINGS, THE ASSESSEE HAS SUBMITTED BEF ORE THE ASSESSING OFFICER THAT THE DONOR MRS. RAJESHWARY OJ HA, AN OLD LADY NOT HAVING GOOD HEALTH AND NOW SETTLED AT VILL AGE: OJHAGUNJ, DISTRICT VASTI, NEAR AYODHYA, UP. SHE EXPRESSED HER INABILITY TO APPEAR BEFORE THE ASSESSING OFFICER INSPITE OF REPE ATED REQUESTS AND UNDER THOSE CIRCUMSTANCES, THE ABOVE SAID AMOUN T OF RS. 3.00 LAKHS ACCEPTED AS AN INCOME OF THE ASSESSEE AN D SURRENDERED BEFORE THE ASSESSING OFFICER. THEREFORE , NO PENALTY CAN BE LEVIED UNDER SECTION 271(C) OF THE ACT. HOWE VER, THE ASSESSING OFFICER DURING THE COURSE OF THE PENALTY PROCEEDINGS NOT ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND OB SERVED THAT THE ASSESSEE HAS CLAIMED THAT THE DONOR IS A FAMILY FRIEND. HOWEVER, THE ASSESSEE HAS NOT FURNISHED ANY DOCUMEN TARY EVIDENCE WITH REGARD TO THE GIFT RECEIVED BY THE AS SESSEE EXCEPT THE GIFT DEED. THE ASSESSEE ALSO NOT FURNISHED THE CREDITWORTHINESS OF THE DONOR, OCCASION TO RECEIVE THE GIFT AND THEREFORE, THE GIFT RECEIVED BY THE ASSESSEE IS EXT REMELY DOUBTFUL AND IMPOSED THE PENALTY UNDER SECTION 271(C) OF THE ACT. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T (A). 3. BEFORE THE LEARNED CIT (A), THE ASSESSEE HAS EXP LAINED UNDER WHAT CIRCUMSTANCES THE ASSESSEE HAS DECLARED THE GI FT AMOUNT AS AN INCOME AND FURNISHED THE GIFT DEED, COPY OF THE RETURN OF THE DONOR, BALANCE SHEET, COPY OF THE BANK ACCOUNT OF T HE DONOR AND SUBMITTED THAT THE DONOR COULD NOT BE PRODUCED AS S HE WAS 75 YEARS OLD LADY AND HAS SHIFTED TO A DISTANCE PLACE IN UP AND SHE ALSO RELIED ON THE DECISION IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (241 ITR 124) (M.P). HOWEVER, THE LEARNED CI T (A) HAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND OBSERVED THERE IS NO PROOF THAT THE ASSESSEE HAS RECEIVED GIFT AND THEREFORE, THE GIFT AMOUNT RECEIVED BY THE ASSESSEE IS THE INCOME OF THE ASSESSEE AND CONFIRMED THE PENALTY LEVIED BY THE AS SESSING OFFICER. ON BEING AGGRIEVED, THE ASSESSEE CARRIED T HE MATTER IN APPEAL BEFORE THE TRIBUNAL. ITA NO.3979 OF 2011 PRAJAMAL ARVIND KAMATH,THANE PAGE 3 OF 5 4. THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITT ED THAT THE AMOUNT WAS SURRENDERED AS AN INCOME OF THE ASSESSEE WITH A CONDITION THAT NO PENALTY COULD BE IMPOSED. HE FURT HER SUBMITTED THAT THE ASSESSEE FILED ALL THE DETAILS L IKE GIFT DEED, RETURN OF INCOME, BALANCE SHEET, COPY OF THE BANK A CCOUNT OF THE DONOR AND THE ASSESSEE HAS DISCHARGED THE ONUS AND IF AT ALL THE ASSESSING OFFICER IS HAVING ANY DOUBT, HE HAS TO PR OCEED FURTHER AND INVESTIGATE THE MATTER, WHICH WAS NOT DONE BY T HE ASSESSING OFFICER. THE ASSESSEE NEITHER FILED INACCURATE PART ICULARS, NOR CONCEALED THE INCOME. THEREFORE, SECTION 271(C) IS NOT APPLICABLE TO THE ASSESSEES CASE. HE STRONGLY RELIED ON THE D ECISION IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (SUPRA). ON T HE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPOR TED THE ORDER PASSED BY THE AUTHORITIES BELOW. 5. WE HAVE HEARD BOTH THE SIDES, PERUSED THE RECORD AND GONE THE ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE H AS RECEIVED A GIFT OF RS. 3.00 LAKHS FROM SMT. RAJESHWARI OJHA, A RESIDENT OF LITTLE FLOWER, SECTOR-9, VASHI, NAVI MUMBAI. IT IS AN UNDISPUTED FACT THAT THE DONOR WAS RESIDING AT MUMBAI AT THE T IME OF THE GIFT. FROM THE FACTS APPEARED FROM THE RECORDS AND ALSO SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE DONOR HAS SHIFTED HER RESIDENCE FROM MUMBAI TO UP, LIVING IN A VILLAGE NEAR AYODHYA. UNDER THOSE CIRCUMSTANCES WHEN THE AS SESSING OFFICER WAS ASKED THE ASSESSEE TO PRODUCE THE DONOR PERSONALLY, THE ASSESSEE HAS SUBMITTED THAT SHE WAS UNABLE TO P RODUCE AND THEREFORE, THE AMOUNT OF RS. 3.00 LAKHS RECEIVED, O FFERED FOR TAX WITH A CONDITION THAT NO PENALTY PROCEEDINGS WOULD BE INITIATED. HOWEVER, THE ASSESSING OFFICER HAVING ACCEPTED THE AMOUNT, DECLARED BY THE ASSESSEE IMPOSED PENALTY PROCEEDING S UNDER SECTION 271(C). IT WAS SUBMITTED BEFORE THE ASSESSI NG OFFICER DURING THE COURSE OF THE PENALTY PROCEEDINGS THAT S HE OFFERED THE AMOUNT AS INCOME UNDER THE CIRCUMSTANCES WHEN THE A SSESSEE ITA NO.3979 OF 2011 PRAJAMAL ARVIND KAMATH,THANE PAGE 4 OF 5 WAS NOT ABLE TO PRODUCE THE DONOR. WE FIND THAT NEI THER THE ASSESSING OFFICER NOR THE CIT (A) PROPERLY EXAMINED THE SUBMISSIONS MADE BY THE ASSESSEE THAT WHETHER THE D ONOR HAS SHIFTED FROM MUMBAI OR NOT. WITHOUT INVESTIGATING I NTO THE MATTER, SIMPLY DENIED THE EXPLANATION OF THE ASSESS EE AND IMPOSED PENALTY UNDER SECTION 271(C). THE AO HAS NO T MADE ANY INVESTIGATION, EXCEPT AS ADMITTED BY THE ASSESSEE D URING THE COURSE OF THE ASSESSMENT PROCEEDINGS. WE FIND THAT IN THIS CASE WHEN THE ASSESSEE SUBMITTED ALL THE DETAILS SUCH AS GIFT DEED, COPY OF THE RETURNS OF THE DONOR, BALANCE SHEET, DE TAILS OF THE BANK ACCOUNT OF THE DONOR AND THE ASSESSEE MADE ALL THE EFFORTS TO PROVE THE GENUINENESS OF THE GIFT. HOWEVER, THE ASSESSEE IS NOT ABLE TO PRODUCE THE DONOR BECAUSE SHE IS STAYING IN A FAR WAY PLACE IN UP. THEREFORE, UNDER THOSE CIRCUMSTANCES, THE ASSESSEE IS NOT ABLE TO PRODUCE THE DONOR. WE FIND THAT THIS IS NOT AMOUNTING TO EITHER FURNISHING OF INACCURATE PARTIC ULARS OF INCOME OR CONCEALMENT OF PARTICULARS OF INCOME. THE REFORE, SECTION 271(1)(C) IS NOT APPLICABLE TO THE ASSESSEE S CASE. IN THE CASE OF SURESHCHANDRA MITTAL VS. CIT (SUPRA), THE M ADHYA PRADESH HIGH COURT HAS HELD THAT THE ASSESSMENT WAS MADE BY THE REVENUE AND ONCE THE ASSESSING AUTHORITIES HAD FAILED TO TAKE ANY OBJECTION IN THE MATTER OF SURRENDER OF IN COME MADE BY THE ASSESSEE IN HIS REVISED RETURN, THE EXPLANATION THAT HE HAD DONE SO TO BUY PEACE WITH THE DEPARTMENT AND TO COM E OUT OF VEXED LITIGATION COULD BE TREATED AS BONAFIDE IN TH E FACTS AND CIRCUMSTANCES OF THE CASE. ACCORDINGLY NO PENALTY C OULD BE LEVIED FOR CONCEALMENT. WHEN THE MATTER WAS CARRIED TO THE HONBLE SUPREME COURT, THE HONBLE SUPREME COURT HAS CONFIR MED THE VIEW TAKEN BY THE HONBLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (251 ITR 9). IN THE PRESENT CASE, THE ASSESSEE IS UNABLE TO PRODUCE THE DONOR B ECAUSE SHE HAS SHIFTED FROM MUMBAI TO UP, THE GIFT AMOUNT RECE IVED BY THE ASSESSEE WAS DECLARED HER AS INCOME TO BUY PEACE AN D TO AVOID LITIGATION. THE ASSESSEE HAS ALSO FILED GIFT DEED, COPY OF THE ITA NO.3979 OF 2011 PRAJAMAL ARVIND KAMATH,THANE PAGE 5 OF 5 RETURN OF THE DONOR, BALANCE SHEET, COPY OF BANK A/ C OF THE DONOR. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT THE EXPLANATION GIVEN BY THE ASSESSEE HAS TO BE CONSIDERED AS BONAFIDE. THEREFORE, THE A SSESSEE NEITHER CONCEALED THE INCOME, NOR FURNISHED INACCUR ATE PARTICULARS OF INCOME AND, HENCE, SECTION 271(1)(C) HAS NO APPLICATION TO THE ASSESSEES CASE. THE ORDER OF CI T(A) IS, THEREFORE, SET ASIDE AND PENALTY LEVIED IS DELETED. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 21 ST MARCH, 2012. SD/- SD/- (RAJENDRA SINGH ) (V.DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 21 ST MARCH, 2012. VNODAN/SPS COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. THE DR, C BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI