TARUN V. PATEL, MUMBAI V. ITO 24(2)(4), MUMBAI

ITA 4409/MUM/2010

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 55953 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-11-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 03-11-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 28-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Gift; Corroborative evidences
• Section: 69

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH G, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI V. DU RGA RAO, J.M. ITA NO. 4409/MUM/2010 ASSESSMENT YEAR: 2004-05 TARUN V. PATEL, APPELLANT 33/B, VINAYAK HEIGHTS, UPPER GOVIND NAGAR, KAILASHPURI, MALAD (EAST) MUMBAI 400 097. (PAN - AABPP3639D) VS. INCOME TAX OFFICER-24(2)(4), RESPONDENT BANDRA (E), MUMBAI. APPELLANT BY : MR. AJAY SINGH RESPONDENT BY : MR. A.K. NAYAK ORDER PER V. DURGA RAO, J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF CIT(A)- 34, MUMBAI, PASSED ON 11/03/2010 FOR THE AS SESSMENT YEAR 2004-05. 2. THE GROUND RAISED IN THIS APPEAL IS AGAINST THE ACTION OF THE CIT(A) IN CONFIRMING THE PENALTY LEVIED BY THE AO U /S 271(1)(C) OF THE ACT. 3. BRIEFLY, STATED THE FACTS OF THE CASE ARE THAT T HE AO NOTICED THAT THE THE ASSESSEE HAD SHOWN GIFT OF RS. 11,43,405/-. THE AO NOTED THAT THE DONOR WAS NOT FAMILY MEMBER OF THE ASSESSE E AND THE ITA NO. 4409/M/10 TARUL V. PATEL 2 ASSESSEE WAS FAILED TO PRODUCE THE DONOR BEFORE HIM . THE AO, THEREFORE, HAD TAXED THE ENTIRE SAID AMOUNT BY TREA TING THE SAME AS 'INCOME FROM OTHER SOURCES' FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SUMATI DAYAL 214 ITR 801. ON A PPEAL, THE CIT(A) CONFIRMED THE ORDER OF THE AO. THEREAFTER, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) ON THE GROUND THAT THE AS SESSEE HAD CONCEALED THE TAXABLE INCOME BY INTRODUCING THE SAM E IN THE GARB OF GIFT AND, ACCORDINGLY, LEVIED PENALTY OF RS. 3,92,6 29/- U/S 271(1)(C). ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY ON THE GROUND THAT THOUGH THE ASSESSEE HAD PROVED IDENTITY OF THE DONO R AND REMITTANCE OF MONEY FROM ABROAD BUT HE COULD NOT FILE PROOF OF CREDITWORTHINESS OF THE DONOR AND IN THE QUANTUM APPEAL, THE ITAT HA D ALSO DISMISSED THE APPEAL OF THE ASSESSEE FOR NON-PROSECUTION. AG GRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAD FILED THE CONFIRMATION FROM THE DO NOR. HE FURTHER SUBMITTED THAT THE GIFT RECEIVED THROUGH BANKING CH ANNELS. IT IS SUBMITTED THAT THE AO IMPOSED PENALTY ON THE GROUND THAT THE ASSESSEE HAS NOT DISCHARGED THE BURDEN LIES U/S 69 OF THE ACT. IT IS FURTHER SUBMITTED THAT THE CIT(A) WITHOUT APPRECIAT ING THE MATERIAL AND EVIDENCE ON RECORD, WRONGLY CONFIRMED THE PENAL TY. IN SUPPORT OF ASSESSEE'S CASE, THE LEARNED COUNSEL FOR THE ASSESS EE RELIED UPON THE FOLLOWING DECISIONS OF ITAT:- 1. NARENDRA A. DHANANI IN ITA NO. 104, 105 & 106/M/09 AND 107/M/09, ORDER DT. 19/11/09. 2. SANTOSH NARAIN KAPOOR V. DCIT, [2008] 25 SOT 26(LUCK.)(URO) 3. ITO VS. DR. SAMEER KANT AGARWAL, [2008] 113 TTJ(LUC .) 252. ITA NO. 4409/M/10 TARUL V. PATEL 3 4. ACIT VS. CAVINKARE (P) LTD., [2008] 113 TTJ (CHENNA I) 260. 5. ON THE OTHER HAND, THE LEARNED DR RELIED UPON TH E ORDERS OF THE AUTHORITIES BELOW. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS AND THE RELEVANT MATERIAL ON RECORD AS WELL AS THE ORDERS O F THE AUTHORITIES BELOW. WE FIND THAT THERE WAS NO INVESTIGATION/ENQU IRY OF THE ASSESSEE BY THE AO AND ALSO THERE WAS NO INFORMATION WITH TH E AO THAT THE GIFTS/CREDITS WERE FAKE OR BOGUS. THE AO HAD NOT B ROUGHT ANY MATERIAL ON RECORD TO PROVE THAT THE AMOUNT IN QUES TION WAS CONCEALED INCOME OF THE ASSESSEE. THERE WAS ALSO NO MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME IN THE ORIGINAL RETURN . WE FIND THAT THE TRANSACTION OF THE GIFT IS DONE THROUGH BANKING CHA NNEL AND CONFIRMATION FROM THE DONOR HAS BEEN FILED BEFORE T HE REVENUE AUTHORITIES. IN THE PRESENT CASE, WHEN THE DONOR IS RESIDING IN ABROAD, IT IS DIFFICULT FOR THE ASSESSEE TO PRODUCE HIM BEF ORE THE AO. IN OUR VIEW, THE ACTION OF THE AO IN INVOKING THE PROVISIO NS OF SECTION 271(1)(C) ON THE GROUND THAT THE ASSESSEE FAILED TO PRODUCE THE DONOR BEFORE HIM, IS NOT PROPER AND THE SAME IS NOT AMOU NTED TO EITHER CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS OF INCOME. UNDER THE SIMILAR FACTS AND CIRCUMSTANCES OF THE CA SE, THE ITAT IN VARIOUS CASES HELD AS UNDER:- 1. IN THE CASE OF NARENDRA A. DHANANI (SUPRA), THE COO RDINATE BENCH OF MUMAI HELD THAT ................THE SURR ENDER OF THE AMOUNT BY NOT PROVING THE GENUINENESS IS GOOD ENOU GH FOR ADDITION, BUT THAT IS NOT SUFFICIENT TO CONSIDER TH AT THERE WAS CONCEALMENT BY THE ASSESSEE, WARRANTING LEVY OF PEN ALTY UNDER SECTION 271(1)(C). EVEN THE SEARCH DOES NOT RESULT IN ANY OTHER UNDISCLOSED INCOME AND AS SEEN FROM THE ORDER THE O NLY ADDITION MADE IN THE ORDER WAS THE GIFTS RECEIVED LONG BACK . IN VIEW OF THESE FACTS, WE ARE OF THE OPINION THAT THERE IS NO NEED FOR LEVY OF PENALTY UNDER SECTION 271(1) (C) AS NEITHER THERE I S CONCEALMENT OF INCOME NOR FURNISHING OF ANY INACCURATE PARTICUL ARS. ITA NO. 4409/M/10 TARUL V. PATEL 4 RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINA TE BENCHES,WE HOLD THAT THE AO ERRED IN LEVYING AND THE CIT(A) IN CONFIRMING THE PENALTY. 2. IN THE CASE OF SANTOSH NARAIN KAPOOR V. DCIT,(SUPR A), THE LUCKNOW BENCH OF TRIBUNAL HELD AS UNDER:- IN THE INSTANT CASE, THERE WAS NO INVESTIGATION OF THE ASSESSEE BY THE INVESTIGATION WING OF THE DEPARTMENT AND AL SO THERE WAS NO INFORMATION WITH THE AO THAT THE GIFTS/CRED ITS WERE FAKE OR BOGUS ON THE DATES WHEN THE ASSESSEE HAD SURRENDERED THE AMOUNTS VOLUNTARILY. THEREFORE, THE ONUS WAS ON THE AO TO PROVE THAT THE ASSESSEE HAD CONCEALED HIS PARTICULARS OF INCOME. HOWEVER, THE AO HAD NOT BROUGHT ANY MATERIAL ON REC ORD TO PROVE THAT THE AMOUNT IN QUESTION WAS CONCEALED INCOME O F THE ASSESSEE. THERE WAS ALSO NO MATERIAL ON RECORD TO ESTABLISH THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF HIS INCOME IN THE ORIGINAL RETURN. HENCE, THE AO HAD NO T DISCHARGED HIS BURDEN OF PROVING CONCEALMENT AND HE HAD SIMPLY RESTED HIS CONCLUSION ON THE ACT OF VOLUNTARY SURRENDER DONE B Y THE ASSESSEE IN GOOD FAITH. FURTHER, THERE WAS NO DISCUSSION IN THE ASSESSMENT ORDER OR PENALTY THAT THE ASSESSEE HAD CONCEALED THE PARTIC ULARS OF HIS INCOME AND FURNISHED WRONG STATEMENTS WITH A MALAF IDE INTENTION TO EVADE TAX OR THE EXPLANATION GIVEN BY HIM WAS NOT BONAFIDE OR FALSE. SINCE IN THE INSTANT CASE THE CONCEALMENT OF INCOME AND FURNISHING WRONG STATEMENT WERE NOT FOUND TO BE ES TABLISHED FROM THE MATERIAL ON RECORD AND FURTHER, SINCE THE SURRENDER MADE BY THE ASSESSEE WAS VOLUNTARY AND THE AO HAD FAILED TO DETECT ANY CONCEALMENT OF INCOME, THE PENALTY LE VIED BY THE AO AND CONFIRMED BY THE CIT(A) WAS NOT JUSTIFIED AND W AS LIABLE TO BE CANCELLED. 3. IN THE CASE OF DR. SAMEER KANT AGARWAL(SUPRA) , THE LUCKNOW BENCH OF TRIBUNAL HELD THAT ASSESSEE HAVING DULY DISCLOSED THE AMOUNT OF GIFT IN HIS RETURN OF BUT HAVING SURRENDERED THE SAME TO BUY PEACE WITH THE DEPARTME NT BECAUSE HE COULD NOT PROVE THE GIFTS BY SUPPORTING EVIDENCE , PENALTY UNDER 271(1)(C) COULD NOT BE LEVIED WHERE AO BROUG HT NO MATERIAL ON RECORD TO PROVE THAT ASSESSEE CONCEALE D INCOME FOR FURNISHED INACCURATE PARTICULARS OF INCOME. ITA NO. 4409/M/10 TARUL V. PATEL 5 4. IN THE CASE OF CAVINKARE (P) LTD., (SUPRA), THE CHENNAI BENCH OF TRIBUNAL HELD THAT THE AO HAS JURISDICTION TO RE OPEN THE ASSESSMENT TO ASSESS THE INCOME WHICH HAS ESCAPED ASSESSMENT EVEN WHEN A NOTICE UNDER A NOTICE UNDER S. 143(2) HAS BEEN ALREADY ISSUED AFTER SUMMARY ASSESSMENT UN DER S. 143(1). 7. TAKING INTO CONSIDERATION OF THE ENTIRE FACTS AN D CIRCUMSTANCES OF THE CASE, IN VIEW OF OUR ABOVE FINDING AND FOLLO WING THE ABOVE DECISIONS (SUPRA), WE SET ASIDE THE ORDER OF THE CI T(A) AND CANCEL THE PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT O F RS. 3,92,629/-. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF NOVEMBER, 2011. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 25 TH NOVEMBER, 2011. KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, G BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.