ITO, CHITTORGARH V. Smt. Usha Kanwar Shaktawat, CHITTORGARH

ITA 455/JODH/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 70149 (ITAT-JODHPUR)
• Duration Of Justice: 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 08-07-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SACHIN CHAUDHARY
• Keywords: Gift; Depreciation; Income from undisclosed sources; Source of fund; Difference of opinion
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. I.T.A. NO. 455/JODH/2012 ASSESSMENT YEARS:2005-06 THE INCOME-TAX OFFICER VS SMT. USHA KANWAR SHAKTAWAT WARD-3, KILA ROAD, W/O SHRI DIGVIJAY S INGH, CHITTORGARH. VILLAGE- OCHARI, CHITTORGARH. PAN NO. BJFPS2863A [APPELLANT] [RESPONDENT] DEPARTMENT BY : SHRI MAHESH KUMAR (D.R.) ASSESSEE BY : SHRI SACHIN CHAUDHARY. DATE OF HEARING : 08/07/2013. DATE OF PRONOUNCEMENT : 06/08/2013 O R D E R PER N.K. SAINI, A.M. : THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE OR DER DATED 23/10/2012 OF LD. CIT(A), UDAIPUR. THE ONLY GROUND RAISED IN THIS APPEAL IS AS UNDER: ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) HAS ERRED IN DELETING THE PENALTY OF RS. 3,95,688/- IMPOSED U/S 271(1)(C) OF THE I.T. ACT. 2. FACTS OF THE CASE IN BRIEF, ARE THAT THE ASSESSE E FILED RETURN FOR THE FIRST TIME DECLARING AN INCOME OF RS. 1,02,250/- ON 27/2/ 2007. THE ASSESSING 2 OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN OPENIN G CAPITAL OF RS. 15,81,350/- AND NO RETURN WAS FILED FOR EARLIER YEA RS. THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961 (H EREINAFTER TO BE REFERRED AS THE ACT) ON 27/12/2007 AT AN INCOME OF RS. 12,70 ,044/- BY MAKING AN ADDITION OF RS. 11,14,792/-. AGAINST THE SAID ADDIT ION, THE ASSESSEE PREFERRED APPEAL TO THE LEARNED CIT(A), WHO DELETED THE ADDIT ION MADE BY THE ASSESSING OFFICER BY PLACING RELIANCE ON THE DECISI ON OF THE HON'BLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. ROOPCHA ND NAWALCHAND GANDHI (2008) 1 DTR (RAJ.), 464. AGAINST THE SAID ORDER OF THE LEARNED CIT(A), THE DEPARTMENT PREFERRED AN APPEAL TO THE ITAT WHEREIN VIDE ORDER DATED 16 TH DECEMBER, 2009, THE ADDITION TO THE EXTENT OF RS. 7 ,83,982/- WAS SUSTAINED. AFTER THE DECISION OF THE ITAT, THE ASSESSING OFFIC ER ISSUED A REMINDER TO THE PENALTY SHOW CAUSE NOTICE U/S 271(1)(C) AND REQUIRE D THE ASSESSEE TO FILE HER REPLY. 3. IN RESPONSE, THE ASSESSEE SUBMITTED THAT THE OPE NING BALANCE SHOWN IN THE CAPITAL ACCOUNT WAS RELATED TO THE EARLIER Y EARS AND THE DETAIL OF ACCOUNTS OF THE EARLIER YEARS HAD ALREADY BEEN FILE D. IT WAS FURTHER STATED THAT THE ITAT HAD PARTLY ACCEPTED THE OPENING BALANCE AN D DUE TO DIFFERENCE OF OPINION OF BALANCE AMOUNT OF OPENING CAPITAL HAD NO T BEEN ACCEPTED, THEREFORE, IT WAS A DEBATABLE ISSUE AND PENALTY COU LD NOT HAVE BEEN LEVIED. IT WAS ALSO STATED THAT THE ADDITION WAS MADE IN THE A SSESSMENT ORDER ON 3 ESTIMATE BASIS AND NO PENALTY U/S 271(1)(C) WOULD H AVE BEEN IMPOSED ON ESTIMATED ADDITION AND THAT THE ASSESSEE NEVER ADMI TTED THE INCOME ADDED WAS HER CONCEALED INCOME. RELIANCE WAS PLACED ON TH E JUDGMENT OF THE HON'BLE BOMBAY HIGH COURT REPORTED AT (2008) 218 CT R (BOMBAY) 581. HOWEVER, THE ASSESSING OFFICER DID NOT FIND MERIT I N THE SUBMISSION OF THE ASSESSEE BY STATING THAT THE ASSESSEE HAS MADE INVE STMENT OF RS. 7,83,792/- FROM OUT OF BOOKS AND UNDISCLOSED SOURCES OF INCOME AND CONCEALED PARTICULARS OF INCOME TO THAT EXTENT. HE, THEREFORE , LEVIED THE PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.3,95,688/- BEI NG 150% OF THE TAX SOUGHT TO BE EVADED. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LEARNED CIT(A) AND REITERATED THE SUBMISSIONS MADE BEFORE THE ASSE SSING OFFICER. THE LEARNED CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE WAS IN HOTEL BUSINESS BEFORE THE FINANCIAL YEAR 1998-99 AND AS PER DETAILS FILED, HAD SHOWN OPENING BALANCE OF RS. 8,04,800/- FOR THE ASSESSMENT YEAR 1999-2000 AND THEREAFTER THE CAPITA L HAD BEEN INCREASED DUE TO NET PROFIT AND VARIOUS GIFTS CLAIMED TO HAVE BEEN RECEIVED ON VARIOUS OCCASIONS, WHICH RESULTED IN SHOWING THE OPENING BA LANCE AT RS. 15,81,350/-. THE LEARNED CIT(A() POINTED OUT THAT THE ASSESSING OFFICER ADMITTED AT THE TIME OF ASSESSMENT THAT THE ASSESSEE HAD FILED AFFI DAVITS FROM THE DONORS OF THE GIFTS AND ACCEPTED THE CLAIM OF THE ASSESSEE OF HAVING RECEIVED THE GIFTS 4 AND SAVING FROM EARLIER YEARS. THE LEARNED CIT(A) O BSERVED THAT THE ASSESSING OFFICER ESTIMATED THE POSSIBLE SAVING AT RS. 4,66,478/- AND ACCORDINGLY, TREATED THE BALANCE AMOUNT OF OPENING CAPITAL AMOUNTED TO RS. 11,14,794/- AS UNDISCLOSED INCOME, WHICH WAS DELETE D BY THE THEN LEARNED CIT(A) AT THE FIRST APPELLATE STAGE AND LATER ON, T HE ITAT ON APPEAL OF THE DEPARTMENT, ESTIMATED THE POSSIBLE SAVINGS AT RS. 7 ,83,792/-. ON THE BASIS OF THE ABOVE FACTS, THE LEARNED CIT(A) WAS OF THE VIEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER AS WELL AS CONFIRMED BY THE I TAT WAS ONLY ON ESTIMATE BASIS AND THAT THE ASSESSING OFFICER LEVIED THE PEN ALTY PURELY RELYING ON THE CONFIRMATION OF THE ESTIMATED ADDITION OUT OF THE O PENING BALANCE BY THE ITAT. THE LEARNED CIT(A) OBSERVED THAT THE ASSESSMENT PRO CEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT AND SEPARATE PROCEEDING S, SO THOSE ARE REQUIRED TO BE CONSIDERED INDEPENDENTLY AND THAT A MERE CONFIRMATION OF AN ADDITION BY APPELLATE AUTHORITY WAS NOT SUFFICIENT FOR IMPOSITION OF THE PENALTY. RELIANCE WAS PLACED ON THE DECISION DATED 23/08/201 2 OF THE ITAT, KOCHIN BENCH IN THE CASE OF PARISON EXPORTS INC. VS. THE ACIT IN APPEAL NO. 174/2012 AND ALSO ON THE DECISION DATED 13/07/2012 OF THE ITAT DELHI BENCH IN THE CASE OF GLOBAL GREEN COMPANY LIMITED VS. DCI T IN APPEAL NO. 419/2012. 5. THE LEARNED CIT(A) FURTHER OBSERVED THAT THE AS SESSING OFFICER HAD NOT BROUGHT ANY MATERIAL EVIDENCE ON RECORD TO SUGG EST THAT PART OF OPENING 5 BALANCE AS CONFIRMED BY THE ITAT ON ESTIMATE BASIS WAS CONCEALED INCOME OF THE ASSESSEE AND THERE WAS NO OBSERVATION IN THE PENALTY ORDER THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN HER RETURN WAS FOUND TO BE INCORRECT OR ERRONEOUS OR FRIVOLOUS AND THE ADDITION MADE OUT OF OPENING BALANCE SHOWN IN THE YEAR UNDER CONSIDERATION WAS ONLY DUE TO DIF FERENCE OF OPINION, THERE WAS NO SPECIFIC EVIDENCE BROUGHT ON RECORD THAT THE ASSESSEE HAD INTRODUCED HER CONCEALED INCOME AS OPENING BALANCE OF THE YEAR UNDER CONSIDERATION PARTICULARLY IN THE VIEW OF THE FACT THAT THE ASSES SEE WAS IN HOTEL BUSINESS FROM THE YEAR 1985. THE LEARNED CIT(A) REFERRED TO THE DECISION OF THE ITAT, AHMEDABAD C BENCH IN THE CASE OF EAGLE SYNTHETICS (P) LTD. VS. ITO (2011) 8 ITR (TRIB) 211 (AHD.) WHEREIN IT WAS HELD AS UNDER:- CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY ASSESSING OFFICER U/ 271(1)(C) ON ACCOUNT OF ADDITION MADE IN THE INCOME DUE TO DISALLOWANCE OF DEPRECIATION, DISALLOWANCE OF BROKE RAGE EXPENSES AND ADDITION ON ACCOUNT OF GROSS PROFIT AS PENALTY PROC EEDINGS AND THE ASSESSMENT PROCEEDINGS BOTH ARE DIFFERENT; SINCE AS SESSEE HAS DULY SUBMITTED THE EXPLANATION AND NO COGENT MATERIAL OR EVIDENCE WAS BROUGHT WHICH MAY PROVE THAT THE REVENUE HAS DETECT ED THE CONCEALMENT OR THE EXPLANATION SUBMITTED BY THE ASS ESSEE WAS FALSE ONE, THE A.O. IS DIRECTED TO DELETE THE PENALTY. 6. THE LEARNED CIT(A) HELD THAT THERE WAS NO CASE FOR IMPOSITION OF PENALTY U/S 271(1)(C)OF THE ACT IN CASE OF THE ASSE SSEE AS THE PENALTY IMPOSED BY THE ASSESSING OFFICER WAS PURELY BASED O N CONFIRMATION OF PART OF DISALLOWANCE OF OPENING CAPITAL. ACCORDINGLY, PENAL TY LEVIED BY THE ASSESSING OFFICER WAS DELETED. NOW THE DEPARTMENT IS APPEAL. 6 7. THE LEARNED D.R. SUPPORTED THE ORDER OF THE ASSE SSING OFFICER AND FURTHER SUBMITTED THAT PART OF THE ADDITION MADE BY THE ASSESSING OFFICER WAS SUSTAINED BY THE ITAT, THEREFORE, THE PENALTY U/S 2 71(1)(C) WAS RIGHTLY LEVIED AND THE LEARNED CIT(A) WAS NOT JUSTIFIED IN DELETIN G THE SAME. 8. IN HIS RIVAL SUBMISSIONS, THE LEARNED COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORIT IES BELOW AND FURTHER SUBMITTED THAT AS THE ADDITION MADE BY THE ASSESSIN G OFFICER AND SUSTAINED BY THE I.T.A.T. IN THE OPENING CAPITAL BALANCE OF T HE ASSESSEE WAS PURELY ON ESTIMATE BASIS. SO IT WAS NOT A CONCEALED INCOME OF THE ASSESSEE, THEREFORE, PENALTY WAS RIGHTLY DELETED BY THE LEARNED CIT(A). RELIANCE WAS PLACED ON THE FOLLOWING CASES. 1. CIT VS. RELIANCE PETRPRODUCTS (P) LTD., 322 ITR 158. 2. SREE KRISHNA ELECTRICALS VS. STATE OF TAMIL NAD U & AMP; ANR. (2009) 23 VT 249 (SC). 3. HARIGOPAL SINGH VS. CIT, 258 ITR 85 (P&H). 4. ITO VS. BALOTRA CO-OPT. MARKETING SOCIETY LTD. I N I.T.A. NO. 11 & 12/JODH/2012 FOR A.Y. 2003-04 AND 2006-07, ORDER DA TED 12.10.2012. 9. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN T HE PRESENT CASE, IT IS AN ADMITTED FACT THAT THE ADDITION IN THE ORIGINAL ASS ESSMENT WAS MADE BY THE ASSESSING OFFICER BY DOUBTING THE OPENING BALANCE O F THE ASSESSEE, THE SAID ADDITION WAS DELETED BY THE LEARNED CIT(A) AND ON T HE APPEAL OF THE 7 DEPARTMENT, PART OF THE ADDITION WAS SUSTAINED BY T HE ITAT, WHICH SHOWS THAT THERE WERE DIFFERENCE OF OPINION RELATING TO THE AM OUNT OF OPENING CAPITAL BALANCE SHOWN BY THE ASSESSEE. IT IS ALSO THE ADMIT TED FACT THAT THE OPENING CAPITAL BALANCE SHOWN BY THE ASSESSEE WAS RELATED T O THE EARLIER YEARS AND NOT TO THE YEAR UNDER CONSIDERATION. AS THE ADDITIO N MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE ITAT IS ONLY ON ESTIM ATE BASIS, SO IT IS NOT SUFFICIENT FOR LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT. A SIMILAR ISSUE HAS BEEN ADJUDICATED BY THIS BENCH OF THE TRIBUNAL VIDE ORDER DATED 12/10/2012 IN THE CASE OF THE ITO VS. BALOTRA COOPERATIVE MARKE TING SOCIETY LTD. IN I.T.A. NO. 11 AND 12/JODH/2012 (SUPRA) WHEREIN, THE RELEVA NT FINDINGS HAS BEEN GIVEN IN PARAS 2.7 TO 2.9, WHICH READ AS UNDER:- 2.7 THE LD. DR STRONGLY SUPPORTED THE ORDER OF TH E ASSESSING OFFICER WHILE THE LD. COUNSEL FOR THE ASSESSEE REITERATED T HE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND STRONGLY SUPP ORTED THE IMPUGNED ORDER PASSED BY THE LD. CIT(A). 2.8 WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND GONE THROUGH THE MATERIALS AVAILABLE ON RECORD. IN THE PRESENT CASE, IT APPEARS THAT THE ASSESSING OFFICER DID NOT ALLOW THE CLAIM OF THE ASSESSEE U/S 80P(2)(E) MADE THE DISALL OWANCE. HOWEVER, IT CANNOT BE SAID THAT THE ASSESSEE DID NO T DISCLOSE ALL THE PARTICULARS TRULY BECAUSE THE CLAIM OF DEDUCTIO N U/S 80P(2)(E) WAS MADE IN THE RETURNED INCOME. THE ASSESSING OFFI CER DID NOT ACCEPT THE CLAIM OF THE ASSESSEE AND THAT CAN BE A GROUND FOR MAKING THE ADDITION BUT NOT FOR LEVYING THE PENALTY U/S 271(1)( C) OF THE ACT. IN THIS REGARD, THE HON'BLE SUPREME COU RT IN THE CASE OF CIT VS RELIANCE PETRO PRODUCTS (P) LTD. , 322 IT R158 HAS HELD AS UNDER:- 8 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) O F THE INCOME-TAX ACT, 1961, SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURN ISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING O F THE WORD 'PARTICULARS' USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN TH E RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE C ANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORD ER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY CO VERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAM OUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY TH E ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSE E CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN THE RETURN MUST NO T BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM, WHICH IS NOT S USTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. 2.9 WE, THEREFORE, BY KEEPING IN VIEW THE RAT IO L AID DOWN BY THE HON'BLE SUPREME COURT IN THE AFORESAID CASE, ARE OF THE VIEW THAT THE LD. CIT(A) WAS FULLY JUSTIFIED IN DELETING THE PENALTY LEVIED U/S 271(1) ( C) OF THE ACT BY THE ASSESSING OFFICER BECAUSE IN THE PRESENT CASE ALSO ALL THE INFORMATION WERE GIVEN BY THE ASSESSEE IN THE RETURN OF INCOME, SO THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONC EALMENT OF INCOME. 9 10. SO RESPECTFULLY FOLLOWING THE AFORESAID REFERRE D TO ORDER DATED 12/10/2012 OF THIS BENCH OF THE TRIBUNAL, WE DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER PASSED BY THE LEARNED CIT(A). ACCORD INGLY, THERE IS NO MERIT IN THE APPEAL OF THE DEPARTMENT. 11. IN THE RESULT, THE APPEAL OF THE DEPARTMENT IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 06/08/2013) . SD/- SD/- (HARI OM MARATHA) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTA NT MEMBER DATED: 06/08/2013 *RANJAN COPY TO : 1. THE APPELLANT- THE INCOME-TAX OFFICER, WARD-3, C HITTORGARH. 2. THE RESPONDENT- SMT. USHA KANWAR SHAKTAWAT, CHIT TORGARH. 3. THE CIT 4. THE CIT(A) 5. THE DR 6. THE GUARD FILE I.T.A. NO.455/JODH/2012. ASSISTANT REGISTRAR