Sh. Rishab Rana, Mubarakpur V. ACIT, Mohali

ITA 509/CHANDI/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81077 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 08-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Gift; Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 509/CHD/2014 ASSESSMENT YEAR : 2009-10 SH.RISHAB RANA VS. THE A.C.I.T., S/O SARJEEVAN RANA, CIRCLE 6(4), PROP. M/S SWAMY FITNESS WORLD, MOHALI. OPP. KOMFORT MARRIAGE PALACE, SWAMI DEALING POINT, PANCHKULA ROAD, MUBARAKPUR. PAN: AHPPR5767F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ANIL BATRA RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 08.12.2014 DATE OF PRONOUNCEMENT : 11.12.2014 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX (APPEAL S), CHANDIGARH DATED 3.2.2014 FOR ASSESSMENT YEAR 2009- 10, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271 ( 1) (C) OF THE INCOME TAX ACT, 1961 ( IN SHORT THE ACT). 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE CRED IT TRANSFER ENTRIES OF RS.4,18,000/- IN THE BANK ACCOUNT STATED TO BE LOAN FROM FRIENDS AND RELATIVES COULD NOT BE EXPLAINED B Y THE ASSESSEE. SO HE AGREED FOR ADDITION OF RS.4,18,00 0/-. THE ASSESSEE HAD ALSO CLAIMED TO HAVE OPENING CASH IN H AND OF 2 RS.2,25,000/- BUT THE CONTENTION OF THE ASSESSEE WA S ACCEPTED ONLY TO THE TUNE OF RS.1,25,000/-, FOR WHICH ALSO T HE ASSESSEE HAD AGREED. THUS THE TOTAL ADDITION OF RS.5,18,00 0/- WAS MADE. THE PENALTY PROCEEDINGS UNDER SECTION 271 ( 1) (C) OF THE ACT WERE ALSO INITIATED. IN THE PENALTY PROCE EDINGS THE ASSESSEE HAD FILED REPLY, WHICH WAS NOT TO THE SATI SFACTION OF THE ASSESSING OFFICER AND VIDE SEPARATE ORDER LEVIE D PENALTY OF RS.1,54,406/-. 3. THE ASSESSEE CONTENDED BEFORE THE LEARNED CIT (A PPEALS) THAT THE TRANSFER ENTRIES TOTALING RS.4,18,000/- CO ULD NOT BE EXPLAINED BY THE ASSESSEE. THEREFORE, HE AGREED F OR THE ADDITION. REGARDING ADDITION OF RS.1 LAC, IT WAS S UBMITTED THAT IT IS ESTIMATED ADDITION ON WHICH PENALTY MAY NOT BE IMPOSED. 4. THE LEARNED CIT (APPEALS) CONSIDERING THE EXPLAN ATION OF THE ASSESSEE CANCELLED THE PENALTY WITH REGARD TO T HE ADDITION OF RS.1 LAC, HOWEVER, THE PENALTY WAS CONFIRMED ON THE ADDITION OF RS.4,18,000/-. THE FINDINGS OF THE LE ARNED CIT (APPEALS) IN PARAS 5 TO 5.3 ON THIS ISSUE ARE REPRO DUCED AS UNDER : 4. I HAVE CONSIDERED THE SUBMISSION OF THE LD. COUNSEL . AS PER THE PROVISIONS OF SECTION 271(L)(C), PENALTY CAN BE LEV IED, IF THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCU RATE PARTICULARS OF SUCH INCOME. FOR THE SAKE OF READY REFERENCE, EXPLANATION-1 BELOW SECTION 271(1) IS REPRODUCED BELOW: 'EXPLANATION 1.-WHERE IN RESPECT OF ANY FACTS MATERI AL TO THE COMPUTATION OF THE TOTAL INCOME OF ANY PERSON UNDER T HIS ACT,- 3 (A) SUCH PERSON FAILS TO OFFER AN EXPLANATION OR OFFERS AN EXPLANATION WHICH IS FOUND BY THE ASSESSING OFFI CER OR THE COMMISSIONER (APPEALS) OR THE COMMISSIONER TO BE F ALSE, OR ( B) SUCH PERSON OFFERS AN EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATION IS BONAFIDE AND THAT ALL THE FACTS RELA TING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOT AL INCOME HAVE BEEN DISCLOSED BY HIM, THEN, THE AMOUNT ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OF SUCH PERSON AS A RESULT THEREOF SHALL, FOR THE PURPOSES OF CLAU SE (C) OF THIS SUB-SECTION, BE DEEMED TO REPRESENT THE INCOME IN R ESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED.' 5.1 THUS, WHEN THE ASSESSEE HAS CONCEALED PARTICULARS O F HIS INCOME OR FURNISHED INACCURATE PARTICULARS, CONDITIONS LAID D OWN IN EXPLANATION- 1(SUPRA) HAVE TO BE EXAMINED. 5.2 IN THE INSTANT CASE, THE ADDITION OF RS. 4,18,000/- WAS MADE TO THE TOTAL INCOME OF THE APPELLANT ON ACCOUNT OF DEPOSIT S RECEIVED BY BANK TRANSFER AND THROUGH CHEQUES AS UNDER: DATE CHQ. NO. AMOUNT (RS.) 10-04-2008 530396 30,000/- 17-0402008 197281 15,500/- 30-04-2008 970721 69,000/- 16-05-2008 BANK TRF. 3,500/- 20-09-2008 690655 2,00,000/- 15-11-2008 227064 1,00,000/- TOTAL 4,18,000/- 5.3 IT IS SURPRISING THAT THE APPELLANT DID NOT HAV E THE COMPLETE PARTICULARS ABOUT THE BANK ACCOUNTS/' PERSONS, FROM WHOM THE ABOVE AMOUNTS WERE RECEIVED AND ALSO THE NATURE OF TRANSA CTION AS TO WHETHER THESE WERE LOANS, GIFTS OR BUSINESS RECEIPTS. THE AP PELLANT HAD PROBABLY AGREED FOR THE ADDITION BECAUSE HE FOUND HIMSELF CO RNERED AND THE APPELLANT CANNOT ESCAPE PENALTY FOR CONCEALMENT ON THE GROUND THAT HE HAD AGREED FOR THE SAID ADDITION. AS THE APPELLANT DOES NOT HAVE ANY EXPLANATION IN RESPECT OF THE IMPUGNED DEPOSIT OF R S. 4,18,000/- AND SO THE CASE OF THE APPELLANT IS SQUARELY COVERED BY EXPLANA TION-1 (A) BELOW SECTION 271(1) OF THE ACT. THEREFORE, THE PENALTY FOR CONCEAL MENT LEVIED ON THE ADDITION OF RS. 4,18,000/- IS CONFIRMED. 4 5. THE ASSESSEE IS IN APPEAL CHALLENGING THE LEVY O F PENALTY ON THE ADDITION OF RS.4,18,000/- ON ACCOUNT OF UNEX PLAINED BANK DEPOSITS. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GON E THROUGH THE FINDINGS OF THE AUTHORITIES BELOW. IT IS ADMITTED FACT THAT THE ASSESSEE COULD NOT EXPLAIN THE CREDIT ENTRIES OF RS.4,18,000/- IN THE BANK ACCOUNT BEFORE THE AUTHOR ITIES BELOW. THEREFORE, THE ASSESSEE AGREED FOR THE ADD ITION OF RS.4,18,000/-. THESE ENTRIES, ACCORDING TO THE LE ARNED COUNSEL FOR THE ASSESSEE, ARE ENTRIES BY TRANSFER A ND WHEN THE ASSESSEE HIMSELF IS NOT ABLE TO EXPLAIN THE TRANSFE R ENTRIES, IT WOULD PROVE THAT THE ASSESSEE HAS FAILED TO OFFER A NY EXPLANATION TO SUBSTANTIATE THE BANK DEPOSITS IN HI S BANK ACCOUNT AND AS SUCH, THESE WERE UNEXPLAINED ENTRIES IN THE BANK ACCOUNT OF THE ASSESSEE. MERELY BECAUSE THE ASSESSEE AGREED FOR ADDITION HAS NO GROUND TO ABSOLVE THE AS SESSEE FROM LEVY OF PENALTY. THE CONCEPT OF VOLUNTARY SU RRENDER IS NO MORE APPLICABLE AND PENALTY IS LEVIABLE. WE RE LY UPON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE O F MAK DATA PVT. LTD. VS. CIT, 358 ITR 593 (SC). IT IS ADMITTED FACT THAT THE ASSESSEE FAILED TO EXPLAIN THE BANK ENTRIE S AND ALSO FAILED TO OFFER ANY EXPLANATION AT THE PENALTY STAG E. THEREFORE, EXPLANATION-1 TO SECTION 271 (1) (C) OF THE ACT IS CLEARLY APPLICABLE IN THE CASE OF THE ASSESSEE. TH US THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SECTION 271 (1) (C) OF THE ACT. THE LEARNED CIT ( APPEALS) WAS, 5 THEREFORE, JUSTIFIED IN CONFIRMING THE ADDITION TO THE EXTENT OF ADDITION MADE OF RS.4,18,000/- ON ACCOUNT OF UNEXPL AINED BANK DEPOSITS. THE APPEAL OF THE ASSESSEE HAS NO MERIT AND IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF DECEMBER, 2014. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 11 TH DECEMBER, 2014 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH