The ITO, Ward-1, Anand V. Shri Hareshchandra Mohanlal Bijilani, Anand

ITA 531/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6311 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 22-06-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 19-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Assessee Lawyers: S N DIVETIA
• Keywords: Gift; Set aside
• Section: 271(1)(c)

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE S/SHRI M.K. SHRAWAT, JM AND D.C.AGRAWAL, AM INCOME-TAX OFFICER, WARD-1, ANAND. VS. SHRI HARESHCHANDRA MOHANLAL BIJLANI, PROP. H.M. CONSULTANCY, 2/C, CHITRAGNA FLATS, NR. MOTIKAKA CHALI, ANAND. (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI B. L. YADAV, DR RESPONDENT BY:- SHRI S. N. DIVETIA, AR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THIS IS AN APPEAL FILED BY THE REVENUE RAISING FOL LOWING GROUND :- (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN DELETING THE PENALTY LEVIED U/S 271(1)(C) OF RS.2,51,685/- OVERLOOKING THE RATIO LAID DOWN BY TH E APEX COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSIONS 306 I TR 277 (SC) WHEREIN IT WAS LAID DOWN THAT PENALTY U/S 271( 1)(C) WAS CIVIL WRONG & MENS REA IS NOT REQUIRED TO BE ESTABL ISHED. 2. THE AO HAD IN THIS CASE IMPOSED THE PENALTY OF R S.2,51,684/- U/S 271(1)(C) IN RESPECT OF ADDITION OF RS.7,99,000/- M ADE BY HIM U/S 68. THIS WAS IN RESPECT OF GIFT BY THE ASSESSEE FROM SHRI SA NJAY PATEL, HIS FRIEND. THE AO HAD REQUIRED THE ASSESSEE TO FILE THE DETAIL S OF GIFT SUCH AS ADDRESS ITA NO.531/AHD/2009 ASST. YEAR -2003-04 ITA NO.531/AHD/2009 ASST. YEAR 2003-04 2 OF THE DONOR, COPY OF DECLARATION OF GIFT, COPY OF PASS-PORT OF THE DONOR, DETAILS OF CHEQUE AND BANK AND PROOF OF MONEY HAVIN G BEEN TRANSFERRED FROM NRE ACCOUNT OF SHRI SANJAY PATEL. ON THE BASIS OF REPLY SUBMITTED BY THE ASSESSEE THE AO FOUND THAT THERE IS NOTHING TO PROVE THE GENUINENESS OF THE GIFT. THE ASSESSEE HAD FAILED TO FILE CORRESPONDENCE BETWEEN THE DONOR AND THE ASSESSEE OR COPY OF PASS- PORT INDICATING DONORS PRESENCE IN INDIA DURING THE PERIOD WHEN GI FT DEED WAS MADE. HE ACCORDINGLY MADE THE ADDITION U/S 68. IN PENALTY PR OCEEDINGS THE AO RELIED ON HIS FINDING GIVEN IN ASSESSMENT PROCEEDIN GS AND LEVIED THE IMPUGNED PENALTY. 3. THE LD. CIT(A) CANCELLED THE PENALTY ON THE GROU ND THAT AO HAD NOT GIVEN SUFFICIENT REASONS TO MAKE THE ADDITIONS. THERE WAS NOTHING TO SUGGEST THAT THE GIFT AMOUNT OF RS.7,99,000/- REPRE SENTED ASSESSEES CONCEALED INCOME OR THAT IT WAS A MONEY LAUNDERING TRANSACTION. HE HELD THAT FOR GIFT, LOVE OR AFFECTIONS OR BLOOD RELATION IS NOT REQUIRED. HE FINALLY CANCELLED THE PENALTY. 4. WE HAVE HEARD THE PARTIES. THE LD. AR FOR THE AS SESSEE AT THE OUTSET SUBMITTED THAT THE ISSUE REGARDING GENUINENESS OF T HE GIFT HAS BEEN RESTORED TO THE FILE OF AO BY THE TRIBUNAL IN ITA N O.2750/AHD/2007 ASST. YEAR 2003-04 VIDE PARA 6 THEREON AS UNDER :- ITA NO.531/AHD/2009 ASST. YEAR 2003-04 3 6. HAVING HEARD THE RIVAL CONTENTIONS AND GOING TH ROUGH THE FACTS OF THE CASE, WE FEEL THAT THERE IS NO DOUBT ABOUT THE IDENTITY AND CAPACITY OF DONOR SHRI SANJAY PATEL BUT THE GENUINENESS OF TRAN SACTION IS NOT PROVED AND NEXUS IN THE TRANSACTION IS NOT ESTABLISHED BY FILING DOCUMENTARY EVIDENCE THAT THIS MONEY HAS TRAVELED FROM USA. EVE N NOW BEFORE US THE ASSESSEE HAS NOT ADDUCED ANY EVIDENCE AND THE ASSES SING OFFICER HAS RECORDED A FINDING, WHICH READS AS UNDER:- WHILE EXAMINING THE SAME IT IS NOTICED THAT THE DO NATION WAS MADE BY ONE NRI, VIZ. SANJAY PATEL, USA, THROUGH AN NRE ACCOUNT HELD BY H IM IN INDIAN BANK, NADIAD BRANCH. AS THE EXPLANATION SUBMITTED BY THE ASSESSE E WAS NOT TO THE SATISFACTION, THE INFORMATION WAS COLLECTED U/S.133(6) OF THE ACT, FR OM THE BRANCH MANAGER, INDIAN BANK, NADIAD. THE BANK HAS REPLIED VIDE LETTER DATE D 05/12/2005 STATING THAT ON DATED 07/03/03 THEY HAVE PURCHASED A CHEQUES BEARING NO.4 46800 DATED6/3/05 DRAWN ON ICICI BANK, AHMEDABAD FOR RS.806140/- AND AFTER DED UCING THEIR CHARGES THEY HAVE CREDITED RS.7,99,000/- TO THE BENEFICIARY ACCOUNT. THE CHEQUES WAS SENT TO THEIR SERVICE BRANCH, AHMEDABAD FOR COLLECTION AND THE SA ME WAS REALIZED ON 17.03.2003. ALONGWITH THE REPLY THEY HAVE ALSO PLACED ON RECORD A COPY OF THE NRERSB ACCOUNT NO.16039 OF MR. SANJAY PATEL, USA, FOR THE MONTH OF MARCH, 2003. ACCORDINGLY, TO INVESTIGATE THIS FACT THAT THIS CH EQUE CAME FROM USA, WHICH WAS PURCHASED BY INDIAN BANK, NADIAD, AND SAM E WAS DRAWN ON ICICI BANK AHMEDABAD. THE ASSESSEE HAS TO LEAD EVI DENCE TO THAT EFFECT AND ACCORDINGLY, THIS ISSUE IS SET ASIDE TO THE FIL E OF AO FOR LIMITED PURPOSE. ACCORDINGLY, FOR LIMITED PURPOSE THIS ISSU E IS SET ASIDE TO THE FILE OF AO AND ALLOWED FOR STATISTICAL PURPOSE. HE SUBMITTED THAT ONCE THE ADDITION DID NOT SURVIVE , PENALTY COULD NOT BE LEVIED. WE AGREE WITH THIS CONTENTION OF THE LD. AR . THE PROPOSITION THAT NO PENALTY UNDER SECTION 271(1)(C) CAN BE LEVIED IF QUANTUM IN RESPECT OF WHICH LEVY OF PENALTY IS PROPOSED, IS DELETED, HAS BEEN HELD BY SEVERAL AUTHORITIES SUCH AS ADDL. CIT VS. BADRI PRASAD KASH I PRASAD (1993) 200 ITR 206 (ALL), PRABHAT OIL TRADERS VS. ITO (1996) 2 18 ITR (AT) 39 ITA NO.531/AHD/2009 ASST. YEAR 2003-04 4 ITAT (AHD), CITY DRY FISH CO. VS. CIT (1999) 238 IT R 63 (A.P.), CIT VS. MD. BUX SAUKAT ALI (2004) 265 ITR 326 (RAJ) AND CIT VS. SHISHPAL (2002) 255 ITR 187 (RAJ). 5. IN VIEW OF THIS, WE UPHOLD THE CANCELLATION OF P ENALTY. THE AO IS FREE TO INITIATE FRESH PENALTY PROCEEDINGS IN THE A SSESSMENT HE PASSES AS A CONSEQUENCE TO TRIBUNALS ORDER REFERRED TO ABOVE. AS A RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 6. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER WAS PRONOUNCED IN OPEN COURT ON 24/6/11. SD/- SD/- (M. K. SHRAWAT) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED :24/6/11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD ITA NO.531/AHD/2009 ASST. YEAR 2003-04 5 1.DATE OF DICTATION 22/6/11. 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING MEMBER 22/6/11. /OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..