RASHMI M. DHANANI, MUMBAI V. ASST CIT CIR 32, MUMBAI

ITA 5429/MUM/2011

• Counselvise Citation: 542919914 RSA 2011
• Duration Of Justice: 2 year(s) 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-02-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-02-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 21-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJEEV JAIN
• Assessee Lawyers: NEELAM C JADHAV
• Keywords: Unexplained cash credit; Gift; Search and seizure
• Section: 68; 132; 143(3); 153A

Judgement Text

, MH MHMH MH INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU MK0 ,L VH ,E IKOYU BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.5429/MUM/2011, ! ! ! ! / ASSESSMENT YEAR-2001-02 RASHMI M. DHANANI 407, GATEWAY PLAZA HIRANANDANI GARDENS, POWAI, MUMBAI-400076 VS ACIT CIRCLE 32, AAYAKAR BHAVAN, GROUND FLOOR, M.K. ROAD, MUMBAI-400020 PAN:AADPD3333J ( '# / APPELLANT) ( $%'# / RESPONDENT) &' &' &' &' ( ( ( ( / ASSESSEE BY : SHRI NEELAM C. J ADHAV ) ( / REVENUE BY : SHRI SANJEEV JAIN ) )) ) '* '* '* '* / DATE OF HEARING : 17-02-2014 +,! ) '* / DATE OF PRONOUNCEMENT : 21-02-2014 , 1961 ) )) ) 254 )1( '-' '-' '-' '-' . . . . ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM : CHALLENGING THE ORDER DATED 10.05.2011 OF CIT(A)-41 , MUMBAI ASSESSEE HAS FILED FOLLOWING GROUNDS OF APPEAL. 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LEAR NED ASSESSING OFFICER HAS ERRED IN CONFIRMING THE PENALTY OF RS. 1,93,500/- WITHOUT PROPER VERIFI CATION AND COGENT REASONS. 2. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER OR AMEN D THE ABOVE GROUNDS OF APPEAL. 2. ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF INC OME ON 30.07.2001 DECLARING TOTAL INCOME OF RS. 94,580/-. THERE WAS A SEARCH AND SEIZURE ACTION U/S . 132 OF THE ACT IN RESPECT OF BANK LOCKER NO. 353 OF BANK OF BARODA, HIRANANDANI GARDEN STANDING IN THE JOINT NAME OF MAHENDRA DHANANI AND THE ASSESSEE. A NOTICE U/S. 153A WAS ISSUED ON 27.0 6.2006. ASSESSMENT WAS COMPLETED U/S 143(3) READ WITH SCTION 153A OF THE ACT BY THE ASSESSING O FFICER (AO) ON 26.12.2007 AT A TOTAL INCOME OF RS. 7,39,580/- AFTER MAKING AN ADDITION OF RS. 6 .45 LACS ON ACCOUNT OF UNEXPLAINED CASH CREDIT IN FORM OF GIFTS. 3 . DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT ASSESSEE HAD RECEIVED GIFT OF RS. 6.45 LACS FROM ASHOK PAHELWANI AND ASHOK THARWANI. HE DIRECTE D THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS OF THE GIFTS. AS PER THE AO, EXPLANATIO N FILED BY THE ASSESSEE WAS NOT ACCEPTABLE BECAUSE THE DONORS WERE NOT RELATIVES OF THE ASSESS EE, THAT ASSESSEE HAD NOT ESTABLISHED THE FACT OF EXISTENCE OF NATURAL LOVE AND AFFECTION BETWEEN HER AND THE ALLEGED DONORS. AS A RESULT, AO HELD THAT RS. 6.45 LACS WAS UNEXPLAINED CASH CREDIT OF T HE ASSESSEE. INVOKING THE PROVISIONS OF SECTION 68 OF THE ACT, HE ADDED IT TO THE TOTAL INCOME OF T HE ASSESSEE. DURING THE COURSE OF ASSESSMENT 2 ITA NOS. 5429/MUM/2011 RASHMI M. DHANANI . PROCEEDINGS, AO INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AND ISSUED A NOTICE, DATED 16.12.2007 TO THE ASSESSEE. MEANWHILE, ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA), WHO CONFIRMED THE ORDER OF THE AO. ASSESSEE AGITATED TH E MATTER BEFORE THE TRIBUNAL AND MATTER WAS DECIDED AGAINST THE ASSESSEE. ON 15.03.2010 A SHOW CAUSE NOTICE FOR PENALTY WAS ISSUED AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, AO HEL D THAT CONTENTIONS OF THE ASSESSEE WERE NOT ACCEPTABLE, THAT FAA AND TRIBUNAL HAD CONFIRMED THE ADDITION OF BOGUS GIFTS, THAT THE ASSESSEE HAD FAILED TO ESTABLISH THE CREDITWORTHINESS OF DONOR A ND GENUINENESS OF GIFT TRANSACTIONS. IN VIEW OF THE ABOVE, AO HELD THAT ASSESSEE HAD FURNISHED INAC CURATE PARTICULARS OF INCOME. HE LEVIED A PENALTY OF RS. 1.93 LACS U/S. 271(1)(C) OF THE ACT. 4 . ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA. AFTE R CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE PENALTY ORDER HE HELD THAT ASSESSEE HAD FAI LED TO PROVE THE GENUINENESS OF THE GIFT BEFORE THE AO AND THE APPELLATE AUTHORITIES, THAT SHE HAD SUBMITTED INACCURATE PARTICULARS OF INCOME, THAT THE PENALTY LEVIED BY THE AO WAS JUSTIFIED. HE DISM ISSED THE APPEAL FILED BY THE ASSESSEE. 5 .BEFORE US, AUTHORISED REPRESENTATIVE(AR) SUBMITTED THAT IN THE CASES OF HARESH A. DHANANI (ITA NO. 5880/MUM/2008- AY 2002-03 DATED 22.05.2009 ) AND ARJUN DHANANI (ITA NO. 5848 & 5849/MUM/2008-AY 2002-03 & 2003-04 DATED 31.08.2009 ), TRIBUNAL HAD DELETED THE ADDITION MADE BY THE AO, U/S. 68 OF THE ACT, THAT CONFIRMATI ON OF ADDITION BY THE TRIBUNAL DID NOT MEAN THAT PARTICULARS OF INCOME WERE CONCEALED, THAT WHE RE TWO WERE POSSIBLE VIEWS AND HENCE PENALTY SHOULD NOT HAVE BEEN LEVIED UNDER THE SIMILAR CIRCU MSTANCES. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE AO AND FAA. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL BEFORE US. WE FIND THAT IN THE CASE OF HARESH A. DHANANI AND ARJUN DHANANI, TRIBUN AL HAD DELETED THE ADDITION MADE BY THE AO ON THE SIMILAR FACTS WHEREAS IN THE CASE OF THE ASS ESSEE ADDITION MADE BY THE AO WAS CONFIRMED. CLEARLY THE TRIBUNAL HAS TAKEN TWO VIEWS ABOUT THE SIMILAR TRANSACTIONS. IN OUR OPINION PENALTY FOR CONCEALMENT CANNOT BE IMPOSED ONLY ON THE BASIS OF CONFIRMATION OF ADDITION IN THE APPELLATE PROCEEDINGS. COURTS ARE OF THE VIEW THAT IF TWO VIE WS ARE POSSIBLE ABOUT AN ISSUE PENALTY U/S. 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED IN THE C ASE UNDER CONSIDERATION GIFT RECEIVED BY HARESH A. DHANANI AND ARJUN DHANANI FROM THE DONORS HAVE BEEN HELD TO BE GENUINE BY THE TRIBUNAL AND IN THE CASE OF THE ASSESSEE HER CLAIM HAD BEEN REJECTED THOUGH IN ALL THE CASES DONORS WERE SAME. CONSIDERING THE PECULIAR FACTS AND CIRCU MSTANCES OF THE CASE UNDER CONSIDERATION, WE ARE OF THE OPINION THAT PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME IS NOT LEVIABLE. THEREFORE, REVERSING THE ORDER OF THE FAA, WE DECIDED THE GROU ND OF APPEAL IN FAVOUR OF THE ASSESSEE. AS A RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. /'0 /'0 /'0 /'0 &' &' &' &' 1 1 1 1 2 2 2 2 ) )) ) - -- - 3 3 3 3 ) )) ) ' ' ' ' 45 4545 45 . ORDER PRONOUNCED IN TH E OPEN COURT ON 21 ST FEBURARY,2014 . . ) +,! 6 7 21 QJOJH QJOJH QJOJH QJOJH , 201 4 , ) - 8 SD/- SD/- ( MK MKMK MK0 00 0 ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU ,L VH ,E IKOYU / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER 3 ITA NOS. 5429/MUM/2011 RASHMI M. DHANANI . / MUMBAI, 7 /DATE:21.02.2014. SK . . . . ) )) ) $'9 $'9 $'9 $'9 :9!' :9!' :9!' :9!' / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / '# 2. RESPONDENT / $%'# 3. THE CONCERNED CIT(A)/ ; < , 4. THE CONCERNED CIT / ; < 5. DR D BENCH, ITAT, MUMBAI / 9=- $' M MM MH HH H , . . . 6. GUARD FILE/ - / %9' %9' %9' %9' $' $'$' $' //TRUE COPY// . / BY ORDER, > / 4 DY./ASST. REGISTRAR , /ITAT, MUMBAI