Smt. Daljit Kaur Bains, Chandigarh V. ITO, Chandigarh

ITA 546/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63995 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-10-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 23-05-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Gift; Corroborative evidences; Onus to prove

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.546 /CHD/2011 (ASSESSMENT YEAR: 2005-06) SMT.DALJIT KAUR BAINS, VS. THE INCOME TAX OFFIC ER, C/O SH.HARRY RIKHY ADVOCATE, WARD 4(1), HOUSE NO.1573, SECTOR 18-D, CHANDIGARH. CHANDIGARH. PAN: ACZPB9910F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARRY RIKHY RESPONDENT BY : SHRI AKHILESH GUPTA, DR DATE OF HEARING : 17.10.2012 DATE OF PRONOUNCEMENT : 30.10.2012 O R D E R PER SUSHMA CHOWLA, J.M. : THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER O F THE COMMISSIONER OF INCOME TAX (APPEALS), CHANDIGARH DA TED 21.3.2011 RELATING TO ASSESSMENT YEAR 2005-06 AGAINST THE PEN ALTY LEVIED U/S 271(1)(C) OF INCOME TAX ACT, 1961 (IN SHORT THE AC T). 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X (APPEALS) IS DEFECTIVE BOTH IN LAW AND ON FACTS OF THE CASE. 2. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I S UNJUSTIFIED IN UPHOLDING THE PENALTY OF RS. 47,12,914/- U/S 271(L) (C) OF THE INCOME TAX ACT, 1961 AS THERE IS NEITHER ANY CONCEALMENT O F INCOME NOR ANY FURNISHING OF INACCURATE PARTICULARS OF INCOME. THIS PENALTY IS UNCALLED FOR AND DESERVES TO BE DELETED. 3. THAT ANY OTHER GROUND MAY BE KINDLY BE ALLOWED TO B E TAKEN AT THE TIME OF APPEAL WITH DUE PERMISSION. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST THE PENALTY IMPOSED U/S 271(1)(C) OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THERE WERE DEPOSITS TOTALING RS.1,41,33,000/- IN S.B.ACCOUNT NO.4134 AND RS.58,4 6,543/- IN S.B. ACCOUNT NO.7957 OF PUNJAB & SIND BANK, SECTOR 15, C HANDIGARH. THE EXPLANATION FURNISHED BY THE ASSESSEE IN RELATION T O THE SAID DEPOSITS WAS ACCEPTED BY THE ASSESSING OFFICER TO THE TUNE OF RS .29,79,543/-. FURTHER THE ASSESSEE HAD FAILED TO EXPLAIN SOURCE OF PAYMEN T OF RS.23,60,000/- AND RS.12,40,000/- TO ESTATE OFFICER, CHANDIGARH. HENCE ADDITION OF RS.1,70,00,000/- WAS MADE AS INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH CREDITS. THE CIT (APPEALS) GAVE R ELIEF OF RS.33,07,000/-. THE TRIBUNAL IN ITA NO.15/CHD/2009 IN I.T.O., WARD 4(1), CHANDIGARH VS. SMT.DALJIT KAUR BAINS, CHANDIG ARH AND IN ITA NO.16/CHD/2009 SMT.DALJIT KAUR BAINS, CHANDIGARH VS . I.T.O., CHANDIGARH VIDE ORDER DATED 10.7.2012 CONFIRMED THE ADDITION UPHELD BY THE CIT (APPEALS). DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE FURNISHED THE REPLY WHICH IS INCORPORATED AT PAGES 2 AND 3 OF THE PENALTY ORDER. THE CLAIM OF THE ASSESSEE WAS T HAT THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE TRANSACTION STAND PROVED AND PENALTY PROCEEDINGS INITIATED IN THE CASE U/S 271(1 )(C) OF THE ACT MAY BE DROPPED. THE ASSESSING OFFICER REJECTING THE EXPLA NATION OF THE ASSESSEE HELD THE ASSESSEE TO HAVE CONCEALED INCOME AND LEVI ED PENALTY OF RS.47,12,914/-. 5. THE CIT (APPEALS) CONFIRMED THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF C IT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE VEHEMENTLY PLACED REL IANCE ON THE EXPLANATION FILED BEFORE THE AUTHORITIES BELOW WHIC H ARE INCORPORATED IN THE ORDER OF THE CIT (APPEALS). 3 7. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDER OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD MADE DEPOSITS IN TWO SAVING ACCOUNTS WITH PUNJA B & SIND BANK, SECTOR 15, CHANDIGARH TOTALING RS.1,41,33,000/- AND RS.58,46,543/-. THE EXPLANATION OF THE ASSESSEE BEFORE THE ASSESSING OF FICER DURING THE ASSESSMENT PROCEEDINGS AS NOTED BY THE ASSESSING OF FICER IN THE PENALTY ORDER ARE AS UNDER: 'DURING THE COURSE OF SCRUTINY ASSESSMENT, IT WAS N OTICED THAT THE ASSESSEE HAD SHOWN DEPOSITS IN BANK ACCOUNTS OF RS. 1,41,33,000/- IN S.B. ACCOUNT NO.4134 AND RS. 58.46.543/- IN S.B. ACCOUNT NO. 7957 OF PUNJAB AND SIND BANK, SECTOR-15, CHANDIGARH. THE EXPLANATI ON GIVEN BY THE ASSESSEE AT THE TIME OF ASSTT. WERE ACCEPTED TO THE EXTENT OF RS. 29,79,543/- ONLY AS FOR THE BALANCE. WHEN ASKED ABOUT THE SOURCES OF THESE CREDIT ENTRIE S, THE ASSESSEE AT THE TIME OF ASSTT. FILED COPY OF TRANSFER CHEQUE FROM ABROAD FOR AROUND RS. 67,50,555/-(I.E. $ 1.50.000). THE ASSESSEE FURTHER STATED TO HAVE SOLD HOUSE FOR RS. 46,00,OOO/- WHEREAS SHE COULD FILE RE GISTRY FOR RS. 28,00,000/- ONLY. THE ASSESSEE HAD ALSO FILED A BAN K ACCOUNT IN THE NAME OF HER BROTHER SHOWING CREDIT ENTRIES OF RS. 51,00, OO O/-. THE ASSESSEE ALSO STATED TO HAVE HAVING TWO APARTMENTS IN U.K. FETCHI NG MONTHLY RENT OF RS. 1,50,OOO/- HER SISTER RUNNING RESTAURANT IN AMERICA WHO HAD REPORTED TO HAVE SENT HER RS. 67,50, OOO/-. THE ASSESSEE HAD MADE PAYMENT OF RS.23,60,000/- AND RS. 12,40,000/- TO ESTATE OFFICER, CHANDIGARH IN HER NA ME, THE ASSESSEE COULD NOT GIVE SUPPORTING EVIDENCE OF HER SOURCES OF INCO ME IN ABROAD, NOR PROVE THE CREDITWORTHINESS OF THE PERSON WHO REPORTED TO HAVE SENT HER RS. 67,50, OOO/-. IT WAS, THEREFORE, HELD THAT THE ASSESSEE FA ILED TO DISCHARGE HER ONUS TO PROVE THE SAME AND GENUINENESS OF TRANSFER OF CR EDIT ENTRIES IN HER ACCOUNT. ACCORDINGLY AN ADDITION OF RS. 70,00, 000/ - WAS MADE TOWARDS HER TAXABLE INCOME AS UNEXPLAINED CASH CRED ITS PENALTY PROCEEDINGS U/S 271(L)(C) WERE INITIATED BY ISSUING NOTICE U/S (L)(C) DATED 31-12-2007. AGAINST THIS ORDER OF THE A.O., THE ASSESSEE WENT I N APPEAL BEFORE THE LD. C.I.T.(APPEALS) CHANDIGARH WHO VIDE HIS ORD ER DATED 12-11-2008 PASSED IN APPEAL NO.383/P/07-08 GAVE A RELIEF OF RS .30,07,000/-, AGAINST WHICH THE DEPARTMENT IS IN APPEAL BEFORE ITAT. 9. THE SAID EXPLANATION WAS NOT ACCEPTED BY THE ASS ESSING OFFICER AND ADDITION OF RS.1,70,00,000/- WAS MADE IN THE HA NDS OF THE ASSESSEE ON ACCOUNT OF DEPOSITS IN BANK ACCOUNT AND PAYMENT S MADE TO ESTATE OFFICER, CHANDIGARH. THE CIT (APPEALS) THEREAFTER GAVE RELIE F OF RS.30,07,000/-. 4 DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ALS O BEFORE THE CIT (APPEALS) THE CONTENTION OF THE ASSESSEE AS INCORPORATED IN P ARAS 5 TO 7 OF THE APPELLATE ORDER ARE AS UNDER: 5. DURING THE COURSE OF PENALTY PROCEEDINGS, THE APPELLANT SUBMITTED THAT HE HAD THE EXPLANATION FOR ALL CREDIT ENTRIES BUT WAS NOT GIVEN REASONABLE OPPORTU NITY AND TIME. IT WAS ALSO STATED THAT THE APPELLANT'S S ISTER MS. JASMEET KAUR HAD BEEN SENDING MONEY IN THE PAST . COPY OF THE PASSPORT OF SMT. JASMEET KAUR WAS ALSO ENCLOSED. THE APPELLANT FURTHER SUBMITTED THAT SMT . JASMEET KAUR IS SERVING IN USA AND ALSO PAYING INCOME-TAX AND HER HUSBAND OWNS CHAINS OF RESTAURANTS. IT WAS FURTHER STATED THAT SMT. JASMEET KAUR WAS THE REAL YOUNGER SISTER OF THE APPELLANT AND BOTH THE SISTERS JOINTLY HELD THE SAVINGS BANK ACCO UNT 7957 IN WHICH THE MONEY IS SENT BY APPELLANT'S SIST ER TIME AND AGAIN. FURTHER THAT BOTH THE SISTERS JOINT LY OWN PROPERTIES IN INDIA PURCHASED OUT OF THE MONEY SENT BY HER. MOREOVER, ALL THE TRANSACTIONS DURING THE YEAR WERE THROUGH BANKING CHANNELS. THE APPELLANT BEING A WIDOW AND HER YOUNGER SISTER HAD BEEN SENDI NG HER MONEY TIME AND AGAIN OUT OF NATURAL LOVE AND AFFECTION.' 6. THE APPELLANT FURTHER SUBMITTED THAT 'THE APPELLANT HAS ALSO H.NO.230, SECTOR-36A DURING THE YEAR UNDER CONSIDERATION FOR RS.42,00,000/- AND NOT RS.46,00, 000/- AS MENTIONED IN THE ORDER, VIDE THR EE SALE DEEDS. THE SALE DEEDS OF RS.17,00, 000/- AND RS.11,00,000/- WERE DULY SUBMITTED BEFORE THE ASSESSING OFFICER AND HE HAS GIVEN THE CREDIT FOR T HE SAME. BUT HE HAS NOT GIVEN THE CREDIT OF THE THIRD SALE DEED AMOUNTING TO RS.14,00, 000/-. THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION HAD DEPOSITED CASH AMOUNTING TO RS.22, 67, 000/- IN HER SAVING BANK ACCOUNTS NO. 4134 AND RS.7, 40, 000 IN HER SAVING BANK ACCOUNT NO. 7957 WITH PUNJAB AND SIND BANK, SECTOR-16, CHANDIGARH. THIS CASH HAD BEEN DEPOSITED OUT OF HER EARLIER WITHDRAWALS FROM THE S AME BANK ACCOUNT IN THE SAME YEAR UNDER CONSIDERATION A ND DEPOSITED WITHIN SHORT PERIOD. ' 7. DURING THE COURSE OF APPELLATE PROCEEDINGS, AGAI N THE SAME STAND WAS TAKEN AND THE SUBMISSIONS GIVEN AT THE TIME OF CONCEALMENT PENALTY PROCEEDINGS WERE REITERATED. THE FOLLOWING CASE LAWS WERE RELIED UPO N BY THE APPELLANT : 1 . CIT VS. STATE OF ORISSA 83 ITR 26 2. CIT VS. SACHDEVA STEEL ROLLING MILLS 254 ITR 168 3. SHREE NIRMAL COMMERCIAL LTD VS. CIT 308 ITR 406 4. CIT VS. BHRARTESH JAIN 323 ITR 358 5. RANBIR CHEMICALS (P) LTD. VS. DCIT(ITAT CHANDIGARH 'A' BENCH)91TTJ 692 5 6. ITO VS. RAKESH GUPTA (ITAT AMRITSAR SMC BENCH) 107 TTJ 909 7. VIJAY POWER GENERATORS LTD VS. ITO (ITAT DELHI 'A' BENCH) 6 DTR 64 8. ITO VS. CHOUDHURY FARRQIE ALI & MARBLE CO. (ITAT JODHPUR BENCH) 82 TTJ I 10. THE CIT (APPEALS) IN THE APPELLATE ORDER AGAINS T LEVY OF PENALTY, NOTED THAT AFTER ENQUIRY AND INVESTIGATION DURING T HE APPELLATE PROCEEDINGS AGAINST THE QUANTUM ORDER, FOLLOWING WA S THE EXTRACT OF THE DECISION OF THE THEN CIT (APPEALS): '.....VIDE THIS OFFICE LETTER DATED 10.10.2008, THE ASSESSEE WAS SPECIFICALLY ASKED THAT MERE STATEMENT THAT SMT. JA SMEET KAUR IS WORKING IN US AND ALSO PAYING INCOME TAX IS NOT SUF FICIENT TO DISCHARGE THE ONUS. AT THE SAME TIME THE ASSESSEE H AS TO PROVE THE GENUINENESS OF THE TRANSACTION. THE PERUSAL OF THE BANK STATEMENT AND BALANCE SHEET OF M/S MONTI'S PIZZERIA RESTAURAN T INC. SHOWS THAT SMT. JASMEET KAUR AND HER HUSBAND DOES NOT HAV E CAPACITY TO SEND THE AMOUNTS AS GIFTS/LOANS. SMT. JASMEET KAUR IS STATED TO HAVE RECEIVED SALARY OF$ 40,000 FOR THE WHOLE YEAR WHICH WOULD BE JUST SUFFICIENT TO MEET THEIR DAY TO DAY EXPENSE S. EVEN THE BALANCE SHEET OF M/S MONTI'S PIZZERIA RESTAURANT IN C. DOES NOT INDICATE ANY FLOW OF MONEY FROM USA TO INDIA AND MO REOVER THERE ARE NEGATIVE LIQUID ASSETS. ' 11. THE CIT (APPEALS) IN THE PENALTY APPELLATE ORDE R VIDE PARAS 9 TO 11 OBSERVED AS UNDER: 9. THE ASSESSEE COULD NOT LINK THESE AMOUNT W.R.T. ANY BANK ACCOUNT, OVER, THESE AMOUNT PERTAIN TO F.Y. 2003-04 I.E. A.Y. 2004-05. THE ASSESSEE ! ' 3 NOT LINK ANY OF THE CREDITS IN THE BANK ACCOUNT NO . 1434 AND ACCOUNT NO. 197 IN PUNJAB AND SIND BANK. THEREFORE, NO CREDIT IS BEING GIVEN TO THE AMOUNT OF RS. 14 LACS STATED TO BE OUT OF SA LE PROCEEDINGS OF HOUSE NO. 230, SECTOR 36A, CHANDIGARH. 10. THE ONLY AMOUNT FOR WHICH THE ASSESSEE COULD E XPLAIN WAS RS.30,07,000/-ON ACCOUNT OF CASH DEPOSIT IN BANK AC COUNTS OUT OF APPELLANT'S EARLIER WITHDRAWALS AND HER CASH IN HAND. THE RELIE F AS SUMMARIZED IN THE APPELLATE ORDER FOR THE ADDITION ON WHICH PENALTY I S LEVIED IS AS UNDER :- S .. NO . AMOUNT SOURCE REMARKS L 56,73,105 GIFTS RECEIVED FROM SMT. GIFTS NOT GENUINE. JASMEET KAUR AS PER HER AFFIDAVIT 2 30,07,000 CASH DEPOSITED IN BANK CONTENTION OF THE ACCOUNTS OUT OF APPELLANT'S ASSESSEE ACCEPTED. EARLIER WITHDRAWALS AND HER 6 CASH IN HAND. 3 14,00,000 AMOUNT RECEIVED AGAINST CONTENTION NOT SALE OF H.NO. 230, SECTOR- ACCEPTED. 3 6 A, CHANDIGARH AS PER SALE DEED. TOTAL 100,80,105 4 69,19,895 NO EXPLANATION. ADDITION CONFIRMED 5 1,70,00,000 GRAND TOTAL 11. THE EXPLANATION GIVEN BY THE APPELLANT TO EXPLA IN THE SOURCES OF DEPOSITS AND PROVE BONAFIDES TO ESCAPE CONCEALMENT PENALTY WERE CONSIDERED AND REJECTED BY THE ASSESSING OFFICER DURING PENALT Y PROCEEDINGS. AS ALREADY STATED AFTER A UGH ENQUIRY, THE SAME EXPLAN ATION HAD BEEN REJECTED DURING APPEALLATE DINGS WHILE DEALING WITH THE QUAN TUM ADDITION. NOT GIVING EXPLANATION FOR ION OF RS. 69,19,895/-, NOT BEING A BLE TO LINK THE CREDITS IN BANK ACCOUNTS WITH AMOUNT OF SALE PROCEEDS AS EXPLAINED, NOT BEING ABLE TO ESTABLISH THE CREDITWORTHINESS OF THE DONOR ARE ENO UGH EVIDENCES TO ESTABLISH THAT THIS IS NOT A CASE OF MERE OMISSION WHERE ADDI TIONS ALONE ARE SUFFICIENT. FURTHER THE CASE LAWS RELIED UPON BY THE APPELLANT ARE DIFFERENT ON FACTS FOR AS IN CIT VS. STATE OF ORISSA 83 ITR 26 CASE, THE COUR T TALKS OF INTENTION - BONAFIDES WHEREAS IN THE INSTANT CASE NOT BEING ABL E TO EXPLAIN ANYTHING CLEARLY SHOWS THE MALAFIDE INTENTION. 12. THE CONCLUSION OF THE CIT (APPEALS) WAS THAT TH E ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS OF PROVING CASH CREDIT S IN THE INSTANT CASE AND IT WAS A CLEAR CASE OF CONCEALMENT OF INCOME. THE TRIBUNAL (SUPRA) IN THE QUANTUM APPEAL UPHELD THE ORDER OF CIT(A). WE ARE IN CONFORMITY WITH THE OBSERVATION OF THE CIT (APPEALS) IN THIS R EGARD THAT IN THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, THE ONUS CAST UPON THE ASSESSEE TO PROVE THE IDENTITY, CREDITWORTHINESS AN D GENUINENESS OF THE CASH CREDITS HAS NOT BEEN DISCHARGED, CONSEQUENTLY THE ASSESSEE HAD CONCEALED ITS INCOME AND IS EXIGIBLE TO LEVY OF PEN ALTY U/S 271(1)(C) OF THE ACT. UPHOLDING THE ORDER OF CIT (APPEALS) WE C ONFIRM LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON CONCEALED INCOM E OF RS.1,41,33,000/- 7 THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISM ISSED. 13. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF OCTOBER, 2012. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED 30 TH OCTOBER, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH