Appeal details
Counselvise Citation
[2017] 128 COUNSELVISE.COM (IT) 0161 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
4 year(s) 6 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
05-07-2017
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
D
Next Hearing Date
25-08-2016
Assessment Year
2000-2001
Appeal Filed On
03-01-2013
Judgement Text
RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN , AM AND SHRI RAVISH SOOD, JM ./ I.T.A. NO. 56/MUM/2013 ( / ASSESSMENT YEAR: 2000 - 01) SHRI RAJEEV BANSAL 101 NAMAN CENTER, G BLOCK BANDRA KURLA COMPLEX, BANDRA (EAST) MUMBAI - 400051 / VS. ITO WARD 17(1)(4) PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI - 400012 ./ ./ PAN/GIR NO. AGDPB4435D ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : SHRI ASHOK MEHTA , A.R. / RESPONDENT BY : SHRI CHANDRA VIJAY , D.R. / DATE OF HEARING : 07/04/2017 / DATE OF PRONOUNCEMENT : 05 /07/2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 29 , MUMBAI, DATED 16.10.2012 , AGAINST THE PENALTY ORDER PASSED BY THE A.O U/S 271(1)(C) OF THE INCOME - TAX ACT 1961 , (FOR SHORT ACT ) . THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD THEREIN RAISED THE FOLLOWING GROUNDS OF APPEAL BEFORE US: - RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 2 GROUND NO. 1: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE HONBLE CIT(A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE LD. ASSESSING OFFICER U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 AMOUNTING TO RS. 2,41,517/ - . THE APPELLANT PRAYS THAT THE SAME MAY PLEASE BE DELETED. THE APPELLANT CRAVES TO ADD, ALTER, AMEND OR OMIT ANY OF THE GROUNDS OF APPEAL BEFORE OR DURING THE HEARING OF THE APPEAL. 2 . BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF DEALING IN SHARES AND SECURITIES AND IS ALSO A DIREC TOR IN A COMPANY, VIZ. M/S. BAN SAL SHAREVEST SERVICES PVT. LTD. ('BSSPL'). SEARCH AND SEI ZURE ACTION U/S. 132(1) OF THE ACT WAS CONDUCTED AT THE PREMISES OF M/S. BSS PL AT 1502/ 1503, SAFALYA, TARABAUG LOVELANE, BYC ULLA, MUMBAI. THAT DURING THE COURSE OF THE SEARCH PROCEEDINGS AS CERTAIN GIFT DEEDS AND BOOKS OF ACCOUNTS PERTAINING TO THE ASSESSEE WERE FOUND AT THE PREMISES OF M/S. BSSPL, THEREFORE, A NOTICE U/S. 153C WAS ISSUED TO THE ASSESSEE ON 13.03.2006, CALLING UPON HIM TO FILE HIS RETURN OF INCOME FOR A. Y. 2000 - 01. THE ASSESSEE FILED HIS RETURN OF INCOME U/S. 153C DECLARING TOTAL INCOME AT RS.95,860/ - ON 28.03.2006. THAT DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE A.O DELIBERATING ON THE GIFT DEEDS WHICH WERE SEIZED DURING THE COURSE OF THE SEARCH PROCEEDINGS, THEREFORE, IN ORDER TO VERIFY THE GENUINENESS OF THE GIFT TRANSACTIONS AND THE FINANCIAL CAPACITY OF THE RESPECTIVE DONORS, THEREIN CALLED UPON THE ASSESSEE TO PRODUCE THEM FOR NECESSARY EXAMIN ATION BEFORE HIM . HOWEVER, THE ASSESSEE INSTEAD OF COMPLYING WITH THE DIRECTIONS OF THE A.O, RATHER SUBMITTED THAT AS THE GIFTS UNDER RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 3 CONSIDERATION WERE RECEIVED THROUGH BANK TRANSACTIONS FROM THE RESPECTIVE DONORS WHO WERE INCOME TAX ASSESSEE S, THEREFORE , THE GENUINENESS OF THE SAID RESPECTIVE TRANSACTIONS WHICH WERE EVIDENCED ON THE BASIS OF THE DULY NOTARIZED GIFT DEEDS STOOD ESTABLISHED BEYOND ANY SCOPE OF DOUBT. THE A.O BEING OF VIEW THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS AND VERACITY OF THE GIFT TRANSACTIONS AGGREGATING TO RS. 10,50,000/ - , THEREFORE , ASSESSED THE SAME AS THE INCOME OF THE ASSESSEE U/S. 68. THE AFORESAID ADDITION WAS THEREAFTER RESTRICTED BY THE CIT(A) TO AN AMOUNT OF RS. 7,50,000/ - UNDER SEC. 69 , WHILE FOR THE BALANCE A DDITION OF RS. 3 LAC WAS RELATED BY HIM TO THE OTHER YEARS. 3. THE A.O AFTER CULMINATING THE ASSESSMENT PROCEEDINGS ISSUED A S H O W CAUSE NOTICE U/S. 271(1)(C) R.W.S 274 TO THE ASSESSEE, CALLING UPON HIM TO EXPLAIN AS TO WHY PENALTY MAY NOT BE IMPOSED ON HIM FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME/CONCEALMENT OF TAXABLE INCOME. THE ASSESSEE SUBMITTED BEFORE THE A.O THAT AS THE ADDITION IN RESPECT OF THE GIFT TRANSACTION S HAD BE EN MADE IN HIS HANDS, NOT FOR THE REASON THAT THE GIFT TRAN SACTIONS WERE FOUND TO BE BOGUS, BUT RATHER FOR THE REASON THAT HE HAD FAILED TO COMPLY WITH THE DIRECT IONS OF THE A.O AND THEREIN SUBSTA NTIATE THE VERACITY OF THE GIFT TRANSACTIONS TO THE SATISFACTION OF THE A.O, BY PRODUCING THE DONORS FOR NECESSARY EXAMINATION BEFORE HIM . IT WAS THUS AVERRED BY THE ASSESSEE THAT NOW WHEN THE GIFT S HAD BEEN RECEIVED THROUGH BANK TRANSACTIONS AN D THE COPIES OF THE CONFIRMATIONS OF THE RESPECTIVE DONORS WHO WERE BEING ASSESSED WITH THE INCOME TAX DEPARTMENT WERE ALSO AVAILABLE ON RECORD, THEREFORE, IN CASE THE A.O STILL HAD ANY DOUBTS AS REGARDS THE GENUINENESS OF THE AFORESAID TRANSACTIONS, THEN HE COULD HAVE MADE NECESSARY VERIFICATION S AFTER SUMMONING THE REQUISITE INFORMATION RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 4 FROM THE SAID RESPECTIVE DONORS . IT WAS THUS SUBMITTED BY THE ASSESSEE THAT THOUGH THE ADDITION IN RESPECT OF THE GIFT TRANSACTIONS WAS AS A MATTER OF FACT MADE FOR THE REASON THAT THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE GENUINENESS AND VERACITY OF THE GIFT TRANSACTIONS TO THE SATISFACTION OF THE A.O, BUT IT COULD ALSO NOT BE LOST SIGHT OF THAT AT NO STAGE THE SAID TRANSACTION S HAD BEEN PROVED BY THE A.O TO BE B OGUS BEYOND ANY SCOPE OF DOUBT. IT WAS SUBMITTED BY THE ASSESSEE THAT THOUGH THE AFORESAID GIFT TRANSACTIONS HAVING NOT BEEN PROVED TO THE SATISFACTION OF THE A.O, HAD THUS BEEN ADDED TO THE INCOME OF THE ASSESSEE, HOWEVER , MERELY FOR THE SAID REASON PENALTY U/S. 271(1)(C) COU LD NOT BE IMPOSED IN HIS HANDS. THE A.O HOWEVER NOT FINDING FAVOUR WITH THE CONTENTION S OF THE ASSESSEE , THEREI N HOLDING A CONVICTION THAT THE ASSESSEE HAD WIL L FULLY AND DELIBERATELY CONCEAL ED THE PARTICULARS OF HIS INCOME , T HEREFORE , IMPOSED A PENALTY OF RS.2,41,517/ - UNDER SEC. 271(1)(C) IN THE HANDS OF THE ASSESSEE. 4. THE ASSESSEE BEING AGGRIEVED W ITH THE ORDER OF THE A.O IMPOSING PENALTY U/S. 271(1)(C ) CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) AFTER DELIBERATING AT LENGTH OVER THE CONTENTIONS OF THE ASSESSEE IN THE BACKDROP OF THE FACTS OF THE CASE , THEREIN BEING OF THE VIEW THAT THE ASSESSEE HAD FAILED TO COME FORTH WITH A BONAFIDE EXPLANATION AND HAD FAILED TO DISCLOSE ALL THE FACTS WHICH WERE MATERIAL FOR THE COMPUTATION OF HIS TOTAL INCOME, THEREFORE UPHELD THE PENALTY IMPOSED BY THE A.O. 5. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAD THEREIN CARRIED THE MATTER IN APPEAL BEFORE US. WE HAVE HEARD THE A UTHORIZED R EPR ESENTATIVE S FOR BOTH THE PARTIES , PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL PRODUCE D BEFORE US. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE FACTS OF THE CASE AND ARE OF THE RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 5 CONSIDERED VIEW THAT IT IS CLEARLY A CASE WHERE THOUGH MATERIAL HAD BEEN PLACED ON RECORD BY THE ASSESSEE TO SUBSTANTIATE THE GENUINENESS AND VERACITY OF THE GIFT TRANSACTIO NS, BUT AS THE VERACITY OF THE SAID TRANSACTIONS COULD NOT BE IRR E BUTABLY PROVE D IN TERMS OF THE DIRECTIONS OF THE A.O , THEREFORE THE AFORESAID AMOUNTS HAD BEEN ADDED TO THE INCOME OF THE ASSESSEE . 6. WE ARE OF THE CONSIDERED VIEW THAT AS ASSESSMENT AND PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT PROCEEDINGS , THEREFORE, MERELY FOR THE REASON THAT AN AMOUNT HAD BEEN ADDED TO THE INCOME OF THE ASSESSEE WOULD NOT AUTOMATICALLY LEAD TO LEVY OF PENALTY IN HIS HANDS . WE ARE ALSO NOT OBLIVIOUS OF THE FACT THAT PENALTY PROCEEDINGS U/S. 271(1)(C) ARE NOTHING SHORT OF BEING IN THE NATURE OF QUAS I CRIMINAL PROCEEDINGS. WE FIND THAT IN THE PRESENT CASE MATERIAL HAD EMERGED DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCT ED AT THE PREMISES OF M /S. BSSPL, WHICH PRIMA FACIE REVEALED THAT THE ASSESSEE HAD RECEIVED GIFT S FROM CERTAIN PARTIES. THE A.O IN ORDER TO VERIFY THE GENUINENESS AND VERACITY OF THE AFORESAID GIFT TRANSACTIONS , THEREIN DELIBERATED UPON THE SEIZED MATERIAL, AND THOUGH FOUND THAT THE ASSESSEE HAD RECEIVED THE AFORESAID AMOUNTS BY WAY OF BANK TRANSACTION S AND THE GIRS OF THE RESPECTIVE PARTIES FROM WHOM THE AMOUNT HAD BEEN RECEIVED WERE ALSO AVAILABLE ON RECORD, BUT THEN IN ORDER TO PUT TO REST CERTA IN DOUBTS AS REGARDS THE GENUINEN ESS OF THE SAID TRANSACTIONS, THEREFORE DIRECTED THE ASSESSEE TO PRODUCE THE RESPECTIVE PARTIES FOR EXAMINATION. WE FIND THAT I T REMAINS AS A MATTER OF FACT THAT THE A.O HAD HARDLY AFFORDED A PERIOD OF 5 DAYS TO THE ASSESSE E FOR PRODUCING THE AFORESAID PARTIES FOR EXAMINATION, AND ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO DO THE NE EDFUL WITHIN THE SAID SHORT PERIOD , THEREFORE ADDED THE AFORESAID AMOUNT TO THE INCOME OF THE ASSESSEE. WE THOUGH ARE NO T OBLIVIOUS OF THE FACT THAT RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 6 DURING THE COURSE OF THE APPELLATE PROCEEDINGS THE CIT(A) HAD AFFORDED AN OPPORTUNITY TO THE ASSESSEE TO PRODUCE THE RESPECTIVE DONORS FOR NECESSARY EXAMINATION , SO THAT THE GENUINENESS OF THE GIFT TRANSACTIONS COULD BE VERIFIED IN THE BACKDROP OF THE FINANCIAL CAPACITY OF THE RESPECTIVE DONORS , BUT H OWEVER THE ASSESSEE EXPRESSED HIS INABILITY TO PRODUCE THE RESPECTIVE PARTIES FOR EXAMINATION, FOR THE REASON THAT THE PRESENT WHEREABOUTS OF THE RESPECTIVE PARTI ES WERE NOT TO HIS K NOWLEDGE. 6. WE THOUGH FIND OURSELVES TO BE IN AGREEMENT WITH THE OBSERVATIONS OF THE CIT(A) THAT DESPITE BEING AFFORDED AN OPPORTUNITY DURING THE COUR SE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE HAD FAILED TO SUBSTANTIATE THE GENUINENESS OF THE GIFT TRANSACTION S , WHICH RAISES SERIOUS DOUBTS AS REGARDS THE VERACITY OF THE GIFT TRANSACTIONS. HOWEVER, WE CANNOT ALSO SHUT OUR EYES TO THE VERY FACT THAT CERTAIN MATERIAL WAS AVAILABLE ON RECORD, VIZ. DOCUMENTS EVIDENCING THE GIFT TRANSACTIONS SEIZED DURING THE COURSE OF THE SEARCH PROCEEDINGS FROM THE PREMISES M/S. BSSPL; AMOUNTS RECEIVED BY THE ASSESSEE BY WAY OF BANK TRANSACTIONS FROM THE RESPECTIVE PARTIES; THE INCOME TAX CREDENTIALS OF THE RESPECTIVE PARTIES BEING AVAILABLE WITH THE LOWER AUTHORITIES, WH ICH THEREIN TO SOME EXTENT DISPELLED THE CHARACTERIZATION OF THE AFORESAID GIFT TRANSACTIONS, AS BOGUS AND SHAM TRANSACTIONS ETC. WE THUS ARE OF THE CONSIDERED VIEW THAT THOUGH IT REMAINS AS A MATTER OF A CONCEDED FACT THAT THE ASSESSEE DESPITE SPECIFIC DI RECTIONS BY THE A.O, HAD HOWEVER FAILED TO PRODUCE THE RESPECTIVE PARTIES FOR EXAMINATION BEFORE HIM, WHICH FACT HAD PRIMARILY WEIGHED IN THE MIND OF THE A.O TO CONCLUDE THAT THE ASSESSEE HAD FAILED TO PROVE THE GENUINENESS OF THE GIFT TRANSACTIONS AND THE REIN DISCHARGE THE ONUS AS STOOD CAST UPON HIM, BUT THEN IN THE BACKDROP OF THE AFORESAID FACTUAL MATRIX, IT WOULD BE WRONG FOR US TO CONCLUDE RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 7 THAT THE ASSESSEE HAD ABSOLUTELY FAILED TO LEAD ANY EVIDENCE IN SUPPORT OF HIS EXPLANATION THAT THE AMOUNTS SO RE CEIVED BY HIM WERE BY WAY OF GIFT TRANSACTIONS. WE ARE OF THE CONSIDERED VIEW THAT THOUGH THE FAILURE ON THE PART OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE AFORESAID TRANSACTIONS AND SUBSTANTIATE THE FINANCIAL CREDIBILITY OF THE RESPECTIVE DONORS TO THE SATISFACTION OF THE A.O BY PRODUCING THE RESPECTIVE PARTIES FOR EXAMINATION BEFORE HIM, AS DIRECTED, THEREIN JUSTIFIABLY SUPPORT THE ADDITION OF THE AFORESAID AMOUNTS IN THE HANDS OF THE ASSESSEE IN THE COURSE OF QUANTUM PROCEEDINGS, BUT THEN IN LIGHT OF THE FACT S AS OBSERVED BY US HEREINABOVE , WE ARE OF THE CONSIDERED VIEW THAT IT CAN SAFELY BE CONCLUDED THAT AS IT IS A CASE OF UNPROVED GIFT TRANSACTIONS LEADING TO AN ADDITION OF THE AFORESAID AMOUNT S AS AN INCOME IN THE HANDS OF THE ASSESSEE , AND NOT BEING A CASE OF DISPROVED GIFT TRANSACTIONS , THEREFORE , NO PENALTY U/S. 271(1)(C) OF THE ACT WOULD BE LIABLE TO BE IMPOSED IN THE HANDS OF THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT AS THE ASSESSEE HAD CAME FORTH WITH AN EXPLANATION AS REGARDS THE AFORESAID AMOUNTS SO RECEIVED BY HIM BY WAY OF BANK TRANSACTIONS FROM THE DULY IDENTIFIED PARTIES, AND IT IS NEITHER THE CASE OF THE DEPARTMENT, NOR SO EVIDENCED BY THE MATERIAL AVAILABLE ON RECORD, THAT THE SAID EXPLANATION OF THE ASSESSEE HAD BEEN FOUND TO BE FALSE, THEREFORE THERE CAN BE NO ESCAPE FROM THE FACT THAT THE ASSESSEE TO SOME EXTENT HAD ALSO SUBSTANTIATED HIS AFORESAID EXPLANATION (WHICH THOUGH NOT BEING TO THE SATISFACTION OF THE A.O, WOULD THOUGH JUSTIFY AN ADDITION IN THE HANDS OF THE ASSES SEE DURING THE COURSE OF THE QUANTUM PROCEEDINGS), THEREFORE , THE CASE OF THE ASSESSEE FALLS BEYOND THE SCOPE AND GAMUT OF THE EXPLANATION 1 OF SEC. 271(1)(C). WE FIND THAT OUR AFORESAID VIEW THAT IN RESPECT OF A TRANSACTION WHICH IS FOUND TO BE UNPROVED B UT NOT DISPROVED , NO PENALTY U/S. 271(1)(C) IS LIABLE TO BE IMPOSED , STANDS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF CIT RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 8 VS. UPENDRA V. MITHANI (ITA L NOS. 1860 OF 2009), DATED 05.08.2009, WHEREIN THE HONBLE HIGH COURT HAD OBSERVED AS UNDER: - THE ISSUE INVOLVED IN THE APPEAL REVOLVES AROUND DELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT. THE TRIBUNAL HAS CONCURRED WITH THE VIEW TAKEN BY THE COMMISSIONER OF INCOME TAX (A). THE COMMISSIONE R OF INCOME TAX (A) HAS RIGHTLY TAKEN A VIEW THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME AS WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE G IVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED, I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE. THE VIEW TAKEN BY THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. THE APPEAL IS WITHOUT ANY SUBSTANCE. THE SAME IS DISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. WE THUS IN THE LIGH T OF OUR AFORESAID OBSERVATIONS, THEREIN SET ASIDE THE ORDER OF THE CIT(A) AND QUASH THE PENALTY OF RS.2,41,517/ - IMPOSED BY THE A.O U/S. 271( 1)(C) . 7. THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRO NOUNCED IN THE OPEN COURT ON 05 .07.2017 SD/ - SD/ - (B. R. BASKARAN) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 05 .0 7 .2017 PS. ROHIT KUMAR RAJEEV BANSAL VS. ACIT (ITA NO. 56/MUM/2013) 9 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI
