ADITYA KUMAR DALMIA, Jaipur V. ITO, Jaipur

ITA 619/JPR/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5565 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2004-2005
• Appeal Filed On: 18-06-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJENDER SINGH JCIT DR DHK
• Keywords: Gift; Accommodation entries; Revised return
• Section: 143(3); 139(5); 147; 68; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 619/JP/2015 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR: 2004-05 SHRI ADITYA KUMAR DALMIA 54, GIJGARH VIHAR, HAWA SADAK JAIPUR CUKE VS. THE ITO WARD- 1 (3) JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AHHPD 1321P VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI RAJENDER SINGH, JCIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16/12/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 02 /02/2016 VKNS'K@ ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 28-04-2015 FOR THE ASSESSM ENT YEAR 2004-05 RAISING THEREIN FOLLOWING GROUND:- THAT THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING PENALTY OF RS. 52,252/- U/S 271(1)(C ) O N THE INCOME OF RS. 1,86,000/- OFFERED BY THE ASSESSEE IN THE REVISED RETURN BY TREATING IT AS UNEXPLAINED. ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 2 2.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE D ERIVES INCOME FROM SPECULATIVE BUSINESS AND OTHER SOURCES. THE ORIGINA L RETURN DECLARING INCOME OF RS. 97,700/- WAS FILED ON 11-09-2004 BY THE ASSESSEE WHICH WAS PROCESSED U/S 143(1) OF THE ACT. THEREAFTER, TH E INVESTIGATION WING OF THE DEPARTMENT CONSEQUENT TO SEARCHES ON ENTRY P ROVIDER M/S. B.C. PUROHIT & GROUP (TAX CONSULTANT) ON 12-04-2005 OBSE RVED THAT THIS GROUP WAS ENGAGED IN THE WIDESPREAD RACKET OF PROVI DING ACCOMMODATION ENTRIES. AO ON THE BASIS OF ADI INFORMATION FOUND T HAT THE ASSESSEE WAS A BENEFICIARY OF THE RACKET AS IT HAD RECEIVED BOGUS GIFTS FROM FOLLOWING PERSONS:- (I) RS. 1,11,000/- FROM SHRI RAJ KUMAR AGARWAL ON 22-12 -2003. (II) RS. 7,5000/-FROM SHRI PAWAN KUMAR AGARWAL ON 13-11-2003 NOTICE U/S 148 DATED 28-09-2006 WAS ISSUED BY THE A O ON THE ASSESSEE. IT MAY BE PERTINENT TO MENTION THAT ASSESSEE IN THE OR IGINAL RETURN CLAIMED THESE GIFTS AS GENUINE. HOWEVER A REVISED RETURN W AS FILED ON 21-06-2005 DECLARING THESE GIFTS AS BOGUS AND OFFERING THEM AS HIS INCOME. AO HAS DEALT WITH THIS ASPECT (WHICH WILL BE CONSIDERED BY UNDERSIGNED LATER) AS A SMART MOVE OF THE ASSESSEE. THE NEWS ABOUT SEARCH O N B.C. PUROHIT ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 3 GROUP DATED 12-04-2005 SPREAD WIDELY AMONGST ENTRY PROVIDER MARKET CIRCLES AND ASSESSEE REALIZED THAT ENTIRE RACKET HA S BEEN DETECTED AND IN ORDER TO PRE-EMPT THE DEPARTMENTAL ACTION THE REVIS ED RETURN WAS FILED. ON RECEIPT OF NOTICE U/S 148 OF THE ACT, THE ASSESSEE FILED A LETTER TO TREAT HIS REVISED RETURN DATED 21-06-2005 AS FILED IN RESPONS E TO NOTICE U/S 148 OF THE ACT. ACCORDINGLY, THE AO FRAMED REASSESSMENT U/ S 147 READ WITH SECTION 143(3) OF THE ACT ON 22-11-2007 AND INITIAT ED PENALTY PROCEEDINGS U/S 271(1)(C ). IN REPLY, THE ASSESSEE CONTENDED AS UNDER: (I) THE ASSESSEE HAD VOLUNTARILY REVISED ITS RETURN OFFERING THE GIFTS TO TAX TO BUY PEACE AND TO AVOID LITIGATI ON. (II) AFTER A PERIOD OF 15 MONTHS OF FILING THE REVI SED RETURN NOTICE U/S 148 WAS ISSUED ON 28-09-2006. THERE WAS NO INTENTION TO CONCEAL THE PARTICULARS OF INCOME. THE AO HOWEVER, IMPOSED THE PENALTY HOLDING THAT TH E ASSESSEE HAD ENTERED INTO BOGUS TRANSACTIONS; THE REVISED RETURN WAS NOT VOLUNTARY AS THE COMPLETE INCRIMINATING INFORMATION WAS AVAILABL E WITH THE DEPARTMENT THUS INACCURATE PARTICULARS OF INCOME WERE FURNISHE D. ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 4 2.2 BEING AGGRIEVED, THE ASSESSEE PREFERRED FIRST A PPEAL WHERE THE LD. CIT(A) CONFIRMED THE PENALTY BY FOLLOWING OBSERVATI ON. 3.2 I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSION AND CAREFULLY GONE THROUGH PENALTY ORDER PASSED BY THE LD. AO. I HAVE TAKEN A NOTE OF FACTUAL MATRIX OF THE CA SE. I HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER PA SSED U/S 143(3) R.W.S. 147 AND THE PENALTY ORDER PASSED U/S 271(1) OF THE ACT. I HAVE ALSO TAKEN A NOTE OF ORIGINAL RE TURN AND REVISED RETURN FILED BY THE ASSESSEE. IT IS A FACT THAT ASSESSEE AFTER DETECTION OF ACCOMMODATION ENTRIES FOUND DURI NG THE COURSE OF SEARCH OPERATION CONDUCTED AGAINST B.C. P UROHIT OF KOLKATA ASSESSEE REVISED ITS ORIGINAL AND OFFERE D RS. 1,86,000/- FOR TAXATION. HAD THERE BEEN NO SEARCH O PERATION CONDUCTED, ASSESSEE WOULD NOT HAVE OFFERED THIS FOR TAXATION. AFTER CONDUCT OF SEARCH OPERATION, ALL PROCEEDINGS IN CASE OF ASSESSEE HAVE BEEN ABATED, MEANING THEREBY REVISED RETURN SO FILED HAS BECOME NON-EST. THEREFORE, THE AO HAS RIGHTLY DISCUSSED ABOUT THE REVISED RETURN IN THE ASSESSMEN T ORDER PASSED U/S 145(3) R.W.S. 147 BUT DID NOT TAKE ANY COGNIZANCE OF THE REVISED RETURN. THEREFORE, PENALTY ORDER PAS SED U/S 271(1) (C ) BY TAKING CONCEALED INCOME OF RS. 1,86, 000/-IS FULLY JUSTIFIED AND SUSTAINED. 2.3 AGGRIEVED, THE ASSESSEE IS NOW BEFORE ITAT WHER EIN THE LD. COUNSEL FOR THE ASSESSEE CONTENDS THAT: (I) ASSESSEE'S REVISED RETURN WAS FILED ON 21-06-20 05. THE ASSESSMENT PROCEEDINGS COULD HAVE BEEN TAKEN U/S 14 3(2) OF THE ACT. 148 ACTION WAS TAKEN ONLY TO REGULARIZE REVISED RET URN WHICH WAS FILED BEFORE NOTICE U/S 148. THE CONCEALMENT ALLEGATION O F INACCURATE ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 5 PARTICULARS OF INCOME IS TO BE SEEN WITH REFERENCE TO A VALID AND VOLUNTARY REVISED RETURN FILED BY ASSESSEE. (II) SINCE THE AMOUNT WAS ALREADY OFFERED TO TAX B Y REVISED RETURN, NO PENALTY WAS IMPOSABLE. RELIANCE WAS PLAC ED IN THE CASE OF SHALIMAR BUILDCON (P) LTD. VS. ITO, 45 DTR 185 HOLD ING THAT SHARE APPLICATION MONEY RECEIVED FROM B.C. PUROHIT GROUP CANNOT BE ADDED U/S 68 IN THE ABSENCE OF ANY EVIDENCE TO SHOW THAT THE SHARE CAPITAL REPRESENTED ACCOMMODATION ENTRIES. (III) FURTHER RELIANCE IS PLACED AS UNDER:- (1) JAI NARAIN UPADHYAY VS. ACIT (2012) 75 DTR 361 (LUCK) (TRIBUNAL) (T.M.) (2) RAGHUVEER SARAN AGARWAL AND SHRI RAJESH AGARWA L VS. ITO IN ITA NO. 1193AND 1994/JP/2010 A.Y. 2003-0 4 (3) SMT. ARCHANA JAIN VS. DCIT (ITA NO. 701/JP/2008 A.Y. 2003-04) (4) CIT VS. SURESH MITTAL, 251 ITR 9 (SC) (5) CIT VS. SHYAMLAL SONI, 276 ITR 156 (M.P.) 2.4 ON THE OTHER HAND, THE LD. DR VEHEMENTLY CONTEN DS AS UNDER:- (I) THE ASSESSEE WAS A WILLING A PARTY TO A NEFARIO US ACCOMMODATION ENTRY RACKET WHICH WAS A MEANS TO LAU NDER BLACK MONEY. ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 6 (II) IN THE ORIGINAL RETURN, THE ASSESSEE HAD CLAIM ED THESE GIFTS TO BE GENUINE. (III) THE SEARCH BY THE INVESTIGATION WING ON THE K INGPIN OF BLACK MONEY RACKET B.C. PUROHIT (TAX CONSULTANT) GROUP CREATED A FUROR IN THE HAWALA TRADE CIRCLES. ASSESS EE WAS AWARE THAT CONSEQUENTIAL PROCEEDINGS WILL BE TAKEN ON HIM FROM WHICH THERE WILL BE NO ESCAPEMENT. (IV) THE PROVISION OF SECTION 139(5) GIVE AN OPTION TO FILE A REVISED RETURN FOR ANY OMISSION OR ANY WRONG STAT EMENT OF INCOME AND NOT FOR MONEY LAUNDERING ADMISSIONS. THE REFORE, THE ASSESSEE REVISED WAS AN ATTEMPT TO COVER UP TAX EVASION, THEREFORE, IT CANNOT BE CALLED A VALID REVISED RETU RN. THE REVISED RETURN IS NOT VOLUNTARILY INASMUCH THE SEAR CH ON THE KINGPIN OF THE BLACK MONEY RACKET WAS WELL KNOWN TO THE ASSESSEE. ON THE BASIS OF PREPONDERANCE OF THE PROB ABILITY AND HUMAN CONDUCT AS ENVISAGED IN THE CASE OF SUMAT I DAYAL VS CIT ,214 ITR 801 (SC), THE ASSESSEES RETURN UND ER THESE COMPULSIONS DOES NOT BECOME VOLUNTARY OR A VALID RE VISED RETURN. THE CASE LAWS RELIED ON BY THE ASSESSEE IN THE CASE OF SHALIMAR BUILDCON (P) LTD. VS. ITO (SUPRA) IS NOT A PPLICABLE WHICH PERTAINS TO SHARE APPLICATION MONEY AND IT WA S CONTESTED ON QUANTUM BY THE ASSESSEE BY ESTABLISHIN G THAT THERE WAS NO EVIDENCE IN THAT BEHALF. IN ASSESSEE'S CASE, THERE ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 7 IS CLEAR ADMISSION AND NO CONTEST TO THE FACTS ABOU T ACCOMMODATION ENTRY. BOTH THE CASES ARE THUS FACTUA LLY DIFFERENT (V) THE FACTS ABOUT FURNISHING OF INACCURATE PARTIC ULARS OF INCOME AND NATURE OF HAWALA TRANSACTIONS IN EACH CASE ARE DIFFERENT AND PECULIAR VARYING FROM CASE TO CASE. B ESIDES THE CASE OF CIT VS. SURESH MITTAL, 251 ITR 9 (SC) STAND S DISTINGUISHED BY HONBLE SUPREME COURT ITSELF IN TH E CASE OF K.P. MADHUSUDAN VS. CIT , 252 ITR 99 (SC). CONSEQUE NTLY, CASES CITED BY THE LD. AR HAVE NO FACTUAL PARITY WI TH ASSESSEE'S CASE. IN VIEW OF THE ABOVE FACTS, CIRCUMSTANCES AND CONTE NTIONS, LD. DR PLEADS THAT THE PENALTY HAS BEEN RIGHTLY IMPOSED. 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ENTIRETY OF THE FACTS REVE ALS THE FACTS NARRATED ABOVE REVEALS THAT THE ASSESSEES ENTIRE DEFENSE QU A PENALTY IS TO THE EFFECT THAT HE FILED THE REVISED RETURN VOLUNTARILY. THE S TATEMENT OF THE ASSESSEE IS TO BE EXAMINED IN THE BACK DROP OF THE FACTS, HU MAN CONDUCT AND PREPONDERANCE OF PROBABILITIES; NOT ON MERE ASSESSE E'S ASSERTION. IT IS NOT ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 8 DISPUTED THAT SEARCH IN THE CASE OF B.C. PUROHIT GR OUP (TAX CONSULTANT) HAVING OFFICE AT JAIPUR AND KOLKATA WAS UNDERTAKEN ON 12-04-2005. THE NEWS OF THE MASSIVE SEARCH OPERATIONS ON THIS GROUP ENGAGED IN NETWORK OF BLACK MONEY OPERATORS MUST HAVE SPREAD LIKE A WI LDFIRE IN THE HAWALA CIRCLES. IN REPLY FILED BY THE ASSESSEE, THE KNOWLE DGE ABOUT SEARCH ON B.C. PUROHIT GROUP (TAX CONSULTANT) HAD NOT BEEN DENIED. IN THESE CIRCUMSTANCES, IT CANNOT BE ASSUMED THAT ASSESSEE B ECAME SAINT BY SHEER DAWN OF WISDOM AND FILED REVISED RETURN VOLUNTARILY . I FIND MERIT IN THE ARGUMENTS OF THE LD. DR THAT REVISED RETURN AS CONT EMPLATED BY SECTION 139(5) OF THE ACT IS TO CORRECT ANY OMISSION OR WRO NG STATEMENT IN THE COMPUTATION OF INCOME AND NOT TO CORRECT TAX EVASIO N. THESE PROVISIONS DID NOT GIVE ANY IMMUNITY FROM ANY BOGUS TRANSACTIO NS DECLARED IN THE ORIGINAL RETURN. THE INTERPRETATION GIVEN BY THE AS SESSEE TO THE CLAIM OF REVISED RETURN IS NOT TENABLE AND NOT IN ACCORDANCE WITH LAW. THE HONBLE APEX COURT IN THE CASE OF UNION OF INDIA AND OTHERS VS. DHARMENDRA TEXTILES PROCESSORS AND OTHERS, 306 ITR 277 (SC) HA S CLEARLY HELD THAT PENALTY IS A CIVIL LIABILITY AND THERE IS NO ONUS O N THE DEPARTMENT TO PROVE MENSREA ON THE PART OF THE ASSESSEE. THE FACTS OF T HE CASE AS EXAMINED IN THE CASE OF SUMATI DAYAL VS CIT (SUPRA) I.E. AFTER TAKING INTO ITA NO. 619/JP/2015 SHRI ADITYA KUMAR DALMIA VS. ITO WARD- 1(3), JAIPUR . 9 CONSIDERATION THE HUMAN CONDUCT AND PREPONDERANCE O F PROBABILITY CLEARLY INDICATE THAT THE ASSESSEE BECAME A WILLING PARTY TO NEFARIOUS BLACK MONEY RACKET FOR OBTAINING BOGUS GIFTS. SUCH ACTS CANNOT BE TAKEN LIGHTLY AS THEY LEAD TO SCOURGE OF BLACK MONEY IN T HE COUNTRY. THUS IN VIEW OF THE FOREGOING, THE PENALTY ORDER OF THE LD. CIT(A) IS CONFIRMED. HENCE, THE APPEAL OF THE ASSESSEE IS DISMISSED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DI SMISSED ORDER PRONOUNCED IN THE OPEN COURT ON 02 /02/2 016 SD/- VKJ-IH-RKSYKUH (R.P.TOLANI) U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 02/02/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI ADITYA KUMAR DALMIA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO,WARD- 1 (3), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.619/JP/2015) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR