Dr. Manoj Kumar Singhal, Rohtak V. ITO, Narnaul

ITA 6238/DEL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74248 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 28-01-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 17-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: KEYUR PATEL
• Assessee Lawyers: SHIV RAJ BATRA
• Keywords: Gift; Accommodation entries; Onus to prove
• Section: 131; 68; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A .NOS.-6238 /DEL/2012 (ASSESSMENT YEAR-2003-04) MANOJ KUMAR SINGHAL C/O. SHIV RAJ KUMAR BATRA, ADVOCATE, H. NO. 310-A, OLD PARTAP TALKIES ROAD, PEERJI MOHALLA, ROHTAK PAN-ABRPS6382F (APPELLANT) VS ITO WARD-1 NARNAUL (RESPONDENT) I.T.A .NOS.-6239/DEL/2012 (ASSESSMENT YEAR-2003-04) MANOJ KUMAR SINGHAL & SONS HUF, C/O. SHIV RAJ KUMAR BATRA, ADVOCATE, H. NO. 310-A, OLD PARTAP TALKIES ROAD, PEERJI MOHALLA, ROHTAK PAN-AAGHM1766R (APPELLANT) VS ITO WARD-1 NARNAUL (RESPONDENT) APPELLANT BY: SH. SHIV RAJ BATRA (ADV). RESPONDENT BY: SH. KEYUR PATEL, SR. DR ORDER PER DIVA SINGH, JM THESE TWO APPEALS FILED BY TWO DIFFERENT ASSESSEES AGAINST SEPARATE ORDERS OF CIT(A), ROHTAK ARE BEING DECIDED BY A COMMON OR DER AS IT WAS A COMMON STAND OF THE PARTIES THAT FACTS AND CIRCUMSTANCES B EING IDENTICAL THE ARGUMENTS CONSEQUENTLY ADVANCED IN ONE APPEAL WOULD COVER THE OTHER ALSO. 2. A PERUSAL OF THE IMPUGNED ORDERS SHOWS THAT THE LD. CIT(A) IN HIS ORDERS HAS CONFIRMED THE ACTION OF THE ASSESSING OFFICER I N BOTH THE APPEALS IMPOSING ITA NOS.6238, 623 9/DEL/12 2 PENALTY OF RS.66,151 & 1,32,259/- RESPECTIVELY ON FACTS PERTAINING TO 2003-04 ASSESSMENT YEAR WHICH COMMON TO BOTH THE APPEALS. 3. IT IS SEEN THAT APART FROM DIFFERENCE IN THE MEN TION OF PENALTY AMOUNTS THE GROUNDS ARE IDENTICAL IN BOTH THE APPEALS FOR READY REFERENCE WE REPRODUCE THE GROUNDS IN ITA 6328/DEL/12:- 1. THAT THE LD. CIT(APPEALS) ROHTAK HAS ERRED IN L AW AS WELL AS ON FACTS OF THE CASE IN CONFIRMING PENALTY OF RS.66 151/-(ITA 6329/DEL/ 12,RS. 1,32,259)WRONGLY LEVIED U/S 271(1)(C) OF I.T ACT BY THE ASSESSING OFFICER. THUS THE SAID APPELLATE ORDER IS TOTALLY WRONG AND ILLEGAL. 2. THAT THE AUTHORITIES BELOW HAVE FURTHER ERRED IN LA W AS WELL AS ON FACTS OF THE CASE IN WRONGLY APPLYING THE PROVIS ION OF SECTION 271(1)(C) OF I.T ACT. THUS THE ORDER PASSED ON WRO NG APPLICATION OF THE PROVISION OF SECTION 271(1)(C) OF I.T ACT IS TOTALL Y WRONG AND ILLEGALLY. 3. THAT THE AUTHORITIES BELOW HAVE FURTHER ERRED IN AP PRECIATING THE RECORD AND FACTS OF THE CASE THAT THE APPELLANT HAS DULY DISCLOSED ALL THE PARTICULARS OF GIFT RECEIVED IN HIS CAPITAL ACC OUNT. THUS THERE WAS NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICUL ARS OF INCOME. THUS THE ORDER OF CONFIRMING THE PENALTY U/S SECTIO N 271(1)(C) IS TOTALLY WRONG AND ILLEGAL. 4. THAT THE AUTHORITIES BELOW HAVE FURTHER FAILED TO A PPRECIATE THAT TRUE AND COMPLETE PARTICULARS OF DONOR WERE DU LY FURNISHED SHOWING HIS IDENTITY CAPACITY AND GENUINENESS OF TR ANSACTION AS ADDRESS, PAN NO., BANK A/C, COPY OF I.T RETURN AND AFFIDAVIT OF THE DONOR WERE FURNISHED. THUS TREATING THE TRUE AND C ORRECT PARTICULARS OF GIFT RECEIVED FROM DONOR AS CONCEALED INCOME IS TOT ALLY WRONG, ILLEGAL AND VOID0AB-INITIO. 5. THAT THE APPELLANT CRAVES, LEAVE TO ADD, DELETE OR AMEND ANY GROUND/GROUNDS OF APPEAL AT THE TIME OF HEARING. 4. REFERENCE IS BEING MADE TO THE FACTS OF ITA NO- 6328/DEL/2012 AS BOTH THE PARTIES ADVANCED THEIR ARGUMENTS QUA THE SAID APPEA L. THE RECORD SHOWS THAT THE ASSESSEE INDIVIDUAL RETURNED AN INCOME OF RS.1,84,8 80/- WHICH WAS PROCESSED U/S 143(1) AND THEREAFTER WAS RE-OPENED BY ISSUANCE OF NOTICE ON THE BASIS OF INFORMATION RECEIVED IN REGARD TO GIFT RECEIVED BY THE ASSESSEE FROM SHRI SUNIL KUMAR GARG OF RS.2 LAC. THE ASSESSMENT WAS CONCLUD ED WHEREIN THE AMOUNT RECEIVED BY WAY OF A CHEQUE WAS ADDED TO THE INCOME OF THE ASSESSEE AS THE ASSESSEE FAILED TO PROVE IDENTITY AND CREDITWORTHIN ESS ETC OF THE DONOR BY WAY OF ITA NOS.6238, 623 9/DEL/12 3 PRODUCING HIM WHO IS CLAIMED TO BE ASSESSEES FRIE ND. SINCE THE ASSESSEE FAILED TO PROVE THE SAME THE GENUINENESS OF THE TRANSACTIO N WAS HELD TO BE NOT PROVED AND THE FINDING OF THE AO CHALLENGED BY THE ASSESSE E WAS CONFIRMED BY THE ITAT IN QUANTUM PROCEEDINGS VIDE ITS CONSOLIDATED ORDER DATED 15 TH JANUARY 2010 IN THE CASE OF THE ASSESSEE INDIVIDUAL AND HUF IN ITA 4259 /DEL/2009 & ITA 4260/DEL/2009. 4.1. THE ASSESSING OFFICER BASED ON THE SATISFACTIO N RECORDED IN THE ASSESSMENT ORDER TAKING NOTE OF THE FACT THAT THE ORDER HAS BE EN CONFIRMED BY THE CIT(A) (AT THAT STAGE) INITIATED PENALTY PROCEEDINGS. TAKING FURTHER NOTE OF THE FACT THAT THE SAID ORDER OF THE CIT(A) WAS ALSO CONFIRMED BY THE ITAT HE GRANTED A FRESH OPPORTUNITY TO THE ASSESSEE TO ADVANCE HIS ARGUMENT S IN RESPONSE TO THE PENALTY NOTICE. 4.2. A PERUSAL OF THE RECORD SHOWS THAT RELIANCE WA S PLACED UPON CIT VS. BALBEER SINGH 214 CTR 147 AND ALSO ADVANCED THE FOL LOWING SUBMISSION:- IN RESPONSE TO THIS NOTICE THE ASSESSEE FILED A W RITTEN REPLY WHICH HAS BEEN PLACED ON RECORD. IN THE WRITTEN SUBMISSIONS THE ASSESSEE HAS STATED THAT, IT IS SUBMITTED THAT NOTHING HAS BEEN CONCEALED IN THIS MATTER BECAUSE BOTH THE GIFTS ARE DULY SHOWN IN THE BOOKS OF ACCOUNTS AND IN THE RETURN OF INCOME-TAX AFTER SHOWING THESE GIFTS IN CAPITAL ACCOUNT WHICH HAS ALREADY PUT ON RECORD. SO I HAVE NOT CONCEALED ANY PARTICULARS REGARDING THESE GIFTS. DUE TO CHANGE IN OPINION AT THE TIME OF RE-ASSESSMENT THE ASSESSING OFFICER HAS TREATED THIS AMOUNT AS INCOMES AND TAXED ACCORDINGLY. 4.3. THE ASSESSING OFFICER NOT CONVINCED WITH THE E XPLANATION OFFERED FURTHER HELD THAT THE DECISION RENDERED BY THE PUNJAB & HAR YANA HIGH COURT WAS DISTINGUISHABLE ON FACTS AS IN THE FACTS BEFORE THE PUNJAB & HARYANA HIGH COURT THE IDENTIFICATION OF THE DONOR; GENUINENESS OF TH E TRANSACTION WAS NOT DOUBTED WHICH WAS NOT A FACT IN THE PRESENT CASE. ACCORDIN GLY, MINIMUM PENALTY OF RS.66,151/- WAS IMPOSED BY HIM. ITA NOS.6238, 623 9/DEL/12 4 5. THE ASSESSEE AGITATED THE ISSUE BEFORE THE CIT(A ). THE FACTS WERE MARSHALED BY THE CIT(A) IN THE FOLLOWING MANNER:- 2. BRIEF FACTS ARE THAT THE ASSESSEE FILED RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,84,800/- WHICH WAS PROCESSED U/S 143 (1) OF THE ACT. THE A.O RECEIVED INFORMATION FROM CIT, ROHTAK THAT THERE WAS AN ACCOMMODATION ENTRY THROUGH AN ENTRY OPERATOR SH. S UNIL KUMAR GARG, RESIDENT OF 2244, GALI RAGHUNANDAN, NAYA BAZA R, DELHI OF RS.2,00 LACS VIDE DD NO. 626823 DATED 20/6/2002 THR OUGH JAI LUXMI CO-OP BANK LTD. FATEHPURI, DELHI IN THE BANK A/C OF THE ASSESSSEE MAINTAINED IN STATE BANK OF PATIALA, NARNAUL. IT WA S FOUND THAT THIS AMOUNT OF RS.2,00 LACS HAS BEEN CREDITED IN THE CAP ITAL A/C OF THE ASSESSEE FOR THE AY 2003-04. A LETTER WAS WRITTEN BY THE A.O TO SH. SUNIL KUMAR GARG AT THE ADDRESS GIVEN IN THE AFFIDA VIT FOR VERIFICATION OF GIFT MADE TO THE ASSESSSEE BUT THE LETTER HAS CO ME BACK UNSERVED WITH THE REMARKS THAT NO SUCH PERSON RESIDES AT TH IS ADDRESS. IN VIEW OF THE ABOVE, THE A.O ISSUED NOTICE U/S 148 TO RE-A SSESS THE INCOME OF THE ASSESSEE. 2.1 IN RESPONSE TO THE NOTICE U/S 148, THE ASSESSEE FIL ED RETURN INCOME DECLARING THE SAME INCOME AS IN THE ORIGINAL RETURN . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO INTIMATE THE RELATIONSHIP BETWEEN HIM AND SH. SUNIL KUMAR GA RG AND THE WHEREABOUTS OF SH. SUNIL KUMAR GARG WHO MADE THE AL LEGED GIFT. IN RESPONSE TO THIS, THE ASSESSEE STATED THAT HE WAS H AVING FRIENDLY RELATIONSHIP WITH SH. SUNIL KUMAR GARG AND HE IS TR YING TO TRACE THE LATEST ADDRESS OF SH. SUNIL KUMAR GARG. THEREUPON, THE AO ASKED THE ASSESSEE TO INTIMATE THE LATEST WHEREABOUTS OF SH. SUNIL KUMAR GARG AND PRODUCED HIM FOR EXAMINATION. THE ASSESSEE EXP RESSED HIS INABILITY TO PRODUCE SH. SUNIL KUMAR GARG AND REQUE STED THE A.O TO ISSUE SUMMONS U/S 131 AT THE ADDRESS SUPPLIED ON HI S AFFIDAVIT AND THE IT RETURN FILED BY HIM. THE AO ACCORDINGLY ISSUED SUMMONS U/S 131 FOR WHICH SH. SUNIL KUMAR GARG DID NOT RESPOND. 2.2 THE A.O MADE ENQUIRIES REGARDING BANK A/C NO. 14154 IN JAI LUXMI CO-OP BANK LTD. FATEHPURI, DELHI OF SH. SUNIL KUMAR GARG AND NOTED THAT A CHEQUE OF RS. 2,01,000/- WAS DEPOSITED IN TH IS A/C ON 20/06/2002 AND ON THE SAME DAY DEMAND DRAFT OF RS.2.00 LACS WA S ISSUED TO THE ASSESSEE. THE CHEQUE OF RS.2,01,000/- WAS TRANSFER RED FROM A/C NO. 3401 OF THE SAME BANK I.E JAI LUXMI CO-OP BANK LTD. FATEHPURI, DELHI ON THE SAME DAY AND A/C NO. 3401 WAS IN THE NAME OF ONE M/S USHA MOTOR CO. 2.3 FROM THE ABOVE FACTS, THE A.O HELD THAT THE ASSESSE E HAS NOT DISCHARGED THE PRIMARY ONUS OF ESTABLISHING THE IDE NTITY AND CREDITWORTHINESS OF THE DONOR AND IT WAS ONLY A COL ORFUL DEVICE USED BY THE ASSESSEE TO BRING HIS UNDISCLOSED MONEY IN THE GARB OF A GIFT. THE AO MADE AN ADDITION OF RS.2.00 LACS AND A FURTHER S UM OF RS.10,000/-, BEING BROKERAGE PAID @ 5% FOR THE ACCOMMODATION ENT RY, U/S 68 OF THE ACT AND INITIATED PENALTY PROCEEDINGS U/S 271(1 0(C) OF THE ACT. THE ITA NOS.6238, 623 9/DEL/12 5 ASSESSEE COULD NOT SUCCEED AGAINST THE ABOVE MENTIO NED ADDITION IN THE FIRST AND SECOND APPEALS. 5.1. CONSIDERING THE SUBMISSIONS ADVANCED ON BEHALF OF THE ASSESSEE THE FINDING OF THE AO WAS CONFIRMED BY THE CIT(A). FOR READY-REFERENCE THE SAME IS EXTRACTED HEREUNDER:- 5. I HAVE CONSIDERED THE ISSUE AND THE SUBMISSIONS MADE THE AR. THE APPELLANT CONTENDED THAT THE GIFT OF RS.2.00 LACS H AS BEEN RECEIVED THROUGH BANKING CHANNELS FROM SH. SUNIL KUMAR GARG WHO AFFIDAVIT AND COPY OF IT RETURN WERE FILED BEFORE THE AO AND THEREFORE IT CANNOT BE HELD TO HVE FURNISHED INACCURATE PARTICULARS OF INCOME OR CONCEALED ANY INCOME. THOUGH THE APPELLANT FURNISHED AFFIDAV IT OF SH. SUNIL KUMAR GARG, HE WAS NOT PRODUCED BEFORE THE A.O. ME RE AFFIRMATION ON AFFIDAVIT IS NOT ENOUGH AND THE CONTENTS OF THE AFFIDAVIT HAVE TO BE CONFIRMED ALONG WITH DOCUMENTARY EVIDENCE. EVEN TH OUGH THE AO INSISTED THE APPELLANT TO PRODUCE SH. SUNIL KUMAR G ARG BEFORE HIM TO EXAMINE THE VERACITY OF THE AFFIDAVIT, THE APPELLAN T FAILED TO DISCHARGE THE ONUS CAST ON HIM. FURTHER, THE APPELLANT HAS F AILED TO PROVE THE CREDITWORTHINESS OF SH. SUNIL KUMAR GARG FOR THE AL LEGED GIFT. MERE FILING OF COPY OF IT RETURN DOES NOT ABSOLVE THE AS SESSEE OF THE ONUS TO PROVE THE CREDITWORTHINESS OF THE DONOR. FROM THE FACTS AS NOTED BY THE A.O, IT IS SEEN THAT SH. SUNIL KUMAR GARG GAVE SIMILAR ENTRIES OF GIFTS TO OTHER PERSONS THROUGH A WEB OF TRANSACTION S THROUGH DIFFERENT BANK ACCOUNTS. THE ASSESSEE HAS FAILED TO ESTABLIS H THE RELATIONSHIP WITH SH. SUNIL KUMAR GARG AND THE OCCASION ON WHICH THE ALLEGED GIFT WAS RECEIVED. THE ABOVE MENTIONED FACTS CLEARLY CO ME WITHIN THE PURVIEW OF FURNISHING INACCURATE PARTICULARS AND THEREFORE ATTRACT THE PROVISIONS OF SECTION 271(10(C). IT HAS BEEN HELD IN THE CASES OF (I) UNION OF INDIA VS. DHARMENDRA TEXTILE PROCESSORS, 306, ITR 276C(SC), (II) GULJAG INDUSTRIES LTD. CS CTO, 293 ITR 584 (SC) AND (III) CIT VS. ATUL MOHAN BINDAL, 317 ITR 1(SC) THAT MENS REA NOT ESSENTIAL FOR CIVIL LIABILI TY OF PENALTY-PENALTIES UNDER FISCAL STATUTES ARE FOR BREACH OF CIVIL LIABI LITIES-WILLFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTR ACTING CIVIL LIABILITY AS IS THE CAS IN THE MATTER OF PROSECUTION U/S 276C . FURTHER, IN THE CASE OF CIT VS. LAL CHAND TIRATH RAM 225 ITR 675 (P &H) THAT MERE OFFERING EXPLANATION IS NOT SUFFICIENT-EXPLANATION TO BE SUBSTANTIATED BY COGENT AND RELIABLE EVIDENCE. COMING TO THE CASE LAWS RELIED UPON THE ASSESSEE, I T IS SEEN THAT IN THE CASE OF CIT VS. RELIANCE PETROPRODUCTS LTD. (SUPRA), HONBLE SUPREME COURT HELD THAT MAKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING OF INACCURATE PARTI CULARS. IN THE PRESENT CASE, NO INCORRECT LEGAL CLAIM HAS BEEN MAD E AND THEREFORE THIS CASE LAW IS NOT APPLICABLE TO THE FACTS OF THE APPELLANT. THE FACTS IN THE CASE OF CIT VS. BALBIR SINGH (SUPRA) WERE DI FFERENT AS THE DONOR ITA NOS.6238, 623 9/DEL/12 6 IN THAT CASE WAS AN NRI AND FURTHER THE IDENTIFICAT ION OF THE DONOR AND THE GENUINENESS OF THE TRANSACTION WAS NOT DOUBTED. IN THE CASE OF BHARTESH JAIN VS. ITO (SUPRA), THE FACTS ARE ENTIRE LY DIFFERENT IN AS IN THAT CASE IN RESPONSE TO THE SUMMONS ISSUED BY THE AO, THE PARTY APPEARED AND ACCEPTED THAT THE CHEQUES IN QUESTION OF RS.4.00 LACS WAS GIVEN BY IT TO THE ASSESSEE THOUGH NOT AS A LOA N. THE OTHER CASE LAWS RELIED UPON BY THE AR ARE EITHER DISTINGUISHAB LE ON FACTS OR ENTIRELY ON DIFFERENT ISSUES. IN VIEW OF THE ABOVE, IT IS HELD THAT, IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) AND THEREFORE THE PENALTY LEVIED BY T HE A.O IS UPHELD AND THE GROUNDS OF APPEAL ARE DISMISSED. 5.2. AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. AR SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY I NACCURATE PARTICULARS OF INCOME AND THE FACTUM OF RECEIPT OF GIFT OF RS. 2.00 LAC F ROM HIS FRIEND SHRI SUNIL KUMAR GARG THROUGH BANKING CHANNELS SUPPORTED BY AFFIDAVI T AND COPY OF THE INCOME TAX RETURN OF SHRI SUNIL KUMAR GARG HAS BEEN PLACED ON RECORD. THE SAID EVIDENCE IT WAS ARGUED IS SUFFICIENT TO PROVE THE I DENTITY, GENUINENESS AND CAPACITY OF THE DONOR. IT WAS ARGUED THAT NO DOUBT IN QUANTUM PROCEEDINGS THE ISSUE HAS BEEN DECIDED AGAINST THE ASSESSEE, HOWEVE R, SIMPLY BECAUSE THE ASSESSEE COULD NOT PROVE THE FACT DOES MEAN THAT TH E EVIDENCE AVAILABLE ON RECORD IS DISPROVED. IT WAS ALSO ARGUED THAT THE EVIDENCE IS NOT FALSE AND THE JUDGMENT OF THE GUJRAT HIGH COURT DATED 22/6/2011 IN TAX APPEAL NO. 496/10 IN THE CASE OF CIT VS. KOKILA BEHAN ISHA COPY PLACED AT PAGES 7 TO 9 IN THE PAPER BOOK WAS RELIED UPON. RELIANCE WAS ALSO PLACED UPON THE ORD ER DATED 5 TH AUGUST 2009 RENDERED BY THE HONBLE BOMBAY HIGH COURT IN I.T AP PEAL (L) NO. 1860/2009 IN CIT VS. UPENDRA V. METHANI (COPY FILED IN THE COURT ). IT WAS HIS SUB MISSION THAT SIMILAR ARGUMENTS AND PROPOSITIONS OF LAW WOUL D BE RELIED UPON IN ITA NO- 6239/DEL/2012 IN THE CASE OF MANOJ KUMAR SINGHAL H UF WHEREIN A GIFT OF RS.4 LAC HAS BEEN RECEIVED IS IDENTICAL MANNER THROUGH B ANKING CHANNELS. 6. LD. SENIOR DR ON THE OTHER HAND HEAVILY RELYING UPON THE IMPUGNED ORDER INVITED SPECIFIC ATTENTION TO PARA 5 OF THE IMPUGNE D ORDER SO AS TO CONTENDED THAT ITA NOS.6238, 623 9/DEL/12 7 SHRI SUNIL KUMAR GARG HAS BEEN FOUND TO BE MAKING S IMILAR ENTRIES OF GIFTS TO OTHER PERSONS THROUGH A WEB OF TRANSACTIONS THROUGH DIFFERENT BANK ACCOUNTS. IT WAS ARGUED THAT THE ASSESSEE HAS FAILED TO ESTABLI SH THE RELATIONSHIP OF SHRI SUNIL KUMAR GARG NOR HAS HE ADDRESSED THE OCCASION ON WHI CH THE ALLEGED GIFT WAS RECEIVED AND IN THE PENALTY PROCEEDINGS ALSO THE PO SITION REMAINS THE SAME. REFERRING TO THE JUDGMENT OF THE APEX COURT IN THE CASE OF UNION OF INDIA VS. DHARMENDRA TEXTILE 306 ITR 276 (SC) IT WAS SUBMITTE D THAT NO DOUBT MENS REA IS NOT ESSENTIAL FOR CIVIL LIABILITY OF PENALTY BUT AT -LEAST SOME EXPLANATION WORTHY OF BEING ACCEPTED SHOULD BE OFFERED. THE CASE LAW REL IED UPON BY THE ASSESSEE IT WAS ARGUED IS NOT APPLICABLE. ATTENTION WAS ALSO IN VITED TO THE FINDINGS RECORDED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN QUANTUM P ROCEEDINGS WHICH IT WAS ARGUED CLEARLY DEMONSTRATES THE WEB OF TRANSACTION CREATED TO HOODWINK THE DEPARTMENT BY CREATING BOGUS EVIDENCES TO PASS OFF UNACCOUNTED MONIES AS GIFTS. SPECIFIC ATTENTION WAS INVITED TO PARA 5. 1 PAGES 15 & 16 OF THE ORDER PASSED IN THE CASE OF THE ASSESSEE IN THE QUANTUM P ROCEEDINGS SO AS TO EMPHASIZES THAT ON EXAMINING THE BANK ACCOUNT OF THE DONOR TH E TRIBUNAL CAME TO THE CONCLUSION THAT THERE WAS A SYSTEMATIC ATTEMPT TO L AUNDER MONEY BY WAY OF GIFTS IN FAVOUR OF A NUMBER OF PERSONS INCLUDING THE ASSE SSEE. IT WAS EMPHASIZED THAT THE TRIBUNAL HEREIN ON EXAMINATION HAD CONCLUDED TH AT THE EVIDENCES ON RECORD IN THE FORM OF BANK ACCOUNT OF THE DONOR LED TO THE IN FERENCE THAT THE SAME WAS OPERATED ONLY WITH A VIEW TO FURNISHING ACCOMMODATI ON ENTRIES. IT WAS ARGUED IN THE FACE OF THESE CATEOGRIC FINDINGS THE ARGUMENT T HAT EVIDENCES HAS NOT BEEN DISPROVED IS OF NO RELEVANCE AS THE ENTIRE CLAIM IS BOGUS AND NO EXPLANATION HAS BEEN OFFERED TO ADDRESS WHY PENAL ACTION FOR SUCH A CTIONS WAS NOT ATTRACTED. ACCORDINGLY, IT WAS HIS PRAYER THAT THE IMPUGNED OR DER SHOULD BE CONFIRMED. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. A PERUSAL OF THE FACTS RECORDED IN THE CASE MANOJ KUMAR SINGHAL ITA NOS.6238, 623 9/DEL/12 8 (INDIVIDUAL) PERTAINING TO THE LOAN OF 2 LACS STATE D TO BE RECEIVED FROM SHRI SUNIL KUMAR GARG WOULD SHOW THAT THE ASSESSEE VIDE ITS RE PLY DATED 08.12.2008 CLAIMED THAT DONOR BEING A FRIEND ACCOMMODATED THE ASSESSEE BY PROVIDING A GIFT OF THE SAID AMOUNT AS THE ASSESSEE WAS IN NEED OF MONEY TO PURCHASE THE LAND AT UDAIPUR AND ULTIMATELY DURING THE SAID ASSESSMENT Y EAR 2003-04, THE ASSESSEE ADVANCED RS.7,50,000/- FOR PURCHASE OF LAND. THESE FACTS ARE FOUND RECORDED IN PARA 3 OF THE ASSESSMENT ORDER. THE RECORD SHOWS T HAT THE SO CALLED FRIEND DESPITE THE REQUEST OF THE DEPARTMENT WAS NOT PRODU CED AND INSTEAD THE ASSESSEE REQUESTED THE AO TO ISSUE SUMMONS TO HIM. THE AO I SSUED SUMMONS ON ASSESSEES REQUEST WHICH REMAINED UNCOMPLIED WITH. IN THE CIRCUMSTANCES THE CIT(A) AND THE TRIBUNAL CONCLUDED IN THE QUANTUM PR OCEEDINGS THAT NEITHER THE CREDITWORTHINESS NOR THE IDENTITY OF THE DONOR COUL D BE PROVED. THE DONOR WAS HELD TO BE A STRANGER TO THE ASSESSEE WHO WAS NEVER PRODUCED TO SUPPORT THE GIFT HAVING BEEN MADE. 7.1. REGARDING THE CLAIM THAT THE GIFT WAS RECEIVED THROUGH BANKING CHANNELS THE EVIDENCE ON EXAMINATION HAS BEEN HELD TO BE NOT SUFFICIENT TO ESTABLISH THE GENUINENESS. THE RECORD SHOWS THAT ON CONSIDERING THE PARTICULARS OF THE BANK ACCOUNT 14154 FROM JAI LAXMI CO-OPERATIVE BANK LTD, FATEHPURI, DELHI FROM WHICH THE GIFT WAS GIVEN IT WAS DISCLOSED THAT THE AMOUNT HAD BEEN TRANSFERRED FROM ACCOUNT NO. 3401 OF THE VERY SAME BRANCH ON T HE VERY SAME DATE. THESE FACTS ARE RECORDED IN PARA 11 & 12 OF THE ASSESSME NT ORDER. IT IS FURTHER SEEN THAT ON EXAMINING THE PARTICULARS OF ACCOUNT NO. 3401. IT WAS NOTICED THAT THE ACCOUNT WAS IN THE NAME OF USHA MOTOR COMPANY AND F ROM THE SAID ACCOUNT TWO CHEQUES TRANSFERRING THE AMOUNT OF 2 LACS AND RS.RS . 4 LACS ODD WERE TRANSFERRED IN ACCOUNT NO. 14154 AND 14125 IN THE NAMES OF SHRI SUNIL KUMAR GARG AND SHRI OM PRAKASH. THE GIFTS OF RS. 4 LAC WAS MADE F ROM THE SAID ACCOUNT BY SH. OM PRAKASH TO SHRI MANOJ KUMAR SINGHAL HUF. THE DE PARTMENT HAS ALSO BROUGHT ON RECORD THAT IN THE BANK ACCOUNT OF SHRI SUNIL KUMAR GARG THERE WAS A ITA NOS.6238, 623 9/DEL/12 9 TOTAL OF RS.44, 30,643/- CREDITED IN THIS ACCOUNT O UT OF WHICH RS.17,81,250/- WAS DEPOSITED IN CASH AND THE REMAINING WAS TRANSFERRED FROM ACCOUNT NOS. 3401, 3328, 3434 & 12446 MAINTAINED WITH THE SAME BANK AN D BRANCH IN THE NAME OF USHA MOTOR COMPANY, WINSOME PORT FOLIO (P) LTD.; D IAMOND GRAPHICS; AND SHRI SANTOSH KUMAR RESPECTIVELY. A PERUSAL OF THE ASSESSMENT ORDER FURTHER SHOWS THAT OUT OF THE TOTAL DEPOSIT OF RS.44,30,643 /- IN THE BANK ACCOUNT OF SHRI SUNIL KUMAR GARG, A SUM OF RS.44,28,122 HAD BEEN GI VEN AWAY AS GIFTS. ON THE BASIS OF THESE CUMULOUS FACTS IT WAS CONCLUDED THAT NO AMOUNT HAS BEEN GIVEN AS GIFT AND IN-FACT SHRI SUNIL KUMAR GARG AND THE OTHE R PERSONS WERE ENGAGED IN THE BUSINESS OF PROVIDING ACCOMMODATION ENTRIES ON COMM ISSION BASIS TO VARIOUS PERSONS, THESE FACTS ARE FOUND RECORDED IN PARA 13 & 14 OF THE ASSESSMENT ORDER. THE RECORD FURTHER SHOWS THAT THESE FACTS HAVE BEEN CONFIRMED BY THE ITAT IN THE QUANTUM PROCEEDINGS PASSED IN THE CASE OF BOTH THE ASSESSEES. A PERUSAL OF PAGE NO. 15 PARA 5.1 WOULD SHOW THAT THE CO-ORDINATE BEN CH CONSIDERING THE CLAIM OF THE ASSESSEE IN REGARD OF GENUINENESS AND THE APPLI CABILITY OF THE PRINCIPLE LAID DOWN BY THE APEX COURT IN CIT VS ORISSA CO-OPERATIO N LTD. (1986) 159 ITR 78 (SC) DISTINGUISHED THE SAME ON FACTS WITH THAT OF THE ASSESSEE. THE RELEVANT PORTION OF THE SAID PARA IS EXTRACTED HEREUNDER :- 5.1. THE FACTS OF THIS CASE ARE DISTINGUISHABLE, IN AS M UCH AS THE A.O HAD TRIED TO ASCERTAIN THE GENUINENESS OF THE GIFT BEFO RE REOPENING OF THE ASSESSMENT AS WELL AS IN THE COURSE OF THE ASSESSME NT PROCEEDINGS. SUMMONS WERE ISSUED TO THE DONOR AT THE INSTANCE OF THE ASSESSEE, WHICH WERE NOT COMPLIED WITH. THE ASSESSEE WAS ALS O GIVEN AN OPPORTUNITY TO PRODUCE THE DONOR AND THE ASSESSEE E XPRESSED HIS INABILITY TO DO SO. THE AO ALSO EXAMINED THE BANK ACCOUNT OF THE DONOR, WHICH FAIRLY LEADS TO A CONCLUSION THAT THER E WAS A SYSTEMIC ATTEMPT TO LAUNDER MONEY BY WAY OF GIFTS IN FAVOUR OF A NUMBER OF PERSONS INCLUDING THE ASSESSEE. THUS, IT IS NOT A CASE WHERE THE AO DID NOT MAKE ANY FURTHER ENQUIRY. IN THE FACE OF T HIS ENQUIRY AND NON- PRODUCTION OF THE DONOR, THE CONTENTS OF THE MEMORA NDUM OF GIFT AND AFFIDAVITS CAN ONLY BE SAID TO BE SELF-SERVING AND UNSUBSTANTIATED DOCUMENTS. ITA NOS.6238, 623 9/DEL/12 10 7.2. IT IS FURTHER SEE THAT THE FINDING OF THE ASSE SSING OFFICER THAT THE BANK ACCOUNT OF THE DONOR WAS OPERATED ONLY WITH THE VIE W TO FURNISH ACCOMMODATION ENTRIES HAS ALSO BEEN CONFIRMED BY THE ITAT. FOR R EADY REFERENCE WE REPRODUCE PARA 5.2 FROM PAGE 19 OF THE ORDER OF THE CO-ORDINA TE BENCH IN QUANTUM PROCEEDINGS:- 5.2. ON CONSIDERING ALL THESE CASE, IT IS CLEAR TH AT ALL FACTS WILL HAVE TO BE TAKEN INTO ACCOUNT IN COMING TO THE CONCLUSION WHET HER THE GIFT WAS GENUINE OR NOT. THE FACTS CLEARLY SHOW THAT THE BA NK ACCOUNT OF THE DONOR WAS USED FOR PROVIDING ACCOMMODATION ENTRIES TO A NUMBER OF PERSONS INCLUDING THE ASSESSEE. THE ASSESSEE WAS N OT RELATED TO THE DONOR. THE AVERMENT MADE REGARDING FRIENDSHIP BETW EEN THEM IN THE MEMORANDUM OF GIFT AND THE AFFIDAVIT REMAIN UNPROVE D. IN FACT, THE CONTENTS OF THE BOTH THESE DOCUMENTS REMAINED UNPRO VED IN ABSENCE OF THE PRODUCTION OF THE DONOR. AFTER ALL, THE DONOR WAS THE WITNESS OF THE ASSESSEE AND IT WAS FOR HIM TO PRODUCE HIM FOR EXAM INATION OF THE ITO AT THE EARLIEST OPPORTUNITY. THE DONOR WAS NOT FOU ND TO BE EXISTING ON THE GIVEN ADDRESS AND THE ASSESSEE HAS NOT BEEN ABL E TO FURNISH THE PRESENT ADDRESS TILL DATE. EVEN BEFORE US, NO STAT EMENT WAS MADE THAT THE DONOR COULD BE PRODUCED NOW FOR THE EXAMINATION OF THE AO. ALL THESE FACTS AND ATTENDANT CIRCUMSTANCES CLEARLY LEA D TO THE CONCLUSION THAT THE GIFT WAS NOT GENUINE. IT IS HELD ACCORDIN GLY. WE MAY HASTEN TO ADD THAT THE ASSESSEE IS NOT REQUIRED TO PROVE THE SOURCE OF THE SOURCE, BUT THE PRIMARY ONUS OF PROVING THE GIFT TO THE GEN UINE BY ADDUCING SATISFACTORY EVIDENCE ABOUT THREE PRIMARY CONDITION S LIES ON HIM, WHICH REMAINS UNDISCHARGED. AS A MATTER OF FACT, T HE EVIDENCE BY WAY OF BANK ACCOUNT OF THE DONOR, COLLECTED BY THE AO A ND CONFRONTED TO THE ASSESSEE, DIRECTLY PROVES THE GIFT TO BE NON-GE NUINE. IN THE LIGHT OF THIS DISCUSSION, THE CASE OF THE ASSESSEE DOES NOT STAND ON MERITS. THEREFORE, THE ADDITION OF THIS AMOUNT TO THE TOTAL INCOME OF THE ASSESSEE IS UPHELD. 7.3. IN THE ABOVE FACTUAL BACKGROUND, CONSIDERING T HE EXPLANATION OFFERED BY THE ASSESSEE IN THE PENALTY PROCEEDINGS IT IS SEEN THAT THE SAME CANNOT BE OF MUCH HELP. THE ARGUMENT THAT EVIDENCE IN THE QUANTUM PR OCEEDINGS HAS NOT BEEN DISPROVED AS SUCH CAN BE SAID TO BE PROVED IS OF NO HELP IN THE FACE OF THE CATEGORIC FINDINGS RECORDED IN THE ORDERS WHICH REM AIN UNASSAILED NAMELY THAT THE DONOR WAS FOUND TO BE OPERATING BY FURNISHING ACCOM MODATION ENTRIES WHICH ITA NOS.6238, 623 9/DEL/12 11 WERE RESORTED TO AS THE ASSESSEE WAS IN NEED OF FUN DS TO PURCHASE SOME LAND IN UDAIPUR. THE CASE LAW RELIED UPON IS ENTIRELY DIST INGUISHABLE. WHETHER PENAL ACTION HAS RIGHTLY BEEN INVOKED OR NOT IS A MATTER OF FACT. THE PRINCIPLE OF LAW LAID DOWN IN FACTS WHERE THE GENUINENESS OF THE GIF T HAS BEEN ACCEPTED IS A DISTINGUISHABLE FACT WHICH IS NOT PRESENT IN THE FA CTS OF THE PRESENT CASES. 7.4. ACCORDINGLY HAVING THROUGH THE PENALTY ORDER A ND THE EXPLANATION OFFERED THEREIN WHICH HAS BEEN EXTRACTED IN THE EARLIER PAR T OF THIS ORDER AND ALSO HAVING GONE THROUGH THE IMPUGNED ORDER WHEREIN THE EXPLANA TION OFFERED REMAINS MORE OR LESS THE SAME AFTER HEARING THE ARGUMENTS OF THE PARTIES BEFORE THE BENCH, WE FIND NO GOOD REASON TO INTERFERE WITH THE FINDING A RRIVED AT IN THE IMPUGNED ORDER. BEING SATISFIED ON ACCOUNT OF THE ABOVE-MENTIONED D ETAILED REASONS RECORDED HEREINABOVE THE ASSESSEES GROUNDS ARE DISMISSED. 8. IN THE RESULT THE ITA NO-6238/DEL/2012 IS DISMIS SED. 8.1. SINCE THE ARGUMENTS ON BEHALF OF THE PARTIES I N ITA NO-6239/DEL/2012 IN MANOJ KUMAR SINGHAL & SONS (HUF) REMAINED THE SAME BARRING THE DIFFERENCE IN FACTS AS HEREIN ALLEGED GIFT WAS OF RS.4 LAC FROM T HE DONOR SH. OM PRAKASH WHO TOO HAS RECEIVED THE AMOUNT FROM THE BANK A/C OF US HA MOTOR COMPANY MAINTAINED IN THE SAME BRANCH WHEREIN ALSO ACCOMMOD ATION ENTRIES BY WAY OF GIFT ETC. WAS FOUND TO BE RECORDED OF THE ENTIRE AM OUNT RECEIVED FROM THE SAME GROUP OF COMPANIES. THE FACTS BEING DECIDED AGAINS T THE ASSESSEE IN QUANTUM PROCEEDINGS. ACCORDINGLY SINCE ARGUMENTS REMANDED IS SAME FOR SIMILAR REASONS AS IN ITA NO-6238/DEL/2012 THE ASSESSEES APPEAL HE REIN ALSO IS DISMISSED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE S ARE DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 11 TH OF MARCH, 2014. SD/- SD/- (B.C.MEENA) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 11/03/2014 *R. NAHEED & AMIT KUMAR* ITA NOS.6238, 623 9/DEL/12 12 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTR AR ITAT NEW DELHI