Mr. Rakesh Tiku, New Delhi V. ACIT, New Delhi

ITA 6591/DEL/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4170 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2010-2011
• Appeal Filed On: 05-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: LAKSHAY GO Y A L
• Keywords: Gift; Avoidance of tax

Judgement Text

ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F: NEW DELHI BEFORE SHRI G.D. AGRAWAL, HONBLE PRESIDENT AND SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 6591/DEL /2014 ASSESSMENT YEAR: 2010-11 MR. RAKESH TIKU, SENIOR ADVOCATE, B-28, GROUND FLOOR, POMPOSH ENCLAVE, GREATER KAILASH-I, NEW DELHI-110048 (PAN: AAFPT2953A) VS ACIT, CIRCLE-37(1), NEW DELHI-110002 (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI LAKSHAY GOYAL, ADV. RESPONDENT BY : NONE DATE OF HEARING : 04.09.2017 DATE OF PRONOUNCEMENT: 04.10.2017 ORDER PER SUDHANSHU SRIVASTAVA, J.M. THIS APPEAL, FILED BY THE ASSESSEE, IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-XXVIII, NEW DELHI D ATED 16.09.2014 AND PERTAINS TO ASSESSMENT YEAR 2010-11 CONFIRMING THE IMPOSITION OF PENALTY OF RS. 32,540/ - IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961. ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THE APPEAL :- 1. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW, FACTS AND CIRCUMSTANCES OF THE CASE B Y CONFIRMING THE PENALTY ORDER OF THE LEARNED ASSESSI NG OFFICER. LEARNED COMMISSIONER OF INCOME TAX (APPEAL S) HAS MIS-UNDERSTOOD THE FACTS OF THE CASE. 1. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS M IS- INTERPRETED THE JUDGMENTS OF HONBLE APEX COURT IN THE CASE OF PRICE WATER HOUSE COOPERS PVT. LTD. VS CIT, CIT VS. RELIANCE PETRO PRODUCTS PVT. LTD. AND DELHI HIG H COURT JUDGMENT IN THE CASE OF CIT VS. BRAHMAPUTRA CONSORT IUM LTD. THESE JUDGMENTS SQUARELY APPLY TO THE FACTS AN D CIRCUMSTANCES OF THE CASE OF THE ASSESSEE. 2. LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS FURTHER MIS-INTERPRETED THE JUDGMENT OF SUPREME COU RT IN THE CASE OF DILIP N. SHROFF VS. JT. CI1 (2007) 210 CTR (SC). 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) H AS FURTHER ERRED WHILE RELYING UPON THE DECISION OF HO NBLE HIGH COURT IN THE CASE OF CIT VS. MAK DATA LTD. THE FACTS OF THIS CASE ARE TOTALLY DIFFERENT FROM THE FACTS O F THE CASE OF THE ASSESSEE. *1 THE APPELLANT CRAVES TO AMEND OR ADD ANY ONE OR MOR E GROUNDS OF APPEAL. 3. AN APPLICATION WAS RECEIVED ON BEHALF OF THE L D. SENIOR DR STATING THAT THE LD. SENIOR DR WAS ABSENT AND ADJOU RNMENT WAS SOUGHT BY THE DEPARTMENT ON THIS GROUND. HOWEVER, LOOKING INTO THE FACTS OF THE CASE, WE DEEM IT FIT TO PROCEED WI TH THE HEARING EX PARTE QUA THE DEPARTMENT. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A SENIOR ADVOCATE IN DELHI HIGH COURT AND DURING THE YEAR UN DER CONSIDERATION, A RETURN DECLARING INCOME AT RS. 1,3 7,96,450/- ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 WAS FILED. THE CASE WAS SELECTED FOR SCRUTINY AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER OBSERVED THAT DURING THE YEAR UNDER CONSIDERATION, THE ASSES SEE, AS COMPARED TO THE RETURN OF INCOME FILED FOR ASSESSME NT YEAR 2009- 10, HAD NOT DECLARED ANY INCOME OF HIS MINOR CHILDR EN. ON QUERY, THE ASSESSEE SUBMITTED THAT INCOME OF RS. 5,295/- H AD BEEN OMITTED FROM BEING INCLUDED IN THE RETURN DUE TO OV ERSIGHT. ACCORDINGLY, THE ASSESSING OFFICER PROCEEDED TO MAK E AN ADDITION OF RS. 5,295/- AFTER GRANTING BASIC EXEMPTION OF RS . 1500/- PER CHILD. FURTHER, THE ASSESSING OFFICER ALSO NOTICED THAT THE ASSESSEE HAD SHOWN A GIFT OF RS. 1 LAKH AS RECEIVED FROM A RELATIVE AND CREDITED TO HIS CAPITAL ACCOUNT. THE ASSESSING OFFICER PROCEEDED TO ADD THE SAID GIFT TO THE INCOME OF THE ASSESSEE U/S 56(VII) OF THE ACT. PENALTY PROCEEDINGS U/S 271(1) (C) OF THE ACT WERE ALSO INITIATED ON ACCOUNT OF THESE TWO ADDITIO NS AND A PENALTY OF RS. 32,540/- WAS IMPOSED FOR FURNISHING INACCURATE PARTICULARS OF INCOME LEADING TO CONCEALMENT OF INC OME. THE LD. CIT (A) ALSO CONFIRMED THE PENALTY AND NOW, THE ASS ESSEE HAS APPROACHED THE ITAT CHALLENGING THE CONFIRMATION OF THE SAID PENALTY. 5. LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE GIFT OF RS. ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 1 LAKH HAD BEEN RECEIVED FROM THE ASSESSEES RELATI VE WHO WAS HIS MAMAS SON AND WAS NOT INCLUDED IN THE DEFINITION OF REL ATIVES AS PER THE PROVISIONS OF SECTION 56(VII) AND, THEREFOR E, IT WAS NOT A CASE OF CONCEALMENT. IT WAS ALSO SUBMITTED THAT TH E AMOUNT HAD BEEN DULY DISCLOSED AS A CREDIT IN THE CAPITAL ACCO UNT AND, THEREFORE, IT COULD NOT BE SAID THAT THE ASSESSEE H AD FILED INACCURATE PARTICULARS OF INCOME. IT WAS FURTHER S UBMITTED THAT THE MINORS INCOME CLUBBED UNDER THE PROVISIONS OF SECTION 64 OF THE ACT HAD BEEN OMITTED DUE TO OVERSIGHT AND THIS EXPLANATION OF THE ASSESSEE WAS BONA FIDE AS THE ASSESSEE HAD FILED RETURN OF INCOME DECLARING AN INCOME OF RS. 1,37,96,450/- AND HAD DULY PAID THE TAX THEREON AND IN SUCH CIRCUMSTANCES, ANY AVOIDANCE OF TAX DUE ON RS. 5,295/- WAS NOT THE INTENTION OF THE ASSESSEE. IT WAS PRAYED THAT THE PENALTY IMPOSED MAY BE DELETED. 6. HAVING HEARD THE LD. AUTHORISED REPRESENTATIVE A S WELL AS AFTER HAVING PERUSED THE MATERIAL ON RECORD, WE FIN D THAT THE ASSESSEES CLAIM THAT MAMAS SON IS COVERED UNDER THE DEFINITION OF RELATIVE U/S 56(VII) OF THE IT ACT IS INCORRECT. HOWEVER, THERE IS NO DENIAL OF THE FACT THAT THE ADDITION ON ACCOUNT OF THIS CLAIM WAS VERY MUCH PART OF THE RETURN FILED BY THE ASSES SEE AND, THUS, THERE WAS NEITHER ANY CONCEALMENT NOR ANY FURNISHIN G OF ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 INACCURATE PARTICULARS IN THE STRICT SENSE OF THE T ERM. SIMILARLY, THE ASSESSEES EXPLANATION REGARDING INADVERTENCE O F INCLUDING THE MINOR CHILDRENS INCOME IN THE RETURN OF INCOME CAN NOT BE SAID TO BE LACKING IN BONA FIDE AS THE ASSESSEE HAS PAID INCOME TAX AMOUNTING TO RS. 54,79,406/- DURING THE YEAR UNDER CONSIDERATION. WITH REGARD TO THE PROVISIONS OF SE CTION 271(1)(C ) OF THE ACT PERTAINING TO PENALTY, THE HONBLE APEX COURT HAS AUTHORITATIVELY LAID DOWN THAT MAKING OF A CLAIM BY THE ASSESSEE WHICH IS NOT SUSTAINABLE WILL NOT TANTAMOUNT TO FUR NISHING INACCURATE PARTICULARS. IN CIT VS. RELIANCE PETROPR ODUCTS PVT. LTD. REPORTED IN [2010] 322 ITR 158, THE HONBLE APEX COURT HAS HELD AS FOLLOWS: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN O RDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE PRESENT IS NOT A CASE OF CONCEALMENT OF INCOME. THAT IS NOT TH E CASE OF THE REVENUE EITHER. HOWEVER, THE LD. COUNSEL FOR TH E REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EX PENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF INCOME. AS PER LAW LEXICON, THE MEANING OF THE W ORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENS E); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. TH EREFORE, THE WORD 'PARTICULARS' USED IN THE SECTION 271 (1) (C) WOULD ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MAD E. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFOR MATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR IN ACCURATE. IT IS NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPL IED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, P RIMA FACIE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING IN ACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMI TTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTER EST WOULD AMOUNT TO GIVING INACCURATE PARTICULARS OF SUCH INC OME.' WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CAN NOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MAKING AN I NCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCU RATE PARTICULARS. 7. ALTHOUGH, BOTH THE LOWER AUTHORITIES HAVE HELD THAT THE ASSESSEE HAS CONCEALED INCOME/FURNISHED INACCURATE PARTICULARS OF INCOME, ON AN OVERALL CONSIDERATION ON THE FACTS , SUCH A VIEW IS NOT TENABLE IS THE PRESENT APPEAL. THE AMOUNT OF GIFT RECEIVED HAS BEEN DULY REFLECTED IN THE RETURN OF INCOME. FU RTHER, THE ASSESEEE IS A TAX-PAYER WHO HAS PAID A HUGE AMOUNT OF INCOME TAX DURING THE YEAR AND THEREFORE AN OMISSION TO IN CLUDE A PALTRY AMOUNT OF RS. 5,295/- DUE TO OVERSIGHT CANNOT BE IN FERRED AS TO BE LACKING IN BONA FIDE. THEREFORE, LOOKING INTO TH E CIRCUMSTANCES ITA 6591/DEL/2014 ASSESSMENT YEAR 2010-11 AND RESPECTFULLY FOLLOWING THE JUDGMENT OF THE HON BLE APEX COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LT D. (SUPRA) WE ARE UNABLE TO AGREE WITH THE VIEW TAKEN BY THE LD. CIT (A) AND WE SET ASIDE THE IMPUGNED ORDER AND DIRECT THE ASSESSI NG OFFICER TO DELETE THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 4 TH OCTOBER, 2017. SD/- SD/- (G.D. AGRAWAL) (SUDHANSHU SRIVASTAVA) PRESIDENT JUDICIAL MEMBER DATED: 4 TH OCTOBER, 2017 GS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER ASSISTANT REGI STRAR