Pt. Laxmi Narayan Gaur Prop. M/s. Bharat Tanker Transport Co., JODHPUR V. ACIT, UDAIPUR

ITA 87/JODH/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8013 (ITAT-JODHPUR)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 27-11-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 21-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G R KOKANI
• Keywords: Gift
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL: JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, HONBLE JUDICIAL MEMBE R AND SHRI N.K. SAINI, HONBLE ACCOUNTANT MEMBER ITA NO. 87/JODH/2012 ASSESSMENT YEAR 2003-04 PT. LAXMI NARAYAN GAUR PROP. M/S. BHARAT TANKER TRANSPORT CO., UDAIPUR VS. ACIT CENTRAL CIRCLE-2, UDAIPUR (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AMIT KOTHARI DEPARTMENT BY : SHRI G.R. KOKANI (DR) DATE OF HEARING : 27/11/2012. DATE OF PRONOUNCEMENT : 12/12/2012 ORDER PER HARI OM MARATHA, J.M.: THIS APPEAL OF THE ASSESSEE FOR A.Y. 2003-04 IS DI RECTED AGAINST THE ORDER OF LD. CIT(A) DATED 01/12/20112, AND EMAN ATES FROM A PENALTY ORDER DATED 06/04/2010 PASSED U/S 271(1)(C ) OF THE ACT. 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A TRANSPORTER AND CARRIES ON BUSINESS IN THE NAME AND STYLE OF M/S. BHARAT TANKER TRANSPORT CO. HE FILED HIS RETURN OF INCOME (ROI) FOR A.Y. 2003-04 ON 27/10/2003 DECLARING TOTAL INCOME O F RS. 7,38,220/-. THE AO HAS DETERMINED HIS TOTAL INCOME VIDE ORDER D ATED 23/09/2006 PASSED U/S 143(3) AT RS. 47,99,970/-. THE ASSESSEE HAS SHOWN GIFTS OF RS. 35 LAKHS RECEIVED FROM VARIOUS PERSONS, AS DEPI CTED IN THE FOLLOWING CHART :- SL NO. NAME AND ADDRESS OF DONORS NAME OF DRAFT I SSUING BANK DATE OF DRAFT AMOUNT AND DRAFT NO. 01 DEEPAK GUPTA S/O LATE G.N. GUPTA, R/O 1756, NAYA BAZAR, DELHI-6 JAI LAXMI COOPERATIVE BANK, FATEHPURI, DELHI-6 THROUGH VIJAYA BANK, DARIYA GANJ, DELHI 11/06/2002 RS. 10 LAC DRAFT NO. 202073 02 CHETAN P RAKASH AGRAWAL S/O SHAMBHU DAYAL, R/O 8/94, SECTOR 15, ROHINI, DELHI 110085 STATE BANK OF PATIYALA, DARIYA GANJ, NEW DELHI 07/08/2002 RS. 7.50 LAC DRAFT NO. 483502 03 KESHO RAM GUPTA S/O LATE SHRI SITA RAM GUPTA, R/O 320 KUCHA GHASIRAM, CHANDI CHOWK, DELHI 110006 STATE BANK OF BIKANER AND JAIPUR, FAIZ ROAD BRANCH, NEW DELHI. 07/08/2002 RS. 7.50 LAC DRAFT NO. 702564 04 INDERKUMAR DEVAKI NANDAN AGGRAWAL, 69, NEW CLOTH MARKET, OUTSIDE RAIPUR GATE, AHMEDABAD 380022 MAHILA UTKARSH NAGRIK SAHAKARI BANK LTD., C.G. ROAD, AHMEDABAD THROUGH HDFC 26/07/2002 RS. 2.50 LAC DRAFT NO. 59722 3 BANK LTD. 05 TENDULKAR INDUBEN VAMAN RAM R/O 1317/24, BAI JIVI CHAWL, HUNMANPURA, SARASPUR, AHMEDABAD MAHILA UTKARSH NAGRIK SAHAKARI BANK LTD., C.G. ROAD, AHMEDABAD THROUGH HDFC BANK LTD. 26/07/2002 RS. 2.50 LAC DRAFT NO. 59723 06 TENDULKAR VARSHA RAVI, 1317/24 BAI JIVI CHAWL, HANUMANPURA, SARASPUR, AHMEDABAD MAHILA UTKARSH NAGRIK SAHAKARI BANK LTD. C.G. ROAD, AHMEDABAD THROUGH HDFC BANK LTD. 26/07/2002 RS. 2.50 LA C DRAFT NO. 59724 07 RANJAN BEN NATWAR LAL SAH, 133, ANIPURA PATIA, OPP. COZY HOTEL, NAROL, AHMEDABAD MAHILA UTKARSH NAGRIK SAHAKARI BANK LTD., C.G. ROAD, AHMEDABAD THROUGH HDFC BANK LTD. 26/07/2002 2.50 LAC DRAFT NO. 59725 3. THE ASSESSEE SUBMITTED EXPLANATION QUA THESE GIF TS. BUT THE A.O. WAS NOT SATISFIED. THEREFORE, HE ADDED THE AB OVE GIFT AMOUNTS BY TREATING THEM AS BOGUS. CONSEQUENTLY THE PENALTY U/ S 271(1)(C) R.W.S. 274 OF THE ACT WERE INITIATED AND A PENALTY OF RS. 12,80,711/- WAS IMPOSED. THIS PENALTY AHS BEEN CONFIRMED BY LD. CIT (A) ALSO BY GIVING A FURTHER REASON THAT THE IMPUGNED ADDITION OF RS. 35 LAKHS HAS BEEN CONFIRMED BY LD. CIT(A) IN FIRST APPEAL. THE ASSESS EE IS AGGRIEVED AND HAS FILED THIS APPEAL BY TAKING FOLLOWING GROUNDS : - 4 1 THE IMPUGNED ORDER PASSED BY THE LD. CIT(A) IS CO NTRARY TO THE PROVISIONS OF LAW, PRINCIPLES OF NATURAL JUSTIC E AND IS ALSO CONTRARY TO FACTS, MATERIAL AND EVIDENCE EXIST ING ON RECORDS. 2. THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENAL TY OF RS. 1280711/- ON IMPUGNED ADDITION MADE U/S 143(3) FOR THE YEAR UNDER REFERENCE. THE AFORESAID PENALTY IS PENA LTY INVALID, WRONG AND UNJUSTIFIED. THE LD. CIT(A) OUGH T TO HAVE DELETED THE SAID PENALTY. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CIRCUMS PECTED THE ENTIRE RECORD, INCLUDING THE PAPER BOOKS, ETC. IT WAS BROUGHT TO OUR NOTICE AT THE VERY OUTSET OF HEARING OF THIS APPEAL THAT THE ADDITION MADE BY AO HAVE BEEN SUBSTANTIALLY DELETED BY HONB LE ITAT. WITH THE HELP OF COPIES OF THE TRIBUNAL ORDERS PASSED IN THI S CASE IN IT(SS)A NO. 16/JU/2008 AND ITA NO. 670/JU/2008 DATED 27/07/2012 IT WAS PLEADED THAT THE IMPUGNED PENALTY WILL NOW SURVIVE AND HENCE DESERVES TO BE DELETED. 5. PER CONTRA, THE LD. D.R. HAS CONTESTED AND HAS S UPPORTED THE PENALTY ORDER. HOWEVER, HE FAIRLY AGREED THAT SUBST ANTIAL ADDITION MADE IN THIS REGARD HAS BEEN DELETED BY THE TRIBUNA L. HE HAS FURTHER 5 SUBMITTED THAT THE LD. CIT(A) HAS, IN FACT, GIVEN T ELESCOPING RELIEF IN RELATION TO SOME OF THE ADDITIONS AND, THEREFORE, T HE DEFAULT OF CONCEALMENT OF INCOME HAS NOT BEEN ALTOGETHER OBLIT ERATED. 6. AFTER HEARING BOTH SIDES, WE HAVE NOTICED THAT H ONBLE TRIBUNAL HAS DELETED SUBSTANTIALLY, THE ADDITION ON WHICH TH IS PENALTY HAS BEEN IMPOSED. WE HAVE ALSO FOUND THAT THE VERY BASIS, O N WHICH THE A.O. HAD CONCLUDED THAT THERE IS CONCEALMENT OF INCOME, HAS BEEN REJECTED BY THE TRIBUNAL. IT HAS BEEN HELD IN THE QUANTUM A PPEAL BY THE TRIBUNAL AS UNDER: 5.10 AFTER CONSIDERING THE ORDERS OF THE AO AND THE ID.CIT(A), WE FIND THAT THE ASSESSEE COULD NOT PROV E THE GENUINENESS OF THE GIFTS RECEIVED. AFTER FILING TH E DETAILS, THE INVESTIGATION WAS MADE AND DONORS HAVE CATEGORICALL Y DENIED IN HAVING GIVEN ANY GENUINE GIFT AS THEY HAVE STATE D THAT THEY HAVE GIFTED THE AMOUNT IN LIEU OF COMMISSION. THESE FINDINGS COULD NOT BE CONTROVERTED BY BRINGING ANY POSITIVE MATERIAL. NO CONFIRMATION AFTER THIS QUERY CONDUC TED BY THE INVESTIGATION WING HAVE BEEN FILED FROM THE DONORS. THEREFORE, THE LAST STATEMENT GIVEN BY THEM PROVE T HAT THE GIFTS WERE NOT GENUINE. ACCORDINGLY, WE ARE OF THE CONSIDERED VIEW THAT THE AO AND THE ID.CIT(A) WILL JUSTIFY IN MAKING AND 6 CONFIRMING THE ADDITIONS RESPECTIVELY. HOWEVER, WE FOUND WEIGHT IN THE ALTERNATE CONTENTIONS OF THE ASSESS EE THAT TELESCOPING AGAINST UNDISCLOSED INCOME ACCOUNT OF L OANS AND ADVANCES GIVEN BY THE ASSESSEE TO VARIOUS PARTIES S HOULD BE GIVEN. WE HAVE CONFIRMED THE ADDITION ON ACCOUNT OF UNEXPLAINED MONEY ADVANCED TO VARIOUS .PERSONS. THO UGH THE ASSESSEE HAD FILED AFFIDAVITS OF THOSE PARTIES THAT THEY HAVE NOT TAKEN ANY LOANS FROM THE ASSESSEE. IT MEANS THAT TH E MONEY WAS WITH THE ASSESSEE WHICH WAS UNEXPLAINED. ONCE T HEY HAVE DENIED IN HAVING RECEIVED ANY LOAN FROM THE ASSESSE E THEIR MEANS THAT THEY HAVE RETURNED THE LOAN TO THE ASSES SEE IN CASH. THEREFORE, IN OUR CONSIDERED VIEW, THE AMOUNT OF LO AN ADVANCED BY THE ASSESSEE WHICH IS HELD AS UNEXPLAINED WAS AV AILABLE WITH THE ASSESSEE TO USE THE SAME UNDER THE GARB OF THE GIFT. ACCORDINGLY WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE DESERVES TO GET TELESCOPING AGAINST THE AMOUNT OF L OAN WHICH IS HELD AS UNEXPLAINED AND INTEREST THEREON EARNED. AC CORDINGLY, WE DIRECT TO ALLOW THE TELESCOPING OF RS. 25.50 LACS P LUS INTEREST EARNED ON THAT AMOUNT WHICH HAS BEEN ASSESSED IN TH E BLOCK PERIOD. FOR THE SAKE OF CLARITY, ENTIRE AMOUNTS WER E ADVANCED FOR THE ASSESSMENT YEAR 2001-02 AND 2002-03 AND THEREFO RE, THOSE AMOUNTS WERE AVAILABLE WITH THE ASSESSEE FOR ROUTIN G THROUGH THE GIFTS. WE ORDER ACCORDINGLY. THUS THE GROUND NO. 1 TO 3 OF THE ASSESSEE ARE DISMISSED WHILE THE ALTERNATE GROUND N O. 5 OF THE ASSESSEE IS ALLOWED. 7 7. THUS, IT IS EVIDENT FROM THE ABOVE FINDINGS THAT THE TRIBUNAL HAS GIVEN A TELESCOPING EFFECT TO THE ADDITION IN QUEST ION AND THUS IN FORM THIS ADDITION DOES NOT SURVIVE. THE ASSESSEE HAS EX PLAINED THESE GIFTS BY PROVIDING EVIDENCE. 8. BEFORE US THE COPIES OF EVIDENCE TO PROVE THE GE NUINITY OF THESE GIFTS, ENCLOSED IN PAPER BOOK OF LD. A.R. FROM PAGE S 1 TO 14 WERE ALSO RELIED ON. WE HAVE EXAMINED THEM. AFTER CONSIDERI NG THE RECORD WE HAVE FOUND THAT THE ASSESSEE HAS PRODUCED VARIOUS E VIDENCES TO PROVE THESE GIFTS. THE NATURE OF THE EVIDENCE IN RESPECT OF EACH GIFT IS AS UNDER: 1. GIFT FROM SHRI DEEPAK GUPTA : A. COPY OF DECLARATION OF GIFT. B. AFFIDAVIT IN SUPPORT OF GIFT. C. COPY OF DEMAND DRAFT D. RETURN OF INCOME SUBMITTED FOR A.Y. 2001-02 E. COPYOF PAN CARD F. ORDER US/ 143(1) FOR A.Y. 1999-2000. G. COPY OF RATION CARD H. SOURCE OF MONEY OUT OF EARLIER ADVANCES GIVEN. I. TAX PAYERS AWARD J. DRAFT COPY. 2. GIFT OF SHRI CHETAN PRAKASH AGGARWAL : A. DECALRATION OF GIFT B. AFFIDAVIT IN SUPPORT OF GIFT. C. COPY OF DRAFT FOR GIFT. 8 3. GIFT OF SHRI KESHO RAM GUPTA : A. DECLARATION OF GIFT B. AFFIDAVIT IN SUPPORT OF GIFT C. COPY OF DRAFT 4. GIFT FROM INDER KUMAR DEVKINANDAN AGARWAL : A. DECLARATION OF GIFT. B. COPY OF RETURN FOR A.Y. 2003-04 SUBMITTED BY DONOR AND COMPUTATION OF INCOME, FINAL ACCOUNTS. C. COPY OF PAN CARD. 5. GIFT FROM TENDULAKR INDUBEN VAMANRAM : A. DECLARATION OF GIFT B. RETURN OF INCOME SUBMITTED FOR A.Y. 2003-04, COMPUTATION AND FINAL ACCOUNTS. C. COPY OF PAN CARD D. COPY OF DRAFT SENT FOR GIFT. 6. GIFT FROM TENDULAKR VARSWHA RAVI : A. DECLARATION OF GIFT B. RETURN FOR A.Y. 2003-04 C. COMPUTATION OF INCOME AND FINAL ACCOUNTS. D. COPY OF PAN CARD. 7. GIFT FROM RAJANBEN NATWARLAL SHAH : A. DECLARATION OF GIFT. B. RETURN OF INCOME FOR A.Y. 2003-04 AND COMPUTATION A ND FINAL ACCOUNTS. C. COPY OF PAN CARD 8. AFFIDAVIT OF APPELLANT SUBMITTED IN SUPPORT OF GIFT : 9. THE CUMULATIVE EFFECT OF ALL THE ABOVE FACTS, CI RCUMSTANCES AND THE EVIDENCE IS THAT THE ASSESSEE FILED EXPLANATION REGARDING RECEIPT OF THE GIFTS WHICH WAS NOT ACCEPTED BY AO. IN SUCH CIR CUMSTANCES, THE DECISION OF THE HONBLE APEX COURT RENDERED IN THE CASE OF CIT VS. 9 RELIANCE PETRO PRODUCTS PVT. LTD. (2010) 322 ITR 15 8 (SC) COMES TO THE RESCUE OF THE ASSESSEE. IT HAS BEEN HELD THAT A GL ANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT, 1961, S UGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN THIS WOULD EMBRACE THE D ETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HEL D GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPO SE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICU LARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACC URATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLI ED IN THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDIN G TO THE TRUTH OR ERRONEOUS. 10 10. WHERE THERE IS NO FINDING THAT ANY DETAILS SU PPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY. A MER E MAKING OF A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NO T AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. 11. FURTHER, THE HONBLE APEX COURT HAS LAID DOWN A CLEAR CUT LAW WHILE DECIDING THE CASE OF AMANTTRAMAN VEERSINGHAIA H & CO. VS. CIT (1980) 123 ITR 457 (SC) THAT THE FINDINGS IN THE A SSESSMENT PROCEEDINGS CANNOT BE REGARDED AS CONCLUSION FOR TH E PURPOSES OF PENALTY PROCEEDINGS. THE CRITERION AND YARDSTICKS F OR IMPOSING PENALTY U/S 271(1)(C) OF THE ACT ARE DIFFERENT AND THOSE AP PLICABLE FOR MAKING OR FOR CONFIRMING ADDITIONS. THEREFORE, IT IS NECES SARY TO REAPPRECIATE AND RECONSIDER THE MATTER TO SEC 7 THESE ADDITIONS/ DISALLOWANCES IN QUANTUM PROCEEDINGS DO ACTUALLY REPRESENT THE TWO O F THE INGREDIENTS (OR BOTH0 OF SECTION 271(1)(C) OF THE ACT. EXPLANAT ION I TO SECTION 271(1)(C) SAYS THAT WHEN ANY PERSON FAILS TO OFFER AN EXPLANATION OR WHEN THE EXPLANATION OFFERED IS FOUND TO BE FALSE I N SUCH CONDITIONS 11 THIS DEEMING PROVISION BECOME OPERATIONAL. THE NECE SSARY INGREDIENTS FOR ATTRACTING EXPLANATION I OF SECTION 271(1)(C) A RE THAT : (I) THE PERSON FAILS TO OFFER ANY EXPLANATION, OR (II) HE OFFERS THE EXPLANATION WHICH IS FOUND BY THE AO OR THE CIT(A) OR THE COMMISSIONER TO BE FALSE, OR (III) THE PERSON OFFERS EXPLANATION WHICH HE IS NOT ABLE TO SUBSTANTIATE AND FAILS TO PROVE THAT SUCH EXPLANATI ON IS BONAFIDE AND THAT ALL FACTS RELATING TO THE SAME HA VE BEEN DISCLOSED BY HIM. 12. SO, IN CASE THE ASSESSEE IS ABLE TO OFFER AN EX PLANATION WHICH IS NOT FOUND TO BE FALSE AND THE ASSESSEE HAS BEEN ABL E TO PROVE THAT SUCH EXPLANATION IS BONAFIDE AND THAT ALL THE FACTS RELATING TO THE SAME HAVE BEEN DISCLOSED BY HIM, THE ASSESSEE WILL ESCAP E THE GUILLOTINES OF THE RIGOURS OF THIS EXPLANATION OR FOR THAT MATTER OF 271(1)(C) OF THE ACT. IN THIS CASE, THE A.O. HAS FOUND THAT THE CLA IM OF THE ASSESSEE IS FALSE. HE HAS NOT ACCEPTED THE EXPLANATION TENDE RED BY THE ASSESSEE AS SATISFACTORY. THESE FACTS BRINGS OUT THE ASSESS EE FROM THE PURVIEW OF THE PENAL PROVISIONS OF U/S 271(1)(C) IN THE LIG HT OF THE ABOVE LEGAL 12 POSITION. WE REVERSE THE IMPUGNED FINDING AND ORDE R TO DELETE THE IMPUGNED PENALTY AND ALLOW THE APPEAL OF THE ASSESS EE. 13. IN THE RESULT, THIS APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 TH DECEMBER, 2012. SD/- SD/- [N.K. SAINI] [HARI OM MARATH A] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12 TH DECEMBER, 2012 COPY TO ALL CONCERNED. 1- ASSESSEE 2- DEPARTMENT BY ORDER 3- CIT(A) 4- CIT CONCERNED. 5- D.R., ITAT, JODHPUR. ASSISTANT REGISTRAR JODHPUR BENCH