Manju Sharma, Solan V. ITO, Solan

ITA 939/CHANDI/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 63968 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 3 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-09-2012
• Assessment Year: 2001-2002
• Appeal Filed On: 16-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K SAINI
• Keywords: Gift
• Section: 27; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NOS. 938 & 939/CHD/2010 (ASSESSMENT YEARS : 2000-01 & 2001-02) MANJU SHARMA, VS. THE INCOME TAX OFFICER, W/O SH.BHAWANI SHARMA, WARD 1, POWER HOUSE ROAD, SOLAN. SOLAN. PAN: AFNPS57456L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARRY RIKHY RESPONDENT BY : SHRI N.K. SAINI, DR DATE OF HEARING : 12.09.2012 DATE OF PRONOUNCEMENT : 28.09.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINS T THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME-TA X (APPEALS), SHIMLA DATED 16.4.2010 RELATING TO ASSESSMENT YEARS 2000-0 1 AND 2001-02 AGAINST THE PENALTY LEVIED U/S 271(1)(C) OF THE INC OME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ONLY ISSUE RAISED IN BOTH THE APPEALS IS AGA INST THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS.99 ,000/- IN ASSESSMENT YEAR 2000-01 AND RS.3,96,590/- IN ASSESSMENT YEAR 2 001-02. 3. COMMON GROUNDS OF APPEAL HAVE BEEN RAISED IN BOT H THE APPEALS AND THE PRESENT APPEALS ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD CONSTRUCTED A 2 RESIDENTIAL HOUSE ON PLOT BEARING NO.1034B, SECTOR 4 PANCHKULA DURING THE ASSESSMENT YEARS 2000-01 TO 2002-03. DURING THE ASSESSMENT PROCEEDINGS RELATING TO ASSESSMENT YEAR 2002-03 THE ISSUE OF DETERMINATION OF COST OF CONSTRUCTION OF THE BUILDI NG WAS REFERRED TO DISTRICT VALUATION OFFICER, CHANDIGARH WHO COMPUTED THE COST OF CONSTRUCTION FOR THE THREE FINANCIAL YEARS AT RS.59 ,28,000/-. THE ISSUE REGARDING CREDIT FOR SELF SUPERVISION WAS LEFT TO T HE DISCRETION OF THE ASSESSING OFFICER. THE ASSESSEE AGAINST THE SAME H AD SHOWN TOTAL INVESTMENT OF RS.51,40,133/- FOR THE THREE FINANCIA L YEARS UNDER CONSIDERATION. THE ASSESSING OFFICER ADOPTED THE T OTAL COST OF CONSTRUCTION RELATING TO ASSESSMENT YEAR 2002-03 AF TER ALLOWING THE CREDIT FOR SELF SUPERVISION, AND DIFFERENCE OF RS.1 ,95,944/- WAS ADDED TO THE INCOME OF THE ASSESSEE. THE CIT (APPEALS) REL YING UPON THE RATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN AMIYA BAL A PAUL VS. CIT HELD THAT THE ASSESSING OFFICER HAD NO POWER TO MAK E A REFERENCE TO THE VALUATION OFFICER AND THE ADDITION MADE THEREIN WAS DELETED. THE ASSESSING OFFICER HAD ALREADY ISSUED NOTICE UNDER S ECTION 148 TO THE ASSESSEE RELATING TO ASSESSMENT YEARS 2000-01 AND 2 001-02. THE REQUISITE DETAILS COULD NOT BE PRODUCED WITHIN TIME BEFORE THE ASSESSING OFFICER AS THE ASSESSEE WAS IN USA AT THE RELEVANT TIME ALONGWITH HER CHILDREN. THE ASSESSEE IN ADDITION TO THE DETAILS OF CONSTRUCTION WAS ALSO REQUISITIONED TO PRODUCE DIFFERENT CONTRACTORS WHO HAD CARRIED OUT THE CONSTRUCTION WORK. THE SAID CONTRACTORS WERE PRODU CED BEFORE THE ASSESSING OFFICER. DURING THE YEAR UNDER CONSIDERA TION, THE ASSESSEE HAD DECLARED TO HAVE PURCHASED THE PLOT ALONGWITH R EGISTRATION CHARGES AT RS.7,53,750/- AND THE INVESTMENT IN CONSTRUCTION WA S RS.2,95,000/- I.E. IN ASSESSMENT YEAR 2000-01. THE SOURCES OF INVESTM ENT WERE EXPLAINED OUT OF NRI GIFT RECEIVED FROM ANURADHA GUPTA AND LO ANS FROM DIFFERENT PERSONS OUT OF PAST SAVING TOTALING RS.7,53,750/-. THE INVESTMENT IN 3 CONSTRUCTION WAS MADE ON ACCOUNT OF PURCHASE OF STE EL, CEMENT, LABOUR CHARGES DURING THE PERIOD 17.2.2000 TO 18.3.2000. THE ASSESSING OFFICER REFERRED THE MATTER OF VALUATION AGAIN TO D VO WHO ESTIMATED THE NET COST OF CONSTRUCTION AT RS.55,43,000/-. DURING THE YEAR ASSESSMENT YEAR 2000-01 THE ASSESSEE HAD CLAIMED TO HAVE RECEI VED CASH GIFTS FROM HER MOTHER-IN-LAW TOTALING RS.75,000/- AND FROM HER FATHER-IN-LAW TOTALING RS.80,000/- IN INDIVIDUAL CAPACITY AND RS. 1,25,000/- IN HUF CAPACITY AND ALSO RS.2 LACS FROM ANURADHA GUPTA. T OTAL CASH GIFTS RECEIVED BY THE ASSESSEE WERE THUS RS.2,80,000/-, W HICH WERE IN ADDITION TO THE LOANS RECEIVED FROM MOTHER-IN-LAW OF RS.2,50 ,000/-. 6. THE ASSESSEE FAILED TO FURNISH COMPLETE INFORMAT ION IN RESPECT OF GIFTS RECEIVED AND CONSEQUENT THERETO A SURRENDER W AS MADE BY THE ASSESSEE. THE ASSESSEE MADE TOTAL SURRENDER AS UND ER: I AMOUNT OF NRI GIFT RS.2,00,000/- II AMOUNT SPENT TOWARDS PURCHASE OF BRICKS, SAND, BAJRI, ARCHITECT FEE & OTHER MISCELLANEOUS OMISSIONS RS.3,50,000/- III AMOUNT OUT OF CASH GIFTS RS.3,00,000/- TOTAL RS 8,50,000 7. OUT OF THE ABOVE SURRENDER OF RS.8,50,000/-, RS. 3,00,000/-, [(I) RS.2 LACS + (III)RS.1 LAC) WERE SURRENDERED RELATIN G TO ASSESSMENT YEAR 2000-01 AND RS.5,50,000/- [(II)RS.3,50,000/- + (III ) RS.2,00,000/-] RELATING TO ASSESSMENT YEAR 2001-02. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE ASSESSEE HAD SUPPRESSED THE VALUE OF THE PLOT OF LAND PURCHASED AND ESTIMATED THE NON-DISCLOSED INVESTMEN T AT RS.13,51,880/-, WHICH WAS INCLUDED AS INCOME OF THE ASSESSEE UNDER SECTION 69B OF THE ACT. FURTHER AS THE ASSESSEE HAD SURRENDERED THE GI FT OF RS.2 LACS RECEIVED FROM ANURADHA GUPTA, WHICH IN TURN WAS UTI LIZED FOR THE PURCHASE OF PLOT OF LAND, THE SAID SUM WAS ALSO ADD ED BACK TO THE INCOME OF THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION . OUT OF SUM OF RS.3 LACS 4 SURRENDERED BY THE ASSESSEE ON ACCOUNT OF TOTAL CAS H GIFTS RECEIVED FROM SHRI BHAWANI SHARMA, SUM OF RS.1 LACS WAS TREATED A S OFFERED FOR THE YEAR 2000-01 AND RS.2 LACS F OR THE YEAR 2001-02. ACCORDINGLY, ADDITION WAS MADE ON ACCOUNT OF UNDER-VALUATION OF PLOT AT R S.13,51,880/- AND NRI GIFT OF RS.,2 LACS AND CASH GIFT OF RS.1 LAC. THE ASSESSEE HAD ALREADY DECLARED THE SAID SUM OF RS.3 LACS AS PART OF ITS INCOME FOR THE ASSESSMENT YEAR 2000-01. THE ASSESSING OFFICER ALS O INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE CIT (APP EALS) HAD DELETED THE SAID ADDITION ON ACCOUNT OF UNDER-VALUATION OF PLOT , WHICH WAS CONFIRMED BY THE TRIBUNAL AND NO PENALTY WAS LEVIED U/S 271(1)(C) OF THE ACT ON THE SAID ACCOUNT. HOWEVER, THE ASSESSING OF FICER HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS O F INCOME IN RESPECT OF NRI GIFTS AND CASH GIFTS AND CONSEQUENTLY PENALTY O F RS.99,000/- WAS LEVIED. THE SAID PENALTY WAS CONFIRMED BY THE CIT (APPEALS) RELATING TO ASSESSMENT YEAR 2000-01. 8. IN ASSESSMENT YEAR 2001-02, SIMILAR ADDITION WAS MADE ON ACCOUNT OF THE EXPENDITURE INCURRED ON ARCHITECT FEE AND PU RCHASE OF BRICK, SAND AND BAJRI TOTALING RS.4,66,106/-. FURTHER ADDITION WAS MADE ON ACCOUNT OF SURRENDER BY THE ASSESSEE OUT OF CASH GIFTS OF R S.3 LACS. THE ASSESSEE HAD ALSO SURRENDERED THE AMOUNTS SPENT TOWARDS PURC HASE OF BRICKS, SAND AND BAJRI TOTALING RS.3,50,000/-. THE ASSESSING OF FICER LEVIED PENALTY U/S 271(1)(C) OF THE ACT FOLLOWING THE REASONING IN THE EARLIER YEAR FOR THE FAILURE OF THE ASSESSEE AND FOR FURNISHING INAC CURATE PARTICULARS OF INCOME. THE SAID PENALTY WAS ALSO CONFIRMED BY THE CIT (APPEALS). 9. THE ASSESSEE IS IN APPEAL AGAINST BOTH THE ORDER S LEVYING PENALTY U/S 271(1)(C) OF THE ACT. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT THAT THE ADDITION WAS MADE ON ACCOUNT OF DIFFERENCE IN THE VALUATION OF THE PROPERTY, THE COST OF CONSTRUCTION DECLARED BY THE ASSESSEE AFTER THE 5 MATER WAS REFERRED TO THE DVO. IT WAS FURTHER POIN TED OUT BY THE LEARNED A.R. FOR THE ASSESSEE THAT THOUGH THE DVOS REPORT WAS ADOPTED BY THE ASSESSING OFFICER, BUT ADDITION WAS MADE IN ASSESSM ENT YEAR 2001-02 OVER AND ABOVE THE VALUE WORKED OUT BY THE DVO. TH E LEARNED A.R. FOR THE ASSESSEE FURTHER POINTED OUT THAT THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD SURRENDERED INCOME ON AC COUNT OF CASH GIFTS RECEIVED BY IT AND ALSO GIFTS FROM MRS. ANURADHA GU PTA AS SHE WAS UNABLE TO FURNISH COMPLETE DETAILS/EVIDENCES IN RES PECT THEREOF. THE CONTENTION OF LEARNED A.R. FOR THE ASSESSEE WAS THA T FULL PARTICULARS WERE FILED BEFORE THE ASSESSING OFFICER, WHICH WERE NOT TO THE SATISFACTION OF THE ASSESSING OFFICER AND CONSEQUENTLY SURRENDER WA S MADE TO BUY PEACE. SAID SURRENDER OF INCOME AS PER THE LEARNED A.R. FOR THE ASSESSEE WOULD NOT ATTRACT LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE LEARNED A.R. FOR THE ASSESSEE PLACED RELIANCE ON THE SERIES OF DECISIONS OF THE PUNJAB & HARYANA HIGH COURT AND CHANDIGARH BENCH OF TRIBUNAL. 10. THE LEARNED D.R. FOR THE REVENUE POINTED OUT TH AT THE ADDITION WAS MADE ON ACCOUNT OF THE EXPENDITURE NOT DEBITED TO T HE ACCOUNTS AND WAS A SPECIFIC ADDITION AND IN THE ABSENCE OF THE EXPLA NATION AVAILABLE WITH THE ASSESSEE, SURRENDER WAS MADE BY THE ASSESSEE. IT WAS FURTHER POINTED OUT BY THE LEARNED D.R. FOR THE REVENUE THAT THE EX PLANATION OF THE ASSESSEE WAS NOT BONAFIDE AND CONSEQUENTLY THE SURR ENDER BY THE ASSESSEE. 11. THE LEARNED A.R. FOR THE ASSESSEE POINTED OUT T HAT THE REPORT OF THE DVO COVERS ALL ITEMS OF COST OF CONSTRUCTION. HOWE VER, THE ASSESSING OFFICER GOES BEYOND THE REPORT OF DVO TO MAKE FURTH ER ADDITION IN THE HANDS OF THE ASSESSEE IN ASSESSMENT YEAR 2001-02. 6 12. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE BEFORE US THE ASSESSEE IN DIVIDUAL HAD CONSTRUCTED RESIDENTIAL HOUSE DURING THE ASSESSMENT YEAR 2000-01 TO 2002-03. THE COST OF CONSTRUCTION DECLARED BY THE ASSESSEE IN THE ABOVE SAID ASSESSMENT YEARS WAS REFERRED FOR VALUATION TO THE DVO AND THE REPORT OF THE DVO WAS AVAILABLE WITH THE ASSESSING OFFICER. IN ASSESSMENT YEAR 2000-01 THE ASSESSEE HAD PURCHASED THE PLOT AND HAD PARTLY CONSTRUCTED THE BUILDING AND NO ADDITION HAS BEEN MADE BY THE ASSESSING OFFICER IN THIS YEAR ON ACCOUNT OF COST O F CONSTRUCTION. HOWEVER, IN ASSESSMENT YEAR 2001-02 THE ASSESSEE HA D CLAIMED TO HAVE MADE CONTRIBUTION TOWARDS COST OF CONSTRUCTION OF T HE BUILDING AND REPORT OF THE DVO WAS RECEIVED BY THE ASSESSING OFF ICER. HOWEVER, WHILE COMPLETING THE ASSESSMENT THE ASSESSING OFFIC ER MADE FURTHER ADDITION OF RS.4,66,106/- BEING EXPENDITURE INCURRE D ON ARCHITECT FEE AND PURCHASE OF BRICKS, SAND AND BAJRI. THE SAID ADDIT ION WAS MADE BY THE ASSESSING OFFICER SUO MOTO AND NOT BECAUSE OF THE V ALUATION REPORT OF THE DVO. THE ADDITION ON THE AFORESAID ACCOUNT HAS BEEN MADE IN THE HANDS OF THE ASSESSEE. HOWEVER, WE FIND NO MERIT I N LEVY OF PENALTY U/S 271(1)(C) OF THE ACT, ON THE AFORESAID ACCOUNT. TH E ADDITION HAD BEEN MADE BY THE ASSESSING OFFICER OVER AND ABOVE THE VA LUATION FIGURES GIVEN BY THE DVO IN HIS REPORT. THE ADDITION BEING ON PURELY ESTIMATE DOES NOT TANTAMOUNT TO FURNISHING OF INACCURATE PAR TICULARS OF INCOME, MAKING THE ASSESSEE EXIGIBLE TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 13. THE NEXT SET OF ADDITION MADE IN THE HANDS OF T HE ASSESSEE IS ON ACCOUNT OF CASH GIFTS RECEIVED BY THE ASSESSEE AND AN NRI GIFT RECEIVED BY THE ASSESSEE. THE ASSESSEE HAD RECEIVED THE AFO RESAID GIFTS FROM HER FATHER-IN-LAW AND HER MOTHER-IN-LAW AND ONE GIFT FR OM HER FAMILY FRIEND BUT AS THE ASSESSEE WAS UNABLE TO GIVE COMPLETE PAR TICULARS IN RESPECT 7 THEREOF, THE SAID SUM OF RS.2 LACS RELATABLE TO NRI GIFTS AND SUM OF RS.3 LACS RELATABLE TO CASH GIFTS WERE SURRENDERED BY TH E ASSESSEE AS ADDITIONAL INCOME DURING THE COURSE OF ASSESSMENT P ROCEEDINGS. THE SAID SURRENDER WAS MADE BY THE ASSESSEE SUBJECT TO NON-LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. FROM THE PERUSAL OF RECO RD WE FIND THAT THE ASSESSEE HAD FURNISHED CONFIRMATIONS FROM THE SAID PARTIES BUT IN ORDER TO BUY PEACE OF MIND THE AMOUNTS WERE SURRENDERED B Y THE ASSESSEE AS COMPLETE PARTICULARS COULD NOT BE COLLECTED BY THE ASSESSEE. THE SAID SURRENDER WAS SUBJECT TO NON-LEVY OF PENALTY U/S 27 1(1)(C) OF THE ACT. HOWEVER, THERE IS NOTHING ON RECORD TO ESTABLISH TH AT THE GIFTS SHOWN BY THE ASSESSEE WERE BOGUS IN NATURE. IN THE ABOVE SA ID FACTS AND CIRCUMSTANCES THE ASSESSEE CANNOT BE SAID TO HAVE F URNISHED INACCURATE PARTICULARS OF INCOME MAKING IT EXIGIBLE TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THUS WE DIRECT THE ASSESSING OFFICER T O DELETE THE PENALTY LEVIED U/S 271(1)(C) OF THE ACT FOR BOTH THE CAPTIO NED ASSESSMENT YEARS I.E. ASSESSMENT YEAR 2000-01 AND 20001-02. THE GRO UNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 14. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH DAY OF SEPTEMBER, 2012. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH SEPTEMBER, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 8