R.Manimaran, Vellore V. ACIT, CHENNAI

ITSSA 15/CHNY/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9668 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-12-2013
• Assessment Year: misc
• Appeal Filed On: 31-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: T VASUDEVAN
• Keywords: Gift

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI (BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ) .. I.T.(SS)A. NO.15 /MDS/2012 BLOCK PERIOD 1.4.1996 TO 31.3.2002 AND 1.4.2012 TO 4.6.2002. SHRI. R. MANIMARAN NO.8, FOURTH CROSS STREET GOPALAPURAM, VELLORE 632 006 . PAN : AAGPM3113L (APPELLANT) V. THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE I(4) CHENNAI . (RESPONDENT) APPELLANT BY : SHRI T. VASUDEVAN, ADV RESPONDENT BY : SHRI S. DA SGUPTA, JCIT. DATE OF HEARING : 05.12.13 DATE OF PRONOUNCEMENT : 18.12.13 O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A) DATED 30.3.2012 IN ITA NO.188/09-10 PASSED U/S 158BFA(2) OF THE ACT. IT(SS)A NO.15/MDS/2012 2 2. THE ASSESSEE HAS RAISED FOUR GROUNDS IN THIS APPEAL, HOWEVER, THE CRUX OF THE ISSUE IS THAT THE ASSESSE E IS AGGRIEVED BY THE ORDER OF THE LD.CIT(A) WHO HAS ERRED IN CONFIRM ING THE ORDER OF THE LD. AO IN LEVYING PENALTY OF `. 3,86,808/- UNDER SECTION 158BFA (2) OF THE ACT. 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN VARIOU S TYPES OF BUSINESS ACTIVITIES. A SEARCH WAS CONDUCTED AT TH E RESIDENCE AND THE BUSINESS PREMISES OF THE ASSESSEE M/S.SHARANAM JEWELLERY ON 04.06.2002 AND THEREAFTER ASSESSMENT WAS COMPLETED FOR THE BLOCK PERIOD 01.4.1996 TO 31.03.2002 AND 1.4.2002 TO 4.6. 2002, U/S. 143 R.W.S 158BC OF THE ACT. AMONGST SEVERAL ADDITIONS MADE, THERE WERE ADDITIONS ON ACCOUNT OF UNDISCLOSED INCOME TOWARDS CASH GIFT RECEIVED AND UNEXPLAINED STOCK OF JEWELLERY FOR `. 2,09,682/- AND `. 5,10,408/- RESPECTIVELY, WHICH WAS SUSTAINED BY THE ITAT. PENALTY PROCEEDINGS WERE INITIATED ON COMPLETION OF THE ASS ESSMENT AND THEREAFTER PENALTY PROCEEDINGS WERE PERUSED ON RECE IPT OF THE ORDER OF THE ITAT. FINALLY, THE LD. AO VIDE HIS ORDER DA TED 27.05.2008 LEVIED PENALTY OF `. 3,86,808/- U/S. 158BFA(2) OF THE ACT FOR THE FOLLOWING REASONS. IT(SS)A NO.15/MDS/2012 3 (1) UNEXPLAINED STOCK OF JEWELLERY: - DURING THE C OURSE OF SEARCH IT WAS REVELED THAT THE ASSESSEE WAS IN POSS ESSION OF JEWELLERY WHICH WAS NOT ACCOUNTED AND THE SAME WAS ADMITTED BY THE ASSESSEE. THIS STATEMENT OF THE ASSESSEE WAS NOT R ETRACTED OR DISPUTED BY THE ASSESSEE TILL THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. SUBSEQUENTLY, IT WAS EXPLAINED THAT THE UNDISCLOSED JEWELLERY WERE PART OF FAMILY JEWELLERY WEIGHING 23 0 GRAMS AND THE REST OF THE JEWELLERY WEIGHING 892GRMS BELONGED TO THE GOLDSMITHS. HOWEVER, THE LD. AO BRUSHED ASIDE THE CONTENTIONS O F THE ASSESSEE BECAUSE THE GOLDSMITHS REFERRED TO BY THE ASSESSEE WERE MEN OF SMALL MEANS AND THERE WAS NO EVIDENCE TO ESTABLISH THAT THE JEWELLERY BELONGS TO THE ASSESSEES FAMILY. THEREF ORE, THE LD. AO LEVIED PENALTY FOR SUCH CONSCIOUS CONCEALMENT BY TH E ASSESSEE. ON APPEAL THE LD. CIT(A) CONFIRMED THE PENALTY ON THIS COUNT SINCE THE ASSESSEE HAD NOT PRODUCED ANY EVIDENCE TO PROVE THE GENUINENESS OF HIS CLAIM. (2) CASH GIFT:- THE SEARCH ALSO REVELED THAT THE ASSESSEE HAD SHOWN CASH GIFTS RECEIVED ON THE OCCASION OF HIS DA UGHTERS MARRIAGE AMOUNTING TO `. 2,09,682/-. THE LD. AO HAD CONFIRMED THE ADDITION IT(SS)A NO.15/MDS/2012 4 BECAUSE THE ASSESSEE DID NOT FURNISH THE ADDRESS OF THE DONORS. FURTHER, THE GIFT CLAIMED TO HAVE BEEN RECEIVED DID NOT TALLY WITH THAT OF GIFTS SHOWN IN THE STATEMENT FURNISHED. ON APP EAL THE LD.CIT(A) HAD ALLOWED RELIEF OF `. 1,25,000/- WHICH THE TRIBUNAL CONFIRMED. SINCE THE DOCUMENTS FURNISHED BY THE ASSESSEE FOR T HE BALANCE CASH GIFT OF `. 84,682/- WERE FOUND NOT TO BE GENUINE THE LD. AO L EVIED PENALTY. THE SAME WAS CONFIRMED BY THE LD. CIT(A) B ECAUSE THE EVIDENCE PRODUCED BY THE ASSESSEE WERE SHAM. 4. BEFORE US, THE LD. AR SUBMITTED THAT THE ASSESSE E HAD FURNISHED THE NAMES AND ADDRESS OF THE GOLDSMITH FR OM WHOM THE ASSESSEE HAD RECEIVED THE JEWELLERY. HE FURTHER SUB MITTED THAT FROM THE STATUS AND FINANCIAL CONDITION OF THE ASSESSEE IT CANNOT BE CONSTRUED THAT THE FAMILY IS NOT CAPABLE OF POSSESS ING GOLD JEWELLERY OF 230 GRAMS. IT WAS ALSO SUBMITTED THAT THE ASSES SEE HAD FURNISHED THE NAMES OF ALL THE DONORS WHO HAD GIVEN THE CASH GIFT ON THE OCCASION OF HIS DAUGHTER MARRIAGE WHICH IS A NORMAL PRACTICE IN THEIR COMMUNITY. FOR THE AFORESAID REASON THE LD. AR PLEA DED THAT THE PENALTY LEVIED BY THE LD. AO MAY BE DELETED. ON TH E OTHER HAND, LD. IT(SS)A NO.15/MDS/2012 5 DR STOUTLY ARGUED IN SUPPORT OF THE ORDERS OF THE L D.CIT(A) AND PRAYED THAT HIS ORDER MAY BE CONFIRMED. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULL Y PERUSED THE MATERIALS ON RECORD. FROM THE FACTS AND CIRCUMSTAN CES OF THE CASE WE FIND MERITS IN THE ARGUMENT MADE BY THE LD. AR. FROM THE FINANCIAL STATUS OF THE ASSESSEE IT WOULD HAVE BEEN POSSIBLE FOR HIM TO POSSESS JEWELLERY OF 230 GRAMS. FURTHER, THE AS SESSEE HAD FURNISHED THE PARTICULARS OF THE GOLDSMITHS FROM WH OM HE HAD RECEIVED JEWELLERY OF 892 GRAMS. THE EXISTENCE OF THE GOLDSMITHS IS NOT IN DISPUTE. THE LD. AO HAD MERELY DISBELIEVED THE SUBMISSIONS OF THE ASSESSEE AND WITHOUT BRINGING ANY MATERIAL F ACTS ON RECORD HAD ARRIVED AT A CONCLUSION THAT THE GOLDSMITHS WERE ME N OF MERGE MEANS. THE LD. AO HAS ALSO NOT EXAMINED THE DONORS WHO HAD CASH GIFTS ON THE OCCASION OF THE ASSESSEE DAUGHTER MARR IAGE. THUS ALL THESE ADDITIONS ARE MADE BASED ON ASSUMPTIONS CONSI DERING THE CIRCUMSTANCE OF THE CASE. THOUGH IT MAY BE SUFFICI ENT CAUSE TO SUSTAIN THE ADDITIONS WE ARE OF THE CONSIDERED VIEW THAT IT WOULD NOT BE APPROPRIATE TO LEVY PENALTY FOR THE ADDITIONS MA DE ON ASSUMPTIONS. IT(SS)A NO.15/MDS/2012 6 THE REVENUES ACTION TO LEVY PENALTY WOULD HAVE BEE N PROPER IF IT HAD PIN DOWNED THE ASSESSEE BY DISPROVING THE REASONS S UBMITTED BY THE ASSESSEE AFTER PROPER VERIFICATION OF THE GOLDSMITH S AND DONORS AND AFTER ANALYZING THE FINANCIAL CONDITION OF THE ASSE SSEES FAMILY. THEREFORE, WE HEREBY DELETE THE PENALTY LEVIED BY T HE LD. AO WHICH WAS FURTHER CONFIRMED BY THE LD. CIT(A). 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 18 TH DECEMBER, 2013 AT CHENNAI. SD/- SD/- ( V. DURGA RAO ) (A.MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 18 TH DECEMBER, 2013. KV COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE