Smt. Veena Singla,, Rudrapur v. ITO, Rudrapur

ITA 2277/DEL/2009 | 2004-2005
Pronouncement Date: 11-03-2011 | Result: Allowed

Appeal Details

RSA Number 227720114 RSA 2009
Assessee PAN ADEPS3965M
Bench Delhi
Appeal Number ITA 2277/DEL/2009
Duration Of Justice 1 year(s) 9 month(s) 15 day(s)
Appellant Smt. Veena Singla,, Rudrapur
Respondent ITO, Rudrapur
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 11-03-2011
Date Of Final Hearing 29-11-2010
Next Hearing Date 29-11-2010
Assessment Year 2004-2005
Appeal Filed On 26-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `A: NEW DELHI BEFORE SHRI C.L.SETHI JUDICIAL MEMBER AND SHRI B.C. MEENA ACCOUNTANT MEMBER I.T. A. NO.2277/DEL/2009 ASSESSMENT YEAR : 2004-05 SMT. VEENA SINGLA INCOME-TAX OFFICER W/O SH. KESHAV SINGLA VS. RUDRAPUR (UTTRAKHAND). 3-MODEL TOWN RUDRAPUR (UTTRAKHAND). PAN: ADEPS3965M (APPELLANT) (RESPONDENT ) APPELLANT BY: SHRI K. SAMPATH ADVOCATE RESPONDENT BY: MRS. ANUSHA KHURANA SR. DR. O R D E R PER C.L. SETHI JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL AGAINST THE ORDER DATED 1 8.02.2009 PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) CO NFIRMING THE PENALTY AMOUNTING TO RS.4 00 360/- LEVIED BY THE ASSESSING OFFICER UNDER SEC. 271(1)(C) OF THE INCOME-TAX ACT 1961 (THE ACT) FO R THE ASSESSMENT YEAR 2004-05. 2. IN THIS CASE THE ASSESSMENT WAS REOPENED UNDER SEC. 147 OF THE ACT. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS TH E ASSESSEE WAS ASKED TO FURNISH COPIES OF BANK ACCOUNT IN WHICH GIFTS OF RS .12 02 000/- CLAIMED TO 2 HAVE BEEN RECEIVED BY THE ASSESSEE FROM DIFFERENT P ERSONS WERE CREDITED. THE ASSESSEE WAS ALSO ASKED TO FURNISH COPIES OF GI FT DEEDS AFFIDAVITS COPIES OF THE BANK ACCOUNTS OF THE DONORS. IN REPLY TO TH E ASSESSING OFFICERS REQUISITION THE ASSESSEE FILED A WRITTEN SUBMISSIO N. IN THE WRITTEN SUBMISSION THE ASSESSEE STATED THAT SHE HAD RECEIV ED FIVE GIFTS FOR A TOTAL AMOUNT OF RS.12 02 000/- FROM FIVE PERSONS. SHE FU RTHER STATED THAT SHE WAS TRYING TO CONTACT THOSE DONORS BUT IT SEEMS THAT TH EY HAD SHIFTED FROM THOSE ADDRESSES TO SOME NEW ADDRESSES WHICH SHE WAS FAILI NG TO TRACE OUT. SO TO BUY PEACE THE ASSESSEE SURRENDERED THE AMOUNT OF R S.12 02 000/- TO BE TAXED AS OTHER INCOME PROVIDED NO PENALTY WAS LEVIE D. ALONG WITH THE ABOVE SUBMISSION THE ASSESSEE FILED COPIES OF GIFT DEEDS AFFIDAVITS COPIES OF PAN CARDS AND ASSESSMENT RELATED PAPERS AND BANK ACCOUNT OF THE ASSESSEE. HOWEVER BANK ACCOUNT OF THE DONOR COULD NOT BE FILED. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE BANK ACCOUNTS OF THE DONORS WERE DIRECTLY COLLECTED BY THE ASSESSING OFF ICER FROM BANK UNDER SEC. 133(6) OF THE ACT. ON EXAMINATION OF BANK ACC OUNT OF ONE OF THE DONOR NAMELY SHRI KESHO RAM GUPTA IT WAS FOUND THAT THE RE WAS HUGE CASH DEPOSITS IN THE BANK ACCOUNT ON VARIOUS DATES BEFOR E ISSUING DRAFT OR CHEQUE TO VARIOUS PERSONS. IN THE LIGHT OF THIS FACT THE ASSESSING OFFICER STATED THAT CREDITWORTHINESS OF THE ALLEGED DONOR WAS NOT PROVE D AND THE TRANSACTION 3 CANNOT BE TREATED AS GENUINE. HOWEVER THE AO ACTE D UPON THE ASSESSEES CONDUCT IN SURRENDERING THE GIFT OF RS.12 02 000/- AS SO STATED BY HIM IN PARA 4 OF HIS ORDER WHICH IS REPRODUCED HERE AS UNDER:- 4. HOWEVER THE ASSESSEE VIDE ORDER SHEET ENTRY AN D WRITTEN SUBMISSION DATED 12.12.2007 HAS SURRENDERED THE GIF TS OF RS.12 02 000.00 TAKEN FROM FIVE PERSONS. FROM THE ABOVE IT IS APPARENT THAT THE ASSESSEE SURRENDERED THE AFORESAI D GIFTS AS SHE WAS WELL AWARE THAT SHE IS UNABLE TOP PROVE THE GENUINENESS OF THE GIFT TRANSACTIONS. HOWEVER THE ABOVE SURRENDER WAS ACCEPTED UNCONDITIONALLY AND THE AMOU NT OF RS.12 02 000.00 SHOWN TO HAVE BEEN ACCEPTED AS GIFT IS TAKEN AS INCOME OF THE ASSESSEE FROM UNDISCLOSED SOURCES AND ADDED TO HIS TOTAL DECLARED INCOME. SINCE THE ASSESSEE HAS SURRENDERED THE GIFT AMOUNT OF RS.12 02 000.00 THUS THE ADDIT ION IS MADE ON AGREED BASIS. 4. THOUGH THE ASSESSING OFFICER HAS MADE THE ADDITI ON BECAUSE THE ASSESSEE HAS SURRENDERED GIFT AMOUNT OF RS.12 02 00 0/- AND THE ADDITION WAS MADE ON AGREED BASIS HE DID NOT ACCEPT THE SURREND ER UNCONDITIONALLY AND THEREFORE HE INITIATED PENALTY PROCEEDINGS UNDER S EC. 271(1)(C) OF THE ACT. AFTER TAKING INTO ACCOUNT ALL THE FACTS AS NARRATED IN THE ASSESSMENT ORDER THE ASSESSING OFFICER ULTIMATELY LEVIED PENALTY UNDER S EC. 271(1)(C) OF THE ACT IN RESPECT OF THE AFORESAID ADDITION OF RS.12 02 0 00/-. 5. ON AN APPEAL THE CIT(A) CONFIRMED THE PENALTY B Y OBSERVING AS UNDER:- 5.6 I HAVE CONSIDERED THE ABOVE SUBMISSIONS OF TH E COUNSEL OF THE APPELLANT AND THE FACTS INDICATED IN THE PENALTY ORDER BY THE AO. IT IS OBSERVED THAT THE APPELLANT HAS CLAIMED 4 TO HAVE RECEIVED 5 GIFTS AGGREGATING TO RS.12 02 00 0/- FROM DIFFERENT DONORS AS INCORPORATED IN THE PENALTY ORD ER. ON EXAMINATION OF THE BANK ACCOUNT OF ONE OF THE DONOR S NAMELY SHRI KESHO RAM GUPTA IT HAS BEEN REVEALED THAT THE RE HAS BEEN HUGE CASH DEPOSIT ENTRIES ION VARIOUS DATES ON THE AFORESAID ACCOUNT. THERE IS A CONSISTENT PATTERN THAT A CERT AIN AMOUNT OF CASH HAS BEEN DEPOSITED ON A PARTICULAR DAY AND ON THE SAME DAY EQUIVALENT AMOUNT INCLUDING DRAFT COMMISSION HA S BEEN DEBITED FOR PURCHASING THE DRAFT. SOME OF THE TRAN SACTIONS HAVE BEEN INCORPORATED IN THE ORDER ITSELF ON THE BASIS OF WHICH THE A.O. HAS QUESTIONED THE CREDITWORTHINESS OF THE DON ORS TO MAKE THE IMPUGNED GIFTS. 5.7 THE A.O. INITIATED PENALTY PROCEEDINGS U/S 271( 1)(C) OF I.T. ACT AND ISSUED SHOW CAUSE NOTICE ASKING FOR EX PLANATION AS TO WHY THE PENALTY SHOULD NOT BE LEVIED U/S 271(1)( C) OF I.T. ACT AND IN COMPLIANCE TO THE SAME THE APPELLANT HAS SU BMITTED BEFORE THE A.O. THAT THE IMPUGNED GIFTS AGGREGATING TO RS.12 02 000/- HAVE BEEN VOLUNTARILY OFFERED FOR TA XATION IN ORDER TO BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION. REFERENCE HAS INVITED TO A NUMBER F JUDICIAL AUTHOR ITIES IN ORDER TO CONTEND THAT ONCE THE INCOME HAS BEEN VOLUNTARIL Y SURRENDERED QUESTION OF LEVY OF PENALTY U/S 271(1) (C ) OF I.T. ACT DOES NOT ARISE. 5.8 HOWEVER THE A.O. HAS NOT BEEN CONVINCED WITH T HE AFORESAID EXPLANATION OF THE APPELLANT BECAUSE THE APPELLANT HAS SURRENDERED THE GIFTS AS A RESULT OF INVESTIGAT ION CARRIED OUT BY THE DEPARTMENT AND AFTER ISSUING NOTICE U/S 148 OF THE I.T. ACT 1961. SINCE THE APPELLANT HERSELF HAS SURREND ERED THE INCOME THERE IS NOTHING MORE TO PROVE AS TO WHETHE R THE SURRENDERED INCOME IS CONCEALED INCOME OR NOT. THE A.O. HAS STRONGLY RELIED UPON THE DECISION IN THE CASE OF DU RGA TIMBER WORKS VS. CIT (1971) 79 ITR 63 (DELHI) TO HOLD THA T CONFESSION BY THE APPELLANT BY WAY OF SURRENDER OF INCOME ATTR IBUTABLE TO THE IMPUGNED GIFTS AGGREGATING TO RS.12 02 000/- MA Y AFFORD SOUND FOUNDATION FOR IMPOSITION OF PENALTY. THE AP PELLANT HAS MADE SURRENDER OF THE IMPUGNED GIFTS AND SUCH SURRE NDER HAS BEEN ACCEPTED UNCONDITIONALLY AND THE IMPUGNED GIFT AMOUNTS HAVE BEEN TREATED AS INCOME OF THE APPELLANT FROM U NDISCLOSED 5 SOURCES. THIS ACT OF THE APPELLANT HAS BEEN CORREC TLY HELD BY THE A.O. AS FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR WHICH REASON THE APPELLANT HAS CONCEDED TO SURRENDE R THE WHOLE AMOUNT OF IMPUGNED GIFTS AS HER INCOME. 5.9 IN THIS REGARD REFERENCE HAS BEEN INVITED TO C ASE OF SAJAN DASS AND SON VS. CIT REPORTED IN 264 ITR 435 (2002) WHEREIN IT HAS BEEN HELD THAT MERE IDENTIFICATION OF THE D ONOR AND SHOWING MOVEMENT OF THE GIFTED AMOUNT THROUGH BANKI NG CHANNEL IS NOT SUFFICIENT TO PROVE GENUINENESS OF T HE GIFT. 5.10 IN THE INSTANT CASE OF THE APPELLANT SINCE SH E HAS FAILED TO DISCHARGE HER ONUS TO ESTABLISH THE CREDITWORTHI NESS OF THE DONORS TO MAKE THE IMPUGNED GIFTS THE PURPORTED GI FTS HAVE BEEN RIGHTLY TREATED AS INCOME FROM UNDISCLOSED SOU RCES IN THE HAND OF THE APPELLANT AND PENALTY IS CLEARLY ATTRAC TED U/S 271(1)( C) OF I.T. ACT BECAUSE OF FILING OF INACCU RATE PARTICULARS OF INCOME. THE A.O. HAS CLEARLY MADE OUT A CASE OF CONCEALMENT OF INCOME BY WAY OF BOGUS CLAIM OF PURP ORTED GIFTS OF RS.12 02 000/- BY SPECIFYING THE DETAILED REASON S IN THE ASSESSMENT ORDER AND SO IT CANNOT BE SAID THAT NO S ATISFACTION HAS BEEN RECORDED IN THE CASE OF THE APPELLANT FOR FURNISHING INACCURATE PARTICULARS OF INCOME RESULTING IN CONCE ALMENT OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C ) OF I.T. ACT 9161. UNDER THESE FACTS AND CIRCUMSTANCES OF THE C ASE AND HAVING REGARD TO THE JUDICIAL PRONOUNCEMENTS REFERR ED TO ABOVE I HEREBY UPHOLD THE ACTION OF THE A.O. IN LE VYING PENALTY OF RS.4 00 360/- UNDER THE PROVISIONS OF SECTION 27 1(1)(C ) OF I.T. ACT AND NO INTERFERENCE IS CALLED FOR IN THIS RESPECT. 6. HENCE THE ASSESSEE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD BOTH THE PARTIES AND HAVE GONE THR OUGH THE ORDERS OF THE AUTHORITIES BELOW. 8. FROM THE PERUSAL OF THE AOS ORDER IT IS CLEAR THAT THE ASSESSING OFFICER HAS MADE THE ADDITION BECAUSE THE ASSESSEE HAS SURRENDERED THE GIFTS 6 AND THE ADDITION WAS MADE ON AGREED BASIS. AT THE SAME TIME THE ASSESSING OFFICER HAS ALSO STATED THAT SINCE THE ASSESSEE HAS FAILED TO PROVE THE CREDITWORTHINESS OF THE DONORS AND GENUINENESS OF T HE TRANSACTION THE ASSESSEE HAD NO ALTERNATIVE THAN TO SURRENDER THE I NCOME. WHEN WE LOOK TO THE REASON FOR SURRENDERING A GIFT AMOUNT WE FIND THAT THE ASSESSEE COULD NOT CONTACT ALL THE AFORESAID DONORS SO AS TO PRODUCE T HEM BEFORE THE AO. HOWEVER ALL THE OTHER DETAILS SUCH AS COPIES OF GIFT DEEDS AFFIDAVITS COPIES OF PAN CARDS AND ASSESSMENT RELATED PAPERS AND BANK ACCOUNT OF THE ASSESSEE WERE DULY FILED. THE AO HAS REJECTED THE ASSESSEES CLAIM BECAUSE THE DONORS HAD MADE DEPOSIT OF CERTAIN CASH AMOUNT IN THEIR BANK ACCOUNT BEFORE THE DRAFT OR CHEQUE WAS ISSUED BY THEM TO TH E ASSESSEE. THIS PARTICULAR REASON CANNOT BE A CRITERIA TO HOLD THAT THE GIFTS ARE NOT GENUINE. THE ASSESSEE IS NOT SUPPOSE TO PROVE THE SOURCE OF SOURCE AND NO PENALTY IS LEVIABLE WHERE ADDITION HAS BEEN MADE DOUBTING THE SOURCE OF SOURCE AS SO HELD BY THE JURISDICTIONAL HIGH COURT OF DELHI IN T HE CASE OF CIT VS. BHARTESH JAIN (2010) 323 ITR 358 (DELHI) WHERE THE HONBLE HIGH COURT HAS HELD THAT WHEN THE AO WAS DOUBTING THE SOURCE O F SOURCE THAT CANNOT BE THE BASIS FOR IMPOSING THE PENALTY. 9. IF WE READ THE ASSESSMENT ORDER AS A WHOLE IT I S MORE THAN CLEAR THAT THE AO HAS ALSO MADE THE ADDITION ON AGREED BASIS. HE DID NOT MAKE ANY 7 FURTHER ENQUIRY INTO THE ISSUE. THOUGH THE ASSESSI NG OFFICER HAS MADE A REFERENCE TO SOME INVESTIGATION COMPLETED BY THE IN VESTIGATION WING BUT HE HAS NOWHERE STATED THAT WHAT SORT OF INVESTIGATION WAS MADE BY THE INVESTIGATION WING AND WHAT WAS THE MATERIAL OR EVI DENCE ON THE BASIS OF WHICH IT COULD BE SAID THAT THE GIFTS RECEIVED BY T HE ASSESSEE WERE PRIMA FACIE NON-GENUINE. THE AO HAS NOT DISCUSSED DETAIL S OF THE REPORT OF INVESTIGATION WING. IT IS NOT THE CASE OF THE AO T HAT ALL THE DONORS HAVE DENIED OF HAVING MADE GIFTS TO THE ASSESSEE BEFORE THE INVESTIGATION WING. 10. IN SUPPORT OF THE PROPOSITION THAT NO PENALTY O N MERE SURRENDER OF GIFTS CAN BE LEVIED THE ASSESSEE HAS RELIED UPON THE FOL LOWING DECISIONS:- (1) RATAN LAL CHAWLA VS. ITO (ITA NO.5454/DEL/04). (2) SMT. SANDHYA VERMA VS. ITO (2008 114 TTJ 933. (3) ITO VS. DR. SAMEER KANT AGARWAL (2008) 113 TTJ (LUC KNOW) 252. (4) ACIT VS. VISHAN NARAYAN KHANNA 171 TAXMAN (MAG.) 136 (DELHI). (5) CIT VS. ASHOK TAKER (2008) 170 TAXMAN 471(DELHI). 11. IN THE CASE OF ACIT VS. VISHAN NARAYAN KHANNA R EPORTED IN 171 TAXMAN (MAG.) 136 THE ITAT DELHI BENCH `H HAS HEL D THAT SINCE NOTHING WAS BROUGHT ON RECORD BY THE AO TO SHOW THAT AMOUNT OF GIFT BELONGED TO THE ASSESSEE HIMSELF MERE SURRENDER OF AMOUNT OF G IFT OF THE ASSESSEE DID NOT TILT SCALES IN FAVOUR OF REVENUE THAT AMOUNT OF GIF T WAS INCOME OF ASSESSEE. HENCE LEVY OF PENALTY UPON THE ASSESSEE WAS NOT JU STIFIED AND DESERVE TO BE DELETED. 8 12. THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ASHOK TAKER (2008) 170 TAXMAN 471 (DELHI) HAS HELD THAT WHEN TH E ASSESSING OFFICER HAS FAILED TO BRING ANY OTHER MATERIAL ON RECORD TO SHOW THAT SURRENDERED INCOME WAS CONCEALED INCOME THE IMPOSITION OF PENA LTY WAS NOT WARRANTED IN LAW. IN THAT CASE THE ASSESSEE FILED A LETTER BEFORE THE AO STATING THAT THE AMOUNT OF RS.31 95 530/- WAS SURRENDERED FOR TAXATI ON TO BUY PEACE AND THE ASSESSEE ALSO FILED AN AFFIDAVIT THAT SINCE THE LOA NS FOR SUNDRY CREDITORS WERE MORE THAN 3 YEARS OLD AND TIME-BARRED THE ASSESSEE WANTED TO ADD BACK THE AMOUNT OF SUNDRY CREDITORS TO HIS INCOME. IN THAT SITUATION IT WAS HELD THAT NO PENALTY WAS LEVIABLE. 13. SIMILAR VIEW HAS BEEN TAKEN IN OTHER DECISIONS REFERRED TO ABOVE. 14. IN THE PRESENT CASE SINCE THE ASSESSEE HAS SUR RENDERED THE GIFT AMOUNT ON THE VERY FIRST OCCASION IMMEDIATELY AFTER THE AO ASKED THE ASSESSEE TO PRODUCE DETAILS AND SINCE THE ASSESSMENT WAS ALSO M ADE ON THE BASIS OF SURRENDER MADE BY THE ASSESSEE ON AGREED BASIS AND SINCE NO COGENT OR ADEQUATE MATERIAL HAS BEEN BROUGHT ON RECORD BY THE AO THAT THE GIFTED AMOUNT WAS ACTUALLY THE INCOME OF THE ASSESSEE OR T HAT THE CASH AMOUNT DEPOSITED IN THE BANK ACCOUNT OF THE DONORS WAS ACT UALLY DEPOSITED BY THE ASSESSEE WE HOLD THAT NO PENALTY UNDER SEC. 271(1) ( C) IN THE PRESENT CASE IS CALLED FOR. THE ASSESSEE HAS BEEN ABLE TO GIVE A B ONA FIDE EXPLANATION AS TO 9 WHY THE ASSESSEE HAS TO SURRENDER THE GIFT AMOUNT T O TAX AND THUS THE ASSESSEE HAS DISCHARGED HER BURDEN WITHIN THE MEANI NG OF EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT. WE THEREFORE SET ASID E THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY. 15. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 16. THIS DECISION IS PRONOUNCED IN THE OPEN COURT O N 11 TH MARCH 2011. SD/- SD/- (B.C. MEENA) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 11 TH MARCH 2011. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.