Shri Sushil Kumar Jain, Ujjain v. The ACIT, 2(1), Ujjain

ITA 240/IND/2011 | 2000-2001
Pronouncement Date: 03-02-2012 | Result: Dismissed

Appeal Details

RSA Number 24022714 RSA 2011
Assessee PAN ABNPJ8067E
Bench Indore
Appeal Number ITA 240/IND/2011
Duration Of Justice 4 month(s) 14 day(s)
Appellant Shri Sushil Kumar Jain, Ujjain
Respondent The ACIT, 2(1), Ujjain
Appeal Type Income Tax Appeal
Pronouncement Date 03-02-2012
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted Not Allotted
Tribunal Order Date 03-02-2012
Assessment Year 2000-2001
Appeal Filed On 19-09-2011
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NOS.240 & 241/IND/2011 A.YS.: 2000-01 & 2001-02 SUSHIL KUMAR JAIN UJJAIN PAN ABNPJ 8067 E ..APPELLANT V/S. ACIT-2(1) UJJAIN ..RESPONDENT AND ITA NOS.242 & 243/IND/2011 A.YS.: 2000-01 & 2001-02 MUKESH KUMAR RANKA UJJAIN PAN ABMPR 7841 P ..APPELLANT V/S. ACIT-1(1) UJJAIN ..RESPONDENT APPELLANTS BY :SHRI RAVI SARDA ADVOCATE RESPONDENT BY :SHRI ARUN DEWAN SR. DR DATE OF HEARING : 24.1.2012 DATE OF PRONOUNCEMENT : 3.2.2012 2 ORDER PER JOGINDER SINGH BY WAY OF THESE APPEALS THE ASSESSEES SEEK TO CHAL LENGE THE CONSOLIDATED ORDERS DATED 13.7.2011 OF THE LEARNED CIT(A)-UJJAIN ON THE GROUND THAT THE LD. FIRST APPELLATE AUTHORIT Y HAS ERRED IN CONFIRMING THE PENALTY OF RS.1 16 000/- & RS.71 000 /-(IN CASES OF BOTH THE ASSESSEES) RESPECTIVELY IMPOSED U/S 2 71(1)(C) OF THE ACT. 2. DURING HEARING THE LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT QUANTUM AND PENALTY PROCEEDINGS ARE ALTOGETHER DIFFERENT ONE OF THE DONOR OF THE GIFT NAMELY SHR I DEEPAK LALWANI WAS PRODUCED BEFORE THE ASSESSING OFFICER A ND DURING EXAMINATION HE SPECIFICALLY CONFIRMED OF MAKING TH E GIFTS. OUR ATTENTION WAS ALSO INVITED TO VARIOUS PAGES OF THE PAPER BOOK BY FURTHER PLACING RELIANCE UPON VARIOUS JUDICIAL PRON OUNCEMENTS. ON THE OTHER HAND THE LD. SR. DR CONTENDED THAT SI NCE THE QUANTUM ADDITION HAS BEEN AFFIRMED BY THE TRIBUNAL THEREFORE THE PENALTY IS AUTOMATIC. PLEA WAS ALSO RAISED THAT THE FINANCIAL CAPACITY OF THE DONORS WAS DOUBTFUL. THE LD. SR. DR DREW OUR ATTENTION TO THE FINDINGS OF THE TRIBUNAL IN QUANTU M ORDER DATED 28.3.2011. 3 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATER IAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION WE ARE REPRODUCING HEREUNDER THE FINDINGS OF FACTS AND THE CONCLUSION DRAWN BY THE TRIBUNAL WHILE DECIDING THE QUANTUM APPEALS OF THE ASSESSEES VIDE ORDER DATED 28.3.2011. THE RELEVANT PORTION OF THE SAME IS REPRODUCED HEREUNDER: THESE APPEALS ARE PREFERRED BY DIFFERENT ASSESSES AGAINST DIFFERENT ORDERS DATED 1.3.2007 PASSED BY THE LEARN ED COMMISSIONER OF INCOMETAX (APPEALS). 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PER USED.. THE GRIEVANCE OF BOTH THE ASSESSES IN BOTH THE YEAR S UNDER CONSIDERATION IS IN RESPECT OF ADDITION OF GIFT RE CEIVED DURING THE RESPECTIVE YEARS. THERE WAS SEARCH ACTION CONDU CTED ON THIS GROUP ON 25.9.03 DURING WHICH SEVERAL INCRIMIN ATING MATERIALS BELONGING TO THEIR GROUP WERE DISCOVERED. SINCE NO BOOKS OF ACCOUNTS WERE MAINTAINED FROM OUT OF THE SEIZED MATERIALS LOOSEN PAPERS ETC. ACCOUNTS WERE MADE UP ON COMPUTER AND SUBSTANTIAL DISCLOSURES MADE BY SHRI M UKESH KUMAR RANKA AND SHRI SUSHIL JAIN. SHRI MUKESH KUMA R RANKA DISCLOSED AROUND RS. 1.1 CRORE AND SHRI SUSHI L JAIN DISCLOSED AROUND RS. 14 LACS. IT WAS ALSO OBSERVED THAT SHRI SUSHIL KUMAR JAIN AND HIS TOTAL FAMILY MEMBERS HAVE TAKEN TOTAL GIFT OF RS.18 82 500/- AND SHRI MUKESH RANKA HAS TAKEN GIFT OF RS.42 32 500/- IN THE NAMES OF HIS FAMILY M EMBERS. DURING THE YEARS UNDER CONSIDERATION WHILE FRAMIN G THE ASSESSMENT U/S 153A THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS IN RECEIPT OF GIFTS FROM DEVIDAS SATLA NI AND DEEPAK LALWANI AN NRI. IN TERMS OF THE STATEMENT OF THE ASSESSEE IT WAS OBSERVED THAT THE GIFTS WERE RECEIV ED FROM PERSONS BELONGING TO SINDHI COMMUNITY HAVING NO REL ATION WITH THE ASSESSEE. THE ASSESSING OFFICER FURTHER OBSERV ED THAT A STUDY OF THE BANK ACCOUNT OF SHRI DEVIDAS SITLANI C LEARLY SHOWS THAT SUMS ARE DEPOSITED AND IMMEDIATELY PASSED ON A S GIFTS. ALL THE TRANSACTIONS ARE DONE JUST IN A MATTER OF 1 0 DAYS APRIL 13 TH TO 19TH. SUBSEQUENTLY THE ACCOUNT SHOWS A BALANC E OF JUST RS. 500/-.IT IS INTERESTING TO NOTE THAT THE A PPELLANT AND HIS PARTNER SHRI MUKESH RANKA IN CERTAIN VENTURES GET G IFTS FROM THE SAME DONORS SITLANI & LALWANI NRIS AT THAT POI NT OF TIME 4 AND THAT TOO WORTH SAME AMOUNTS RS. 3.50 + 2 LACS E ACH. IN THE CASE OF DONOR DEEPAK KUMAR LALWANI THE BANK ACC OUNT SHOWS DEBIT BALANCE ALL THROUGH. THE SOURCES AND T HEIR CAPACITY TO MAKE SUCH HUGE GIFTS IS NOT ESTABLISHED . APPELLANT HAS NOT MADE ANY GIFTS TO THEM. BOTH ARE NOT RELAT ED TO THE ASSESSEE. THE FACTS GATHERED AND THE INVESTIGATION CARRIED OUT AMPLY ESTABLISH THAT THE GIFTS ARE NOT GENUINE FOR BOTH THE ASSESSMENT YEARS. ON ASKING BY THE ASSESSING OFFIC ER THE ASSESSEE COULD NOT PRODUCE THE DONOR FOR EXAMINATIO N. AS PER THE FAMILY HISTORY PREPARED BY THE ASSESSING OF FICER AS PER MATERIAL FOUND DURING THE COURSE OF SEARCH AND THE CREDITS APPEARING IN THEIR RESPECTIVE BANK STATEMENT IT WA S OBSERVED THAT THE ASSESSEE WAS ADOPTING DEVICE OF TAKING GIF TS AND WAS SHOWING VERY MEAGER INCOME IN HIS RETURNS. ACCORDI NGLY THE THEORY OF GIFT WAS NOT ACCEPTED BY THE ASSESSING OF FICER INSOFAR AS GENUINENESS OF THE GIFT AND CREDIT WORTH INESS OF THE DONER WAS NOT ESTABLISHED. 3. BY THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOMETAX (APPEALS) CONFIRMED THE ACTION OF THE ASS ESSING OFFICER BY OBSERVING THAT THE SOURCES OF THE DONORS AND THEIR CAPACITY ARE NOT ESTABLISHED. THE BANK ACCOUNTS SH OW MEAGER FUNDS AND ALSO DEPOSITS BEING MADE JUST TO M AKE THE GIFTS. THE APPELLANT WA DISCLOSING INCOME ON ESTIM ATE BASIS AND IS INVOLVED IN REAL ESTATE BUSINESS WHICH GIVE SCOPE FOR UNEXPLAINED CASH AVAILABILITY. NRI HAS NOT BEEN PR ODUCED. DONORS ARE IN NO WAY RELATED TO THE ASSESSEE. NO P HOTOS ESTABLISHING CLOSE LINKS BETWEEN DONOR AND DONEE EV ER PRODUCED. NO GIFT IS EVER MADE TO THE DONOR OR THE IR FAMILY MEMBERS. BACKGROUND OF THE CASE AND SURROUNDING CIRCUMSTANCES ALSO POINT OUT THAT THE GIFTS ARE NOT GENUINE. BY PLANNING ONE CAN ALWAYS CREATE DOCUMENTS OF GIFT DE ED OBTAIN GIFT BY CHEQUE ETC. BUT THIS DOES NOT IN ANY MAKE T HE GIFT A GENUINE ONE. 4. AGGRIEVED BY THE ABOVE ORDER OF THE LEARNED COMM ISSIONER OF INCOMETAX (APPEALS) FOR BOTH THE YEARS BOTH THE ASSESSES ARE IN FURTHER APPEAL BEFORE US. 5. WE HAVE CONSIDERED THE RIVAL CONTENTIONS CAREFU LLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FIN D FROM RECORD THAT BOTH THE ASSESSES WERE IN RECEIPT OF HU GE AMOUNTS OF GIFT EITHER IN THEIR OWN NAME OR IN THE NAMES OF THEIR FAMILY MEMBERS. THE DONOR WAS NOT RELATED WITH THE ASSESS EE IN ANY WAY. BOTH WERE BELONGING TO THE DIFFERENT COMM UNITY. THE CAPACITY OF THE DONOR TO ADVANCE THE GIFTED AMO UNT WAS NOT ESTABLISHED. EVEN THOUGH DURING THE COURSE OF A PPELLATE PROCEEDINGS THE ASSESSEE PRODUCED ONE OF THE DONOR S DEEPAK LALWANI. HOWEVER ON THE BASIS OF HIS BANK STATEMENT THE LEARNED COMMISSIONER OF INCOMETAX (A PPEALS) FOUND THAT HE WAS NOT CAPABLE TO GIVE THE ALLEGED A MOUNT OF 5 GIFT. THUS THE CREDIT WORTHINESS OF THE DONOR WAS NOT ESTABLISHED. VARIOUS FINDINGS RECORDED BY THE LOWE R AUTHORITIES WITH REGARD TO GENUINENESS OF THE GIFT AND THE CREDIT WORTHINESS OF THE DONORS COULD NOT BE DISLODGED BY THE LEARNED COUNSEL FOR THE ASSESSEE DURING THE COURSE OF HEARING BEFORE US. THE FINDINGS RECORDED BY THE LOWER AUTH ORITIES ARE AS PER MATERIAL ON RECORD WHICH DO NOT REQUIRE ANY INTERFERENCE. 6. IN THE RESULT ALL THE APPEALS OF THE ASSESSEE A RE DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED REPRESENTATIVES OF BOTH THE SIDES ON 28 TH MARCH 2011. 4. IF THE FINDINGS CONTAINED IN THE AFORESAID ORDER AND THE ARGUMENTS ADVANCED BY THE LD. RESPECTIVE COUNSEL AR E KEPT IN JUXTAPOSITION AND ANALYSED WE FIND THAT SUBSTANTIA L DISCLOSURES WERE MADE BY SHRI MUKESH KUMAR RANKA AND SHRI SUSHI L KUMAR JAIN (BOTH ASSESSEES BEFORE US). SHRI MUKESH KR. RA NKA DISCLOSED AROUND 1.1 CRORES AND SHRI SUSHIL KUMAR JAIN DISCLO SED RS.14 LACS. WE FURTHER FIND THAT SHRI SUSHIL KR. JAIN AND HIS FAMILY MEMBERS TOOK GIFT OF RS.18 82 500/- AND SHRI MUKESH KR. RANKA TOOK GIFT OF RS.42 32 500/- IN THE NAMES OF HIS FAM ILY MEMBERS. THESE GIFTS WERE TAKEN FROM SHRI DEVIDAS SATLANI AN D SHRI DEEPAK LALWANI BOTH NRIS. IT IS FURTHER OBSERVED T HAT BOTH THE DONORS ARE FROM SINDHI COMMUNITY AND ARE HAVING NO RELATION WITH THE ASSESSEE. IT IS FURTHER OBSERVED THAT THE AMOUNTS OF GIFTS WERE DEPOSITED IN THEIR BANK ACCOUNTS AND IMMEDIATE LY THEREAFTER THESE AMOUNTS WERE PASSED ON TO THE ASSESSEES AND T HEIR FAMILY 6 MEMBERS. THESE TRANSACTIONS WERE DONE WITHIN TEN DA YS (13 TH TO 19 TH APRIL) AND SUBSEQUENTLY JUST RS.500/- REMAINED IN THE ACCOUNT. THE SOURCES AND THE CAPACITY OF SUCH HUGE GIFTS WERE NOT ESTABLISHED. THERE IS A FURTHER FINDING THAT TH E INVESTIGATION CARRIED OUT BY THE DEPARTMENT ESTABLISHED THAT THES E GIFTS WERE NOT GENUINE. THESE ASSESSEES WERE ADOPTING THE DEVI CE OF TAKING GIFTS. EVEN THERE IS A FINDING IN THE ORDER OF THE LD. CIT(A) THAT THE DONORS WERE NOT CAPABLE TO GIVE THE ALLEGED AMOUNT OF GIFTS MEANING THEREBY THE CREDITWORTHINESS AND GENUINENE SS OF THE GIFTS ARE CLOUDY. THE FINDING OF FACT MENTIONED BY THE LD. CIT(A) WAS NOT CONTROVERTED BY THE ASSESSEES AND ULTIMATEL Y THE TRIBUNAL AFFIRMED THE STAND OF THE LD. CIT(A). 5. UNDER THE AFOREMENTIONED FACTS NOW QUESTION ARI SES WHETHER THE ASSESSEES CONCEALED THE PARTICULARS OF INCOME OR FILED INACCURATE PARTICULARS OF SUCH INCOME? THE OB VIOUS REPLY IS YES BECAUSE FIRSTLY IN THE ABSENCE OF SEARCH U/S 132 OF THE ACT AT THE PREMISES OF THE ASSESSEES THERE WAS ALL LIK ELYHOOD OF ESCAPEMENT OF TAX AND THE COLOURABLE DEVICE ADOPTED BY THESE ASSESSEES IN THE FORM OF GIFTS. IT IS A CLEAR CASE OF NON-DECLARATION OF TRUE INCOME RESULTING INTO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TRUE INCOME. FOR IMPOS ING PENALTY 7 U/S 271(1)(C) OF THE ACT EITHER THERE SHOULD BE CO NCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF S UCH INCOME. WE ARE IN AGREEMENT WITH THE ARGUMENTS OF THE LEARN ED COUNSEL FOR THE ASSESSEE ONLY TO THE EXTENT THAT PENALTY AN D QUANTUM PROCEEDINGS ARE ALTOGETHER DISTINCT AND SEPARATE BU T AT THE SAME TIME EYES CANNOT BE KEPT BLINDFOLDED UNDER THE FAC TS NARRATED HEREINABOVE. 6. SO FAR AS FILING OF COMPUTATION OF INCOME AND BA LANCE-SHEET ETC. SHOWING THE GIFTS ARE THROUGH BANKING CHANNEL ITSELF IS NOT SUFFICIENT TO CONSIDER THE GIFTS AS GENUINE. THE AT TENDANCE CIRCUMSTANCES NEED TO BE LOOKED INTO. WE ARE NOT DO UBTING THE IDENTITY OF THE DONORS OF THE DONEES BUT THAT ITSEL F IS NOT SUFFICIENT TO ALLOW THE CLAIM OF THE ASSESSEES. THE OVERALL CI RCUMSTANCES CLEARLY INDICATE THAT IT WAS MERELY A MANAGED SHOW BY THE ASSESSEES AS THE DONORS HAVE GIVEN GIFTS TO SO MANY PERSONS. THEY SEEM TO BE HABITUAL DONORS. EVEN OTHERWISE TH ERE IS NO EXCHANGE OF INTER SE GIFTS BETWEEN THE DONORS AND T HE DONEES AND EVEN THEY ARE FROM DIFFERENT COMMUNITIES AND HAVING NO RELATION. WE ARE MAKING IT CLEAR THAT IT IS ALWAYS NOT NECESS ARY THAT GIFTS CAN BE DONATED ONLY IN CLOSE RELATIONS BUT AT THE S AME TIME THE ATTENDANCE CIRCUMSTANCES SHOULD INDICATE THE SAME. SO FAR AS 8 THE ARGUMENTS OF THE LEARNED COUNSEL FOR THE ASSESS EE THAT THE LD. ASSESSING OFFICER HAS NOT BROUGHT ANY POSITIVE MATERIAL ON RECORD TO SUGGEST THAT THE GIFTS RECEIVED BY THE AS SESSEE WERE NOT GENUINE WE ARE OF THE VIEW THAT IT IS THE ASSESSEE S WHO HAVE TO ESTABLISH THE GENUINENESS OF THE GIFTS AND NOT THE ASSESSING OFFICER. THE FACTUAL FINDINGS RECORDED IN THE ASSES SMENT ORDERS ORDERS OF THE LD. CIT(A) AND ALSO OF THE TRIBUNAL H AVE NOT BEEN NEGATED BY THE ASSESSEES. 7. THE LEARNED COUNSEL FOR THE ASSESSEE HAS ALSO R ELIED UPON VARIOUS JUDICIAL PRONOUNCEMENTS AND COPIES OF THE S AME HAVE BEEN PLACED ON RECORD. WE HAVE GONE THROUGH THE SAM E AND FOUND THAT EITHER THEY ARE ON DIFFERENT FACTS OR TH E CIRCUMSTANCES LEADING TO SUCH CONCLUSION ARE NOT IDENTICAL TO THE FACTS OF THE PRESENT APPEALS. THE SUM AND SUBSTANCE OF THESE DEC ISIONS IS THAT FOR IMPOSING PENALTY U/S 271(1)(C) EITHER THE RE SHOULD BE CONCEALMENT OF INCOME OR FURNISHING INACCURATE PART ICULARS AND SECONDLY THE QUANTUM AND PENALTY PROCEEDINGS ARE S EPARATE AND DISTINCT. WE ARE IN FULL AGREEMENT WITH THESE DECIS IONS LAID DOWN BY VARIOUS HON'BLE COURTS. HOWEVER SINCE THE FACTS AND CIRCUMSTANCES NARRATED HEREINABOVE ARE DIFFERENT T HESE JUDICIAL PRONOUNCEMENTS MAY NOT HELP THE ASSESSEES. IN VIEW OF THESE 9 FACTS WE FIND NO INFIRMITY IN THE IMPUGNED ORDERS. THESE ARE UPHELD. FINALLY THE APPEALS OF BOTH THE ASSESSEES ARE DIS MISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON3RD FEBRUA RY 2012. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3.2.2012 COPY TO:APPELLANT/RESPONDENT/CIT/CIT(A)/DR/GUARD FI LE !VYS!