MRS. SHARMILA N. SHAH, MUMBAI v. DCIT (19)(3),

ITA 2805/MUM/2009 | 2004-2005
Pronouncement Date: 29-07-2011 | Result: Dismissed

Appeal Details

RSA Number 280519914 RSA 2009
Assessee PAN AAXPS7923D
Bench Mumbai
Appeal Number ITA 2805/MUM/2009
Duration Of Justice 2 year(s) 2 month(s) 28 day(s)
Appellant MRS. SHARMILA N. SHAH, MUMBAI
Respondent DCIT (19)(3),
Appeal Type Income Tax Appeal
Pronouncement Date 29-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 29-07-2011
Date Of Final Hearing 26-05-2011
Next Hearing Date 26-05-2011
Assessment Year 2004-2005
Appeal Filed On 01-05-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E MUMBAI BEFORE SHRI P.M. JAGTAP A.M. AND SHRI V. DURGA RA O J.M. ITA NO. 2805/MUM/2009 ASSESSMENT YEAR: 2004-05 SHARMILA N. SHAH APPELLANT KAMALKUNJ 2 ND FLOOR 5 SANTOSH NAGAR HILL ROAD BANDRA (W) MUMBAI 050 (PAN AAXPS7923D) VS. DY. COMMISSIONER OF INCOME-TAX RESPONDENT (19)(3) MUMBAI APPELLANT BY : MR. DHARMESH SHAH RESPONDENT BY : MR. C.G.K. NAIR DATE OF HEARING : 26/05/2011 DATE OF PRONOUNCEMENT : ORDER PER V. DURGA RAO J.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF CIT(A)- XIX MUMBAI PASSED ON 03/02/2009 FOR THE A SSESSMENT YEAR 2004-05. 2. THE ONLY GROUND RAISED IN THIS APPEAL IS IN RESP ECT OF LEVY OF PENALTY OF RS. 4 43 316/- U/S 271(1)(C) OF THE ACT. 3. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S AN INDIVIDUAL FILED HER RETURN OF INCOME DECLARING THE TOTAL AT R S. 20 96 011/- WHEREIN THE ASSESSEE HAD SHOWN LONG TERM CAPITAL GA IN OF RS. 19 53 132/- AND SUBMITTED ALONG WITH THE RETURN OF INCOME BEFORE THE AO. AS PER THE DETAILS SUBMITTED BY THE ASSESSEE TH E LONG TERM CAPITAL GAIN HAS BEEN SHOWN ON SALE OF 22000 SHARES OF BUNI YAD CHEMICALS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE WAS ASKED ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 2 TO FURNISH THE DETAILS LIKE BROKERS NOTE NAME OF THE BROKER DETAILS OF PAYMENTS MADE FOR PURCHASE OF SHARES AND DETAILS OF RECEIPTS ON SALE OF SHARES THE BROKER THROUGH WHOM THE SHARES WERE PURCHASED AND SOLD BANK STATEMENT INDICATING PAYMENTS AND RECEIP TS A COPY OF DEMAT ACCOUNT ETC. AND THE SAME WERE FURNISHED BY THE ASSESSEE. FROM THE DETAILS SUBMITTED BY THE ASSESSEE IT WAS OBSERVED BY THE AO THAT THE ASSESSEE SOLD SHARES THROUGH M/S GOLDSTAR FINVEST PVT. LTD. AND IT WAS ALSO OBSERVED THAT M/S GOLDSTAR FINVEST PVT. LTD. IS A BROKER ON INTERNCONNECTED STOCK EXCHANGE OF INDIA. THE AO CALLED FOR INFORMATION U/S 133(6) OF THE ACT FROM M/S GOLDSTAR FINVEST PVT. LTD. & INTERCONNECTED STOCK EXHANGE OF INDIA. THE AO HAD NOT RECEIVED ANY INFORMATION FROM M/S GOLDSTAR FINVEST PVT. LTD. WHILE HE RECEIVED INFORMATION FROM M/S INTERCONNECTED STOCK EXCHANGE OF INDIA VIDE THEIR LETTER DATED 22/09/06 BEARING REFERENCE NO. 0 6- 07/ISE/18157/RK IN WHICH IT WAS INTIMATED THAT SHAR ES OF M/S BUNIYAD CHEMICALS WERE NEVER TRADED ON THE INTERCO NNECTED STOCK EXCHANGE OF INDIA AND M/S GOLDSTAR FINVEST PVT. LTD . HAS BEEN EXPELLED FROM THE STOCK EXCHANGE AND IS NO LONGER A LLOWED TO TRADE ON THE INTERCONNECTED STOCK EXCHANGE OF INDIA. THE AO HAD COMMUNICATED THE ABOVE INFORMATION TO THE ASSESSEE VIDE LETTER DATED 14/10/06 THE CONTENTS THEREIN ARE REPRODUCED BELOW :- FROM THE DETAILS SUBMITTED BY YOU IN THE COURSE OF ASSESSMENT PROCEEDINGS IT IS SEEN THAT YOU HAVE CLAIMED TO HAV E PURCHASED AND SOLD 22000 SHARES OF M/S BUNIYAD CHEMCALS LTD. THROUGH BROKER M/S GOLDSTAR FINVEST PVT. LTD. FROM THE PHOT OCOPIES OF THE BROKERS NOTE FURNISHED BY YOU IT IS SEEN THAT M/S GOLDSTAR FINVEST PVT. LTD. ARE HAVING THEIR OFFICE AT 7 SWE ET HOME 9 TH ROAD EXTENSION JVPD SCHEME JUHU MUMBAI. INFORMAT ION WAS CALLED FROM M/S GOLDSTAR FINVEST PVT. LTD. AT THE A BOVE MENTIONED ADDRESS U/S 133(6) OF THE ACT. HOWEVER THE SAME HA S BEEN RECEIVED BACK UNSERVED BY THIS OFFICE. YOU ARE REQU ESTED TO FURNISH THE LATEST ADDRESS OF THE BROKER THROUGH WH OM YOU HAVE TRANSACTED IN THE SHARES OF M/S BUNIYAD CHEMICALS L TD. FROM THE PHOTOCOPIES OF THE BROKERS NOT FURNISHED B Y YOU IT IS SEEN THAT M/S GOLDSTAR FINVEST LTD. WAS A DEALER OF INTERCONNECTED STOCK EXCHANGE OF INDIA VASHI. INFO RMATION WAS CALLED FROM INTERCONNECTED STOCK EXCHANGE OF INDIA VASHI U/S 133(6) OF THE ACT AND IN RESPONSE TO THIS IT HAS BE EN STATED BY ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 3 INTERCONNECTED STOCK EXCHANGE OF INDIA VASHI (COPY ENCLOSED) THAT FOR THE FY2003-04 NO TRADING IN SHARES OF M/S BUNIYAD CHEMICALS LTD. HAS TAKEN PLACE. YOU ARE THEREFORE REQUESTED TO STATE SO AS TO ON WHICH STOCK EXCHANGE THE SHARES YOU HAVE CLAIMED TO HAVE TRANSACTED HAS BEEN TRADED. 4. IN RESPONSE TO THE SAID AOS LETTER THE AO VIDE LETTER DATED 08/11/06 SUBMITTED THAT TO BUY PEACE AND AVOID PRO TRACTED LITIGATION WITH THE INCOME TAX AUTHORITIES THE CLAIM OF LONG TERM CAPITAL GAIN OF RS. 19 93 132.19 ON SALE OF 22000 SHARES OF BUNIYAD CHEMICALS LTD. IS WITHDRAWN AND REQUESTED TO TAX THE SAID LONG TER M CAPITAL GAIN ACCORDINGLY AS INCOME LIABLE TO BE TAXED AT HER OWN MOTION. IN VIEW OF THE ABOVE THE AO BROUGHT THE SAID LONG TERM CAPITA L GAIN OF RS. 19 93 132.19 TO TAX. SUBSEQUENTLY PENALTY PROCEEDI NGS U/S 271(1)(C) INITIATED BY THE AO ON THE GROUND THAT THE CLAIM OF LONG TERM CAPITAL GAIN WAS NOT GENUINE/BOGUS AND SERVED A SHOW CAUSE NOTICE ON 09/05/2007 REQUIRING THE ASSESSEE TO SHOW CAUSE AS TO WHY AN ORDER IMPOSING PENALTY SHOULD NOT BE PASSED FOR FURNISHIN G OF INACCURATE PARTICULARS/CONCEALMENT OF INCOME. IN RESPONSE TO T HE SAID NOTICE THE ASSESSEE FILED HER REPLIES ON 28/11/06 & 24/5/07 WH EREIN IT WAS REITERATED THE FACT THAT SHE WITHDREW HER CLAIM OF LONG TERM CAPITAL GAIN AND OFFERED TOTAL INCOME AS INCOME CHARGEABLE TO TAX VOLUNTARILY WITH A VIEW TO BUY PEACE AND AVOID LITIGATION WITH IT AUTHORITIES. SHE ALSO RELIED ON THE FOLLOWING CASE LAWS: 1. THE JUDGEMENT OF MP HIGH COURT OF [2000] 241 ITR 124 CIT VS. SURESH CHAND MITTAL JULY 20 1999 CASES REFERR ED TO SIR SHADILAL SUGAR AND GENERAL MILLS LTD. VS. CIT [1987 ] 168 ITR 0705 (SC). 2. THE JUDGMENT OF BOMBAY HIGH COURT IN THE CASE O F COMMISSIONER OF INCOME TAX VS. KIRAN & CO. REFERRE D CASES 98 ITR 426 101 ITR 292. 3. THE JUDGMENT OF P&H HIGH COURT IN THE CASE OF CI T VS. HUKAMCHAND HARI PRAKASH REFERRED CASE 92 ITR 513. 5. THE AO AFTER CONSIDERING THE EXPLANATION OF TH E ASSESSEE AS WELL AS CASE LAWS RELIED UPON BY THE ASSESSEE OBSERVED T HAT THE ASSESSEE DELIBERATELY FILED INACCURATE PARTICULARS OF HER IN COME BY DECLARING ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 4 INCOME UNDER THE HEAD LONG TERM CAPITAL GAIN INST EAD OF INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES SO AS TO REDUCE THE TAX LIABILITY. THE AO FURTHER OBSERVED THAT ON DETECTIO N OF THE DEPARTMENT ONLY THE ASSESSEE CHANGED HER STAND BY WITHDRAWING THE LONG TERM CAPITAL GAINS CLAIM. IT WAS OBSERVED THAT IT IS ON LY AFTER THE AO INVESTIGATED THE TRANSACTIONS AND PROVED BEYOND DOU BT THAT THE TRANSACTION OF SHARES CLAIMED BY THE ASSESSEE WAS B OGUS/NON- GENUINE THE ASSESSEE CAME FORWARD WITH A REVISED S TATEMENT OF TOTAL INCOME CHANGING THE HEAD OF INCOME FROM LONG TERM C APITAL GAIN TO INCOME FROM OTHER SOURCES. THE AO THEREFORE LEVIED PENALTY OF RS. 4 43 316/- U/S 271(1)(C) ON THE GROUND THAT THE ASS ESSEE HAS DELIBERATELY INTENTIONALLY AND CONSCIOUSLY FILED I NACCURATE PARTICULARS OF HER INCOME TO REDUCE THE TAX INCIDENCE. AGGRIEVE D THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 6. BEFORE THE CIT(A) IT WAS SUBMITTED THAT ALL THE DETAILS IN RESPECT OF SHARE PURCHASE AND SELLING WAS SUBMITTED BEFORE THE AO AND THE ASSESSEE MADE ALL EFFORTS TO FIND OUT THE B ROKER M/S GOLDSTAR FINVEST PVT. LTD. AND THEREFORE WHEN SHE WAS NOT ABLE TO FIND OUT THE BROKER SHE WITHDREW THE CLAIM TO BUY PEACE OF MIND AND UNDER THESE CIRCUMSTANCES NO PENALTY CAN BE LEVIED. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE OBSERVED THAT THE ASSESSEE FILED BROKERS BILL DELIVERY OF SHARES TRANSFERRED IN TH E NAME OF ASSESSEE IN THE RECORDS OF THE COMPANY DEMAT ACCOUNTS RECEIPT BY CHEQUE BEFORE THE AO. HOWEVER WHEN THE AO CONFRONTED WITH A SHOW CAUSE NOTICE DATED 04/10/06 NO ATTEMPT WAS MADE TO DEFEN D THE SO CALLED GENUINENESS OF LONG TERM CAPITAL GAIN ON SALE OF SH ARES FROM M/S BUNIYAD CHEMICALS LTD. THE LEARNED CIT(A) FOLLOWIN G THE CASE OF CIT VS. DURGA PRASAD MORE [1971] 82 ITR 540 OBSERVED TH AT THE ASSESSEE OFFERED LONG TERM CAPITAL GAIN TO TAX ONLY AFTER RE CEIPT OF SHOW CAUSE NOTICE WHICH WAS A CULMINATION OF ENQUIRIES DONE A T THE LEVEL OF STOCK BROKER AND THE STOCK EXCHANGE IT CANNOT BE HELD TO BE VOLUNTARY. FURTHER THE BROKER M/S GOLD STAR FINVEST (P) LTD. IN THIS CASE WAS ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 5 NOT TRACEABLE THAT IT HAS A DUBIOUS RECORD IS EVIDE NT FROM THE FACT THAT A STOCK EXCHANGE HAD BANNED IT FROM TRADING AND THE TRANSACTIONS TOO WERE NOT BORNE IN THE RECORDS OF STOCK EXCHANGE. TH IS KNOCKS AT THE BOTTOM OF THE ASSESSEES DEFENCE THAT NO INACCURATE PARTICULARS OF ITS INCOME WAS FURNISHED AND THE INCOME WAS NOT CONCEAL ED. IN VIEW OF THE ABOVE FINDINGS THE CIT(A) CONFIRMED THE PENALT Y LEVIED. ON BEING AGGRIEVED THE ASSESSEE IS IN APPEAL BEFORE THE TRI BUNAL. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT ALL THE DETAILS IN RESPECT OF PURCHASE OF SHARES BANK ACCO UNT ALLOTMENT OF SHARES ETC. WERE SUBMITTED BEFORE THE AO. HE THER EFORE CONTENDED THAT THE ASSESSEE NEITHER FURNISHED INACCURATE PART ICULARS OF INCOME NOR CONCEALED HIS INCOME AND HENCE SECTION 271(1) (C) HAS NO APPLICATION TO THE ASSESSEES CASE. IT IS SUBMITTED THAT THE AO HAS NOT GIVEN ANY FINDING IN HIS ORDER THAT THE TRANSACTION S OF BUYING AND SELLING OF SHARES WERE NOT GENUINE THEREFORE PENA LTY U/S 271(1)(C) CANNOT BE IMPOSED. IT IS FURTHER SUBMITTED THAT THE AO WITHOUT INVESTIGATING WHETHER BUYING AND SELLING OF SHARE T RANSACTIONS ARE GENUINE OR NOT IMPOSED PENALTY. IT IS CONTENDED THA T PENALTY PROCEEDINGS ARE ALTOGETHER DIFFERENT FROM THE ASSES SMENT PROCEEDINGS AND THE AO BEFORE IMPOSING PENALTY OUGHT TO HAVE BE EN MADE AN ENQUIRY WHETHER THE TRANSACTIONS MADE BY THE ASSESS EE ARE GENUINE OR NOT. THE LEARNED COUNSEL REFERRED PAGES 34 &35 OF H IS PAPER BOOK AND SUBMITTED THAT THE ASSESSEE HAS EXPLAINED THE REASO NS FOR WITHDRAWING THE LONG TERM CAPITAL GAIN AND THE SAME WAS OFFERED FOR TAXATION UNDER THE HEAD INCOME FROM OTHER SOURCES AND THEREFORE ONCE THE AO ACCEPTED THE OFFER MADE BY THE ASSESSEE HE CANNOT IMPOSE PENALTY U/S 271(1)(C) OF THE ACT. 8. ON THE OTHER HAND THE LEARNED DR SUBMITTED THAT THE AO HAS MADE ALL THE DETAILED ENQUIRY WITH REGARD TO BUYING AND SELLING OF SHARES AND THEREFORE AFTER DUE ENQUIRY THE AO CAM E TO KNOW THAT THE BROKER THROUGH WHOM THE ASSESSEE PURCHASED SHARES N OT REGISTERED ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 6 WITH INTERCONNECTED STOCK EXCHANGE OF INDIA AND HE WAS ALSO EXPELLED THE SAID STOCK EXCHANGE. APART FROM THAT THE ASSESS EE HAS PURCHASED SHARES FROM THE SAME PERSONS AND SOLD TO THE SAME P ERSONS FOR HIGHER RATE THEREFORE THE AO AFTER INVESTIGATING INTO TH E MATTER ASKED THE ASSESSEE TO EXPLAIN THE DETAILS AND WHEREABOUTS OF THE BROKER. THE LEARNED DR SUBMITTED THAT THE AO HAS RIGHTLY IMPOSE D PENALTY U/S 271(1)(C). 9. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF THE PARTIES PERUSED THE RECORD AND GONE THROUGH THE ORDERS OF T HE AUTHORITIES BELOW. THE ASSESSEE FILED RETURN OF INCOME CLAIMING LONG TERM CAPITAL GAIN OF RS. 19 53 192.19. ON BEING ASKED TO EXPLAIN BY THE AO WITH REGARD TO THE SAID LONG TERM CAPITAL GAIN THE ASSE SSEE FILED DETAILS. AFTER EXAMINING THE DETAILS THE AO CALLED FOR INFOR MATION U/S 133(6) OF THE ACT FROM THE BROKER M/S GOLD STAR FINVEST PVT. LTD. AND M/S INTERCONNECTED STOCK EXCHANGE OF INDIA WHERE THE BROKER M/S GOLD STAR FINVEST WAS A MEMBER. THE AO HAS NOT RECEIVED ANY INFORMATION FROM THE BROKER M/S GOLD STAR FINVEST BUT M/S INTER CONNECTED STOCK EXCHANGE OF INDIA VIDE THEIR LETTER DATED 22/09/06 BEARING REFERENCE NO. 06-07/ISE/18157/RK INTIMATED THAT SHARES OF M/ S BUNIYAD CHEMICALS WERE NEVER TRADED ON THE INTERCONNECTED STOCK EXCHANGE OF INDIA AND M/S GOLDSTAR FINVEST PVT. LTD. HAS BEEN EXPELLED FROM THE STOCK EXCHANGE AND IS NO LONGER ALLOWED TO TRADE ON THE INTERCONNECTED STOCK EXCHANGE OF INDIA. THE AO COMM UNICATED THE SAID INFORMATION TO THE ASSESSEE. AFTER RECEIVING T HE INFORMATION THE ASSESSEE HAS WITHDRAWN HER CLAIM OF LONG TERM CAPIT AL GAIN AND OFFERED THE SAME TO TAXATION. IN THIS CONTEXT WE H AVE TO EXAMINE WHETHER THE ASSESSEE HAS SURRENDERED HER CLAIM VOLU NTARILY OR AFTER DETECTION BY THE DEPARTMENT. IN THIS CASE THE ASS ESSEE HAS SUBMITTED ALL THE DETAILS LIKE BROKERS NOTE NAME OF THE BRO KER DETAILS OF PAYMENTS MADE FOR PURCHASE OF SHARES AND DETAILS OF RECEIPTS ON SALE OF SHARES THE BROKER THROUGH WHOM THE SHARES WERE PURCHASED AND SOLD BANK STATEMENT INDICATING PAYMENTS AND RECEIP TS A COPY OF ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 7 DEMAT ACCOUNT ETC. WHEN THE AO INVESTIGATED INTO T HE DETAILS OF THE BROKER WHETHER THE BROKER IS A MEMBER OF INTERCONNE CTED STOCK EXCHANGE OR NOT AND WHETHER ANY TRADING TOOK PLACE WITH REGARD TO PURCHASE AND SELLING OF SHARES IT CAME TO THE NOTI CE OF THE AO THAT THE BROKER OF THE ASSESSEE M/S GOLD STAR FINVEST WA S NEVER TRADED FROM THE INTERCONNECTED STOCK EXCHANGE OF INDIA AND THE MEMBERSHIP OF THE SAID BROKER HAS BEEN EXPELLED FROM AY 2003-0 4. WHEN ALL THESE FACTS BROUGHT TO THE NOTICE OF THE ASSESSEE BY THE AO THE ASSESSEE HAS WITHDRAWN HER LONG TERM CAPITAL GAINS CLAIM. W E ARE OF THE VIEW THAT THE ASSESSEE CLAIMED THE LONG TERM CAPITAL GAI N BY FILING INACCURATE PARTICULARS OF HER INCOME THEREFORE TH E SAME ATTRACTS THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. THE ASS ESSEE HAS NOT MADE ANY ATTEMPTS TO TRACE OUT THE BROKER NOR COULD NOT FIND WHERE THE SHARES PURCHASED BY HER OR SOLD BY HER. AFTER INVES TIGATING INTO THE FACTS OF THE CASE AND WHEREABOUTS OF THE BROKER TH E AO ISSUED NOTICE TO THE ASSESSEE CALLING FOR EXPLANATION AND THE ASS ESSEE WITHOUT MAKING PROPER ENQUIRY SIMPLY WITHDREW THE CLAIM AND OFFERED THE SAME FOR TAXATION. THE ASSESSEE NEITHER BEFORE THE AO NOR BEFORE THE CIT(A) OR EVEN BEFORE US NOT EXPLAINED WHAT WERE TH E EFFORTS MADE BY THE ASSESSEE BEFORE OFFERING THE INCOME FROM HEAD LONG TERM CAPITAL GAIN TO THE HEAD INCOME FROM OTHER SOURCES. IN S O FAR AS THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE AO HAS NOT MADE ANY INVESTIGATION IT IS PERTINENT TO NOTE THA T THE AO AFTER DETAILED INVESTIGATION ONLY ISSUED NOTICE TO THE AS SESSEE AND WHEN THE ASSESSEE ACCEPTED THE DISCREPANCIES IN THE TRAN SACTION HE WITHDREW THE CLAIM OF THE LONG TERM CAPITAL GAIN AN D OFFERED THE SAME TO TAXATION UNDER THE HEAD INCOME FROM OTHER SOURC ES. IN OUR HUMBLE VIEW NO FURTHER INVESTIGATION IS REQUIRED. IN SO F AR AS THE GENUINENESS OF THE TRANSACTION IS CONCERNED TO IMPOSE PENALTY U/S 271(1)(C) IT IS NOT NECESSARY THAT THE AO HAS TO GIVE A FINDING THA T THE TRANSACTION IS NOT GENUINE IN OUR VIEW IF THE AO CAME TO THE CON CLUSION THAT THE CLAIM OF THE ASSESSEE IS BASED ON INACCURATE PARTIC ULARS OR CONCEALMENT OF INCOME THAT ITSELF IS SUFFICIENT T O INVOKE SECTION ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 8 271(1)(C) OF THE ACT. IN THE PRESENT CASE THE ASSE SSEE HAS FILED INACCURATE PARTICULARS OF INCOME AND THE CLAIM WAS MADE ON A DIFFERENT HEAD WHICH WAS NOTICED BY THE AO AND WHE N BROUGHT TO THE NOTICE OF THE ASSESSEE THE ASSESSEE CHANGED HIS CL AIM FROM LONG TERM CAPITAL GAIN TO INCOME FROM OTHER SOURCES. THERE FORE WE ARE OF THE VIEW THAT THE AO IS FULLY JUSTIFIED IN IMPOSING PEN ALTY U/S 271(1)(C) OF THE ACT. UNDER THESE CIRCUMSTANCES WE FIND THAT T HE LEARNED CIT(A) JUSTIFIED IN CONFIRMING THE ORDER OF AO IN IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. 10. IN SO FAR AS THE CASE LAWS RELIED UPON BY THE A SSESSEE ARE CONCERNED I) IN THE CASE OF CIT V. RAJIV GARD [20 08] 175 TAXMAN 184 THE REVENUE AUTHORITIES FOUND THAT SALE OF SHARES O N WHICH CAPITAL GAIN HAD BEEN DECLARED BY THE ASSESSEE IN ORIGINAL RETURN WAS BOGUS ISSUED NOTICE U/S 148 OF THE ACT TO ASSESSEE. IN RE SPONSE ASSESSEE FILED REVISED RETURN SURRENDERING ENTIRE AMOUNT OF SALE PROCEEDS OF SHARES ALLEGEDLY IN ORDER TO BUY PEACE OF MIND AND TO AVOID HAZARDS OF LITIGATION AND ALSO TO SAVE HIMSELF FROM ANY PENAL ACTION. AO IMPOSED PENALTY ON THE GROUND THAT THE ASSESSEE FILED REVIS ED RETURN OF INCOME AFTER DETECTION OF CONCEALMENT OF INCOME BY THE DEP ARTMENT. PENALTY WAS DELETED OBSERVING THAT THE AO HAD SIMPLY RESTED HIS CONCLUSION ON ACT OF ASSESSEE OF HAVING OFFERED ADDITIONAL INC OME IN REVISED RETURN AND HAD FAILED TO TAKE ANY OBJECTION THAT DE CLARATION OF INCOME MADE BY THE ASSESSEE IN HIS REVISED RETURN AND HIS EXPLANATION WERE NOT BONAFIDE. THE FACTS OF THE PRESENT CASE ARE ENT IRELY DIFFERENT FROM THE CASE RELIED UPON BY THE ASSESSEE AS IN THE PRES ENT CASE THE AO ISSUED NOTICE U/S 133(6) TO THE BROKER AS WELL AS S TOCK EXCHANGE AND AFTER EXAMINING THE ENTIRE DETAILS CALLED THE ASSES SEE EXPLAIN AND THE ASSESSEE WITHOUT EXPLAINING ANY THING WITHDRAWN THE CLAIM. UNDER THESE CIRCUMSTANCES THE AO JUSTIFIED IN INVOKING S ECTION 271(1)(C) OF THE ACT. II) IN THE CASE OF GIRI RAJ GUPTA VS. ITO (ITA NO . 3580(DELHI) OF 2005 THE TRIBUNAL OBSERVED THAT ALL THE EVIDENCE GATHERED BY THE ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 9 INVESTIGATING WING OF THE DEPARTMENT BY EXAMINING T HE BROKER M AND HIS CHARTERED ACCOUNTANT REFERRED TO THE TRANSACTIO NS IN SHARES AND THE MODUS OPERANDI ADOPTED BY M IN ACCOMMODATING ASSESSEES TO BRING INTO THEIR BOOKS THEIR UNDISCLOSED INCOME IN THE GUISE OF THE SALE OF SHARES. BUT NONE OF THE STATEMENTS MADE BY THE M REFERRED TO THE ASSESSEE SPECIFICALLY OR POINTEDLY BY NAME OR E VEN BY NECESSARY IMPLICATION NOR WAS THERE ANYTHING IN THE STATEMENT TO LINK THE ASSESSEE WITH THE MANIPULATIVE PRACTICES ALLEGED TO HAVE BEEN ADOPTED BY THE SHARE BROKER M. THERE WAS THEREFORE NO D IRECT EVIDENCE TO SHOW THAT THE ASSESSEE ALSO MADE USE OF THE SERVICE S OF M FOR THE PURPOSE OF BRINGING INTO THE ACCOUNTS HIS UNDISCLOS ED INCOME IN THE GUISE OF SALE OF SHARES. THE ASSESSEE ALSO DID NOT PARTICIPATE IN THE ENQUIRY MADE FROM THE DIRECTOR OF COMPANY N IN TH E COURSE OF WHICH HE DENIED HAVING TRANSFERRED THE SHARES IN THE ASSE SSEES NAME. THE ASSESSEE WAS NO DOUBT CONFRONTED WITH THE STATEMENT OF THE DIRECTOR BUT ASSESSEE PLACED RELIANCE ON THE DOCUMENTARY EVI DENCE IN HIS POSSESSING REGARDING THE TRANSACTION OF THE SHARES INCLUDING EVIDENCE TO SHOW THAT THE COMPANY N ITSELF HAD ACKNOWLEDGE D THE RECEIPT OF SHARES FROM THE ASSESSEE AS WELL AS THE COVERING LE TTER SENT BY THE COMPANY N ALONG WITH THE SHARE CERTIFICATES DULY TRANSFERRING THE SHARES IN THE ASSESSEES NAME. FURTHER THE PURCHA SE OF THE SHARES DECLARED IN THE ASSESSEES BALALNCE SHEET AS ON 31- 3-1995 HAD NOT BEEN ENQUIRED INTO OR FOUND FALSE IN THE ASSESSMENT FOR THE ASSESSMENT YEAR 1995-96. FURTHER ALL OTHER EVIDEN CE SUCH AS THE BROKERS NOTES BILLS QUOTATIONS STATEMENTS OF AC COUNT OF THE ASSESSEE IN THE BOOKS OF THE BROKER THE LETTERS WR ITTEN BY THE BROKER TO THE ASSESSEE HAD NOT BEEN FOUND TO BE FALSE. I F ANYTHING THEREFORE IT COULD ONLY BE STATED THAT THE EVIDENC E FROM BOTH THE SIDES MIGHT BE MATCHED. IN SUCH A SITUATION THE BENEFIT OF DOUBT SHOULD HAVE TO BE GIVEN TO THE ASSESSEE. THE FACT THAT TH E ASSESSEE SURRENDERED THE INCOME MIGHT PRIME FACIE APPEAR TO GO AGAINST THE ASSESSEE BUT THAT WAS LIMITED ONLY TO THE ASSESSME NT PROCEEDINGS AND WAS MADE ONLY TO PUT AN END TO THE PROTRACTED P ROCEEDINGS AND TO ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 10 BUY PEACE OF MIND. THEREFORE IT COULD NOT BE SAID THAT THE ASSESSEE EITHER CONCEALED HIS INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF. FURTHER THERE WAS NO DEFINITE FINDING OF CONCEALMENT IN THE PENALTY ORDER EXCEPT THE CONCLUSION THAT THE ASSESS EE WILLFULLY FILED INACCURATE PARTICULARS AND CONCEALED THE INCOME. A T BEST IT COLD ONLY BE STATED THAT THE ASSESSEE COULD NOT SUCCEED IN PR OVING IN THE MANNER REQUIRED BY ASSESSING OFFICER THAT THE AMOU NT RECEIVED BY HIM REPRESENTED SALE PROCEEDS OF SHARES BUT IT COUL D NOT BE ASSERTED POSITIVELY HAVING REGARD TO THE EVIDENCE ON RECORD THAT THE ASSESSEES CLAIM STOOD DISPROVED. THEREFORE THE PENALTY IMPO SED UPON THE ASSESSEE WAS NOT JUSTIFIED AND WAS LIABLE TO BE DEL ETED. IN THE PRESENT CASE THE ADDRESS OF THE BROKER IS NOT AVAI LABLE WITH THE STOCK EXCHANGE AND THE STOCK EXCHANGE INFORMED THAT THE B ROKER WAS EXPELLED FROM AY 2003-04 AND THE BROKER NEVER TRADE D IN THE STOCK EXCHANGE. THEREFORE THE ABOVE CASE LAW IS NOT APPL ICABLE TO THE FACTS OF THE CASE. III) IN THE CASE OF MR. RAMAKANT R. JADHAV VS. CIT (ITA NO. 6241/MUM/09 THE TRIBUNAL HELD THAT THE AO HAS NOT BROUGHT ANY THING ON RECORD TO ESTABLISH THAT THE SHARES PURCHA SED BY THE ASSESSEE WERE BOGUS AND THEREFORE HE WAS NOT JUST IFIED IN IMPOSING PENALTY U/S 271(1)(C) OF THE ACT. IN THE PRESENT CA SE THE AO MADE DETAILED ENQUIRY AND INVESTIGATION WITH REGARD TO B ROKER AND STOCK EXCHANGE AND AFTER THE ENQUIRY THE AO CAME TO KNO W THAT THE SOL CALLED BROKER NEVER TRADED IN STOCK EXCHANGE AND HE WAS EXPELLED FROM STOCK EXCHANGE. THE NOTICE RETURNED UNSERVED A ND THE AO ASKED THE ASSESSEE TO PRODUCE THE ADDRESS OF THE BROKER B Y ISSUING NOTICE U/S 133(6) AND THE ASSESSEE HAS NOT MADE ANY ATTEMP T TO FIND OUT THE WHEREABOUTS OF THE BROKER. THEREFORE THE SAID CASE LAW IS NOT APPLICABLE TO THE FACTS OF THE CASE OF THE ASSESSEE . 11. IN VIEW OF THE ABOVE DISCUSSION WE UPHOLD THE ORDER OF CIT(A) THE GROUND RAISED BY THE ASSESSEE ON THIS COUNT IS HEREBY DISMISSED. ITA NO.2805/M/2009 MRS. SHARMILA N. SHAH 11 12. IN THE RESULT APPEAL OF THE ASSESSEE IS DISMIS SED. PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF JULY 2011. SD/- SD/- (P.M. JAGTAP) (V. DURG A RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI DATED: 29 TH JULY 2011 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE E BENCH I.T .A.T. MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR I.T.A.T. MUMBAI.