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IN THE INCOME TAX APPELLATE TRIBUNAL
"G"BENCH, MUMBAI
. . , , ,
BEFORE SHRI B.R. BASKARAN, ACCOUNTANT MEMBER AND
SHRI AMIT SHUKLA, JUDICIAL MEMBER
. / ITA no. 3312/Mum./2009
( / Assessment Year : 200405)
Shri K.A. Malani
................. /
17, Jayshree, 65 Pestom Sagar
Road no.2, Chambur, Mumbai 400089 Appellant
v/s
Income Tax Officer
................... /
Ward 22(2)1
Navi Mumbai Respondent
.
/ Permanent Account Number AABPM7979B
/ Assessee by : Shri A.L. Sharma
/ Revenue by : Shri Pavan Kumar Beerla
/ /
Date of Hearing 13.10.2014 Date of Order 21.10.2014.
/ ORDER
,
/
PER AMIT SHUKLA, J.M.
The present appeal has been preferred by the assessee,
challenging the impugned order dated 17th February 2009, passed by
the learned Commissioner (Appeals)XXII, Mumbai, for the assessment
year 200405. The sole dispute in this appeal is whether or not the
learned Commissioner (Appeals) was justified in confirming the penalty
Shri K.A. Malani
2
of Rs. 1.20 lakhs levied by the Assessing Officer under section
271(1)(c).
2. Facts in brief:The assessee had shown gifts of sums aggregating
to Rs. 4 lakhs from four persons which were credited to the capital
account. Before the Assessing Officer, the assessee had submitted gift
confirmation, copy of bank statement of the donors, copy of affidavit,
copy of cash flow statement to prove the genuineness of the gift.
However, the said gift was treated as unexplained on the ground that
the assessee could not prove the creditworthiness of the donors and
also could not produce them. In the quantum proceedings up to the
stage of Tribunal out of gifts of Rs. 4 lakhs, the gift from 3 donors
aggregating to Rs. 3 lakhs was confirmed. In the penalty order, the
Assessing Officer has levied the penalty of Rs. 1.20 lakhs on account of
gift received from the following three donors:
Kasturbai R. Sampat Rs. 1.00 lakh
Lalitaben M. Parmar Rs. 1.00 lakh
Tushar R. Sampat Rs. 1.00 lakh
3. Before the learned Commissioner (Appeals), the assessee
submitted that the primafacie evidence to prove the genuineness of
the gift was given which is evident from the fact that the assessee has
furnished copy of bank pass book of the donors, copy of PAN card,
confirmation copy, affidavit and in some cases copy of form no.2D i.e.,
Shri K.A. Malani
3
acknowledgment of filing of return of income. The details of such
evidence have been incorporated in Page3 of the appellate order.
Besides this, the assessee had submitted that, during the course of
remand proceedings, the donors have attended before the Assessing
Officer, however, the Assessing Officer has not recorded the statement
and all the details were furnished with regard to the genuineness of the
gift during the remand proceedings. However, the learned
Commissioner (Appeals) have confirmed the penalty on the ground that
s
the assessee has failed to prove the creditworthiness of the donor'
relationship with the donor and the occasion of gift. Accordingly, after
relying upon the decision of the Hon'ble Supreme Court in Dharmendra
Textiles v/s CIT, confirmed the said penalty.
4. Before us, the learned Counsel for the assessee submitted that
the penalty proceedings are separate and distinct from the assessment
proceedings and therefore, the evidences filed by the assessee should
have been reexamined for the purpose of levy of penalty under
section 271(1)(c). Insofar as the assessee is concerned, he has
discharged his onus by giving all the necessary evidence except for
producing the donors which was done during the course of the penalty
proceedings and also by the fact that the letter from the donors were
filed directly before the Assessing Officer which were addressed to the
Assessing Officer. Thus, he submitted that on such facts and
Shri K.A. Malani
4
circumstances no penalty should be levied. Ld. DR on the other hand
relied upon the order of the CIT(A).
5. We have heard the rival contentions, perused the relevant
findings of the authorities below and the material available on record.
Out of gifts received from 4 persons for sums aggregating to Rs. 4
lakhs, the gift from 3 persons for Rs. 3 lakhs stands confirmed from the
stage of the Tribunal. It is a settled law that the penalty proceedings
are separate and distinct from the assessment proceedings and for the
purpose of penalty under section 271(1)(c) the evidence and the
explanations have to be reappraised to see, whether the assessee is
guilty of concealment of income or for furnishing of inaccurate
particulars or not. From the records it is seen that the assessee has
filed the copy of gift confirmation along with the PAN of the donors; in
some cases copy of acknowledgment of their return of income; copy of
bank statement of donors; affidavit of the donors giving the particulars
of their income tax assessment and the cash flow statement from
where such amount was given to the assessee. In all these cases, the
amount was giving through account payee cheque. The addition has
been confirmed by the Tribunal on the ground that before giving the
gift certain cash were deposited in the bank account. Such a finding in
the quantum proceedings may be quite relevant, however the same is
not conclusive for proving that the assessee is guilty of concealment of
Shri K.A. Malani
5
income, unless it is brought on record that money deposited does not
belong to the donors.
6. The addition has been confirmed solely on the circumstantial
evidences and on the presumption that the cash deposited by the
donor belongs to the assessee. Even that is also believed, then the
donors have undertaken the risk that the cash deposited in the bank
account belongs to them on which they are liable to be taxed. In such a
situation, the source should have been enquired from them when they
are separately assessed to tax. Insofar as the assessee is concerned,
the primafacie onus which lies upon the assessee has been discharged
by proving the identity of the donors and source from where the
assessee has received gifts. The Explanation 1 to section 271(1)(c)
raises a rebuttal presumption i.e., such a presumption can be rebutted
by adducing evidences along with the explanation. If such an
explanation has not been found to be false, then there cannot be a
case for levying the penalty under section 271(1)(c) either for
concealment of income or for furnishing of inaccurate particulars of
income. Thus, under the facts and circumstances, we do not find any
reason to confirm the penalty. Accordingly, the penalty levied u/s
271(1)(c) is deleted.
7.
7. s appeal is allowed.
In the result, assessee'
Shri K.A. Malani
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Order pronounced in the open Court on 21st October, 2014.
Sd/- Sd/- Sd/- Sd/-
.
.
B.R. BASKARAN AMIT SHUKLA
ACCOUNTANT MEMBER JUDICIAL MEMBER
MUMBAI, DATED: 21.10.2014.
/ Copy of the order forwarded to:
(1) / The Assessee;
(2) / The Revenue;
(3) ( ) / The CIT(A);
(4) / The CIT, Mumbai City concerned;
(5) ,
, / The DR, ITAT, Mumbai;
(6) / Guard file.
/ True Copy
/ By Order
.
/ Pradeep J. Chowdhury
/ Sr. Private Secretary
/
/ (Dy./Asstt. Registrar)
, / ITAT, Mumbai
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