9911796707
TMI Blog2019 (8) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... And Shri Anadee Nath Misshra, Accountant Member For the Assessee : None For the Revenue : Shri Surender Pal, Sr. DR ORDER PER ANADEE NATH MISSHRA, AM This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals, ["Ld. CIT(A)", for short], Ghaziabad, dated 10.07.2015 for Assessment Year 2012-13, on the following ground: "That the Learned Commissioner of Income Tax (Appeal) law as well as on facts on the case in sustaining the Penalty amounting to ₹ 1179516/- of I. Tax At which ought not to have been sustained by the Learned Commissioner of Income Tax (Appeal) Ghaziabad." (2) Assessment Order U/s 143(3) read with Section 153A of Income Tax Act, 1961 ("IT Act", for short) was passed on 18.02.2014 in which addition of ₹ 30,00,000/- was made U/s 69A of IT Act and further addition of ₹ 11,87,129/- was made U/s 68 of I.T. Act. The relevant portion of the Assessment Order is reproduced as under: "During the year he had to invest in the new showroom also and has also given net loan of ₹ 11,00,000/- approx. to Shri Gaurav Garg. It is also important to note that sales are shown to be much more in Dec. 11 & Jan.2012 than t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee never stated that the said sum was a gift from his father Shri Ravindra Garg. This first statement about the source and nature of this amount seized from assessee is of paramount importance in this case. After the cash was requisitioned u/s 132A the assessee changed his stand stating that this sum was a gift from his father out of sale proceeds of his jewellery shop. As far as the purpose of his carrying the said amount is concerned, the same is not relevant here. The assessee has also filed an affidavit before me on 16/10/2014 from the prospective seller of the impugned property Smt Sunanda Govil to the effect that she had demanded a draft of ₹ 20 Lacs and cash of ₹ 30 lacs from Shri Gaurav Garg for sale of her property. This evidence is neither admissible u/r 46A nor is material to decision in the matter. Therefore this is nothing but an after-thought and a concocted fanciful story to defraud the revenue. The AO has rightly held that the assessee's father would be having a negative capital if this claim of alleged gift is accepted. The AO has cogently brought out that in order to explain sources of the alleged gifts assessee's father has enhanced his sales i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtfolio Pvt. Ltd. ( Delhi) ITA NOs. 134/2012 Order dt 21/12/2012 following the case of (A. Govindarajulu Mudaliar 34 ITR 807) It has been held that the concept of 'Shifting onus" does not mean that once certain facts are provided, the assessee's duties are over. If on verification, the AO cannot contact the share applicants, or the information becomes unverifiable, the onus shifts back to the assessee. At that stage, if it falters, the consequence may well be an addition u/s 68 (vi) In Shankar Ghose v ITO [1985] 23 TTJ (Cal.) 20 the assessee failed to prove the capacity of the person from whom he had allegedly taken loan. Further the assessee could not explain the need for the loan and the manner in which the loan amount was spent. The creditor issued two letters demanding repayment but did nothing on non compliance therewith.- such letters did not therefore carry any conviction about the explanation of the assessee. Loan amount was rightly held as assessee's own undisclosed income. (vii) In the case of Sumati Dayal 214 ITR 801(SC) it has been held that, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to income-tax as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was completed u/s 143(3) on 18.02.2014 determining assessee's income at ₹ 45,78,670/- against returned income of ₹ 3,91;540/- Income was computed as under: Income declared ₹ 3915407- Additions on account of (1)Unexplained income Unexplained cash credit ₹ 3000000/- (2)Unexplained cash credit ₹ 1187129/- ₹ 4187129/- Taxable Income ₹ 4678669/- The assessee is engaged in job-work pertaining to jewellery and the business qualifies u/s 44AD of the I.T. Act, 1961. Apart from this the assessee is having income 'from house property, In this case cash of ₹ 30 lacs was found and taken into the custody by the SHO, Police Statibn-Muradnagar, District Ghaziabad during General Assembly Elections-2012 of Uttar Pradesh and in turn requisitioned u/s 132A of the I.T. Act, 1961 in terms of directions of Election Commission of India. During the course of statement recorded on oath on 06.01.2012 by the DDIT(Inv.)-I, Ghaziabad the assessee in his statement stated that he was carrying cash for being delivered to Dr, Santosh Kumar- Gupta,- Modinagari Ghaziabad against purchase- of land at Mohan Nagar, Ghaziabad. During the course of ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale proceeds of his jewellery shop is nothing but an after-thought and a concocted fanciful story to defraud the revenue because at the first instance i.e. in the statement u/s 132A recorded by DDIT(Inv.)-I, Ghaziabad the assessee had never stated that the amount of cash of ₹ 30 lacs was a gift from his father. It was only on 26.08.2013 that the assessee stated to have received-a gift of ₹ 30-lac from his father Sh. Ravinder Garg. Further, the capacity of his father too is not proved. Thus, the Ld. CIT(A) had confirmed the additions made by-the AO. As regards addition, of ₹ 11,87,129/- on account of draft of ₹ 20.50 lacs found in his possession, the Ld. CIT(A) deleted the additions made by the AO and stated that merely because the assessee is a debtor of ₹ 8,62,871/- the father could not have given him ₹ 20.50 lacs is not tenable. A notice u/s 274 read with section 271 of the I.T. Act was issued to the assessee on asking him to show cause as to why an order imposing a penalty on you should not be made u/s 271 of the I.T. Act, 1961. In response to above notice, a written reply dated 18.11.2014 was received in which r- the assessee cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d i.e. Rs: 15,49,120/-, issue notice of demand- and challan." 3. Against the above penalty the appellant has come in appeal raising following grounds of appeal "That the learned assessing officer had erred in law as well as on facts of the case in imposing the penalty u/s 271(l)(c) of the Income Tax Act amounting to ₹ 1549120/- i.e. @ 200% which is unjust, arbitrary, unlawful and highly excessive against the principle of natural justice which ought not to have been imposed by the learned assessing officer." 4. Having considered facts of the case and rival contentions, the appeal is decided as under:- In the case the following additions/disallowances had been made by the A.O. in the assessment order dated 18.02.2014:- 1. Addition of ₹ 30,00,000/- u/s 69A of the Act 2. Addition of ₹ 11,87,129/-u/s 68 of the Act. The CIT (Appeal), Ghaziabad vide his order Appeal No. 585/2013- 14/GZB dated 16.10.2014 upheld the addition of ₹ 30,00,000/- and deleted the addition of ₹ 11,87,129/-. The Assessing Officer levied penalty proceedings on the addition of ₹ 30,00,000/- upheld by the CIT(A). In the penalty order the A.O. has brought out that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the expression in clause (c) is has concealed the particulars of his income' and not 'has concealed his income'. It is obvious that the penal provisions would operate when there is a failure of duty to disclose fully and truly particulars of income, imposed under the Act and the Rules there under. The duty is enjoined upon a person to make a correct and complete disclosure of his income and it is only when he fails in his duty by not disclosing his income or part thereof, he conceals the particulars of his income. The duty is enjoined upon him to make a complete disclosure of his income as well as a correct disclosure. Therefore, if the disclosure made of the particulafs of income is incorrect, then also he commits breach of his duty. Such defaults entail the penal consequences contemplated by section 271 (1 )(c). (ii) The position of law with regard to levy of penalty u/s 271(1 )(c) has undergone a substantial change after the insertion of Explanation (1) to section 271(l)(c) w.e.f 01.04.1976. Explanation (1) to section 271(1 )(c) raises a presumption that as and when any amount is added or disallowed in computing the total income the same shall be deemed or represent the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (1982) 135 ITR 652. (vii) Similar view has been expressed by the Kerala High Court in the ease of CIT Vs. K.P. Madhusudana reported in 246 ITR 218. This decision has been affirmed by the Supreme Court in 251 ITR 99. Affirming the aforesaid decision, the Hon'ble Supreme Court has further held that after insertion of explanation its earlier decision in the case of Sir ShadiLal Sugar and General Mills Ltd. Vs. CIT reported in 168 ITR 705 (SC) was no longer applicable. (viii) The Delhi High Court in the case of CIT Vs. Sohan Singh 254 ITR 170 has. held that for the purpose of penalty matter has to be examined in the background of Explanation to section 271 (1(c). It has also been held that evidence recorded during the course of assessment proceedings, though not conclusive, are not totally irrelevant. They could be taken note of. According to the High Court what was required was that the assessee must offer an explanation which, if found to be untenable or unacceptable, then the penalty can be levied under section 271(1 )(c) of the IT Act. The scope of s. 271(1)(c) has also been elaborately discussed by the Supreme Court in UOI vs. Dharmendra Textile Processors 306 ITR 277 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
