2014 (3) TMI 493
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..... CIT(Appeals) Rohtak has erred in law as well as on facts of the case in confirming penalty of Rs.66151/-(ITA 6329/Del/ 12,Rs. 1,32,259)wrongly levied u/s 271(1)(c) of I.T Act by the Assessing Officer. Thus the said appellate order is totally wrong and illegal. 2. That the authorities below have further erred in law as well as on facts of the case in wrongly applying the provision of Section 271(1)(c) of I.T Act. Thus the order passed on wrong application of the provision of Section 271(1)(c) of I.T Act is totally wrong and illegally. 3. That the authorities below have further erred in appreciating the record and facts of the case that the appellant has duly disclosed all the particulars of gift received in his capital account. Thus there was no concealment or furnishing of inaccurate particulars of income. Thus the order of confirming the penalty u/s Section 271(1)(c) is totally wrong and illegal. 4. That the authorities below have further failed to appreciate that true and complete particulars of donor were duly furnished showing his identity capacity and genuineness of transaction as address, PAN No., Bank A/c, Copy of I.T Return and affidavit of the donor were furnished. Th....
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....nd taxed accordingly." 4.3. The Assessing Officer not convinced with the explanation offered further held that the decision rendered by the Punjab & Haryana High Court was distinguishable on facts as in the facts before the Punjab & Haryana High Court the identification of the donor; genuineness of the transaction was not doubted which was not a fact in the present case. Accordingly, minimum penalty of Rs.66,151/- was imposed by him. 5. The assessee agitated the issue before the CIT(A). The facts were marshaled by the CIT(A) in the following manner:- "2. Brief facts are that the assessee filed return of income declaring total income of Rs.1,84,800/- which was processed u/s 143(1) of the Act. The A.O received information from CIT, Rohtak that there was an accommodation entry through an entry operator Sh. Sunil Kumar Garg, resident of 2244, Gali Raghunandan, Naya Bazar, Delhi of Rs.2,00 lacs vide DD No. 626823 dated 20/6/2002 through jai Luxmi Co-op Bank Ltd. Fatehpuri, Delhi in the bank a/c of the assesssee maintained in State Bank of Patiala, Narnaul. It was found that this amount of Rs.2,00 lacs has been credited in the capital a/c of the assessee for the AY 2003-04. A letter w....
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....e AO was confirmed by the CIT(A). For ready-reference the same is extracted hereunder:- "5. I have considered the issue and the submissions made the AR. The appellant contended that the gift of Rs.2.00 lacs has been received through banking channels from Sh. Sunil Kumar Garg who affidavit and copy of IT return were filed before the AO and therefore it cannot be held to hve furnished inaccurate particulars of income or concealed any income. Though the appellant furnished affidavit of Sh. Sunil Kumar Garg, he was not produced before the A.O. Mere affirmation on affidavit is not enough and the contents of the affidavit have to be confirmed along with documentary evidence. Even though the AO insisted the appellant to produce Sh. Sunil Kumar Garg before him to examine the veracity of the affidavit, the appellant failed to discharge the onus cast on him. Further, the appellant has failed to prove the creditworthiness of Sh. Sunil Kumar Garg for the alleged gift. Mere filing of copy of IT return does not absolve the assessee of the onus to prove the creditworthiness of the donor. From the facts as noted by the A.O, it is seen that Sh. Sunil Kumar Garg gave similar entries of gift....
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....t of Rs. 2.00 lac from his friend Shri Sunil Kumar Garg through banking channels supported by affidavit and copy of the Income Tax return of Shri Sunil Kumar Garg has been placed on record. The said evidence it was argued is sufficient to prove the identity, genuineness and capacity of the donor. It was argued that no doubt in quantum proceedings the issue has been decided against the assessee, however, simply because the assessee could not prove the fact does mean that the evidence available on record is disproved. It was also argued that the evidence is not false and the judgment of the Gujrat High Court dated 22/6/2011 in Tax Appeal No. 496/10 in the case of CIT Vs. Kokila Behan Isha copy placed at pages 7 to 9 in the paper book was relied upon. Reliance was also placed upon the order dated 5th August 2009 rendered by the Hon'ble Bombay High Court in I.T Appeal (L) No. 1860/2009 in CIT Vs. Upendra V. Methani (copy filed in the Court). It was his sub mission that similar arguments and propositions of law would be relied upon in ITA No- 6239/Del/2012 in the case of Manoj Kumar Singhal HUF wherein a gift of Rs.4 lac has been received is identical manner through Banking Channels....
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.... vide its reply dated 08.12.2008 claimed that donor being a friend accommodated the assessee by providing a gift of the said amount as the assessee was in need of money to purchase the land at Udaipur and ultimately during the said assessment year 2003-04, the assessee advanced Rs.7,50,000/- for purchase of land. These facts are found recorded in para 3 of the assessment order. The record shows that the so called friend despite the request of the Department was not produced and instead the assessee requested the AO to issue summons to him. The AO issued summons on assessee's request which remained uncomplied with. In the circumstances the CIT(A) and the Tribunal concluded in the quantum proceedings that neither the creditworthiness nor the identity of the donor could be proved. The donor was held to be a stranger to the assessee who was never produced to support the gift having been made. 7.1. Regarding the claim that the gift was received through banking channels the evidence on examination has been held to be not sufficient to establish the genuineness. The record shows that on considering the particulars of the bank account 14154 from Jai Laxmi Co-operative Bank Ltd, Fatehp....
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.... of the assessment as well as in the course of the assessment proceedings. Summons were issued to the donor at the instance of the assessee, which were not complied with. The assessee was also given an opportunity to produce the donor and the assessee expressed his inability to do so. The AO also examined the bank account of the donor, which fairly leads to a conclusion that there was a systemic attempt to launder money by way of gifts in favour of a number of persons including the assessee. Thus, it is not a case where the AO did not make any further enquiry. In the face of this enquiry and non- production of the donor, the contents of the memorandum of gift and affidavits can only be said to be self-serving and unsubstantiated documents. ........................................................................" 7.2. It is further see that the finding of the Assessing Officer that the bank account of the donor was operated only with the view to furnish accommodation entries has also been confirmed by the ITAT. For ready reference we reproduce Para 5.2 from Page 19 of the order of the Co-ordinate Bench in quantum proceedings:- "5.2. On considering all these case, it is clear that....