TMI Blog2014 (3) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... . The assessee is not required to prove the source of the source, but the primary onus of proving the gift to the genuine by adducing satisfactory evidence about three primary conditions lies on him, which remains undischarged - As a matter of fact, the evidence by way of bank account of the donor, collected by the AO and confronted to the assessee, directly proves the gift to be non-genuine – thus, the addition of the amount to the total income of the assessee upheld. Penalty u/s 271(1)(c) of the Act – Held that:- Whether penal action has rightly been invoked or not is a matter of fact - The principle of law laid down where the genuineness of the gift has been accepted is a distinguishable fact which is not present in the facts of the present case – there is no reason to interfere in the findings arrived in the order – Decided against Assessee. - I.T.A. Nos. 6238 /Del/2012, I.T.A .Nos. 6239/Del/2012 - - - Dated:- 11-3-2014 - Smt Diva Singh And Shri B. C. Meena,JJ. For the Appellant : Sh. Shiv Raj Batra (Adv). For the Respondent : Sh. Keyur Patel, Sr. DR ORDER Per Diva Singh, JM. These two appeals filed by two different assessee's against separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h was processed u/s 143(1) and thereafter was re-opened by issuance of notice on the basis of information received in regard to gift received by the assessee from Shri Sunil Kumar Garg of Rs.2 lac. The assessment was concluded wherein the amount received by way of a cheque was added to the income of the assessee as the assessee failed to prove identity and creditworthiness etc of the donor by way of producing him who is claimed to be assessee's friend. Since the assessee failed to prove the same the genuineness of the transaction was held to be not proved and the finding of the AO challenged by the assessee was confirmed by the ITAT in quantum proceedings vide its consolidated order dated 15th January 2010 in the case of the assessee individual and HUF in ITA 4259/Del/2009 ITA 4260/Del/2009. 4.1. The Assessing Officer based on the satisfaction recorded in the assessment order taking note of the fact that the order has been confirmed by the CIT(A) (at that stage) initiated penalty proceedings. Taking further note of the fact that the said order of the CIT(A) was also confirmed by the ITAT he granted a fresh opportunity to the assessee to advance his arguments in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn. During the course of assessment proceedings, the assessee was asked to intimate the relationship between him and Sh. Sunil Kumar Garg and the whereabouts of Sh. Sunil Kumar Garg who made the alleged gift. In response to this, the assessee stated that he was having friendly relationship with Sh. Sunil Kumar Garg and he is trying to trace the latest address of Sh. Sunil Kumar Garg. Thereupon, the AO asked the assessee to intimate the latest whereabouts of Sh. Sunil Kumar Garg and produced him for examination. The assessee expressed his inability to produce Sh. Sunil Kumar Garg and requested the A.O to issue summons u/s 131 at the address supplied on his affidavit and the IT return filed by him. The AO accordingly issued summons u/s 131 for which Sh. Sunil Kumar Garg did not respond. 2.2 The A.O made enquiries regarding bank a/c no. 14154 in Jai Luxmi Co-op Bank Ltd. Fatehpuri, Delhi of Sh. Sunil Kumar Garg and noted that a cheque of Rs. 2,01,000/- was deposited in this a/c on 20/06/2002 and on the same day demand draft of Rs.2.00 lacs was issued to the assessee. The cheque of Rs.2,01,000/- was transferred from a/c no. 3401 of the same bank i.e Jai Luxmi Co-op Bank Ltd. Fatehpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Textile Processors, 306, ITR 276C(SC), (ii) Guljag Industries Ltd. Cs CTO, 293 ITR 584 (SC) and (iii) CIT Vs. Atul Mohan Bindal, 317 ITR 1(SC) that Mens rea not essential for civil liability of penalty-Penalties under fiscal statutes are for breach of civil liabilities-Willful concealment is not an essential ingredient for attracting civil liability as is the cas in the matter of prosecution u/s 276C. Further, in the case of CIT Vs. Lal Chand Tirath Ram 225 ITR 675 (P H) that mere offering explanation is not sufficient-Explanation to be substantiated by cogent and reliable evidence. Coming to the case laws relied upon the assessee, it is seen that in the case of CIT Vs. Reliance Petroproducts Ltd. (Supra), Hon'ble Supreme Court held that making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. In the present case, no incorrect legal claim has been made and therefore this case law is not applicable to the facts of the appellant. The facts in the case of CIT Vs. Balbir Singh (supra) were different as the donor in that case was an NRI and further the identification of the donor and the genuineness of the transaction was not doubted. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... casion on which the alleged gift was received and in the penalty proceedings also the position remains the same. Referring to the judgment of the Apex Court in the case of Union of India Vs. Dharmendra Textile 306 ITR 276 (SC) it was submitted that no doubt Mens rea is not essential for civil liability of penalty but at-least some explanation worthy of being accepted should be offered. The case law relied upon by the assessee it was argued is not applicable. Attention was also invited to the findings recorded by the Tribunal in assessee's own case in Quantum proceedings which it was argued clearly demonstrates the web of transaction created to hoodwink the department by creating bogus evidences to pass off unaccounted monies as gifts . Specific attention was invited to Para 5.1 pages 15 16 of the order passed in the case of the assessee in the quantum proceedings so as to emphasizes that on examining the bank account of the donor the Tribunal came to the conclusion that there was a systematic attempt to launder money by way of gifts in favour of a number of persons including the assessee. It was emphasized that the Tribunal herein on examination had concluded that the eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 2 lacs and Rs.Rs. 4 lacs odd were transferred in Account No. 14154 and 14125 in the names of Shri Sunil Kumar Garg and Shri Om Prakash. The gifts of Rs. 4 lac was made from the said account by Sh. Om Prakash to Shri Manoj Kumar Singhal HUF. The department has also brought on record that in the bank account of Shri Sunil Kumar Garg there was a total of Rs.44, 30,643/- credited in this account out of which Rs.17,81,250/- was deposited in cash and the remaining was transferred from Account Nos. 3401, 3328, 3434 12446 maintained with the same bank and branch in the name of Usha Motor Company, Winsome Port Folio (P) Ltd.; Diamond Graphics; and Shri Santosh Kumar respectively. A perusal of the assessment order further shows that out of the total deposit of Rs.44,30,643/- in the bank account of Shri Sunil Kumar Garg, a sum of Rs.44,28,122 had been given away as gifts. On the basis of these cumulous facts it was concluded that no amount has been given as gift and in-fact Shri Sunil Kumar Garg and the other persons were engaged in the business of providing accommodation entries on commission basis to various persons, these facts are found recorded in Para 13 14 of the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contents of the both these documents remained unproved in absence of the production of the donor. After all, the donor was the witness of the assessee and it was for him to produce him for examination of the ITO at the earliest opportunity. The donor was not found to be existing on the given address and the assessee has not been able to furnish the present address till date. Even before us, no statement was made that the donor could be produced now for the examination of the AO. All these facts and attendant circumstances clearly lead to the conclusion that the gift was not genuine. It is held accordingly. We may hasten to add that the assessee is not required to prove the source of the source, but the primary onus of proving the gift to the genuine by adducing satisfactory evidence about three primary conditions lies on him, which remains undischarged. As a matter of fact, the evidence by way of bank account of the donor, collected by the AO and confronted to the assessee, directly proves the gift to be non-genuine. In the light of this discussion, the case of the assessee does not stand on merits. Therefore, the addition of this amount to the total income of the assessee is up ..... X X X X Extracts X X X X X X X X Extracts X X X X
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