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2015 (7) TMI 650 - ITAT DELHI

2015 (7) TMI 650 - ITAT DELHI - TMI - Penalty levied by the AO u/s 271(1)(c) - gift received from relative or on occasion of marriage of the individual or by way of inheritance have no application to HUF as such the exception in case of HUF is restricted to the gift by will or in contemplation to death and the gift of ₹ 10,00,000/- was to be treated as income from other sources as per AO - AO did not accept the contention of the assessee as it was a clear case of tax evasion by furnishing .....

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of the assessee was a bonafide which was rectified by filing the revised return before receiving any notice u/s 142(1) of the Act and before receiving the copy of reasons recorded by the AO for reopening the assessment.

There was no question of furnishing of inaccurate particulars of income as the gift was received by the assessee HUF from the father of the Karta and this fact was available to the AO who framed the original assessment u/s 143(3) of the Act on 31.03.2009. Later on, whe .....

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71(1)(c) of the Act was not leviable in the peculiar facts of the present case. Decided in favour of assessee. - ITA No. 1308/Del/2014 : Asstt. Year : 2007-08 - Dated:- 15-7-2015 - Sh. N.K. Saini, J. For The Assessee : Sh. Ved Jain, CA & Pranjal Srivastava, Adv. For The Revenue : Sh. Bhim Singh, Sr. DR ORDER Per N. K. Saini, AM: This is an appeal by the department against the order dated 24.12.2013 of ld. CIT(A)-XII, New Delhi. 2. The only grievance of the assessee in this appeal relates to .....

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return in response to the already issued notice u/s 148 of the Act and also to submit photocopies of all bank account along with debit and credit entries for the period 01.04.2007 to 31.03.2008. In response the assessee filed a revised return declaring an income of ₹ 11,24,348/-. During Course of assessment proceedings, the AO noticed that the assessee under the status of HUF had received a gift of ₹ 10,00,000/- on 15.05.2006 from Sh. Sharat Chand Jain who is the father of Karta of a .....

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from other sources. He accordingly made the addition of ₹ 10,00,000/- and initiated the penalty proceedings u/s 271(1)(c) of the Act. The AO did not accept the contention of the assessee and observed that it was a clear case of tax evasion by furnishing wrong particulars and that the assessee came forward only when the notice u/s 148 of the Act and further noticed u/s 142(1) of the Act were issued. He also observed that though the gift received was clearly taxable, it was not offered for .....

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he assessee was of a bonafide belief that the gift received by HUF from Karta/father of Karta was exempted under the provisions of the Act and that the said fact was accepted by the AO while passing the assessment order dated 31.03.2009 u/s 143(3) of the Act. The ld. CIT(A) further observed that the assessee before receiving the copy of reasons recorded, suo motu revised its return of income on 29.04.2011 and offered the amount received as gift for taxation. The said action of the assessee was c .....

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d that the assessee also could not have been alleged to have filed inaccurate particulars as it was under a bonafide belief that the gift received by HUF was not taxable. The ld. CIT(A) deleted the penalty levied by the AO. 5. Now the department is in appeal. The ld. DR reiterated the observations made by the AO and strongly supported the penalty order dated 19.03.2012. 6. In his rival submissions the ld. Counsel for the assessee reiterated the submissions made before the authorities below and f .....

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7; 10,00,000/- was claimed as exempt under the proviso (a) to section 56(2)(iv) of the Act treating the same as received from the relative while filing the original return. However, the gift received from relative or on the occasion of marriage of an individual or by way of inheritance have no application to the HUF, so it was quite evident that the assessee was under a bonafide belief that the gift was not taxable that is why the same was not included in the original return of income. It was st .....

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015 (Raj. HC) M/s Riffleberg Capital (P) Ltd. Vs Addl. CIT, ITA No. 4990/Del/2012, order dated 02.02.2015, New Delhi CIT Vs Bennett Coleman & Co. Ltd. (2013) 87 DTR 0368 (Bom HC) CIT Vs Mahanagar Telephone Nigam Ltd. (2011) 63 DTR 0087 (Del HC) M/s St. Soldier Properties & Industries Ltd. Vs ACIT, ITA No.6256-58/Del/2012, order dated 11.10.2013, New Delhi CIT Vs Somany Evergreen Knits Ltd. (2013) 352 ITR 0592 CIT Vs Reliance Petro Product (SC) 230 CTR 320 CIT Vs Raj Overseas (P&H) (2 .....

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received from relative was not taxable as per proviso (a) to section 56(2)(iv) of the Act. However, when a notice u/s 148 of the Act was received, the assessee suo motu revised its return of income before receiving any notice u/s 142(1) of the Act, included the said gift in its revised income and paid all the due taxes. However, the AO considered the said income disclosed in the revised return as concealed income and levied the penalty u/s 271(1)(c) of the Act. In the present case, the assessee .....

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d only when in the accounts/return an item has been suppressed dishonestly or the item has been claimed fraudulently or a bogus claim has been made. When the facts are clearly disclosed in the return of income, penalty cannot be levied and merely because an amount is not allowed or taxed to income, it cannot be said that the assessee had filed inaccurate particulars or concealed any income chargeable to tax. Further, conscious concealment is necessary. Even if some deduction or benefit is claime .....

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was a bonafide which was rectified by filing the revised return before receiving any notice u/s 142(1) of the Act and before receiving the copy of reasons recorded by the AO for reopening the assessment. 10. On a similar issue the Hon ble Supreme Court in the case of Price Waterhouse Coopers Pvt. Ltd. Vs CIT (supra) has held as under: 19. The contents of the Tax Audit Report suggest that there is no question of the assessee concealing its income. There is also no question of the assessee furnis .....

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