TMI Blog2013 (4) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties, perused findings of the authorities below and considered the material available on record. Both the parties stated that issues are identical and both the parties mainly argument in the case of Sri Sarv Prakash Kapoor. Therefore, for the purpose of disposal of the appeals by the different assessees, we take up the appeal in ITA No. 107 of 2011 for the purpose of disposal of both the appeals as under :- ITA No. 107 of 2011 (Assessee Sarv Prakash Kapoor) 4. Briefly stated the facts of the case are that during the year assessee had shown a loan of ₹ 9,80,000/- from his son Master Romit Kapoor. During the assessment proceedings, it came to the light that this loan was given out of gift ₹ 10 lakhs received by Master Romit Kapoor from one Shri Sanjeev Kumar Dagar. While framing the assessment order the gift claimed to have been received by Master Romit Kapoor was held to be bogus by the A.O. by giving elaborate reasons. The assessee preferred appeal before learned CIT(A) who has also confirmed the addition on merit. The A.O. accordingly initiated penalty proceedings and vide separate order the A.O. levied penalty @ 300% against the assessee. The assessee pref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. The appellant has failed to prove the creditworthiness of the donor as the source of funds out of which the donor claimed to have made the gift is not satisfactorily explained as held by CIT(A)-II, Agra vide his order dated 12.1.05 and I am in complete agreement with him and it is not considered necessary to reproduce the same as it will be mere repetition. As already stated the appellant has failed to prove the genuineness of the gift. On these facts, I am of the opinion that the provisions of clause (B) explanation 1 to sec. 271(1) (c) are clearly applicable in the appellant s case. Mere offering an explanation is not sufficient as it has to be substantiated as held in the case of CIT Vs. Lalchand Jizath Ram (P H) 225 ITR 675. For levy of penalty u/s 271 (1) (c) mens rea is not necessary as it is a strict liability for breach of civil liabilities as held by Hon ble Supreme Court in the case of UOI Vs. Dharmendra Textile Processors (306 ITR 277). Therefore, I am of the opinion that the penalty u/s 271(1)(c) has been rightly levied and the same is confirmed. 3. In the result, appeal is dismissed. 5. The assessee in his appeal challenged the confirmation of levy of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on record. Learned counsel for the assessee also submitted that on quantum assessee preferred an appeal before Hon ble Allahabad High Court which is pending for adjudication. Learned D.R. relied on order of CIT(A) and 225 ITR 675 (P H) 7. We have considered the rival submission and material available on record. The facts noted above are not in dispute. The assessee has received loan of ₹ 9,80,000/- from his son. The son of the assessee received gift of ₹ 10 lakhs from Sri Sanjay Kumar Dagar of New Delhi. The assessee produced all the documents of gift before the authorities below i.e. confirmation of the donor, gift deed, copy of the bank account etc. The donor was also produced at the appellate stage and statement on oath was recorded in which he has confirmed the giving of gift to the son of the assessee. The identity of the son of the assessee is not in dispute and son of the assessee also confirmed giving of loan to his father. The A.O. instead of verifying genuineness of the loan asked the assessee to furnish supporting evidence of creditworthiness of the donor and to produce the donor for examination. Since the assessee has failed to produce the donor befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the imposition of penalty was not justified. Hon ble Supreme Court in the case of Dilip N. Shroff vs. Joint Commissioner of Income Tax and another [2007] 291 ITR 519 SC held that imposition of penalty is not automatic. It is a matter of discretion and the Assessing Officer has to be fair and objective while levying the penalty. The ITAT, Chennai Bench in the case of A. Rajendran Ors. Vs. Asstt. Commissioner of Income Tax 134 TTJ 498 (Chennai B ) held as under :- Though additions made by the AO were sustained disbelieving the alleged gifts received by the respective assessees on the basis of preponderance of probability, it cannot be said that the amounts were concealed income or the explanations furnished by the assessees were not bona fide as the donor had appeared and confirmed the gifts and also explained that he had made the gifts on account of his close relationship with the assessees and, therefore, penalty under s. 271(1)(c) was not leviable. The ITAT, Delhi Bench in the case of Bhartesh Jain vs. Income Tax Officer 43 DTR 320 (Del. E ) held as under :- Assessee having produced confirmations for both the alleged loans, it cannot be said that the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the matter. The explanation of the assessee is substantiated through evidences available on record and the explanation of the assessee was not found to be false or bogus. The A.O. merely found the gift to be doubtful may not be sufficient to levy the penalty in the matter. It is well settled law that quantum and penalty proceedings are independent and altogether different proceedings. The finding given in the quantum may have probative value but in the case of the assessee, the assessee has been able to explain that he has received a genuine loan from his son. Therefore, in the circumstances even if quantum addition is confirmed, the A.O. should have exercised discretion in favour of the assessee for not levying the penalty under section 271(1)(c) of the Act against the assessee. 9. We may not further that the A.O. in the penalty order has recorded his satisfaction that the assessee has deliberately concealed the particulars of income and furnished inaccurate particulars of income in respect of the loan amount, therefore, the penalty is leviable under Section 271(1) (c) read with Explanation (1) to the above section. From such findings recorded by the A.O. and inference drawn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income on finding that gift of ₹ 4 lakhs shown by the assessee was not genuine. The A.O. vide separate order imposed 100% penalty which is confirmed by the learned CIT(Appeals). 15. Learned counsel for assessee submitted that facts are same as discussed in other case. One of the donor Shri Jai Singh Yadav appeared at the appellate stage and statement was recorded and he has confirmed giving of gift to the assessee. All evidences of genuine gift were filed and gift was through banking channel. Other donor Gajanand Goyal suffered injuries during Bomb blast in Delhi was not available. He submitted that assessee produced all possible evidence and appeal of the assessee is pending before Hon ble High Court on quantum. The assessee produced confirmation of gift, gift deed, PAN Card, ration card, return of wealth tax and capital account of the donor, therefore, levy of penalty in this case is also not justified. Apart from above submission, he has submitted that when the matter came up before ITAT, Agra Bench on quantum appeals, the Hon ble judicial member decided the appeal in favour of the assessee by holding that since the assessee received the gift amount in her bank pass boo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
