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Mr. Atul Ashar (HUF) , Mumbai Versus ITO – 16 (1) (4) , Mumbai

2016 (7) TMI 844 - ITAT MUMBAI

Penalty u/s 271(1)(c) - bogus gifts receipts - reopening of assessment - Held that:- There is detection by revenue authorities of the assessee being beneficiary of bogus gift of ₹ 5,00,000/- consequent to searches on Shah group in October 2002 and lists were prepared by Pune directorate for Mumbai region whereby the assessee was listed as one of the beneficiary of bogus gift of ₹ 5,00,000/- and the assessee filed revised return of income on 21-10-2004 declaring and surrendering ͅ .....

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e-opening and cannot be said to be voluntary act on the part of the assessee. In our considered view, the action of the A.O. in levying the penalty u/s 271(1)(c) of the Act of ₹ 1,45,089/- for concealment of income , which was later confirmed/sustained by the learned CIT(A) was quite justified and we confirm the same - Decided against assessee. - I .T.A. No.2553/Mum/2009 - Dated:- 13-7-2016 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER For The Assessee Shri N .....

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led the AO ) u/s 271(1)(c) of the Income Tax Act,1961 (Hereinafter called the Act ). 2. The grounds of appeal raised by the assessee in memo of appeal filed before the Income Tax Appellate Tribunal, Mumbai (hereinafter called the Tribunal ) read as under:- 1. The Ld CIT(A) erred in disregarding the facts of the case & confirmed the order levying penalty u/s 271(1)(c) of the Income Tax Act, 1961. 3. The brief facts of the case are that in this case DGIT (Inv.), Mumbai had received the informa .....

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ment u/s. 147 of the Act , and notice u/s. 148 of the Act dated 14.07.2005 was issued to the assessee. The assessment was completed by the AO u/s 143(3) r.w.s. 147 of the Act vide assessment orders dated 28th August, 2006 whereby the said amount of ₹ 5,00,000/- of gift received by the assessee and ₹ 33/- being interest on saving bank account was brought to tax by the Revenue , albeit the assessee had already filed revised return of income with the Revenue on 21-10-2004 i.e. prior to .....

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evenue during searches on Shah Group in October 2002 , that the assessee was one of the recipient beneficiary of bogus gift of ₹ 5,00,000/-. Consequently, the AO initiated penalty proceedings u/s 271(1)(c) of the Act against the assessee. The assessee submitted in penalty proceedings that he has filed revised return of income on 21st October, 2004 wherein the amount of ₹ 5,00,000/- was declared as miscellaneous income under the head income from other sources and the due taxes has bee .....

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region . The assessee had filed revised return on 1st August, 2004 ( correct date as per claim of the assessee is 21-10-2004) wherein he had offered the said sum of ₹ 5 lacs as miscellaneous income under the head income from other sources and paid due taxes to the Revenue. During the assessment proceedings u/s 147 read with Section 143(3) of the Act, it was held by the AO that the assessee failed to produce any explanation or details or any documentary evidence to prove the genuineness of .....

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ddition was made to the income declared in the revised return of income filed with the Revenue. The A.O., however, treated the additional income as concealed income and thus penalty of ₹ 1,45,089/- u/s 271(1)(c) of the Act was levied by the A.O. vide penalty orders dated 26- 02-2007 passed u/s 271(1)(c ) of the Act. 4. Aggrieved by the penalty order of the A.O. dated 26-02-2007 passed u/s 271(1)(c) of the Act, the assessee filed his first appeal before the learned CIT(A). 5. Before the lea .....

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ued on 14-07-2005 which is subsequent to the filing of revised return by the assessee on 21-10-2004. The contention of the assessee was not acceptable to the learned CIT(A). The learned CIT(A) held that the reason behind the filing of revised return of income on 21-10-2004 was the search conducted by the Directorate of Investigation in Shah group of cases in October 2002, whereby it was detected that the Shah Group has received bogus gifts. The assessee is also beneficiary of bogus gift of ͅ .....

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rse of search on Shah group in October 2002. Accordingly the learned CIT(A) confirmed the penalty levied by the A.O. u/s 271(1)(c) of the Act, vide appellate orders dated 08-01-2009. 6. Aggrieved by the appellate orders dated 08-01-2009 passed by the learned CIT(A), the assessee is in appeal before the Tribunal. 7. The ld. Counsel for the assesse submitted that the assessee has filed revised return on 21st October, 2004 whereby income of ₹ 5,00,000/- being gift received was declared in the .....

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e gift of ₹ 5 lacs as miscellaneous income under the head income from other sources . Taxes were duly paid to the Revenue by the assessee before filing of revised return of income on this income of ₹ 5,00,000/- declared as miscellaneous income under the head income from other sources . It is submitted that the revised return of income filed by the assessee on 21-10- 2004 was also submitted as return of income in pursuance to notice u/s 148 of the Act. The said return of income is acc .....

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have observed that the assessee has filed his original return of income with the Revenue for the impugned assessment year on 23rd July, 2002 u/s 139(1) of the Act whereby the income declared was ₹ 1,00,820/-. There was a search operation u/s 132(1) of the Act conducted by Pune Directorate in the case of Shah Group in the month of October, 2002. It was found by the Revenue during the searches that the said Shah group has received bogus gifts , and it was revealed that the assessee is also o .....

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is revised return on 21-10-2004 (copy of the acknowledgement of revised return is placed in the file) whereby the so called bogus gift of ₹ 5,00,000/- received by the assessee was surrendered by the assessee and declared in the revised return of income filed with revenue on 21-10-2004 as miscellaneous income under the head income from other sources . We have observed that the assessee has filed his revised return of income on 21-10-2004 which is beyond the prescribed time limit as stipulat .....

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the assessee on 21-10-2004 was also submitted by the assessee before the Revenue to be treated as the return of income in pursuance of notice dated 14-07-2005 u/s 148 of the Act. Since the revised return of income filed on 21-10-2004 was filed beyond the period prescribed u/s 139(5) of the Act, the said revised return of income shall be deemed to be non-est and any disclosure made therein shall have no evidentiary value. The disclosure of the said bogus gift of ₹ 5,00,000/- which was made .....

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(3) of the Act whereby returned income which , inter-alia, also consisted of surrendered income of ₹ 5,00,000/- being receipt of bogus gift , was accepted by the AO. The assessee did not contest during the assessment proceedings about surrender of bogus gift of ₹ 5,00,000/- as miscellaneous income under the head income from other sources as no explanation whatsoever was submitted by the assessee about these alleged bogus gifts of ₹ 5,00,000/- nor the assessee filed any appeal a .....

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of searches on Shah group in October 2002, the said revised return probably was filed by the assessee on 21-10-2004 , albeit notice u/s 148 of the Act was issued by Revenue later on 14-07-2005 as per the facts as emerging from the records before us. The assessee did not offer any explanation whatsover about the surrender of the bogus gift of ₹ 5,00,000/- during the assessment proceedings u/s 143(3) read with Section 147 of the Act nor any explanations with respect to these gift of ₹ .....

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e to offer explanation with respect to the receipt of gift of ₹ 5,00,000/- while the assessee did not offer any explanations whatsover with respect to the receipt of these gifts of ₹ 5,00,000/- during the relevant previous year and hence the assessee has rendered himself liable for penalty u/s 271(1)(c) of the Act. The assessee has relied upon the decisions of the Mumbai Tribunal in the case of Parinee Developers Private Limited v. ACIT in ITA no. 6772/Mum/2013 vide orders dated 11.0 .....

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ange of method of accounting , change of head of income etc. but they did not deal with the case of bogus gifts which was admittedly declared as income by the assessee in revised return filed beyond the period stipulated u/s 139(5) of the Act , while the said bogus gifts were not declared as income in the original return of income filed u/s 139(1) of the Act. In the case of Prema Gopal Rao(supra) , the tax-payer filed revised return of income declaring long term capital gains after issuance of n .....

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