TMI Blog2016 (6) TMI 1300X X X X Extracts X X X X X X X X Extracts X X X X ..... or has no evidence to produce at any stage and when the done is not a close relative, the transaction is not genuine. Therefore, the AO has correctly levied the penalty. When the assessee has given the gifts to various persons, therefore, the penalty is to be confirmed. Therefore, opinion that the AO and ld. CIT(A) are justified in their action. - Decided against assessee. - I.T.A.No. 331/Ind/2015 - - - Dated:- 8-6-2016 - Shri D.T. Garasia, Judicial Member Appellants by : Shri Prakash Jain, C. A. Respondent by : Shri R. A. Verma, DR ORDER This appeal by the assessee is directed against the order of CIT(A)-I, Indore, dated 19.11.2014 for the assessment year 2004-05. 2. The only ground in this appeal is confirming the penalty of ₹ 1,20,000/- by the ld. CIT(A) u/s 271(1)(c) of the Income-tax Act, 1961. 3. The assessee has filed the return of income on 06.09.2004 for the assessment year 2004-05 declaring total income of ₹ 1,77,750/-. During the course of assessment proceedings, the AO found that as per the capital account filed alongwith the return, it was noticed that the capital account was credited at ₹ 4,00,000/- by the assessee on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as received the gift by filing copy of gift deed alongwith return of income, entry in capital account at credit side of the account of Smt. Meenakshi Jain. Hence, the assessee has filed all the particulars of gift and return of income. Therefore, the penalty cannot be levied. He relied upon the decision of CIT vs. Balbir Singh, (2008) 214 CTR ( P H ) 147, A. Rajendran Others vs. ACIT, (2010) 134 TTJ 120. 7. On the other hand, the ld. Departmental Representative submitted before me that the legal ground taken by the assessee that the AO has initiated the penalty proceedings only by mentioning that penalty proceedings u/s u/s 271(1)(c) is initiated separately. Accordingly, the amount of ₹ 4,00,000/- is treated as unexplained credit and charged to income tax as income of the assessee as per Section 68 of the Income-tax Act, 1961. The penalty proceedings u/s 271(1)(c) of the Income-tax Act, 1961, are separately initiated on this issue. For this ld. Departmental Representative relied upon the following decisions :- (i) M. Sajjanraj Nahar v. CIT, (2006) 293 ITR 230 (Mad). (ii) Nainu Mal Het Chand v. CIT, (2007) 294 ITR 185 (All). (iii) (1) Ms.Madhushree Gupta (2) Br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of ACIT vs. M.P. State Tourism, wherein I have decided the issue that if the penalty proceedings are initiated or inaccurate particulars of income, no, penalty can be imposed for concealment of income and vice versa. In the instant case, penalty proceedings are separately initiated and has been mentioned by the AO that the penalty proceedings u/s 271(1)(c) initiated separately. I find that the issue had come up before the Hon'ble Allahabad High Court in the case of Nainu Mal Het Chand vs. CIT, (2007) 294 ITR 185 (All). Hon'ble High Court of Allahabad held as under :- In order to justify the levy of penalty, two factors must co-exist, (i) there must be some material or circumstances leading to the reasonable conclusion that the amount does represent the assessee s income; it is not enough for the purpose of penalty that the amount has been assessed as income, and (ii) the circumstances must show that there was animus, i.e., conscious concealment, or act of furnishing of inaccurate particulars on the part of the assessee; the Explanation has no bearing on factor No.1 but it has a bearing only on factor No.2; the Explanation does not make the assessment order conclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r :- DEDUCTION OF TAX AT SOURCE RENT WAREHOUSING CHARGES ASSESSEE DEDUCTING TAX AT 2 PER CENT. TREATING THEM AS CONTRACTUAL PAYMENTS WAS RENT AND PASSING ORDER FOR RECOVERY OF DIFFERENCE IN TAX AND INTEREST PAYEE PAYING FULL TAXK ON WAREHOUSING CHARGES APPELLATE TRIBUNAL DECISION THAT ASSESSEE HAS ONLY TO PAY INTEREST VALID INCOME-TAX ACT, ss. 194C, 194I, 201(1A) CIRCULAR NO. 275/201/95-IT(B) DATED JANUARY 29, 1997. APPELLATE TRIBUNAL RECTIFICATION OF MISTAKE MISCELLANEOUS APPLICATION THAT GROUND NOT DECIDED MADE AFTER DISMISSAL BY HIGH COURT OF APPEAL FROM ORDER OF TRIBUNAL MAINTAINABILITY NOT DECIDED INCOME-TAX ACT, 1961, s. 254(2). 14. Respectfully following the decision of Hon'ble Allahabad High Court (supra), I am of the view that the AO was justified in holding that the penalty u/s 271(1)(c) is separately initiated. Therefore, it is not necessary for AO to mention that penalty proceedings is initiated for concealment of income for filing inaccurate particulars of income. Therefore, this legal ground of the assessee is dismissed. 15. In respect of quantum, the Tribunal in assessee s own case, has decided this issue by observing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess of the transaction and consequent addition was made u/s 68 of the Act. On appeal, the learned CIT(A) affirmed the addition. The assessee is in appeal before the Tribunal. On perusal of record, we find that identity of the donor has been duly established by the assessee as affidavit of the donor and copy of passport have been placed on record. So far as source of income of the donor is concerned, the assessee could not explain the source of income of the donor, thus its genuineness is clearly in doubt. A query was raised by the Bench regarding source of income of Mrs. Meenakshi Jain. The learned counsel fairly agreed about the insufficiency of funds available for making the gift as no documentary evidence was produced at any stage. In the case of gifts recorded to be received in the books of the donee, mere identification of the donor, showing the movement of amount through banking channel is not sufficient to prove the genuineness of gift. Heavy onus lies on the donee not only to establish the identity of the donor but also the capacity of the donor to make such gift. It is very important ingredient to prove beyond doubt the capacity of giving large amount of gift by the donor. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or and consequent genuineness of transaction is not established, we find no justification to interfere with the addition confirmed by the CIT(A) in the case of Nemichand Jain. Therefore, this appeal of the assessee has no merit and dismissed as such. 16. From the above order of the Tribunal, the Tribunal has held that Smt. Meenakshi Jain has issued the cheque giving gifts to various persons and found that these are arranged affairs. The donor is not blood relative of the done and there was no occasion for making the gift and assessee failed to establish the genuineness of the transaction and addition u/s 689 was confirmed. During the course of hearing of the appeal, the assessee was asked to prove sufficiency of fund for making the gift. No documentary evidence was produced at any stage. Therefore, the Tribunal held that the amount received by the assessee through Banking channel is not sufficient to prove the genuineness of the gift. Therefore, from the decision of the Tribunal, the assessee could not prove the sufficiency of source of income which the Donor has no evidence to produce at any stage and when the done is not a close relative, the transaction is not genuine. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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