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2019 (8) TMI 721

..... he element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing the return. The object behind the enactment of section 271(1)(c) read with Explanations indicates that the said section has been enacted to provide for a remedy for loss of revenue. The penalty under that provision is a civil liability. Willful concealment is not an essential ingredient for attracting civil liability as is the case in the matter of prosecution u/s 276C of the Income-tax Act. We are of the view that the order of the Ld. CIT(A) is well-reasoned and is in accordance with law, having regard to facts and circumstances of the present case. Impugned order of Ld. CIT(A) is, therefore, hereby confirmed. - Decided against assessee. - ITA No:- 5716/Del/2015 - 12-7-2019 - Shri Kuldip Singh, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Assessee : None For the Revenue : Shri Surender Pal, Sr. DR ORDER PER ANADEE NATH MISSHRA, AM This appeal by Assessee is filed against the order of Learned Commissioner of Income Tax (Appeals, [ Ld. CIT(A) , for short], Ghaziabad, dated 10.07.2015 for Assessment Year 2012-13, on the following ground: That the .....

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..... ded to the income of the assessee u/s 68 of I.T. Act, 1961 as unexplained cash credit. Addition: 11,87,129/- (3) Vide appellate order dated 16.10.2014, the Ld. CIT(A) deleted the aforesaid addition of ₹ 11,87,129/-; but confirmed the aforesaid addition of ₹ 30,00,000/-. The relevant portion of the order of Ld. CIT(A) is reproduced as under: 5.1 The first addition relates to addition of ₹ 30,00,000/- on account of cash found in possession of assessee by the Static Surveillance Team during general Assembly elections in the state of UP on 5/1/2012. This amount was later requisition by the Income Tax Department u/s 132A. In the explanation in the statement u/s 13A the assessee stated that the said sum was out the sale proceeds of his jewellery shops. Thus at the first instance the assessee never stated that the said sum was a gift from his father Shri Ravindra Garg. This first statement about the source and nature of this amount seized from assessee is of paramount importance in this case. After the cash was requisitioned u/s 132A the assessee changed his stand stating that this sum was a gift from his father out of sale proceeds of his jewellery shop. As far as the p .....

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..... essee is expected to establish:- 1. Identity of his creditors; 2. Capacity of creditors to advance money; and 3. Genuineness of transaction. As to the issue of genuineness of transaction, it was further held in the above decision that the transaction is not genuine, simply because some, out of many, of the transactions are by cheque. Conversely, it is not open for the Assessing officer to add token amount merely for the purpose of making the returned income into a round figure. Where certain sum of money claimed by the assessee to have been borrowed from certain persons, it is for the assessee to prove, by cogent and proper evidence, that they are the genuine borrowings for the reason that the facts are exclusively within the assessee sknowledge. (v) In case of CIT v/s NR Portfolio Pvt. Ltd. ( Delhi) ITA NOs. 134/2012 Order dt 21/12/2012 following the case of (A. Govindarajulu Mudaliar 34 ITR 807) It has been held that the concept of Shifting onus does not mean that once certain facts are provided, the assessee s duties are over. If on verification, the AO cannot contact the share applicants, or the information becomes unverifiable, the onus shifts back to the assessee. At that sta .....

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..... this amount even creditworthiness too is reasonably proved. Therefore this addition is deleted. Ground no. 5 is allowed. (4) The Assessing Officer ( AO , for short) vide order dated 19.12.2014, levied penalty amounting to ₹ 15,49,120/- under Section 271(1)(c) of I.T. Act, in respect of the aforesaid addition of ₹ 30,00,000/-, upheld by the Ld. CIT(A). The assessee filed appeal against the levy of penalty, before the Ld. CIT(A). Vide order dated 10.07.2015 in appeal no. 20/295/2014-15/GZB, upheld the levy of penalty U/s 271(1)(c) of IT Act, amounting to ₹ 11,79,516/-. The relevant portion of the order of the Ld. CIT(A) dated 10.07.2015 is reproduced as under: 2. The penalty order in this case is reproduced as under:- In this case assessment was completed u/s 143(3) on 18.02.2014 determining assessee's income at ₹ 45,78,670/- against returned income of ₹ 3,91;540/- Income was computed as under: Income declared ₹ 3915407- Additions on account of (1)Unexplained income Unexplained cash credit ₹ 3000000/- (2)Unexplained cash credit ₹ 1187129/- ₹ 4187129/- Taxable Income ₹ 4678669/- The assessee is engaged in job-work pertai .....

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..... count of unsecured loans repayment to the assessee and that ₹ 11,87,129/-. represented the unsecured loans taken from M/s Deepali Jewellers which was reflected in the Audited Balance sheet of the said firm. On the basis of above findings the AO has added ₹ 11,87,129/- u/s 68 of the I.T. Act to the income of the assessee as unexplained cash credit. Aggrieved with the order of the AO, the assessee filed an appeal before CIT(A), on who vide his order Appeal No. 585/2013-14/GZE3/185 dated 16.10.2014 partly allowed the appeal of the assessee. On the point of addition of-₹ 30 lacs, the Ld. CIT(A), in his order, has clearly stated that the statement of the assessee that the sum of ₹ 30 lacs was a gift from his father out of sale proceeds of his jewellery shop is nothing but an after-thought and a concocted fanciful story to defraud the revenue because at the first instance i.e. in the statement u/s 132A recorded by DDIT(Inv.)-I, Ghaziabad the assessee had never stated that the amount of cash of ₹ 30 lacs was a gift from his father. It was only on 26.08.2013 that the assessee stated to have received-a gift of ₹ 30-lac from his father Sh. Ravinder Garg. F .....

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..... ishes the wilfull effort to evade tax with the guilty mind. Though it is now settled that mens rea is not essential for civil liability of penalty which includes penalty u/s 271 (1)( c) as established by the Hon'ble Supreme Court in its decision in the case of Union of India Vs Dharrnendra Textile processors (SC) 306 ITR 277, Guljag Industries Ltd. Vs GTO (SC) 293 ITR 584, CIT Vs Atul Mohan Bindal (SC) 317 11 R 1. -Still a clear present of mens rea is being taken here for levy of higher rate of penalty on the assessee. The minimum and maximum penalty works out to ₹ 7,74,560/- and ₹ 23,23,5001- respectively. Looking to the facts of the case I hereby impose maximum penalty of 200% of the tax sought to be, evaded i.e. Rs: 15,49,120/-, issue notice of demand- and challan. 3. Against the above penalty the appellant has come in appeal raising following grounds of appeal That the learned assessing officer had erred in law as well as on facts of the case in imposing the penalty u/s 271(l)(c) of the Income Tax Act amounting to ₹ 1549120/- i.e. @ 200% which is unjust, arbitrary, unlawful and highly excessive against the principle of natural justice which ought not to ha .....

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..... hat the amount of cash of ₹ 30 lacs was a gift from his father. It was only on 26.08.2013 that the assessee stated to have received - a gift of ₹ 30 lac from his father Sh. Ravinder Garg. Further, the capacity of his father too is not proved. The contentions of appellant are not tenable in view of the facts above and the legal position in respect of penalty of 271 (1 )(c) as under:- (i) The expression used in clause (c) of section 271(1) is has concealed the particulars of his income of furnished inaccurate particulars of such income . Therefore, both in cases of concealment and inaccuracy, the phrase particulars of income is used. It will be noted that as regards concealment, the expression in clause (c) is has concealed the particulars of his income and not has concealed his income . It is obvious that the penal provisions would operate when there is a failure of duty to disclose fully and truly particulars of income, imposed under the Act and the Rules there under. The duty is enjoined upon a person to make a correct and complete disclosure of his income and it is only when he fails in his duty by not disclosing his income or part thereof, he conceals the particulars .....

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..... ssee rebuts the presumption, he would be liable for penalty under section 271(1 )(c) of the Act. It is now an established law that the presumption would not stand rebutted merely by furnishing any general or fantastic or fanciful or unreasonable explanation by assessee. The explanation should be based on cogent and relevant material and should be acceptable to the authorities. In this connection reference may be made to the Delhi High Court s decision in the case of CIT Vs. Gurbachan Lai reported in 250 ITR 157(Delhi) (vi) The apex court had approved the interpretation placed upon the Explanation by a Full Bench of the Punjab and Haryana High Court in Viswakarma Industries Vs. CIT (1982) 135 ITR 652. (vii) Similar view has been expressed by the Kerala High Court in the ease of CIT Vs. K.P. Madhusudana reported in 246 ITR 218. This decision has been affirmed by the Supreme Court in 251 ITR 99. Affirming the aforesaid decision, the Hon ble Supreme Court has further held that after insertion of explanation its earlier decision in the case of Sir ShadiLal Sugar and General Mills Ltd. Vs. CIT reported in 168 ITR 705 (SC) was no longer applicable. (viii) The Delhi High Court in the case .....

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..... /2019 - Adjournment on request of the assessee s side 13/03/2019 - Adjournment on the request of assessee s side and last opportunity given to assessee 02/07/2019 - None appeared from assessee s side (6) At the time of hearing before us, no one appeared on behalf of the assessee. The Ld. Departmental Representative ( DR , for short) supported the orders of the lower authorities namely AO and Ld. CIT(A). He relied on the orders of the AO and Ld. CIT(A) ; and also relied on the decisions of the Hon ble High Court of Delhi in the cases of Commissioner of Income tax vs. Zoom Communication (P.) Ltd. [2010] 191 Taxman 179 (Delhi) and Commissioner of Income-tax, Delhi-IV vs. Escorts Finance Ltd. [2009] 183 Taxman 453 (Delhi). (7) After hearing the Ld. DR and after carefully considering the materials available on record; we are of the view that the order of the Ld. CIT(A) is well-reasoned and is in accordance with law, having regard to facts and circumstances of the present case. Therefore, we do not see any reason to interfere with the finding of the Ld. CIT(A). Impugned order of Ld. CIT(A) is, therefore, hereby confirmed. Thus, Ground raised in this appeal is dismissed accordinlgy. (8) I .....

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