TMI Blog2019 (8) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... ntant 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 Learned Commissioner of Income Tax (Appeal) law as well as on facts on the case in sustaining the Penalty amounting to ₹ 1179516/- of I. Tax At which ought not to have been sustained by the Learned Commissioner of Income Tax (Appeal) Ghaziabad. (2) Assessment Order U/s 143(3) read with Section 153A of Income Tax Act, 1961 ( IT Act , for short) was passed on 18.02.2014 in which addition of ₹ 30,00,000/- was made U/s 69A of IT Act and further addition of ₹ 11,87,129/- was made U/s 68 of I.T. Act. The relevant portion of the Assessment Order is reproduced as under: During the year he had to invest in the new showroom also and has also given net loan of ₹ 11,00,000/- approx. to Shri Gaurav Garg. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come 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 purpose of his carrying the said amount is concerned, the same is not relevant here. The assessee has also filed an affidavit before me on 16/10/2014 from the prospective seller of the impugned property Smt Sunanda Govil to the effect that she had demanded a draft of ₹ 20 Lacs and cash of ₹ 30 lacs from Shri Gaurav Garg for sale of her property. This evidence is neither admissible u/r 46A nor is material to decision in the matter. Therefore this is nothing but an after-thought and a concocted fanciful story to defraud the revenue. The AO has rightly held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly 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 stage, if it falters, the consequence may well be an addition u/s 68 (vi) In Shankar Ghose v ITO [1985] 23 TTJ (Cal.) 20 the assessee failed to prove the capacity of the person from whom he had allegedly taken loan. Further the assessee could not explain the need for the loan and the manner in which the loan amount was spent. The creditor issued two letters demanding rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pertaining to jewellery and the business qualifies u/s 44AD of the I.T. Act, 1961. Apart from this the assessee is having income 'from house property, In this c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Further, the capacity of his father too is not proved. Thus, the Ld. CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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. 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (v) As per the provisions of Explanation (l)(B),now the entire onus is on the assessee to not only offer an explanation but also to substantiate it and to prove that the presumption was bonaflde. At the same time the presumption so raised by the Explanation (1) is rebuttable. The effect is that unless and until the assessee 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Remarks 20/07/2017 - Bench did not function 04/09/2017 - Adjournment on the request of both sides 02/11/2017 - Adjournment on the request of the assessee s side 17/01/2018 - Bench did not function 03/04/2018 - Adjournment on the request of the assessee s side 20/06/2018 - Adjournment on the request of the assessee s side 03/12/2018 - Bench did not function 18/09/2018 - Bench did not function 03/12/2018 - Adjournment on the request of the assessee s side 14/01/2019 - Adjournment on request of the assessee s side ..... X X X X Extracts X X X X X X X X Extracts X X X X
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