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TMI Blog2019 (8) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the year he had to invest in the new showroom also and has also given net loan of Rs. 11,00,000/- approx. to Shri Gaurav Garg. It is also important to note that sales are shown to be much more in Dec. 11 & Jan.2012 than the months of December,2010, January,2011 and Dec.2012, Jan.2013. On being asked Shri Ravindra Garg stated that this wasdue to marriage season during period Dec.2011 to Jan.2012. This explanation is also not tenable as marriage season comes in every year. The comparative sales next year during these months are lesser. Moreover, Shri Ravinder Garg did not produce books of account and other details as called for by notice u/s 131 of I.T. Act, 1961 dated 31.01.2014. In view of the above, explanation in respect of source of cash is not found to be satisfactory, the sum is added u/s 69A of I.T.Act,1961. Addition : Rs. 30,00,000/- During assessment proceedings, vide notice u/s 142(1) dated 6.8.2013 the assessee was required to state the source of draft of Rs. 20,00,000/- dated 05.01.2012. Vide reply dated 10.10.13, the assessee explained that the said draft was made consisted of repayment from M/s Deepali Jewellers amounting to Rs. 20.50 lacs. However, from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al if this claim of alleged gift is accepted. The AO has cogently brought out that in order to explain sources of the alleged gifts assessee's father has enhanced his sales in the month of Dec 11 and Jan 12. This is nothing but a colourable device on part of assessee and his father. More so, because the books of account, from which such sales could be verified, were not produced before the AO in response to summons u/s 131 dated 31.1 2014. Thus the capacity of his father too is not proved. It would be relevant to note here that the AO has invoked provisions of section 69A, the assessee being in possession of unaccounted money. But the assessee explaining such cash as gift from his father, the case laws relevant to section 68 as regards genuineness of the claim and creditworthiness of the alleged gift and the donor are equally relevant to the case at hand. Therefore a discussion on genuineness and creditworthiness albeit w.r.t section 68 would be -relevant here too and would not be out of place. (i) Though the Assessing Officers, often, acts on confirmatory letters as evidence, the onus does not get discharged merely by such confirmatory letters as found in CIT Vs. United Commer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ati Dayal 214 ITR 801(SC) it has been held that, where any sum is found credited in the books of the assessee for any previous year, the same may be charged to income-tax as the income of the assessee of that previous year if the explanation offered by the assessee about the nature and source thereof is, in the opinion of the Assessing Officer, not satisfactory. In such case there is prima facie evidence against the assessee, viz., the receipt of money, and if he fails to rebut the same, the said evidence being unrebutted, can be used against him by holding that it is a receipt of an income nature. While considering the explanation of the assessee, the department cannot, however, act unreasonably. In view of facts of the case and above legal position, the assessee's case fails both on grounds of genuineness of transaction and creditworthiness of his father. Thus, the appellant has failed to explain satisfactorily the cash find in his possession. The addition made u/s 69 is justified. The relevant grounds of appeal are rejected and the addition is confirmed. 4.2 The second addition relates to the addition of Ks. I 187129 in view of draft of Rs. 20.50 lac found in his possession. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar- Gupta,- Modinagari Ghaziabad against purchase- of land at Mohan Nagar, Ghaziabad. During the course of assessment proceedings he was, further asked to explain as why he did not carry books of account and documentary evidence when the cash of Rs. 30 lacs was found despite clear directives of Election Commission of India. In reply to this the assessee has declared that the source of cash of Rs, 30 lacs is from sale of jewellery of his shops and about the bank draft amounting to Rs. 20 lacs, he stated that he had purchased it through his bank account. He never stated in his statement recorded by the DDIT(Inv.)-I, Ghaziabad dated that the amount of cash of Rs. 30 lacs was a gift from his father. It was only on 26.08.2013 he stated to have received a gift of. Rs. 30 laps from his father Shri Ravinder Garg. On verification of genuineness of gift and creditworthiness of donor i.e Shri Ravinder Garg it was perused by the AO that 'the donor does not haVe the capacity to give such a big amount of gift as he has income, of Rs. 5 lacs per annum and his capital account shows that on giving this alleged gift, the capital balance turned in defidit. On the basis of the above findings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was received in which r- the assessee contended that as the assessee has filed appeal with Ld. CIT(A), Ghaizabad which is heard and hence the said appeal is pending for adjudication, the penalty u/s-271 (l)(c) may be kept in abeyance till the adjudication of the appeal. Assessee's contention is =not acceptable as the Ld. CIT(A) has already given his decision vide order dated 16.10.2014 partly in favour of the assessee and it is only after the order that a show-cause notice dated 18.11:2014 has been issued by the undersigned. Penalty proceedings cannot be kept in abeyance because of the prescribed limitation for its completion after passing of the order by the CIT(A), Ghaziabad. So far the merits of the case are concerned, the facts have been discussed in detail not only in the assessment Order but also in the order dated 16.10.2014 of the CIT(A). In both the orders, change of stand of the assessee at the time of seizure of cash of Rs. 30. lacs and a demand draft of Rs. 20.50 lacs by the SST and at the time of statement requisitioned u/s 132A has been discussed in de. In my view it is a case of deliberate concealment of income by furnishing inaccurate particulars. Therefore, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee deliberately concealed the income and furnished inaccurate particulars. Thus, furnishing of inaccurate particular and concealment of income is clearly established in this case and it is a fit case for levy of penalty. During appeal proceedings the appellant in his written submission filed on 06.01.2015 has contended that the A.O. had not considered and examined the documentary evidences produced before him. The appellant further contended that the A.O. had levied penalty on deleted addition of Rs. 11,87,129/- which is contrary to provisions of Section 271(l)(c) and penalty had been imposed on higher rate which are also against the penal provisions. The contention of the appellant and facts of the case have been gone through. The contention that penalty has been levied on deleted addition is not correct. From the penalty order, it is seen that AO has referred to CIT (A)'s order and has levied penalty after receipt of order of CIT (A) on the addition sustained. The contention that documentary evidences produced before the A.O. were not considered is not tenable. In fact, the issue stands examined by CIT (A) in quantum appeal and his findings as quoted by AO clearly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of which particulars have been concealed. Similar view has been expressed in the case of A.M. Shah & Co. Vs CIT (Guj) 238 ITR 415. (iii) Further w.e.f. 10.09.1986 amendment has been made in Explanation 1-B to section 271(l)(c). After this amendment further onus has been placed on the assessee to prove that the explanation furnished by him was bonaflde. The position now is that unless and until the assessee substantiates the explanation and proves that such an explanation was bonaflde the addition made to his income shall deem to represent the concealed income. (iv) On the analysis of the provisions of section 271(1 )(c) it is observed that the Explanation 1 to section 271(1) provides for the situation where no explanation for the failure is offered by the assessee or where the explanation that has been offered is found to be false or where the assessee is not able to substantiate the explanation offered by him. In all these cases, the amount added or disallowed in computing the total income of such person shall be deemed to represent the income in respect of which particulars have been concealed. As per the Proviso to this Explanation, the onus to establish that the explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tul Mohan Bindal 317 ITR 1 (SC). The Explanations appended to section 271(1)(c) of the Income-tax Act, 1961, entirely indicate the 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 under section 276C of the Income-tax Act. In view of above discussion, on the given fact's, penalty is confirmed in principle. Further, in my considered view, in facts and circumstances of the case, the penalty at the fate of 200% is also justified as the assessee concocted deliberately a fanciful story of gift from father. Therefore, I confirm the penalty." (5) The present appeal before us has been filed by the Assessee against the aforesaid order dated 10.07.2015 of the Ld. CIT(A) in Income Tax Appellate Tribunal ("ITAT", for short). The appeal was fixed for hearing from time to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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