Kamal Kant Jain v. Commissioner Of Income Lax, Chanaigarn

ITA No. 369 of 2013 =|. IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH IIA No. 369 of 2013 Date of Decision: 14.7.2014 | Kamal Kant Jain ...Appellant Versus Commissioner of Income lax, Chanaigarn ... Respondent CORAM:-HON BLE MR. JUSTICE AJAY KUMAR MITTAL.HON BLE MR. JUSTICE JASPAL SINGH. PRESENT: Mr. S.K. Mukhi, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1]This appeal has been filed by the assessee under Section260A of the Income Tax Act, 1961 (in short “the Act’) against the orderdated 26.8.2013 (Annexure A-4) passed by the Income Tax AppellateTribunal, Chandigarh Bench “A’, Chandigarh (hereinafter referred to as‘the Tribunal’) in ITA No. 178/Chd/2013 for the assessment year 2003-04, claiming the following substantial questions of law:- ;Whether, on the facts and circumstances of thecase, the Tribunal was justified in confirming thepenalty so levied by the AO u/s 271(1)(c) of theIncome Tax Act, 1961 on account of gifts byfamily friends duly confirmed by affidavits/gittdeeds and Bank transfers and thereby provingthe identity through family function photographs,case, the Tribunal was justified in confirming thepenalty so levied by the AO u/s 271(1)(c) of theIncome Tax Act, 1961 on account of gifts byfamily friends duly confirmed by affidavits/gittdeeds and Bank transfers and thereby provingthe identity through family function photographs, ITA No. 369 of 2013=2= credit worthiness and genuineness of thetransaction simply on presumptions? ;Whetner tne order of the I[ribunal Is perversand against the provisions of law? 2.Put shortly, the facts necessary for adjudication of thepresent appeal as narrated therein may be noticed. Ine assessee Isengaged in the business as partner of M/s Nikka Mal Babbu Ram &sons, Chanadigarn. Ine searcn and seizure operation was conductedon 27.10.2006 at tne residential and business premises of M/s NikkaMal Babbu Ram & Sons. The appellant filed return for the assessmentyear 2003-04 snowing Income at.42,09,444/-. Accordingly, notice underSection 153A of the Act was issued to the assessee on 74.6.200/7 for thassessment years 2001-02 to 2006-07. During the year In question, theassessee received gift of41,00,000/- from Shri Amrit Dilawari and=9,46,5/5/- from Shri Charanjeet P. Singh, both NRIs through properbanking channel. The Assessing Officer treated the said gifts as incomefrom other sources and framed the assessment at=11,84, 860/- videorder dated 31.12.2008 (Annexure A-1). Penalty proceedings were alsoinitiated against the assessee under Section 2/71(1)(c) of the Act foconcealment of particulars of income. Feeling aggrieved, the assesseefiled an appeal before the Commissioner of Income Tax (Appeals) [forbrevity “the CIT(A)] who vide order dated 25.1.2010 dismissed theappeal. Against the order dated 25.1.2010, the assessee filed an appealbefore the Tribunal. The Tribunal vide order dated 29.9.2010 dismissedthe appeal. Thereafter, notice under Section 271(1)(c) of the Act wasissued to the assessee to show cause as to wny the penalty be notimposed for concealment of income. The Assessing Officer vide order ITA No. 369 of 2013a dated 25.3.2011 (Annexure A-2) imposed penalty ot L2,03,6/1/- undersection 2/1(1)(c) of the Act. Against the penalty order, the assesseeTiled an appeal before the CIIT(A) who vide order dated 1.11.2012(Annexure A-3) confirmed the penalty order and dismissed the appeal.Feeling aggrieved by the order dated 1.11.2012 (Annexure A-3) passedby the CIT(A), the assessee filed an appeal before the Tribunal. TheTribunal vide order dated 26.8.2013 (Annexure A-4) dismissed theappeal. Hence, the present appeal. ITA No. 369 of 2013a dated 25.3.2011 (Annexure A-2) imposed penalty ot L2,03,6/1/- undersection 2/1(1)(c) of the Act. Against the penalty order, the assesseeTiled an appeal before the CIIT(A) who vide order dated 1.11.2012(Annexure A-3) confirmed the penalty order and dismissed the appeal.Feeling aggrieved by the order dated 1.11.2012 (Annexure A-3) passedby the CIT(A), the assessee filed an appeal before the Tribunal. TheTribunal vide order dated 26.8.2013 (Annexure A-4) dismissed theappeal. Hence, the present appeal. 3.Learned counsel for the appellant submitted that the amountof gift received was snown In the books of account and, therefore, therewas no concealment. It was also argued that the assessee nad receivedthe amount through banking channel and the affidavit of the donor hadalso been produced. It was urged that in such circumstances, the levy ofpenalty merely on the basis of addition made which nad attained finalitywas unsustainable in view of judgment inCommissioner of Income-Tax v. Balbir Singh (2008) 304 ITR 125 (P&H) 4After hearing learned counsel for the appellant, we do notfind any merit in the aforesaid contention. 5 The Tribunal while upholding the levy of penalty hadconcluded that the assessee had failed to substantiate that the gittreceived was genuine. The plea of the assessee that the gift wasreceived due to his financial difficulty was also negated on appreciationof material on record. The gifts were held to be bogus and explanationof the assessee was held to be false. It was observed as under:- “Now coming to the facts in case before us, theassessee has received two gifts amounting to Rs.1lakh from Amrit Dilawari and Rs.5,46,5/75/- from Shr Charanjeet P. singh. During the assessmentproceedings the statement of the assessee wasrecorded in which the assessee was asked to give theaddresses of such donees. It may be true that theassessee may not remember the full addresses but atleast the persons who Is giving a sum of Rs.1 lakhand Rs.5,46,5/75/-, he snould have known the State oCity of USA where sucn donees were living. Thisclearly shows that the gifts are bogus. Further aquestion was asked that on what occasion the giftswere given. The assessee had stated that the giftswere received because the assessee was In a greatTinancial difficulty. This ts totally wrong. Before us,copy of bank statement has been filed by theassessee. First gift Is snown to have received on29.10.2002. On that date balance in the Saving Bankaccount was Rs.42,17,965/- and in fact statement hasbeen filed from period 10.8.2002 before us throughoutAugust to October, 2002 there has been a balanceranging from Rs.40 lakhs to Rs.58.95 lakhs. Thesecond gift was received on 16.1.2003 and beforereceipt of gift, bank balance in same account is|Rs.12,33,939/-. In our opinion huge bank balance inthe Saving Bank Account in the Financial Year 2002-O3 clearly snow that the assessee was not In anyfinancial difficulty and therefore, it is clear that theseare bogus gifts. Therefore, the explanation given by ITA No. 369 of 2013 =5- the assessee is_ totally false and accordinglyexplanation (1) to Section 2/1(1)(c) would not beattracted. In our opinion, this Is a Tit case for levy ofpenalty and we uphold the order of the Id. CIT(A).” 6 In view of the above, under the circumstances noticednereinabove, it could not be said that there was no concealment. Iheissue before this Court InBalbir Singh's case (supra)was against thefinding recorded by the Tribunal, wherein it was held that there was noconcealment against the assessee. However, in the present case, theTribunal nas come to tne conclusion that the assessee nad concealedthe furnishing of current particulars of income. The judgment in-BalbirSingh's case (supra)relied upon by the learned counsel for theappellant being based on Individual fact situation does not come to therescue of the appellant.|aIn view of the above, no substantial question of law arises inthis appeal. Consequently, finding no merit, the instant appeal isaismissed. (AJAY KUMAR MITTAL) JUDGE 6 In view of the above, under the circumstances noticednereinabove, it could not be said that there was no concealment. Iheissue before this Court InBalbir Singh's case (supra)was against thefinding recorded by the Tribunal, wherein it was held that there was noconcealment against the assessee. However, in the present case, theTribunal nas come to tne conclusion that the assessee nad concealedthe furnishing of current particulars of income. The judgment in-BalbirSingh's case (supra)relied upon by the learned counsel for theappellant being based on Individual fact situation does not come to therescue of the appellant.|aIn view of the above, no substantial question of law arises inthis appeal. Consequently, finding no merit, the instant appeal isaismissed. (AJAY KUMAR MITTAL) JUDGE July 14, 201416! (JASPAL SINGH) JUDGE