Income Tax Appellate Tribunal - Ahmedabad
Rameshchandra Vadilal Shah, Ahmedabad vs Income Tax Officer,Ward-2(2),, ... on 20 March, 2017
IN THE INCOME TAX APPELLATE TRIBUNAL,
"SMC" BENCH, AHMEDABAD
BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER
AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER
आयकर अपील सं./ ITA No.1333/Ahd/2011
नधा रणवष /A.Y. 2005-06
Shri RameshchandraVadilal Shah Vs The Income Tax Officer,
Prop: of M/s.Ramesh& Co. Marchi Ward-2(2),
Pole, Ratan Pole Ahmedabad Ahmedabad
PAN : ARCPS4758C
(Appellant) (Respondent)
By Appellant : Shri Dhiren Shah, A.R
By Respondent : Shri Om Prakash Meena, Sr DR
सन
ु वाई क तार ख/Date of Hearing : 25/01/2017
घोषणा क तार ख /Date of Pronouncement: 20/03/2017
आदे श/O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER
This is an appeal preferred by the assessee for the assessment year 2005-06 against the order of Ld.CIT(A) for levying/confirming the penalty u/s.271(1)(c) of the Income Tax Act, 1961 of Rs.5,19,629/-
2. Facts of the case are during the assessment proceedings it was noticed that the assessee had claimed to have taken gifts from eight persons totaling to Rs.15,00,000/-which was credited in his capital account. The assessee submitted confirmation of the so called donors in the certain cases along with copy of conveyance deed and copy of their PAN cards.
3. To verify the genuineness of these gifts letters u/s.133(6) of the Act were issued to the donors. However, letters in the names mentioned of seven person were returned back by the postal authorities with the remark "left/not known" Whereas so claimed donor Shri Kamlesh Patel, wherein submitted that he has not made any gift to the assessee. Again, the assessee was requested to produce the donors for verification/examination but nobody attended on the given date. Thereafter, summons u/s. 131 of the Act, were also issued to all those so called donors and an Inspector was deputed to find out the whereabouts of donors, who gave his report by stating that donors were not available on the given addresses. Thereafter, in this regard, details of the bank accounts of the donors were called for u/s.133(6) from the concerned bank. In response, the Branch Manager, submitted that the donors had not maintained their account with this bank, but pay orders had been issued to them from various other accounts holder's account, so inquiries were made from the account holders from whose account the pay order were issued. In response, all persons submitted in writing that one staff member Shri Ramesh Vadilal Shah from Ramesh & Co., had come with cash and on request made by him, the banker cheques were issued to him. However, during the assessment proceeding on 04/12/2017, the assesse surrendered himself and submitted that "In order to buy peace with department, to avoid lengthy and costly litigation expenses" he is paying tax amounts which had been claimed as gifts. Thus, the asssessee was not able to establish either the creditworthiness of the donors or the genuineness of the transaction.
4. In view of the above facts, cash credit in form of gifts shown to have been received for Rs.15 lakhs was held as unexplained and added to the returned income u/s.68 of the I.T. Act.
5. However, the assesse went in appeal before CIT(A)-VII, Ahmedabad. The appeal before the Ld.CIT(A), the CIT(A) confirmed the above addition of Rs.15,00,000/- made u/s.68 of the Act. However, show cause notice u/s.274 r.w.s. 271 was issued to the assesse on 17/12/2008. The assessee filed submission dated 08/01/2009 pleading to drop the penalty proceedings or to keep the penal proceeding in abeyance till the decision of the appeal filed before the ITAT against the order of CIT(A).
6. Under the circumstances as above, matter was adjudicated on the basis of submission dated 08/01/2009 filed by the assessee.
7. The Ld.CIT(A) further held that "I am convinced that the assessee has candidly admitted that the particulars regarding gifts filed by him during the assessment proceeding were false. This is an exemplary case in which the assessee, on one had had candidly admitted to have filed inaccurate particulars and on the other hand pleaded not to levy penalty"
The penal proceedings in any statute are provided as measure of deterrence. In a case where default is proved, or in the case where there is candid admission, penal proceedings are totally warranted. This having convinced that the assessee has filed inaccurate particulars and thereby concealed his income, Ld.CIT(A) has levy a penalty of Rs.15,58,997/-
8. We have heard rival submission of both the parties and gone through the impugned order passed by the authorities below:
It has been held in the case of ''ShobhaTrading Co.P.Ltd., Vs ITO (1995) (52 ITD 188)''. In this case it was held that it is an un ambiguous and admitted fact that assesse made fake claim of gifts for which he had to accede that those so claimed fake gifts were part of this undeclared or concealed income. That is why he had surrendered the fake gifts.
In other case ''Addl.CIT Vs. Delhi Cloth and General Mills (157 ITR,
822)'' it was held that assessee had made the fake claim of gifts of Rs.15 Lakhs and admitted that same as his undeclared and concealed income.
Next in case of ''J.K. Jaioo Vs. CIT (MP) (181 ITR 410)'' in this case it was held that assessee had made the claim of gifts and assessee could not prove the genuineness of transactions and creditworthiness of the donors.
In the case of ''MAK Data (P) Ltd., Vs Commisioner of Income Tax [2013] 38 taxmann.com 448 (SC)'' where offer of surrender of certain amount received as share application money made by the assessee in view of the detection made by the Assessing Officer in search conducted in case of assessee's sister concern, said surrender of income not being voluntary in nature, authorities below were justified in levying penalty under section 271(1)(c).
9. Thereafter, respectfully following the above judgments we note that the assessee has made fake claim of the gifts and when pointed out by the department, he surrendered the claim. In our considered opinion, this is a fit case for levy of penalty. In the result we are not incline to interfere in the order passed by Ld.CIT(A).
10. Thus, appeal filed by the assessee is dismissed.
Order pronounced in the Court on 20th March , 2017 at Ahmedabad.
Sd/- Sd/-
(N.K.BILLAIYA) (MAHAVIR PRASAD)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 20/03/2017
Manish
आदे श क त ल प अ े षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. !यथ / The Respondent.
3. संबं%धत आयकर आय&
ु त / Concerned CIT
4. आयकर आयु&त(अपील) / The CIT(A)
5. )वभागीय त न%ध, आयकर अपील य अ%धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
TRUE COPY आदे शानस
ु ार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt.Registrar)
आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
True Copy
1. Date of dictation 14/03/2017Directly on computer on .....
2. Date on which the typed draft is placed before the Dictating Member- ......... Other Member ...................
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