Income Tax Appellate Tribunal - Delhi
Smt. Kamla Devi Bishnoi vs Income-Tax Officer on 31 December, 1990
Equivalent citations: [1991]36ITD471(DELHI)
ORDER
J. Kathuria, Accountant Member
1. This appeal by the assessee for assessment year 1981-82 challenges the confirmation of penalty of Rs. 12,500 imposed under Section 271(1)(c) of the Income-tax Act, 1961 by the Income-tax Officer.
2. Relevant facts of the case are that for assessment year 1981 -82 the assessee in her return showed long term capital gain of Rs. 2,450 and claimed the same as exempt under Section 80T of the Act. Shri M.L. Bansal, Chartered Accountant, who appeared before the Income-tax Officer stated that the aforesaid capital gain arose on the sale of jewellery for Rs. 24,950. He also produced a photo stat copy of the purchase vouchers of M/s. Gian Chand Kapoor & Sons, 1228,KachaBagh,ChandniChowk, dated 11-9-80. His submission before the assessing officer was that the jewellery had been purchased as well as sold during the previous year and also offered that short term capital gain may be assessed in the hands of the assessee. It was also pointed out to the assessing officer that there was an account known and styled as "purchase for daughter's marriage" account in which the opening balance was of Rs. 22,500 and this account was squared up by showing to sale proceeds at Rs. 24,950 and the profit of Rs. 2,450. The submission was that a sum of Rs. 22,500 had been set apart by the assessee for daughter's marriage in the year relevant to assessment year 1975-76 and that the jewellery was purchased with that money in the year relevant to assessment year 1981-82 and also sold in the same year. The Income-tax Officer, however, did not believe the story of the assessee and added the entire amount of Rs. 24,950 as income from undisclosed sources. In the quantum appeal the assessee submitted the following in the statement of facts: "the jewellery which was sold in the year under consideration was also purchased in the same year". The money was lying under the head "purchases of jewellery for daughter's marriage". It may be mentioned here that the facts have not been stated correctly in the statement of facts reproduced above because the heading is not "purchases of jewellery for daughter's marriage account", but "purchase for daughter's marriage account". The addition of "jewellery" in the narration of the said account is, therefore, a product of the assessee's imagination.
3. The addition of Rs. 24,950 was confirmed by the Commissioner of Income-tax (Appeals) and finally by the Tribunal. During the course of the assessment proceedings the Assessing Officer initiated penalty proceedings under Section 271 (1)(c) of the Act. The assessee did not comply with the requirements of the notice. The assessing officer afforded another opportunity to the assessee. The assessee requested the assessing officer to stay the penalty proceedings till the disposal of quantum appeal. The assessing officer noted the fact that the assessee's appeal had since been dismissed and the addition confirmed. He accordingly imposed a penalty of Rs. 12,500.
4. The assessee appealed to the Commissioner of Income-tax (Appeals) and in the statement of facts attached to the penalty appeal the following facts were reiterated: "The jewellery of Rs. 24,950 was sold in the year under consideration. The money was lying under the head 'purchases for daughter's marriage'." Commissioner of Income-tax (Appeals) confirmed the order of the Income-tax Officer. The assessee has now come up in second appeal before us.
5. ShriGanesan, the learned counsel for the assessee, took us through the paper-book filed by the assessee and submitted that purchases of Rs. 22,250 were made in the accounting year 1973 as per the following details:
(i) 6-4-1973 purchases for daughter's marriage Rs. 10,000
(ii) 10-4-1973 -do- -do- Rs. 2,500
(iii) 12-5-1973 -do- -do- Rs. 10,000
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Rs. 22,500
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It was submitted by the learned counsel that the nomenclature of the account clearly showed that the assessee had made purchases worth Rs. 22,500 in connection with the daughter's marriage and this amount had been shown in the balance sheets of the assessee year after year till 31-3-1980. It was submitted that the opening balance on this account standing in the assets side of the balance sheet was Rs. 22,500. According to the learned counsel this account was squared up after crediting the account with the sale proceeds of Rs. 24,950 and the profit of Rs. 2,450 was shown as long term capital gains. His submission was that this amount of Rs. 22,500 was available with the assessee not in the form of cash, but in the form of jewellery which was sold in the year relevant to the assessment year 1981-82. It was also submitted that apart from disbelieving the plea of the assessee, the Revenue has not established the contumacious conduct of the assessee or the concealment of particulars of income. It was vehemently argued that the sale of jewellery was not attacked by the Revenue; it was only the purchase which had not been proved. According to the learned counsel, since concealment had not been established, there was no justification for levy of penalty under Section 271(1)(c) of the Act.
6. The learned Departmental Representative, on the other hand, submitted that the addition of Rs. 24,950 was made precisely because the sale had been accepted as genuine, but since theassessee had failed to prove the source of acquisition of jewellery the addition had rightly been made.lt was submitted that in the assessment proceedings the assessee's stand all along up to the Tribunal had been that a sum of Rs. 22,500 was lying with the assessee in the form of cash and that the jewellery had been purchased in the year relevant to the assessment year 1981-82 and sold in the same assessment year. It was pointed out that even in the statement of facts before the Commissioner of Income-tax (Appeals) in penalty proceedings the same position had been affirmed. It was highlighted that now the learned counsel for the assessee was changing the stand and submitting that the jewellery was very old, having been purchased in 1973. It was also submitted that if the assessee had purchased the jewellery in 1973 for Rs. 22,500, the same would have been sold for a much higher amount than Rs. 24,950 on 12-1-1981. It was submitted that the assessee had been blowing hot and cold and taking contradictory stands. The purchase of jewellery had not been proved at all and the conduct of the assessee was clearly contumacious in the sense that she had taken contradictory stands. It was also submitted that the facts found in the assessment proceedings had their own relevance and evidentiary value and these could not be wished away in the penalty proceedings. It was submitted that the penalty had been rightly levied by the assessing officer and rightly confirmed by the first appellate authority.
7. We have carefully considered the rival submissions as also the facts on record. We have also gone through the paper book filed by the assessee. We find that at the assessment stage the plea of the assessee was that the jewellery had been purchased and sold in the year relevant to assessment year 1981-82. A photo stat copy of the purchase voucher dated 11-9-1980 was also produced before the assessing officer. In the statement of facts filed before the first appellate authority in quantum appeal the same position was reiterated. The same facts were affirmed before the Tribunal in the statement of facts. In the penalty appeal also the assessee submitted the same facts before the first appellate authority. So far the stand of the assessee was that a sum of Rs. 22,500 was lying in the form of money with the assessee though in a different account and with the help of that money the assessee had purchased the jewellery during the year relevant to assessment year 1981-82 and the same was sold also in the same assessment year. Before the assessing officer, the learned counsel for the assessee had even offered a sum of Rs. 2,450 to be assessed as short term capital gains. It is really intriguing as to why the assessee did not file the original purchase voucher of 11-9-1980 before the Departmental authorities. The learned counsel for the assessee has now taken an altogether different stand and stated that the amount of Rs. 22,500 actually represented jewellery purchased by the assessee in the year 1973. This stand is not only contradictory to the stand taken earlier all along the proceedings; it is also un-supported by any positive evidence. It is anybody's guess as to what articles had been purchased for the daughter's marriage in 1973 in three lots. In our view penalty is imposable in this case in view of Explanation 1 to Section 271(1). This Explanation lays down that where in respect of any facts material to the computation of the total income of any person, such person fails to offer explanation or offers an explanation which is found to be false then the amount added or disallowed in computing the total income of such person for the purposes of Section 271(1)(c) of the Act shall be deemed to represent the income in respect of which particulars have been concealed. According to Explanation 1(B) this presumption will not arise where such person offers an explanation which he is not able to substantiate provided the explanation is bona fide and all the facts relating to the same and material to the computation of his total income have been disclosed by him.
8. In the instant case we find that the assessee's explanation cannot be said to be bona fide because of the changing stands taken at different times. Upto the stage of penalty proceedings before the first appellate authority the stand of the assesseehas been that a sum of Rs. 22,500 was lying in the form of cash with the assessee in a particular account. Now the explanation before us is that it was not cash which was lying with the assessee, but the jewellery. This stand is also not supported by any evidence. The explanation submitted by the assessee in the background of the above facts cannot be said to be bona fide.
9. We, therefore, hold that having regard to all facts and circumstances of the case and the legal position discussed above, penalty of Rs. 12,500 was rightly confirmed by the first appellate authority.
10. In the result, the appeal is dismissed.