आयकर अपील य अ धकरण, अहमदाबाद यायपीठ डी, अहमदाबाद । IN THE INCOME TAX APPELLATE TRIBUNAL " D " BENCH, AHMEDABAD ी मकल ु ु कमार ु ावत, या यक सद य एवं ी ट .आर.मीणा, लेख ा सद य के सम । BEFORE SHRI MUKUL Kr.SHRAWAT, JUDICIAL MEMBER And SHRI T.R.MEENA, ACCOUNTANT MEMBER आयकर अपील सं./I.T.A. No.604/Ahd/2013 ( नधारण वष / Assessment Year : 2005-06) Dr.Bela Shailesh Shah बनाम/ The Income-tax Officer Shriji Maternity & Vs. Ward-1 Surgical Nursing Home Anand R&A Home, Near Laxmi Char Rasta Anand थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AJGPS 8998 G (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से / Appellant by : -None- यथ क ओर से/Respondent by : Shri A.Tirkey सनवाई ु क तार ख / Date of Hearing : 02/05/2013 घोषणा क तार ख /Date of Pronouncement : 17/5/13 आदे श / O R D E R PER SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER : This is an appeal filed by the Assessee arising from the order of the ld.CIT(Appeals)-IV, Baroda dated 31/12/2012 passed for A.Y.2005-06. The assessee is aggrieved by the confirmation of ITA No.604/Ahd/2013 Dr.Bela Shailesh Shah vs. ITO Asst.Year - 2005-06 -2- penalty of Rs.1,70,875/- levied u/s.271(1)(c) of the IT Act. In the grounds itself, it is stated that the impugned penalty was levied in respect of an addition of Rs.5,66,040/- made u/s.68 of IT Act. 2. As per the order passed u/s.271(1)(c) dated 15.3.2011, the assessment was made u/s.143(3) on 6.9.2007 on the total income assessed at Rs.7,41,170/- which contains an addition of Rs.5,66,040/- made u/s.68 of IT Act. It has also been noted that the assessee had preferred an appeal before CIT(A), however that was dismissed vide an order dated 10.09.2009. Facts
of the case as noted by the AO were that the assessee is a gynecologist and running a nursing home at Anand. The assessee had received the said sum from father-in-law, namely, Hasmukhbhai K.Shah. It was explained that Shri Hasmukh Shah was working as Superintendent and looking after the administration, staff supervision, payment of salary, etc. He was drawing a salary of Rs.93,000/- per annum. It has also been explained that the said amount was given out of his bank account. However, the objection of the Revenue was that the cash was deposited before transferring the money to the assessee. The explanation of the cash deposit was that Shri Hasmukh Shah had sold ancestor's jewellery. Bills of sale of jewellery were filed before the AO. Shri Hasmukh Shah appeared before the AO and explained that the jewellery was sold because his daughter-in-law was in need of finance for purchasing equipments for the hospital.
ITA No.604/Ahd/2013 Dr.Bela Shailesh Shah vs. ITO Asst.Year - 2005-06 -3- The AO was not convinced and after certain other enquiries assessed the same in the hands of the assessee on the ground that the creditworthiness and the source was not established by the assessee. While levying the penalty, the AO had held that the assessee had furnished inaccurate particulars of income and willfully concealed the income, therefore levied a penalty of Rs.1,70,875/-. Before ld.CIT(A), facts were reiterated and in support of the merits of the case that the genuineness as also the creditworthiness of the deposits, few cases were cited, namely, Nemichand Kothari vs. CIT
- 264 ITR 254 (Gauhati), Murlidhar Lahorimal vs. CIT 280 ITR 512 (Guj.), CIT vs. Rameshwar Dass Suresh Pal Cheeka 208 CTR 459 (P&H), Pritam Daftary vs. CIT 283 ITR 259 (Cal.) and CIT vs. Giralal Chhaganlal Tank 257 ITR 281 (Raj.). The assessee has also cited a decision of Hon'ble Gujarat High Court pronounced in the case of CIT vs. Baroda Tin Works 221 ITR 661(Guj.) for the legal proposition that since the addition u/s.68 was under a deeming fiction, therefore penalty is not to be levied unless the loan is established to be a concealed income of the assessee. Further, in the case of CIT vs. Kamal Chemicals Industries 277 ITR 150 (P&H), it was held that the issue of source of income of a creditor being a pure findings of fact, therefore the cancellation of penalty did not involve any substantial question of law. Likewise, in the case of CIT vs. M.M. Gujamgadi 290 ITR 168(Kar.) that although the assessee had voluntarily agreed for addition of cash credit but it could not be held ITA No.604/Ahd/2013 Dr.Bela Shailesh Shah vs. ITO Asst.Year - 2005-06 -4- that the explanation of the assessee was not bona fide. The Court has held that as per Explanation-1(b) of section 271(1)(c) penalty was not to be levied and the Tribunal was justified in cancelling the penalty. However, ld.CIT(A) was not convinced and held that the cash-flow statement and the bank statements were not reliable as also the explanation of sale of jewellery was doubtful. Finally, the action of the AO was confirmed.
3. On the date of hearing, no one has appeared from the side of the appellant, however considering the smallness of the dispute, we hereby decided to proceed ex-parte qua the assessee after hearing ld.Sr.DR Mr.A.Tirkey who has placed reliance on the orders of the AO & CIT(A).
4. Facts of the case have clearly revealed the disclosure of the impugned amount received from the father-in-law was duly made by the assessee suo motu along with the connected accounts. This is not the case that the fact of receiving the impugned amount was detected by the Revenue Department on certain investigation. Rather, the AO had proceeded on the basis of those very facts and disclosures as already made by the assessee before or during the course of assessment proceedings. On one hand, the assessee had ITA No.604/Ahd/2013 Dr.Bela Shailesh Shah vs. ITO Asst.Year - 2005-06 -5- offered an explanation that the said amount was received from her father-in-law and that the amount was transacted through bank, hence it was a genuine loan transaction. Shri Hasmukh Shah had also appeared and confirmed the said transaction. However, the Revenue Department was not satisfied with the said explanation as also the evidences placed on record. So, this is a case where an explanation was offered by the assessee but it was disbelieved by the Revenue and a different opinion was formed. But this is not the case where the loan transaction entry was found to be bogus or untrue in nature. It is also not in dispute that by invoking the deeming provisions of section 68 of the Act the impugned amount was taxed as deemed income in the hands of the assessee. Almost on an identical situation, the Hon'ble Gujarat High Court in the case of Baroda Tin Works 221 ITR 661 has held that the deeming fiction is to be restricted only to the assessments and not to be invoked for the purpose of levying the penalty. We have also come across an another order of the Hon'ble Jurisdictional High Court pronounced in the case of National Textiles vs. CIT (2001)249 ITR 125 (Guj.), wherein the observation is that it is not enough that the income assessed in the hands of the assessee in the assessment proceeding, but there must be animus concealment. In that precedent also, the addition pertained to section 68 of IT Act. We therefore conclude that this is not a fit case for levy of concealment penalty, hence ITA No.604/Ahd/2013 Dr.Bela Shailesh Shah vs. ITO Asst.Year - 2005-06 -6- reverse the findings of the authorities below and direct to delete the penalty.
5. In the result, the appeal of the Assessee is allowed.
Sd/- Sd/- ( ट .आर.मीणा ) ( मकल ु ु कमार ु ावत ) लेखा सद य या यक सद य ( T.R. MEENA ) ( MUKUL Kr. SHRAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 17/ 5 /2013 ट .सी.नायर, व. न.स./T.C. NAIR, Sr. PS 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 आयु त / Concerned CIT
4. आयकर आयु त(अपील) / The CIT(A)-IV, Baroda
5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड फाईल / Guard file.
ु / BY ORDER, आदे शानसार स या पत त //True Copy//
उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad
1. Date of direct dictation on computer dated ......8.5.13
2. Date on which the typed draft is placed before the Dictating Member 8.5.13.................. Other Member.....................
3. Date on which the approved draft comes to the Sr.P.S./P.S.................
4. Date on which the fair order is placed before the Dictating Member for pronouncement......
5. Date on which the fair order comes back to the Sr.P.S./P.S......17.5.13
6. Date on which the file goes to the Bench Clerk.................. 17.5.13
7. Date on which the file goes to the Head Clerk..................................
8. The date on which the file goes to the Assistant Registrar for signature on the order..........................
9. Date of Despatch of the Order..................