TaxTMI 
TaxTMI 
2011 (10) TMI 14
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....residential premises of the Assessee on 18th June, 2003. (b) The Assessee filed his return of income for the assessment year 2004-05 on 28th October, 2004. (c) Since a search was initiated under Section 132, a notice under Sections 143(2) and 142(1) along with detailed questionnaire was issued on 10th October, 2005. In response to this notice the Assessee filed details in response to the above questionnaire. The Assessee further offered an amount of Rs. 89,57,106/- received on account of gift for taxation vide letter dated 2nd December, 2005. (d) After examination of seized material pertaining to the Assessee and the reply filed by the authorized representative of the Assessee, income of the Assessee was assessed at Rs. 1,15,49,232/-. (e) It is pertinent to mention herein that the Assessee had filed a confirmation with regard to the receipt of gift. The Assessee had further filed copies of the gift deed and other related papers to support the gift. The Assessee had also offered the amount voluntarily without there being any detection by the Department. However, the Assessing Officer(AO) rejected the explanation of the Assessee and directed that since the A....
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....or imposing penalty in absence of any material brought out by the Department to prove that assessee had willfully or due to fraud had concealed the income. 8. there was no circumstances to lead to a reasonable and positive inference that the assessee‟s case - that the gift received was false. 9. the facts and circumstances are equally consistent with the hypothesis that it could have been genuine gift. Therefore, even taking recourse to Explanation, same circumstances or state of evidence on which the gift were treated as income, could not by themselves justify imposition of penalty without anything more on record produced by the assessee or the Department. 10. there is no clinching evidence as regards to the concealment. 11. there was no fraud or gross or willful neglect on the part of the assessee in returning the correct income and that the initial burden cast on the assessee stood discharged. Moreover, the department in penalty proceedings made no effort to enquire the status of surrendered Gift." 6. It is also necessary at this stage to note the observation of the AO while making the assessment under Section 143(3) of the Act. The ....
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....ionnaire for the Asst. Year. "Had you taken/given any loan/gift during the F.Y. under consideration? If yes, please furnish details." This letter was received by the appellant on 12.10.205 and thereafter, vide letter dt.2.12.2005, the appellant had furnished the details of gift received in the present year from NRIs and had also furnished the copies of gift deed along with reply. Besides this, in the same letter, the assessee made it clear that through the aforesaid amount was received by the appellant as a gift but to buy the peace and to avoid any dispute, the appellant was offering the amount of gift received from NRIs for the present A.Y. as taxable income subject to the condition that no penalty action shall be initiated against the assessee under any section of I.T. Act. In the same letter, it was further made clear by the appellant that the gift under consideration as shown to have been received were genuine one and related document of gift were annexed along with the letter. From this it is clear that the Assessing Officer was not having any piece of information regarding the fact that the gifts were not genuine one and these were part of total income of the appellant. Even....
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....at a later stage, there was no question of any concealment on its part and no penalty, u/s. 271(1)(c) was levied. Hon‟ble Jharkhand High Court in the case of CIT vs. Ashim Kumar Aggarwal (153 Taxman 226) has given a finding in that particular case that omission from return of income did not amount to concealment. In that particular case during the course of search cash balance was found and explanation furnished was rejected in the assessment order and thereafter, the Assessing Officer has also imposed the penalty then Hon‟ble Jharkhand High Court has observed that even if it was presumed that particulars of income had not been properly disclosed by the assessee, then also, mere omission of the same form return of income did not amount to concealment. Contrary to this, in the present case, the affidavit from the donors were furnished, there was no show cause seeking specific information regarding genuineness of specific gifts under consideration and it was the appellant who along with furnishing necessary evidence and explanation for genuineness of the gift had offered on his own the amount of gifts from NRIs as additional income for both the A.Ys. under consideration. ....
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....e‟s declaration. Also, the AO did not point out or refer to any evidence or material to show and establish that the gift received by the Assessee was either bogus or sham. Admittedly, the Assessee had offered the gift for taxation voluntarily and it was not the case of the Revenue that the same was done after its detection by the Department. Further, it was also not the case of the Revenue that material was found during the search indicating that the gift transaction was an arranged affair to accommodate the Assessee‟s unaccounted money. In this respect it is evident that the ITAT correctly came to the conclusion that the AO did not possess any piece of information that the gift was not genuine and was part of the undisclosed income of the Assessee. In the questionnaire dated 10th October, 2005 the AO had simply raised a query for the relevant assessment year in the following manner:- "Had you taken/given any loan/gift during the F.Y. under consideration? If yes, please furnish details". In response to this query the Assessee had furnished the details of gift received in the relevant year from NRI‟s and had also furnished the copy of gift deed along with reply. Ap....