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Penalty under section 271(1)(c) leviable on Bogus gifts

The Tribunal while upholding the levy of penalty had concluded that the assessee had failed to substantiate that the gift received was genuine. The plea of the assessee that the gift was received due to his financial difficulty was also negated on appreciation of material on record.

The Tribunal while upholding the levy of penalty had concluded that the assessee had failed to substantiate that the gift received was genuine. The plea of the assessee that the gift was received due to his financial difficulty was also negated on appreciation of material on record. The gifts were held to be bogus and explanation of the assessee was held to be false. It was observed as under:-

‘Now coming to the facts in case before us, the assessee has received two gifts amounting to Rs. ‘1 lakh from AmritDilawari and Rs. ‘5,46,575 from ShriCharanjeet P. Singh. During the assessment proceedings the statement of the assessee was recorded in which the assessee was asked to give the addresses of such donees. It may be true that the assessee may not remember the full addresses but at least the persons who is giving a sum of Rs. ‘1 lakh and Rs. ‘5,46,575, he should have known the State or City of USA where such donees were living. This clearly shows that the gifts are bogus. Further a question was asked that on what occasion the gifts were given. The assessee had stated that the gifts were received because the assessee was in a great financial difficulty. This is totally wrong. Before us, copy of bank statement has been filed by the assessee. First gift is shown to have received on 29-10-2002. On that date balance in the Saving Bank account was Rs. ‘42,17,965 and in fact statement has been filed from period 10-8-2002 before us throughout August to October, 2002 there has been a balance ranging from Rs. ’40 lakhs to Rs. ‘58.95 lakhs. The second gift was received on 16-1-2003 and before receipt of gift, bank balance in same account is Rs. ‘12,33,939. In our opinion huge bank balance in the Saving Bank Account in the Financial Year 2002- 03 clearly show that the assessee was not in any financial difficulty and therefore, it is clear that these are bogus gifts. Therefore, the explanation given by the assessee is totally false and accordingly explanation (1) to section 271(1)(c) would not be attracted. In our opinion, this is a fit case for levy of penalty and we uphold the order of the learned Commissioner (Appeals).’

 In view of the above, under the circumstances noticed hereinabove, it could not be said that there was no concealment. The issue before this Court in Balbir Singh’s case (supra) was against the finding recorded by the Tribunal, wherein it was held that there was no concealment against the assessee. However, in the present case, the Tribunal has come to the conclusion that the assessee had concealed the furnishing of current particulars of income. The judgment in Balbir Singh’s case (supra) relied upon by the learned counsel for the appellant being based on individual fact situation does not come to the rescue of the appellant.

Categories: Income Tax

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