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2015 (9) TMI 320 - AT - Income TaxValidity of assessment order u/s.153 C r.w.s.153 A - penalty u/s.271(1)(c) - Held that:- A Although various additions were made we are confined to the penalty levied on addition of ₹ 11,50,000/- made by the Assessing Officer u/s.68 of the I.T. Act and proportionate interest thereon amounting to ₹ 2,53,000/-. Admittedly, apart from the addition of ₹ 5 lakhs no other addition has been made on the basis of incriminating material found and seized from the premises of Shri Shreeram H. Soni which relates to the assessee. The loan amount of ₹ 6,50,000/- obtained from different persons are already appearing in the balance sheet filed in the original return of income and nothing was detected due to the search. Further, the Assessing Officer in the assessment order has made addition on the ground that although the assessee filed the confirmation letters, however, the assessee could not file the PAN numbers, and addresses of the concerned loan creditors. This in our opinion may be sufficient for making addition in the quantum proceedings but certainly not in the penalty proceedings for levy of penalty u/s.271(1)(c) of the I.T. Act in an assessment framed u/s.153C r.w.s. 153A. In this view of the matter we hold that the assessee is not liable to penalty u/s.271(1)(c) of the I.T. Act on the amount of ₹ 6.50 lakhs since the same was not based on any incriminating material found during the course of search and the addition was based on the basis of loan creditors found from the balance sheet already filed prior to the search along with the original return of income. We accordingly set aside the order of the CIT(A) and direct the AO to cancel the penalty levied on addition of ₹ 11,50,000/- and proportionate interest thereon. The grounds raised by the assessee are accordingly allowed. - Decided partly in favour of assessee.
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