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2015 (11) TMI 418 - AT - Income TaxPenalty u/s 271(1)(c) - concealment of particulars of income as well as furnishing of inaccurate particulars of income - Held that:- On perusal of the penalty order, it is clear that the penalty was levied for furnishing inaccurate particulars of income and thereby concealed the particulars of income which means that this finding, in our considered opinion, is confusing and is not clear whether the Assessing Officer holding the assessee guilty of furnishing the inaccurate particulars of income or concealing the particulars of income. This goes to prove that the Assessing Officer had not arrived at the satisfaction as to the guilty state of mind of the assessee. Further, we find that the statement of surrender is the sole basis for making the addition of ₹ 22,51,000/-, while surrendering this amount, the assessee clearly stated that the surrender is made with the intention of buying peace and avoiding unnecessary litigation and the amount surrendered cannot be co-related with incriminating materials found as a result of survey operations. Though the Assessing Officer and the CIT(A) recorded the finding that the assessee promised to produce the vouchers, which were not accounted in the books of account, failed to do so. It is a trite law that the onus always lies on the person who alleges in this case that it is the department who made an allegation that some vouchers found which were not accounted in the books of account. Therefore, it is the duty of the Revenue to prove that which vouchers were not accounted in the books of account. The Assessing Officer never brought any such vouchers on the record except making ipse dixit statement that some vouchers are found that apart, the Hon’ble Madras High Court in the case of CIT Vs. S. Khader Khan Sons, (2007 (7) TMI 182 - MADRAS HIGH COURT ) and the Hon’ble Kerala High Court in the case of Paul Mathews and Sons Vs. CIT, (2003 (2) TMI 25 - KERALA High Court) had clearly held that no addition can be made based on the mere statement. The decision of the Hon’ble Madras High Court was approved by Hon’ble Supreme Court in the case of CIT Vs. Khader Khand Son, (2013 (6) TMI 305 - SUPREME COURT) after granting the leave. That apart, the CBDT which is the apex body in administering the provisions of Income Tax Act had issued Circle dt. 10th March, 2003 to its officers that no addition can be made on mere statement of assessee without bringing any independent incriminating material on record. Therefore, in the light of the above decision, the very addition made by the Assessing Officer is not free from doubt. The mere disallowance cannot be a sound basis for imposition of penalty. In the light of the above legal position, we have no hesitation to quash the penalty levied under Section 271(1)(c) of the Act. Hence, the appeal filed by the assessee is allowed in full. - Decided in favour of assessee.
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