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2015 (12) TMI 1023 - AT - Income TaxPenalty imposed under section 271(1)(c) - addition of deemed dividend under section 2(22)(e) - Held that:- There is a credit balance in respect of M/s. Emmar Diamonds Ltd., appearing in the books of the assessee during the relevant financial year. It is also a fact that the assessee is a shareholder in M/s. Emaar Diamonds Ltd. It is also a fact on record that the credit balance appearing in the name of M/s. Emaar Diamonds Ltd. has been treated as a deemed dividend under section 2(22)(e) of the Act and in the quantum of appeal before the Tribunal, the assessee has accepted the addition by not pressing the ground raised. However, these facts alone would not be sufficient to conclude that assessee has either furnished inaccurate particulars of income or concealed the particulars of income so as to impose penalty under section 271(1)(c). It is well known that assessment proceedings and proceedings for imposition of penalty under section 271(1)(c) are two distinct and separate proceedings. In the facts of the present case, on a reference to the statement of account of loan transaction with M/s. Emaar Diamonds Ltd., a copy of which has been submitted at Page-8 of the paper book, it is very much clear that the assessee had an opening balance of loan to M/s. Emaar Diamonds Ltd. amounting to ₹ 2,32,26,000. During the year, the assessee has also received payment against the aforesaid loan to M/s. Emaar Diamonds Ltd., on different dates starting from 2nd August 2004. As it appears on 23rd September 2004, the assessee received an amount of ₹ 1.50 crores from M/s. Emaar Diamonds Ltd., as a result of which there was a credit balance in favour of the said party. It is the contention of the assessee that M/s. Emaar Diamonds Ltd. per mistake repaid in excess. However, immediately after such mistake came to the notice the assessee on 28th September 2004, paid back an amount of ₹ 50 lakh to M/s. Emaar Diamonds Ltd. On a perusal of the statement of account the explanation of the assessee appears to be correct. It is seen from the statement of account that the assessee is regularly advancing loan to M/s. Emaar Diamonds Ltd., therefore, the claim of the assessee that on 23rd September 2004, M/s. Emaar Diamonds Ltd., while making repayment has paid back excess amount per mistake is quite plausible. Considering the aforesaid facts, we are of the view that the assessee cannot be accrued of furnishing inaccurate particulars of income or concealing particulars of income. Therefore, imposition of penalty under section 271(1)(c) in the present case, in our view, is not justified. Accordingly, we delete the penalty imposed. - Decided in favour of assessee.
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