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2016 (3) TMI 414 - AT - Income TaxPenalty under section 271(1)(c) - undisclosed deposits - Held that:- The assessee has given explanation about the source of deposits in the accounts. The explanation could not be substantiated with the supporting evidence, but the explanation was not held by the AO as false. Had the assessee gave confirmation from M/s.Shrinathji Corporation in the Asstt.Year 2002-03, then the addition itself would have been deleted, but the AO has not issued any notice to M/s.Shrinathji Corporation in order to find out whether the explanation given by the assessee is false or not. Similarly, in the Asstt.Yar 2003-04, the explanation given by the assessee is that he has received back ₹ 1.50 lakhs from Shri Anvarbhai Kapadia and that amount was deposited in the bank account. The AO has accepted the facts that a sum of ₹ 3.00 lakhs advanced by the assessee, but disbelieved the explanation of ₹ 1.50 lakhs. Again the explanation of the assessee was not held to be false. Therefore, in view of our discussion, we are of the view that the assessee does not deserve to be visited with penalty under section 271(1)(c) of the Act, and accordingly impugned penalty in both the appeals are cancelled. - Decided in favour of assessee
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