Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 304 - AT - Income TaxPenalty u/s 271(1)(c) - unexplained cash deposit - assessee surrendered an amount of ₹ 20 lac on a condition that the AO shall not levy penalty u/s 271(1)(c) of the Act, as per mutual discussions - AO had not complied with the conditions laid down by the assessee for surrender - CIT(A) upheld the addition on the ground that the assessee had made a surrender & came to a conclusion that the assessee had taken into account the opening balance while surrendering the amount of ₹ 20 lac - Held that:- as far as the opening balance is concerned, the assessment of the earlier assessment year was reopened and the claims of the assessee was accepted. Order was passed u/s 143(3) read with section 148 of the Act on 25.2.2014. Thus, the opening balance cannot be added. Coming to the surrender made by the assessee, as find that this is a conditional surrender. The assessee, in his detailed reply dated 27.12.2011, explained the sources of cash deposit made during the year. It was submitted that the assessee was having sufficient cash in hand at the beginning of the year amounting to ₹ 22,36,415/-. As already stated, this opening balance was explained by filing the financial statement as well as the assessment order for the assessment year 2008-09. The assessee, in his detailed explanation, had explained monthwise, the cash deposits made in the savings bank account along with the corresponding sources. This explanation runs into ten pages. Cash memos with regard to the sales made of MS BARS was also furnished. The AO has not pointed out any defect or discrepancy in these details submitted by the assessee. The entire addition was based on the conditional surrender made by the assessee. The AO did not honour the condition of not levying penalty and went ahead and issued notice for levying penalty u/s 271(1)(c). The AO, in my view, should have entirely rejected the offer of the assessee and gone ahead with his finding based on evidence or, in the alternative, desisted from initiating penalty proceedings. In this case, the AO chose to accept only a part of the statement. As the submissions of the assessee vide letter dated 27.12.2011 were not factually controverted by any of the authorities, the addition made merely on the ground of disclosure cannot be sustained. The assessee has explained the source of each deposit with evidence and the AO has not found any fault in the claim made by the assessee. No defects were pointed out. Hence, the addition in question is hereby deleted. - Decided in favour of assessee
|