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2020 (4) TMI 554 - AT - Income TaxPenalty u/s 271(1)(c) - unexplained investment u/s.69 - as contended that assessee had deposited cash, out of the sales proceeds of Art Silk Cloth and also withdrawn money from the said bank account for payment of purchase of Art Silk Cloth - assessee was not maintaining any books of accounts, therefore requested to treat the above account as retail business account and club the income from retail business u/s.44AF - HELD THAT:- In case addition is made on the basis of peak working and on the same estimated income is assessed, then, in that eventuality, no penalty is leviable and moreover once the assessee himself has submitted that the above account be treated as retail business account and club the income from retail business u/s.44AF of the Act. Then, obviously the additions at the most could be made on the basis of estimation. And, therefore, in that circumstance, no penalty is leviable. Revenue has failed to make any such enquiry and as stated earlier no corresponding unaccounted asset belonging to assessee has been found and therefore, following the ratio of SHRI OJAS ASHOKBHAI MEHTA VERSUS ITO, WARD 3 (1) , SURAT. [2013 (8) TMI 1127 - ITAT AHMEDABAD] the explanation of assessee is required to be treated as bonafide and consequently no penalty u/s 271(1)(c) can be imposed in view of explanation to section 271(1)(c) of the Act and we have also considered that merely because additions have been made & the same is confirmed in first appeal, it does not at all mean that penalty for concealment of income is automatically required to be imposed. Explanation 1 to section 271(1)(c) only raises rebuttable presumption, which can be discharged by assessee on balance of probability. The penalty can be justified only if assessee fails to offer an explanation or his explanation is found to be false. If these circumstances are not present, the penalty can be avoided if assessee is able to substantiate his explanation. Respectfully following the aforesaid decision of the Co-ordinate Bench and decision of Hon'ble Gujarat High Court decision CIT Vs. President Industries [1999 (4) TMI 8 - GUJARAT HIGH COURT] we are of the considered opinion that present penalty does not survive - Decided in favour of assessee.
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