TMI Blog2014 (1) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee as to how the penalty is not leviable and there is a clear cut case of concealment of income as well as furnishing of inaccurate particulars of income - As per explanation 1 to Section 271(1), if the explanation is given, which is not found to be false and some other conditions are fulfilled by the assessee, it can be said that 271(1)(c) is not applicable - no explanation is given by the assessee – Thus, Section 271(1)(c) is clearly applicable – Decided against Assessee. Applicability of Section 41(1) of the Act – Held that:- Penalty in respect of this addition is not justified because such liability is appearing in the balance sheet of the assessee - it cannot be said that the liability has conclusively ceased to exist and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Without prejudice to the above the Ld. Commissioner of Income Tax (Appeals)-IV, Ahmedabad has further erred in law and in facts in confirming the action of the Ld. A.O. in the levy of penalty u/s.27(1)(c) on the failure to: (a) Substantiate the credits in terms of Sec.68 of the I.T. Act amounting to Rs. 6,35,000/- is concealment of particulars of income and (b) Satisfactorily explain the source of investment of Rs.2,16,838/- is furnishing of inaccurate particulars of income. The penalty so confirmed on such additions is prayed to be cancelled". 3. Your appellant craves liberty to add, alter, amend or substitute or withdraw any of the grounds of appeal hereinabove contained. 4. Similarly, the grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the A.O. that the assessee did not only conceal the particulars of its income but also furnished inaccurate particulars of such income, and therefore, the objection of the A.O. did not specify as to whether assessee has concealed the income or has furnished inaccurate particulars of income, and therefore, the penalty order in both the years is bad in law as per the decision of Hon ble Gujarat High Court rendered in the case of New Sorathia Engineer Co. Vs. CIT reported in (2006) 282 ITR 0642, and therefore, the same may be quashed in both the years. 6. In reply, learned D.R. for the revenue supported the order of authority below. It was submitted by learned D.R. that as per the judgment of Hon ble Gujarat High Court rendered in K.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cannot be said that the allegation of the A.O. is not specific. Hence, in our considered view, we find that in the facts of the present case, this issue is covered in favour of the revenue and against the assessee by the judgment rendered in K.M. Shah (supra) and other two judgments of Hon ble Gujarat High Court in case of New Sorathia Engineering Co. (supra) and Manu Engineering (supra) are not applicable in the present case. For the same reason, the Tribunal s decisions cited by the learned Counsel for the assessee and copy furnished in the paper book are also not applicable in the present case because the tribunal s decision has followed the judgment of Hon ble Gujarat High Court rendered in the case of New Sorathia Engineer Co. (supra). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent order, we find that it is noted by the A.O. in paragraph 4 of the assessment order that the assessee has shown unaccounted income of Rs.2,24,222/- in the profit loss account. We further noted that the assessee had explained that he has reconciled the Auto Sweep Account in Kotak Mahindra Bank Ltd along with the bank statement and accordingly, excess credit appearing in the Auto Sweep Account with the Kotak Mahindra Bank Ltd., which represented the interest income credited by the bank in the past as well as for the year under consideration and therefore, the same is credited under the head unaccounted income because the assessee was not knowing as to which portion of this income is related to which year. In addition to this, there is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both years, the assessee has not even made an attempt to fulfill the requirement of law by establishing the identity and creditworthiness of the loan creditors and genuineness of the transaction. There is one more addition, i.e., regarding unaccounted income credited by the assessee and not declared the same for tax purpose and similarly the assessee had negative cash balance in Assessment Year 2008-09 shown under that head in Balance sheet without including the same in the income of the assessee. There is no explanation of the assessee as to how the penalty is not leviable and there is a clear cut case of concealment of income as well as furnishing of inaccurate particulars of income. As per explanation 1 to Section 271(1), if the explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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