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2015 (5) TMI 505 - ITAT AHMEDABAD

2015 (5) TMI 505 - ITAT AHMEDABAD - TMI - Penalty levied u/s 271(1)(c) - unexplained assets - Held that:- So far the gold ornaments are concerned, the assessee has given the proper explanation for the source of gold ornaments in respect of each and every assessee. The Assessing Officer substantially accepted the assessee’s explanation and treated only a small part of the gold ornaments to be unexplained. Therefore, in our opinion, the assessee has given proper explanation in respect of the gold .....

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vestment in KVP, NSC and SBI Bond. The only explanation for cash in hand was that it belongs to various family members and the savings is out of the withdrawal for household expenditure in the preceding year. We have seen that the withdrawal by the assessee in the preceding year is meager with which the assessee would be able to manage the household expenses only and would not be able to save much. No evidence has been given that the part of the cash belongs to the family members. The Assessing .....

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lry was not justified while the levy of penalty in respect of unexplained cash and investments in KVP, NSC, SBI Bond was justified. - Decided partly in favour of assessee. - IT(SS)A No.661/Ahd/2011, IT(SS)A No.662/Ahd/2011, IT(SS)A No.663/Ahd/2011, IT(SS)A No. 664/Ahd/2011, IT(SS)A No. 665/Ahd/2011, IT(SS)A No. 666/Ahd/2011, IT(SS)A No. 667/Ahd/2011, IT(SS)A Nos. 668 to 672/Ahd/2011, IT(SS)A No. 672/Ahd/2011 - Dated:- 17-4-2015 - Shri G.D. Agrawal And Shri S. S. Godara JJ. For the Appellant : Sh .....

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irmation of the penalty levied u/s 271(1)(c) by the ld. CIT(A). The name of the assessees, assets which are treated as unexplained and the penalty levied are tabulated at Annexure-1 appended herewith the order. 3. At the time of hearing before us, the ld. Counsel for the assessee argued at length. His main submission was that the gold ornaments were acquired by the various assessees and their spouse and children in the preceding year. The Assessing Officer treated the small portion of the gold o .....

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mily members have sufficient income from past many years and substantial withdrawal for household expenses. He also submitted that the assessee did not file the appeal against the additions made by the Assessing Officer for unexplained jewelry or cash so as to end the litigation and to buy peace. That merely because the additions have been accepted by the assessee, it should not automatically result into the levy of penalty u/s 271(1)(c) of the Act, especially when the assessee had given the pla .....

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celled. 4. The ld. Departmental Representative, on the other hand, relied upon the orders of the authorities below. 5. We have carefully considered the arguments of both the sides and perused the material placed before us. So far as the gold ornaments are concerned, we find that significant part of the gold ornaments have been accepted by the Assessing Officer as explained in the case of all the assessees and only a very small portion is treated as unexplained. For example, in the case of Atulbh .....

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ial portion of the gold ornaments found from the assessee have been accepted and only a small portion of which is treated as unexplained on estimated basis. This by itself does not amount to concealment of income. The assessee has given the plausible explanation in respect of all the gold ornaments found with them and merely because the Assessing Officer partly accepted the gold ornaments to be explained, it would not be proper to levy the penalty u/s 271(1)(c) in respect of the small portion of .....

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fficer has given sufficient credit for the cash which can be presumed to have been belonging to various family members. Despite giving the above credit, more than 50% of the cash found from each person is treated as unexplained which is accepted by the assessee by not filing the appeal. The assessees contention is that the substantial withdrawals are for household expenses and therefore, the accumulation of cash is out of saving from house hold withdrawal. This explanation of the assessee cannot .....

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withdrawal during the accounting year relevant to assessment year 2001-02 to 2003-04 was less than ₹ 10,000/- per month and in other years also it is less than ₹ 20,000/- per month. While the total cash found from Shri Onilbhai N. Patel was ₹ 4,72,900/-, out of which ₹ 3,52,900/- have been treated as unexplained; in addition to which, the investment made by Shri Onilbhai N. Patel in the preceding year, without recording in the books of accounts was ₹ 60,000/- in Ki .....

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treated as unexplained. At page No.20, the CIT(A) has given the year-wise withdrawal which is reproduced below for ready reference:- Ass Year Total withdrawals during the year Cash withdrawals during the year 2007-08 230658 135000 2006-07 122635 77500 2005-06 103309 60000 2004-05 127298 99000 2003-04 124385 95000 2002-03 115514 110000 2001-02 88373 79000 Total 912172 655500 From the above, it is evident that his cash withdrawal was less than or around ₹ 10,000/- per month, while total wit .....

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al are as under:- Ass Year Total withdrawals during the year Cash withdrawals during the year 2007-08 537973 149000 2006-07 521256 15000 2005-06 59759 43000 2004-05 50630 46000 2003-04 113663 28000 2002-03 29117 21000 Total 1312398 302000 His cash withdrawal is less than ₹ 5,000/- per month in 5 years, and in only one year it is around ₹ 12,000/- per month. In the above circumstances, in our opinion, the Assessing Officer was fair enough in accepting the cash of ₹ 1,00,000/- to .....

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years his cash withdrawal was only ₹ 5000/- per month and in other two years also it is less than ₹ 10,000/- per month. In the above circumstances, in our opinion, the Assessing Officer was quite fair in accepting the cash of more than a lac as explained and treated the balance cash of ₹ 1,61,000/- as unexplained being the undisclosed income of the assessee. No proper explanation has been given by the assessee during the penalty proceedings also in respect of unexplained cash f .....

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the assessee has given proper explanation in respect of the gold ornaments which is not found to be false or untrue, though the Assessing Officer accepted the assessee s explanation partially on estimated basis. In the above circumstances, in our opinion, levy of penalty in respect of part of the gold ornaments which are treated as unexplained is not justified. However, the facts are different in respect of cash found and investments in other assets like KVP, NSC and SBI Bond. No proper explana .....

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