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2015 (7) TMI 202 - ITAT AHMEDABAD

2015 (7) TMI 202 - ITAT AHMEDABAD - TMI - Penalty u/s. 271(1)(c) - unexplained peak credit - Held that:- It is not in dispute that the undisclosed bank account which was detected by the department contains transfer entries to other 5 undisclosed bank accounts maintained by the assessee. In view of this fact the Tribunal concluded that the subsequent disclosure of the assessee of existence of the said 5 bank accounts cannot be held as voluntary. We do not find any error much less an apparent erro .....

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cable in the instant case wherein expressly stated about the provisions of Section 271(1)(c) of the Act. Additions made on the basis of estimation may be one of the grounds on which discretion not to impose penalty may be exercised. However, in the absence of any requirement to prove the concealment or furnishing of inaccurate particulars found in section 271(1)(c) of the Act cannot form the sole basis to delete penalty imposed by the Assessing Officer and confirmed by the Commissioner (Appeals) .....

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neous Applications filed by the assessee against the consolidated order of the Tribunal dated 30-6-2014 passed in I.T.A.No.1272 & 1273/Ahd/2011 for the A.Y. 1991-92 AND 1992-93. 2. The grievance projected in the Miscellaneous Petition filed by the assessee reads as under:- 1. The applicant above-named has downloaded on 8-8-2014 with the order passed by the Appellate Tribunal Bench -C, Ahmedabad for A.Y. 1991-92 in ITA No.1272/Ahd/11 whereby the appeal of the Applicant has been dismissed. It .....

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cted other five bank accounts. 2. In the humble submission of the applicant, the apparent error is as under:- 2.1. The applicant submits with utmost respect that the finding given by Hon ble Tribunal that the source of deposit in said bank accounts was not explained by the assessee-applicant is not factually correct in as much as it would be noticed from the assessment order itself that while explaining the modus operandi it was pointed out as under:- With initial capital contribution of several .....

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that the assesseeapplicant by letter dated 1-12-1995 brought to the notice of ADIT(INV) about the existence of further bank accounts. Had the Dept. Knowledge about the same,. They would have been referred to earlier by ADIT (INV) while recording applicant s statement. Even the disclosure made by the applicant before ADIT (INV) did not pertained to the peak credit for this year under consideration. This year was reopened as a result of assessment made for A.Y. 1993-94 wherein peak credit for thi .....

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f peak of undisclosed bank account... The applicant submits with utmost respect that the facts of the present case are similar to those cases in the sense that the addition of peak credit of bank accounts found out was made and the penalty levied thereon was deleted. The applicant s case is on much stronger footing that it is not the case of search and other bank accounts were disclosed by the present applicant to Dept. 2.4. The applicant submits with utmost respect that the reliance placed by H .....

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decisions. 2.6. It is therefore, prayed that the inadvertent factual errors as pointed out hereinabove may please be rectified and the ultimate order of the Hon ble Tribunal may please be modified in light of the correct facts as well as position in law. 3. Order of the Tribunal reads as under:- 1. These are the appeals filed by the assessee against the order of the Commissioner of Income Tax (Appeals)-XX, Ahmedabad dated 04.02.20111. 2. The sole ground taken in both the appeals by the assessee .....

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and ₹ 36,880/- in Assessment Year 1992-93. Thereafter, it was found on investigation by the Department that the assessee was having certain bank accounts which were not disclosed to the Department. Accordingly, the peak balance in the undisclosed bank accounts were treated as income of the assessee. 4. The Assessing Officer completed the assessment by determining assessee s total income at ₹ 3,19,480/- in the Assessment Year 1991-92 and at ₹ 5,77,070/- in Assessment Year 1992-9 .....

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, the Authorized Representative of the assessee submitted that as the addition was made of the peak amount of the respective assessment years, the addition was on estimate basis and therefore penalty u/s. 271(1)(c) cannot be levied. He, in support of the above contention, relied upon the decision of this Bench of the Tribunal in the case of Murarilal Ratanlal Agarwal Vs. ACIT in IT(SS)A No. 573 & 615/Ahd/2012 Assessment Year 2004- 05 order dated 05.07.2013 and in the case of Shri Ojas Ashokb .....

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enalty u/s. 271(1)(c) should not have been levied in respect of income assessed on the basis of those five bank accounts. 10. The Departmental Representative supported the orders of lower authorities. 11. We find that it is not in dispute that the six bank accounts with reference to which addition was made by the Assessing Officer were not disclosed by the assessee in its return of income. The source of deposit in the said bank accounts could not be explained by the assessee. In the above circum .....

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eak balance in the bank account for which no plausible explanation about the source of the same could be given by the assessee. Therefore, such decisions are found to be not applicable in the instant case. 12. Further, in this connection we would like to quote the decision of the Hon ble Gujarat High Court rendered in the case of CIT Vs. Becharbhai P. Parmar (2012) 341 ITR 0499 (Guj.) wherein the Hon ble High Court has held as under: Penalty corresponding to the addition of ₹ 17.22 lakhs w .....

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lars found in section 271(1)(c) of the Act cannot form the sole basis to delete penalty imposed by the Assessing Officer and confirmed by the Commissioner (Appeals). 13. Further, we also do not find merit in the alternative argument of the assessee because the other five bank accounts which were also not disclosed in the return had transfer entries to the one undisclosed bank account which was already detected by the Department. Thus, the disclosure of the other five undisclosed bank accounts by .....

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e material available on record. According to the Authorised Represetative of the assessee the assessee explained the source of deposit in its 6 undisclosed bank account and the same is evidenced by the following finding in the assessment order. With initial capital contribution of several persons named above I have made investment in shares and securities of funds initially contributed in cash is employed by way of cash deposits in different bank accounts particulars whereof are disclosed with t .....

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not actually correct because in the reasons recorded for reopening of the assessment of the years under consideration, the reasons recorded shows that the assessee vide its letter dated 1-12-1995 brought to the notice of the ADIT about the existence of the further bank account. 7. We find that it is not in dispute that the undisclosed bank account which was detected by the department contains transfer entries to other 5 undisclosed bank accounts maintained by the assessee. In view of this fact t .....

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e cases were that penalty was levied in respect of difference in peak deposit as disclosed by the assessee and peak deposit as estimated by the department in undisclosed bank account and in the instant case no penalty was levied in the difference between the peak deposit as disclosed by the assessee and peak deposit as estimated by the department. 9. We find that in those cases it was not at issue that whether penalty u/s. 271(1)(c) is leviable in respect of the income which has been added to th .....

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