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2015 (7) TMI 404 - ITAT AHMEDABAD

2015 (7) TMI 404 - ITAT AHMEDABAD - TMI - Penalty levied u/s.271(l)(c) - addition made u/s.68 - Held that:- The only legal point which goes against the Assessee was that he has not furnished the evidences in support of the material facts pertaining to cash credits introduced in the books of account. In this case, the Assessee has offered an explanation giving reasons of his hardship of not producing certain confirmation letters, etc. Since the penalty proceedings are undisputedly a distinct proc .....

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ndings of the authorities below and direct to delete the penalty levied. - Decided in favour of assessee - ITA No.1107/Ahd/2011 - Dated:- 20-3-2015 - Shri Mukul Kr. Shrawat And Shri Anil Chaturvedi JJ For the Appellant : Shri Nimesh Yadav, Sr.D.R.. For the Respondent : S/Shri Parimal Singh and B. Parmar, A.R. ORDER Per: Mukul Kumar Shrawat, JUDICIAL MEMBER This is an Appeal filed by the Assessee arising from the order of learned CIT(A)-XX, Ahmedabad, dated 13.01.2011. The Appellant is aggrieved .....

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n was confirmed by learned CIT(A) in the first round vide an order dated 30th September, 2004. When the matter was carried before the Tribunal, it was restored back to the file of the AO vide order dated 13th of October, 2005. In consequence thereupon, the AO has passed a fresh assessment order as referred above, relevant paragraph is reproduced below: "From the above concerns and in respect of his personal account, assessee submitted separate balance sheet with original return of income. F .....

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- as per balance sheet of Om Steel nor has filed any confirmation inspite of repeated specific request since the assessee had failed to furnish the list of depositors/lender and also explanation about the nature and source thereof ₹ 1,91,96,156/- being the total amount of loans/deposits is charged to income-tax as income of the assessee of the previous year under consideration as per provision u/s. 68 of the IT Act, 1961. 3. Since the said addition was confirmed; hence again the Assessee p .....

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lant. It is claimed by him that ail other deposits are carried forward from the last year; but it is to be mentioned that the learned Authorised Representative of the Appellant at this stage also, before me, has not filed any confirmations and other evidences in support to prove the genuineness of creditors. As regards fresh credits during the year also, the Appellant is not in a position to file confirmations and supporting evidence to prove the genuineness of the credits ......... 5.3 (iii) Ke .....

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gned penalty u/s.271(l)(c) was imposed. Learned CIT(A) reproduced the submission of the Assessee; stating the past history of the case as under: "For the year under consideration, the appellant had filed Return of Income on 24/05/1999 declaring total income of ₹ 69,131/-, which was processed under section 143(1) (a) of the act. Subsequently the case was reopened under section 147 and re-assessment was finalized under section 144 r.w.s. 147 of the act on 07/03/2002 determining total in .....

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section 68 of the act, against which the appellant file an appeal before learned CIT(A), who has partly allowed the appeal of the appellant by confirming the addition to the extent of ₹ 7,25,8501- under section 68 of the Act. Subsequently the learned assessing officer-issued notice under section 271(l)(c) of the Act asking the appellant why the penalty should not be levied. In this connection, the appellant vide letter dated 19/03/2010 submitted the explanation for non-levy oj the penalty. .....

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a situation when the Assessee has not established the identity, creditworthiness in respect of the credits introduced during the year then the deposits remained unexplained which resulted into levy of concealment penalty. 7. Since the penalty was confirmed; hence, the Assessee is now again before us. 8. From the side of the Appellant, learned AR, Mr. Parimal Singh appeared. He has narrated in short that the assessment year involved was A.Y. 1989-90; hence due to lapse of so many years, almost o .....

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depositors. Rather, the Revenue Department had no evidence in its hand to demonstrate that there was any wrong statement of facts. Finally, he has also pleaded that now the question of penalty u/s.271(l)(c) in respect of addition made u/s.268 has been settled in Assessee's favour in the case of National Textiles vs. Commissioner of Income Tax, 249 ITR 125. 9. From the side of the Revenue, learned Sr.D.R., Mr. Nimesh Yadav has supported the levy of penalty and pleaded that the same was right .....

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portion of the loans taken but remained unsuccessful in respect of the small amount of ₹ 7,25,850/-. Even that could have been explained by the AO if the matter was decided in the year when for the first time a question was raised in respect of the deposits introduced by the Assessee. Now, after a lapse of more than 14 years it was very difficult for the Assessee to collect the source of investment of those depositors. This difficulty of the Assessee can be appreciated, considering sympat .....

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documents on record. The accountant, who had arranged the loans was not produced and it was stated that he had left the service as relations with him were strained. In this state of accounts and evidence in the quantum proceedings the Department was justified in treating the cash credits as income of the assessee, but merely on that basis by recourse to Explanation-1, penalty under 271(l)(c) could not have been imposed without the Department making any other effort to come to the conclusion that .....

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