GST Helpdesk   Subscription   Demo   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (9) TMI 320 - ITAT PUNE

2015 (9) TMI 320 - ITAT PUNE - TMI - Validity of assessment order u/s.153 C r.w.s.153 A - penalty u/s.271(1)(c) - Held that:- A Although various additions were made we are confined to the penalty levied on addition of ₹ 11,50,000/- made by the Assessing Officer u/s.68 of the I.T. Act and proportionate interest thereon amounting to ₹ 2,53,000/-.

Admittedly, apart from the addition of ₹ 5 lakhs no other addition has been made on the basis of incriminating material foun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the concerned loan creditors. This in our opinion may be sufficient for making addition in the quantum proceedings but certainly not in the penalty proceedings for levy of penalty u/s.271(1)(c) of the I.T. Act in an assessment framed u/s.153C r.w.s. 153A. In this view of the matter we hold that the assessee is not liable to penalty u/s.271(1)(c) of the I.T. Act on the amount of ₹ 6.50 lakhs since the same was not based on any incriminating material found during the course of search and the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

JM, JJ. For the Petitioner : Shri Sunil Ganoo & Shri K N Bora For the Respondent : Shri B. C. Malakar ORDER Per R. K. Panda, AM. This appeal filed by the assessee is directed against the order dated 22-08-2013 of the CIT(A)-II, Pune relating to Assessment Year 1998-99. 2. At the time of hearing the Ld. Counsel for the assessee did not press Grounds of appeal No.1 & 5 for which the Ld. Departmental Representative has no objection. Accordingly, the above 2 grounds are dismissed as 'no .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ed C.I.T.[A] has erred in confirming the penalty on alleged unproved loan of ₹ 11,50,000.00. The order of the leaned C.I.T.[A] being arbitrary, perverse and devoid of merits and based on presumptions and surmises the same may please be deleted. 4. The learned C.I.T.[A] has erred in confirming the penalty on interest of ₹ 2,53,000.00 on alleged unproved loan of ₹ 11,50,000.00. The order of the learned C.I.T.[A] being arbitrary, perverse and devoid of merits and based on presumpt .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rs), blank undated cheques duly signed by the borrowers. Some of the documents found during the course of search, i.e. promissory note along with blank cheque of ₹ 5 lakhs are related to the assessee firm. While passing the order u/s.153A in the case of Shri Shreeram H. Soni the fact of borrowing cash loan and payment of interest as mentioned in the seized document was proved. On the basis of such seized material and assessment order passed u/s.153A in the case of Shri Shreeram H. Soni, th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng Officer asked the assessee to furnish loan confirmations from those parties. The assessee failed to furnish loan confirmations of ₹ 5 lakhs taken from Shri Shreeram H. Soni. So far as the confirmations filed for the remaining loans, the AO noted that although the assessee has filed the confirmations which are new loans but these are without PAN Numbers and addresses. The details of such loans as mentioned by the AO at page 3 of his order are as under : Sl.No. Name of the party Amount 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

21,20,000/- 5. The Assessing Officer asked the assessee to prove the genuineness of the above loan transactions by giving their PAN Numbers, Bank Account extracts etc. In absence of any compliance of the above to the satisfaction of the Assessing Officer, the Assessing Officer held that assessee failed to prove the genuineness and credit worthiness of the lenders of these loans. He therefore made addition of ₹ 21,20,000/- u/s.68 of the I.T. Act. Further, he also made addition of ₹ 5 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unting to ₹ 8,16,977/- and estimated profit on sales at ₹ 13,55,816/-. He also disallowed donation of ₹ 35,052/-. After setting off the brought forward losses of the preceding assessment years amounting to ₹ 48,79,680/-, the Assessing Officer determined the total income at ₹ 19,28,545/-. 6. The assessee preferred an appeal before the CIT(A) contesting the addition of ₹ 21,20,000/- made u/s.68 of the I.T. Act. The assessee did not contest the addition of ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nal and the Tribunal upheld the view of the CIT(A) and dismissed the appeal filed by the Revenue. 7. Subsequently, the Assessing Officer initiated penalty proceedings u/s.271(1)(c) of the I.T. Act. Rejecting the various explanations given by the assessee the Assessing Officer levied penalty of ₹ 12,51,530/- on account of the following additions sustained : Unexplained cash credit u/s.68 (6,50,000 + 5,00,000) 11,50,000/- Disallowance of proportionate interest on the unexplained loans 2,53,0 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion of unexplained cash credit of ₹ 11,50,000/- and proportionate interest on unexplained loans of ₹ 2,53,000/-. While doing so, he observed that the assessee on its own has accepted the addition of ₹ 5 lakhs obtained from Shri Shreeram H. Soni. Similarly, the CIT(A) in the appellate order has confirmed the addition of ₹ 6,50,000/- being loan obtained from 2 persons. The confirmatory letters filed by the assessee during appellate proceedings with respect to Shri Santokch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in the books of the assessee, penalty is leviable u/s.271(1)(c) of the I.T. Act. 9. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 10. The Ld. Counsel for the assessee made two fold arguments. He submitted that the assessee had filed the original return disclosing the loan creditors. In response to notice u/s.153C the assessee filed the return. The issue of notice u/s.153C was based on some promissory notes of ₹ 5 lakhs found from the residence of Shri Shreera .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e reasons the assessee could not challenge the validity of the assessment u/s.153C in absence of any incriminating materials. But the fact remains that based on the creditors appearing in the balance sheet prior to the date of search penalty has been levied. 10.1 Referring to the decision of Hon'ble Bombay High Court in the case of CIT Vs. Continental Warehousing Corporation vide ITA No.523/2013 order dated 21-04-2015 he submitted that the Hon'ble High Court in the said decision after co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

come or undisclosed property discovered in the course of search. 10.2 Referring to the copy of the audited profit and loss account and balance sheet filed along with the original return the Ld. Counsel for the assessee drew the attention of the Bench to pages 11 and 12 of the audited accounts which gives the details of loans and advances. He submitted that all the cash credits added by the Assessing Officer appear in the loans and advances account filed along with the original return of income. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s not proved the loans to be bogus. Referring to the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Upendra V. Mithani vide ITA No.1860 of 2009 the Ld. Counsel for the assessee drew the attention of the Bench to the following: "The issue involved in the appeal revolves around deletion of penalty u/s.271(1)(c) of the I.T. Act. The Tribunal has concurred with the view taken by the Commissioner of Income Tax (A). The Commissioner of Income Tax (A) has rightly taken a view .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ance. The same is dismissed in limine with no order as to costs." He accordingly submitted that in absence of any categorical finding by the Assessing Officer that the loan creditors are bogus no penalty u/s.271(1)(c) can be levied. 11. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that the assessee was unable to prove the identity and credit worthiness of the loan creditors and the genuineness of the transactions. Therefore, p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

uments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find during the course of search at the premises of one Shri Shreeram H. Soni blank promissory notes (singed by the borrower) and blank undated cheques duly signed by the borrowers were found which contain the promissory note along with the blank cheque of ₹ 5 lakhs relating to the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on in the quantum appeal. However, the fact of obtaining loan from Shri Shreeram H. Soni was found from the premises of Mr. Soni in shape of blank cheque of ₹ 5,00,000/- and blank promissory note and based on the seized documents/papers notice u/s.153C r.w.s. 153A was issued to the assessee. The loan obtained from Mr. Soni was already reflected in the balance sheet filed alongwith the original return of income which was filed prior to the data of search. Merely because the assessee did not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version