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2015 (9) TMI 1169 - ITAT MUMBAI

2015 (9) TMI 1169 - ITAT MUMBAI - TMI - Penalty levied u/s 271(1)(c) - Held that:- The assessing officer issued the penalty notice without specifying the charge under which the notice was issued. Before us, the Ld D.R could not distinguish the above said decision. Hence, on this legal ground also, the assessee’s appeal is required to be allowed.

In view of the foregoing discussions, we set aside the orders passed by Ld CIT(A) for both the years under consideration and direct the asses .....

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-08 and 2008-09. 2. The assessee is aggrieved by the decision of ld.CIT(A) in confirming the penalty levied in both the years u/s 271(1)(c) of the Act. 3. The facts relating to the issue are stated in brief. The Revenue carried out the search and seizure operation under section 132(1) of the Act in the hands of the assessee on 22.01.2009. During the course of search proceedings, it was noticed that the assessee has claimed expenditure in respect of commission paid to two parties namely (a) M/s N .....

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tion 132(4) of the Act, the assessee submitted that the above said commission payments were made to persons who gave the lead for the contract works obtained by the assessee and such kind of commission payments are normal. He submitted that he got the work of ICICI, India Bulls and Cloud Nine, which was to the tune of about ₹ 100 crores, through M/s Nischal Corporate services private limited He further submitted that he got the work of Chennai and Bangalore projects of M/s Carmen Builders .....

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through an Inspector located Kolkatta revealed that the office of the above said company generally remains closed. In reply, the assessee submitted that he had given the cheque in the name of the concerns as sought by the concerned person, who brought the work. The assessee further submitted that he does not normally verify the bonafides of the company, since huge contract work was brought by them. He further submitted that he had not received cash against the cheque so given and accordingly con .....

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ome and the same was also accepted by the AO. 5. The AO initiated penalty proceedings in both the years under consideration and accordingly levied the penalty u/s 271(1)(c) of the Act on the commission expense surrendered by the assessee, with the reasoning that the assessee would not have offered these amounts, had there been no search and the same proves the malafide intention on the part of the assessee to conceal true and correct income. 6. In the appellate proceedings, the ld CIT(A) also co .....

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.Ltd. and M/s.Nishchal Corporate Services Pvt. Ltd. To whom we had made payments. I have also been told by you about certain facts about genuineness of payments. I have made payments to these companies as per request of persons who has got me the work. It is my inability as of now to produce these parties to support my contention that the payments are for genuine business purpose. However, I am once again saying that I have not received cash from anyone, else you would have found unaccounted inv .....

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peace of mind and on the condition that there will not be any adverse consequences including penalty and/or prosecution I offer a sum of ₹ 4 crores as income which will take care of the alleged bogus payments, the excess and possible any other discrepancies in any payment and/or jewellery the year wise breakup of the additional income being offered is as under: Financial Year Asstt.Year Amount (Rs.In lakhs) 2006-07 2008-09 200 2007-08 2008-09 150 2008-09 2009-10 50 Since I have co-operate .....

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rovided with all the material on the basis of such adverse inference is sought to be made, including-but not limiting- the following:- (a) Copy of statement taken of the Mr. Sandeep Sitlani of M/s Nishchal corporate services Pvt Ltd. (b) Copy of the Report of Inspector of Addl. DDI, Kolkatta (c) Any other material relied upon by the AO. 9. Thus, we notice that the case of the assessee is that the impugned commission payments were genuine. Further they have been paid along with service tax by way .....

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and for AY 2008-09 was ₹ 69.56 crores. This shows the level of operation of the assessee. We notice that the assessee has been repeatedly claiming before the search officials that the commission payments were genuine and further, if had been accommodation bills, he should have received corresponding amount by way of cash. He has repeatedly submitted that he did not receive any cash and the said submission is also corroborated by the fact that the revenue did not unearth huge amount of cas .....

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fice of M/s Twinkle Vanijya Pvt Ltd. The assessee has also sought any other materials on the basis of which adverse inference was drawn by the AO. However, we notice that the assessee was not provided with all the above said documents. Accordingly, we are of the view that the surrender of commission expenditure would not automatically lead to the malafides of the assessee as presumed by the assessing officer, since the assessing officer has not afforded an opportunity to the assessee to contradi .....

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out the genuineness of the payments at the time of search proceedings on the basis of enquiries conducted by them. However, the assessee has all through maintained that the payments were genuine. In support of the same, the assessee has stated that the payments were made by way of cheque, TDS were deducted and the service tax was also paid. Hence, in our view, it cannot be said that the explanation of the assessee was found to be false. Though the AO has expressed the view that the admission of .....

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he time of initiation of penalty proceedings. He submitted that the above said notice issued for concealment of particulars of income or furnishing of inaccurate particulars of income . He submitted that the assessing officer has not specified that as to which limb the notice was issued, i.e., whether it is issued for concealment of particulars of income or furnishing of inaccurate particulars of income. The Ld A.R contended that the assessing officer should be clear about the charge at the time .....

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