TMI Blog2015 (11) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer and the CIT(A) recorded the finding that the assessee promised to produce the vouchers, which were not accounted in the books of account, failed to do so. It is a trite law that the onus always lies on the person who alleges in this case that it is the department who made an allegation that some vouchers found which were not accounted in the books of account. Therefore, it is the duty of the Revenue to prove that which vouchers were not accounted in the books of account. The Assessing Officer never brought any such vouchers on the record except making ipse dixit statement that some vouchers are found that apart, the Hon’ble Madras High Court in the case of CIT Vs. S. Khader Khan Sons, (2007 (7) TMI 182 - MADRAS HIGH COURT ) and the Hon’ble Kerala High Court in the case of Paul Mathews and Sons Vs. CIT, (2003 (2) TMI 25 - KERALA High Court) had clearly held that no addition can be made based on the mere statement. The decision of the Hon’ble Madras High Court was approved by Hon’ble Supreme Court in the case of CIT Vs. Khader Khand Son, (2013 (6) TMI 305 - SUPREME COURT) after granting the leave. That apart, the CBDT which is the apex body in administering the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iction and void abinitio. iv. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) on the additions made in the assessment order u/s 143(3) dated 24-12-2009 as these additions are also contrary to law and facts. v. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271 (l)( c) is bad in law being beyond jurisdiction and barred by limitation and contrary to the principles of natural justice and has been passed by recording incorrect facts and findings and without giving adequate opportunity to the assessee and without considering the submissions/evidences of the assessee and without providing any adverse material on record and the same is not sustainable on various legal and factual grounds. vi. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned penalty order framed by Ld. AO that too without recording mandatory satisfaction as per law. vii. That the assessee cra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred the matter to DVO who vide his report dated 16th December, 2009, stated that the construction of the property took place during the period from 1st February, 2003 to 13th March, 2006 which means there was no construction that took place during the previous year relevant to the assessment year under consideration. However, during the course of assessment proceedings, the appellant made application under the provisions of Section 144A of the Act to the Additional Commissioner of Income Tax for issuance of direction to the Assessing Officer on the matter. The appellant, apart from producing the evidence, reiterated the submission made before the Assessing Officer. The appellant filed the copies of licence issued by the Municipal Corporation, Delhi on 26th June, 2004 to run the business, property tax return of the building for the financial year 2003-04; new electricity connection and application for electricity connection to NDPL on 11th November, 2003; copy of the telephone connection to the MTNL on 9th January, 2003, and copies of completion certificate of building received from MCD, dated 25th October, 2004. Despite this, the appellant had agreed for the addition of ₹ 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... traction. In fact, in this case the surrender had been made was entirely on the basis of documents found in the Survey and subsequently the Assessee and his wife gave letters seeking retraction of the surrender on 25.10.2007. However, subsequently it is seen that as per the first two paragraphs on page 5 of the written submissions of the Appellant the retraction of 25.10.2007 was withdrawn. Thus in this case there was a surrender followed by a retraction which was followed by a withdrawal of the retraction. The abovementioned two paragraphs on page 5 of the written submissions of the Appellant have been typed in bold letters in this order on page 14 show that the Assessee withdrew the retraction during the assessment proceedings. In such a situation when the retraction has been withdrawn, there is no point in talking about the retraction as now it is clear that the Assessee has clearly admitted the unaccounted income invested in the construction of property. It is noteworthy that the Assessee himself has stated that the withdrawal of the retraction was done taking the advice of his Counsel. Thus in these circumstances the Assessee cannot even claim that the withdrawal of the retrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of 5% only. You are requested to enhance this deduction. The AR of the assessee also requested that the addition of ₹ 22,51,060/- on account of investment in the property as admitted in the statement during the course of survey be made and remaining difference be considered in the case of assessee' wife Smt. Kamini lain. Accordingly, the case was referred to the Addl. CIT, Range-20 for his directions u/s 144A for making proposed addition of ₹ 22,51,000/- on account of investment in the property on the basis of vouchers of expenses found at the time of survey. The Addl. CIT vide letter No. 1185 dated 23.12.2009 approved the proposed additions as per directions reproduced hereunder- On the basis of facts mentioned in your above referred letter as well as on personal discussion held in my chamber today, where the assessee's AR Shri Sanjay Aggarwal, CA was also present, the additions proposed by you in the case of Sh. Ashwani Kumar lain and Smt. Kamini lain are hereby approved. In view of all these facts noted above an addition of ₹ 22,51,000/- was made on account of unaccounted investment in construction of property as surrendered by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006-07. This amount was surrendered on the basis of certain vouchers found at the time of survey, copies of which were promised to be produced by the assessee before the AO within a couple of days but which were never produced. 8.6 Thus it is seen that the addition made on account of unexplained expenditure for construction of property was made not just on the basis of the statement or admission of the Assessee but rather there were vouchers which gave evidence for this unaccounted investment which were found during the course of Survey. These documents were to be produced by the Appellant before the Income Tax Authorities but were never produced. No benefit can be given to the Assessee for his own default. Further, it is seen that the addition was made not just on the basis of the admission of the Assessee and the vouchers found during the course of Survey but rather these were based on the actual unaccounted construction on the site which was determined by the Valuation Officer at ₹ 52,71,413/- but after seeking instructions u/s 144A from the Addl. CIT the addition was restricted to ₹ 45,02,000/-. Thus the addition made in the case is on the basis of 3 aspects ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or penalty proceedings the assessee could adduce any evidence in support of its claim. Accordingly, in view of the above facts and further deriving support from the judicial decision supra, 1 hold that the assessee has furnished inaccurate particulars of income and thereby concealed its income for the year under consideration. Consequently, as the default of the assessee U/S 271(l)(c) is established. 8.9 It is seen that the Assessee has tried to twist the facts of the case to claim that it was only on the basis of the statement of the Assessee that the addition was made and that the penalty was imposed only because the addition was made. However, this is not the case as seen above and it is held that the Assessee deliberately concealed the particulars of his income, and furnished in-accurate particulars of such income. It is seen that not only unaccounted construction in property was done by the assessee but also the Assessee very actively tried to evade the imposition of tax. The vouchers evidencing the unaccounted investment in construction were found during the Survey and the Assessee in an attempt to evade the taxes surrendered the income and promised to produce the vouc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on ble Kerala High Court in the case of Paul Mathews and Sons Vs. CIT, (2003) 263 ITR 101 (Ker.). He further submitted that no penalty is leviable and in respect of an item for which the addition was made based on the concession of the party and in support of this proposition, he relied on the decision of Hon ble Gujarat High Court in the case of National Textiles Vs. CIT, (2001) 249 ITR 125 (Guj.). He also submitted that no penalty can be levided based on the DVO s report as held by the Hon ble Supreme Court in the case of Dilip N. Shroff Vs. CIT, 291 ITR 519 (SC) and he finally submitted that the Assessing Officer himself was not sure as to what charge should be levelled against the appellant either for concealment of particulars of income or for furnishing of the inaccurate particulars of income. He submitted that the two are mutually exclusive and in support of this proposition, he relied on the decision of coordinate bench of ITAT, Ahmedabad, in the case of Assistant Commissioner of Income Tax Vs. Apsara Processors (P) Ltd., 27 ITD 411 and the decision of the Hon ble Gujarat High Court in the case of New Sarothia Engg. Co. Vs. CIT, 282 ITR 642 (Guj.). Therefore, according to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had clearly held that no addition can be made based on the mere statement. The decision of the Hon ble Madras High Court was approved by Hon ble Supreme Court in the case of CIT Vs. Khader Khand Son, (2013) 352 ITR 480 (SC) after granting the leave. That apart, the CBDT which is the apex body in administering the provisions of Income Tax Act had issued Circle dt. 10th March, 2003 to its officers that no addition can be made on mere statement of assessee without bringing any independent incriminating material on record. Therefore, in the light of the above decision, the very addition made by the Assessing Officer is not free from doubt. The mere disallowance cannot be a sound basis for imposition of penalty. In this regard, we place reliance on the decision of coordinate bench of ITAT, Bombay in the case of Boston Consulting Group (Indi) Pvt. Ltd., (2011) 12 taxmann.com 278/47; SOT 25 (Mum.) URO. Further, we find from the penalty order that the Assessing Officer had not given a finding as to how and in what manner the assessee had furnished the inaccurate particulars of income resulting in addition except making a bald charge against the assessee that it had furnished inaccurate par ..... X X X X Extracts X X X X X X X X Extracts X X X X
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