TMI Blog2015 (12) TMI 121X X X X Extracts X X X X X X X X Extracts X X X X ..... deposited the amount of ₹ 14 lacs in the bank and before us it was stated that the assessee purchased miscellaneous assets which were later on sold and the amount was deposited in the bank. There is no evidence to show the existence of any miscellaneous assets therefore explanation given by the assessee is totally false. This is not a case of full disclosure of facts therefore penalty confirmed - Decided against assessee. - ITA No. 737/Chd/2014, ITA No. 735/Chd/2014 - - - Dated:- 7-11-2014 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R. SOOD, ACCOUNTANT MEMBER For the Appellant : Shri Rakesh Jain For the Respondent : Shri. Rajeev Kumar ORDER PER T.R.SOOD, A.M. This is an appeal filed by the Assessee against the order dated 05/12/2013 of CIT (Appeals), Karnal. 2. In this appeal assessee has raised the ground which is mentioned below: Because the action of upholding the levy of penalty of ₹ 6,53,882/- u/s 271(1) (c) of the Income Tax Act, 1961 is being challenged on facts and law while relying upon the decision reversed by the Hon ble Jurisdiction High Court. 3. After hearing both the parties we find that the survey was conduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the income declared during the survey. Assessing officer noted at the time of survey physical cash was only ₹ 6500 therefore no cash was available and therefore he made addition of ₹ 14 Lacs and initiated penalty proceedings under section 271(1)(c). 5. It seems later on the Ld. CIT(A) on appeal reduced the addition ofRs. 11,62,215/- on account of loss of sale of paddy to ₹ 5,47,639/- and addition on account of loss of sale of rice amounting to ₹ 6,38,241/- was reduced to ₹ 34,743/-. The addition on account of surrender amount and unexplained cash was upheld the order of Ld. CIT(A). Assessee as well as revenue challenge the order of Ld. CIT(A) before the Tribunal. The Tribunal confirmed the order of Ld. CIT(A). 6. In response to the show cause notice for levy of penalty it was submitted as under : It is respectfully submitted tht the assessee did not furnish inaccurate particulars of his income nor concealed his income. The assessee filed his return of income in time and duly paid the tax on it. The assessment was made u/s 143(3) of the IT Act in which some additions were made on the basis of alleged under billing in sales without any basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y has accepted the amount of sales in the said Sales Tax Assessment. In respect of the surrendered amount it was submitted that AO has accepted the surrender then naturally the assessee would deposit the cash. Reliance was also placed on certain case laws. 9. The Ld CIT(A) considered the submissions and referred to the observations in the quantum proceeding. She also referred to the survey report and observed that no surrender was made on account of cash therefore, clearly cash was not available. Ultimately she observed that decision of Hon ble Supreme Court in case of Mak Data P. Ltd. Vs. CIT, 358 ITR 593 was applicable and therefore upheld the action of the Assessing officer. 10. Before us Ld. Counsel for the assessee submitted that as far as the issue of selling of paddy and rice at lower price is concerned, the assessee was hard pressed to sell the same because there was tremendous pressure from sundry creditors as assessee owed the sum of rupees more than 90 lacs to the various sundry creditors. In any case the sale transactions have been accepted by the Sales Tax Authority. The addition has been finally made by the Ld. CIT(A)on estimate basis and therefore penalty provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the assessee. The surrender letter referred to by the Ld. Counsel for the assessee which is available at page 143 of the Paper Book which reads as under : To, The Joint Commissioner of Income Tax, Kurukshetra Range, Kurukshetra Subject: Survey under section 133-A(1) of IT Act 1961 conducted at M/s Mahavir Trading Company, Kurukshetra on 19.01.2007 Respected Madam, This is in response to the survey conducted at the business Premises of M/s Mahavir Trading Company at Kurukshetra on 19.01.2007 discussed with your goodself. That during the course of survey proceedings certain discrepancies were found interest he books of account, loose papers, stock of various products byproducts various other records and documents. That the assessee firm voluntarily surrenders a sum of ₹ 14.00 lacs (Fourteen lacs ) as additional income for the financial year 2006-07 relevant to assessment year 2007-08 to cover up all alleged discrepancies in the books of account, loose papers, documents, stock, byproducts and other records. On document D-2 outside it is written M/s Atma Ram Sushil Kumar on document D-6 it is written M/s Jain Rice Mill but both pertain to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct AO to levy penalty only on ₹ 14 lacs addition. 20. In the result appeal of the assessee is partly allowed. ITA No. 735/Chd/2014 1. This is an appeal filed by the Assessee against the order dated 05/12/2013 of CIT (Appeals), Karnal. 2. The facts and issues raised in this appeal are identical and Ld. Counsel for the assessee submitted that decision in case of ITA No. 737/Chd/2014 may be followed here. In this case also penalty has been levied on three items i.e; sale of rice at lower price amounting to ₹ 6,03,708/-, Item no. 2 addition on account of sale of rice at lower price amounting to ₹ 1,97,364/- and sum of ₹ 5,30,000/- deposited in cash. Following the order in case of ITA No. 737/Chd/2014 we hold that no penalty is leviable on the addition which were reduced by the Ld. CIT(A) on account of sale of rice and sale of paddy at lower price. However, following the above order the penalty is leviable in respect of ₹ 5,30,000/- deposited in cash in the bank. 3. In the result appeal of the assessee is partly allowed. In the result appeals of both the assessee s are partly allowed. Order pronounced in the Open Court on 07/11/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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