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Dashratbhai Narandas Versus Income Tax Officer, Ward-1, Mehsana

2015 (12) TMI 1017 - ITAT AHMEDABAD

Penalty u/s. 271(1)(c) - addition u/s. 68 - Held that:- In the present case the assessee had disclosed the material facts before the AO. When the assessee has made a particular claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars thereof.

It is a settled legal pos .....

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n the absence of complete and convincing corroborative evidence, the Revenue may justify addition, but in the matter of penalty proceedings, the onus lies heavily on the Revenue to prove that the assessee had concealed its income or has filed inaccurate particulars of its income.

No penalty is leviable u/s 271(1)(c) and therefore direct its deletion. Decided in favour of assessee. - ITA No: 2788/AHD/2013 - Dated:- 30-10-2015 - SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER & SHRI S.S. GO .....

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for A.Y. 2009-10 on 11.05.2009 declaring total income at ₹ 1,45,660/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) vide order dated 09.12.2011 and the total income was determined at ₹ 04,87,170/- interalia by disallowing the claim of deduction and other additions. On the disallowance and the additions aggregating to ₹ 3,45,383/- that was made by A.O, he vide order dated 28.05.2012 held that Assessee had concealed the income .....

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of additional income but however confirmed the penalty on the addition of unsecured loan (Rs. 72,250/-) and addition of opening cash balance (Rs. 2,04,015) by holding as under:- 13. When the present case is examined in view of this legal position, it is found that in this case appellant failed to offer any explanation regarding opening cash balance ₹ 204,015/- before AO during assessment and penalty proceedings. Another addition of ₹ 72,250/- was made on account of unsecured loans s .....

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ce to express a view to the contrary. Now a days only a microscopic minority of returns are selected for detailed scrutiny. The taxpayers are aware of this and many of them try to take undue advantage of this by filing incorrect income. This tendency needs to be strongly discouraged. It is therefore necessary that concealment of income is penalized suitably so that it acts as effective deterrence for other taxpayers. Keeping in view all these facts, I hold that levy of penalty u/s. 271(l)(c) is .....

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ppeal before us and has raised the following grounds:- 1. The Id. Commissioner of Income Tax (Appeal): II, Ahmedabad [for short CIT (A)] has grievously erred in law and on facts in conforming the penalty u/s. 271(1)(c) on the agreed addition u/s. 68 of ₹ 72,250/- in total disregard of the facts of the case and additional evidence brought on record in the course of penalty proceedings. 2. The Id. CIT(A) has grievously erred in law and on facts in confirming the penalty u/s. 271(1)(c) on agr .....

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has raised two grounds but the solitary issue to be decided is about the levy of penalty u/s. 271(1)(c) of the Act. 6. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and with respect to the addition of unsecured loan of ₹ 72,250/- submitted that Assessee had received loan from Shri Rajendra Patel on 3.05.2008 and the same was also repaid by cheque on 01.09.2008. He further submitted that since Rajendra Patel was at that time residing in U.S.A. , Assessee was .....

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y the A.O was accepted by the Assessee and was not challenged in appeal. He submitted that merely because the addition has been accepted and not challenged the additions cannot be construed to be undisclosed income. He further submitted that the penalty proceedings and assessment proceedings are distinct and separate and merely because addition has been made would not make Assessee liable for penalty u/s. 271(1)(c) of the Act. He therefore prayed that the penalty be deleted. Ld. D.R. on the othe .....

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to Section. 271(l)(c) are that: (i) the person fails to offer the explanation, or (ii) he offers the explanation which is found by the AO or the ld. CIT(A) or the ld. CIT to be false, or (iii) the person offers explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him. If the case of any assessee falls in any of these three categories, then according to the deeming provision provid .....

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have been disclosed by him, then in that case penalty shall not be imposed. 9. In the present case the assessee had disclosed the material facts before the AO. When the assessee has made a particular claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars thereof. What is to be .....

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