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Daswani Classes Versus ACIT, Circle-1, Kota

2016 (3) TMI 250 - ITAT JAIPUR

Penalty u/s 271(1)(c) - Held that:- The assessee has shown cash creditor of ₹ 4 lacs in the name of Smt. Veena Khatri, Indore. The assessee had not furnished confirmation before the Assessing Officer, at the time of quantum addition as well as at the time of imposing penalty. The payment received and repaid through banking channel does not make the transaction sacrosanct. The assessee also had not furnished copy of PAN, copy of return to prove the identity, genuineness and creditworthiness .....

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r the Respondent : Shri Kailash Mangal, JCIT ORDER Per T. R. Meena, AM This is an appeal filed by the assessee against the order dated 26/11/2012 of the learned C.I.T.(A), Ajmer for A.Y. 2004-05. The sole ground of appeal is as under:- "1. On the facts and in the circumstances of the case and in law the ld CIT(A) has erred in confirming penalty of ₹ 123600/- U/s 271(1)(c) of the Income Tax Act. The appellant prays that penalty imposed of ₹ 123600/- U/s 271(1)(c) of the Income Ta .....

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hatri, which was not produced by the assessee. As per the Assessing Officer, the assessee has not able to establish the genuineness of the transaction, the identity of the creditor and creditworthiness of the creditor. 3. Before imposing penalty U/s 271(1)(c) of the Act, the Assessing Officer gave reasonable opportunity of being heard, which was replied by the assessee vide letter dated 22/3/2010, which has been reproduced by the Assessing Officer in penalty order. It was submitted before the As .....

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n the account of Smt. Veena Khatri. There is no concealment in the above said transactions. Merely because it has been disallowed by the Assessing Officer and confirmed by the ld CIT(A), does not mean that the assessee has concealed any particulars of income. There being nothing to suggest that the assessee had concealed particulars of income. After considering this reply, the Assessing Officer has held that the assessee could not produce the confirmation from the cash creditor and other support .....

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him was bonafide and that he has disclosed all material fact necessary for the assessment, then explanation-1 to Section 271(1)(c) operates. Accordingly, he imposed penalty at ₹ 1,23,600/-, which is 100% of tax sought to be evaded on concealed income. 4. Being aggrieved by the order of the Assessing Officer, the assessee the matter before the ld CIT(A), who had confirmed the penalty by observing as under:- "I have considered contentions of the appellant as well as submission of the a .....

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proved. The claim that the transaction was through the banking channel does not in any case show that all the ingredients which are to be proved in respect of cash credits i.e. identity and creditworthiness of cash creditor and genuineness of the transaction have been proved. Further the assessee's contention that there has to be conscious concealment on the part of the assessee for the levy of the penalty is not acceptable as it has been held in the case of Union of India vs. Dharmendra Tex .....

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ealment, no penalty is leviable. The ld Assessing Officer neither in the assessment order nor in penalty order, no where stated or alleged or proved that the assessee has concealed particulars of his income or furnished inaccurate particulars of income in its return of income. He relied on the decision of Hon'ble Supreme Court in the case of CIT Vs Reliance Petro products (P) Ltd. 322 ITR 158 (SC). The judgment of Hon'ble Supreme Court is squarely applicable on the facts of the assessee& .....

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e is from Kota, Rajasthan. The loan was taken through account payee cheque and same had been repaid in later year by account payee cheque. The assessee was not known any whereabout regarding Smt. Veena Khatri. Despite the best efforts, he has failed to get details of her. However, the assessee had established the genuineness of the transaction. Hence only due to position beyond control of the assessee, it cannot be said that the said loan was bogus nor both the lower authorities has stated the s .....

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