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DCIT- Range- 9 (1) , Mumbai Versus M/s Amore Jewels P Ltd.

2016 (4) TMI 563 - ITAT MUMBAI

Penalty under section 271(1)(c) - addition on share application money received from five companies - Held that:- during the course of penalty proceedings, the assessee vide letter dated 19th March, 2012 has again furnished the entire details and submitted that, assessee has discharged its onus by submitting the evidences to substantiate its claim; like, copy of confirmation letters from these companies; copies of Bank statement showing the transaction of share subscription money; copies of audit .....

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ality, however in the penalty proceedings, assessee may chose to rely upon the same material to prove that he has not guilty of furnishing of concealment of income. The Explanation 1 to section 271(1)(c) raises rebuttable presumption and once the assessee has furnished all the evidences in support of its explanation and has substantiated his claim then the onus cost upon him is discharged and onus then shifts upon the AO to prove that such an explanation or evidence is false. Here in this case t .....

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Mum/2013 - Dated:- 4-3-2016 - SHRI RAJENDRA, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER For The Appellant : Shri Rajendra Kumar For The Respondent : Shri Rajeshmal Lodha PER AMIT SHUKLA, JM: The aforesaid appeal has been filed by the revenue against impugned order dated 22.10.2010, passed by Commissioner of Income Tax (Appeals)-19, Mumbai [CIT(A)] in relation to the penalty proceedings under section 271(1)(c) for the assessment year 2007-08. 2. The revenue is aggrieved by cancelling .....

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eived from Smt Nirmala Barmecha, however, in respect of following five companies share application money received was confirmed by the CIT(A) under section 68, as unexplained credit:- 1. Coromandal Merchants P. Ltd. 2. Maple Mercantile P. Ltd. 3. Certicare Marketing P. Ltd. 4. Ziwani Barter P. Ltd. 5. Devraaj Mercantile P. Ltd. The addition of ₹ 38,75,000/- on account of share application money from above stated companies have also been confirmed from the stage of the Tribunal also. 4. Bef .....

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her, at the stage of the Tribunal, the assessee had filed copies of on audited Balance Sheets, profit and loss account of these companies for the year ending 31st March, 2009 and also copy of company master details from the site of Ministry of Corporate Affairs. All the said document goes to prove that, so far as the assessee is concerned, the entire onus stood discharged. Now, in the quantum proceedings, the addition has been confirmed only on the ground that the addresses of these companies we .....

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n of income filed; confirmation letter; Form No. 2 filed with the Registrar of Companies; PAN card , etc. Thus, the onus of the assessee stood fully discharged and accordingly, no penalty can be levied under section 271(1)(c) for furnishing of inaccurate particulars or for concealment of income. 5. On the other hand, Ld. DR strongly relied upon the order of the AO and submitted that, once the addition has been confirmed the penalty has rightly been levied. 6. The Ld. CIT(A) has deleted the penal .....

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Investment in share capital made by the five entities listed earlier. Penalty has been levied on this confirmed addition. Coming to the observations of the AO, it seem that his observation in para no. 4 of the order to the effect that no documentary evidences has been furnished to establish the genuineness of the transactions or the creditworthiness of the shareholder-companies is misplaced. This is so because in the same paragraph the AO has mentioned that the perusal of the bank statements of .....

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question, it is hence clear that the AO was in possession of specific documents which point towards the genuineness of the transactions as also the existence and creditworthiness of the companies. 5.1 I have also gone through the bank accounts of all the five companies for the month of July, 2005 in which all these transactions of investment are stated to have taken place. It is clear that all the five companies have had substantial transactions and they had substantial inflow and outflow of mon .....

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tisfaction about the extent of the documentation can give rise to a quantum addition, as it has in this case but there has to be a clear-cut case of furnishing of inaccurate particulars or concealment of income for levying penalty, which is not to be seen, in fact, the penalty order virtually states everything that has been stated in the assessment order. 5.2 The case-laws cited by the appellant are very much to the point insofar as the quantum addition is concerned. All of them basically say th .....

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the quantum, but the concealment penalty. The AO has unfortunately not made out any case whatsoever in terms of inaccurate particulars or concealment, thereby implying that the successful finalization at the quantum appeal at the level of CIT(A) would indicate an acceptance on part of the appellant that it had indeed sought to introduce unexplained cash credits. As the AR has been at pains to point out the decision not to further agitate the matter cannot in any way be taken as proof of acceptan .....

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has he been able to make out a case that the appellant has clearly received monies from several investors. The proofs thereof have not been found to be acceptable by the AO. But nowhere has the AO been able to point out any lack of accuracy or lack of genuineness in the explanation or the documentation. Obviously the only argument that the AO has taken is that he feels that the assessee has introduced unexplained cash credits. But this has been not backed up by any linkage whereby the same money .....

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in the same bank and all of them received the said amount as share application money either on the same day or next day. However, during the course of penalty proceedings, the assessee vide letter dated 19th March, 2012 has again furnished the entire details and submitted that, assessee has discharged its onus by submitting the evidences to substantiate its claim; like, copy of confirmation letters from these companies; copies of Bank statement showing the transaction of share subscription mone .....

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