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2016 (5) TMI 851 - ITAT JAIPUR

2016 (5) TMI 851 - ITAT JAIPUR - TMI - Penalty levied u/s 271(1)(c) - addition u/s 68 - Held that:- Assessing Officer imposed penalty under this Section on the basis of finding given in assessment order only no separate inquiry has been conducted to disprove the explanation furnished by the assessee. The case laws relied upon by the assessee are squarely applicable on the facts of the case. There is no material on record to show that surrendered income was concealed income of the assessee. There .....

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.I.T.(A), Ajmer for A.Y. 2007-08. The effective grounds of appeal are as under:- 1. On the facts and in the circumstances of the case Ld. CIT(A) has grossly erred in confirming the penalty of ₹ 15,85,386/- levied u/s 271(1)(c) of the Income Tax Act, 1961. 1.1 That the Ld. CIT(A) has erred in upholding the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961 without appreciating the fact that the income was surrendered by the assessee during the course of assessment proceeding and the i .....

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re remained no income on which tax sought to be evaded could be calculated which fact was not appreciated by the Ld. CIT(A). 2. The sole ground of the appeal is against confirming the penalty of ₹ 15,85,386/- imposed U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act). In this case, assessment U/s 143(3) of the Act was completed on 21/12/2009 in which addition on account of deposit in the name of various persons were made at ₹ 47.10 lacs U/s 68 of the Act. The penalty procee .....

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assessee that amount was surrendered voluntarily is totally false and baseless because it is the department who has investigated the matter from various parties & not even single party was found in existence as discussed in the forgoing paras. 18.2 Secondly, the outcome of enquires were made available to assessee by supplying the copy of letters received from various Gram Panchayats & inquiry report of Inspector. The assessee came up with surrender when the results of investigation and i .....

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ssee to surrender the amount for taxation as no other option was left. b) Secondly, it was not an agreed addition as discussed in the preceding paras. Even otherwise also establishment of mens rea is not pre-requisite for imposition of penalty as held by the Hon ble Supreme Court in the case Dharmendra Textile Processors vs UOI reported in [2008] 306 ITR 0277 the object behind the enactment of section 271(1)(c) read with the Explanation indicates that the said section has been enacted to provide .....

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Co. Ltd. (v) [2009] 316 ITR 0058 (Mad)- Komal Basha V/s DCIT The ld Assessing Officer has held that on the basis of above facts, the assessee had concealed and furnished inaccurate particulars of income and thereby caused loss to the revenue. Further the onus was on the assessee to prove that there is no concealment but assessee failed to prove the same during the assessment as well as penalty proceedings. Finally be imposed penalty at ₹ 15,85,386/-, which is 100% of tax sought to be evad .....

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ealment as a rule of law. (2) The responsibility for rebutting such inference is squarely on the tax payer. (3) The assessee is expected to offer an explanation for the difference. Absence of any explanation, by itself, will merit penalty (4) The explanation where offered, should not be found to be false. (5) Merely because the assessee is not able to substantiate his explanation, penalty may not be exigible, if such explanation is bona fide and all the facts relating to the same and material to .....

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ision of Hon ble Allahabad High Court in the case of Raj Kumar Chourasiya vs CIT, reported in 288 ITR 329. 4.22 When the present case is examined in view of this legal position, it is found that appellant has shown sum of ₹ 47,10,000 in the name of various persons as advances against booking of vehicles. Appellant has shown this amount in his balance sheet filed by him along with the return claiming the same to be genuine deposits received from various persons. It was only when AO made enq .....

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nafide, therefore the case falls in category (b) of para 4.19 as mentioned above. The levy of penalty u/s 271(1)(c) is therefore justified in this case pursuant to the decision of Dharmendra Textiles. 4.23 AO has rightly placed reliance on the following decisions for coming to the conclusion that penalty is leviable in this case. (a) [2009] 226 CTR (Delhi) 533 - CIT V/s Dass Trading & holding (P) Ltd. (b) [2008] 305 ITR 0029(MP) - DDIT V/s Chirag Metal Rolling Mills Ltd. (c) [2008] 302 ITR 0 .....

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customers in Balance sheet. During the course of assessment proceedings, addresses of customers from whom advances were received were filed as available in the records of the assessee. These advances were received for booking of the vehicles from casual customers and when supplies from company was not made available, advance money were refunded to the customers. Copies of account of subsequent year in which the advances have been squared up were also filed before the ld A.O.. It is further submi .....

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ssued u/s 133 (6) could not be served on the parties due the reason of incomplete addresses and the assessee could not produced these parties it cannot be hold that booking advance received by the assessee is unaccounted money of the assessee. More particularly amount was subsequently refunded to the customers. The assessee furnished best possible address of the parties and tried to identify the customers with its best efforts. However, after the lapse of 4 years, the correct where about of the .....

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dent inquiry during the course of penalty proceedings and simply relied upon the inquiries made and conclusions drawn at the time of assessment proceedings, when it is a fact on record that assessment proceedings and penalty proceedings are distinct and separate and fresh enquiries should have been made and AO should have given an opportunity to the appellant of being heard and to explain its case. By not doing so the Ld. AO has proceeded to conclude the order on his sweet will and with a precon .....

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said person as witness has confirmed on oath all the facts as explained by the appellant. He has confirmed of having booked the Eishers Truck by advancing the amount and also receiving the refund owing to the nondelivery of the booked truck within the stipulated time period of one month. In the affidavit, the mode and manner of advancing the money and receiving the same back has been explained by the said witness on oath which duly support the contentions of assessee. It is therefore, submitted .....

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in April 2007. The assessee due to the time barring limit was very close do not have sufficient time to produce these parties for verification, therefore in order to avoid prolonged litigation and to buy the peace of mind had accepted the advance money as its income. It is not the case that after in depth examination and cross verification by the assessee the amount was surrendered. Further, if such amount received from these customers is treated as out of undisclosed income of the appellant and .....

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Ltd. Vs. CIT reported in [2014] 1 SCC 674, (5) Reliance Petro Products reported in 322 ITR 158 (6) 170 Taxman 471 CIT Vs. Ashok Taker (Delhi) (7) 300 ITR 40 V.V. Projects and Investments Pvt. Ltd. Vs. Dy. CIT (2008) (AP) (8) CIT Vs. Haryana Warehousing Corporation [ITA No. 871 of 2008, dated 01.07.091 (Punj- & Har.) (9) 35 DTR 420 Asstt. CIT Vs. Indica Exports (Del H ) (10) Goswami Smt. Chandralata 125 ITR 700 (Raj.) (11) 131 ITR 619 Additional Commissioner of Income-tax v. Aggarwal Misthan .....

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y the Assessing Officer on the account of investigation then he offered the amount for taxation. Thus, he prayed to confirm the order of the ld CIT(A). 6. We have heard the rival contentions of both the parties and perused the material available on the record. The assessee is engaged in the business of all types of automobile vehicles, accessories and spare parts and also service centre for all type of automobiles vehicles. The year under consideration is the first year of the business of the as .....

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