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2016 (6) TMI 109 - ANDHRA PRADESH HIGH COURT

2016 (6) TMI 109 - ANDHRA PRADESH HIGH COURT - TMI - Penalty under Section 271(1)(c) - contributions for investment by the assessee which were treated as unexplained income - Held that:- Penalty under Section 271(1)(c) of the Income Tax can be levied only in cases where the Assessing Officer, or the Commissioner of Income Tax (Appeals), are satisfied that any person has concealed the particulars of his income, or has furnished inaccurate particulars of such income. The penalty proceedings initia .....

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the Act. Both the Commissioner of Income Tax (Appeals) and the Tribunal have assigned reasons for arriving at the satisfaction that there was no concealment of income on the part of the assessee and, based on such findings, held that no penalty could be levied on the additions made - Decided against revenue - I.T.T.A.No.236 of 2015 - Dated:- 4-11-2015 - SRI JUSTICE RAMESH RANGANATHAN AND SRI M.SATYANARAYANA MURTHY, JJ. FOR THE PETITIONER : PRASAD (SC FOR INCOME TAX) JUDGMENT: (per Hon ble Sri Ju .....

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tions, it was found that the assessee had entered into a sale agreement, along with three other members, for purchase of land against which part payment of ₹ 4.90 crores was admitted to have been made by the date of the survey. Out of the assessee s admitted share of ₹ 1,22,50,000/-, ₹ 1,17,50,000/- was treated as unexplained investment and added to the returned income. Further, a sum of ₹ 25,00,000/- was also brought to tax, treating it as undisclosed additional investme .....

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Section 271(1)(c) of the Act. The assessee questioned the penalty order before the Commissioner of Income Tax (Appeals), both on the ground of limitation and with respect to the additions. The Commissioner of Income Tax (Appeals) held that there was no infirmity in the order of the Assessing Officer with regards limitation. On the issue of addition of ₹ 1,17,50,000/-, the assessee contended that the contributions were received from seven members, who had come together, and had invested thr .....

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ssing Officer for want of verifiable evidence/information; the assessee had explained, on the spot, the investment by producing creditors; the creditors had substantiated with respect to advancing sums; it was only the Assessing Officer who disbelieved that they had no creditworthiness, and this could not be treated as concealment. The Commissioner of Income Tax (Appeals) held that two creditors, one among whom was shown to be a Software Engineer, and another was shown to have agricultural incom .....

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ithout proving the angle of concealment. To this extent, the Commissioner of Income Tax (Appeals) gave relief to the assessee. With regards addition of ₹ 25,00,000/-, the Commissioner of Income tax held that penalty was leviable thereon representing the unexplained investments, where concealment was established by the facts of the case. The CIT (A) held that penalty was not leviable on the addition of ₹ 1,17,50,000/- which also represented explained investment in the hands of the ass .....

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confirmatory letters, and the Assessing Officer had examined the persons all of whom had confirmed advancing the amounts; assessment proceedings and penalty proceedings were separate and distinct; once the assessee was able to furnish a bona fide and plausible explanation in respect of the material facts, the burden cast by Explanation 1 of Section 271(1) (c) of the Act was discharged; merely because the explanation furnished by the assesee was considered unsatisfactory and unreasonable, it woul .....

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