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2016 (6) TMI 164 - ITAT AHMEDABAD

2016 (6) TMI 164 - ITAT AHMEDABAD - TMI - Penalty levied u/s. 271(1)(c) - undisclosed income by the assessee from sale of shops - Held that:- Findings of the Tribunal in the quantum appeal speaks for itself in as much as the additions based on the statements were discarded following the ratio laid down in the case of S. Khader Khan [ 2007 (7) TMI 182 - MADRAS HIGH COURT] . Further, we do not find any evidence on record which could suggest that the assessee has actually received ₹ 4.75 lacs .....

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the Appellant : Shri M.K. Patel, A.R. For the Respondent : Smt. Sonia Kumar Sr. D.R. ORDER Per N. K. Billaiya, Accountant Member 1. This appeal filed by the assessee is preferred against the order of Ld. CIT(A), Valsad dated 26.03.2014 pertaining to A.Y. 2005-06. 2. The grievance of the assessee relates to upholding of the penalty levied u/s. 271(1)(c) of the Act amounting to ₹ 11,86,400/-. 3. The roots for the levy of penalty lie in the assessment order made u/s. 143(3) of the Act dated .....

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o the assessee whereas the assessee has accounted the receipt of ₹ 1,80,000/- only. Further, in his statement Shri Jay Chandrakant Patel (Director) admitted that sale consideration of the shops is recorded in the books to the extent of 50% only. 5. Taking a leaf out of these two statements, the A.O drew a conclusion that ₹ 32,70,000/- has not been shown in its books of accounts by the assessee and the same was added to the total income as undisclosed income by the assessee from sale .....

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Commissioner of income Tax (Appeals). The Hon ble Commissioner of Income (Appeals), Valsad, partly allowed the appeal of the assessee. The assessee company has filed an appeal before the Hon ble ITAT which is pending for disposal as on date. In our case we have disclosed all facts and particulars both in our return of income and during the course of assessment proceedings. Hence we request you good self not to levy penalty and drop the contemplated penalty proceedings. Alternatively and without .....

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ny and initiated penalty. As regards this addition made by the then Learned assessing Officer we would like to humbly submit before your good self as under 2.1 During the year under consideration an action u/s. 133A was carried out in the premises of the assessee company and a statement was recorded on oath of Shh Jay Chandrakant Patel, one of the Directors of the company and Shri Rashmin Mahendra Abhoti, who has purchased a shop in the name of his wife Smt. Ranjanben R. Aboti. The assessee comp .....

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undisclosed income earned from sale of shops. 2.3 In this regard we would like to humbly submit before your good self that the addition has been made by the then Learned assessing Officer solely based on the statement recorded by the Director of the assessee company, which was duly retracted within a reasonable time. The Learned assessing Officer further relied upon the statement of Shri Rashmin Mahendra Abhoti, who has not purchased any shop in his name. The then Learned assessing Officer has .....

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For initiating penalty proceedings there has to be a conclusion reached by the assessing officer that the assessee company has concealed income or has furnished any inaccurate particulars of income. In the assessee company s case we have disclosed all facts and particulars both in our return of income and during the course of assessment proceedings. Hence we request your good self not to levy penalty and drop the contemplated penalty proceedings initiated on this addition. 3.1 The then Learned a .....

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then learned assessing officer the Hon ble CIT(A) has deleted the same. Hence we request your good self not to levy penalty on the above addition. Keeping in view of the above we humbly request your good self to drop the contemplated penalty proceedings initiated against assessee company and oblige. 8. The detailed submission of the assessee did not find any favour with the A.O who was satisfied that the assessee has consciously concealed its income to the tune of ₹ 32.70 lacs and accordi .....

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e ld. D.R. strongly supported the findings of the revenue authorities. 11. Having heard the rival contentions, we have carefully perused the orders of the authorities below. We have also gone through the decision of the Tribunal in ITA N0. 3032/Ahd/2008 while deciding the quantum addition the Tribunal held as under:- 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. The submission of the ld. counsel for the asse .....

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quot;11. In the case of CIT vs. Khader Khan Son (supra) the Hon'ble High Court has held that Sec. 133A does not empower any I.T. authority to examine any person on oath, hence, ay such statement has no evidentiary value and any admission made during such statement cannot by itself be made the basis for addition. Further the Hon'ble High Court has held as under:- "7. In the decision of Pullangode Rubber Products Co. Ltd. vs. State of Kerala (1973) 91 ITR 18, the Apex Court held that .....

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s not brought any corroborative evidence and material on record to justify the addition. The A.O has not brought any independent evidence or given any finding to substantiate the declaration made at the time of survey. In view of these facts we are of the view that no addition can be made only on the basis of admission during the course of survey. We thus direct the deletion of the addition made. Thus this ground of the assessee is allowed." 5.1. The ld. counsel for the assessee has also re .....

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factual matrix of the case. Admittedly the addition in respect of various purchasers of shops has been made by the assessing officer based on the statement recorded on oath of a third party of his wife's affair and one of the Directors of the appellant company. The assessing officer has not confronted the appellant regarding receipt of money in cash and merely assumed that the appellant has received cash from each and every purchaser. The assessing officer has not made any enquiry against a .....

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g officer and the addition made by the assessing officer is upheld. This ground of appeal is accordingly dismissed." 5.2. It is evident from the above observation of the ld.CIT(A) that the AO had not confronted the assessee regarding receipt of money in cash and merely assumed that the assessee has received cash from each and every purchaser. Undisputedly, the AO has not made enquiry from the other purchasers and no material has been placed on record that money was received in cash except t .....

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