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2016 (6) TMI 429 - ITAT HYDERABAD

2016 (6) TMI 429 - ITAT HYDERABAD - TMI - Penalty u/s 271(1)(c) - estimation of income u/s 44AF - Held that:- The assessee is a small trader involved in bamboo business and filed his return of income by estimating the income u/s 44AF. Therefore, the assessee is not required to maintain any books of account as per the provisions of section 44AF and relaxation available to these kind of assessees. Hence, the assessee had filed the return of income and AO has not found any mistake or not found any .....

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t traceable due to efflux of time i.e. after expiry of 5 years. Since assessee had discharged the initial burden of proof and considering the substantial time lag, we are inclined to adjudicate the issue in assessee’s favour as this case is not a fit case to levy penalty u/s 271(1)(c) of the Act. Accordingly, the penalty is deleted and grounds raised by the revenue are dismissed.- Decided in favour of assessee. - ITA No. 1046/Hyd/2013, ITA No. 1047/Hyd/2013 - Dated:- 8-6-2016 - Shri D. Manmohan, .....

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acts from ITA No. 1046/Hyd/2013. 3. Briefly the facts of the case are that for AY 2003-04, the assessee filed his return of income on 23/02/2014 declaring an income of ₹ 3,62,906/- deriving income from house property at ₹ 2,14,072 and income from trading from bamboo ballies admitted at ₹ 1,48,834 which was estimated at 5.25% on the turnover in accordance with the provisions of section 44AF of the Income-tax Act, 1961 (in short the Act ). Agricultural income was declared at S .....

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gh the assessee filed a detailed explanation before the AO, rejecting the same, the AO levied penalty of ₹ 14,27,483/- u/s 271(1)(c). 4. Aggrieved, the assessee preferred an appeal before the CIT(A) and filed written submissions before the CIT(A), which were extracted by the CIT(A) at pages 2 & 3 of his order. After considering the submissions of the assessee, the CIT(A) deleted the penalty levied by the AO by observing as under: 5. In view of the submissions made by the appellant, I p .....

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iable. The Supreme Court in the case of CIT Vs. Reliance Petro Products Ltd. reported in 322 ITR 158 observed that where the particulars furnished are not proved to be false, there cannot be any penalty u/s 271(1)(c) of the Act. Besides, the decisions cited by the ld. AR in the above paragraphs also support my view that no penalty is leviable in such circumstances. 5. Aggrieved, the Revenue is in appeal before us raising the following grounds of appeal: 1. The decision of the CIT (Appeals) is er .....

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nd to be doubtful and the persons said to have advanced the money were also not in existence. Hence, the CIT(A) ought to have sustain the penalty. 4. Any other ground that may be urged at the time of hearing. 6. Ld. DR submitted that assessee had not proved the information furnished are accurate. Ld. CIT(A) has not appreciated the facts of the case as the assessee could not produce any proper evidence with regard to the source of deposits made. CIT(A) had grossly overlooked the quantum addition .....

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This is the model of business of the assessee. He further submitted that the addition was made merely on doubt and disbelief of the AO. This may be good case for making addition u/s 69 but not making penalty u/s 271(1)(c) of the Act. 8. Considered the submissions of both the counsels and material facts on record. The facts are the assessee is a small trader derived income from bamboo ballies for the AY 2003-04. He filed his return of income u/s 44AF, estimated @ 5.25% on the turnover and admitt .....

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ils of three deposits made and subsequently renewed for short period of 15-20. Ld. AR also submitted that the business model of the assessee is to take advance from the buyers and pays to sellers advance for blocking the bamboos. Assessee was parking the advances received from the buyers in the bank as short term deposits. This submission was matching with the deposits duration and subsequent withdrawals. Coming to the investigation of AO, the AO had verified the genuineness of the documents fil .....

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elapse of 5 years. The remote chances of possibility that such persons must have moved from their places. Moreover, the Assessee had discharged the onus of burden by submitting the particulars of the transaction in the agreement, payment voucher etc. As held in the case of CIT Vs. Oasis Hospitalities Pvt. Ltd.(333 ITR 119) that when the Assessee discharged the initial burden and could not produce the persons due to substantial time lag, penalty cannot be levied. In the present case also, the AO .....

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