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The ACIT, Circle-1 (4) , Ahmedabad Versus Shri Bhaubha Devisinh and Vice-Versa

2016 (7) TMI 323 - ITAT AHMEDABAD

Levy of penalty u/s.271(1)(c) - Held that:- The assessee had disclosed the material facts before the AO. When the assessee has made a particular claim in the return of income and has also furnished all the material facts relevant thereto, the disallowance of such claim cannot automatically lead to the conclusion that there was concealment of particulars of his income by the assessee or furnishing inaccurate particulars thereof. It is settled law that penalty proceedings and assessment proceeding .....

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e parameters of judging the justification for addition made in the assessment case of the asssessee is different from the penalty imposed on account of concealment of income or filing inaccurate particulars of income and that certain disallowance/addition could legally be made in the assessment proceedings on the preponderance of probabilities but no penalty could be imposed u/s. 271(1)(c) of the Act on the preponderance of probabilities and Revenue has to prove that the claim of expenses by the .....

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e Act - Decided in favour of assessee - IT (SS) A Nos. 442 & 445/Ahd/2012, IT(SS)A Nos. 32 to 35/Ahd/2016 - Dated:- 31-5-2016 - Shri Anil Chaturvedi, Accountant Member And Shri S. S. Godara, Judicial Member For the Revenue : Shri Jagdish, CIT-D.R. For the Assessee : Shri Sakar Sharma, A.R. ORDER Per Bench Out of this bunch of appeals; two appeals by the Revenue for Asst.Years 2004-05 & 2007-08 and four appeals by the Assessee for Asst.Years 2004-05, 2006-07, 2008-09 & 2010-11 are directe .....

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der. 3. First, we take up Revenue s appeals, i.e. IT(ss)A Nos.442 & 445/Ahd/2012 for AYs 2004-05 & 2007-08 respectively. Common grounds raised in these appeals are as under:- Extracted from IT(ss)A No.442/Ahd/2012 (1) The Ld.CIT(A) has erred in law and on facts in deleting the addition of ₹ 3,50,000/- made on account of unaccounted receipts from Bhikhubhai N.Padsala. (2) On the facts and in the circumstances of the case and in law, the CIT(A) ought to have upheld the addition of &# .....

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ls of the Revenue need to be dismissed on account of low tax effect in view of the CBDT Circular No. 21 of 2015 dated 10.12.2015. The ld. D.R. fairly admitted that in all the appeals of Revenue, the tax effect is less than the limit prescribed by the aforesaid CBDT Circular. 5. We have heard the rival submissions and perused the material on record. On perusing the grounds of appeal raised by the Revenue in the different appeals, we find that Revenue is aggrieved by the orders of ld. CIT(A) in re .....

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e in various appeals of Revenue, the tax effect is less than ₹ 10 lacs and in the absence of any material on record by the Revenue to demonstrate that the issues in the present appeals are covered by exemptions specified in clause (8) of the CBDT Circular, we are of the view that the monetary limit prescribed by the instructions of the aforesaid CBDT Circular would be applicable to the present appeals of the Department and therefore the present appeals of Revenue are not maintainable on ac .....

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AYs 2004-05 2006-07, 2008-09 & 2010-11 respectively. In all the appeals of the Assessee, the issue involved is against levy of penalty u/s.271(1)(c) of the Act. 7.1. The relevant facts for AY 2004-05 as culled out from the materials on record are as under:- 7.2. Assessee is an individual having income from agriculture and other sources. A search u/s.132 was carried out in the case of assessee on 04/03/2010. Subsequently, notice u/s.153A of the Act was issued on 07/10/2010 and served upon the .....

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st of the aggregate addition being ₹ 36,37,427/-. Aggrieved by the order of the AO, assessee preferred appeal before the ld.CIT(A), who vide order dated 19/7/2012 granted substantial relief to the assessee and confirmed the addition only to the extent of ₹ 1,56,515/-. On the aforesaid addition that was confirmed by the ld.CIT(A). AO vide order dated 28/3/2014 held that the assessee had failed to furnish evidence in support of unexplained income and thereby had concealed the income an .....

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rein action u/s.132 has taken place and assessment u/s.153A came to be framed. After the appeal order for quantum addition, the income was confirmed at ₹ 1,98,655/- against returned income of ₹ 42,500/-. The addition was based on the notings from seized paper (page No.45) which has been discussed in Assessment order. The penalty order discusses the issue in details. The AO has imposed penalty in this search case at ₹ 26,392/- which is in relation to the differential amount i.e. .....

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erent Hon'ble Courts, penalty of concealment cannot be imposed because the assessee has taken a particular stand or had preferred an interpretation which was plausible and reasonable, but has not been accepted, unless the assessee had not disclosed facts before the authorities. Such cases have to be distinguished from cases where the claim of the assessee is farcical or farfetched. Dubious and fanciful claims under the garb of interpretation, are a mere pretence and not bonafide. Similarly, .....

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e was granted with following comments, "..... where no clear finding was recorded by Assessing Officer whether assessee was guilty of concealing income and/or furnishing inaccurate particulars of income, .....". Therefore, courts have consistently held that there need to be findings of A.O. if the penalty order is to be confirmed. In instant case, there is specific finding by the A.O. as mentioned hereinabove. Subject to outcome of quantum appeal in ITAT, Ahmedabad, I decide that AO s .....

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of ₹ 1,05,633/- is concerned, he submitted that assessee had offered interest income on receipt basis in different assessment year and is accepted by the AO. As far as the addition of ₹ 20,768/- out of agricultural income is concerned, he submitted that the disallowance of 10% has been made on estimated basis. He further submitted that assessment proceedings and penalty are distinct and separate and, therefore it is not necessary that on the additions made, penalty has been necessari .....

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d.CIT(A). The penalty under s. 271(l)(c) of the Act is leviable if the AO is satisfied in the course of any proceedings under the Act that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. 9.1. The necessary ingredients for attracting Explanation 1 to Section. 271(l)(c) are that: (i) the person fails to offer the explanation, or (ii) he offers the explanation which is found by the AO or the ld. CIT(A) or the ld. CIT to be false, or (iii) t .....

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the purposes of clause (c) of Section. 271(1), and the penalty follows. On the other hand, if the assessee is able to offer an explanation, which is not found by the authorities to be false, and assessee has been able to prove that such explanation is bona fide and that all the facts relating to the same have been disclosed by him, then in that case penalty shall not be imposed. 9.2. In the present case the assessee had disclosed the material facts before the AO. When the assessee has made a par .....

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Further apart from the falsity of the explanation given by the assessee, the Department must have before it before levying the penalty, cogent material or evidence from which it could be inferred that assessee has consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars of income. It is well settled that the parameters of judging the justification for addition made in the assessment case of the asssessee is different from the penalty imposed on acc .....

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