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2016 (7) TMI 807 - ITAT MUMBAI

2016 (7) TMI 807 - ITAT MUMBAI - TMI - Penalty order u/s 271(1)(c) - cash paid by the assessee for acquisition of shops out of undisclosed sources - Held that:- From the order of he ld.CIT(A), it is seen that factual findings have been recorded that element of cash was involved in the transaction of acquisition of shops. The Assessing Officer has given a finding after verifying the evidences that cash component of payments aggregating to ₹ 3,44,02,000 was involved in the transaction. Amoun .....

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Mum/2014 - Dated:- 10-6-2016 - SHRI AMIT SHUKLA (JUDICIAL MEMBER) AND SHRI ASHWANI TANEJA (ACOUNTANT MEMBER) For The Appellant : None For The Respondent : Shri A Ramachandran ORDER Per ASHWANI TANEJA, AM This appeal has been filed by the assessee against the order of Commissioner of Income-tax (Appeals) [hereinafter called ld.CIT(A) ] dt 07-03- 2014 passed against the penalty order u/s 271(1)(c) dated 30th March, 2012 challenging the levy of penalty of ₹ 41,71,188. 2. During the course of .....

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parte qua the assessee. 3. The solitary issue raised in this appeal is with regard to penalty of ₹ 41,71,188 levied by the Assessing Officer on the amount of cash paid by the assessee for acquisition of shops out of undisclosed sources. 4. The brief facts noted from the orders of the lower authorities are that the assessee is an individual and a partner in M/s Satnam Sakhi & Assoiates. The Partnership firm M/s Satnak Sakhi Associates comprises of three partners, with share of profit as .....

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ops, in the name of the firm, and the same was kept outside the books of account. The A.O held that 36% share is that of the appellant, on the basis of the profit sharing ratio. Accordingly a sum of ₹ 1,23,84,720/- was brought to tax in the hands of the appellant on substantive basis. The A.O has assessed the same on protective basis in the hands of the firm. Penalty proceedings were initiated under s. 271(1)(c) of the Act. The Assessing Officer did not accept the explanations of the asses .....

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hese papers contained certain figures aggregating to ₹ 3,44,02,000/- (refer page 14) and ₹ 1,97,89,286/- (refer page 20) against each of the partner on their profit sharing ratio. All the pages numbering 14 to 21 were written in the same handwriting. b. A close examination of the seized papers numbering from 14 t021 will reveal that page no. 14 is the summarizing paper from page no. 15 to 17 and the same is related to figure of ₹ 3,44,02,000/- which is added in the hands of the .....

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t was not convinced with the arguments of the assessee and, therefore, he confirmed the levy of penalty with following observations: 5. I have very carefully considered the facts and the legal position. I have taken into account the findings of the A.a as well as the counter arguments of the appellant. I have also examined the copies of the seized material which is crucial to understand the issue at stake. Four shops were acquired by the firm in Everest Chamber, Andheri East. The appellant has n .....

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in the books of account. Therefore a reasonable and logical conclusion that can be drawn is that the appellant in fact has no quarrel with the finings of the A.O that the notings in page 20 refer to the figures as appearing in the books of accounts, and which are agreed to be payments made through cheque. Hence what is to be examined is the notings as per pages 14 to 17, which, according to the A.O, represents the cash component of the ₹ 3,44,02,000/-. According to the appellant, the A.O m .....

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a case that the figures appearing in pages 14 to 17 are with reference to a proposed project and the figures as noted are mere approximations or estimations of the cost as projected. But the figures as noted, especially as noted in page 14, do not in any manner give the appearance of mere projection or estimates. The notings as in page 14 are reproduced hereunder:- Lakhi Received 2,03,50,000 40% share 1,37,60,800 Excess Received 65,89,200 -, Umesh C. Received 48,52,000 Less: Share 24% 82,56,480 .....

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ss and would not be in accordance with the state of affairs as projected by the appellant. The word "received" has no place in a scheme of things which are meant to be "projections". The said explanation of the appellant belies logic. The explanation as given by the appellant is unacceptable in the given facts and circumstances. The appellant has offered an explanation which he has not been able to substantiate. When the appellant fails to substantiate the explanation, the pr .....

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inly valid though have only probative value. The facts of this case have been independently considered bearing in mind the provisions in respect of levy of penalty under s. 271(1)(c). So also, in penalty proceedings, concealment need not be proved to the hilt. The circumstantial evidences are certainly valid and material especially so when willful concealment is not an essential ingredient for attracting penalty, which is a civil liability. It has been held in CIT vs. Master Sunil R. Kalvo [2007 .....

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