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2016 (7) TMI 1049 - ITAT DELHI

2016 (7) TMI 1049 - ITAT DELHI - TMI - Penalty u/s 271(l)(c) - undisclosed cash deposits - assessee argued that as sufficient surrender has been made by the assessee suo motu, the penalty proceedings initiated against him should be quashed - Held that:- The surrender of income in case of the assessee was not voluntary as the offer of surrender was made in lieu of CIB information made available by the Assessing Officer during the assessment proceedings. It is noted that the assessee himself has c .....

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ing the course of assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. The Assessing Officer has categorically recorded the findings that he was satisfied that the assessee had concealed the true particulars of income and is liable for penalty proceedings u/s 271 read with Section 274 of the Act. Thus no illegality in the departmentís initiation of penalty proceedings in the instant case. We, therefore fully agree with the view taken by .....

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f appeal: Penalty on estimated basis on Disclosed Credit Transactions: 1. Whether the Ld CIT(A)-19, New Delhi justified in confirming the concealment penalty on the income calculated on estimated basis on the disclosed credit transactions in books of accounts? Penalty on estimated basis on Voluntarily Surrendered Bank Account: 2. That on the facts and in the circumstances of case and in law, the Ld CIT(A)-19 New Delhi has failed to appreciate that surrendered bank account was not detected by A.O .....

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onfirming the concealment penalty because of inadvertent mistake of an accountant and disregarding the affidavit filed by the assesee's accountant? Penalty on income calculated on estimated basis 4. Without prejudice to other grounds, whether the Ld CIT(A)-19, New Delhi was justified in confirming the concealment penalty on the income calculated on estimated basis (i.e. where the quantum of exact income is not ascertainable)? Relief Claimed:-that the penalty u/s 271(l)(c) amounting to ₹ .....

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income. It was observed by the A.O. that the assessee had not disclosed certain bank accounts maintained in the name of M/s. Gulshan International. He further noted that the assessee has not considered the income arose from M/s. Rock International India. Considering the discrepancies, the assessee agreed on the profits being estimated @ 6% on ad-hoc basis. During the assessment proceedings, the assessee surrendered certain amounts as well as the cash deposits which was found in the bank account .....

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g penalty of ₹ 7,13,200/-. 3. Aggrieved by this order, assessee preferred appeal before Ld. CIT(A) who confirmed the penalty, as the explanation submitted by the assessee was not satisfactory and that the surrender so made by the assessee was on the basis of information unearthed by the Assessing Officer during the assessment proceedings. He thus confirmed the findings of Ld. Assessing Officer that income has escaped assessment intentionally. 4. Aggrieved by the order of Ld. CIT(A), the as .....

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1 ICICI Bank Ltd. 072305000201 Current 2 ICICI Bank Ltd. 072305000511 Current 3 ICICI Bank Ltd. 033001002107 Saving 6.1 Ld. A.R. submitted that the above bank accounts were never detected by the income tax department. These were surrendered voluntarily. 7. Ground No.3: Ld. A.R. submitted that in relation to Rock International in para 11 of assessment order, that Ld. A.O. accepted the audited results of said returned income, ergo, addition of ₹ 5,69,710/- was made, being audited net profit .....

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sufficient knowledge about Income Tax Returns. Ld. A.R. submitted that assessee reconciled all his financials, bank statements with the help of his counsel. Ld. A.R. submitted that it was at that time, the assessee realized that he didn't disclose the Income of ₹ 5,69,710/- in Income Tax Return. It was also learnt that current account in M/s. Gulshan International was also not considered in the Balance sheet of M/s Gulshan International. Ld. A.R. submitted that the assessee surrendered .....

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ant has accepted his mistake by filling an affidavit (placed at Pages No.31 & 32 of this paper book). Ld. CIT (A) however, discredited the Affidavit filed by the accountant by considering it to be not genuine. 8. Ground No.4: Ld. A.R. submitted that Ld. A.O. has calculated the income on estimate basis by applying flat rate of 6% on total credit transactions. He submitted that in total credit transactions, there are some loans and advances cash withdrawals from one bank account and deposited .....

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submitted that the failure to include the income from M/s. Rock International is a bona fide mistake. He thus requested that the penalty may be dropped. 9. On the contrary, Ld. D.R. submitted that the A.O. had specifically asked for the details of bank accounts held by the assessee for which the assessee had replied declaring three bank accounts as under: S.No. Bank nam & Branch Account No. 1 HDFC Bank Ltd., Preet Vihar 15612020002527 2 ICICI Bank Ltd. Preet Vihar 003705008499 3 SBI, Yamuna .....

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ed in the Paper Book filed by the assessee before us. He further referred that at page 3 of the assessment order, where the Assessing Officer has disclosed the details revealed by Investigation wing shows that the assessee was maintaining seven bank accounts. As the chart has been reproduced at page 3 of the Assessing Officer s order, the same is not being reproduced herein. 9.2 Ld. D.R. drew our attention to the submissions made by the assessee before the Assessing Officer vide letter dated 13. .....

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way of any material / evidence on record and thus, the assessee failed to discharge the requirement as specified under Explanation (1) and (2) to Section 271(1)(c) of the Act. 9.4 Ld. D.R. further referred to letter dated 13.03.2014 wherein the opening line says that as the accountant was held up with some litigation in his family at his native village in U.P. and that the accounts were prepared when he returned. Ld. D.R. submits that it is clear from such statements made by assessee before the .....

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having such a huge turnover, has only one employee being this accountant, Mr. Naeem Ahmed, who has shown his failure before the A.O. at the time of assessment proceedings. Ld. D.R. relied upon the Annexure 3 to the compilation at page 4 filed before us. 9.5 Ld. D.R. submitted that during the assessment proceedings, it was brought to the notice of assessee that income from Rock International (India) has been undisclosed. The Assessing Officer has obtained the details of Rock International India .....

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crept in for Assessment Year 2012-13, which has been accepted by the assessee before Ld. CIT(A). The relevant observation of Ld. CIT(A) are reproduced at page 18 of his order. The Ld. D.R. thus submitted that the assessee has concealed the particulars of income and has also furnished inaccurate particulars. He further submitted that the assessee has also not discharged the onus of providing a satisfactory explanation to establish the bona fide. 10. We have head rival submissions and perused the .....

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nion, there is a basic fundamental difference between ignorance and bona fide mistake. In the first case, assessee cannot be excluded from the penalty proceedings as there is willful omission on behalf of the assessee in disclosing his true and correct income. Whereas, in the second case, the omission must be become as inadvertence, which can be due to human error. It cannot be ignored that human error must be tested on probabilities. No doubt that the courts are liberal when any bona fide mista .....

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s to assess income. The burden is on the assessee to show otherwise by cogent and reliable evidence. When the initial onus placed by the Explanation has been discharged by the assessee, the onus shifts on the Revenue to show that the amount in question constitutes the income and not otherwise. 10.3 In the facts and circumstances of the present case, the assessee has only stated that he has surrendered the additional sum with a view to avoid litigation and to buy peace of mind from the department .....

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