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2016 (10) TMI 852 - ITAT HYDERABAD

2016 (10) TMI 852 - ITAT HYDERABAD - TMI - Levy of penalty u/s. 271(1)(c) - unexplained investment - Held that:- Whatever may be the reason for confirming part of the amount in assessment, the same does not automatically lead of levy of penalty u/s. 271(1)(c). Assessee can question the addition itself in penalty proceedings so as to justify non-levy of penalty. Considering the fact that these assets are acquired much earlier and assessee has shown them as opening balance only, in our opinion the .....

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see against the order of the Ld.Commissioner of Income Tax (Appeals)-9, Hyderabad dated 29-02-2016, confirming the penalty of ₹ 1,77,473/- u/s. 271(1)(c) of the Income Tax Act [Act]. 2. Briefly stated facts as mentioned in the order of CIT(A) are as under: "1.0 The appellant Smt K. Hemalatha is an individual. A search operation was conducted on the appellant's son-in-law Shri K. Srinivasa Rao at his residence situated at Plot No.1219 Road No 36, jubilee Hills, Hyderabad on 09-10-2 .....

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s called from time to time before the learned AO. 1.1 The learned AO questioned the appellant as to the source of opening balance of her capital account amounting to ₹ 22,94,430/-. Appellant explained that out of the said amount of ₹ 11,00,000/- pertain to the sale proceeds of house sold at Kovvuru, Andhra Pradesh which as declared in the accounting year relevant to the A.Y. 2004-05. In respect of balance amount of ₹ 11,94,000/-, it was explained that it was accumulation of agr .....

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an amount of ₹ 3,53,000/- out of addition of ₹ 11,94,000/- and confirmed the addition for the balance of amount of ₹ 8,40,500/-. 2. Aggrieved by the confirmation of addition of ₹ 8,40,500/- the assessee has come on appeal before the Hon'ble Tribunal. 3. The Hon'ble Tribunal vide its order dt 16-11-2011 gave further relief of ₹ 2,10,000/- and confirmed the balance addition of ₹ 6,30,500/-. 4. As part of the addition of ₹ 6,30,500/- as mentioned a .....

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the capital account. She was unable to produce proof of the agricultural income though it was really earned. Hence there is no concealment of income. 6. The Ld AO ought to have appreciated that even in the absence of returns of income prior to the assessment years 2002-03 the appellant would have made savings over her life time from agricultural income etc. which would have contributed to her capital balance as on 1-4-2004. 7. The Appellant did not have any income other than agricultural income .....

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ts of the case. The only issue involved is this case is the levy of penalty u/s. 271(1)(c) of the IT. Act of ₹ 1,77,473/- for the A.Y. 2005-06. The brief facts of the case are while completing the assessment for the A.Y. 2005-06 u/s 143(3) r.w.s. 153C of the I.T. Act on 24.12.2009, the Assessing Officer made an addition of ₹ 11,94,000/- as unexplained credit, as the assessee failed to adduce any evidence in support of her contentions that this amount of ₹ 11,94,000/- represents .....

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e proceedings the assessee contended the even though the Hon'ble ITAT sustained the addition of ₹ 6,30,500/-, there is no concealment of Income as the assessee had accumulated agricultural income over a period of 12 years along with sale proceeds of house at Kovuru, and further submitted that she is unable to produce proof of the same. The assessee relied on the following case laws in support of in her contention. 1. Jasbir Singh Saini Vs. Income Tax Officer [2015] 61 Taxmann. Com 230 .....

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6,30,500/-. Even during the appellate proceedings, the assessee submitted that she is unable to produce any proof of the same. Therefore, in the absence of any documentary evidence, the assessee's claim cannot be accepted. As rightly stated by the Assessing Officer, the assessee is very much hit by the explanation 1(A) to sec. 271 (1)(C) of the IT Act which clearly stipulates that when a person fails to offer an explanation or offers an explanation which is found to be false, then such incom .....

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s: (i) Loknath Chowdhary Vs. CIT (Cal) 155 ITR 29. (ii) Rahmat Devft & Engineering Corporation Vs. CIT (Cal) 130 ITR 602. (iii) CIT Vs. Rattam Singh Grewal (P&H) 304 ITR 75. (iv) Charndatt H. Danget Vs. Income Tax Officer (ITAT, Mumbai) 126 ITO 483. In the above cases, it was held that unexplained investment is deemed to be income for the purpose of levying penalty if no satisfactory explanation is offered and penalty is leviable. These decisions are applicable in the assessee's case .....

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