TMI Blog2015 (7) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee. He has not even considered explanation given by the assessee and merely on the basis of ITAT order, he levied the penalty. The A.O has not brought any evidence to conclude that the assessee had furnished inaccurate particulars of his income. In the quantum appeal, the Tribunal has accepted explanation of the assessee to the extent of deposit of ₹ 2,30,000/- as explained and partly confirmed the addition stating that explanation given by the assessee was not convincing. In the above circumstances, it cannot be said that the assessee has concealed his income or furnished any inaccurate particulars. - Decided in favour of assessee - ITA NO. 349/Chd/2015 - - - Dated:- 31-7-2015 - SHRI H.L. KARWA, VICE-PRESIDENT Shri Ashok Goyal and Sudhir Sahgal for the Appellant. Shri D.S. Sidhu, DR for the Respondent. ORDER 1. This appeal filed by the assessee is directed against the order of CIT(A), Karnal dated 06.03.2014, confirming the penalty amounting to ₹ 27,860/- levied by A.O under section 271(1)(c) of the Act for the A.Y.2005-06. 2. The brief facts of the case are that the assessee is an individual having income under the heads ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequently modified in the order of ITAT dated 26th September, 2011 in ITA No. 153/Chd/2011. 3. The penalty proceedings u/s. 271(1)(c) were initiated by issuing the notice mentioning the addition sustained by ITAT as 1,39,000/- in place of 1,09,000/-. Reply to the said notice was filed by the assessee on 12th March, 2013, whereby, it was clarified that in the penalty proceedings, the confirmed addition has been mentioned as 1,39,000/- while the right amount is 1,09,000/- which also stands duly corrected by the ITAT. The A.O. in penalty order held that no explanation whatsoever has been offered in respect of the amount of ₹ 1,09,000/- held as unexplained deposits by the ITAT out of total deposits in bank account no. 183 with OBC. The A.O held that the assessee had furnished inaccurate particulars and has not been able to substantiate its claim of income returned hence, penalty under section 271(1)(c) amounting to ₹ 27,860/- being 100% of the tax sought to be evaded on an income of ₹ 1,09,000/- was levied. 4. The assessee went into appeal before the CIT(A) against the order of the A.O levying penalty under section 271(1)(c). Before the CIT(A), the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was sought that the penalty under section 271(1)(c) may be deleted. 7. The learned DR defending the order of the CIT(A) submitted that after the insertion of the Explanation to section 271(1)(c), in view of the provisions of section 68 for treating unexplained cash credit in the books of account of the assessee as his income, the further question of proving by the revenue that the addition was income of the assessee for the purposes of penalty, does not arise. 8. I have heard the rival contentions and perused the material on record. The undisputed facts of this case are that the assessee had deposited cash amounting to ₹ 3,39,000/- in his bank account. He gave his explanation for the same and out of total addition of ₹ 3,39,000/-, he was able to convince to the extent of ₹ 2,30,000/- to the authorities up to the level of the ITAT. The only issue remaining before me is with regard to the penalty on the remaining amount of ₹ 1,09,000/- added in the income of the assessee under section 68 of the Act. Before analyzing the legality of the penalty so levied, one must understand a few factual aspects of the present case. It can be seen from the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Financial Year 2004-05. The household expenses met by the father of the assessee out of his sources has no relevance. 10. The assessee had withdrawn cash of ₹ 2.00 lacks on 10.3.2004 + ₹ 30,000/- on 24.3.2004, which was available for making cash deposits in the bank account. I find merit in the said claim of the assessee. Accordingly, I direct the AO to allow the benefit of ₹ 2,30,000/- as cash available with the assessee. In the absence of any evidence brought on record, I find no merit in the claim of the assessee that the cash was available with him out of withdrawal made over the years. I direct the A.O to allow the adjustment of cash of ₹ 2.30 lakhs available with the assessee and balance addition of ₹ 1,09,000/- is hereby confirmed. The grounds of appeal raised by the assessee are partly allowed. It will also be fruitful to go through the para 7 of the same order whereby, the explanation regarding these deposits given by the assessee has been referred to: 7. The learned Authorized Representative of the assessee pointed out that the source of cash deposit were duly explained before the authorities below which have been dis-believed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, it has to be seen that, whether the same is substantiated or not. Section 68 is a deeming fiction, whereby an amount which though not proved to be the income of the assessee is deemed to be so. In the present case, the explanation of the assessee though was not accepted in its entirety, there is no material on the basis of which it would be held that the same was not bona fide. In other words the explanation given by the assessee has not been disproved. From the order of the AO in penalty, it is quite apparent that he has not been able to record any finding with regard to concealment or furnishing of inaccurate particulars of income of the assessee. He has not even considered explanation given by the assessee and merely on the basis of ITAT order, he levied the penalty. The A.O has not brought any evidence to conclude that the assessee had furnished inaccurate particulars of his income. In the quantum appeal, the Tribunal has accepted explanation of the assessee to the extent of deposit of ₹ 2,30,000/- as explained and partly confirmed the addition stating that explanation given by the assessee was not convincing. In the above circumstances, it cannot be said that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
