9911796707
TMI Blog2015 (7) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment under section 147 of the Income Tax Act by issuing notice u/s 148, dated 30.07.2008. The A.O on the basis that the information of giving loan was not verifiable from the income, formed a belief that due to omission on the part of the assessee, income of Rs. 4 lacs had escaped assessment. On the request of the assessee he provided him the copy of reasons recorded. During the course of assessment proceedings, the plea of the assessee was that he had given loan/deposit through D.D to Bajrang Bali Rice Mills out of his capital of Rs. 4,52,894/- as on 31st March, 2005. The A.O noticed that the assessee had made cash deposits in bank account No. 183 with Oriental Bank of Commerce, Pehowa Branch as under : 31.05.2004 Rs. 1,50,000/- 05.06.2004 Rs. 1,89,000/- Rs. 3,39,000/- The statement of assessee was recorded on 26.10.2009 by the A.O in which he stated that the above said amounts were received from his father in cash. The assessee failed to file any documentary evidence in this regard and the AO treated the deposits of Rs. 3,39,000/- as unexplained u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income nor furnished inaccurate particulars of income. It was the onus of the A.O to prove otherwise by bringing some adverse material against the assessee on record. It was also submitted that A.O had made the addition in a mechanical manner. Mens rea & Mala fide intention both being the essential ingredients and the initial burden of discharging the onus being on the revenue for proof that the assessee has concealed his income or furnished inaccurate particulars deliberately, the penalty is not leviable. In view of this it was prayed before the CIT(A) to delete the penalty. 5. Rejecting this contention of the assessee CIT (A) confirmed the penalty amounting to Rs. 27,860/- levied by the A.O. u/s 271(1)(c). 6. During the course of hearing before me, the learned Counsel of the assessee submitted that the AO while levying penalty has not brought any material on record and has only relied upon the confirmation of part of addition of Rs. 1,09,000/- by the ITAT and this alone is not sufficient to uphold the levy of penalty. As per the AR the assessee has contended that he has tendered the explanation which is not found to be false and therefore, penalty cannot be levied. Further, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls tabulated at page 4 of the appellate order, the total income of the assessee in A.Y. 2001-02 was Rs. 44,800/-, A.Y 2002-03 was Rs. 59,200/-, A.Y 2003-04 was Rs. 68,250/-, A.Y 2004-05 was Rs. 98,500/- and in A.Y 2005-06 was Rs. 1,05,342/-. Out of the said income the assessee had withdrawn in A.Y 2001-02 Rs. 22,500/-, in A.Y2002-03 Rs. 25,000/-, in A.Y Rs. 43,500/-, in A.Y 2004-05 Rs. 32,500/- and in A.Y 2005-06 Rs. 36,400/-. The assessee had claimed certain brought forward cash in hand and hence the assessee had tabulated that in A.Y 2005-06, the brought forward funds available with the assessee were Rs. 4,52,894/-. The assessee had failed to produce any record to show that the assessee had accumulated the aforesaid funds and source of the said funds. From the perusal of the details it transpires that in A.Y. 2001-02 out of total income of Rs. 44,800, the assessee had withdrawal a sum of Rs. 22,500 only which the assessee claims was available with him and has not been utilized for any purpose. In A.Y 2004-05 out of Rs. 98,500/- withdrawal of Rs. 32,500/-, in A.Y. 2003-04 out of Rs. 68,250/- withdrawal of Rs. 43,500/-, in AY 2004-05 out of Rs. 98,500/- withdrawal of Rs. 32,500 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the learned CIT(A) stressed that the assessee had failed to produce any evidence to justify the availability of cash which in turn was deposited in the bank account maintained by the assessee, from which he issued DDs to Bajrang Bali Rice Mills." 9. From the reading of the above extract of the order of ITAT, It is clear that this is a case where the assessee has offered an explanation even regarding the sustained part of the addition made under section 68, which is a plausible explanation. Admittedly, the onus to prove the said deposits lie on the assessee, though he has not been able to satisfy the authorities to the extent of addition upheld. 10. At present, this Bench is concerned with the appeal against the penalty levied under section 271(1)(c). Conditions under section 271(1)(c) must exists before the penalty be imposed, independently of the quantum proceedings. As per the Explanation to section 271, the income is deemed to have been concealed or particulars are held to be furnished inaccurately if the assessee offers an explanation which is false or which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding independent of presumption about concealment of income of the previous year which the assessee has concealed or particulars of which have been inaccurately furnished by him. As in the present case the assessee's burden to rebut the presumption raised by the Revenue stands discharged on the basis of the material available on record, the Tribunal was right to hold that penalty need not be sustained under section 271(1)(c) of the Act in absence of any evidence to conclude a positive finding that there was concealment of the income. We accordingly answer Question No.2 also in favour of the assessee and against the Revenue." 12. In another case CIT v. Baroda Trading Works [1996] 221 ITR 661 the Hon'ble Gujarat High Court has held that even if the addition under section 68 was made on admission by the assessee, Tribunal having come to a conclusion that the presumption under the explanation to Section 271(1)(c) stood rebutted, no penalty under section 271(1)(c) can be sustained. 13. In view of the above, I set aside the order of the Authorities below and cancel the penalty levied under section 271(1)(c) of the Act. 14. In the result, the appeal filed by the assessee is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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