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2016 (12) TMI 1189 - ITAT KOLKATA

2016 (12) TMI 1189 - ITAT KOLKATA - TMI - Penalty u/s 271(1)(c) - sale of agriculture produce in the mandi - Held that:- AO made the impugned addition for not producing the relevant evidence showing the sale of agriculture produce in the mandi and the CIT-A confirmed the same observing that the Assessee did not produce anything before the AO in support of his claim and the Tribunal held that income declared under the head agriculture is excessive and determined the same by restricting to ₹ .....

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g Yaden, Addl. CIT, Sr.DR ORDER Shri S.S. Viswanethra Ravi, JM :- This appeal by the assessee is directed against the order dated 11-01-2016 passed by the Commissioner of Income Tax(Appeals)-15, Kolkata for the assessment year 2008-09, wherein he confirmed the penalty of ₹ 5,04,710/- imposed u/s. 271(1) ( c) of the Act. 2. The assessee has raised the fol lowing grounds of appeal:- 1. For that the order of the Ld. C. I .T(A) is arbitrary, i l legal , excessive, perverse and bad in law. 2. F .....

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d even though the land holding of the assessee was accepted. 5. For that on the facts and circumstances of the case the penalty confirmed is unjustified, not in accordance with law and is liable to be cancel led. 6. For that the order of the Ld. C. I .T(A) be modified and the asses see be given relief prayed for . 7. For that the assessee craves leave to add, alter or amend any ground before or at the time of hearing. 3. Going by the above grounds, the only issue remains for our consideration is .....

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property, income from other sources and agriculture. During verification of such documents the AO noticed that the assessee is co-owner of five (5) bighas of land. The AO found that the assessee had shown ₹ 15,40,370/- as agricultural income. In support of which, the assessee filed the details of sale of agriculture produce, purchase bills and documents in connection with the expenses amount received thereon. According to AO, it is not at all possible to earn such huge amounts on sale of a .....

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28-12-2010. Accordingly, the AO imposed penalty of ₹ 5,04,710/-. It is pertinent to note that the Tribunal on the appeal filed against the quantum addition restricted the income from agriculture at ₹ 10,00,000/- and treated the balance of ₹ 5,40,370/- being (Rs. 15,40,370 - ₹ 10,00,000/-) as income from other sources. 6. As aggrieved by such order of the AO in imposing the impugned penalty u/s. 271(1)(c) of the Act, the assessee challenged the same before the CIT(A). Bef .....

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the AO, hence he should have also accepted the agricultural income earned out of it. b. There is no specific charge mentioned in the showcause notice for penalty dated 29/12/2010 issued u/s 274 of the Act. The AO has not struck out the irrelevant part. c. On the basis of following judgments, the penalty order is legal and is liable to be quashed. 1. Hon'ble Kolkata ITAT, ITA No. 98/Kol/2013 Sri Birendra ath Saha Vs. DC1T 2. Hon'ble Gujrat High Court, CIT Vs Manu Eng. Works 122 ITR 306. 3 .....

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case laws relied upon by him are also not applicable in the instance case. The AO has mentioned in the assessment that the assessee could not produce any evidence regarding earning agricultural income as claimed in his return. Ownership of agricultural land cannot mean that the assessee was earning agriculture income in the absence of purchase and sale bills and documents regarding expenses incurred. The AR of the assessee admitted during the appellate proceedings also that such documents are n .....

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stipulated under section 271 (1)( c) should be discernible from the assessment order. As mentioned above this fact is clearly borne out from the assessment order. Thus, the ground that penalty proceedings was initiated on one account and levied on another account is not correct. Various judgments cited by the AR of the assessee pointed out that the specific finding regard existence of the conditions mentioned in section 271 (1)( c) should be discernible either from the assessment order or the pe .....

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unt at the end of the penalty order, the AO has mentioned in the penalty order as under:- "Tax on total income (including the concealed income of ₹ 5,04,707/- income of ₹ 15, 40, 370/- on which penalty is applicable." Thus. the AR argued that the AO had initiated tile penalty on one ground i.e. "furnishing inaccurate particulars of income" and levied the penalty on another ground i.e. "Concealment" which is legally not correct. This contention of the AR .....

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efore us by raising the aforementioned grounds of appeal and contended that the AO initiated penalty proceedings on both the charges as mentioned in the notice issued u/s.274 of the Act. The Ld. AR argued that the penalty cannot be imposed for furnishing of inaccurate particulars without mentioning the specific charge of offence committed by the assessee i.e whether he has concealed the income or furnished inaccurate particulars of income and relied on the same decisions as submitted before the .....

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mp;H), Ravail Singh reported in 254 ITR 191 (P&H) and Sangrur Vanaspati Mills Ltd reported in 303 ITR 53 (P&H) for such proposition and placed on record at page 64 of the paper book. 9. On the contrary, the Ld.DR submits that the assessee could not produce any explanation either in assessment proceedings or penalty proceedings before the AO and relied on the orders of the authorities below. 10. Heard both and perused the material available on record. We find that the Ld.AR advanced two f .....

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therefore, restricted to ₹ 10,00,000/-. With regard to contention of charging and imposing of penalty as mentioned in the said notice issued u/s. 274 of the Act the, fact remains admitted that the AO ticked only the portion of furnishing of inaccurate particulars of such income. Therefore, the ratio of decision as laid down by the Hon ble High Court of Karnataka in the case of Manjunatha Cotton & Ginning Factory reported in 359 ITR 565(Kar) is not applicable to the facts of the instan .....

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d average sale rate and worked out the additional sale at ₹ 15,50,306 which was rounded off to ₹ 15,50,000 and added to the income of the assessee. The Tribunal also estimated the yield on the basis of preceding year and the addition made by the learned CIT(A) had been sustained. The Hon ble High Court held that there should be conclusive evidence that the assessee had concealed the particulars of income or furnished inaccurate particulars of income for levying the penalty and the re .....

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is necessary that there must be concealment by the assessee of the particulars of his income or furnishing of inaccurate particulars of such income. The provisions of s. 271(1)(c) of the Act are not attracted to cases where the income of an assessee is assessed on estimate basis and additions are made therein. It was held that when the addition had been made on the basis of estimate and not on account of any concrete evidence of concealment, then the penalty was not leviable. The similar view wa .....

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