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2016 (12) TMI 1290 - ITAT MUMBAI

2016 (12) TMI 1290 - ITAT MUMBAI - TMI - Penalty under section 271(1)( c ) - addition on basis of loose paper found in search - Held that:- Addition made by the AO on the basis of loose papers was reduced to 10% of the said addition and thus the addition which survived at FAA level was ₹ 21,47,795/-. We further find that the addition was made by the AO on the basis of impounded documents which contains entries which the assessee could not explain and added the entire amount as appearing in .....

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existence and we therefore, are not in agreement with the conclusion drawn by the tax authorities. Accordingly, we delete the penalty. - Decided in favour of assessee - I.T.A. No. 4900/Mum/2014 - Dated:- 22-12-2016 - Shri Mahavir Singh, JM And Shri Rajesh Kumar, AM Appellant by : Shri Anuj Kishnadwala Respondent by : Smt. Anu K Aggarwal ORDER Per Rajesh Kumar, AM The appeal filed by the assessee is directed against the order dated 27.3.2014, passed by the CIT(A)-24, Mumbai, for the assessment ye .....

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nt of ₹ 1,95,40,372/- which did not contain dates of entry. Since the impounded documents were found in the possession of the assessee, the AO concluded that the above amount of ₹ 2,14,27,947/- was unaccounted receipts of the business from custom s house agency. The AO also found that the assessee has debited an amount of ₹ 1,13,36,910/- under the head Cargo Handling Expenses, CWC/Maserk/Dock Fees, Documentation charges, Loading and unloading charges and Transportation charges .....

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of addition sustained by the ld.CIT(A) out of total ₹ 2,14,27,947/- and the AO after considering the reply of the assessee came to the conclusion that the assessee has concealed particulars of income and considering the particulars of income within the meaning of section 271(1) ( c ) read with Explanation (1) to section 271(1)(c) of the Act and levied the penalty of ₹ 7,21,264/- at the rate of 100% of the tax sought to be evaded vide order dated 15.3.2012 passed under section 271(1)( .....

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timation of income of ₹ 21,42,795/@ 10% of ₹ 2,14,27,947/- after taking into account the expenses which the assessee may have incurred to earn these receipts, by the CIT(A)-24, Mumbai. Moreover, CIT(A) Mumbai has categorically held that the total receipts of ₹ 2,14,27,947/- were not accounted for by the assessee in books of account. The same view is confirmed by the ITAT, Mumbai in its order dated 15/3/2013 wherein ITAT, Mumbai has elaborately discussed each one of the entries .....

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to file its reply and if the assessee chose to remain silent and merely filed a copy of the CIT(A)'s order without filing a rejoinder, the fault lays with the assessee and not with the Assessing Officer. It has also been submitted that when the department was in appeal before ITAT, Mumbai, Assessing Officer could have waited till the order of ITAT, Mumbai, however, there is no bar in Income tax Act 1961 to the levy of penalty after the receipt of orders of CIT(A), Mumbai and the Assessing Of .....

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sed by the assessee is rejected. However, assessee was given sufficient opportunities in present appellate proceedings to furnish explanation and assessee's CA has already furnished a 39 page paper book on 1/11/2013 which is fully taken into consideration while deciding the appeal. Moreover, in assessee's case, the furnishing of inaccurate particulars of income as well as concealment of income are both applicable because assessee has furnished inaccurate particulars of business receipts .....

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of the CIT(A) about the unaccounted business receipts and income of ₹ 21,42,795/-. In nutshell, levy of penalty u/s. 271(1)(c) of LT. Act, 1961 is fully justified in facts and in law. Aggrieved by the order of the ld. CIT(A), the assessee has preferred an appeal before the this Tribunal. 3. The ld. AR vehemently submitted before us that the premises of the assessee was searched by the search team and certain loose/unaudited papers were found and the assessment was framed by the AO by makin .....

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on (1) to section 271(1)(c) of the Act was totally wrong and without any basis. The assessee has not claimed any false expenditure nor has not offered any explanation which were found to be false by the tax authorities. The ld.AR submitted that the case of the assessee was a case of difference of opinion and the entire addition was based upon the estimation and conjectures which was reduced substantially by the ld.CIT(A) and therefore, it was a patent case of difference of opinion amongst the ta .....

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