TMI Blog2017 (1) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... ank account for purchase of scooter, this would result in double addition. Therefore, such an addition is not sustainable and therefore does not attract penalty u/s. 271(1)(c) of the Act. Undisclosed investment in plots - The dispute is only with regard to the assessment year in which transaction has to be recorded in the books of account. Under such circumstances we are of the view that no penalty is to be levied on addition, where the dispute is with regard to year of taxability. - Decided in favour of assessee - ITA No. 935/PUN/2014 - - - Dated:- 18-1-2017 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Hari Krishan For The Revenue : Shri Anil Chaware ORDER PER VIKAS AWASTHY, JM : This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-I, Nashik dated 03-03-2014 for the assessment year 2009-10 confirming the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ). 2. The brief facts of the case as emanating from records are: The assessee is engaged in the business of sale and purchase of plots and is also having agricultural income. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 30-11-2016 has deleted the penalty where the notice issued for levy of penalty u/s. 271(1)(c) does not specify the charge for levy of penalty in an ambiguous manner. 3.1 The ld. AR further submitted that even on merits the penalty levied u/s. 271(1)(c) on the additions made during the assessment are liable to be cancelled. The first addition on which the penalty is levied is with respect to deposits in ICICI Bank amounting to ₹ 4,05,000/-. The addition has been made u/s. 68 of the Act. The assessee is having income from agriculture. The deposits in the bank are from agricultural operations. The Assessing Officer made additions on the basis of entries in the passbook. It is a well settled law that the provisions of section 68 cannot be invoked to make additions on the basis of entries in the bank passbook, as bank passbook is not part of books of account. In support of his submissions the ld. AR placed reliance on the following decisions: i. Commissioner of Income Tax Vs. Bhaichand N. Gandhi, 11 Taxman 59 (Bom) : 141 ITR 67 (Bom); ii. Commissioner of Income Tax Vs. Baroda Tin Works, 221 ITR 661 (Guj). 3.2 The ld. AR contended that if the addition made u/s. 68 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nk. No relevant document was produced by the assessee to show that the deposits were made from sale of agricultural produce. The ld. DR further submitted that during the assessment proceedings on verification of the balance sheet it transpired that the assessee is having two bank accounts with ICICI Bank which were not disclosed by the assessee. Therefore, the credit balance as on 31-03-2009 in both the bank accounts i.e. ₹ 10,777/- was treated as undisclosed income for the year under consideration. In respect of unrecorded purchase of land/plots, the ld. DR contended that during the assessment proceedings the assessee had produced possession letter dated 11-11-2011, whereas the sale deed was executed in March, 2011. The possession letter is a self serving document and would not get preference over the sale deed which is a registered document. 5. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. We have also considered the case laws and the documents on which the ld. AR of the assessee has placed reliance while making his submissions. Undisputedly, the additions made in the assessment have attaine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income. The reliance in this regard was placed on the ratio laid down by the Hon ble Supreme Court in T. Ashok Pai Vs. CIT (2007) 292 ITR 11 (SC), wherein at page 19 it was held that concealment of income and furnishing inaccurate particulars of income carry different connotation. Applying the said proposition, it was held that where the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similarly, for furnishing inaccurate particulars of income, the standard proforma without striking of relevant clauses, as per the Hon ble High Court would lead to inference as to non-application of mind. 16. Further, the Hon ble Karnataka High Court in CIT Vs. SSA S Emerald Meadows (supra) has dismissed the appeal of Revenue, where the Tribunal had allowed the appeal of assessee holding that the notice issued by the Assessing Officer under section 274 r.w.s. 271(1)(c) of the Act to be bad in law as it does not satisfy which limb of section 271(1)(c) of the Act under which it has been initiated The Hon ble High Court had relied on decision of Division Bench of the Court rendered in CIT Anr. Vs. Manjunatha Cotto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... satisfaction for initiating proceedings under section 271(1)(c) of the Act, exact charge of the Department against the assessee is not clear. The Assessing Officer records the satisfaction for initiating penalty proceedings on both the counts i.e. concealment of income and furnishing of inaccurate particulars of income. The Hon ble Bombay High Court had also upheld the quashing of penalty proceedings for assessment year 1967-68 to be justified on account of vagueness and ambiguity in the notice issued. But the Hon ble High Court further held that where the assessee was fully aware of exact charge of the Department against him, then technical nonstriking of certain terms in the notice would not invalidate the proceedings. Where there is default in the first stage of making the assessee aware of exact charge of the Department, then initiation of penalty proceedings are vitiated and the same are to be quashed. The issue of notice under section 274 of the Act on such vagueness and ambiguity makes such notice invalid and proceedings thereafter are to be quashed. 25. The Hon ble Supreme Court in T. Ashok Pai Vs. CIT (supra) had held as under:- 23. Section 271(1)(c) remains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank account. The addition has been made u/s. 68 of the Act. The additions u/s. 68 can be made only where cash credit appears in books of account of the assessee. The Bank passbook is not part of books of account of the assessee. Therefore, the additions made u/s. 68 on the basis of entries in the bank passbooks are not sustainable. Our view is further fortified by the decision rendered in the case of Mayawati Vs. DCIT reported as 113 TTJ 178 (Del.) and the decision of Hon ble Bombay High Court in the case of Commissioner of Income Tax Vs. Bhaichand N. Gandhi (supra). The Hon ble Jurisdictional High Court has upheld the order of Tribunal, where the Tribunal deleted the addition u/s. 68 holding that cash credit for the previous year shown in the assessee s bank passbook issued to him by the bank but not shown in the cash book maintained by him for the year, does not fall within the ambit of section 68 of the Act. 8. The Hon ble Gujarat High Court in the case of Commissioner of Income Tax Vs. Baroda Tin Works (supra) observed : Sections 68, 69, 69A, 69B and 69C are all part of the same scheme where certain amounts though not proved to be the income of the assessee of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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