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2017 (2) TMI 694 - ITAT CHANDIGARH

2017 (2) TMI 694 - ITAT CHANDIGARH - TMI - Penalty u/s 271(1)(c) - Unexplained expenditure u/s 69 - Held that:- It is admitted fact that it is based upon seized document and explanation of the assessee was not found sastisfactory. The assessee explained that it is rotating capital investment by Shri J.C.Bansal which had already been declared before Settlement Commission in the amount of ₹ 30,70,000/-. However, when break-up of the same was given, amount of ₹ 94,500/- did not find men .....

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g the penalty under section 271(1)(c) of the Act against the assessee on this addition. - Addition on account of undisclosed income - Held that:- Receipts produced on record clearly show that almost all the payments which were due upon Shri Rahul Chhabra have been received by assessee in subsequent years. Therefore, there is no question of any amount of ₹ 5 lcs paid by Shri Rahul Chhabra in cash. Thus, the assessee is able to explain at this stage that no amount of ₹ 5 lacs was p .....

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y on this addition. - ITA Nos. 233 & 234/CHD/2016 - Dated:- 8-2-2017 - Shri Bhavnesh Saini, Judicial Member And Ms. Annapurna Gupta, Accountant Member Appellant by : Shri Sudhir Sehgal Respondent by : Shri S. K. Mittal ORDER Per Bhavnesh Saini, JM Both the appeals by the same assessee are directed against different orders of ld. CIT(Appeals)-3 Gurgaon dated 06.01.2016 for assessment years 2007-08 and 2009-10, challenging the levy of penalty under section 271(1)(c) of the Income Tax Act. 2. We ha .....

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132 of Income Tax Act was carried out on 07.07.2009 on Bansal Group of cases by Investigation Wing, Chandigarh. The assessee was one of the person/concern covered under section 132 of the Act. 5. As regards unexplained expenditure of ₹ 94,000/- under section 69C of the Act, it is observed by the Assessing Officer that as per page 81 of Annexure A-1 seized from the office premises of the assessee i.e. SCO 2474, Sector 22, Chandigarh. This was hand written sheet showing certain transactions .....

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mmission. The plea of the assessee that this amount represents undisclosed income of Shri J.C.Bansal and has been declared in his hands before Settlement Commission was not acceptable. The seized document pertains to the assessee and this was undisclosed expenditure of the assessee. The Assessing Officer after discussion made a perusal of the chart produced before him noted that ₹ 94,500/- was not shown as incurred out of additional income surrendered during assessment year 2007-08. The as .....

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tary evidence. The Assessing Officer was, therefore, of the view that assessee has concealed the income and furnished inaccurate particulars of income willfully. 6. As regards undisclosed income of ₹ 5 lacs, it is observed by the Assessing Officer that as page 57 of Annexure A-2 seized from business premises was a hand written page showing transaction in cheques and cash received from Shri Charanjit Lal and Shri Rahul Chhabra. The assessee was asked to give details of these transactions an .....

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n shown. The total payment shown was ₹ 12,89,760/-. Consequently, a sum of ₹ 5 lacs was treated as undisclosed income of the assessee. The ld. CIT(Appeals) confirmed the addition and penalty proceedings were also initiated against the assessee. 7. The assessee at the penalty proceedings filed written statement which is noted in the penalty order in which the assessee briefly explained the same facts that since cheques of Shri Rahul Chhabra were continuously dishonoured, therefore, he .....

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cordingly, imposed under section 271(1)(c) of the Act. 8. The assessee challenged the penalty order before ld. CIT(Appeals), detailed submissions were made, however, ld. CIT(Appeals) did not accept contention of the assessee because both the above additions have been confirmed by ITAT and are based upon seized document. The ld. CIT(Appeals) noted that assessee did not disclose all the facts in the return of income and burden upon assessee has not been discharged and penalty can be imposed even u .....

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mitted that it was a rotating capital investment by Shri J.C.Bansal and he had already disclosed ₹ 30.70 lacs therefore, penalty need not be imposed. As regards the addition of ₹ 5 lacs, copy of the seized paper is filed at page 6 of the Paper Book. Copies of the allotment letter and cheques dishonoured in the name of Shri Rahul Chhabra are filed at page 1-5 of the Paper Book. He has submitted that in the seized paper, no cash receipt of ₹ 5 lacs has been mentioned. He has subm .....

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l calculation of the same to show that balance payment due against Shri Rahul Chhabra was ₹ 7,51,340/- which have been recovered from Shri Rahul Chahbra later on in a sum of ₹ 7,46,000/- in different amounts starting from 22.12.2010 to 12.11.2014. Copies of the receipts issued by the assessee in the name of Shri Rahul Chhabra are also placed on record. He has, therefore, submitted that almost all the payments which were due as per calculation on left side of the seized paper have bee .....

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He has also relied upon decisions of Hon'ble Supreme Court in the cases of Dharmendra Textile & Processors 306 ITR 277 and Atul Mohan Jindal 317 ITR 1 on the proposition that penalty is strictly a civil liability. 10. We have considered rival submissions. As regards first addition of ₹ 94,500/-, it is admitted fact that it is based upon seized document and explanation of the assessee was not found sastisfactory. The assessee explained that it is rotating capital investment by Shri .....

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y evidence or material on record. Therefore, Explanation-1 to Section 271(1)(c) of the Act is clearly attracted in the case of the assessee. The authorities below were, therefore, justified in levying the penalty under section 271(1)(c) of the Act against the assessee on this addition. We, therefore, dismiss this ground of appeal of the assessee. 10(i). As regards levy of the penalty on the addition of ₹ 5 lacs, the quantum addition has been confirmed by the Tribunal. The Tribunal consider .....

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our of the cheques, therefore, in the absence of any evidence on record, quantum addition of ₹ 5 lacs was upheld. The ld. counsel for the assessee, however, produced on record the allotment letter in the name of Shri Rahul Chhabra alongwith schedule of payment of ₹ 15,36,100/- and also filed copies of receipts which were cancelled on dishonour of the cheques. Copies of the dishonoured cheques are also produced on record. The ld. counsel for the assessee, therefore, submitted that the .....

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m Shri Rahul Chhabra later on which have been accounted for in the books of account of the assessee. These receipts now produced on record clearly show that almost all the payments which were due upon Shri Rahul Chhabra have been received by assessee in subsequent years. Therefore, there is no question of any amount of ₹ 5 lcs paid by Shri Rahul Chhabra in cash. Thus, the assessee is able to explain at this stage that no amount of ₹ 5 lacs was paid in cash by Shri Rahul Chhabra, othe .....

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on quantum have been confirmed by the Tribunal but it was confirmed because assessee failed to reconcile the entries that no amount of ₹ 5 lacs have been received in cash from Shri Rahul Chhabra. Since quantum and penalty proceedings are distinct and independent and assessee is now able to explain that due amount was paid subsequently as noted above, therefore, we are of the view it is not a fit case of levy of penalty on the addition of ₹ 5 lacs. We may note that the findings in th .....

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ditions of ₹ 59,43,115/- and ₹ 4,80,000/-. 14. Brief facts relating to the issues are that during the course of search, page Nos. 59 to 67 of Annexure A-2 were seized from the office of the assessee. The said documents were confronted to Shri Lalit Jindal whose statement was recorded on 29.07.2009 i.e. after the search. Documents tabulated contain entries relating to receipt of payment from Shri Budhiraja family and letter dated 10.08.2008 addressed to Shri Lalit Jindal which contain .....

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have not been accounted for in the regular books of account which in turn have been surrendered to the tune of ₹ 2 Crores. The scanned copy of page 67 is available at page 3 of the assessment order which is letter written to Shri Lalit Jindal on 10.08.2008 with regard to investment in various properties. The said document talked about the discussion with Mr. Jindal and total amount receivable from Mr. Jindal at ₹ 1,28,89,362/- against which ₹ 13 lacs had already been received f .....

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essment order and page 62 of A- 2 is the Letter (e) 61, 60 and 62 are reproduced at pages 8, 9 and 10 of the assessment order. The said three pages i.e. 61, 60 and 62 of the seized documents were in respect of transactions at (e). Page 59 of A-2 is scanned and is placed at page 11 of the assessment order. The Assessing Officer noted from all these pages that on each page, the assessee has recorded the total amount and the balance amount after adjustment which are due to him and his family member .....

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, analyzed the reply of the assessee and found it was not acceptable and made an addition of ₹ 1,28,68,362/- holding that page 67 was nothing but summary of pages 59 to 66. 15. The addition was challenged before ld. CIT(Appeals) and ld. CIT(Appeals) considered this issue in detail and held that Assessing Officer having added ₹ 1,28,69,362/- was not correct as the same was an outstanding amount. However, at page 15 Para (i) of the assessment order, amount of ₹ 59,43,115/- was st .....

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l briefly noted that assessee failed to produce Shri Monga before the Assessing Officer and did not accept contention of the assessee that figures given in the seized paper were notional figures and assessee failed to co-relate entries contained in the seized paper. The Assessing Officer, after considering the explanation of the assessee at the penalty stage noted that explanation of the assessee is not acceptable and assessee has concealed income on the basis of seized paper and levied the pena .....

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4,80,000/- was confirmed. The Assessing Officer on this addition also, did not accept explanation of the assessee and noted that explanation of the assessee is after thought and cannot be relied upon. The assessee furnished inaccurate particulars of income as well as concealed the income. Therefore, on both these additions, penalty was levied by Assessing Officer. 17. The ld. CIT(Appeals) on the same reasoning as have been given in assessment year 2007-08, confirmed the levy of penalty and dism .....

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authorities below that amount was stated to be paid by Shri Sunil Bansal and he made same declaration but assessee failed to substantiate the same explanation and it was found that undisclosed income was higher as against disclosed on these seized papers, therefore, addition of ₹ 4,80,000/- was made. 18 (i) Ld. Representatives of both the parties submitted that this issue is same as have been considered in assessment year 2007-08 on the addition of ₹ 94,500/-, therefore following th .....

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ith the assessee in his own name, in the name of his wife or against some customer or friend. In the seized letter dated 10.08.2008, Shri Anil Monga has given approximate and notional figures. All the investments made with the assessee which he wanted that assessee should re- purchase the same. No amount have been paid by assessee to Shri Anil Monga. The addition is made of the amount payable on which no inquiry have been conducted on the confirmation filed by Shri Anil Monga. The addition is co .....

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ve been maintained, but penalty is not leviable in the facts and circumstances of the case. 19(i) On the other hand, ld. DR relied upon orders of authorities below. 20. We have considered rival submissions. All the seized papers are noted and reproduced in the assessment order. The letter dated 10.08.2008 contained certain details with regard to the approximate figure of the property booked with the assessee. In the seized paper, it is stated that amount of ₹ 13 lacs have been received and .....

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the name of his wife or some other persons. The names of other persons are also mentioned in most of the loose slips like Anil Behal, Sanjay Kapoor, Vineet Marwah. Shri Anil Monga explained that the properties have been booked with the assessee for which payments have been made and he has made a request to the assessee to re- purchase the properties which were booked with the assessee. The term premium/amount payable have been given in the seized paper to show that the notional value of the pro .....

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e amounts are paid by the assessee to Shri Anil Monga. However, none of the seized papers speak of the same thing. The additions have been confirmed because Shri Anil Monga was not produced before authorities below and that the entries are not co-related. Shri Lalit Jindal, Director of the assessee in his explanation also answered that this letter was written by Shri Anil Monga giving details of investments made in various projects. Shri Anil Monga mentioned the expected price of the properties .....

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