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Asst. Commissioner of Income Tax Versus Shri Bhushan Kamalnayan Vora And Vice-Versa

2017 (9) TMI 661 - ITAT MUMBAI

Penalty u/s 271(1)(c) - unexplained investment under section 69 - assessee during the survey u/s 133A voluntarily accepted that discrepancy in stock - AO's non surety about the charge as concealment of particulars of income or for furnishing of inaccurate particulars of income - Held that:- As referred to Para of penalty order and Para of assessment order whereby the penalty initiated and levied by the AO we are of the view that concealment is initiated and penalty is levied and the AO is not su .....

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esumption of concealment or concealed income is rebutted, it is for the department to establish that the income which the assessee is alleged to have concealed is, in fact, his income as distinguished from deemed income of the assessee which he failed to disclose in his return. In the present case of the appellant, find that effectively the penalty has been levied on the deemed income under section 69, which is not sustainable relying upon the aforesaid case laws. Hence, the penalty levied under .....

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n appeal No. CIT(A)-32/IT-27/DCIT(2)/2014-15 dated 14-05-2015. The Assessment was framed by ACIT Circle 17(2), Mumbai for the A.Y. 2008-09 vide order dated 29-12-2010 under section 143(3)(ii) of the Income Tax Act, 1961(hereinafter the Act ). The penalty was levied by DCIT Circle 17(2), Mumbai vide order dated 05-03-2014 under section 271(1)(c) of the Act. 2. The only issue in this appeal of Revenue is against the order of CIT(A) deleing the penalty levied by the AO u/s 271(1)(c) of the Act on t .....

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ot be extended to penalty proceeding in spite of the fact that the assessee during the survey under section 133A voluntarily accepted that discrepancy in stock and that was not based on any fiction. 2. On the facts and in the circumstances of the case, Ld. CIT(A) erred in deleting the penalty wrt unexplained cash credit under section 68 and commission expenses without considering the fact that the Ld. CIT(A) has confirmed the quantum addition and assessee preferred not to appeal against said ord .....

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case and have come to the conclusion that the assessee has concealed income/ furnished inaccurate particualrs of the income within the meaning of section 271(1)I,r.w. explanation 1 to this section and made himself liable for penalty under section 271(1)I. Had the case of assessee has not been selected for scrutiny the assessee would have easily escaped without paying taxes on this income. I am satisfied that penalty is clearly leviable in this case. 5. The first issue raised by the learned Couns .....

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nalty is levied and the AO is not sure about the charge of levy of penalty under section 271(1)(c) of the Act. 6. At the outset, it is clear that this issue is squarely covered in favour of assessee and against the Revenue by the decision of Hon ble Bombay High Court in the case of CIT vs. Samson Perinchery (Bom) in ITA No. 1154 of 2014 dated 05-01-2017. We find that the AO while levying penalty under section 271(1)(c) of the Act in his discussion clearly stated that the expression used in secti .....

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order of the Tribunal deleted the penalty imposed upon the Respondent Assessee. This by holding that the initiation of penalty under Section 271(1)(c) of the Act by Assessing Officer was for furnishing inaccurate particulars of income while the order imposing penalty is for concealment of income. The impugned order holds that the concealment of income and furnishing inaccurate particulars of income carry different connotations. Therefore, the Assessing Officer should be clear as to which of the .....

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indicates non application of mind on the part of the Assessing Officer while issuing the penalty notice. Respectfully, following Hon ble Bombay High Court decision in the case of Samson Perinchery (supra) on specific charge, penalty levied by the AO cannot be sustained. Accordingly, we confirm the order of CIT(A) deleing the penalty and dismiss the appeal of Revenue. 7. Coming to the merits of the case, we find from the penalty order of the AO i.e. as regards to unexplained investment towards d .....

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dition was made in quantum assessment because the appellant had not separately added the unexplained investment in stock in profit and loss account, and the claim of increase in gross profit rate of 2.63% due to such unexplained stock was found misleading and incorrect. The quantum addition made of unexplained investment in stock under section 69 has been confirmed by CIT(A). However, as regards the levy of penalty under section 271(1)(c) on such deemed income, the decision f Hon ble High Court .....

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fact, his income as distinguished from deemed income of the assessee which he failed to disclose in his return. In the present case of the appellant, I find that effectively the penalty has been levied on the deemed income under section 69, which is not sustainable relying upon the aforesaid case laws. Hence, the penalty levied under section 271(1)(c) on this issue is deleted, and therefore, the ground of appeal is allowed. 4.3 I have perused the facts of the case and appellant s submissions ca .....

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