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TMI Blog2018 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee vide reply dated 17.10.2011 requested the AO to re-fix the hearing after 25 days. The assessee vide letter dated 9.1.2012 submitted as under : "Your goodself has now sought to levy the penalty In respect of the addition on account of unexplained cash credits of Rs.17,61,900/-. In this regard, at the outset, we submit that the said addition itself is incorrect and unjustified and hence no penalty can be levied in the present case. In his case, the Assessing Officer has observed that the assessee has deposited cash and not recorded in the books of accounts. In this regard, we submit that the bank account was reflected in the books of accounts of the assessee as evident from the Balance Sheet filed. The said cash deposits were mainly out of cash received as advance for sale of the residential premises of the assessee at Ahmedabad. The assessee had proposed to sell the premises since he was in dire need of funds. It Is submitted that the assessee had proposed to sell the premises situated at 402, C wing, Suryanshi Tower, Vastrapur. Ahmedabad to Shri Jasubhal D. Gandhi and Smt. Madhukanta J. Gandhi. Accordingly, the assessee had received Rs.18,62,000/- from the said parties ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently confirmed on 3.12.2009 stating that after examination of record minutely it was found that the it purchased jewellery from these parties. The AO alleged that M/s Prerak Gems made two contrary statements . Therefore, the AO was of the view the assessee evaded tax and accordingly imposed penalty of Rs. 6,01,369/- 100% of the tax sought to be evaded. In the appellate proceedings, the ld.CIT(A) confirmed the action of the AO by observing as under : "5.2 In light of the above facts, there remains no doubt that the explanation so furnished by the appellant is patently false and wrong. If all these facts are considered and viewed together, it immensely transpires that it the appellant had introduced his unaccounted and undisclosed income under the garb of „cash deposits‟ in bank account and which the appellant could not explain. On the contrary, it is a case of ex facie undisclosed income of the appellant. It is established that the appellant had concealed his income chargeable to tax and also concealed the particulars of such income. Therefore, levy of penalty cannot be considered improper. It is well established fact that the department scrutinizes cases at minima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r their record, there was no transaction of purchase of jewellery from Shri Jasubhai D Gandhi and Smt.Madhukanta J Gandhi vide letter dated 4.11.2009 whereas thereafter another letter dated 3.12.2009 by M/s Prerak Gems confirmed the dealing with the in-laws of the assessee that it has purchased jewellery from Shri Jasubhai D Gandhi and Smt.Madhukanta J Gandhi. The said parties explained as to how the mistake has happened as the name in the books of accounts appeared As Shri Jasubhai D Gandhi and Smt.Madhukanta J Gandhi. The said jewelers have submitted the purchase bills , purchase register, copies of profit and loss and income tax return wherein these transactions were duly reflected. The ld. AR submitted that since the transactions has been confirmed by the jeweler therefore no penalty could be levied on that account. The ld. AR, in support of the contentions submitted relied on the decision of the Hon‟ble Gauhati High Court in the case of Commissioner Of Income-Tax vs Tezpur Roller And Flour Mills(1976) 103 ITR 259 (Gauhati). The ld. AR submitted that in view of the above decision the penalty needs to be struck down as the assessee has discharged the onus cast upon it and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d.CIT(A) upholding the order of AO. In the case relied upon by the assessee of the Hon‟ble Gauhati High Court(supra), the Hon‟ble High Court held as under: "11. In Commissioner of Income-tax v. Khoday Eswarsa and Sons, [1972] 83 ITR 369, 376 (SC) the Supreme Court after quoting from Anwar Ali's case, as quoted herein-above, has observed as follows : "From the above it is clear that penalty proceedings being penal in character, the department must establish that the receipt of the amount in dispute constitutes income of the assessee. Apart from the falsity of the explanation given by the assessee, the department must have before it before levying penalty cogent material or evidence from which it could be inferred that the assessee has consciously concealed the particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. No doubt the original assessment proceedings for computing the tax may be a good item of evidence in the penalty proceedings but the penalty cannot be levied solely on the basis of the reasons given in the original order of assessment." 12. In the instan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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