TMI Blog2018 (1) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... 726/-. The quantum order of assessment was challenged before the FAA, who vide order dated 5.10.2010 partly allowed the appeal of the assessee by upholding the addition on account of house property and partly in respect of cash credit to the tune of ₹ 17,61,900/-. Thereafter the AO issued show cause notice dated 27.9.2011 and 28.12.2011 which were served upon the assessee and the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s called for remand report and on this basis confirmed the addition of ₹ 24,702/- under the head income from house property and partly confirmed the unexplained cash credit of ₹ 17,61,900/-. The AO also rejected the contention of the assessee that the said amount was received from in-laws i.e. father-in-law, mother in-law, who raised by selling of personal jewellery to M/s Prerak Gems but during the remand report proceedings, on AO‟s inquiry with M/s Prerak Gems who first denying any such transactions with the assessee‟s in-laws subsequently 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 ₹ 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l in levying minimum penalty @100 % in case of such a patently false claim . Therefore, there is no reason to interfere with the order of the AO levying minimum penalty 4. The ld. AR vehemently, submitted before us that the confirmation of penalty by the ld.CIT(A) is totally wrong and against the facts on record. The ld. AR submitted that the assessee received money of ₹ 17,61,900/- which was alleged to be unexplained cash credit u/s 68 of the Act received from inlaws who in terms raised money by selling the jewellery to M/s Prerak Gems. The ld. AR while taking us through the page no.63 of the paper book which is a letter filed by M/s Prerak Gems in response to the information sought by the AO. M/s Prerak Gems submitted that as per 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter with M/s Prerak Gems. It was confirmed that names were wrongly written in the record of the jeweler as Shri Jasubhai D Gandhi and Smt.Madhukanta and regretted the error and inconvenience caused to the assessee. The copy of the bills, purchase bills, extract of purchase register, copy of profit and loss account and IT return were filed with the department having confirmed the purchase of jewellery from Shri Jasubhai D Gandhi and Smt.Madhukanta. In our opinion, the action of the ld.CIT(A) in confirming the penalty appears to be incorrect as the assessee has discharged onus cast upon it by proving the source of money from his inlaws which was confirmed by the Jewellers . In the present circumstances, we are not inclined to agree with the conclusion drawn by the ld.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 follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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