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TMI Blog2018 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... er levying the penalty u/s 271(1)(c) of the Act amounting to Rs. 1,48,550/- whereas as per the facts & circumstances the same should not b levied." 2. Briefly stated, the facts of the case are that the assessee had filed his return of income for A.Y. 2006-07 on 31.03.2007, declaring an income of Rs. 98,326/-. Subsequent to Search & seizure proceedings under Sec. 132 of the Act in the case of Vakrangee Software Ltd and its group entities on 13.12.2010, the case of the assessee was covered. That a Notice under Sec. 153A was issued to the assessee calling upon him to file his return of income for the year under consideration, viz. A.Y. 2006-07. The assessee in compliance to the aforesaid notice submitted that his return of income filed on 31.03.2007 may be treated as the return of income filed in compliance thereto. 3. The A.O while framing the assessment observed that though the assessee had claimed a deduction of Rs. 1,00,000/- under Chapter VIA, however, he could furnish proof only in respect of an amount of Rs. 26,644/- only. Thus, the A.O disallowed the assesses claim of deduction under Chapter VIA to the extent of Rs. 73,356/-. The A.O further observed that the assessee had m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by him in his bank account. The assessee in order to fortify his aforesaid contention also placed on record the confirmation from Chotamal Patodia, HUF, wherein it was affirmed that a loan/advance in cash was given to the assessee. The CIT(A) observed that the said confirmation was also produced before the A.O who had rejected the same. The CIT(A) further observed that the financial credentials in the case of Chotamal Patodia who did not have significant sources of income and had filed a return of income showing petty income of Rs. 1,26,000/- for the year under consideration, did not inspire much of confidence. The CIT(A) being of the view that neither the financial capacity of the creditor stood established nor the assessee had produced the bank account of the creditor to support his claim, therefore, concluded that the source of the aforesaid cash deposit remained unexplained. The CIT(A) on the basis of his aforesaid conviction concluded that as the assessee had failed to explain the source of the cash deposits, therefore, the same was rightly held to be his unexplained income. The CIT(A) in the backdrop of his aforesaid observations upheld the penalty imposed by the A.O under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27 ITR 510 (Del). 8. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record. We have deliberated at length on the issue under consideration and have given a thoughtful consideration to the same. We shall first take up the disallowance/addition made by the A.O in respect of the claim of Rs. 1 lac raised by the assessee under Chapter VIA in his return of income. We find that it remains as a matter of fact that the assessee had failed to furnish supporting evidence as regards the claim of Rs. 73,356/- raised by him under Chapter VIA in his return of income. We find that as observed by the CIT(A), the assessee had not even furnished the details as regards which all investments the said deduction was claimed by him, the same not only fails to inspire any confidence as regards the said claim, but rather, raises serious doubts as regards the veracity of the same. We find that it is neither a case of a bonafide claim of excess deduction, nor a case of mere unproved or unsubstantiated claim of deduction of the assessee. We are unable to comprehend that even if the assessee was unable to place on r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable as regards an unproved explanation. We find that our aforesaid view stands fortified by the judgment of the Hon'ble High Court of Bombay in the case of the judgment of CIT Vs. Upendra V. Mithani (ITA (L) No. 1860 of 2009), dated 05.08.2009, wherein it was observed as under:- "The issue involved in the appeal revolves around deletion of penalty under Section 271(1)(c) of the I.T. Act. The Tribunal has concurred with the view taken by the Commissioner of Income Tax (A). The Commissioner of Income Tax (A) has rightly taken a view that no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. The view taken by the Tribunal is a reasonable and possible view. The appeal is without any substance. The same is dismissed in limine with no order as to costs." We thus are of the considered view that as the explanation of the assessee as regards the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his order passed under Sec. 143(3) r.w 153A, dated 25.03.2013. The assessee did not further assail the order passed by the A.O, which thus attained finality. The A.O while framing the assessment initiated penalty proceedings under Sec. 271(1)(c) as regards the aforesaid additions/disallowance in the hands of the assessee, and thereafter imposed a penalty of Rs. 1,77,591/- under Sec. 271(1)(c) in the hands of the assessee, which on appeal was sustained by the CIT(A). 15. The assessee aggrieved with the order of the CIT(A) upholding the penalty of Rs. 1,77,591/- imposed by the A.O under Sec. 271(1)(c), had carried the matter in appeal before us. We find that the facts and the issue involved in the present appeal are the same as those involved in the aforesaid appeal of the assessee for A.Y. 2006-07, marked as ITA No. 5765/Mum/2014, therefore, our order passed in the said case shall apply mutatis mutandis to the present appeal of the assessee for A.Y. 2007-08, marked as ITA No. 5766/Mum/2014. Thus, the appeal of the assessee is partly allowed in terms of our observations recorded in the appeal of the assessee for A.Y. 2006-07, marked as ITA No. 5765/Mum/2014. Order pronounced in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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