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TMI Blog2018 (2) TMI 1278X X X X Extracts X X X X X X X X Extracts X X X X ..... dition for outstanding expenses for purchase of goods and expenses of Rs. 10,47,627/- u/s. 68 and addition of Rs. 85,000/- in respect of opening balance of Deposits of Rs. 85,000/-. (2)(i) The learned C.I.T. (Appeals) -10, Ahmedabad has erred in not appreciating the order u/s. 143(3) r.w.s.147 of the I T Act, 1961 for A.Y. 2007-08 and 2008-09 as per which the same A.O. had made reassessment without making any addition for similar outstanding expenses for purchase of goods and expenses. (ii) The learned C.I.T. (Appeals) -10, Ahmedabad erred in rejecting the legal precedent that the passing of the reassessment orders for 2007-08 and 2008-09 can be described as change of opinion as held by the Hon'ble Calcutta High Court in the case of CIT vs. Calcutta Credit Corporation (166 ITR 29). 3.(i) The learned C.I.T. (Appeals)-10, Ahmedabad erred in confirming the decision of the learned A.O., for considering creditors for expenses and goods of Rs. 10,47,627 as concealed income unlawfully and without base. (ii) The learned C.I.T. (Appeals)-10, Ahmedabad erred in confirming the decision of the learned A.O., for considering creditors of Rs. 7,50,572/- as concealed income on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out from the materials on record are as under:- The assessee has filed return of income on 29/09/2009 declaring total income of Rs. 3,29,140/-. The Case was selected for scrutiny under CASS. The assessment was finalized u/s.143(3) on 27/12/2011 on total income of Rs. 33,15,580/-. 3.1 During the course of assessment proceedings it was noticed that the assessee has received salary of Rs. 2,81,100/- from Target infrastructure Pvt. Ltd. which was originally not offered to tax during the filing the return of income. During the course of assessment proceedings the assessee vide letter dt 19/05/2011, offered this amount for tax. As the assessee has not disclosed the salary, the same was added to the total income of the assessee. Penalty proceedings u/s.271(l)(c) was initiated vide issuing notice on 27/12/2011. 3.2 During the course of assessment proceedings, summon were issued to 28 creditors out of them 7 persons are either not appeared or denied to have any credit to the assessee. The amount involve was Rs. 10,47,627/- which was added to the total income of the assessee. Penalty proceedings u/s.271(l)(c) was initiated vide show cause notice elated 27.12.2011. 3.3 On Verification ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Textiles v. CIT(2001)249 ITR 125 (Gujarat High Court) b) CIT v. Sureshchandra Mittal (2001) 251 ITR 9 (SC) c) Shri Shadilal Sugar & General Ltd. V. CIT (1987) 168 ITR 705 (SC) Therefore, your assessee humbly requests your good self to do away with the levy of penalty. (2)Deposits of Rs. 85000/- : Your assessee could not furnish confirmation of two depositors worth Rs. 85,000/-. At the same time, the revenue has not suffered any tax in the year under assessment or any year in the past. However, your assessee has agreed to the addition of Rs. 85,000/- for buying peace and tranquility of mind. It is a well founded, settled and accepted position in the law that if an assessee surrenders income to buy peace of mind and avoid further litigation, penalty for concealment is not leviable. Your assessee further relies upon the following judicial pronouncements to support his views. a) Smt. Brij Bala Choudary v. ITO (2003) 87 ITD 173 (Luck- Trib)/(2004) 82 TTJ 355(Luck -Trib) b) National Textiles v. CIT(2001) 249 ITR 125 (Gujarut High Court) c) CIT v. Sureshchandra Mittal (2001) 251 ITR 9 (SC) d) Shri Shadilal Sugar & General Ltd. Vs. CIT (1987) 168 ITR 705 (SC) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the decision relied upon by the assessee is not applicable in this case as facts and circumstances are totally difference from the present case. The Judgment of Gujarat High Court in the case of National Textile Ltd has deleted the penalty on the ground that the revenue has made no efforts to prove that the cash creditor was not genuine by issuing summons. In the present case summons were issued to the creditors, their statement was recorded u/s.131 of the Act, which proves that credit entries in the books are not genuine. 3.7 The Honorable ITAT in the case of Smt. Brijbala Chaudhary is held that penalty cannot be imposed on addition made on estimate basis. This is not the issue with the present case and therefore not applicable. 3.8 During the assessment proceeding out of unsecured loan, addition of Rs. 85,000/- u/s.68 of the Act., was made in respect of two depositors namely Shri Harshad V. Patel of Rs. 40,000/- and Pravin V. Patel of Rs. 40,000/- and Pravin V. Patel of Rs. 45,0000/- as the assessee failed to file confirmation from the above persons. 3.9 During penalty proceeding assessee submitted that he has agreed for the addition for buying peace and tranquility of mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, to (1) Vikibhai M. Raval (2) Bakulbhai Panchal and (3) Vijay Mahasan and had recorded their statements. On the basis of such statements addition of Rs. 7,50,572/- was made. However, the appellant was not informed about the statements recorded u/s.131 of the I.T. Act, 1961 and despite of the fact, appellant wrote a letter to the AO on 10/07/2012 to provide copies of statements of all the parties those were examined by the ld. AO u/s.131. But neither opportunity of cross examination nor statement u/s.131 was reported by the AO and supplied to the appellant and made an addition without informing the appellant. Since AO has not given any chance to cross examines the person whose statement were recorded u/s.131. Moreover, statement of above said persons were not supplied to the appellant and same is amount to miscarriage of justice. Ld. AO ought to have supplied the statement and thereafter given him chance to cross examine the person though statement was recorded by the AO. 6. In our considered opinion, in such circumstances penalty cannot be levied and penalty of Rs. 4,80,525/- deleted. 7. In the result, appeal filed by the assessee is allowed This Order pronounced in Open Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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