9911796707
TMI Blog2022 (4) TMI 673X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, the assessment was framed under section 143(3) of the Act by the AO vide order dated 20 December 2011 after making certain additions to the total income of the assessee as detailed under: 1. Unexplained unsecured loans Rs. 15,01,195/- 2. Addition on account of short term capital Gain Rs. 13,50,000/- 3. Addition on account of disallowance of long term capital loss Rs. 13,50,000/- 4. Unexplained capital addition Rs. 2,25,000/- 5. Addition on account of income from other sources Rs. 3,00,000/- 4.1 The above additions were also confirmed by the learned CIT-A vide order dated 28 June 2012 and thereafter the assessee has not preferred any appeal against the order of the learned CIT-A. Thus the order of the learned CIT-A for the quantum additions reached to the finality. 4.2 It was alleged by the AO during the quantum proceedings that the assessee with respect to the above income has concealed the particulars of income and therefore the penalty proceedings were initiated under section 271(1)(c) of the Act by issuing notice under section 274 read with section 271(1)(c) of the Act dated 20 December 2011. During the penalty proceedings, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder the head capital gain without giving the benefit of cost of acquisition. As such the value of the cost of acquisition was treated as nil in the absence of necessary documents. According to the assessee, it is not possible to calculate the income under the head capital gain without having the cost of acquisition. Thus, no income under the head capital gain can be determined. Accordingly, the question of levying the penalty with respect to the addition made by the AO for Rs.13.50 lakhs under the head capital gain does not arise. 6.5 The assessee with respect to the addition of Rs. 3 Lacs made by the AO, treating the gross value of the sale consideration as income under the head other sources admitted that he failed to furnish the supporting documents for the purchase and the sale of the properties. But, the assessee furnished the balance sheet for the year 2002-03 before the learned CIT-A to demonstrate that there was the investment shown by him (the assessee) in the land at village which was sold for Rs.3 Lacs. 6.6 The assessee without prejudice to the above also submitted that the entire amount of gross value of sale consideration has been treated as income under the head ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ain without allowing the benefit of the cost of acquisition. The necessary details with respect to the cost of acquisition were duly furnished before the authorities below and therefore it was incumbent upon the authorities to allow the same after necessary verification in the event of having any doubt. In either of the case, authorities below cannot treat the entire amount of sale consideration as income under the head capital gain/other sources without giving the benefit of the corresponding cost. 9. On the other hand the learned DR before us vehemently supported the order of the authorities below. 10. We have heard the rival contentions of both the parties and perused the materials available on record. In the present case, there were various additions made by the authorities below to the total income of the assessee which have been elaborated in the preceding paragraph. According to the Revenue, the assessee has concealed the particulars of income and therefore the penalty was levied/confirmed by the respective authorities. Now, we proceed for each item of addition with respect to which penalty was levied by the authorities below. i. Penalty with respect to the unexplained c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of, the unsecured loans taken from depositors of Hans Motor garage it is submitted that all the loan has been received by accounts payee cheque only in the bank account of your appellant. Since, all such loans received from party no. 1 to 4 in Hans Motor Garage were through cheques therefore the persons having identity and creditworthiness. Further, all other details like confirmations; identity proof etc. has been furnished except party to serial no. 4 ( Hariom Auto Electric Rep.Works). In respect of the loans amounting to Rs. 4,61,000/- received from the party at serial no. 1 to 24 in Hans Motor it is submitted with humble respect that the onus of your appellant to furnish confirmations and Identity proof has been duly discharged during the course of the assessment proceedings. However, the learned A.O. has rejected the said confirmations and considered said loans as unexplained simply on the ground that no source of the said depositor has been explained by your appellant Merely as your appellant could not explain the source of the depositor, the same cannot be the basis to treat the said loans as unexplained cash credit. 10.2 From the above, it is transpired that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not inclined to uphold the order of the authorities below for levying the penalty under the provisions of section 271(1)(c) of the Act on account of concealment of income with respect to unexplained cash credit under section 68 of the Act. 10.5 Moving to the next amount of penalty levied on the addition of short-term capital gain and disallowance of long-term capital loss and treating the long-term capital gain as income from other sources. The assessee with respect to two pieces of land has shown short-term capital gain of Rs.50,000 and 59,000.00. However, the AO has treated the entire gross value of the sale consideration as income under the head capital gain on the reasoning that the assessee failed to furnish the necessary details for the cost of acquisition of such lands. The additions made by the AO were confirmed by the learned CIT-A which were not challenged before the higher forum by the assessee. In other words the additions made by the revenue authorities have reached to the finality. Based on that, the revenue authorities have levied the penalty for the additions made during the quantum proceedings. However we find that the assessee during the penalty proceedings h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty was sold at a price of Rs.3 Lacs and the capital loss was calculated after claiming the index cost of acquisition of the property. But, the AO disallowed the loss shown by the assessee and treated the sale consideration of Rs.3 Lacs as income from other sources. The action of the AO was based on the reasoning that the assessee failed to furnish the supporting documentary evidence. Indeed, the assessee before the learned CIT-A during the assessment proceedings has furnished the balance sheet for the year 2002-03 wherein such investment was shown. Once the assessee has filed the supporting documents, the onus is shifted upon the revenue to disprove the contention of the assessee based on the documentary evidence. However, we note that the learned CIT-A without giving any cogent reason has not considered the financial statement filed by the assessee for the year 2002-03 which is placed on pages 45 to 50 of the paper book. As the penalty proceedings are distinct and independent to the quantum proceedings, in our considered view, penalty cannot be levied merely on the reasoning that some addition was made by the AO during the quantum proceedings. There has to be independent verif ..... X X X X Extracts X X X X X X X X Extracts X X X X
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