TMI Blog2022 (5) TMI 1386X X X X Extracts X X X X X X X X Extracts X X X X ..... ) in this regard. Hence, we uphold the order of the ld. CIT (A) and the appeal of the assessee is dismissed. Penalty levied u/s 271(1)(c) - HELD THAT:- We note that the AO has passed the penalty order before the CIT (A) passed the order in the quantum proceedings. The addition in this case related to rejection of claim of agricultural income and rejection of sources of deposits. In our considered opinion, assessee has made a claim and the same has been rejected by the Revenue authorities. Mere rejection of a claim cannot ipso facto fasten rigours of penalty upon the assessee. This has been so held by Hon ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd . [ 2010 (3) TMI 80 - SUPREME COURT] . We are conscious that we have upheld the addition on agricultural income on the grounds of absence of cogent evidence of agricultural activities done on the said land. In this view of the matter, the said addition does not fasten upon the assessee liability for penalty. Other addition has also been sustained by us for not having any cogent evidence. We are of the opinion that penalty u/s 271(1)(c) is not exigible on these additions also. Hence, we set aside the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as found that during the year following credits were found in the account of Sh. Kamal Joshi on account of cash deposits :- Date Particulars Cr. Amount in Rs. 05.02.2008 Cash 500 -do- -do- 12,00,000 05.03.2008 -do- 5,00,000 -do- -do- 63,000 Total : 17,63,500 In the absence of any documents furnished by the assessee, the cash deposits of Rs.17,63,500/- are unexplained and add this amount of Rs.17,63,500/- u/s 68 of the IT Act in the income of the assessee treating the same as unexplained. 5. Upon assessee s appeal, ld. CIT (A) noted various submissions of the assessee and also noted the report of Investigation Wing. Ld. CIT(A) dismissed the assessee s contention of non-service of proper notice by observing as under :- From a perusal of the above, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cash deposits - 17,63,500 Stamp duty paid Rs. 69,000 + 36,000 (Registration date is before cash withdrawal of 45 lakh from Bank account Rs.) - 1,05,000 1,65,82,500 Therefore, the total assessed income comes to Rs. 1,65,82,500/-, against assessed income by AO at 1,82,63,500/-. So the appeal is treated as partly allowed but technically enhanced as land transactions have been assessed on business income. 18.4 No enhancement of Rs. 3,27,490/- showed as income from civil construction in letter before Investigation Wing has been made, as no evidence of civil construction work has been furnished and it was only an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i Gate as discussed Rs. 3,00,000/- Unexplained deposits in bank from Smt. Anil Kumar and Smt. Ram Pyari as discussed Rs.25,00,000/- Unexplained deposits from Smt. Anita Rana as discussed Rs. 8,00,000/- Undisclosed bank interest as discussed Rs. 81,917/- Total Income Rs.86,81,917/- 10. Upon assessee s appeal, ld. CIT (A) granted relief to the assessee to some extent. Ld. CIT (A) deleted the addition of Rs.50,00,000/- of cash deposit on the ground that there was substantial cash withdrawal in the earlier year. Granting part relief on the additions, the relevant portion of the order of ld. CIT (A) is as under :- 7. Construction receipts of 30 lakh being cheque deposits could not be established to be construction receipts. However, the assessee claimed opening cash balance of Rs.36,14,500/- out of cash withdrawals of 49 lakh made in A.Y. 2008- 09. Though house hold expenses of only 30,000/- have been shown in A.Y. 2008-09, the claim of receipt of 8 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sustenance of part penalty levied under section 271(1)(c) of the Act on the additions for AY 2008-09 dealt with herein above. The AO in the penalty order has levied the penalty on both the sums added by him i.e. Rs.1,65,20,000/- and Rs.17,63,500/- being bank deposit and cash deposits respectively. The reasoning given by the AO in levying the penalty was that assessee has not given any reply, hence the assessee has furnished inaccurate particulars of his income. Thereafter, he also held that the assessee is in default of concealment of income. Ld. CIT (A) passed a rather cryptic order. He did not fully reject the bonafide of the explanations of the assessee but held that they were questionable. Operative part of his order is dealt with as under :- 6. As evident from quantum appellate order, it is a case where neither full material facts were disclosed before the AO nor any return of income was filed though the assessee was aware of the enquiries by investigation wing as he had filed reply in the said proceedings. The bonafides of the assessee's explanation are also questionable. Therefore, the penalty levied by the AO is confirmed to the extent of 100% of tax sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the record. We note that as regards the major addition of Rs.50,00,000/- and the penalty imposed thereupon no longer survives as ld. CIT (A) has deleted the addition and the Revenue has not filed any appeal. As regards other additions, assessee has given explanations for the same. Assessee has mentioned persons from whom he received the money but the same has been rejected by the authorities below for lack of cogent evidence. It is not the case that Revenue has made enquiries from the concerned persons from whom loan has been taken and who had denied the same and hence the penalty on such addition cannot be sustained. Similar is the position of the assessee s claim for receipt from civil work, the same has been rejected for absence of cogent evidence. As held by us in the earlier penalty order, the rejection of assessee s claim cannot ipso facto fasten liability of penalty upon the assessee. Hence, relying on the decision of Hon ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd. - 322 ITR 158 (S.C.), we are of the opinion that penalty levied u/s 271(1)(c) is not exigible. Hence, we delete the levy of penalty and allow the appeal of the assessee. 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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