TMI Blog2018 (5) TMI 2125X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee knowingly furnished inaccurate particulars of income and was very much aware that he was involved in Hawala entries. In these appeals, the penalty was levied/confirmed on the basis of involvement of the assessee as discussed in the earlier paras of this order. Thus, there is clear cut case of concealment of income/furnishing of inaccurate particular of such income, that being the case, we find no infirmity in imposing/confirming the penalty. Considering the provision of the Act and the foregoing discussion, order of the Tribunal on quantum addition, material facts available on record, it can be concluded that it was a conscious act of the assessee to hide something from the Department. As in the case of the present assessee, the quantum addition has been confirmed. However, in principle, the penalty levied by the Assessing Officer in respect of additions confirmed by the Tribunal should be sustained. However, by a later development, the co-ordinate Bench of the Tribunal in the case of Varun Industries Ltd. [ 2017 (4) TMI 1593 - ITAT MUMBAI] simply setaside the matter to the file of the Ld. Commissioner of Income Tax (Appeal), to decide the issue afresh after taking i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an.com 539(Guj.). It was pleaded that in the case of Varun Industries, the Department has accepted that the transaction is genuine. 2.1. We have considered the rival submissions and perused the material available on record. Before adverting further and in view of the submissions from both sides, it is our bounded duty to examine the order of the Tribunal on quantum addition (ITA No.5739 to 5745/Mum/2012) for Assessment Years 2001-02 to 2007-08, order dated 25/09/2017. These bunch of appeals filed by two different assessee s are directed against two common orders passed by the CIT(A) 37, Mumbai dated 24.07.2012 for the assessment years 2001-02 to 2007-08. Since, the facts are identical and issues are common, these appeals were clubbed, heard together and disposed of by this common order for the sake of convenience. The grounds of appeal raised by the assessee, Shri Dilip Shah are as follows: 1. On the fact and circumstances of the case as well as in Law, the Learned CIT(A) has erred in confirming the action of Learned Assessing Officer in passing a consolidated order for all seven assessment years from 2001-02 to 2007-08, ignoring the statutory provisions and requirement. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raves leave to add, amend alter or delete the said ground of appeal. 2. Brief facts of the case extracted from ITA No. 5739/Mum/2012 in the case of Shri Dilip C. Shah for the assessment year 2001-02 are that search and seizure u/s 132 of the Income tax Act, 1961 was carried out in the case of Shri Dilip C. Shah and Shri Atul Sanghvi on 05.02.2007. During the course of search and seizure operation incriminating materials were found which revealed that the assessee along with Shri Atul Shanghvi involved in providing accommodation entries to various beneficiaries. The incriminating documents found further revealed that the assessee has operated more than 100 bank accounts in various names and also tampered documents like PAN card and other evidence in support of address proof to open and operate bank accounts in the name of various persons. Earlier a survey action was carried out at the office premises at 78/80, Motor garage Bldg. Mota Compound, Gaushala, C.P. Tank, Mumbai-4. During the course of survey keys of three bank lockers were found in the possession of the assessee and Shri Atul A. Sanghvi. Accordingly, a warrant by u/s. 132 was executed and total cash of Rs.47.30 lacks al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... response to the notices authorized representative for the assessee appeared from time to time and furnished various details, as called for. 4. During the course of assessment proceedings, the A.O noticed that the assessee is operating more than 100 bank accounts in various entities name in different bank accounts and the total sum found credited in these bank accounts was worked out at Rs.21,22,27,57,495/-. The A.O further observed that the assessee had issued sales bills in the name of 51 entities for an amount of Rs.8,59,99,06,373/-. The A.O has summarised the details of companies/firms operated by the assessee along with shri Atul Sanghvi and the names of persons of concerns are listed in the assessment order dated 31.12.2008 at paragraph 5.1. Similarly, the A.O has listed the total sales bills issued by the assessee in the name of various concerns at paragraph 5.2 of assessment order dated 31.12.2008. The A.O also listed the names of companies/firms and corresponding bank accounts operated in various banks at paragraph 5.3 of his order dated 31.12.2008. As per the information gathered during the course of search coupled with further inquiries conducted during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has opened bank account s in one persons name in different bank accounts by fixing his photograph on the fabricat d address proof and PAN No. The A.O further observed that the statement recorded during the course of search from one Mr. Yashwant Pandya who claimed to be the accountant of the assessee indicates that the assessee is issuing sales bills in various names. Shri Yashwant Pandya accountant of the assessee who has clearly stated in his statement that he had under instruction from Shri Atul Sanghvi and Shri Dilip C. Shah, bills in respect of the various companies were prepared in the office of the assessee. The bills were prepared in the name of various concerns whose blank cheques were found during the course of search. The A.O further relied upon the statement of Shri Pradip M Jabalia who had given his address for correspondence for some of the bank accounts operated by shri Atul Sanghvi and Shri Dilip C. Shah. In the statement he has confirmed that the letters from the bank were collected by Shri Atul and Dilip Sanghvi. The sum and substance of the statement given by the Shri Pradip M Jabalia is that Shri Atul Sanghvi and Shri Dilip Sanghvi floated various dummy concern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e etc, to open bank accounts in the name of different persons who had nothing to do with those transactions. The assessee and Shri A. Sanghvi have operated bank accounts in different persons names, however the real transactions have been carried out by the assessee along with Shri Atul Sanghvi. All these sequence of events and evidences clearly indicates that the assessee is engaged in the activity of providing accommodation entries therefore, he opined that the total sum found credited in these bank accounts is the gross turnover of the assessee from the activity of issuing bogus bills. The A.O has concluded assessment in the following manner:- (I) Commission on bogus billing:- The A.O has worked out commission on bogus billing issued in the name of different entities to the tune of Rs.856,64,69,533/- at the rate of 2% on total bill amount and divided for a period of 7 years from assessment year 2001-02 to 2007-08 and added 50% on total commission in the hands of the assessee and 50% in the hands of Shri Atul Sanghvi. (II) Additions towards Bank Credit:- During the years there are bank credits to the tune of Rs. Rs.21,22,27,57,495/. The A.O has taken total bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest of the revenue. The commission income on the said transactions should be assessed proportionately on substantive basis in the hands of the assessee, as already done in the original assessment. 4.2.2 Regarding the deposits aggregating to Rs.1.388.09 crores in the assessment years comprised in the block period for which the assessee has not been able to furnish proper explanation, this amount should be taxed in the hands of the assessee proportionately to the extent of his share in the business on substantive basis as his own unexplained or unaccounted income. 4.2.3 Assessee should be allowed opportunity to prove that the deposits are accounted for or/are no the assessee's own income but income of some other person, by submitting proof of identity of such other person, creditworthiness of such person, business operation carried out and that the transaction is genuinely carried out by such other person, in which. case, the said amount or amounts would be reduced from the aggregate amount of unexplained bank deposits and taxed only on protective basis in the respective year or years. The remaining amount that remains unexplained, would be taxed in the respective years i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee. The AO had treated the same as unexplained income of the a.ssessee and decided to bring it into tax in various assessment years. He also worked out the additions for different assessment years. However, he made the said additions on protective basis observing that the assessee had not been able to establish the source of these credits. He, however, made the addition of 2% of the said amount as commission income of the assessee on substantive basis A perusal of the above findings itself reveals that the order of the AO was erroneous. In the absence of any evidence, on the file-Is to source of the credits of the amount in question in the various bank accounts of the assessee, the AO had treated the said amount as unexplained income of the assessee. Once the AO had treated so, the AO was required to make the addition of this amount on substantive basis. Even without making the addition of the amount in question on substantive basis in any other persons' account, the AO could not have made the addition of the amount on protective basis in the assessee's account. From the above facts, the Ld.CIT was justified in holding that the order of the AO was not only erroneous ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder in Di/ip Shah v. ACIT (supra), would in our view present a reasonable and equitable course under the circumstances. 3.2 The above course, besides being in conformity with that by the tribunal in the cited case, i.e., in principle, would also be in consonance with law inasmuch as the assessments impugned in the instant appeals stand since set aside by the revision order, which holds as on date, so that the action of the Id. CIT(A) in dismissing the same as not maintainable cannot be faulted with. The exclusion of the jurisdiction of the Administrative Commissioner qua an assessment, it needs to be borne in mind, is only where the same stands modified in appeal, so that it stands merged with the appellate order, and then, again, only to that extent (refer Explanation (c) to s. 263(1)). No appellate order had admittedly been passed by 13/1/2011, i.e., on which date the revisionary authority issued the show cause to the assessee in the instant case. 3.3 Under the circumstances, we only consider it fit and proper to dismiss the instant by the assessee, subject to the condition that in case the appellant, who has admittedly also challenged the section 263 orders/s before the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has merely made his submissions which were made even at the time of original assessment proceedings and have been rejected there itself without any further corroborative evidence to explain the credits found in the bank accounts. The A.O further observed that the purpose of the present proceedings is merely to make fresh assessment only with respect to the deposit in the bank accounts and hence, the assessee is having an obligation to discharge his onus by furnishing identity, genuineness, and creditworthiness of the transactions. Since, the assessee has failed to file any evidence to explain the credits found in the bank accounts, the AO completed the assessment by treating 50% of total unexplained bank credits of Rs.1388.09 crores and divided it amongst the assessment years 2001-02 to 2007-08, as per the actual credits found in the respective years and added in the hands of the assessee as unexplained cash deposit u/s 68 of the Act. 14. In so far as sale bills issued in the name of M/s Varun Industries Ltd. amounting to Rs. 856,64,49,533/- the A.O added total amount of sales bills issued in the name of M/s Varun Industries Ltd as unexplained income of the assessee on prote ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers and also additions made towards total sales bills on protective basis, once he was treated as bogus bills provider, and commission income is estimated on total sales, additions cannot be made towards total sales bills on protective basis when substantial additions has been made in the hands of persons receiving the bills. The assessee further submitted that a substantial addition has been made towards total value of sale bills found in the name of M/s Varun industries Ltd; hence, and protective addition made in its hands, should be deleted. As regards addition made towards bank credits, the assessee submitted that the bank accounts found during the course of search are, in fact, belong to some other persons and further, they have categorically admitted before the A.O by filing confirmation letter and their I.T. returns, therefore the A.O was erred in treating total sum found credited in the bank account as his unexplained income. 16. The CIT(A) after considering the assessee s submissions and also taking into account the facts of the case has observed that there is no merit in the legal ground raised by the assessee challenging the validity of assessments, as though the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuance of boqus bills. By making a mere averment that he was not involved in such activity in spite of a host of such evidence found in his possession would not cut much ice and cannot lead to an inference which the appellant wants the revenue authorities to hold. In view of the above facts there is not even of iota of truth in the pleadings made by the appellant and hence ground No 3 is dismissed. 2.7.1 Ground No.4 relates to making of protective assessment of Ps.35,46,36,038/- on account of sales made to M/s. Varun Inds. Ltd. The only plea which has been made by the appellant is that because a substantive addition has been made in the hands of M/s. Varun Ind. Ltd., the protective assessment in the hands of the appellant, would not survive. It is true that a substantive addition has now been made in the hands M/s Varun Ind. Ltd., but as long as the issue has not attained finality, on facts and in law, it cannot be said that the protective assessment in the hands of the appellant is wrong because the very basis of making a protective assessment is to protect the interest of revenue which even the appellant has not denied. Only if the substantive addition made in the hands of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A.O. during the assessment framed which has been appealed against before me. 2.8.3 The Ld. A.R. in his submission has dealt with ground Nos. 5 to 8 together, as according to him, the some are interlinked. According to him, the appellant is .a commission agent in the metal market where the rate of commission is not fixed and varies between 0.02% to 0.05 %. However, there is no written agreement entered into between commission agent and the clients. Even in the grounds of appeal, the appellant has mentioned that the prevailing commission rate in the steel market ranges between 0.02% to 0.05%. Thus, there is no denying the fact that the appellant earns commission and the services rendered by him. It is also a matter of fact that during the course of search, the appellant was found in the possession of signed blank cheques, sale bills issued by various dummy companies which went on to prove that the appellant was engaged in issuing bogus bills and therefore it is obvious that the normal rate of commission would not be charged by him to the perspective bill seekers. The persons using these bills would be saving substantial amount of tax by claiming bogus deduction. They would be ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resentative has simply re//ed on the fact that some parties were produced during the original assessment proceedings or that certain audited annual accounts and cop/es of IT returns have been submitted in some cases. This too however, does not discharge his onus. 2. has merely made his submissions which were made even at the time of the original assessment proceedings and have been rejected there itself. 3. The purpose of the present proceedings is merely to make fresh assessment only with respect to the deposits in the bank accounts and it is beyond by jurisdiction to comment or delve on the other issues which have already achieved finality so far as this office is concerned. 4. The Delhi High court in the case of CTT vs. Oasis Hospital Pvt. Ltd. (reported in itatonlin.org) has while deciding on an issue of addition u/s. 68 of the I T Act has categorically held that S. 68 provides that if the assessee is notable to give satisfactory explanation as to the nature and source of a sum found creia ted in his books, the sum may be treated as the undisclosed income of the assessee. The initial burden is on the assessee to explain the source of the credit and to do so, the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counts or other documents were produced to substantiate the claim made by the appellant and his witnesses that they carried out independent identifiable genuine business. That being the case, it can be safely presumed that the onus which was cast on the appellant to substantiate the claim made was not discharged and therefore no fault can be found with the action token by the Ld. A.O. in bringing to tax the amounts as in the assessment order. The case laws cited by Id. A.1. are distinguishable on facts as none of them deal with hawala racket. 2.9.4 Even as per the statement of Shri Pradeep M. Jobalia recorded on 8.3.2007 having office at Podar Chambers, Ground flr Parsi Bazar St., Fort, Mumbai 400001, it is apparent that his office address was being used by the appellant for receiving correspondence from bank Shri Jobaha in reply to question No .2 clearly mentioned that he did not know any of the parties and it was only Shri Dilip Chunhal Shah and Shri Atul Amrutlal Sanghvi who were collecting the correspondence apart from his office. Even in the cross examination of Shri Jobalia done by Shri Atul Sanghvi and his Authorized representative it was clear that none of the persons wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents like PAN cards signatures etc. to open bank accounts in the name of different persons, who had nothing to do with those transactions, in fact they were mere name lenders or dummies. 4. The duo were handling all the correspondence of the different concerns. 5 The duo were operating the bank accounts and cash withdrawal and other transactions were carried out by the assessee.' dismissed the appeal filed by the assessee. The sum and substance of the observations of the CIT(A), the evidences collected during the course of search, and inquiry conducted during the course of the assessment proceedings undoubtedly prove the fact that the assessee along with Shri Atul Sanghvi are involved in providing accommodation entries in the form of bogus bills to various persons. The CIT(A) further observed that the statement recorded from the assessee and other associate and the statements Shri P.M. Jobalia, Shri N.V. Neelakantan, and Shri Vinod Kumar Uttamal Shah further supported the findings of the A.O that the assessee is a hawala operator issued bogus bills in the name of dummy/fictitious concerns and operated more than 100 bank accounts various names by fabricating docum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eparately. There is no error in the order of the CIT(A). Therefore, we are inclined to uphold the findings of the CIT(A) and dismiss the grounds raised by the assessee. 21. The next issue that came up for our consideration from grounds No. 3 to 7 revolves around one common issue of activity of the assessee and computation of income from such activity. The lower authorities came to the conclusion that the assessee is a hawala operator involved in providing accommodation entries to various parties by issuing bogus purchase bills and engaged in money laundering activities, therefore concluded that the assessee is a hawala operator and income from such activities has to be computed by taking into account of total sum found credited in the bank account of the assessee and also income from estimation of income from such total receipts. The facual matrix of the case which lead to the dispute are that initially a survey operation u/s 133A of the Income Tax Act, 1961 was carried out in the office premises of the assessee, wherein information about three bank lockers were found. Subsequently, the case has been converted into search by issuing warrant u/s 132 and conducted search in the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in the hands of the assessee is incorrect, more so, when the assessee is treated as an hawala operator and income from such activity has been estimated at 2% on total sale bills issued. In this regard, he relied upon the decision of ITAT, Chennai Bench in the case of Parasmal Dangi alias Parasmal Jain 100 TTJ 508. 23. The Ld.DR, on the other hand, strongly supporting the order of the CIT(A) submitted that evidences gathered during the course of search and post search investigation conducted during the course of assessment proceedings clearly establish the fact that the assessee, a hawala operator, issued bogus purchase bills in the name of various dummy / fictitious concerns and operated more than 100 bank accounts in the names of various persons whether existing or fictitious, therefore, the AO has rightly treated the assessee as a hawala operator and estimated income from such activity and his order should be upheld. 24. We have heard both the parties and perused the material available on record. It is an undisputed fact that incriminating materials found and seized during the course of search clearly indicates that the assessee is engaged in issuing bogus bills in the na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts in the National Co-operative Bank. All these facts lead to a conclusion that the assessee has floated various dummy companies / firms to facilitate issuing of bogus purchase bills and operated bank accounts by fabricating documents. The assessee has not been able to rebut any of the findings recorded by the AO, though he claims that he is a registered broker in the steel market. Therefore, we are of the considered view that the lower authorities were right in concluding that the assessee is engaged in the activity of providing accommodation entries. Hence, we are inclined to uphold the findings of CIT(A) and dismiss the ground raised by the assessee. 25. Coming to the additions made by the AO towards estimation of commission @2% on total sale bills issued in the name of M/s Varun Industries Ltd on substantive basis and addition made towards total sale value on protective basis in the hands of the assessee, the AO has estimated commission @2% on total sale bills issued in the name of M/s Varun Industries Ltd and made additions in the hands of assessee and his partner, Shri Atul Sanghavi @50% each. The AO has estimated 2% commission by taking into account the fact that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egard to nature of dispute and the stages of outcome in appellate forums is not ascertainable at present. Therefore, we are of the considered view that though the Act, does not provide for protective assessments, in the interest of revenue, the AO can make protective additions to protect the interest of the revenue. Therefore, we are of the view that the AO was right in making protective additions towards sale bills issued in the name of M/s Varun Industries Ltd. Nevertheless, the assessee shall be entitled to relief as and when the substantive addition made in the hands of M/s Varun Industries Ltd is confirmed once all rounds of litigation ends. The CIT(A) after considering the relevant facts has rightly upheld additions made by the AO. We do not find any error in the order of the CIT(A); hence, we are inclined to uphold the findings of the CIT(A) and reject ground raised by the assessee. 27. The next issue that came up for our consideration is addition made on account of deposits in the bank account of the persons other than the assessee which were found from the possession of the assessee during the course of search along with signed blank cheques, sale bills, PAN cards, etc. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, we are of the view that the AO was right in treating the sums found credited in the bank accounts as unexplained credits in the hands of the assessee. As regards the claim of the assessee that some of the parties have appeared before the AO and filed their income-tax returns explaining bank accounts found in the possession of the assessee and hence those bank accounts, should be excluded. We do not find any merits in the argument of the assessee for the reason that the evidences gathered during the course of search and further enquiries conducted in the course of post search investigation clearly establishes the fact that the assessee has operated more than 100 bank accounts in different banks. All evidences gathered during the course of search clearly indicates fabrication of various documents like PAN card, ration card, etc. and photographs of certain individuals to open bank accounts in different banks with the help of one, Shri Pradip M Jabalia, who had categorically admitted in his statement recorded on 08-03-2007 tht correspondence with regard to bank accounts are made by Shri Dilip Shah and Shri Atul Sanghvi. Shri Jabalia, in reply to question No.2 clearly mentioned that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation offered by the assessee about the nature and source thereof is, in the opinion of the AO, is not satisfactory. The assessee could not prove credits found in the bank accounts. Therefore, we are of the view that the CIT(A) has rightly upheld the additions made by the AO towards total credits found in the bank account amounting to Rs.1388.09 crores as unexplained credits in the hands of the assessee. We do not find any error in the order of the CIT(A). Hence, we are inclined to uphold the findings of the CIT(A) and reject the ground raised by the assessee. 31. The next issue that came up for our consideration is addition towards cash deposits to the bank accounts. The AO made additions towards total cash deposits in the bank account amounting to Rs.7,01,650 being 50% share of the assessee on the ground that the assessee has not filed any evidences to prove the identity, genuineness of transaction and creditworthiness of the creditors. The AO has taken total cash deposits for the year and divided into 50% in the hands of the assessee and 50% in the hands of Shri Atul Sanghvi and made additions u/s 68 of the Act. The assessee claims that he has source of income to explain cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es available in the form of estimation of income with cash found at the time of search. If the source is in excess of cash found during the course of search and if it is not floated to any other assets or not expended elsewhere, then the AO is directed to allow telescoping towards income to the cash found at the time of search and allow relief accordingly. 34. The facts and circumstances narrated above are identical to all other appeals under consideration, therefore, the decision arrived at above applies mutatis mutandis to all other appeals in this consolidated order. 35. ITA Nos 5713 to 5719/Mum/2012 Ays 2001-02 to 2007-08 The facts and circumstances narrated above are identical to all other appeals under consideration, therefore, the decision arrived at above applies mutatis mutandis to all other appeals in this consolidated order. 36. In the result, all the appeals filed by the assessee are partly allowed for statistical purpose. 2.2. We find that in the aforesaid order, while dealing with the quantum addition, the Tribunal considered the factual finding and arguments from both sides and there after found that incriminating material was found and seized fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.-Where in respect of any facts material to the computation of the total income of any person under this Act,- (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the 48[Principal Commissioner or] Commissioner to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. xxxxxxxxxxxxxxxxxxx Explanation 2.-Where the source of any receipt, deposit, outgoing or investment in any assessment year is claimed by any person to be an amount which had been added in computing the income or deducted in computing the loss in the assessment of such person for any earlier assessment year or years but in respect of which no penalty under clause (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as references to those provisions as for the time being in force and applicable to the relevant assessment year. 2.4. A glance at this provision would suggest that in order to be covered under this section firstly, there has to be concealment of income by the assessee and secondly, the assessee must have furnished inaccurate particulars of his income. Present is clear cut case of furnishing of inaccurate particulars of such income and consequent concealment. This is exactly the case of the Revenue. As per Law Lexicon, the meaning of the word particular is a detail or details (in plural sense); the details of a claim, or the separate items of an account. Therefore, the word particulars used in the Section 271(1)(c) would embrace the meaning of the details of the claim made. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. In Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... manner, the assessee had furnished the particulars of his income. The Court ultimately went on to hold that the element of mens rea was essential. It was only on the point of mens rea that the judgment in Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai Anr. was upset. In Union of India Vs. Dharamendra Textile Processors (cited supra), after quoting from Section 271 extensively and also considering Section 271(1)(c), the Court came to the conclusion that since Section 271(1)(c) indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing Return, there was no necessity of mens rea. The Court went on to hold that the objective behind enactment of Section 271(1)(c) read with Explanations indicated with the said Section was for providing remedy for loss of revenue and such a penalty was a civil liability and, therefore, willful concealment is not an essential ingredient for attracting civil liability as was the case in the matter of prosecution under Section 276-C of the Act. The basic reason why decision in Dilip N. Shroff Vs. Joint Commissioner of Income Tax, Mumbai Anr. (cited supra) was overruled by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it can be concluded that it was a conscious act of the assessee to hide something from the Department. The ratio laid down in the following the cases, supports the case of the Revenue. I. CIT vs Satish Medical Agencies 277 ITR 394 (All.) II. Jyoti Laxman Konkar vs CIT 292 ITR 163 (Bom.), III. Deepak Construction Company vs CIT 293 ITR 285(Guj.) IV. CIT vs Mahavir Prasad Bajaj 298 ITR 109(Jhar.) V. D H Secheron Electrods Pvt. Ltd. Vs CIT 281 ITR 421 (MP.) VI. Shri Nithyakalyani Textiles Ltd. Vs DCIT 282 ITR 154 (Mad.) VII. LMP Precision Engineering Company Ltd. Vs DCIT (330 ITR 93) (Guj.) VIII. CIT vs Deep Chand 336 ITR 292 (P H) IX. Sethy Industries Corporation vs DCIT 338 ITR 243 (P H) X. B.Damodar V.B. Jewellers vs JCIT 353 ITR 206 (Karna.) XI. Standard Hind Company vs CIT (2014) 361 ITR 370 (All.) XII. Bajrang Glass Emporium vs CIT (2014) 361 ITR 376 (All.) XIII. Indus Engineering Company vs ACIT (2010) 323 ITR 302 (Bom.), 2.7. So far as, the decision from Hon'ble Gujarat High Court in the case of Bhailal Manilal Patel ((supra)) is concerned, it is with respect to the issue of imposing penalty until substantive addition is made ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
