Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (9) TMI 501 - ITAT MUMBAIPenalty u/s. 271(1)(c) - addition on unexplained cash credits assessed u/s. 68 - Held that:- Entire transaction is, as apparent, calculated to introduce liquid capital in the firm for payment to the outgoing partner, whose share thus gets acquired by the outgoing partner, introducing his family members as partners in his stead. The stated depositors, with no financial means of their own, are only ostensible sources of finance, introducing cash together on an appointed day, as if they were waiting with cash in their hands to be deposited with the firm and, further, shifting the source thereof to non-specified identities. It is clearly a concerted action with a view and toward the distinct objective of maintaining the continuity of the business of the firm in wake of the departure of a person holding 50% interest therein. There is a complete lack of bona fides, and the genuineness of the transactions, highly suspect. As explained in CIT vs. Durga Prasad More [1971 (8) TMI 17 - SUPREME Court] it is the truth of the recitals in the documents (or the truth of their contents) that is relevant and is to be established, or else it would leave the door wide open for tax evasion by merely executing self-serving documents, and that the Revenue authorities were fully entitled to look at the surrounding circumstances to find out the reality of the transaction and not put blinkers while looking at documents produced before them. In the present case, we have ‘statements’ instead of ‘documents’, so that the said decision is in ratio fully applicable in the facts and circumstances of the case. The ld. CIT(A) has incorrectly shifted the burden of proof and furnishing a reasonable explanation, substantiating the same, on the Revenue. When the assessee’s case falls either under part (A) or (B) of Explanation 1 to section 271(1)(c), he is deemed to have concealed particulars of income. There is, further, in the admitted and undisputed facts and circumstances, no case for application of the decision in Reliance Petroproducts (P) Ltd. (2010 (3) TMI 80 - SUPREME COURT), which stands wrongly applied by the ld.CIT(A). What the said decision states is that where a claim is found as not correct or valid in law, the same cannot by itself lead to the levy of penalty. It is trite law that penalty proceedings are separate and distinct proceedings, and is to be levied on its’ own merits - Decided in favour of revenue
|