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2019 (8) TMI 509 - ITAT BANGALOREPenalty u/s 271(1)(c) - addition u/s 68 regarding outstanding balance of sundry creditor - Addition u/s 40A(2)(b) - CIT(A) rejected the additional evidence filed by the assessee being confirmation letter from the creditor under Rule 46A of the I.T. Rules - HELD THAT:- Prime facie, the contention of the ld. AR that the penalty u/s 271(1)(c) is not sustainable as the assessee has not contested the quantum i.e. Assessment Order u/s 143(3) to buy peace with the Department whereas the CIT(A) has overlooked the evidence produced before in the appellate proceedings and confirmed the penalty order of AO. On this issue, we find the CIT(A) has rejected the additional evidence under Rule 46A of the IT Rules. We are of the opinion that the assessee shall not gain any benefit by delaying the litigation and support our view on the principle of natural justice, and admit the additional evidence filed by the assessee. In respect to addition made in due to unreasonable salary paid to the assessee's wife u/s 40A(2)(b), we are of the opinion that in the penalty proceedings, the assessing authority shall deal the issues independently and any addition in the quantum proceedings cannot be a gateway for levying the penalty. Therefore considering the overall facts and circumstances of the case, we restore the disputed issues to the file of CIT (A) to adjudicate afresh considering the additional evidence filed by the assessee and allow the grounds of the assessee for statistical purposes. Appeal of assessee is treated as allowed for statistical purposes.
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