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2015 (7) TMI 599 - AT - Income TaxPenalty levied u/s. 271(1)(c) - unaccounted loan advancing - CIT(A) deleted penalty levy - Held that - In the quantum order, it has been found by the Tribunal that the confirmation of the addition by the learned CIT(A) was based on incorrect facts. Therefore, the quantum was set aside to the file of the AO. The relevant observations of the Tribunal have already been reproduced in the above part of this order. The assessee has filed ample evidence in respect of each person from whom she has received her amount back. Considering the explanation of the assessee and the evidence filed by the assessee and also the fact that the addition was wrongly sustained by the CIT(A) on incorrect facts, we are of the opinion that the learned CIT(A) did not commit any error in deleting the penalty. We decline to interfere with the findings of the CIT(A). - Decided against revenue.
Issues Involved:
1. Deletion of penalty levied under Section 271(1)(c) of the Income-tax Act, 1961. 2. Addition of Rs. 36,80,000 to the assessee's income based on unexplained sources of income. Issue-Wise Detailed Analysis: 1. Deletion of Penalty Levied Under Section 271(1)(c) of the Income-tax Act, 1961: The Revenue challenged the CIT(A)'s decision to delete the penalty of Rs. 12,09,516 levied under Section 271(1)(c) for A.Y. 2005-06. The penalty was imposed due to the addition of Rs. 36,80,000 to the assessee's income, which the AO claimed was based on inaccurate particulars of income and concealment of income. The CIT(A) had deleted the penalty, stating that the assessee had provided ample evidence to prove that the amounts received were repayments of advances given in earlier years. The Tribunal noted that the CIT(A) had relied on various judicial pronouncements and the fact that the transactions were recorded in the balance sheets of earlier years. The Tribunal upheld the CIT(A)'s decision, stating that the penalty could not be levied merely because the addition was confirmed during assessment proceedings without disproving the evidence provided by the assessee. 2. Addition of Rs. 36,80,000 to the Assessee's Income Based on Unexplained Sources of Income: The AO had added Rs. 36,80,000 to the assessee's income, which included Rs. 35,00,000 received from seven individuals. The AO disbelieved the assessee's claim that these amounts were repayments of advances given for mining purposes in earlier years. The CIT(A) confirmed the addition, citing that the amount was still outstanding in the balance sheet for A.Y. 2005-06. However, the Tribunal found that the CIT(A)'s findings were contrary to the facts on record, as the balance sheet for A.Y. 2005-06 did not show the amount as outstanding. The Tribunal set aside the CIT(A)'s order and remanded the matter back to the AO for fresh examination, directing the AO to consider the personal financial statements and books of accounts of the assessee. The Tribunal observed that the assessee had provided detailed evidence, including agreements and confirmations from the parties involved, to substantiate the claim that the amounts were repayments of earlier advances. The Tribunal also noted that three individuals had appeared before the AO and confirmed the transactions. The Tribunal concluded that the CIT(A)'s confirmation of the addition was based on incorrect facts, and thus, the penalty could not be sustained. Conclusion: The Tribunal upheld the CIT(A)'s decision to delete the penalty, emphasizing that the penalty could not be imposed based on incorrect facts and without disproving the evidence provided by the assessee. The Tribunal also remanded the matter of the addition of Rs. 36,80,000 back to the AO for fresh examination, directing the AO to consider the personal financial statements and books of accounts of the assessee. The appeal filed by the Revenue was dismissed.
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