2016 (1) TMI 1400 - AT - Income Tax

Levy of penalty u/s.271(1)(c) - unexplained investment u/s.69C - Held that - We find in the instant case the AO has made the addition of 1, 57, 500/- as unexplained investment u/s.69C of the Act on the basis of entries in seized documents/accounts found from the premises of Shri Shriram H. Soni. The AO has given cogent reasons while making the addition. We find the Ld.CIT(A) while sustaining the addition made by the AO has given valid reasons which has already been reproduced in the preceding paragraphs. In our opinion the order of the CIT(A) is a reasoned one and does not call for any interference from our side. We accordingly uphold the same and the grounds raised by the assessee are dismissed. CIT(A) while confirming the penalty levied by the AO has given a clear cut finding that the assessee has concealed the particulars of his income and also furnished inaccurate particulars of income with regard to payment of interest and brokerage on loan of 10 lakhs obtained through Shri Shriram Hiralal Soni. He has also given a finding that the assessee has tried to misrepresent the facts by taking grounds which are devoid of facts and merit. There is no other material before us to contradict the factual finding given by the CIT(A) while upholding the penalty levied by the AO u/s.271(1)(c) of the I.T. Act. In our opinion the order passed by the CIT(A) confirming the penalty levied by the AO u/s.271(1)(c) of the I.T. Act 1961 is a reasoned one and does not call for any interference from our side. - Decided against assessee.

Summary

Issues Involved:
1. Validity of notice issued under section 153C of the Income Tax Act.
2. Addition of unexplained investment under section 69C of the Income Tax Act.
3. Confirmation of penalty levied under section 271(1)(c) of the Income Tax Act.

Detailed Analysis:

1. Validity of Notice Issued Under Section 153C:
The assessee challenged the validity of the notice issued under section 153C, arguing that the notice was issued in his individual capacity after the firm was dissolved and he became the proprietor. The CIT(A) found that the cheques and promissory notes seized from Mr. Soni's premises were issued by the appellant as a partner of M/s. K.R. Boob & Sons, which was later dissolved, making the appellant the proprietor. The CIT(A) concluded that the requirements of section 153C were complied with by the AOs, and the appellant's contention was rejected. The Tribunal upheld the CIT(A)'s decision, stating that the order was reasoned and did not call for interference.

2. Addition of Unexplained Investment Under Section 69C:
The AO made additions based on entries in seized documents/accounts found from Mr. Soni's premises, indicating that the assessee had availed a loan of Rs. 10,00,000. The CIT(A) confirmed the AO's additions, stating that the seized documents clearly showed the appellant as a borrower and that the loan transaction had materialized. The appellant's contention that the transaction did not materialize was rejected as devoid of fact and merit. The Tribunal upheld the CIT(A)'s decision, agreeing that the order was well-reasoned and did not require interference.

3. Confirmation of Penalty Levied Under Section 271(1)(c):
The AO levied penalties for concealment of income and furnishing inaccurate particulars of income related to the payment of interest and brokerage on the loan obtained through Mr. Soni. The CIT(A) confirmed the penalties, stating that the appellant had concealed particulars of income and furnished inaccurate particulars. The Tribunal upheld the CIT(A)'s decision, noting that the appellant had tried to misrepresent facts and that the CIT(A)'s order was a reasoned one, not calling for interference.

Conclusion:
The Tribunal dismissed all the appeals filed by the assessee, upholding the CIT(A)'s decisions regarding the validity of the notice under section 153C, the addition of unexplained investment under section 69C, and the confirmation of penalties under section 271(1)(c). The Tribunal found the CIT(A)'s orders to be well-reasoned and justified.