2017 (6) TMI 825 - AT - Income Tax

Addition u/s 68 - Held that - We find that assessee miserably failed to furnish any relevant documents before the assessing authority and Ld.CIT(A). He filed some details of agriculture land holding by Mr.Manilal M. Patel and the source of ₹ 1 Lac given by Manilal Madhavdas was shown to be received from sale of agriculture produced. However, Ld.Counsel could not place any documentary evidences in the form of confirmation, income tax return and bank statements of Mr.Manilal Madhavdas before both the lower authorities. Where assessee has failed to prove the genuineness and creditworthiness of the alleged cash credit of ₹ 1 Lac from Mr.Manilal Madhavdas, we confirm the addition u/s.68 of the Act, at ₹ 1 Lac and call no interference in the order of Ld.CIT(A). Difference worked in capital a/c of Gopal Pipe & Hardware and capital a/c - Held that - As during the course of assessment proceedings as well as before Ld.CIT(A) assessee was unable to reconcile the alleged difference of ₹ 78,000/- and submission made were general in nature. Even before the Tribunal, Ld.Counsel made a general reply and was unable to reconcile the two balance. We are therefore of the view that in the given circumstances asssessee has no plausible basis to reconcile the difference in the two accounts viz. one appearing in the personal balance sheet and another in the proprietorship concern. Thus we confirm the addition. Addition on account of house withdrawal - Held that - Assessee has not brought on record the details of any family members and their income tax return as well as withdrawal made by them in their individual capacity. In the totality of the facts and considering the minimum standard of living required, we find the estimation of household expenses by AO to be justified. We therefore, do not find any reason to interfere with the order of Ld.CIT(A) and we therefore, dismiss this ground of the assessee. Penalty u/s.271(1)(c) - unexplained cash - addition u/s 68 - Held that - As during the course of assessment and appellant proceedings as well as during the penalty proceedings assessee, in order to prove the identity, genuineness and creditworthiness of the alleged cash credit of ₹ 1 Lac, assessee could not find favour from any of the authorities in the quantum appeal. However, examining these facts in the light of the provisions of section 271(1)(c) where the assessee is deemed to be in fault if he conceals the particular of income or furnishes inaccurate particular of income. We notice that in the given case, assessee has filed the particular of income and also tried to prove its correctness by presenting various evidence. We are therefore, of the opinion that in these facts assessee should not have been visited by penalty u/s.271(1)(c) of the act. We therefore delete the penalty

Summary

Issues:
Quantum addition and penalty u/s.271(1)(c) of the Income Tax Act 1961 for the Asst. Year 2008-2009.

Quantum Addition Issue:
The appeal regarding quantum addition was initially considered time-barred by two days due to a delay in dispatch by postal authorities. The delay was condoned by the Tribunal, allowing the appeal to proceed. The case involved an individual engaged in trading who filed a return declaring income. During scrutiny, various additions were made by the Assessing Officer, leading to an appeal before the Ld.CIT(A). The appeal included challenges related to unsecured loans, capital accounts, and household expenses. The Tribunal dismissed the grounds related to unexplained loans and discrepancies in capital accounts, upholding the additions made by the lower authorities. The Tribunal also confirmed the estimation of household expenses, dismissing the appeal on this ground.

Penalty u/s.271(1)(c) Issue:
The penalty proceedings under section 271(1)(c) were initiated following the quantum addition decision. The penalty was imposed on unexplained cash credit received, which was confirmed by the Ld.CIT(A). The Tribunal noted that the assessment and penalty proceedings are separate. The appellant provided details to establish the genuineness of the cash credit, including ownership proof, agriculture land details, and banking transactions. Despite the confirmation of the addition in the quantum appeal, the Tribunal found in favor of the appellant in the penalty proceedings. The penalty was deleted as the appellant had provided evidence to prove the correctness of the income particulars, leading to the allowance of the appeal against the penalty.

In conclusion, the Tribunal addressed the issues of quantum addition and penalty u/s.271(1)(c) for the Asst. Year 2008-2009. The Tribunal dismissed the quantum addition appeal, upholding the additions made by the lower authorities. However, in the penalty appeal, the Tribunal allowed the appellant's appeal by deleting the penalty imposed, considering the evidence provided to establish the genuineness of the cash credit. The judgment was pronounced on 7th April 2017 at Ahmedabad.