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TMI Blog2012 (9) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 31-7-2012 - SHRI MUKUL KR.SHRAWAT JM SHRI ANIL CHATURVEDI, JJ. Appellant by : Shri S.S. Jadeja. Respondent by : Shri B.L. Yadav, Sr. D.R. ORDER PER: SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER. These appeals are filed by the assessee against the order of Ld. CIT (A)-V, Surat both dated 22-12-2009 for the assessment years 2002-03 and 2003-04 respectively, confirming the penalty of Rs.1,41,219/- and Rs.59,913/- for A.Yrs. 2002-03 and 2003-04 respectively. ITA No.339/Ahd/2010 ( A.Y. 2002-03). 2. Brief facts of the case are that the assessee had received the gifts aggregating to Rs.4,61,500/-. In order to verify the genuineness of these gifts the assessment was reopened after recording reasons. During the course of re-assessment proceedings, the A.O. asked the assessee to substantiate the claim of gifts and was also asked to produce the donors for verification but the assessee did not produce them for examination. As the A.O. was not satisfied with the contentions of assessee, he treated the total amount of Rs.4,61,500/- received as gifts as unexplained cash credit and added it u/s. 68 of the Act. The assessee carried the matter before CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per book. He further submitted that pursuant to the directions of ITAT, A.O. has passed order u/s. 143(3) r.w.s.254 on 27-12-2011 wherein as against the total addition of Rs.4,61,500/- made u/s. 68 by order dated 30-1-2006, the addition was modified to Rs.1,27,500/- vide order dated 27-12-2011. He placed on record at page 26 to 29 of the paper book, the copy of the order dated 27- 12-2011. He further submitted that in the appeal before us the issue is of penalty of Rs.1,41,219/- that was levied on the addition of Rs.4,61,500/-. Since the final addition is only Rs.1,27,500/-, the penalty of Rs.1,41,219/- made on the addition of Rs.4,61,500/- does not survive and therefore the same be deleted. 6. On the other hand the Ld. D.R., relied on the order of A.O. 7. We have heard the rival contentions and perused the material on record. We find that the co-ordinate Bench in ITA no.2834/Ahd/2007) A.Y. 2002-03) vide order dated 23-4-2010 has held as under:- 7. In view of the above, we admit the additional ground raised before us and the matter is restored to the file of Assessing Officer with the direction that A.O. will furnish the reasons recorded before issuing notice under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s found that the gifts received from Shri Ashvin L.Savani of Rs.80,000/- and Smt. Varsha D. Dhameliya of Rs.47,500/- are not genuine. Shri Ashvin L. Savani and Smt.Varsha D. Dhameliya are not his family member or blood relation with them, they are the friend only. If the gifts are received from the others whose are not related with blood relation, the gifts are not genuine. Therefore, the gifts received from above Rs.1,27,500/- is added back to the total income of the assessee. Penalty proceedings initiated u/s. 271(1)(c ) of the Act for inaccurate particulars. 7. Subject to the above remarks, the total income of the assessee is computed hereunder: Total income as discussed in para 5 above. 2,21,120 Add As discussed in para-6 above. 1,.27,500 Assessed total income 3,48,620 Rounded off u/s. 288A 3,48,620 9. From the above facts it can be seen that initially addition of Rs.4,61,500/- was made u/s. 68 vide order dated 30-1-2006. The addition that has been finally made vide order dated 27-12-2011 is of Rs.1,27,500/. The penalty proceedings against which the assessee is in appeal before us is against penalty levied on the addition of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... editworthiness and therefore penalty was rightly levied. He relied on the orders of Assessing Officer CIT (A). 14 We have heard the rival contentions and perused the material on record. The assessee had disclosed the facts necessary for assessment before the A.O. Merely because the assessee could not prove creditworthiness does not justify imposition of penalty u/s. 271(1) (c ).The co-ordinate Bench in ITA No.1176/Ahd/2009 had deleted the penalty by holding as under:- 5. We have heard both the parties and perused the record. We have also gone through the decision of the ITAT in the case of Leelaben Labhubhai Laklhani (Group Case) referred to supra. We find that the issue is covered by the said decision of the ITAT, wherein the Tribunal has held as under:- 7 We have heard the Ld. D.R. and have perused the orders of the A.O. and the CIT(A) .We find that the assessee has claimed to have received five gifts totaling to Rs.3,03,651/-.The assessee has disclosed all the material facts necessary for its assessment before the A.O. The gifts were made by the closerelatives and therefore the element of natural love and affection could not be ruled out. The assessee has filed an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
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