9911796707
TMI Blog2012 (9) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.3.1993. The assessee preferred an appeal against this assessment order and the Ld. CIT(A) has given part relief. Both the Revenue and the assessee went in appeal before the Tribunal against the order of Ld. CIT(A). The ITAT set aside the grounds back to the file of Ld. CIT(A) for fresh consideration in both the appeals. Following the directions of the ITAT, the Ld. CIT(A) passed orders on 10.3.2008 and 28.3.2008 and decided the appeals of the revenue as well as the assessee. This order of the Ld. CIT(A) was accepted by the assessee as it did not prefer any further appeal. Following additions were confirmed which have been accepted by the assessee. 1) Shri Rajendra Prasad Jain Rs. 15,00,000/- 2) Shri N.N. Rana Rs. 1,02,100/- 3) Americ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation-1 to Sec. 271(1)(c) of the Act. 7. After hearing the rival submissions and perusing the orders of the lower authorities at different stages, let us first see the provisions of Sec. 271(1)(c) r.w. Explanation-1(A&B) of the Act which is as under: 271. Failure to furnish returns, comply with notices, concealment of income, etc.--(1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person- (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income,....... "Explanation -1 .... (A) such person fails to offer an explanation or offers an explanation which is found by the AO or the CIT(A) or the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uine as Shri R.P. jain was examined by AO u/s. 131 of the Act wherein he categorically denied of having any knowledge about the transactions in the money market with the assessee. The AO further observed that Shri R.P. Jain was the student of 19 years of age and in his statement has stated that he was unaware of any bank account. Based on the statement of Shri R.P. Jain, the AO concluded that the payment made to Shri R.P. Jain at Rs. 15,00,000/- is not genuine, accordingly levied the penalty on such disallowance. The Ld. Counsel reminded us that in the immediately preceding year, the same Shri R.P. Jain was paid a sum of Rs. 2,37,720/- which has been accepted by the department. 10. We have carefully considered the submissions of the Ld. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase and sale of securities through him , entitles him to earn brokerage. Assuming yet not accepting , in this transaction also assessee must have received brokerage and the profit on the above said transactions is earned by Shri R P Jain , which the assessee has paid to R P Jain , then , how can this payment of Rs.15 lacs be claimed as expenses by the assessee ? Be that as it may, we have already held that the assessee has failed to substantiate its explanation and therefore liable for penalty . ii) Payment of sub-brokerage to Shri N.N. Rana for Rs. 1,02,100/- 11. It is the contention of the assessee that it has paid Rs. 1,02,100/- as sub-brokerage to Shri N.N. Rana. The assessee explained the transaction by filing bank statement and c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation therefore levy of penalty on disallowance of Rs. 1,02,100/- is justified. iii ] Payment to Darashaw & Co. amounting to Rs. 50,000/- 14. This amount of Rs. 50,000/- has been disallowed because as per the AO, the assessee is following cash system of accounting and as the payment of Rs. 50,000/- by cheque was not cleared before the end of the accounting year therefore the AO disallowed the same. 15. We find that this disallowance of Rs. 50,000/- is purely on technical ground following the method of accounting of the assessee , which , we find that , it was allowed in the subsequent year when the payment was actually made. In our considered view, no penalty can be levied on this disallowance of Rs. 50,000/- which is only based on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of Rs. 9.88 lakhs but the genuineness of the transaction has not been proved. Even the bank advice and the confirmation filed do not have the details of transaction nor any contract note has been filed or brought on record. In the absence of any contract note it is not acceptable that the payment has been made as difference in securities . On that note, we hold that the assessee has failed to substantiate his claim and accordingly levy of penalty on the disallowance of Rs. 9.88 lakhs is justified. 19. To sum up, we hold that the levy of penalty on the following disallowance is justified: a) Shri Rajendraprasad Jain Rs. 15,00,000/- b) Shri N.N. Rana Rs. 1,02,100/- c) American Express/M/s. Relan & Co. Rs. 9,88,000/- As the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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