9911796707
TMI Blog2013 (10) TMI 105X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 271(1)(c) of the Income-tax, 1961 [for short "IT Act"]. 2. Facts leading to the present appeal in nut-shell are as under: 2.1 That a search action under section 132 of the IT Act was carried out covering residential and business premises of one Kabhai Chauhan Group of Companies on 04-03-2005 inclusive of one M/s. Om Shivam Corporation. During the search, two cheques worth of Rs. 16,43,000/- and 14,50,000/- were seized from the premises of M/s. Om Shivam Corporation which were in the name of assessee. A notice under section 153C of the IT Act was issued upon the assessee however, the assessee did not file any return of income. Thereafter, the assessee stated that the original return filed be treated as return of the income filed in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee could not furnish any satisfactory explanation with respect to the aforesaid cheques and therefore, it proved that the said amount was settled in cash between the assessee and the purchaser and the aforesaid two cheques were returned. Therefore, the AO passed an order to add Rs.30.93 lacs in the total income of the assessee and also passed an order to initiate penalty proceedings under section 271(1)(c) of the Act for concealment of particulars of income/filing inaccurate particulars of income. 2.3 A notice was issued under section 271(1)(c) of the IT Act on 29-12-2006. That thereafter the assessee preferred appeal before the CIT(A) against the order of assessment and CIT(A) dismissed the said appeal by order dated 29-08-2007. That t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 30.93 lacs. 2.4 In view of the fact that the orders of authorities below making addition of Rs. 30.93 lacs [with respect to two cheques recovered from the premises of M/s. Om Shivam Corporation] came to be set aside by the ITAT and directed to delete the addition of Rs. 30.93 lacs which was the basis of the order of penalty under section 271(1)(c) of the IT Act, the ITAT by impugned order has dismissed the appeal preferred by the Revenue and has confirmed the order passed by the CIT(A) quashing and setting aside the penalty order passed under section 271(1)(c) of the IT Act. Feeling aggrieved and dissatisfied with the order passed by the ITAT as well as the CIT(A) in quashing and setting aside the order of penalty, the Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Parikh, learned counsel appearing for the Revenue and perused the impugned order passed by the AO imposing the penalty under section 271(1)(c) of the IT Act; the order passed by the CIT(A) quashing and setting aside the order of penalty as well as the impugned order passed by the ITAT as well as the order passed by the ITAT in quantum appeal directing to delete addition of Rs. 30.93 lacs. 4.1 At the outset it is required to be noted that as such the penalty proceedings were initiated pursuant to the order passed by the AO making the addition of Rs. 30.93 lacs [with respect to the two cheques of Rs. 16,43,000/- and Rs. 14,50,000/-] recovered from the premises of M/s. Om Shivam Corporation recovered during the search carried out. However, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vised return is not in dispute surrendering his undisclosed income. The dispute is left with the amount of Rs. 30,93,000/- which relates to the recovery of two postdated cheques during the course of search which were in the name of the assessee. The learned Counsel for the assessee demonstrated from the agreement in question that both the two post-dated cheques referred to in the assessment order pertained to dated 31-12-2000 and 31-12-2001. The same were found in the possession of M/s. Om Shivam Corporation at the time of search carried out on 04-03-2005. Thus, till the date of search both the post-dated cheques were not encashed by the assessee. Accordingly to law dealing with negotiable instruments, the validity of both the cheques would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case noted above, we are of the view that addition is made against the assessee merely on presumption or suspicion expressed by the AO regarding some facts which are not in existence. The law is settled that suspicion howsoever may be grave but it cannot take the place of legal proof. For making addition u/s 153C of the IT Act, the AO shall have to prove that the seized documents or the undisclosed income belongs to the assessee. In the absence of any cogent or reliable evidence available on record regarding alleged receipt of cash by the assessee, the authorities below were unjustified in making and confirming the addition. In the absence of any evidence incriminating in nature against the assessee, we do not justify the addition. We acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
