9911796707
TMI Blog2015 (11) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... e different from assessment proceedings. The Assessing Officer has initiated penalty proceedings on estimated basis. There is no wilful concealment of income and the assessee has also offered huge amount of income for taxation in the assessment year under consideration. The assessee has also relied on the decision in the case of CIT v. S. Sankaran 241 ITR 825, wherein the Hon’ble Jurisdictional High Court has observed that mere addition to income at the instance of assessee would not warrant a finding of concealment of income or the levy of penalty. Mere addition of income agreed to by it itself is not the proof of concealment. The lower authorities are not correct in initiating penalty proceedings. After considering the above facts and circumstances, the well settled principles namely that the assessment proceedings and penalty proceedings are quite distinct and the findings given in the assessment order are not conclusive. Accordingly, mere addition of amount as income is not the criteria to levy penalty. - Decided in favour of assessee. Unexplained silver articles - Held that:- Since receipt of silver articles received by the assessee as Sreedhanam and gift has been accepted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of convenience. 2. The appeals of the assessee in I.T.A. Nos. 1653, 1654, 1656, 1657 1658/Mds/2013 are found to have been filed late by 54 days in filing the appeal. The appeal in I.T.A. No. 1655/Mds/2013 is also found to have been filed late by 134 days in filing the appeal. The assessee has filed separate affidavits to condone the delay in filling the appeals and submitted that the delay in filing the appeals was neither wilful nor deliberate but due to compelling bonafide circumstances. The impugned order got mixed up with other papers and the assessee could able to retrieve the order only in June, 2013. Thereafter, after taking the advice of the Chartered Accountant, the appeal papers were prepared and filed. Therefore, the ld. Counsel for the assessee has submitted that there was no wilful attempt on the part of the assessee and prayed for condoning the delay and to admit the appeals for hearing. The ld. DR has not seriously objected to the submissions of the ld. Counsel for the assessee. 3. We have carefully considered the affidavits filed by the assessee for condonation of delay in filing the appeals. We have also considered the submissions of the ld. Counsel for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of Rs. .90,000/- on account of rental income for all the assessment years. 7. Subsequently, the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act on the addition made on account of rental income and levied penalty amounting to Rs. .62,107/- for the assessment year 2000-01, Rs. .34,000/- for the assessment year 2001-02, Rs. .1,57,000/- [for both the addition on rental income and sundry loans] for the assessment year 2002-03, Rs. .27,000/- for the assessment year 2004-05 and Rs. .83,000/- [for both the addition on rental income and silver articles] for the assessment year 2005-06. 8. Against the penalty levied by the Assessing Officer under section 271(1)(c) of the Act, the assessee preferred appeals before the ld. CIT(A) for all the assessment years. After considering the re-assessment order, penalty order and submissions of the assessee, the ld. CIT(A) has observed as under: 4.5 The first issue pertains to levy of penalty on addition of rental income of ₹ 90,000/-. While framing the original assessment order, the AO noticed that the assessee has shown ₹ 90,000/- as rental receipt from the property at Blossom Infotech Buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant for the impugned property. The rental income has not been admitted by the appellant or her sons. The appellant has also not produced any evidence to conclusively prove that her two sons are the actual owners of the impugned property. Hence, there is concealment of particulars regarding receipt of rental income from the property Blossom Infotech Building'. The AO has, therefore, rightly levied the penalty u/s 271(1)(c) of the Act for concealment of rental income of ₹ 90,000/-. The same is confirmed and the ground is dismissed. 9. For the assessment years 2001-02, 2002-03, 2004-05 and 2005-06, the ld. CIT(A) confirmed the penalty levied under section 271(1)(c) of the Act on account of rental income. 10. On being aggrieved, the assessee is in appeal before the Tribunal for all the above assessment years. The ld. Counsel for the assessee has submitted that the penalty cannot be imposed on bonafide errors of omission. He has further submitted that the assessee paid huge amount of tax and mistake occurred. Hence, penalty should not be levied and prayed that the Tribunal may kindly delete the penalty. 11. On the other hand, the ld. DR has submitted that i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer with a direction to dispose the matter after conducting necessary enquiry and verification. After hearing to the assessee, the Assessing Officer has made the addition with regard to rental income since the assessee has not furnished any documentary evidence. Apart from this on verification of the income tax records of Shri Shivakumar (HUF), son-inlaw of the assessee, a sum of Rs. .90,000/- was paid to the assessee as rent for the above property. Therefore, during the set aside assessment proceedings, the assessee could not get relief for rental receipts. Thereafter, the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act. During the penalty proceedings also, the assessee has not produced any evidence with regard to settlement of the said property to her sons. Since the assessee has not offered the rental incomes in her return and concealed the particulars of income, the Assessing Officer levied penalty under section 271(1)(c) of the Act. On appeal, the ld. CIT(A) confirmed the penalty levied by the Assessing Officer on the ground that the assessee has not produced any material evidence to conclusively prove that she has executed the settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No. 1656/Mds/2013 [A.Y. 2002-03] 17. In this appeal, the first issue is with regard to rental income has already been decided hereinabove with other assessment years and the next issue pertains to penalty levied for the addition towards unexplained sundry loan. In the assessment order, the Assessing Officer has observed that the assessee has shown sundry loans of Rs. .28,41,000/-. Since the assessee has not furnished evidence during the assessment proceedings, the entire sundry loan of Rs. .28,41,000/- was treated as undisclosed income of the assessee and added to the returned income. The ld. CIT(A) vide order dated 05.03.2008, after considering the submissions of the assessee, deleted the addition of Rs. .25,00,000/- and confirmed the addition of Rs. .3,41,000/-. On further appeal, the Tribunal vide its common order in I.T.A. No. 1271 to 1276/Mds/2008 and I.T.A. No. 1432 to 1438/Mds/2008 dated 22.05.2009 found no error or illegality in the order of the ld. CIT(A), whereby addition to the extent of Rs. .25 lakhs was deleted and the balance addition of Rs. .3,41,000/- was further confirmed. 18. The Assessing Officer has initiated penalty proceedings under section 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wilful concealment of income and the assessee has also offered huge amount of income for taxation in the assessment year under consideration. The assessee has also relied on the decision in the case of CIT v. S. Sankaran 241 ITR 825, wherein the Hon ble Jurisdictional High Court has observed that mere addition to income at the instance of assessee would not warrant a finding of concealment of income or the levy of penalty. Mere addition of income agreed to by it itself is not the proof of concealment. The lower authorities are not correct in initiating penalty proceedings. After considering the above facts and circumstances, the well settled principles namely that the assessment proceedings and penalty proceedings are quite distinct and the findings given in the assessment order are not conclusive. Accordingly, mere addition of amount of Rs. .3,41,000/- as income is not the criteria to levy penalty. Thus, we find that it is not a fit case to levy penalty under section 271(1)(c) of the Act. Accordingly, we direct the Assessing Officer to delete the penalty. Thus, the appeal is partly allowed. I.T.A. No. 1658/Mds/2013 [A.Y. 2005-06] 22. For the assessment year 2005-06, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remaining silver articles worth Rs. .1,34,262/- by supporting evidences and confirmation from the donors, the ld. CIT(A) confirmed the penalty levied by the Assessing Officer. 23. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee has contended that during the course of quantum appeal, the Tribunal has accepted receipt of silver articles by way of Sreedhanam and gifts. Therefore, he prayed that the penalty levied should be deleted. 24. On the other hand, the ld. DR has strongly supported the order passed by the ld. CIT(A). 25. After hearing both sides, we find that the Coordinate Bench of the Tribunal in I.T.A. Nos.1432 to 1438/Mds/2008 vide order dated 22.05.2009, by confirming 50% of the total value of silver articles as undisclosed investment, directed the Assessing Officer to treat 50% of the total value of silver articles as Sreedhanam and gifts received by the assessee. Against 50% of the addition confirmed by the Tribunal, the Assessing Officer has initiated penalty proceedings. The ld. Counsel for the assessee has contended that the silver articles received by the assessee as Sreedhanam and gifts has not been ruled o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /23.01.2002 with Mr.K.P. Karuppuswamy represented by his power of attorney Mr. M. Raja for the property situated at Thiruvallore District, Ambattur Taluk, Thiuvanmiyur Village in Survey No. 185/6 measuring an extent of 84 cents (1/4th share in 84 cents together with 12000 sq.ft. uncompleted building). The assessee has paid Rs. .25 lakhs as advance to the vendor s power agent and the receipt of which the power I.T.A. 18 Nos.1653-1658/M/13 agent admitted and acknowledged. Based on the above payment of Rs. .25 lakhs, show cause notice was issued to the assessee. Since the assessee has not explained the sources for the said advance of Rs. .25 lakhs, the Assessing Officer added the said amount to the returned income. 28. Against the above addition, the assessee preferred an appeal before the ld. CIT(A) and the ld. CIT(A) confirmed the addition of Rs. .25 lakhs since the assessee has not explained the source of payment of advance of Rs. .25 lakhs made to Shri K.P. Karupusamy and Shri S. Danushkodi on 23.01.2001 by observing as under: 4.3 I have carefully considered the facts of the case and the submissions made by the learned AR. The submission made by the ld. AR on 12.12.2012 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fferent matter that Smt. Padmapriya is also required to explain the source of acquisition in her case in the A.Y. 2004-05, since the actual purchase was made on 30.05.2003. The advance paid by the appellant was prior to sale deed executed on 30.05.2003. The advance paid by the appellant was prior to sale deed executed on 30.05.2002 and the same has to be independently and satisfactorily explained by the appellant. So far as the case of the appellant is concerned, it is seen from the Receipts and Payments account of the appellant for the year ended 31.03.2002 that the appellant had received sundry loan of Rs. .28,41,000/- and had also received Rs. .25,00,000/- from Repco Bank. The appellant has shown payment of Rs. .18,32,180/- towards land. But, that was towards property at Krishna Nagar and not an advance for land at Thiruvanmiyur. Hence, it is established that the appellant has not explained the source of advance for Thiruvanmiyur property. The Receipt and Payment account also does not come to the rescue of the appellant because all receipts amount to Rs. .1,30,96,949/- have already been paid for various purposes as stated in the said account, the total paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
