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TMI Blog2016 (1) TMI 983X X X X Extracts X X X X X X X X Extracts X X X X ..... PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Nikhil Pathak For The Revenue : Shri Hitendra Ninave ORDER PER VIKAS AWASTHY, JM : The appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)-II, Nashik dated 15-05-2012 confirming the levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) in the assessment year 2007-08. 2. The brief facts of the case are : The assessee had purchased land measuring 1.11 Hectare from one Shri Govind Sitaram Dhemse. The sale consideration of the land as per registered sale deed is ₹ 12,50,000/-. The assessee filed his return of income for the assessment year 2007-08 on 29-10-2007 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the assessee has paid part of sale consideration in cash and thus made addition of ₹ 20,80,000/-. The appeal of the assessee in quantum proceedings was dismissed by the Commissioner of Income Tax (Appeals). In second appeal, the Tribunal also confirmed the addition. The assessee thereafter, accepted the addition. However, there is no evidence on record to show that the assessee has paid cash towards part payment of sale consideration. The quantum addition has been sustained merely on the theory of probability. However, penalty cannot be levied on the additions made on probability, assumptions and estimations. The ld. AR further contended that one of the reasons for making addition was that Shri Dhemse from whom the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n his bank and has disclosed the same in his return of income. It is a well known fact that where on-money is paid, no transactions are recorded in the books of account, thus, leaving no trial of evidence. The ld. DR prayed for dismissing the appeal of the assessee. 5. Both sides heard, orders of the authorities below perused. Addition u/s. 69 of the Act has been made in the income returned by the assessee on the basis of valuation report of DVO and the admission of the vendor that he has accepted ₹ 25,28,000/- in cash from the assessee. According to the registered sale deed, the consideration for purchase of land is ₹ 12,50,000/-. The DVO in his report has determined the value of land as ₹ 33,30,000/-. In the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ong it may be. Another reason for levy of penalty is admission of Shri Dhemse. The assessee was not afforded opportunity to cross-examine Shri Dhemse. The Assessing Officer authorities below have violated the principles of natural justice in not giving opportunity to the assessee to cross-examine Shri Dhemse. Penalty cannot be levied on assessee solely on the admission of vendor without any corroborative evidence. 7. The Hon'ble Calcutta High Court in the case of CIT Vs. Ratanlal Surekha reported as 61 Taxman 133 (Cal.), while upholding the order of Tribunal in deleting the penalty u/s. 271(1)(c) where opportunity was not afforded to the assessee to cross-examine the person on whose confession penalty was levied, the Hon'ble H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement that they have in fact not given any loan is incorrect and was made before some other Income-tax Officer in some other proceedings The assessee has consistently contended that the alleged statements were made behind the back of the assessee and the assessee was never given any opportunity to confront them and/or cross-examine them. No particulars of any such statement/s are on record. In any event, the said original assessment was set aside and the income-tax authorities themselves at the time of reassessment of the assessee's income pertaining to the assessment year 1967-68 and the assessment year 1968-69 once again tried to summon the parties who had given loans to the assessee. The assessing authority surely did not expect all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 1967-68 and one question for the assessment year 1967-68 are answered in the negative, i.e., in favour of the assessee and against the Revenue. As set out in our order dated July 31, 2008, despite repeated opportunities given to the Revenue no one has appeared on behalf of the Revenue. We have, therefore, proceeded to pass the present order after hearing the advocate representing the assessee. In any event we do not pass any order as to costs. 9. In the case of Britannia Industries Limited Vs. Deputy Commissioner of Income Tax reported as 238 ITR 57 (Cal.). The Hon'ble Calcutta High Court has held that it cannot be said that there was escapement of income in a case where the DVO has enhanced the valuation of prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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