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TMI Blog2017 (3) TMI 1223X X X X Extracts X X X X X X X X Extracts X X X X ..... o account the same to conclude that this is not a fit case to invoke the impugned penalty provision as the assessee has not been able to substantiate his claim in quantum proceedings. We wish to observe here that the hon’ble apex court in Reliance Petroproducts’ case (2010 (3) TMI 80 - SUPREME COURT) has already settled the law that quantum and penalty proceedings are separate and each and every disallowance / addition made in the course of former does not ipso facto attract the latter penal provision in the Act. We keep in mind the same and direct the Assessing Officer to delete the impugned penalty. - Decided in favour of assessee - ITA No.3024/Ahd/2013 - - - Dated:- 22-3-2017 - SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the learned CIT(A) that the aggregate of the credit side of the bank statement may be taken as the total turnover of the assessee and a reasonable profit of 5% may be estimated to be the income of the assessee. 3.3 The learned CIT(A) considering the submissions of the assessee and the observations made by the learned AO, restricted the addition to ₹ 15,32,778/- and thereby partly allowed the appeal of the assessee. The findings of the learned CIT(A) in Para 2.3 of his order is reproduced herein under for reference: 2.3. I have considered the submission made by the appellant and observation of the AO. The explanation given by the appellant even though the purchaser was some other person, is not at all believable and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, it is clear that this amount of ₹ 6 lakh is no more available to the appellant. Thereafter, it is seen that there is a peak deposit of ₹ 7,03,440/- on 21/12/2006. Prior to that also the credit balance had increased to ₹ 5,94,935/- on 19/10/2006 and also the credit balance of ₹ 5,65,256/- on 25/07/2006. Since there are various cash withdrawals and cash deposit and since the assessee has been dealing in trading of old cars, as well as earning commission the theory of peak addition plus profit on the entire transactions would be the right thing to apply. However, before applying the theory of peak and profit it is necessary to see that the amount of ₹ 6 lakh paid to Bhagwati Caterers Private Ltd. is not ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.7,03,440 (iii) 5% profit on aggregate turnover of ₹ 45,76,131/- admitted by the assessee Rs.2,29,338 Total Rs.15,32,770 On analyzing the bank statement, we find that the opening balance of the bank as on 01-04-2006 is ₹ 3,05,778.82 and the closing balance as on 31-03-2007 is ₹ 2,95,150.82. Thus, there is an erosion of capital for ₹ 10,628/-(Rs.3,05,778.82 - ₹ 2,95,150.82). Further, the total aggregate of the credit side of the bank statement amounting to ₹ 45,76,131.20 also includes the commission earned by the assessee from purchase and sale of second hand cars apart fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amount paid to Bhagwati Caterers Rs.6,00,000/- Total Rs.14,59,260/- Less: accumulated profit for the previous 3 years ₹ 1,50,000/- ₹ 13,09.260/- Less: Erosion in capital (O/B ₹ 3,05,778.82 - C/B ₹ 2,95,150.82) ₹ 10,628/- Less: income already disclosed in the return ₹ 1,55,820/- ₹ 11,42,812/- Rounded off to ₹ 11,40,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .02.2012. The CIT(A) upholds the same in lower appellate order under challenge. 5. We have heard learned Departmental Representative strongly supporting the impugned penalty as levied by both the lower authorities by holding that the assessee has concealed its taxable income. It however emerges from this tribunal s quantum order that it is not an instance wherein the assessee had not offered any explanation or adduced altogether false explanation in order to state source of the impugned cash deposits. The fact remains that the assessee has already proved to have been engaged in commission business in automobile sector wherein it is not always possible to file all the relevant confirmations. Learned co-ordinate bench also appears to have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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