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TMI Blog2018 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... le as regards an unproved explanation - as the explanation of the assessee as regards the cash deposit of ₹ 4,81,600/- had though remained unproved to the satisfaction of the A.O, however, the same had and not been disproved and conclusively found to be false, therefore, no penalty under Sec. 271(1)(c) would be called for in his hands on the said count - penalty set aside. Appeal allowed in part. - ITA No. 5765 And 5766/Mum/2014 - - - Dated:- 27-12-2017 - SHRI R.C SHARMA, AM AND SHRI RAVISH SOOD, JM For The Appellant : Shri Mihir A. Tanna, A.R. For The Respondent : Shri Rajesh Kumar Yadav, D. R. ORDER PER RAVISH SOOD, JUDICIAL MEMBER: The present appeals filed by the assessee are directed against the orders passed by the Commissioner of Income Tax (Appeals)-40, Mumbai, dated 02.06.2014, each for A.Ys 2006-07 and 2007-08, which in itself arises from the orders passed by the A.O under Sec. 271(1)(c) of the Income-tax act, 1961 (for short Act ), dated 18.09.2013 and 20.09.2013, respectively. That as common issues are involved in the appeals, therefore, they are taken up and disposed of by way of a consolidate order. We shall first take up the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O that as all the facts had been discussed and disclosed at the time of the assessment proceedings, therefore, no penalty u/s 271(1)(c) for concealment of income or furnishing of inaccurate particulars of income was called for in his hands. However, the explanation of the assessee did not find favour with the A.O, who being of the view that the assessee had purposefully furnished inaccurate particulars of income within the meaning of Sec. 271(1)(c), therefore, imposed a penalty of ₹ 1,48,550/- under Sec. 271(1)(c). 5. Aggrieved, the assessee assailed the order of the A.O imposing penalty in appeal before the CIT(A). The assessee submitted before the CIT(A) that as the assessee who had claimed a deduction of ₹ 1 lac under Chapter VIA in his return of income, however, due to lack of evidence could substantiate his claim only to the extent of ₹ 26,644/-, therefore, the A.O disallowed the balance claim of the assessee to the said extent and made an addition of ₹ 73,356/- on the said count in the hands of the assessee. The assessee submitted before the CIT(A) that as the disallowance of the claim of the assessee was made merely for lack of evidence, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther submitted that the assessee had before the lower authorities explained that the source of cash deposit of ₹ 4,81,600/- in the bank account of the assessee was the amount of loan/advance received in cash from the HUF of his father, viz. Chotamal Patodia, HUF, and had also placed on record the confirmation affirming the said factual position. It was thus averred by the ld. A.R that though the explanation of the assessee for lack of evidence might not have found favour with the A.O, however, as the same was not proved to be false or incorrect, therefore, no penalty under Sec. 271(1)(c) in respect of the said amount of cash deposit of ₹ 4,81,600/- could have been imposed in the hands of the assessee. The ld. A.R in support of his contention that no penalty under Sec. 271(1)(c) was called for in the hands of the assessee relied on the judgment of the Hon ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd. (2010) 230 CTR 320 (SC). Per contra, the ld. Departmental representative (for short D.R ) submitted that as the assessee had raised a false claim of deduction of ₹ 73,356/- under Chapter VIA, as well as failed to explain the source of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the A.O under Sec. 271(1)(c) as regards the cash deposit of ₹ 4,81,600/- in the bank account of the assessee. We find that the assessee had before both of the lower authorities explained that the source of cash deposit of ₹ 4,81,600/- in the bank account of the assessee was the amount of loan/advance received in cash from the HUF of his father, viz. Chotamal Patodia, HUF. The assessee in order to fortify the aforesaid source of investment had also placed on record the confirmation affirming the said factual position. We find that the authorities below not impressed by the financial credibility of the creditor, thus suspecting the genuineness of the transaction had rejected the explanation and added the said amount as the unexplained cash credit of the assessee under Sec. 68, which had been accepted by the assessee and not carried further in appeal. 10. We have deliberated on the facts leading to an addition of the cash deposit of ₹ 4,81,600/- in the hands of the assessee. We find substantial force in the contention of the ld. A.R that though the aforesaid explanation of the assessee which he had supported by placing on record the confirmation of the creditor, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax (Appeals)-40, Mumbai has erred in : 1. Confirming the action of the Learned Assessing Officer levying the penalty u/s 271(1)(c) of the Act amounting to ₹ 1,48,550/- whereas as per the facts circumstances the same should not b levied. 13. Briefly stated, the facts of the case are that the assessee had filed his return of income for A.Y. 2007-08 on 31.10.2007, declaring an income of ₹ 1,64,525/-. Subsequent to Search seizure proceedings under Sec. 132 of the Act in the case of Vakrangee Software Ltd and its group entities on 13.12.2010, the case of the assessee was covered. That a Notice under Sec. 153A was issued to the assessee calling upon him to file his return of income for the year under consideration, viz. A.Y. 2007-08. The assessee in compliance to the aforesaid notice submitted that his return of income filed on 31.10.2007 may be treated as the return of income filed in compliance thereto. 14. The A.O while framing the assessment observed that though the assessee had claimed a deduction of ₹ 1,00,000/- under Chapter VIA, however, he could furnish proof in respect of an amount of ₹ 95,882/- only. Thus, the A.O disallowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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