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TMI Blog2018 (2) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... hat he is not guilty of either furnishing of inaccurate particulars of income or for concealment of income - entire explanation and evidence filed by the assessee is neither been found to be incorrect nor has been proved to be incorrect on the basis of any material on record as the information and the genuineness of the entries in the books of accounts of the third party has not been put to verification or cross examination by the AO. Simply relying on the account of the third party cannot be the basis for making any addition in the hands of the assessee leave alone levying the penalty u/s 271(1)(c). - Decided against revenue - ITA No. 6634/Del/2016 - - - Dated:- 30-1-2018 - Shri Amit Shukla, Judicial Member And Shri O. P. Kant, Accountant Member Department by : Shri Ravi Kant Gupta, Sr.DR Assessee by : Shri V.K. Bindal, CA ORDER Per Amit Shukla, J. M. The aforesaid appeal has been filed by the revenue against impugned order dated 17.10.2016, passed by Ld. CIT (Appeals) for the assessment year 2007-08, in relation to the penalty proceedings u/s 271(1)(c) for the assessment year 2007-08. The revenue has challenged the deletion of penalty of ₹ 14,04,500 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd is maintaining two ledgers in its books of account, one in the name of M/s. Shivam Export and another in the name of Satyender Yadav Prop. M/s. Shivam Exports. After analysis of ledger of Shivam Exports in the books of Anant Raj Industries Ltd., it has been found that Anant Raj has shown to have received ₹ 20,15,500/- as cash and ₹ 4,92,287/- through cheques in FY 2006-07 and Rs.l,50,000/- through cheque in FY 2007-08 from Shivam Exports. And after analysis of the ledger of Shri Satyender Yadav Prop M/s. Shivam Exports in the books of Anant Raj Industries Ltd., it has been found that Anant Raj has shown to have received ₹ 21,56,965/- as cash in FY 2006-07 and ₹ 2, 62, 680/- as cash and ₹ 8, 08,484/- through cheques in FY 2007-08. However M/s. Shivam Exports has shown to have paid ₹ 6, 12,787/- through cheques in FY 2006-07 to M/s. Anant Raj in its books of account. Also it is evident from the submission filed by M/s. Shivam Exports before Ld. CIT(A) Alwar that he made payment of ₹ 10,09,024/- through various cheques in FY 2007-08. The summary of transactions can be summarized as under:- Payment received from M/s. Shivam Exports ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring the course of such assessment proceedings, the assessee submitted that it has transacted with M/s. Shivam Exports and Shri Satyendra Yadav during the relevant financial year to whom the assessee had sold ceramic tiles to the aforesaid parties against C Form and had received cheques and cash against invoices issued to them. Further, assessee also filed its regular VAT return, wherein sale transaction as per C-Form duly reflected in the books of account with the aforesaid party has been duly shown. The assessee had also accounted the said sales both in cash and cheque amount in its books of account which has been subjected to statutory audit and audit u/s 44AB. As it is a Public Limited Company all the details of sales, purchases, etc., are duly supported by cash book, bank book, journal vouchers, party wise ledger accounts, sale invoices, bills, etc. Entire sales were duly examined during the course of earlier assessment proceedings and therefore, same could not be disturbed. The assessee in support to its contention had submitted as under:- In support of aforesaid transactions the Assessee is enclosing herewith following details for your perusal:- 1. Summary of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hivam Exports, noted that it has shown to have paid sum of ₹ 6,12,787/- through cheques to the assessee, whereas the assessee had shown cash sales from the said party. The relevant copy of account in the books of the assessee company and in the books of M/s. Shivam Exports were extracted by him as under:- Payment received from M/s. Shivam Exports Satendra Yadav Prop. M/s. Shivam Exports as per books of M/s. Anant Raj Industries pertains to A.Y. 2007-08: Particulars Amount received in cash Amount received through cheques Payment received from M/s Shivam Exports Rs.20,15,500/- Rs.4,92,287/- Payment received from Satendra Yadav Prop. M/s Shivam Exports Rs.21,56,965/- - Payment made by M/s Shivam Exports to M/s. Anant Raj Industries As per books of M/s. Shivam Exports Particulars Amount received in cash Amount receivedthrough cheques Payment made by M/s Shivam Exports Rs.6,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving that assessee has shown sale to Shri Satendra Yadav and M/s. Shivam Exports of ceramic tiles for sum of ₹ 55,76,722/-; and against such sales, assessee has received payments of ₹ 41,72,465/- by way of cash and ₹ 5,11,159/- by way of cheque. Entire sale amount has been duly recorded in the books which has been subjected to audit and the sales is comprehensively proved by the various documents filed by the assessee before the AO. He further held that, no information has been brought on record by the AO to prove that a cash credited in the books of accounts of the assessee shown as sales actually belong to the assessee or assessee has routed its own money. Apart from that, AO has drawn adverse inference on the basis of statement of Shri Satendra Yadav, taken note by the Ld. CIT(A) Alwar in his own case, however there was no cross examination provided to the assessee of Shri Satendra Yadav. Thus, he held that there was nothing on record which can prove that assessee had concealed any income or furnished any inaccurate particulars of income. Accordingly, he deleted the said addition. 8. Before us the Ld. Sr. DR submitted that the AO has added the amount as unex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ginning Factor (2013) 359 ITR 565 ; CIT vs. SSA s Emerald Meadows (2016)73 taxmann.com 248(SC). 11. We have heard the rival submissions and also perused the relevant findings given in the impugned orders. Here in this case the addition has been made by the AO for sums aggregating to ₹ 41,72,465/- on account of sales made to the two parties in cash on the ground that same is unexplained cash credit under the deeming provisions of section 68. As discussed in the foregoing paragraphs, the assessee had shown following sales of ceramic tiles to two parties:- S.No I Name of Party Opening balance Sales Cash recd. Cheques recd./ transfer Closing balance 1 . Shivam Exports (1,19,305) 27,02,939 20,15,500 5,11,159 56,975 2. Satendra Yadav - 28,73,783 21,56,965 - 7,16,818 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount and has shown it as part of its gross income. On these facts, it cannot be a satisfaction either for initiation or for levy of penalty u/s 271(1) (c) under any of the limb of the charge. 12. So far as the arguments taken from the side of the revenue that, since the findings given in the quantum side has attained finality and therefore, penalty on such addition is justified automatically; we are unable to subscribe to this view, because it is well settled principle that penalty proceedings are separate and distinct from the assessment proceedings and the assessee in the penalty proceedings may adduce any fresh evidence or may rely on same material or the evidence to prove that he is not guilty of either furnishing of inaccurate particulars of income or for concealment of income. Here the entire explanation and evidence filed by the assessee is neither been found to be incorrect nor has been proved to be incorrect on the basis of any material on record, because the information and the genuineness of the entries in the books of accounts of the third party has not been put to verification or cross examination by the AO. Simply relying on the account of the third party cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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