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TMI Blog2018 (3) TMI 1183X X X X Extracts X X X X X X X X Extracts X X X X ..... 7ID of the Act without giving proper and reasonable opportunity to the assessee, hence the levy of penalty u/s 271D of Rs. 170000/- is against the law and deserves to be deleted." 2. At the outset, the counsel for the assessee objected the action the ld. CIT(A) contending that he has erred in confirming the penalty u/s 27 ID of the Act for Rs. 170000/- on the facts and circumstances of the case since, in quantum appeal the Ld. CIT (Appeals) and Hon'ble Tribunal has considered said amount as income and hence, the penalty u/s 27ID of Rs. 170000/- is against the law and deserves to be deleted. 3. The facts as per record are that the Assessing Officer has noticed that the assessee has received three loans in cash in contravention of provisions of Section 269SS of the Act and for this default, penalty u/s 271D of Rs. 1,70,000/- was imposed on the assessee by the Addl. CIT, Range 3 Gwalior on reference made by ITO-Ward 3(1), Gwalior. The ld. CIT(A) vide impugned order dated 16.03.2016, confirmed the penalty by observing as under: 5.1 Without deliberating much on the above, undisputed position (as made out in para 4.1 of this order) of the appeal is that the appellant has received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cash and returned back by cheque. Thus, according to the AO the assessee has contravened the provision 269(SS) of the Income tax Act and the penalty proceedings were initiated u/s 271D of IT Act. He estimated the income from 4 Dumpers at Rs. 1.5 lakhs, instead of Rs. 1,16,800 and made other additions as well. The assessee went in Appeal before CIT Appeal. 7. Assessee filed a detailed reply before CITAppeal dtd. 18.11.09 which is at page 26 to 28 of the Paper Book at page 27 para 2, assessee submitted before CIT Appeal that all the credits in the bank account amounting to Rs. 27,43,153/- added by the AO as unexplained money is added without allowing proper opportunity to the assessee. These were the entire gross receipts of freights of Dumpers which were deposited in the bank. No books of account were maintained by the assessee and that assessee shown the income of Dumpers Plying u/s 44AE of the Income tax Act. Hence this addition of Rs. 27,33,153/- deserved to be deleted. 8. The CIT Appeal vide appeal dtd. 09.02.2010 page 23 of the Paper book at para 5.2 noted as under :- "On perusal of details, it is seen that the appellant has submitted that amount of Rs. 15,16,090/- in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om freight were received from different customers, which is deposited in the bank accounts of the assessee." Therefore, the Id. C1T (A) correctly held that the entire addition of Rs. 27,33,153/-should not be made and only the profit is to be estimated. However, the Id. CIT (A) failed to note that by applying the provisions of section 44AE, the income of the assessee had already been computed at Rs. 1,05,000/- which was sufficient business income of the assessee, as the assessee has already declared excess income of Rs. 1,16,800/- in the return of income. Therefore, further addition of Rs. 2,04,986/- by applying the profit rate of 7.5% is clearly unjustified. Rather, it would amount to double taxation of computing the business income of the assessee separately as against the business income already computed u/s 44AE of the IT Act. Therefore, further addition of Rs. 2,04,986/- is clearly unjustified. We accordingly, set aside the orders of the authorities below and delete the addition of Rs. 2,04,986/-. The Id. CIT (A), however, correctly held that the addition on account of deposits in the bank account should not be considered for the purpose of making the addition of Rs. 27,33,15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered as income and has been treated as part of the receipts of the income then section 269SS and 269T have not application and penalty u/s 271D cannot be imposed as it is not a loan or cash deposit in violation of these sections and section has no application. 16. Assessee further relies on the following decisions of 44AE :- a. CIT Kanpur V/s Nitin Soni (2012) 207 Taxman page 332, Paper Book No.50. In these cases, it has been held that where section 44AE and 44ADhave been applied. No further addition of other source can be made. These judgments have been followed by Hon'ble ITAT in assessee case atpara 6 of the ITAT order. b. Diwan Enterprise V/s CIT reported in 246 ITR page 571 Delhi High Court, Paper Book Page no. 58. c. CIT Rohtak V/s Smt. Kamlesh (2013) 217 Taxman 272. d. CIT V/s Laxmi Trust Co. (2008) 303 ITR page 99 Madras. This order isagainst the penalty u/s 269SS/271D and court has taken a view when thetransaction is bonafide in cash, the penalty is not leviable. In view of these position of facts and law, it is submitted that the penalty of Rs. 1,70,000/- levied u/s 271D may kindly be cancelled." 5. The ld. DR relied on the order of the lower author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of plying of dumpers; thatRs. 40,000/- have been mentioned as freight receipt in A/c. 881; thatthe assessee has also deposited amount of Rs. 1,68,500/- in the A/c No. CD 92 as received from Shri Arvind Sikarwar; thatas the assessee has failed to give any detail or confirmation for the same, the same amount of Rs. 1,68,500/- is also treated as income from undisclosed sources; that the deposits of Rs. 2.00 lakh in the SB account no. 881 Bank of India and Rs. 25,33,153/- in CD Account No. 92 aggregating to 27,33,153/- was added to the total income of the assessee,treating the entire bank deposits as freight receipt of dumpers, although the assessee has not maintained the books of account and directed the Assessing Officer to apply gross profit rate of 7.5% on the entire freight receipt of Rs. 27.33,153/- which works out to Rs. 2,04,986/- as against Rs. 1,16,086 the return income by the assessee u/s 44AE. 9. The ITAT, Agra Bench vide order dated 09.08.2012 in Para 8 confirmed the finding of ld. CIT(A) that income has to be computed by applying the provisions of Section 44AE of the Act. Considering the assessee's explanation that substantial freight receipt of Rs. 27,33,153/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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