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TMI Blog2018 (7) TMI 462X X X X Extracts X X X X X X X X Extracts X X X X ..... ied cannot be sustained. Though the CIT(A) had sustained the addition, the assessee had not filed any appeal against that order, that by itself does not prove that there is any conclusive material to suggest that the assessee has earned additional income determined by the Assessing Officer. Penalty cannot be levied in this kind of situation. The addition was only on account of assessment of income on the deposits made into the account of the assessee’s bank. The assessee could not prove that there was willful or gross negligence on the part of the assessee, resulting thereby the assessee concealed the income to that extent. There was no deliberate concealment on the part of the assessee. - No penalty levy - Allahabad High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1)(c), the assessee stated that he has not earned any income from such activity. He was getting only a monthly salary of ₹ 4,000/- from his employer. The Assessing Officer rejected the contention of the assessee stating that it was difficult to believe that the assessee had allowed his bank account for transfer of huge amount of money for other persons without getting any benefit. Therefore, the Assessing Officer was convinced that the assessee had concealed particulars of income and imposed a minimum penalty of ₹ 4,600/- u/s. 271(1)(c) of the Act. 3. On appeal, the CIT(A) observed that concrete information procured from Enforcement Directorate and CBI wing of the Department was available with Assessing Officer regarding rou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to him, and although they may have taken place before he joined the conspiracy or after he left it. 3.1 The CIT(A) relied on the judgment of the Supreme Court in Criminal Appeal No. 179 of 1972 with Criminal Appeal 178 of 1972 in Shivnarayan and Laxminarayan Joshi and Others vs. State of Maharashtra and Criminal Appeal Nos. 252 and 253 of 1973 in State of Maharashtra vs. Loonkaran Hansraj and Others dealt with cases where circumstantial Evidence can be accepted even when there is no direct evidence. In view of the above cases, the CIT(A) held that there is clear entry of deposit of large amounts in the bank account of the assessee, the source of which he was not able to explain and he has permitted the Hawala agent to use his account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5% of ₹ 1,11,65,080/- which worked out to ₹ 27,912/-. Consequently, the Assessing Officer levied penalty on this income which was worked out to ₹ 4600/- The contention of the Ld. DR is that even though the income was estimated, the penalty could be levied and for this purpose he relied on the following High Court judgments: 1)CIT(Addl.) vs. Smt. Chandrakanta and Another (205 ITR 607) (MP) 2) A.M. Shah Company vs. CIT 238 ITR 415 (Guj.) 4.1 The addition was estimated by the Assessing Officer on the amount deposited into the assessee s bank account. The Assessing Officer adopted the flat rate of 0.25% as income of the assessee on the total deposits made in his bank account. The Assessing Officer did not record the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is not proper to levy penalty as held by different High Courts in the following cases: 1) New Plaza Restaurant vs. ITO (301 ITR 259) 2) Sajay Ikake vs. CIT (360 ITR 271) 3) Vijay K.Talwar vs. CIT (1 SCC 673) 4) Commissioner Customs vs. Stone and Marble (2011) (12 SCC 758) 5) CIT vs. Target Construction Co. Ltd. 231 taxman 55 (All.) 4.2 Further, it was held by the Allahabad High Court in the case of CIT vs. Raj Bans Singh (276 ITR 351), that when income is estimated by different authorities right from Assessing Officer to Tribunal and it was a simple case of one estimate against another estimate, and therefore, penalty cannot be levied. Similarly, Bombay High Court in the case of CIT vs. Badve (138 ITR 82); Punjab and Har ..... X X X X Extracts X X X X X X X X Extracts X X X X
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