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TMI Blog2018 (9) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act which contains the offense committed by assessee as “ concealed the particulars of income or furnished the inaccurate parties of such income”. In view of above narration of notice, the Assessing Officer was not specific as to the offense committed by the assessee. In the penalty proceedings, the Assessing Officer has imposed the penalty for concealing the particulars of income. Once, the Assessing Officer itself was not specific as to under which limb, the Assessing Officer was going to penalize the assessee or to seek explanation of the assessee, no penalty can be imposed against the assessee u/s. 271(1)(c) - Decided in favour of assessee - ITA No. 2332 /Del/2011 & 6125/Del/2013 - - - Dated:- 11-9-2018 - Shri Bhavnesh Saini, Judicial Member And Shri L.P. Sahu, Accountant Member Appellant by Sh. Salil Aggarwal, Shailesh Gupta, Advocates Respondent by Sh. Surender Pal, Sr. DR ORDER Per L.P. Sahu, A.M.: ITA No. 2332/Del/2011 pertains to addition made against the assessee u/s. 68 of the IT Act and the appeal No. 6125/Del/2013 challenges the penalty imposed u/s. 271(1)(c) of the IT Act, consequent upon the addition u/s. 68. For the sake of convenience, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04.05.2018 Copy of order passed in miscellaneous petition filed by department, recalling the order so passed on 31.05.2016. In pursuance to the order dated 04.05.2018, recalling the order passed on 31.05.2016 by the Tribunal, the present appeal has again come up for hearing on merits before us. 3. During the course of hearing before us, the ld. Counsel for the assessee candidly admitted that the proceedings initiated u/s. 147/148 are legally valid and he did not press the legal grounds raised in this behalf. Now, the only question which remains to be adjudicated by us in this appeal is whether the ld. Authorities below are justified in making/sustaining the addition made u/s. 68 of the IT Act. The grounds raised by the assessee read as under : 1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the order of assessment framed u/s 147/143(3) in as much as pre conditions as envisaged under section 147 of the I.T. Act are not fulfilled so as to clothe the AO with the jurisdiction to reopen the assessment. 2. That the learned Commissioner of Income Tax (Appeals) in doin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... NT DATE NAME OF ENTRY PROVIDER NAME OF BANK BRANCH OF BANK 400000 7-Mar-02 TECHNOCOM ASSOCIATES PVT. SBP DG 500000 13-Mar-02 DIVISION TRADING P. LTD. SBP DG 400000 2-Feb-02 TECHNOCOM ASSOCIATES PVT. SBP DG 5. In order to justify the impugned receipts, the AR of the assessee reply before the Assessing Officer on 06.08.2009 as under : It was noticed from the list of entries that the assessee iM/s Ranutrol Industries Ltd. had taken following accommodation entry from the following person (entry operator) as per details hereunder:- Amount Date Name of entry provider Name of bank Branch of bank 400000 7-Mar-02 Technocom Associate Pvt. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IndusInd Bank dated 27.11.2009 stating that the amount has been encahsed by the above named to companies. Assessing Officer also observed that both the parties while giving cheques to the assessee of the impugned amount, have deposited cash of the equivalent amount in their bank accounts as noted in the assessment order. Keeping in view the fact that the alleged cheques issued by the assessee were not reflecting in the bank accounts of both the parties and deposit of cash of equivalent amount in their bank account, led the Assessing Officer to hold that the amount received by the assessee was an accommodation entry. He, therefore, made addition of ₹ 13 lacs u/s. 68 of the Act, being unexplained credit in the hands of the assessee. 6. In appeal, the ld. CIT(A) decided the issue as under : 5. Ground no. 4 is directed against the addition of ₹ 13,00,000/- u/s 68 of the Act. As per the facts of this case, information was received by the AO from the Investigation Wing relating to accommodation entry received by the appellant company from two parties, viz. M/s Technocom Associates Pvt. Ltd. (Rs. 4,00,000/- plus ₹ 4,00,000/-) and M/s Division Trading P. Ltd. (Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f these machines. 4. We have only correspondence for purchase order and advance for payment which were duly acknowledged by these parties. 5. There is no dealing with these parties after cancellation of order for purchase of machinery 6. We are not in a position to produce these parties because the dealing took place in the year 2001-02. You can summon these parties Yourself since the addressed are already available with you. Our case is different from the other case as we have not taken any accommodation entry. It was purely a business transaction. We first paid the money and then got our money refunded. 5.1.2 From the above, it is clear that the appellant does not have any proof that the cheques claimed to have been issued by the appellant to the above parties were deposited in their accounts. The appellant has no knowledge that the above parties were ever engaged in manufacturing or supply of the alleged machines and the appellant cannot produce any evidence in this regard. The appellant cannot explain as to how it came to know those parties except saying that it came to know about the parties through friends. The appellant does not have any correspond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any of the above two parties. There is also absence of any evidence to show that the negotiation so made was cancelled. The assessee also failed to controvert the finding of the ld. Authorities below that the assessee failed to prove that the above two parties were engaged in manufacture and sale of machinery. Once, the negotiation of purchase of machinery was cancelled with the above two parties, the assessee also failed to substantiate that he had made purchase of such machinery from any other parties or not subsequently. The Bench asked the ld. AR to disclose the total turnover of the assessee, which he also failed to give any detailed thereof. The bank certificate of the assessee s bank account no doubt states about the encashment of two cheques by the above two parties, but this certificate nowhere reveals as to in which bank account, the said cheques were credited. Once, the receipt of amounts alleged paid by the assessee to the sellers is not proved, no credence can be placed on the alleged refund thereof in the hands of the assessee. In presence of all these facts, coupled with the fact that the cash deposit of equivalent amounts was found in the bank accounts of the two p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lakshya Seth vs. ITO (ITA No. 852/Del/2016 vide order dated 16.05.2018) after following the decision of Hon ble Karnataka High Court in the case of SSAs Emrald Meadows, 73 taxmann.com 241 supported by Hon ble Supreme Court. The findings of the Tribunal read as under : 4. After considering the rival submissions, we are of the view that penalty is not leviable in the matter. The A.O. issued show cause notice dated 28th March, 2013 before levy of the penalty against the assessee in which the A.O. has recorded as under : have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1, 2, 3, 4 and 5. 4.1. These facts, therefore, clearly show that notice issued by the A.O. for levy of penalty under section 271 (l)(c) of the Act to be bad in law as it did not specify in which limb of Section 271(l)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself similar view is taken by Hon ble Karnataka High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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