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TMI Blog2019 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... dings may qualify to be a valid argument justifying the quashing of the penalty orders. However, the occasion to make such a prayer would only arise after the assessee meets the bar first i.e. the assessee needs necessarily to demonstrate that these were contract receipts. Accordingly, in the interest of substantial justice, accepting the prayer of the ld. AR made on behalf of the assessee, the impugned order is set aside back to the file of the CIT(A). While so doing it is made clear that in the eventuality of abuse of the trust reposed in the assessee, the CIT(A) would be at liberty to pass an order on the basis of material available on record. Any fresh evidence the assessee seeks to file is directed to be admitted and in case it is found to be not sufficient or incomplete, the CIT(A) would be free to give any suitable direction for production of necessary evidences considered relevant for addressing the issues. - Appeals of the assessee are allowed for statistical purposes. - ITA Nos. 1535 And 1536/CHD/2018 - - - Dated:- 28-6-2019 - Smt. Diva Singh, JM For the Assessee : Shri Neeraj Arora For the Revenue : Shri Harjinder Singh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portunity, the assessee stated to be a labour contractor was unable to demonstrate that these deposits were from contract receipts. The ld. AR pleaded for an opportunity to bring supporting evidences on record stating that the labour contractor being ignorant about the legal nuances may not have understood the need and necessity to place supporting evidences on record. 6. The ld. Sr.DR submitted that admittedly more than sufficient opportunity has been given and even today, there is no evidence on record on the basis of which it is being pleaded that the matter may be remanded. 7. The ld. AR addressing the departmental objection invited attention to the fact that the assessee was a small time labour contractor and may not have understood the need for placing supporting evidences on record. 8. I have heard the rival submissions and perused the material available on record. For the sake of completeness, it is appropriate to bring out the fact that before the AO in the quantum proceedings, the assessee did not file any supporting evidences to show that these were contract receipts. Even before the CIT(A), the assessee in the quantum p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate to tax the peak amount in the bank account, which is ₹ 8,40,000/- . This amount has to be taxed u/s 69A of the Income-tax Act, and addition made by the Assessing Officer is accordingly reduced to ₹ 8,40,000/- . The appellant gets relief of ₹ 3,80,000/- ( ₹ 12,20,000/- - ₹ 8,40,000/-) . Grounds of appeal taken by the appellant are partly allowed. ( emphasis supplied) 8.2 It is evident that consistently in the quantum proceedings, the assessee failed to file any evidence to substantiate its claim that these were his contract receipts. These orders are accepted and not further challenged before the ITAT. In the penalty proceedings before the AO, no evidences were filed and it was argued that estimated addition on a difference of opinion cannot be the basis of penalty u/s 271(1)(c) of the Act. Similarly before the CIT(A), same argument was repeated which was dismissed holding as under : 4.2 I have perused the penalty order and examined the reply of the assessee. As per facts of this case, the appellant is a labour contractor and has shown gross receipts of only ₹ 18,900/- while the deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y order was confirmed. Similar is the factual and legal position taken into account by the CIT(A) in ITA 1536/CHD/2018. 8.4 Considering the facts, circumstances and the arguments in the aforesaid factual background, I am of the view that without placing the necessary evidences on record, the assessee's claim is not allowable. No doubt simply because the additions have been confirmed, levy of penalty is not automatic. It is equally well settled that the explanation offered in the penalty proceedings has to be considered in the context of the penal provisions and the assessee can well assail the order relying on arguments and facts which may not have been canvassed in the quantum proceedings. However, in the facts of the present case, the legal arguments advanced are not applicable as the penalty has not been levied on estimated addition nor is it a case of difference of opinion, it is purely and simply a case where the stated claim that these were contract receipts has remained unproved. In the said background being live to the departmental concerns that the deposits in the bank account need to be addressed specially in the context of the present times wherein t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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