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TMI Blog2016 (5) TMI 1553X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly penalty levied on all these counts are hereby confirmed. Levying penalty in regard to addition made on account of agricultural income, investment made in purchase of land to the extent and investment made in M/s.Ramdev Jewellery - AO has made addition only for the reason that the assessee s wife did not declare any agricultural income in her return of income with respect to the adjacent agricultural land owned by her - The quantum of agricultural income declared by the assessee is also minimal and there is no substantial reason to disbelieve the claim of the assessee. Revenue has also not brought any evidence to show that the assessee was not indulging in agricultural activities. Similarly, addition towards purchase of land to the extent of ₹ 2,08,000/- is made because the AO opined that the assessee had paid on-money. However, other than oral statements, no other materials or persons were examined to conclusively prove that the assessee had received on-money. Further, investment in Ramdev Jewellery for ₹ 50,000/- is a nominal amount and there can be a presumption that the assessee could possess such amount from his tax paid income. We hereby direct the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned Assessing Officer asked the assessee as to why the loan credits should not be treated as unexplained credits, the assessee submitted that the evidences are in the form of counterfoils of pro-notes in the seized documents which are in the possession of the Department. On verification of the same, the learned Assessing Officer observed that some loan creditors reflected in the returns were not supported by seized materials in nature of pro-notes and therefore treated the same as unexplained credit under section 68 of the Act. Subsequently, the learned Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Act and vide order dated 26.03.2014 levied penalty for the assessment years 2001-02 to 2007-08. 4. The learned Assessing Officer had levied penalty for the relevant assessment years herein below for the following reasons:- Assessment year Reasons for making addition Amt. of Addition Rs. 100% of tax sought to be evaded is levied as penalty Rs. 2001-02 i)Un-explained loan ii)Incorrect clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Even during the penalty proceedings the assessee could not explain the genuiness of the loan transactions which cemented the fact that there is concealment of income. Incorrect claim of Agricultural Income: 4.2 For all the assessment years mentioned herein above, the learned Assessing Officer had made additions disbelieving the claim of the assessee that he had received agricultural income only for the reasons that no agricultural income was declared by the assessee s wife Smt.Meera Devi, who had agricultural lands adjacent to the land owned by the assessee. Further the learned Assessing Officer observed that the assessee has not furnished any evidence to explain the claim of agricultural income. Hence he opined that the assessee had concealed the particulars of his income. Unrecorded bond loans:- 4.3 For the assessment years 2004-05 to 2007-08, the assessee had maintained bond books wherein he had recorded the amount receivable from the borrowers towards cash loans or the outstanding amount receivables in respect of sale of gold jewellery. It is the practice of the assessee to strike out the entry whenever the amount is received. The entries which were not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 94,623 Total - A ₹ 59,69,693 Source of investment Amount Rs Increase in loan credits 33,89,572 Agricultural income not proved 26,150 Inadequate drawing Rs,.94,623 Unrecorded bond items ₹ 15,21,465 Total -B ₹ 50,31,810 Difference between A B = ₹ 6,37,883/- being investments for which sources are not established. Assessment Year : 2007-08: Details of Investment made in the Assessment Year 2006-07 Amount of Investment Unredeemed pawned items ₹ 40,20,000 Gold jewellery ₹ 17,05,000 Cash in Hand ₹ 5,500 Unrecorded Bond loans ₹ 13,25,440 Inadequate drawings ₹ 1,32,988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the penalty levied on all these counts. Accordingly penalty levied on all these counts are hereby confirmed. 7. However, we are not convinced with the action of the learned Assessing Officer for levying penalty in regard to addition made on account of agricultural income, investment made in purchase of land to the extent of ₹ 2,08,000/- and investment made in M/s.Ramdev Jewellery for ₹ 50,000/-. As regards the agricultural income, it is not disputed that the assessee does not own agricultural land. The learned Assessing Officer has made addition only for the reason that the assessee s wife did not declare any agricultural income in her return of income with respect to the adjacent agricultural land owned by her. The quantum of agricultural income declared by the assessee is also minimal and there is no substantial reason to disbelieve the claim of the assessee. The Revenue has also not brought any evidence to show that the assessee was not indulging in agricultural activities. Similarly, addition towards purchase of land to the extent of ₹ 2,08,000/- is made because the learned Assessing Officer opined that the assessee had paid on-money. However, other than ..... X X X X Extracts X X X X X X X X Extracts X X X X
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