, ""
IN THE INCOME TAX APPELLATE TRIBUNAL "D" BENCH, MUMBAI
BEFORE HON'BLE S/SHRI H.L. KARWA, PRESIDENT AND B.R.BASKARAN (AM)
.. , .. ,
./I.T.A. No.2409/Mum/2012
( / Assessment Year :2006-07)
Shri Ramchandra Krishna Patil, / Income Tax Officer 4(3),
11, Jivdani Kripa, Chimgar Ali, Vs. Thane
Achole Village,
Nallasopara (E),
Dist.Thane.
( /Appellant) .. ( / Respondent)
. / . / PAN/G IRNo.:AL IPP3270C
/ Appellant by : Shri Bhupendra Shah
/Respondent by : Shri Neil Philip
/ Date of Hearing
: 27.10.2014
/Date of Pronouncement : 29.10.2014
/ O R D E R
Per B.R.BASKARAN, Accountant Member:
The appeal filed by the assessee is directed against the order dated
14.12.2011 passed by ld. CIT(A)-II, Thane and it relates to assessment year
2006-07.
2. The Assessee is aggrieved by the decision of the ld. CIT(A) in confirming
the penalty of Rs.4,32,408/- levied by the AO u/s 271 (1)( c ) of the Income
Tax Act, 1961 (the Act).
3. We have heard the parties and perused the record. During the course of
assessment proceeding the AO noticed that the assessee had deposited cash
aggregating to Rs.16.26 lakhs in the bank account maintained with United
I.T.A. No.2409/Mum/2012
2
Western Bank. When the AO asked the assessee to explain the source for
making cash deposits, the Assessee submitted that he had sold jewellery to
different jewellers on various dates and realized an aggregate amount of
Rs.14,17,323/- and the said proceeds were utilized for making deposits. From
the details furnished by the assessee, the AO noticed that the assessee has sold
jewellery on different rates on the very same day to different jewellers. Further,
the AO also issued letters u/s 133(6) of the Act to the jewelers, to whom
jewellery was sold. However, all the letters were received back from the postal
authority with the remark "not known". Hence the AO issued summons to the
assessee who appeared before the AO and submitted that he is more than 77
years old and further agreed for addition of Rs.14,17,323/- representing the sale
value of gold. Accordingly, the AO assessed the above said amount as the
income of the assessee. The AO, thereafter, initiated penalty proceedings and
levied penalty of Rs.4,32,408/- and the same was confirmed by the ld. CIT(A).
4. We notice that the Assessee has given following explanations before the
AO during the course of penalty proceedings:
"i. the Assessee has sold his jewellery through his son Sudam Patil;
ii) Gold was sold in the FY 2005-06 and the confirmations were called for
in the FY 2008-09 after almost 2 ½ years and it is possible that the
purchasers are not cooperating due to fear and unwanted trouble;
iii) the Assessee is 77 years old it is not possible for him to personally go
to parties or he cannot force his son to be after these parties to get
confirmations. Under these circumstances to have peace of mind the
Assessee agreed for addition on the ground that penal proceedings should not
be initiated. The assessee has also cooperated in paying the assessment dues
promptly and also not preferred any appeal against the assessment order;
iv) Relying upon the decision in the case of Shri Bajrang Trading and
Supply Co 187 ITR 299 it is contended that addition in assessment by
invoking the provisions of section 68A cannot form basis for penalty in the
absence of any material unmistakable proving the concealment.
vi) Reliance is also placed upon the decision in the case of Gokuldas
Harvallabhdas 34 ITR 98"
I.T.A. No.2409/Mum/2012
3
5. Thus, we notice that the assessee has furnished explanations to the AO
during the course of penalty proceedings. We further notice that the assessee
furnished details of sale of jewellery to the AO along with the details of jewellers'
to whom the jewellery were sold. The assessee also submitted that he had to
depend upon his son for selling the jewellery as he was 77 years old at the
relevant point of time. The assessee has also submitted that the AO has asked
for details of jewellary shops after expiry of 2 ½ years and he was not in a
position to force the jewellers to co-operate with the AO. Under these
circumstances, the Assessee has accepted the assessment of the sale value of
gold jewellery as his income. Thus, we notice that the assessee has offered
explanation with regard to the addition made and the said explanation has not
been found fault by the AO. In fact, during the course of assessment
proceedings, the AO had issued letters to the jewelers u/s 133(6) of the Act but
they have been returned unserved. We notice that thereafter the AO did not
make any further inquiry. It is well settled proposition of law that the addition
made during the course of assessment proceedings will not automatically lead to
penalty u/s 271(1)( c ) of the Act. During the course of penalty proceedings, the
AO has to re-appreciate the matter first in the light of Explanation given by the
assessee. In the instant case, as noted earlier, the assessee has offered
explanation for accepting the assessment of sale value of gold and the said
explanation has not been found false. Further, even though the assessee could
not prove the sale of jewellery, yet the assessee has furnished all the material
available with him to the AO. Under these circumstances, we are of the view
that the penalty u/s 271(1)( c ) of the Act cannot be levied in the instant case, as
the assessee has discharged the burden placed upon him under the explanation
given u/s 271(1)( c ) of the Act. Accordingly, we set aside the order of ld.
CIT(A) and direct the AO to delete the penalty levied u/s 271(1)( c ) of the Act
for the year under consideration.
I.T.A. No.2409/Mum/2012
4
6. In the result, the appeal filed by the Assessee is allowed.
The above order was pronounced in the open court on 29th Oct, 2014.
29th Oct, 2014
Sd sd
(.. / H.L. KARWA) (.. ,/ B.R. BASKARAN)
/ PRESIDENT /Accountant Member
Mumbai: 29th Oct,2014.
. ../ SRL , Sr. PS
/Copy of the Order forwarded to :
1. / The Appellant
2. / The Respondent.
3. () / The CIT(A)- concerned
4. / CIT concerned
5. , , /
DR, ITAT, Mumbai concerned
6. / Guard file.
/ BY ORDER,
True copy
(Asstt. Registrar)
, /ITAT, Mumbai
|
