Case Law Details

Case Name : Mrs.Ramesh K. Patel C/o. Vs ITO (ITAT Ahmedabad)
Appeal Number : ITA No.1989/Ahd/2015
Date of Judgement/Order : 30/11/2017
Related Assessment Year : 2008-09
Courts : All ITAT (4534) ITAT Ahmedabad (338)

Mrs. Ramesh K. Patel C/o. Vs ITO (ITAT Ahmedabad)

It is come on record that the assessee has not filed even a single satisfactory documentary or oral evidence or confirmation to the satisfaction of the lower authorities so as to prove genuineness of the above two cash deposits. We therefore quoting Hon’ble Apex Court’s judgment in the case of MAK Data Pvt.Ltd., Civil Appeal No.9772 of 2013 decided on 30.10.2013 that there should not only be an explanation but also it should be a well substantiated one under section 271(1)(c) Explanation (1) of the Act. There can hardly be any dispute that the above narrated facts have already indicated lack of such a satisfactory explanation coming from assessee’s side. We, therefore see no reason to interfere with both lower authorities’ action imposing impugned penalty.

Full Text of the ITAT Order is as follows:-

This assessee’s appeal for Asstt.Year 2008-09 arose against ld.CIT(A)-3’s, Ahmedabad order dated 6.4.2015 passed in case No.CIT(A)-3/ITO/Wd.8(3)(4/237/14-15) confirming Assessing Officer’s action in imposing penalty of Rs.3,92,920/- in his order dated 26.3.2013 in proceedings under section 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).

2. Case called twice. None appeared at assessee’s behest. Case file also indicates that he has never put appearance despite the fact that today is seventh opportunity of hearing. Nor he placed on record any power of attorney through his counsel. We therefore proceed ex parte against the assessee.

3. Relevant facts are in a narrow compass. Impugned penalty arose from section 68 addition of Rs.11,62,500/- made in assessment order dated 29.12.2010 as confirmed in CIT(A)’s quantum appellate order dated 12.12.2011 deleting major part of addition of Rs.34.60 lakhs except to the extent indicated hereinabove. The assessee did not prefer any quantum appeal before this Tribunal. The issue therefore before us is that of correctness of impugned penalty pertaining to remaining quantum addition of Rs.11,62,500/- in above terms.

4. There is no dispute about the assessee having deposited the above amounts in cash. This quantum amount of Rs.11,62,500/-involves two different instances of Rs.9.00 lakhs and Rs.6,62,5000/-. The assessee’s case qua former deposit instance was that very sum had been received as advance against agreement on sale of land. It however emerged in quantum proceeding that he did not file even a single name of the payer/vendee. It rather transpires that the land in question stood acquired by the State Government on 18.5.2009. Assessee’s explanation qua later instance of Rs.2,62,500/- was that the same was received in cash of less than Rs.20,000/- each obtained from 16 different parties/relatives. Same story continued here in as well where not even a single confirmation or relative was produced to support of genuineness of cash loan plea. The AO therefore invoked impugned penal provision in his order dated 26.3.2013 for levying of penalty in question of Rs.392,920/- after concluding that its act and conduct amounted to both concealment as well as furnishing of inaccurate particulars of income. The CIT(A) confirmed AO’s action as under:

“2.4 I have considered the facts of the case and the submissions made by the appellant as well as the arguments taken by the assessing officer for imposing penalty under section 271(1)(c) of the IT Act. The penalty of Rs. 3,92,920/- has been levied in respect of the addition Rs.11,62,500/- which was confirmed by the then CIT(A) vide his order dated 12-12-2011 in respect of advance received by the appellant against agreement to sale of land and borrowings on friends and relatives. During penalty proceedings, it is seen that the appellant was given another opportunity and he filed detailed submission before the AO. In respect of the addition of Rs. 9,00,000/- the appellant submitted during penalty proceedings that the /cancellation deed in respect of sale of property had been filed before the A O whereas on verification the A 0 found that this was not so. Thus in respect of addition of Rs. 9,00,000/-, no evidence has been produced by the appellant during assessment proceedings, appellate proceedings, penalty proceedings or even now during appeal proceeding in respect of the penalty order. The appellant’s submission that he was not given opportunity to do so is totally acceptable since a perusal of the assessment order shows that he was given several opportunities by the A O at that time to explain the source of Rs. 9,00,000/- in his bank account, and then again during appellant and penalty proceedings. Moreover, independent inquiries made by the A O during assessment proceedings showed that the land in question had been acquired by the Gujarat Government on 18-05-2009 and some other land had been allotted to the appellant. These facts were not brought on record by the appellant during assessment f proceedings, and in fact he gave contradictory statements in respect of the deposit of Rs.9,00,000/-. In view of the above facts, it is clear that the appellant had furnished inaccurate particulars of income.

As regards the addition of Rs. 2,62,500/- on account of borrowing from friends and relatives, the appellant has changed his stand several times during assessment proceedings. Further, the identity, genuineness and creditworthiness of the depositors was not established by the appellant during assessment, appellate and penalty proceedings. No evidence regarding t the same has been submitted before me either. Moreover, it is seen that in respect of this addition as well, the appellant made contradictory submissions during assessment proceedings. Thus it is clear that the appellant’s claim is not genuine and he had furnished inaccurate particulars of income. The case laws relied on by the A O while passing the impugned penalty order, are also squarely applicable to the appellant’s case. Further, the case laws relied on by the appellant are not applicable since in this case the facts are totally different and it has been proved that the appellant has been consistently ^changing his stand and has not, till date, furnished any evidence or cogent explanation in respect of the additions made.

Considering the discussion above, I am of the view that the appellant was liable for penalty and therefore the penalty of Rs. 3,92,920/- levied u/s. 271(1)( c) of the Act is confirmed.”

5. We have heard ld.DR. He strongly supports both lower authorities’ action imposing impugned penalty. It is come on record that the assessee has not filed even a single satisfactory documentary or oral evidence or confirmation to the satisfaction of the lower authorities so as to prove genuineness of the above two cash deposits. We therefore quoting Hon’ble Apex Court’s judgment in the case of MAK Data Pvt.Ltd., Civil Appeal No.9772 of 2013 decided on 30.10.2013 that there should not only be an explanation but also it should be a well substantiated one under section 271(1)(c) Explanation (1) of the Act. There can hardly be any dispute that the above narrated facts have already indicated lack of such a satisfactory explanation coming from assessee’s side. We, therefore see no reason to interfere with both lower authorities’ action imposing impugned penalty. Thus, assessee’s appeal is dismissed.

6. In the result, appeal of the assessee is dismissed.

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Category : Income Tax (25791)
Type : Judiciary (10458)
Tags : ITAT Judgments (4713) section 271(1)(c) (324)

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