TaxTMI 
TaxTMI 
2016 (4) TMI 959
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....the penalty U/s 271(1)(c) has been imposed and confirmed by the ld CIT(A) without making any independent enquiry in penalty proceedings and simply relying upon the conclusion drawn in assessment order thus the penalty deserves to be deleted. 1.3 That the assessee has voluntarily surrendered the income and paid the due tax thereon thus there remained no income on which tax sought to be evaded could be calculated which fact was not appreciated by the ld CIT(A)." 2. The assessee is engaged in the business of purchase of sale of marble and granite, tiles and slabs. The return of income was filed on 30/07/2007 declaring total income of Rs. 2,50,070/-. During the course of scrutiny assessment, the Assessing Officer made addition of Rs. 20,21,897/- U/s 41(1)(a) of the Income Tax Act, 1961 (in short the Act) and also initiated penalty proceedings U/s 271(1)(c) of the Act for concealing and furnishing inaccurate particulars of income. Addition U/s 68 of the Act were also made for Rs. 19,13,007/- and Rs. 1,48,500/-. 2.1 Before imposing penalty U/s 271(1)(c), the Assessing Officer gave reasonable opportunity of being heard, which was availed by the assessee vide letter dated 12....
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....s relied upon by the assessee are also not squarely applicable, which was applicable on surrender voluntarily with bonafide belief. In assessee's case, the investigation of department as compelled the assessee to surrender amount for taxation as no other option was left. In assessee's case, there was no agreed addition. The mens rea need not be proved by the Assessing Officer as held by the Hon'ble Supreme Court in the case of Dharmendra Textile Processors Vs UOI (2008) 306 ITR 0277. He further relied on the following decisions: (i) CIT Vs Dass Trading & holding (P) Ltd. (2009) 226 CTR (Delhi) 533. (ii) DDIT Vs Chirag Metal Rolling Mills Ltd. (2008) 305 ITR 29 (MP). (iii) K.P. Madhusudan (2001) 251 ITR 99(SC). (iv) CIT Vs. Guruvijay Kuri Co. Ltd. (2008) 302 ITR 239 (Ker). (v) Komal Basha Vs DCIT (2009) 316 ITR 0058 (Mad). After considering the above case laws, the Assessing Officer imposed penalty U/s 271(1)(c) of the Act for concealing the particulars of income and furnishing inaccurate particulars of income at Rs. 13,70,028/-, which is 100% of tax sought to be evaded. 3. Being aggrieved by the order of the Assessing Officer, ....
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....e conclusion that penalty is leviable in this case. (a) [2009] 226 CTR (Delhi) 533 - CIT V/s Dass Trading & holding (P)Ltd. (b) [2008] 305 ITR 0029 (MP) - DDIT U/s Chirag Metal Rolling Mills Ltd. (c) [2008] 302 ITR 0239 (Kev) - CIT V/s Guruvijay Kuri Co. Ltd. (d) [2009] 316ITR 0058 (Mad) - Komal Basha V/s DCIT. The ld CIT(A), therefore hold that AO is justified in imposing penalty of Rs. 13,77,028/- in this case and the same is confirmed. Ground No. 2 is thus dismissed. 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that in balance sheet, the assessee had shown unsecured loan in the name of 8 persons received from them in amount below Rs. 20,000/-, which were opening balance as on 01/4/2006. The assessee furnished details of cash creditors but could not file confirmations in respect of loan in spite of his best efforts made. Finally he surrendered this amount voluntarily to buy peace of mind and to avoid any litigation. The other unsecured loan of Rs. 19,13,007/-, which was also part amount representing opening balance. The arguments are similar to above transaction, as surrendered voluntarily in absence....
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....tesh Marble Rs. 1,00,350/- and remaining amount outstanding as on 31/3/2007. These creditors were related to purchase made to the earlier year. The balance amount was received as advance money for purchase of goods by the parties. Most of these parties, the assessee had sold marble to them and sale bills were submitted during the course of assessment proceedings before the Assessing Officer. He has drawn our attention on page Nos. 13 to 30 of paper book. The outstanding was due to some parties, the terms and rates could not be agreed upon despite of the long negotiation. Thus, the amounts were refunded to the parties in the year under consideration and in subsequent year. During the course of assessment proceedings, notices U/s 133(6) were issued to M/s JK Marbles Industry and M/s Lovely Marbles. The Assessing Officer received the confirmations from them duly confirming the copy of account of the assessee. The ld Assessing Officer has drawn adverse inference on the basis of that payments were made in subsequent year through bearer cheque. M/s Laxmi Flooring had squared up the account of the assessee but as per assessee's book, he has liability to pay for the creditors. There is no ....
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....ng balance of cash creditor cannot be added in the year under consideration U/s 68 of the Act. The Coordinate Bench in the case of Durga Devi Somani Vs. ITO, ITA No. 672/JP/2011 for A.Y. 2007-08 order dated 31/10/2014, in the case of Ashish Gupta Vs. ITO ITA No. 671/JP/2011 A.Y. 2007-08 order dated 17/10/2014, in the case of Ashok Kumar Kamdar Vs. ITO in ITA No. 684/JP/2011 A.Y. 2007-08 order dated 18/11/2011, in the case of Sumitra Devi Agarwal Vs. ITO ITA No. 687/JP/2011 A.Y. 2007-08 order dated 01/10/2015 and in the case of Jugal Kishore Sharma Vs. ITO in ITA No. 686/JP/2011 A.Y. 2007-08 order dated 09/10/2015 have considered the identical issue and held as under:- "2.10 We have heard the rival contentions and perused the material available on record. We are inclined to delete the penalty on following reasons:- i. It clearly emerges that the amounts in question were carried over trade credits from earlier year, corresponding purchases were included in trading a/c thus legally speaking if trade credits are added as cessation of liability, the relevant entries exist in books ITA No. 671/JP/2011 Ashish Gupta vs. ITO, Kishangarh 11 and if they are held as bogus the....