TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 1091
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....er the crux of the issue is as follows:- i) The learned Commissioner of Income Tax (Appeals) has erred in confirming the minimum penalty of Rs. 3,90,456/- levied by the learned Assessing Officer under section 271(1)(c) of the Act for concealment of income by the assessee" 3. Brief facts of the case are that search action under section 132 of the Act was conducted on 03.08.2005 in the case of Sri Vimal Kumar Gadhiya and in consequence thereof notice under section 153A r.w.s 153 of the Act was issued to the assessee. In response to the said notice, the assessee filed her return of income on 31.05.2006 declaring income of Rs. 20,80,063/- which included additional income of Rs. .20,06,019/- offered during the course of survey under section 1....
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....AO made an addition of Rs. 13,85,000/- on account of potli loan and Rs. 4,25,000/- on khata petti loan as the appellant failed to satisfactorily explain with documentary evidence with regard to the sources of the said loans. Aggrieved by this, the appellant has gone before the CIT(A). The CIT(A)-I, Chennai vide order in ITA No.182,183/07-08 dated 17-10-2011, confirmed an amount of Rs. 7,35,000/- out of potli loan of Rs. 13,85,000/-. Since the appellant failed once again before the AO, during remand proceedings, to furnish satisfactory explanation with supporting evidence, in respect of khata petti loan of Rs. 4,25,000/-, the CIT(A) confirmed this addition. Consequently the AO levied penalty u/s 271(1)(c) on the said addition totaling to Rs.....
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....se that it treats every difference between the reported and the assessed income as concealed income. But, at the same time, it provides the criteria where penalty would be warranted. Penalty is leviable for concealment, where an assessee fails to offer any explanation for the difference or offers an explanation, which is found to be false. In these cases, penalty can be treated as mandatory. 7.3. Thus, it is clear from the above, the additional income which was sustained by the CIT(A) to the extent of Rs. 11,60,000/- was added by the AO, on verification of the materials during the course of scrutiny. In view of the above, the appellant's submissions are not accepted as the AO had the record which can sustain the finding that there had....
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.... in para 6 at page no.4 it is apparent that the assessee had produced confirmation letters with respect to potli loan received of Rs. 7,35,000/- and the transaction relating to Rs. 4,25,000/- were routed through bank. The relevant portion of the order is reproduced herein below:- "4. Coming to the merits of the levy of penalty, penalty has been levied in respect of two addition- Rs. 7,35,000 under the head patti loans, and Rs. 4,25,000 being Khatta petti loans. 5. As regards the source for potti loans of Rs. 7,35,000, it consists of Rs. 2,35,000/- being advances received from 4 persons for sale of jewellery , and Rs. 5,00,000 being advance received for sale of an immovable property. The appellant had produced confirmation letters from th....
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.... 18,75,000/- was offered for taxation by the appellant. As regards this amount, i.e Rs. 4,25,000/- the advances were through account payee cheques. Since there were several parties, the appellant could not organise all of them and produce before the Assessing Officer. Here again, since the oppel/ant accepted the addition to avoid further litigation and not because the transactions were not genuine. The appellant submits that just because she has accepted the addition, it cannot be construed that she had concealed the income attracting levy of penalty." 7. From the above, it is evident that the learned Assessing Officer has made the addition without verifying the confirmation letters by issuing summons to the creditors and also without ver....