TaxTMI 
TaxTMI 
2016 (8) TMI 1084
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....- levied u/s.271(l)(c) of the IT Act. 2. As per the facts and circumstances of the case arid in law, the Ld.CIT(A) has erred and directed to cancel the penalty of Rs,25,78,504/- levied u/s.271(1)(c) of the I.T. Act, on concealment of income of Rs. 65/19/606/- which was sustained by the CIT(A)-IV, Surat in his appeal order dated 15.01.2008, 3. On the. facts and in the circumstances of the case and in law, the CIT(AJIV, Surat ought to have upheld at least the order of the Assessing Officer. 4. It is, therefore, prayed that the order of the CIT(A)-IV, Surat may be set aside and that of the Assessing Officer's order may be restored. 4. Briefly stated facts of the case are that the assessee is a limited company. Return of income for Asst. Year 2001-02 was filed on 31.10.2001 declaring business loss of Rs. 64,89,606/-. Case was processed u/s 143(1) of the Act accepting the returned loss. Thereafter, proceedings u/s 147 of the Act were initiated and during the course of re-assessment proceedings assessee could not produce any details as computer hard disc in which the accounts of the company have been stored got corrupted and the hard copy of the books of accounts and vouc....
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....nexplained cash credit of Rs. 30,000/-. Appeal was withdrawn by assessee on quantum issue. In the penalty proceedings the matter travelled to the first appellate authority and ld. CIT(A) dealt with the alternative submissions made by assessee which were given effect to by ld. Assessing Officer as per his wisdom. Assessee did not agree to the appeal effect given by ld. Assessing Officer. Thereafter we observe that ld. CIT(A) while adjudicating appeal u/s 154 of the Act has clearly made out the crux of the order of ld. CIT(A) passed u/s 271(1)(c) of the Act by observing as under :- 2.3. I have gone through the facts of the case, the appellate order, order of the A.O. giving effect to the appeal order, rectification application, order rejecting the application and the submissions of the appellant. In view of the reasons given for delay in filing this appeal the said delay is condoned. Looking to the peculiar nature of facts, I am of the opinion that my jurisdiction in this appeal is limited to the interpretation of the order passed by my predecessor. Therefore, the operative part of the decision of my predecessor, i.e. para-7, 8, 9 & 10 of the appellate order dated 10.08.2009 is re....
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....er, the decision of the Hon'ble jurisdictional Tribunal in the case of ACIT Vs Apsara Processors (P) Ltd.(supra) is respectfully not being followed and the latest judgement of the Apex Court in the case of Gold Coin Health Food (P) Ltd. (supra) is being respectively followed. The argument of the learned AR that the amendment to Explanation 4 to section 271(!)(c) of the Act made by the Finance Act. 2002, was not applicable in the A.Y. under consideration, i.e., A.Y.20QO-01, is, therefore, not acceptable and is rejected. It is, accordingly, held that penalty was leviable u/s. 27l(l)(c) in the instant case under consideration, even though the assessed income was a loss/Nil. 8. As regards the second argument of the learned AR that the A 0 has erred in computing the "amount oj tax sought to be evaded", the contentions of the appellant are found to be correct. It is seen that the AO has, at para 9(c) of the impugned penalty order, adopted the figure of 'concealed income' at Rs. 68,59,880/-, which amount in fact represents the total turnover declared by the appellant, instead of the amount of estimated profit of Rs. 3,40,274/-, being 5% of the total turnover of Rs. 68,59,88....
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....on of Rs. 30,000/- on account of unexplained credits/loans, however, the contentions of the appellant are not acceptable. When a cash credit appears in the books of account, the burden lies on the assessee to prove prima-facie the source and nature thereof. Such roof includes proof of (i) the identity of the creditors, (ii) their credit worthiness/capacity to advance the 'money, and lastly (in) the genuineness of the transaction. It has also been held by the Courts that the mere fact that the assessee had established the existence and identity of the creditor or had filed confirmatory letter from the creditor was not sufficient to establish the ability of the creditor to advance the loan or the genuineness of the transaction. In the instant case, it is seen that in spite of ample opportunity provided to it, the appellant has not discharged the burden cast upon it to prove the said cash credits. The confirmatory letters filed by the appellant were not even properly signed by the alleged creditors not were other details in this regard furnished before the AO to prove their credit worthiness etc. The said cash credits totaling to Rs. 30,000/-, thus remain unproved. In the above fa....
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....directed that the penalty on Rs. 3,40,274/- be deleted. Therefore whichever way one looks at it - substance of the order or actual words used - the penalty on the adhoc addition made rejecting book loss an estimating GP was required to be deleted and only the penalty to the extent levied on "second addition" of Rs. 30,000/- on account of unexplained credit / loans was confirmed and required to be retained. The A.O. will modify his order accordingly. 11. From going through the observation of ld. CIT(A) we find that in the order passed u/s 271(1)(c) of the Act by ld. CIT(A) penalty was sustained only towards unexplained cash credit of Rs. 30,000/- and the remaining penalty invoked by ld. Assessing Officer on the concealed income of Rs. 68,59,888/- was deleted because the amount represented the total turnover declared by the assessee and similarly penalty invoked on the estimated profit of Rs. 3,40,274/- being 5% of total turnover was also deleted being estimated in nature. 12. In the given facts and circumstances of the case, wherein assessee has declared business loss of Rs. 64,89,606/- in the return of income duly processed u/s 143(1) of the Act and in the reassessment procee....