TaxTMI 
TaxTMI 
TaxTMI 
2016 (9) TMI 797
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....(Appeals) ought to have appreciated the submissions of the appellant towards the source for cash credit of Rs. 2.5 lakhs and ought to have deleted the addition made by A.O. under Section 68 of the Act. 4. The learned CIT (Appeals) ought to have considered the submission of the appellant towards the genuineness of the loan borrowed from the villagers and the same was supported by confirmation letters. Thus, the addition of Rs. 6,46,000 has to be deleted. 5. Without prejudice, the addition/disallowance is excessive, arbitrary and unreasonable and liable to be deleted into. 6. The learned CIT (Appeals) erred in confirming the interest under Section 234A and 234B of the Act. 7. For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed." 3. Ground No.1 is general in nature and does not require any specific adjudication. 4. Ground No.2 is regarding addition of Rs. 1 lakh on account of cash credit. During the course of appellate proceedings, the Assessing Officer noted that the assessee has cash credit in the books of accounts as withdrawal from Axis Bank of Rs. 1 lakh. The Assessing Officer verified th....
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....sessee has also explained that the said amount was repaid by the assessee on 21.7.2009 and 22.7.2009 respectively. The Assessing Officer did not choose to verify the facts explained by the assessee and disallowed the explanation at threshold. It is pertinent to note that when the assessee has explained that this loan amount in question has been paid to these creditors and also filed the confirmation of these two parties then in case the Assessing Officer was not satisfied or doubting the veracity of the confirmation as well as the claim then further enquiry / investigation could have been conducted by the Assessing Officer. Instead of conducting further enquiry, the Assessing Officer has out rightly rejected the explanation as well as confirmation produced by the assessee. Accordingly in view of the facts and circumstances of the case we find that this issue requires a proper verification and examination. If need arises the creditors may be examined by the Assessing Officer on being production by the assessee. 8. Ground No.3 is regarding addition of Rs. 2.5 lakhs towards unexplained cash credit. 9. The assessee claimed to have received Rs. 2.5 lakhs from various persons as per ca....
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.... of the authorities below for this issue. 11. Ground No.4 is regarding addition of Rs. 6,46,000 on account of borrowed fund from villagers. 12. The assessee has shown loan of Rs. 19,000 each from 34 persons amounting to Rs. 6,46,000. The Assessing Officer question the strange situation when 34 persons lent money to the assessee in a span of four days of an identical amount of Rs. 19,000 each. The assessee filed confirmation letters from the creditors but all stereo typed letters dated between 21.7.2012 to 31.7.2012. The Assessing Officer further noted that all the confirmations were written in the same hand writing and gave name and vague addresses of the alleged creditors. The Assessing Officer asked the assessee to produce the lenders. In response the assessee shown her inability to produce the lenders on the ground that they were busy in their agriculture work. Hence the Assessing Officer made an addition of Rs. 6,46,000 as unexplained cash credit. The assessee challenged the action of the Assessing Officer before the CIT (Appeals) but could not succeed. 13. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the r....
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.... to the concealment or furnishing of inaccurate particulars to justify the confirming of the levy of penalty. 5. Without prejudice, the confirming of penalty by the CIT (Appeals) is excessive, arbitrary and unreasonable and liable to be deleted in toto. 6. For these and other grounds that may be urged at the time of hearing of the appeal the appellant prays that the appeal may be allowed." 17. The assessee has also raised additional ground which reads as under : " 1. The Assessing Officer having issued the notice under Section 274 read with section 271(1)(c) of the Act in a mechanical manner, the penalty order passed under Section 271(1)(c) of the Act is not sustainable in the eye of law. 2. The appellant begs to submit that the decision of the jurisdictional High Court in the case of CIT Vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Karn) is squarely applicable and therefore the impugned order of the authorities below is required to be set aside." 18. We have heard the learned Authorised Representative as well as learned Departmental Representative and considered the relevant material on admission of additional grounds. As it is clear from the issue raised....
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....e. Sending printed form where all the grounds mentioned in the section 271(1) are mentioned would not satisfy the requirement of law. By considering the said decision, the Hon'ble jurisdictional High Court in the subsequent decision dt.25.1.2016 in the case of M/s. Safina Hotels Pvt. Ltd. Vs. CIT & Another (supra) has held in paras 9 to 11 as under : " 9. The Judgment of Manjunath Cotton and Ginning's case (supra) is squarely applicable to the facts of the present case wherein, it is held that the levy of penalty is not automatic concomitant of the assessment and the standard proforma without speaking of the relevant clauses lead to an inference to nonapplication of mind. In the conclusion part at para.63 of the said judgment, in clauses n,p,q,r, it is held thus: "(n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. (p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. (q) Sending printed form where all the ground mentioned in Section 271 are mentioned wo....