TaxTMI 
TaxTMI 
2017 (7) TMI 98
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....ssessee derives income from running a resort in the name of M/s Royal Resort. The requisite information/details have been filed and examined by the Assessing Officer. The Assessing Officer noted that assessee has added the fixed assets of agricultural land of Rs. 24 lacs, details of the same were asked for alongwith source of investment in these assets. The assessee declared that he has purchased the land for Rs. 38,77,000, however value of the agricultural land appearing in the books of account was Rs. 24 lacs. The assessee explained that he has purchased agricultural land from Shri Gurtej Singh S/o Shri Avtar Singh, Village Dewatwal, Ludhiana vide purchase deed dated 30.03.2007. The assessee invested Rs. 38,77,000/- including registration expenses towards purchase of said agricultural land, details of the same were also intimated to the Assessing Officer which have been reproduced in the impugned order. The assessee explained that Rs. 24 lacs was withdrawn from the books of M/s Royal Resort and copy of the agricultural land account was filed. It was explained that Rs. 10 lacs was withdrawn from Saving Bank Account No. 4032 with Indian Overseas Bank on 26.03.2007 maintained by fat....
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....isition of the land by way of inheritance/succession or otherwise in nature, it was mentioned that agriculture income of the said agricultural land were already shown in the hands of the HUF during the assessment proceedings. The Assessing Officer, however, did not accept contention of the assessee because assessee trying to divert the agriculture income to HUF and the assessee himself has not shown any agriculture income therefore, addition of Rs. 7,20,000/- was made and penalty proceedings were initiated for concealment of income and filing inaccurate particulars of income. 2(iii) It is also noted that assessee has also introduced a sum of Rs. 8,98,528/- as unsecured loan from his non resident friends/relatives. The assessee was asked to produce the source of these credits. All the entries in his bank account came from Western Union Money Transfer. The Money Transferred has obtained an undertaking from the assessee wherein it has been undertaken by the assessee that these receipts are not in the shape of loan and advances. The extract of the certificate is reproduced in the impugned order. The Assessing Officer, therefore, noted that the money was not received for the purpose ....
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....filed before ADIT (Investigation) Ludhiana in which same facts have been explained as were explained before Assessing Officer. PB-24 is the report of DDIT (Investigation) Ludhiana to DIT (Investigation) Ludhiana dated 27.08.2009 in which the same matter in issue with regard to purchase of land by assessee was considered and same explanation of the assessee have been accepted by Investigation Wing and it was referred to DIT (Investigation) that investment of Rs. 38,77,000/- made by assessee in purchase of property have been duly explained and therefore, it was proposed to file the proceedings against the assessee. 4(i) The ld. counsel for the assessee further submitted that since father of the assessee paid the amount of Rs. 14,77,000/- directly to the seller, therefore, these were not noted in the balance sheet of the assessee. He has, therefore, submitted that even if addition on quantum have been confirmed but the explanation of the assessee was not found to be false. The assessee explained this issue before the authorities below based upon the evidence and material on record. Therefore, no penalty should be levied on this addition. The ld. counsel for the assessee as regards ....
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....on record. The ld. DR also submitted that penalty is strictly a civil liability and relied upon decisions of Hon'ble Supreme Court in the case of Dharmendra Textile & Processors 306 ITR 277 and Atul Mohan Bindal 317 ITR 1. The ld. DR also submitted that the withdrawal of Rs. 10 lacs by father of the assessee on 26.03.2007 is not relevant because sale deed was registered on the same day. Penalty was, therefore, rightly levied against the assessee. 5. I have considered rival submissions and material on record. It is well settled law that quantum and penalty proceedings are independent and distinct proceedings. The findings given in the quantum proceedings are relevant and have probative value but these are not conclusive to hold that assessee is liable for penalty in each and every case automatically. The assessee at the penalty stage could still explain that penalty is not leviable in the matter. As regards addition of Rs. 10 lacs, the assessee explained that the amount was withdrawn by father of the assessee from the joint account on 26.03.2007 which is supported by the copy of the bank account. The authorities below did not accept explanation of the assessee because sale de....
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....ted in the account of the assessee and copy of the receipt and ledger account is filed at page 14-15 of the Paper Book. Assessee in the balance sheet of M/s Royal Resort has shown the amount of agriculture income payable to the HUF. Therefore, merely because assessee has not shown agriculture income for himself may not be relevant for the purpose of levying the penalty against the assessee. As regards addition of Rs. 8,89,528/-, assessee explained that these were unsecured loans received from non resident friends and relatives. They have filed their confirmed copy of the ledger account with their confirmation and copies of Western Union Money Transfer. These were, therefore, supported by explanation of the assessee. May be the explanation of the assessee was not acceptable to the Revenue Department, but it is a fact that assessee explained this issue through evidence and material on record. 6. Considering totality of the facts and circumstances and explanation of the assessee above, it is clear that assessee offered explanation on these additions which were not found to be false. The explanation of the assessee is substantiated through evidence and material on record and assesse....