TaxTMI 
TaxTMI 
2017 (7) TMI 1280
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....ed are outside the scope and ambit of Sec. 271(1)(c) as none of the additions is in the nature of concealment of income within the meaning of sec. 271(1)(c)." 2. The appellant has also raised an additional ground for admission having been raised for the first time before the Tribunal, which reads as under : "That under the facts and circumstances Ist SCN dtd. 14.11.2011 is premature and other 2 SCN's dtd. 23.12.2011 and 03.04.2012 do not precisely specify the charge, therefore illegal and unsustainable in law, hence, penalty order passed in pursuance to such invalid notices is unsustainable in law and without jurisdiction". 3. The brief facts of the case are that assessment of assessee was completed at a total income of Rs. 42,06,490/- as against the returned income of Rs. 4,56,490/-. In the assessment proceedings, the AO noticed that the assessee had made investment of Rs. 1,57,50,000/- in purchase of a property (Rs.1,50,00,000 as sale consideration + Rs. 7,50,000/- as stamp duty), out of which a sum of Rs. 1,02,50,000/- was invested during the period relevant to assessment year under consideration. On being asked for the source of investment, the assessee explained....
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....ellant challenged the penalty order in appeal before the ld. CIT(A), who after considering detailed submissions of the assessee and various case laws cited, dismissed the appeal observing as under : "I have carefully considered the written submissions of the appellant and also the contents of the penalty order and perused the relevant material available on record and after having carefully considered the entire facts and circumstances of the case, my conclusions on the issues raised in the grounds of appeals are as under : The only issue involved in the appeal in hand is imposition of penalty u/s 271(1)(c) which is being discussed and adjudicated in following paras of this order: Part-I:(Penalty with respect to unexplained investment of Rs. 7,50,000/- on account of Stamp Duty) In this regard vide written submission dated 25/3/2014 it has simply been stated that above expenditure has been incurred out of funds available with the assessee. However, no detail or supporting evidence in this regard has been submitted during the appellate proceeding. Moreover, in the course of hearing with respect to above appeal the counsel of the appellant did not pr....
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....iness of the creditor is concerned, on perusal of their pass book and ITR it is quite clear that the earning capacity of the creditors are very low if compared with the amount of loan given to the appellant. In view of above discussion it clearly appears that the creditors did not have sufficient creditworthiness to advance such a big amount of unsecured loans to the appellant. During the appellate proceedings vide submission dated 25/3/2014 the counsel of the appellant has pleaded not to treat the amount of loan as concealed income to the extent the creditors had in their account prior to introduction of impugned cash in their bank account, which amounts to indirect admittance by the appellant that the cash deposited in the lender's bank accounts are not explainable deserving to be treated as undisclosed income in the hands of the assessee. Moreover, this issue could have been raised in quantum appeal which has not been preferred for the reason best known to the appellant only. Therefore, appellant's above contention does not appear to be tenable. From material available on record it is noticed that only two lenders were produced before the AO for cross e....
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....ate proceedings the appellant, in support of her contention, has cited various case laws and has argued that her case was not covered by the provisions of section 271(1)(c) of the I.T. Act. However, on perusal of above citations, discussed in detail by the appellant in her written submission, as reproduced in forgoing paras of this order, I find that the facts of the case in hand are not covered by above judicial pronouncements and thus are not relevant in context of present appeal. In view of the above discussion and keeping in view all the above facts and circumstances of the case and relevant provisions of the Act I am of the considered view that the assessee has completely failed to substantiate her explanation to prove the creditworthiness and genuineness of loan transactions and was also unable to establish and prove that the explanation given by her are bona fide and that all the relevant facts were disclosed by the appellant with respect to above unsecured loan transactions despite having been given sufficient time and opportunities during the assessment as well as penalty proceedings. Even during the appellate proceedings the appellant has failed to come out with ....
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....buy peace of mind and to avoid the exaggerated enquiries and to concentrate on business; that the loans were through banking channel; onus on appellant stood discharged by filing confirmations and bank statements of all the creditors, two creditors personally admitted to have advanced money to appellant in their statements; that doubt on source of source is no ground for treating the amount as concealed income; that non-production of all the creditors is no ground to impose penalty and that the identity and creditworthiness of creditors stood proved. 9. The ld. AR also raised an alternative contention that the source of loan to the extent of Rs. 2,51,492/- which already existed in the accounts of various creditors prior to introduction of cash deposit, should not be taken as unexplained and as such penalty imposed on whole of the additions cannot be sustained. The details of existing credit balance in bank accounts of creditors prior to cash deposits therein, have been given in the written synopsis of the appellant. The ld. AR has also relied on plenty of decisions for the proposition that doubting source of source is not ground of penalty; that non-production of creditors does ....
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....R 593 (SC) that the satisfaction of the Assessing Officer should be discernible from the assessment order for imposition of penalty, and he is not required to record his satisfaction in a particular manner or reduce it to writing. The relevant observations of Hon'ble Court read as under : "9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. A O during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer 8 deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and ....
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.... that the facts of the case in hand are not existing in the judicial pronouncements relied by the assessee and thus are not relevant to the context of the present appeal before us in the peculiar facts and circumstances. Therefore, the additional ground raised by the assessee deserves to fail. 13. On going through the findings reached by the ld. Authorities below and the examinations of documentary evidence furnished by assessee made by AO, we find that the creditors had made cash deposits in their bank accounts almost equal to the amounts of unsecured loans advanced to the assessee immediately prior to issuance of cheques/DDs in favour of the assessee. The ld. CIT(A) has rightly observed that in such a scenario, cash deposits of huge amounts prior to issue of cheques cannot be a co-incidence in case of each and every creditors under consideration, particularly when no such other instances of huge cash deposit were found in the bank statements. Moreover, one of the creditors, Mr. Bishan Swaroop admitted in his statement that he borrowed money from several persons to advance loan to the appellant, which also does not appear credible for want of any supporting documents on record.....