2017 (9) TMI 1927

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....eted on 24.12.2007 on Rs. 24394724/- against the return income of Rs. 393860/-. The addition of Rs. 3996951/- on account of bogus liabilities of Rs. 70000/- on account of unaccounted entries were confirmed by the ld CIT(A) and coordinate bench. Therefore, penalty u/s 271(1)(c) was levied after considering the reply of the assessee dated 10.05.2010. The ld CIT(A) deleted the penalty and therefore, the Revenue is in appeal before us. 3. The Revenue has raised the following grounds of appeal:- "1. The order of the Ld. CIT(Appeals) is erroneous and contrary to facts and law. 2. On the facts and in the/circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty amounting to Rs. 12,28,080/-, which w....

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.... the decision of the Hon'ble Supreme Court in case of the appellant dated 28.03.2011. It was submitted that addition have been concurrently upheld by al the appellate authorities therefore the penalty has been levied by the AO correctly. 5. The ld AR submitted a written note as under:- 1. A Search operation took place on 13.12.2005. 2. The assesee had filed return of income for A.Y. 2003-04 on 27.11.2003 (i.e before the date of search) (APB-93) wherein old unclaimed creditors to the tune of Rs. 39,96,851/- were written off and the same were offered as income in the profit & loss account. The return had been processed u/s 143(1) vide intimation dated 30.01.2004 (APB-92). 3. After search, assessments of the a....

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....80/- being 100% of the tax sought to be evaded on account of the said concealement/furnishing of inaccurate particulars of his income....) (page 2 of penalty order) 6. Penalty proceedings are separate proceedings and the assessee challenged the penalty and the Id. Cit (A) has deleted the penalty vide his order dated 03.10.2011 against which the department has filed the present appeal. Arguments in brief: 1. As per section 271(1) (c) of the Income tax Act penalty can be imposed for concealment of particulars of income or furnishing of inaccurate particulars of income. The penalty can be imposed for a specific charge. 2. The Id. AO has to record his satisfaction to specify either of the charge i.e concealme....

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....inaccurate particulars of income. Reliance placed on judgment of Hon'ble Supreme Court in the case of Reliance Petro Products (P) Ltd 230 CTR 320 (SC) c) Further while shifting the addition to A.Y. 2000-01 the Id. AO has made presumption that the assessee might have settled the accounts of creditors in cash or through some other illegal means. Mere presumptions without any concrete evidence on record cannot be a reason for imposing penalty u/s 271 (1) (c) . With respect to addition of Rs. 70,000/- : The addition was sustained by the Hon'ble ITAT in the quantum proceedings observing as under: Here the drawings were almost 4-5 months before the date of deposit and the assesee, in our view, has not p....