2024 (4) TMI 1055

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.... penalty u/s. 271(1)(c) of Rs. 1,27,645/-." ITA No. 84/Rjt/2018 (A.Y. 2008-09) "1. The order u/s. 143(3) is bad in law. 2. The A.O. has erred in law as well as on facts in making addition of Rs. 1,05,827/- in respect of contract receipt on account of difference in 26AS and receipt shown in books of accounts. The ld. CIT(A) has erred in law as well as on facts in confirming addition of Rs. 1,05,827/-. 3. The A.O. has erred in law as well as on facts in making addition of Rs. 2,00,500/0 in respect of purchase of agriculture land from the cash balance available on record. The ld. CIT(A) has erred in law as well as on facts in confirming addition of Rs. 2,00,500/-. 4. The A.O. has erred in law as well as on facts in making lumpsum addition of Rs. 1,05,879/- in respect of various expenses for want of vouchers. The ld. CIT(A) has erred in law as well as on facts in confirming addition of Rs. 1,05,879/-. The appellant craves leave to add, alter, amend, delete or withdraw one or more grounds of appeal." 3. The first order pertains to quantum proceedings, wherein Ld. CIT(A) has confirmed the additions made by the Assessing Officer. The second order passed by Ld. CIT(A) in respe....

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.... books of accounts as well as in the Audit Report. Accordingly, the assessee submitted that once the land is purchased from cash available with the assessee (duly supported by furnishing of cash book by the assessee during the course of assessment proceedings) and the said agricultural land is also reflecting in the books of accounts of the assessee, which have been duly audited, then there is no question of levy of penalty. The assessee further submitted that the assessee is a civil contractor and during the impugned year under consideration, the assessee had contractual receipts of 2,14,08,976/- and therefore, the assessee had sufficient liquidity of cash funds so as to purchase the aforesaid property amounting to Rs. 2,00,500/- only. Accordingly, the assessee submitted that no penalty may be levied on account of purchase of agricultural land. However, Ld. CIT(A) dismissed the appeal of the assessee with the following observations:- "5.1 The second issue in the case of appellant is related to levy of penalty u/s 271(1)(c) of the Act on addition of Rs. 200500/- as made by the Assessing Officer on account of unexplained sources of investment in purchase of agricultural land. As p....

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....s to make investments in the aforesaid property. Thirdly, the Counsel for the assessee submitted that the cash book extracts showing entries were also submitted during the course of assessment proceedings which clearly showed that sufficient cash balance was available in the cash book of the assessee for purchasing the aforesaid land. Therefore, looking into the instant facts there is no question of levy of penalty under Section 271(1)(c) of the Act for concealment of income / furnishing inaccurate particulars of income. 11. In response, Ld. D.R. placed reliance on the observations made by the Ld. CIT(A) in the appellate order. 12. We have heard the rival contentions and perused the material on record. On going through the instant facts, we are of the considered view that this is not a fit case of levy of penalty. The assessee has shown contractual receipts of Rs. 2,14,08,976/- and had also produced copy of cash book, which showed that the assessee was having sufficient cash balance for the purpose of purchasing the aforesaid property. Further, the above agricultural land was also shown by the assessee in the books of accounts as well as in the Audit Report. Penalty under Section....

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.... total contractual receipts declared by the assessee amounting to Rs. 2,14,08,976/- in the books of accounts. Therefore, from the aforesaid facts, it is evident that the assessee had no mala fide intention to conceal the Revenue. 17. However, Ld. CIT(A) dismissed the appeal of the assessee with the following observations:- "As per the AR on the basis of this method, the appellant has not considered the revenue and related expenses of work of Rs. 105827/- in AY 2008-09. As per the AR this bill generally booked only when the appellant gets bill approved from the contractee institute. As per the AR there remains the possibility that the appellant has not recorded the same as income in particular year, but he has recorded that income in the next year whereas the customers has deducted the TDS and has shown in 26AS form to claim the expenses in the particular year. But this entire submission of the appellant is not supported by any evidence. The AR of the appellant has not been able prove that this contract income of Rs. 1,05,827/- has properly been booked in consecutive, financial year. It may be mentioned that the Ld. CIT(A) has also confirmed this addition of Rs. 105827/- for want....