THE ASSISTANT COMMR. OF INCOME TAX, CEN. CIRCLE-1,, JAMNAGAR vs. SHRI MERAMAN H. PARMAR,, JAMNAGAR

2 . A.Y. 2012-13 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in cancelling the penalty levied u/s 271d of the Income-tax Act, 1961 of Rs. 2,45,50,000/-.

2. Any other ground that the revenue may raise before or during the proceedings before the Hon’ble I.T.A.T.

3. On the facts of the case and in law, the Ld. CIT(A) ought to have upheld the penalty order of the A.O.

4. It is, therefore, prayed that the order of the Ld. CIT(A) may be set aside and that of the A.O. be restored to the above extent.

3 . A.Y. 2012-13 2. During the F.Y.2011-12, the assessee alongwith other 16 persons entered into a partnership deed and started a partnership firm in the name of M/s Shreenathji Developers. The has introduced a capital of Rs, 15,35,000/- in the firm in cash. The source of the capital introduced by the assessee is not verifiable. The investment made by assessee the in the partnership firm is from unaccounted sources as it is not reflected in the return of income.

3. In this case an information was received from ACIT, Cir-1, Jamnagar the assessee has introduced in cash in the capital to the tune of Rs. 15,35,000/. With view to verify the genuineness of the cash introduced in capital, the case was re- opened.

4. Without prejudice to the above, it may be further pointed out that the officer has not taken only the best possible view in absence of any material on record. Reliance in this regard is placed on the decision of Hon'ble ITAT, Kolkata in the case of Somdutt Builders (P) Ltd V/s. DCIT (1TAT, Kolkata) 98 ITD 78, In fact, the Hon'ble Apex Court in the case of C1T V/s. P.V.S. Beedies P. Ltd. (SC) 237 ITR 13 have held that the position of law pointed out even by internal audit party constitutes valid reason for re-opening the assessment. Moreover, this view has also been upheld by the Hon’ble Supreme Court in the case of ITO V/s. Purushottam Das Bangur & Anr. (SC) 224 ITR 362.

5. In response to the notices issued on various dates, Shri Chetan Agarwal, Chartered Accountant and authorized representative of the assessee attended from time to time and submitted the details as called for. The details submitted by the A.R. have been verified.

6. Subject to the above remarks, the income of the assessee is recomputed as below:

4 . A.Y. 2012-13 Total Returned Income Rs. 1,53,120/- Total Assessed Income Rs. 1,53,120/- Rounded of u/s. 288 of the Income tax Act, 1961. Rs. 1,53,120/-

7. Assessed u/s. 147 r.w.s. 143(3) of the Act at Rs. 1,53,120/-. Charged Interest u/s. 234A, 234B, 234C and 234D, as applicable. Issued demand notice and Challan after giving credit for prepaid taxes.

4. In the case of other partner Shri Bharatsinh Kalubhai Jadeja wherein no addition was made by the A.O. with following observation:

2. During the F.Y.2011-12, the assessee alongwith other 16 persons entered into a partnership deed and started a partnership firm in the name of M/s Shreenathji Developers. The has introduced a capital of Rs, 15,35,000/- in the firm in cash. The source of the capital introduced by the assessee is not verifiable. The investment made by assessee the in the partnership firm is from unaccounted sources as it is not reflected in the return of income.

3. In this case an information was received from ACIT, Cir-1, Jamnagar the assessee has introduced in cash in the capital to the tune of Rs. 15,35,000/. With view to verify the genuineness of the cash introduced in capital, the case was re- opened.

4. Without prejudice to the above, it may be further pointed out that the officer has not taken only the best possible view in absence of any material on record. Reliance in this regard is placed on the decision of Hon'ble ITAT, Kolkata in the case of Somdutt Builders (P) Ltd V/s. DCIT (1TAT, Kolkata) 98 ITD 78, In fact, the Hon'ble Apex Court in the case of C1T V/s. P.V.S. Beedies P. Ltd. (SC) 237 5 . A.Y. 2012-13 ITR 13 have held that the position of law pointed out even by internal audit party constitutes valid reason for re-opening the assessment. Moreover, this view has also been upheld by the Hon’ble Supreme Court in the case of ITO V/s. Purushottam Das Bangur & Anr. (SC) 224 ITR 362.

5. In response to the notices issued on various dates, Shri Chetan Agarwal, Chartered Accountant and authorized representative of the assessee attended from time to time and submitted the details as called for. The details submitted by the A.R. have been verified.

6. Subject to the above remarks, the income of the assessee is recomputed as below: Total Returned Income Rs. 1,35,650/- Total Assessed Income Rs. 1,35,650/- Rounded of u/s. 288 of the Income tax Act, 1961. Rs. 1,35,650/-

7. Assessed u/s. 147 r.w.s. 143(3) of the Act at Rs. 1,35,650/-. Charged Interest u/s. 234A, 234B, 234C and 234D, as applicable. Issued demand notice and Challan after giving credit for prepaid taxes.

5. In the case of other partner Shri Bhikhabhai R. Sharma wherein no addition was made by the A.O. with following observation:

2. During the F.Y.2011-12, the assessee alongwith other 16 persons entered into a partnership deed and started a partnership firm in the name of M/s Shreenathji Developers. The has introduced a capital of Rs, 15,35,000/- in the firm in cash. The source of the capital introduced by the assessee is not verifiable. The 6 . A.Y. 2012-13 investment made by assessee the in the partnership firm is from unaccounted sources as it is not reflected in the return of income.

3. In this case an information was received from ACIT, Cir-1, Jamnagar the assessee has introduced in cash in the capital to the tune of Rs. 15,35,000/. With view to verify the genuineness of the cash introduced in capital, the case was re- opened.

6. Since all partners plea have been accepted by the department and no adverse action has been taken by the department and Ld. A.O. has accepted cash deposits as genuine. In the case of other partners, therefore, on the principle of parity and consistency, we allow the appeal of the Assessee.