SHRI MAHESH KUMAR S/O SHRI HIRALAL,INDORE vs. INCOME TAX OFFICER 5(5), INDORE

PER MANISH BORAD, AM.

This appeal of Assessee pertaining to A.Y. 2008-09 is directed

against the order of Ld. Commissioner of Income Tax(Appeals)-II,

Indore (in short ‘CIT(A)’), dated 01.05.2017 which is arising out of

the order u/s 271(1)(c) of the Income Tax Act 1961(hereinafter

called as the ‘Act’) framed on 01.03.2016 by ITO-5(5), Indore.

Mahesh Kumar ITA No.554/Ind/2017 2. The assessee’s sole grievance is against the order of Ld.CIT(A)-

II, Indore confirming the penalty of Rs.39,82,800/- levied by the Ld.

Assessing Officer u/s 271(1)(c ) of the Act on account of

unexplained source of deposit in bank account.

impugned penalty of Rs.39,82,800/- was levied by the Ld.

Assessing Officer on the addition for unexplained deposit in bank of

Rs.1,32,76,000/-. He further submitted that the assessee went in

appeal before Hon'ble Tribunal against the quantum of addition and

Hon'ble Tribunal vide order dated 24.5.2017 in I.T..A No.

752/Ind/2014 deleted the quantum addition of Rs.1,32,76,000/-.

He prayed that as the quantum has been deleted, no penalty is

leviable u/s 271(1)(c ) of the Act.

submission made by the assessee.

placed before us. We find that the addition of unexplained deposit

in bank account at Rs.1,32,76,000/- was made by the Income Tax

Officer Ward 3(3), Indore in the assessment order framed us/ 143(3) 2

Mahesh Kumar ITA No.554/Ind/2017 of the Act dated 31.12.2010 which was followed by the penalty

proceedings u/s 271(1)(c ) and vide order dated 01.03.2016 penalty

@100% of tax sought to be evaded on the addition of

Rs.1,32,76,000/- was levied at Rs.39,82,800/-.

order dated 24.05.2017 while adjudicating the issue of quantum of

addition in the case of assessee deleted the addition of

Rs.1,32,76,000/- made on account of unexplained cash credit on

the basis of circumstantial evidences on record and statement of

Power of Attorney holder recorded by the A.O and holding that the

amount of Rs.1,32,76,000/- is received by the assessee on account

of sale of agriculture land and the same is to be treated as capital

receipt.

levied u/s 271(1)(c ) of the Act at Rs.39,82,800/- on the quantum of

addition of Rs.1,32,76,000/- on account of unexplained cash credit.

The basis of levying penalty u/s 271(1)(c ) of the Act is on the

addition made in the hands of the assessee. In the instant case,

the very basis of levying penalty i.e. the quantum addition has been

Mahesh Kumar ITA No.554/Ind/2017 deleted by the Co-ordinate Bench therefore penalty u/s 271(1)(c)

has no legs to stand for. In our considered view the impugned

penalty needs to be deleted. We accordingly do so and direct the

Ld. Assessing Officer to delete the penalty of Rs.32,82,800/-.

The order pronounced in the open Court on 12.10.2018.

Sd/- Sd/-

( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER �दनांक /Dated : 12 October, 2018 /Dev

Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By order Asstt.Registrar,I.T.A.T., Indore