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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI RAJESH KUMAR, AM & SHRI AMARJIT SINGH, JM
O R D E R
PER AMARJIT SINGH, JM:
The assessee has filed the present appeal against the order dated 04.06.2018 passed by the Commissioner of Income Tax (Appeals)-51, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 1997-98 in which the penalty levied by the AO has been order to be confirmed.
The assessee has raised the following grounds: - 2. “1 On the facts and circumstances of the case, the Ld. CIT(A) erred in holding that the penalty levied of Rs.170,000/- u/s 271(1)(c) on the quantum addition related to the commission income earned stands confirmed on the quantum as determined by the AO as per the direction of Hon’ble ITAT.
ITA. No5108/M/2018 A.Y. 1997-98 b. The Ld. CIT(A) erred in stating that penalty is confirmed inspite of the fact that Hon’ble Tribunal has set aside the assessment to the file of the AO and as such appellant submits that the penalty order is also to be set aside. 3. The appellant craves, leave to add, alter modify any ground of appeal before or at the time of hearing." The brief facts of the case are that the assessee filed his return 3. of income on 29.10.1997 declaring total income to the tune of Rs.1,83,310/-. Thereafter, a search action was carried out in the case of the assessee on 24.09.1998. Thereafter, the assessment was completed on 28.03.2000 determining taxable income at Rs.5,79,84,610/-. Thereafter, the Hon’ble ITAT has set aside the assessment order, subsequently, the order u/s 143(3) r.w.s. 254 of the Act dated 17.11.2008 was passed at a total income in sum of Rs.1,25,29,699/- on account of following additions.: - S. No. Name Amounts
1. Commission on hawala bills Rs.8,55,330/- 2. Unaccounted sales proceeds Rs.45,18,575/- 3. Subsidy received Rs.29,300/- 4. Sundry Creditors Rs.22,85,042/- 5. Loan Creditors Rs.43,19,112/-
6. Opening Capital Rs.3,39,000/- Thereafter the penalty proceeding was initiated. Since the CIT(A) has confirmed the addition on commission of hawala bills in sum of Rs.3,81,631/- and Opening Capital in sum of Rs.23,584/-, therefore, the penalty in sum of Rs.1,70,000/- was levied. Feeling aggrieved, the A.Y. 1997-98 assessee filed an appeal before the CIT(A) who confirmed the order of the AO, therefore, the assessee has filed the present appeal before us.
We have heard the argument advanced by the Ld. Representative of the parties and perused the record. The AO has levied the penalty on account of Commission on hawala bills in sum of Rs.3,81,631/- and on account of Opening Capital in sum of Rs.23,584/-. The Ld. Representative of the assessee has argued that the Hon’ble ITAT on the ground of Commission of hawala bills has set aside the finding of the CIT(A) and remanded the issue before the AO, therefore, the penalty is not liable to be sustainable in accordance with law. It is also argued that the Opening Capital in sum of Rs.23,584/- was assessed on the basis of the estimation basis, therefore, no penalty is liable to be sustainable. The copy of order dated 29.08.2017 passed by Hon’ble ITAT in & 4622/M/2013 is on the file in which we noticed that the issue of Commission of hawala basis has been restored before the AO to decide the matter of controversy afresh. Apparently, at this stage, there is no demand of on account of Commission on hawala bills, therefore, the penalty is not liable to be sustainable in the eyes of law. Now, coming to the second point on the basis of which the penalty has been levied, is in connection with the Opening capital in sum of Rs.23,584/-. Appraisal of the Hon’ble ITAT order in the assessee’s own case (supra) we observed that the finding of the CIT(A) has upheld by Hon’ble ITAT which has been assessed on estimation basis.