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Income Tax Appellate Tribunal, “A” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI MANOJ KUMAR AGGARWAL
Aforesaid appeal by the assessee is against order dated 6th September 2016, passed by the learned Commissioner (Appeals)–16, Mumbai, confirming the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 ( in short, the Act) for the assessment year 2010–11.
2 M/s. Aakash Projects & Infrastructure Pvt. Ltd.
Brief facts are, the assessee a company derives income from house property and commission. For the impugned assessment year the assessee filed its return of income on 17th September 2010, declaring total income of ` 80,180. During the assessment proceedings, the Assessing Officer noticing that the assessee has shown loan availed from certain parties called upon the assessee to furnish details. After perusing the details and loan confirmation furnished by the assessee the Assessing Officer issued notices under section 133(6) of the Act to the concerned parties for confirmation of the transaction. As observed by the Assessing Officer, one of the lenders M/s. Nicco Securities Ltd. could neither be located nor the notice under section 133(6) of the Act could be served upon it. Therefore, the Assessing Officer called upon the assessee to establish the identity of the said creditor along with its creditworthiness and genuineness by furnishing necessary details including copy of bank statement. As alleged by the Assessing Officer, the assessee was unable to furnish any evidence to prove the creditworthiness of the said creditor and genuineness of the loan transaction. He also observed that the Assessing Officer having jurisdiction over M/s. Nicco Securities Pvt. Ltd. also informed that the said party was not traceable. Thus, on the basis of aforesaid facts, the Assessing Officer concluded that the assessee was unable to prove the source of loan
3 M/s. Aakash Projects & Infrastructure Pvt. Ltd. amounting to ` 25 lakh claimed to have been availed from M/s. Nicco Securities Pvt. Ltd., hence, treated it as unexplained cash credit under section 68 of the Act. Accordingly, he added it to the income of the assessee. On the basis of such addition, the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act alleging concealment of income and furnishing of inaccurate particulars of income. After issuing a show cause notice under section 274 r/w section 271(1)(c) of the Act to the assessee the Assessing Officer ultimately passed an order on 5th March 2015, imposing penalty of ` 7,72,500 under section 271(1)(c) of the Act on the allegation of furnishing of inaccurate particulars of income.
Though, the assessee challenged the aforesaid penalty order before the learned Commissioner (Appeals) he also sustained the imposition of penalty.
We have considered rival submissions and perused materials on record. Learned Counsel appearing for both the parties have submitted before us that the addition on the basis of which penalty under section 271(1)(c) of the Act was imposed, in the meanwhile, has been restored back to the Assessing Officer for de novo adjudication. A copy of the order dated 25th October 2017 passed in ITA no.2578/Mum./ 2014 was also placed on record. On a perusal of the order of the Co–
4 M/s. Aakash Projects & Infrastructure Pvt. Ltd. ordinate Bench, the submissions made by the learned Counsel for the assessee are found to be correct. Thus, when the very addition on the basis of which the impugned penalty under section 271(1)(c) of the Act was imposed is not in existence, the penalty also cannot survive. Accordingly, we delete the penalty imposed under section 271(1)(c) of the Act. Ground raised is allowed.
In the result, assessee’s appeal is allowed. Order pronounced in the open Court on 25th May 2018