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Income Tax Appellate Tribunal, MUMBAI BENCHES “H”, MUMBAI
Per Amit Shukla, Judicial Member
The aforesaid appeal has been filed by the assessee against impugned order dated 28.11.2013, passed byLd. CIT(Appeals)-18, Mumbai,in relation to the penalty proceedings u/s. 271(1)(c) for the A.Y. 2003-04. The assessee is aggrieved by the levy of penalty on account of addition of Rs.2,00,000/- which was made u/s. 68 and Rs.20,200/- on account of bogus claim of agricultural income.
Before us, the learned counsel, Ms. Nikita Agarwal, submitted that so far as the levy of penalty on addition of Rs.2 lacs made u/s. 68 is concerned, the same stands deleted by the order of the Tribunal
Mrs. Manju Jain. dated 21.09.2016, in assessee’s own case in the quantum proceedings in and, therefore, the penalty levied on the amount of Rs. 2 lacs should be deleted. Regarding the treatment of agricultural income as income from other sources, she submitted that though same was not pressed by learned AR before the Tribunal in quantum proceedings, however no penalty can be levied on such treatment of agricultural income as income from other sources for the reason that firstly, it is mere change of head of income; and secondly, in the subsequent year the assessee has filed the proof of sale of agricultural land. Thus, no penalty should be levied on such an addition.
On the other hand, the learned DR submitted that the assessee’s claim for agricultural income remains unsubstantiated and no details or evidence whatsoever has been filed by the assessee.
Therefore, penalty has rightly been levied by the AO and confirmed by the CIT(A) on the agricultural income. Regarding addition of Rs. 2 lacs, he admitted that the same now stands deleted by the Tribunal and, therefore, no penalty can be levied on this amount.
After considering the rival submissions of the parties and on perusal of the relevant findings given in the impugned orders, we find that so far as levy of penalty on account of unexplained cash credit of Mrs. Manju Jain. Rs. 2 lacs made u/s. 68 is concerned, the same now stands deleted by the Tribunal after observing and holding as under:-
“3. We have considered rival contentions and found from the record that assessee was in receipt of loan from Mahesh
Jewellers, proprietor Rajmal K. Jain during the assessment year
2003-04 under consideration. The loan was not of Rs.2 lakhs but it was a carried forward loan where in the amount was given and taken at various dates during the A.Y.2003-04 and the net balance outstanding is shown as Rs.2 lakhs as at 31-3-2003. We found that loan was received by account payee cheque from Bank of India. On 10 -4-2002 there was a cheque of Rs.4 lakhs, on 22-
4-2002, a cheque of Rs.38,617/- and on 14-12-2002 a cheque of Rs.3,50,000/- was received. Out of these payment assessee has repaid a sum of Rs.1,50,000/- by way of cheque of HDFC Bank on 31-1-2003, there was a closing balance of Rs.2 lakhs on 31-3-
2003. The required confirmation from Rajmal K. Jain, proprietor of Mahesh Jewellers was filed before the lower authorities, who was assessed to tax. We had also verified the acknowledgement of return of income of Shri Rajmal Jain along with its Profit and Loss account and balance sheet duly indicating the loan amount.
Under these circumstances, we do not find any merit for the addition of Rs.2 lakhs made by the AO.”
Whence quantum itself has been deleted, then no penalty on this amount can be levied or sustained and accordingly, we direct the AO to delete the penalty on addition of Rs. 2,00,000/-.
As regards the levy of penalty on agricultural income, it is seen that the assessee had shown agricultural income of Rs. 20,200/- in the capital account. However, during the course of assessment proceedings, no details of land holding and 7/12 extract or any other evidence or document was furnished in support of agricultural income of Rs.20,200/-. The assessee in the quantum proceedings may not have pressed this ground before the Tribunal,but it is a trite law that if the assessee claims that certain income is exempt and do not form part of the total income then onus lies heavily upon the assessee to show that such an income is exempt. This primary onus of the assessee has not been discharged either during the course of assessment proceedings or in the course of penalty proceedings.
There has to be some prima facie explanation that at the time of filing the return of income, the assessee had some basis for showing or claiming the agricultural income in the return of income, which has been claimed as exempt. In the absence of any details it has been rightly held to be taxed as income from other sources. Even before us, without there being any material or plausible bonafide explanation, we are unable to appreciate the contention of the learned counsel and accordingly, we sustained the penalty on the disallowance of agricultural income of Rs.20,200/-.
Thus, the appeal of the assessee is partly allowed.
Order pronounced in the open court on this17thday of January 2017.