MONA HARESH JETHAMALANI,ULHASNAGAR vs. ASST CIT CIR 2, KALYAN

सुनवाई की तायीख / Date of Hearing : 28.11.2016 घोषणा की तायीख /Date of Pronouncement : 30.11.2016 आदेश / O R D E R

PER D. KARUNAKARA RAO, AM:

2. The Ld CIT (A) erred in not passing speaking order on submission dated 7.10.2015 as well as discussion recorded in para 4.0 by CIT (A)-3, Thane.

3. The appeal is in time and order.”

2. The only issue involved in this appeal relates to the levy of penalty u/s 271(1)(c) of the Act. In this regard, at the outset, Ld Counsel for the assessee briefly narrated the facts of the case which include that the assessee is engaged in the business of „manufacturing of electrical goods‟ and running a proprietorship concern names „M/s. Bharat Electrical Industries‟. Assessee filed the return of income declaring the total income of Rs. 19,91,887/-. Assessment was completed u/s 143(3) of the Act the assessee income was determined at Rs. 22,95,250/-. In the assessment, AO made addition, u/s 69 of the Act, of Rs. 3,03,357/- on account of „unexplained investment in stock‟. Subsequently, penalty of Rs. 1,02,113/- was levied by the AO vide order dated 27.9.2013 on the said amount. On appeal, CIT (A) confirmed the same. Therefore, the assessee filed the present appeal before the Tribunal.

3. During the proceedings before us, Ld Counsel for the assessee submitted that the said addition of Rs. 3,03,357/- relates to the purchases made by the assessee from various suppliers. Mentioning that the penalty proceedings are different from that of the assessment proceedings, where the AO should examined the correctness of the allegation of concealment / furnishing of inaccurate particulars of income independently, Ld Counsel for the assessee submitted that the AO has not undertaken any enquiry whatsoever involving the said suppliers of the stock. Ld Counsel for the assessee further submitted that the assessee is ready even now for enquiry into the said investment. Further, Ld Counsel for the assessee mentioned that AO has not undertaken any enquiry u/s 133(6) of the Act. Ld AR also submitted that the said suppliers have recorded the sales to the assessee and assessee is ready to substantiate the same if the matter is remanded to the file of the AO.

4. On the other hand, Ld DR for the Revenue relied on the orders of the Revenue Authorities.

5. We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On hearing both the parties, we find, the said addition of Rs. 3,03,357/- is undisputedly relates to the purchases from 8 parties and the AO did not undertake any investigation into the submissions of the assessee that the said purchases are entirely accounted for and borne out of books of account of the assessee as well as the suppliers of the assessee. In our view, the above facts were not put to the scrutiny during the assessment proceedings independently. Why to levy penalty, if the transactions are factually accounted? Considering the peculiar facts of the case, we are of the opinion, the correctness of the unexplained nature of the investment of Rs. 3,03,357/- is required to be investigated if they constitute unexplained investments. We order accordingly and direct the AO to undertake investment into the same and examine the relevant books of account of the assessee and the parties concerned