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Income Tax Appellate Tribunal, “J” BENCH, MUMBAI
Before: SHRI SAKTIJIT DEY & SHRI RAMIT KOCHAR
Aforesaid appeal at the instance of the assessee is directed against the order dated 26th September 2014, passed by the learned Commissioner (Appeals)–35, Mumbai, confirming penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 (for short "the Act") for the assessment year 2006–07.
Brief facts are, the assessee an individual filed her return of income for the assessment year under consideration on 23rd August
2 Jesal B. Jhaveri 2006, declaring total income of ` 1,33,751. During the assessment proceedings, on the basis of information obtained by him, Assessing Officer found that the assessee is maintaining a savings bank account in HDFC Bank, Borivali Branch, wherein cash deposits made on various dates in the relevant financial year amounted to ` 3,94,130. He, therefore, called upon the assessee to explain the source of such deposits. As observed by the Assessing Officer, the assessee did not submit any explanation in relation to the source of cash deposits. Therefore, the Assessing Officer treating the entire cash deposit of ` 3,94,130, as unexplained cash credit under section 68 of the Act added back to the income of the assessee. Though, the assessee challenged the addition by filing appeal before the learned Commissioner (Appeals), however, as it appears, subsequently, the appeal was withdrawn by the assessee. Thus, the assessee accepted the addition and paid the tax. On the basis of addition made, the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c) of the Act by issuing a show cause notice. In reply to the show cause notice, it was submitted that savings bank account in which the cash deposit was found was held jointly with her father Late Bhupendra M. Jhaveri, who was a practicing Chartered Accountant and the entire cash deposit was made by him. The assessee submitted, she was totally unaware of the transaction in the bank account and it was 3 Jesal B. Jhaveri not her income, though, she was compelled to accept the addition under section 68 of the Act. The Assessing Officer, however, did not find merit in the explanation of the assessee. Being of the view that the assessee had failed to explain the source of cash deposits with concrete evidence the concealment of income to the extent of undisclosed deposits in the bank account is proved. Accordingly, he passed an order imposing penalty of ` 1,03,518 under section 271(1)(c). Aggrieved, assessee filed appeal before the first appellate authority.
The learned Commissioner (Appeals), however, confirmed penalty imposed by the Assessing Officer.
Before us, the learned Authorised Representative reiterating the stand taken before the Departmental Authorities submitted, explaination submitted by the assessee was not properly considered either by the Assessing Officer or by the learned Commissioner (Appeals) before imposing penalty. The learned Authorised Representative submitted, when the Assessing Officer was not able to locate a source of income from which assessee could have earned the income to deposit in the bank account, assessee’s explanation that the money does not belong to her cannot be rejected / disbelieves. He, therefore, pleaded for deleting the penalty.
4 Jesal B. Jhaveri
Learned Departmental Representative relied upon the order of the Assessing Officer and the learned Commissioner (Appeals).
We have considered the submissions of the parties and perused the material available on record. Though, it is a fact on record that cash deposits to the tune of ` 3,94,130, was found in the savings bank account with HDFC bank, however, the assessee in the course of penalty proceedings as well as before the first appellate authority, had explained that the account was jointly held with his father a practicing Chartered Accountant and who only was aware of the transactions made through the said bank account. We find the aforesaid explanation of the assessee has not at all been considered properly either by the Assessing Officer or by the learned Commissioner (Appeals). On a perusal of the saving bank account, pass book copy, it is found that the account was jointly held by the assessee with her father Shri Bhupendra M. Jhaveri. Though, this fact was brought to the notice of the Assessing Officer, however, we do not find any discussion by the Assessing Officer or learned Commissioner (Appeals) that it was a joint account of assessee and her father. Considering the fact that the assessee’s father was a practicing Chartered Accountant, it is quite possible, he might have made the cash deposits into bank account on various dates till his death on 13th July 2007. Therefore, the entire
5 Jesal B. Jhaveri deposit in the bank account cannot be held to be belonging to the assessee. Merely because the assessee in the absence of proper evidence available with her could not explain the source of cash deposit, hence, ultimately decided to accept the addition made, that itself will not lead to the conclusion that the money deposited in the bank account belonged to the assessee alone. It is not a case where the assessee has failed to offer any explanation in terms of section 271(1)(c). The assessee did explain that the account in which the cash deposits were made was a joint account held with her father. This factual aspect has not at all been appreciated by the Assessing Officer and the learned Commissioner (Appeals). Considering the aforesaid facts, in our view, it cannot be conclusively proved that the entire cash deposits actually represent assessee’s undisclosed income, notwithstanding the fact that the assessee accepted the addition being unable to prove the source of cash deposit with sufficient evidence. That being the case, we hold that the imposition of penalty in the instant case is not proper. Accordingly, we delete the same.