KISHORE MOTIRAM MALANI,MUMBAI vs. ITO 9(2)(2), MUMBAI

सुनवाई क" तार"ख /Date of Hearing : 06-10-2016 घोषणा क" तार"ख /Date of Pronouncement : 04-11-2016 आदेश / O R D E R

PER RAMIT KOCHAR, Accountant Member

ITA 3169/Mum/2013 2

1. The AO has erred in raising penalty of Rs. 328691/- 2. The AO has erred in adding Rs. 10 lacs as undisclosed income.

3. The Brief facts of the case are that the assessee is aggrieved by the levy of penalty of Rs.3,28,691/- by the AO u/s. 271(1)(c) of the Act vide order dated 22.03.2012 with respect to additions made by the AO in quantum assessment on account of loan repayment of credit card being towards unexplained investment u/s. 69 of the Act . The assessee having availed personal loan from Citi bank and repaid the same through EMI , whereby the credit card payments to the tune of Rs.10,18,266/- were made and the assessee submitted that these payments were from personal loans but , however, no personal balance sheet was submitted to substantiate the same. Thus , the AO concluded from the statement of affair and credit card statement submitted by the assessee that Rs.10,00,000/- has been invested in the fixed assets, investments etc. during the year under consideration out of undisclosed income which has been utilized for repayment of the Credit Card’s personal loans. The quantum assessment framed by the AO u/s 143(3) of the Act was confirmed by learned CIT(A) in first appellate proceedings. In penalty proceedings initiated u/s 271(1)(c) of the Act , the assessee did not submit any details before the AO and the AO levied penalty of Rs. 32,8,691/- u/s 271(1)(c) of the Act , on the amount of Rs.10,00,000/- which was subject matter of quantum additions vide assessment order passed u/s 143(3) of the Act , with respect to which the AO held that the assessee had filed inaccurate particulars of income and penalty of Rs.3,28,691/- was levied by the AO u/s 271(1)(c) of the Act vide penalty orders dated 22.03.2012. The penalty so ITA 3169/Mum/2013 3 levied u/s 271(1)(c) of the Act was confirmed by learned CIT(A) in his appellate orders in first appeal vide appellate orders dated 08-03-2013. In the appellate proceedings before learned CIT(A), the assessee submitted that the assessee is in the process of filing second appeal with the Tribunal against quantum assessment.

4. Aggrieved by the appellate orders dated 08-03-2013 of learned CIT(A), the assessee filed second appeal with the Tribunal. None appeared for the assesee. The Ld DR brought to our notice that the Tribunal has decided the second appeal of the assessee with respect to quantum assessment in vide orders dated 29.06.2015 whereby the Tribunal has set aside the order of the learned CIT(A) and restore the issue relating to the addition of Rs.10 lacs to the file of learned CIT(A) for his fresh consideration and adjudication of appeal afresh , copy of order of the Tribunal is placed in file. While learned DR relied upon the order of learned CIT(A) but conceded that the Tribunal with respect to quantum addition has set aside and restored the matter to the file of learned CIT(A).

5. We have considered the rival contentions and perused the material on record including the afire-stated Tribunal order. We have observed that with respect to quantum additions made by the AO vide assessment order framed u/s 143(3) of the Act , the Tribunal in vide orders dated 29.06.2015 has set aside the order of learned CIT(A) confirming the addition back to the file of learned CIT(A) for de-novo determination of the issue by holding as under:

“ 3. We heard Ld. D.R. and also perused the record. Admittedly the addition of Rs. 10.00 lakhs has been made for want of details relating to the sources for making payments towards credit card dues and loan repayments. The reason cited by Ld A.R for the failure of the assessee to ITA 3169/Mum/2013 4 appear before Ld CIT(A) appears to be reasonable to us. Further, the Ld A.R submits that the assessee would be in position to furnish relevant details, if an opportunity is given. Hence, in the interest of natural justice ,we are of the view that the assessee should be provided one more opportunity , since the Ld CIT(A) has passed the order without hearing the assessee.

In view of afore-stated order of the Tribunal, penalty of Rs. 3,28,691/- levied by the AO u/s 271(1)(c) of the Act and as confirmed by learned CIT(A) , on the same issues as are subject matter of quantum additions in assessment framed u/s.143(3) of the Act, will not survive and hence is ordered to be deleted subject to conditions stated hereinafter . Since the Tribunal has set aside and restored the issue vide afore-stated orders dated 29-06-2015 in to the file of learned CIT(A) for de-novo adjudication of appeal on merits with respect to quantum additions , it will be appropriate that the AO shall be entitled to initiate and levy the penalty afresh u/s 271(1)(c) of the Act , if so required after adjudication of the appeal by learned CIT(A) w.r.t. quantum additions which were made by the AO vide assessment framed u/s 143(3) of the Act , as directed by the Tribunal in its orders dated 29.06.2015 in ITA no. 2367/Mum/2013. We order accordingly.

ITA 3169/Mum/2013 5