SAYED FAZLE ABBAS,MUMBAI vs. ACIT CEN CIR 5(3), MUMBAI

Rival contentions have been heard and record perused. Facts in brief are that at the time of search and seizure action, 842.800 grams of gold jewellery was found out of which 701.400 grams were accepted by the Department to be disclosed. It was claimed that the balance 141.400 grams of gold ornaments were received on the occasion of the birth of assessee’s children or given to his wife by her mother. However, the AO did not accept assesee’s contention and made addition with regard to difference in jewellery found. The AO also levied penalty u/s.271(1)(c) of the Act with regard to the addition so made.

By the impugned order the CIT(A) confirmed the action of AO, against which assessee is in further appeal before us.

We have considered rival contentions and gone through the orders of authorities below. From the record we found that penalty of Rs.1,90,916/- was levied with respect to addition of Rs.20,000/- in respect of commission income earned by assessee and for difference in the jewellery. Ground with regard to penalty levied with respect to commission received was restored back to the file of AO. However, the CIT(A) confirmed the penalty levied with reference to the difference in jewellery found. From the record we found that with regard to the difference in jewellery the assessee has submitted explanation that it was given to his wife by her mother. The AO levied penalty because no evidence with regard to purchase of jewellery by the mother was produced before him. We found that mother has been expired much before the block period. Merely because the bills taken by mother from who wife of assessee has got the jewellery could not be produced, will not dislodge the contention of the assessee that jewellery was received from late parents. Ld. AR also placed on record judicial pronouncements in case of Late Smt. Dularidevi Jha, IT(SS)A No.26/Mum/2009, order dated 22-3-2010m Shri Ramakant Jha, IT(SS)A No.39/Mum/2009, order dated 31-3-2010 and the order of the Tribunal in the case of Shri Ajit Kumar Jha, IT(SS)A No.40/Mum/2009, order dated 11-2-2010. It was observed in these judicial pronouncements that the explanation of the assessee to the effect that gifts were received from various authorities were not found to be false or incorrect or no material has been brought on record to establish that these gifts were bogus. It was found to be a case of non-substantiation of the explanation filed by the assessee. Accordingly, penalty so levied was deleted by the Tribunal.

In the instant case also the assessee has filed explanation with regard to the source of receipt of jewellery from late parents. Since parents have already been expired much before the block period, and assessee could be produced the bills of acquisition of jewellery by the parents, it is proper to make an addition for such jewellery, but in our view may not be sufficient to levy penalty as there is no contrary material available on record to disprove assessee’s contention. Furthermore, there is no finding to the contrary that assessee’s claim was not genuine. Keeping in view all these facts and circumstances, it is not a fit case for levy of penalty u/s.271(1)(c) with regard to the difference in jewellery so found.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on this 28/09/2016. (AMARJIT SINGH) (R.C.SHARMA) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER भुंफई Mumbai; ददनांक Dated 28/09/2016 प्र.कु.मभ/pkm, नन.स/ PS आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent. 2. आमकय आमुक्त(अऩीर) / The CIT(A), Mumbai. 3. आमकय आमुक्त / CIT 4. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. आदेशाि सार/ BY ORDER, गार्ा पाईर / Guard file. 6. सत्मावऩत प्रनत //// उप/सहायक पुंजीकार (Asstt.