RUPEN PATEL,MUMBAI vs. DCIT - CC-25, MUMBAI

Rival contentions have been heard and record perused. The facts of the case are that there was an action under section 132 of the Income Tax Act 1961 on 2 (A.Y.10-11 &11-12) Rupesh Patel vs. Dy. CIT 16.12.2010 in the case of M/s Patel Engineering Ltd. group of cases and the assessee was inter-alia covered in the search operation. During the course of search, cash of Rs.6.5 lakhs was seized from the residence of the assessee. It was the explanation of the assessee before the AO that the cash in hand on 16.12.2012 was on account of withdrawal of Rs.7.75 lakhs from HDFC Bank Account held by himself, his wife and his son and also on account of withdrawal by son Shri Ryan Patel of Rs.2 lakhs on 13.5.2008. The AO held that it is not possible to give credit for the sum of Rs.2 lakhs for the reason that it is improbable that the cash withdrawn on 13.05.2008 would still remain with the assessee. Taking these aspects into consideration, the AO accepted Rs.5.75 lakhs as explained and added back Rs.75,000/- as the unaccounted income of the assessee. Aggrieved by the said addition the assessee appeal has been filed before the CIT(A).

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

We have considered rival contentions and found that as on date of search assessee was having cash in hand of Rs.6.50 lacs out of withdrawals of Rs.7.75lakhs was from HDFC Bank Account held by assessee, his wife and his son. There was also withdrawal from son Shri. Ryan Patel of Rs.2 lakhs. Cash 3 (A.Y.10-11 &11-12) Rupesh Patel vs. Dy. CIT withdrawal was found to be much more than the cash-in-hand as on date of search. All cash found during search was duly explained and statement was also recorded u/s 132(4). Accordingly we do not find any merit for the addition of Rs.75,000/- so made by AO.

In the result, the appeal of assessee is allowed. ITA No. 3075/Mum/2015 A.Y. 2010-11 6. Assessee is aggrieved for penalty imposed u/s 271(1)(c) of Rs.24,280/- in respect of addition of deemed let out value of property situated at Karjat. Property was not actually let-out nor assessee was in receipt of any rent. However, by applying the deeming provisions the AO made an addition of notional value of rent.

We have considered rival contentions and found that penalty was levied with respect to the addition made on account of deemed rent of said house property. We found that the said property was situated 8kms of the municipal limits and since it was exempt from wealth tax and that assessee was under a bonafide belief that such property was not taxable under the income tax as well, no income under the head House property was declared. We found that both the House properties were disclosed by the assessee in the Balance Sheet and that being so the penal provision of section 271(1)(c) cannot be invoked as there was no deliberate attempt to furnish inaccurate particulars of income.

In view of the above discussion we do not find any merit for the penalty of Rs.,24,280/- with respect to the above addition.

In the result, appeal of the assessee is allowed. Order pronounced in the open court on 03/08/ 2016 Sd/- Sd/- (SANDEEP GOSAIN) (R.C. SHARMA) न्मायमक सदस्म / Judicial Member रेखा सदस्म / Accountant Member भुंफई Mumbai; ददनांक Dated : 03.08.2016 Ps. Ashwini आदेश की प्रनिलऱपि अग्रेपषि/Copy of the Order forwarded to : अऩीराथी / The Appellant 1. प्रत्मथी / The Respondent 2. आमकय आमुक्त(अऩीर) / The CIT(A) 3. आमकय आमुक्त / CIT - concerned 4. ववबागीम प्रयतयनधध, आमकय अऩीरीम अधधकयण, भुंफई / DR, ITAT, Mumbai 5. गार्ड पाईर / Guard File 6. आदेशधिुसधर/ BY ORDER,