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Income Tax Appellate Tribunal, MUMBAI “SMC” BENCH, MUMBAI
Before: SHRI SHAILENDRA KUMAR YADAV, JUDICIAL
This appeal has been filed by assessee against the order of Commissioner of Income-Tax (Appeals)-9, Mumbai, dated 08.08.2014 for A.Y. 2006-07 on following ground:
“The Commissioner of Income Tax (Appeals)-9, Mumbai has erred in: • Confirming the action of the Learned Assessing Officer of levying the penalty u/s.271(1)(c) of the Income Tax Act 1961, amounting to Rs.11,27,600/-. Whereas as per the Facts & Circumstances the same should not be levied.”
Assessee company engaged in the business of trading in alloy steel. It furnished its return of income for A.Y. 2006-07 declaring total income at Rs.61,200/-. Assessing Officer completed assessment u/s.143(3) r.w.s 148 of the Act and determining taxable income of Rs.34,11,200/- where an addition of Rs.33,50,000/- was made on account of unexplained cash credits related to bogus share application money and penalty proceedings u/s.271(1)(c) of the Act were also initiated on this addition. Assessee company had not filed any appeal against the assessment order u/s.143(3) r.w.s. 148 of the Act. The stand of assessee has been that addition in question was accepted to buy peace of mind and there was neither furnishing of inaccurate particulars nor concealment of income. However, Assessing Officer concluded that company had committed default by concealment of particulars of income A.Y. 06-07[Ruia Alloy Trade P. Ltd. vs. ITO] Page 3 as the act of assessee company clearly gives out to show artificial share application money merely to build the capital out of unaccounted income routed through entry provider. Assessing Officer therefore levied minimum penalty of Rs.11,27,600/- equivalent of 100% tax sought to be evaded and the said penalty was confirmed by CIT(A).
2.1 Same has been opposed before me inter alia submitting that Assessing Officer has levied penalty u/s.271(1)(c) of the Act amounting to Rs.11,27,600/- on addition made in assessment order u/s.143(3) r.w.s. 148 of the Act. According to assessee, all facts had been disclosed and at the time of assessment proceedings, necessary details/information have been submitted at the relevant point of time. Merely because department has not accepted the contention of assessee does not amount to furnishing inaccurate particulars or concealment of income. Assessee had furnished all the details to the Assessing Officer. Assessing Officer on the basis of doubts raised by the Investigation Wing made an addition of Rs.33.50lac, even through the share application money was received through proper banking channel and all related documents i.e. share application form, ITR copy, Bank Statement & financial documents were submitted. From this, I find that assessee has declared all the facts and details on recorded at relevant point of time. Quantum addition and penalty proceeding are two different things. Assessee has given complete details at relevant A.Y. 06-07[Ruia Alloy Trade P. Ltd. vs. ITO] Page 4 point of time, so on the basis of addition in quantum, penalty is not automatic. Thus, taking all facts and circumstances into consideration, penalty in question is not justified and same is directed to be deleted.
In the result, the appeal of assessee is allowed.
Pronounced in the open Court on this the 27th day of June, 2016.