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Income Tax Appellate Tribunal, “B” Bench, Mumbai
O R D E R Per B.R. Baskaran, AM :-
Both these appeals filed by the assessee are directed against the orders passed by learned CIT(A)-40, Mumbai and it relate to A.Ys. 2005-06 & 2007- 08.
Assessee is aggrieved by the decision of learned CIT(A) in confirming the penalty levied in both the years by the Assessing Officer u/s. 271(1)(c) of the Act.
None appeared on behalf of the assessee and hence we proceed to dispose of the appeal ex-parte, without presence of the assessee. In A.Y. 2005- 06, the Assessing Officer levied penalty of ` 10,247/- and in A.Y. 2007-08, the Assessing Officer levied penalty of ` 19,178/- u/s 271(1)(c) of the Act. Both penalties pertain to certain deposits found in the bank account of the assessee, which were assessed as income of the assessee.
2 Shri Mukesh D. Dedhia
We have heard the learned Departmental Representative and perused the record. The assessee belongs to Zamkudi group, which was subjected to search and seizure operations on 9.10.2010. Consequent to the search operations, assessments in the hands of the assessee for the two years under consideration were completed u/s. 143(3) read with section 153C of the Act. During the course of search operations, it appears that the assessee could not explain certain cash deposits found in the bank account and accordingly surrendered the amount of ` 50,232/- and ` 1,20,000/- respectively in assessment year 2005-06 and 2007-08. Though these amounts were not originally disclosed in the returns of income filed u/s. 139(1) of the Act, the assessee disclosed the same in the returns of income filed in response to the notices issued u/s. 153C of the Act by honouring the surrender made. The Assessing Officer assessed the above said amounts as income of the assessee and also levied penalty thereon treating them as concealment of income. The learned CIT(A) also confirmed the same.
From perusal of the orders passed by the tax authorities, we notice that the assessee has submitted that these amounts represent gifts received from friends and relatives and hence they were not originally disclosed in the returns of income filed u/s. 139(1) of the Act. However, during the course of search, the assessee admitted the same as his income, since he could not produce necessary documents to support the claim. It was submitted that the he has surrendered these amounts in order to buy peace and not to litigate with the Department. However, the above said explanations of the assessee were not found convincing to the tax authorities and hence they have levied the penalty u/s 271(1)(c) of the Act.
6. On a careful Perusal of the facts, we notice that the assessee has admitted deposits found in the bank account as his income, since he was not in a position to produce documents supporting the claim that they represent gifts received from friends and relatives. We notice that the assessee has duly
3 Shri Mukesh D. Dedhia offered the same as his income in the returns of income filed u/s. 153C of the Act. Thus, we notice that the assessee was constrained to offer the gift receipts as his income, since the relevant documents to support the claim could not be obtained after passage of considerable years. Considering these factual aspects, we are of the view that the explanations offered in this regard and the consequential surrender made are on bonafide ones. Under these set of facts, we are of the view that the assessee has discharged burden placed upon him under Explanation-1 to section 271(1)(c) of the Act. Accordingly, we set aside the orders passed by learned CIT(A) for both the years under consideration and direct the Assessing Officer to delete the penalty levied u/s. 271(1)(c) of the Act in both the years.
In the result, both the appeals filed by the assessee are allowed.
Order has been pronounced in the Open Court on 13.6.2016.