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Income Tax Appellate Tribunal, DIVISION BENCH ‘SMD’, CHANDIGARH
Before: SHRI SANJAY GARG & DR. B.R.R. KUMAR
PER DR.B.R.R.KUMAR, A.M.:
The present appeal has been filed by the Assessee against the order of
the Ld. CIT(A)-2, Amritsar Camp at Chandigarh dt. 27/09/2017.
The Assessee has raised the following grounds of appeal:
That the impugned order is against facts and law. 2. That on law, facts and circumstances of the case, the Worthy CIT(A) was not justified in confirming the action of the Ld. Assessing Officer for imposing the penalty of Rs. 1,58,370/- under section 271(1)(c) of the Act on addition of Rs. 4,65,893/- whereby the addition of Rs. 3,89,950/- was made on account of unexplained cash deposit and Rs. 75,943/- on account of interest income from bank. 3. That on the facts, circumstances and legal position of the case, the impugned penalty order deserves to be quashed since the appellant has not been charged with any specific limb of Section. 271(1)(c).
Brief facts of the case are that based on the cash deposits in the bank
accounts maintained by the assessee the peak deposit of cash was determined
at Rs. 17,19,950/- out of which the Assessing Officer found the explanation of the
assessee to be true pertaining to the source of the amount to the tune of Rs.
13,30,000/-, thus holding that the amount of Rs. 3,89,950/- remained unexplained
and brought this amount of Rs. 3,89,950/- to tax.
The assessee’s explanation regarding the sources of Rs. 3,89,950/- as being
a income from agriculture land of Rs. 12,70,750/- from 7.5 Acres has not been
accepted by the Assessing Officer on the grounds that the agriculture income
could be only @ Rs. 25,000/- per acre (Rs. 1,75,000 for 7.5 Acres) as against the
claim of the assessee. Further the Assessing Officer has made addition of Rs.
75,943/- on account of interest income from bank.
The quantum additions have been accepted by the assessee and no
appeals have been filed.
Before us, the Ld. AR argued that the penalty was levied on the amount
determined as concealed income on estimate basis refuting the submission of
the assessee pertaining to receipt of agriculture income and no penalty is
leviable on the income determined on estimate basis as the assessee has
neither concealed the particulars of income or furnished inaccurate particulars
of such income.
The Ld. DR argued that the agriculture income was not shown in the return
of income at all and hence the concealment is proved. He further argued that
the present case is not only of estimation of income but it is a case where the
Assessing Officer had detected various discrepancies and which he has listed in
his assessment order and only after that the assessee agreed for calculation of
his income on estimate basis. He submitted that since the assessee was
cornered and had no reply to the observations made by Assessing Officer,
therefore, he surrendered by agreeing to the estimation on percentage basis
and therefore, the difference in returned income and assessed income is
necessarily a concealed income and the authorities below has rightly imposed
and upheld the penalty.
We have gone through the arguments and find that the agriculture
income was estimated by the Assessing Officer @ Rs. 25,000/- which lead to the
quantum addition. The Assessing Officer accepted the contention of the
assessee also without making any further investigation either with regard to
income estimated or surrendered. There is no specific finding that concealment
of income in the present case. The additions made on estimation basis do not
tantamount to concealment of particulars of income or furnishing inaccurate
particulars of such income. Hence keeping in view that the addition has been
made on estimation basis, the assessee has surrendered the interest income
before the Assessing Officer, the Assessing Officer has not done any
investigation during the penalty proceeding and based on the ratio laid down
by Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Iqbal Singh & Co.
(2009) 180 Taxmann 355 and CIT Vs. Modi Industrial Corporation [2010] 34 DTR
158, we here by direct that penalty levied be deleted.
In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court.
Sd/- Sd/- (SANJAY GARG) (DR. B.R.R. KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated : 11/06/2018 AG Copy to: 1.The Appellant, 2. The Respondent, 3. The CIT(A), 4. The CIT, 5. The DR