DR. SURJIT SINGH,ROPAR vs. ITO, W-2(2), ROPAR

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ITA 310/CHANDI/2018Status: DisposedITAT Chandigarh11 June 2018AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the additions were made on an estimation basis and there was no specific finding of concealment of income. The assessee had also surrendered the interest income. Therefore, the penalty levied was deleted.

What were the facts?

The Assessing Officer made additions to the assessee's income on account of unexplained cash deposits and interest income. The assessee accepted these quantum additions but appealed against the penalty imposed under Section 271(1)(c).

What were the issues?

Whether penalty under Section 271(1)(c) can be levied on income added on estimation basis without a specific finding of concealment.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DIVISION BENCH ‘SMD’, CHANDIGARH

Before: SHRI SANJAY GARG & DR. B.R.R. KUMAR

For Appellant: Shri. Parikshit Aggarwal
For Respondent: Shri. Tarun Kushwaha
Hearing: 04/06/2018Pronounced: 11/06/2018

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.

2.

The Assessee has raised the following grounds of appeal:

1.

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).

3.

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.

4.

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.

5.

The quantum additions have been accepted by the assessee and no

appeals have been filed.

6.

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.

7.

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.

8.

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.

9.

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

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