R.RAJAKUMAR,CHENNAI vs. ACIT, CHENNAI

This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-VIII, Chennai, dated 12.04.2013 relevant to the assessment year 2008-09.

Facts in brief are that the assessee is a dealer in tiles and marbles. The assessee had filed a return of income for the assessment year under consideration by declaring a total income of ` 9,54,933/-. The return filed by the assessee was processed under Section 143(1) of the Income-tax Act, 1961 (in short 'the Act').

The assessee has submitted before the A.O., during the course of penalty proceedings, that the reason for difference between the actual sale value of the flats sold and admitted sale value of the same flats is that the cash receipt of ` 5,44,500/- was inadvertently omitted to be recorded by the Accountant as the copy of the sale document was not available at the time of finalization of accounts. The cash receipt information was also not available. In respect of the difference between the actual bank balance in Karnataka Bank as per the bank statement and the bank balance shown by the assessee, the assessee admitted his inability due to the absence of particulars. The assessee further submitted that he has no intention or wilful omission to conceal any income. The mistake committed by him was inadvertent mistake. However, the A.O. was not agreeing with the explanation offered by the assessee and levied penalty under Section 271(1)(c) of the Act.

On being aggrieved, the assessee carried the matter in appeal before the Ld. CIT(Appeals) where the Ld. CIT(Appeals) confirmed the order of the A.O.

On being aggrieved, the assessee carried the matter in appeal before the Tribunal. The Ld.counsel for the assessee submitted that the difference between the actual sale value of flats sold and admitted sale value of flats was inadvertently omitted to be recorded by the Accountant because the copy of the sale document was not available at the time of finalization of the accounts. It is only an inadvertent mistake. The copies of the sale deeds were purchased before the A.O. Based on these copies filed by the assessee only the A.O. came to a conclusion that there is a difference of amounts. In sofar as bank balance in the Karnataka Bank and bank balance shown by the assessee in the absence of particulars, there is a minor difference.

On the other hand, the Ld. D.R. strongly supported the orders of the authorities below.

We have heard both sides and perused the records and gone through the orders of the authorities below. After considering the entire facts and circumstances of the case, we find that it is not a fit case to levy penalty under Section 271(1)(c) of the Act. Even it is not the case of the A.O. that the explanation given by the assessee is false. The A.O. simply rejected the explanation and invoked the provisions of Section 271(1)(c) of the Act. We, therefore, cancel the penalty and allow the appeal of the assessee.

In the result, the appeal filed by the assessee is allowed.