MOHD ZUBAIR H QURESHI,NAVI MUMBAI vs. ITO 13(1)(1), MUMBAI

During hearing of this appeal, we have heard Ms. Sneha R. Sarbhushan, ld. counsel for the assessee and Shri Randhi Gupta, ld. DR. The crux of argument advanced on behalf of the assessee is that neither there is concealment of income nor furnishing of inaccurate particulars of such income, as the assessee, duly explained the receipt of Rs.2 lakh from M/s Raien Trading Corporation alongwith the genuineness of the transaction and the identity. On the other hand, the ld. DR, defended the imposition as well as confirmation of penalty.

2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee declared taxable income of Rs.2,05,220/- in his return annexed with tax audit report in form no. 3CD and 3CB as per the provisions of section 44AB of the Act. The return was processed u/s 143(1) of the Act. Subsequently, the return was selected for scrutiny as per computerized procedure. The assessment was completed u/s 143(3) of the Act determining the total income at Rs.40,55,840/- by making the addition of Rs.5,45,000/- as unexplained cash credit, Rs.11,70,000/- again as unexplained cash credit and Rs.21,35,621/- as addition u/s 40A(iii) of the Act. The assessee preferred appeal before the ld. Commissioner of Income Tax (Appeals), wherein, addition for loan of Rs.2 lakh was confirmed and the balance addition of Rs.3,45,000/- was deleted (out of addition of Rs.4,45,000/-). The department filed appeal before the 3 Mohd. Zubair H. Quereshi Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) and the assessee filed cross objections. The Tribunal set aside the matter to the file of the Assessing Officer. The assessee filed miscellaneous application before the Tribunal with respect to order dated 14/05/2008, setting aside the issue of disallowance of Rs.21,35,621/-, made u/s 40A(iii) of the Act. The order was recalled. The stand of the Revenue is that the assessee did not file confirmation of loan from Hikmatulla M. Zuber for the amount of Rs.2 lakh. Penalty proceedings were initiated u/s 271(1)(c) of the Act. Before us, the assessee has filed an affidavit that Md. Zuber H. Qureshi and Hikmatulla Mohammed Zubair are one and the same person and the business is run in the name of Hikmatulla Mohammed Zubair HMZ Impex. In this affidavit, it has been confirmed that during A.Y. 2002-03, loan of Rs.2 lakh was received from Raien Trading Corporation vide cheque no.78181 dated 04/02/2002 and copy of confirmation and bank statement highlighting the long transactions forms part of the paper book (pages 35 & 43). The ld. counsel explained that these documents were also filed before the Revenue authorities. In view of this factual position, though addition was made and no appeal was filed by the assessee against the quantum addition, therefore, we are of the view that quantum and penalty proceedings are all together different. The addition was confirmed by the authorities on the basis that loan confirmation with respect to Rs.2 lakh could not be filed by the assessee. Totality of facts, clearly indicates that at least the penalty of 4 Mohd. Zubair H. Quereshi Rs.61,200/- imposed u/s 271(1)(c) of the Act cannot survive. We are not commenting anything on the quantum addition as no appeal was filed by the assessee. Thus, we direct the Assessing Officer at least to delete penalty imposed to the tune of Rs.61,200/- as the assessee neither concealed the income nor furnished inaccurate particulars of such income. Finally, the appeal of the assessee is allowed. This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 20/10/2015.