Asifhusen J.Male, Anand vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL " B " BENCH, AHMEDABAD (BEFORE SHRI SHAILENDRA Kr. YADAV, J.M. & SHRI ANIL CHATURVEDI, A.M.)

I.T. A. No. 3129/AHD/2011 (Assessment Year: 2005-06)

Shri Asifhusen J. Malek V/S Dy. Commissioner of Income Prop: Giriraj Transport, State Tax, Kheda Circle, Nadiad. Highway, Po: Sevxalia- 388240 (Appellant) (Respondent)

PAN: ACWPM4166B

Appellant by : Shri Aseem Thakkar, A.R. Respondent by : Shri Roop Chand, Sr. D.R.

(आदे श)/ORDER

Date of hearing : 10-04-2015 Date of Pronouncement : 17 -04-2015

PER SHRI ANIL CHATURVEDI,A.M.

1. This appeal filed by the Assessee is against the order of CIT(A)-IV, Baroda dated 14.09.2011 for A.Y. 2005-06.

2. The relevant facts as culled out from the material on record are as under.

3. Assessee is an individual stated to be engaged in the business of transportation. Assessee filed his return of income for A.Y. 2005-06 on 30.11.2005 declaring total income of Rs. 1,59,770/-. The case was selected for scrutiny and thereafter the assessment was framed under section 143(3) 2 ITA No 3129/AHD/2011 . A.Y. 2005-06 vide order dated 28.12.2007 and the total income was determined at Rs. 9,61,480/- by interalia disallowing the claim of bad debts (Rs. 5,69,606/-), disallowance u/s 40A(3) (Rs. 1,03,712/-) and agricultural income treated as income from other source u/s.68 of (Rs. 1,00,000/-). Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 11.05.2009 deleted the addition on account of bad debts but sustained the addition made u/s. 40A(3) and agricultural income. On the additions that were confirmed by ld. CIT(A), A.O vide order dated 25.03.2010 levied penalty of Rs. 62,330/- u/s. 271(1)(c) of the Act. Aggrieved by the order of A.O., Assessee carried the matter before ld. CIT(A) who vide order dated 14.09.2013 deleted the penalty on the disallowance made u/s. 40A(3) but upheld the penalty on the addition of agricultural income treated as income of other sources Rs. 1,00,000/- by holding as under:-

4. With regard to the addition of Rs. 1,00,000/- , the A.O. in my opinion has correctly levied the penalty on such addition . The undisputed fact is that the appellant has credited Rs.1,00,000/- as agricultural income in his capital account and therefore onus was on him to prove genuineness of such income by filing cogent evidences . However the appellant has failed to prove that the above income of Rs. 1,00,000/- was on account of agricultural activities carried on by him during the year under consideration. The appellant could not furnish the details of exact area of land cultivated, agricultural crops produced and sale bills of such agricultural crops sold. The appellant had merely furnished the photocopy of 7/12 and 8 A 'UTARA' and the same were not sufficient to establish that there was actually agricultural activities carried out by the appellant and as a result of the same, the above amount of Rs. 1,00,000/- was earned by him. Thus the appellant had filed inaccurate particulars of income in respect of above income of Rs.

1,00,000/- and therefore penalty levied by the A.O. u/s 271(1) ( c) on such addition is hereby confirmed.

4. Aggrieved by the aforesaid order of ld. CIT(A), Assessee is now in appeal before us.

5. Before us, ld. A.R. reiterated the submissions made before A.O and ld. CIT(A) and further submitted that during the course of assessment 3 ITA No 3129/AHD/2011 . A.Y. 2005-06 proceedings, Assessee had submitted the proof of agricultural land holding, Certificate from Government Officer that he had income from agriculture and the holding of agricultural land has not been doubted by A.O. He further submitted that Assessee had also furnished the photo copies of 7/12 and "8A Utara" evidencing the holding of agricultural land and the agricultural activities. He therefore submitted that merely because the submissions of the Assessee have not been accepted and the additions have been made u/s. 68, it is not necessary that penalty u/s. 271(1)(c) be levied. He further submitted that Assessee has not concealed any particulars of income nor has furnished inaccurate particulars of income. He therefore submitted that penalty be deleted. The ld. D.R. on the other hand supported the order of A.O and ld. CIT(A).

6. We have heard the rival submissions and perused the material on record. In the present case, the issue is with respect to levy of penalty u/s. 271(1)(c) on the addition of Rs. 1,00,000/- which was shown by the Assessee as agricultural income and which was not accepted by the A.O and was therefore treated by him as income from other sources. It is an undisputed fact that Assessee had furnished the copy of 7/12 and 8A Utara evidencing the holding of land and the holding of land has not been doubted by the A.O. It is also not a case where Assessee has furnished inaccurate particulars of income or concealed the particular of income. Further, for levy of penalty there has to be evidence or material to show that the Assessee has deliberately furnished inaccurate particulars of income. It also a settled law that penalty proceedings are entirely distinct from assessment proceedings and howsoever relevant and good the findings in assessment proceedings may be, they are not conclusive as far as penalty proceedings are considered.

4 ITA No 3129/AHD/2011 . A.Y. 2005-06

It is also well settled that the parameters of judging the justification for addition made in assessment case of an assessee is different from the penalty imposed on account of concealment of income or filing inaccurate particular of income and that certain disallowances/additions could legally be made in assessment proceedings on the preponderance of probabilities but no penalty could be imposed u/s. 271(1)(c) of the Act on the preponderance of probabilities and the Revenue has to prove that the claim made by the Assessee was not genuine. Considering the totality of facts, we are of the view that the present case is not a fit case for levy of penalty and we therefore direct its deletion. Thus the ground of Assessee is allowed.

7. In the result, the appeal of Assessee is allowed.

Order pronounced in Open Court on 17 - 04 - 2015.

Sd/- Sd/- (SHAILENDRA Kr. YADAV) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER Ahmedabad. TRUE COPY Rajesh

Copy of the Order forwarded to:- 1. The Appellant. 2. The Respondent. 3. The CIT (Appeals) - 4. The CIT concerned. 5. The DR., ITAT, Ahmedabad. 6. Guard File. By ORDER

Deputy/Asstt.Registrar ITAT,Ahmedabad