Manokanta Saraf, Surat vs Assessee

आयकर अपील सं./I.T.A. No.2384/Ahd/2011 ( नधा रण वष / Assessment Year : 2007-08) Smt. Manokanta Saraf बनाम/ The Income Tax Officer L/H of Late Shri Rajkumar Vs. Ward-3(1) Saraf Surat B-505, Aashirwad Park City Light, Parle Point Surat - 395 008 थायी ले खा सं . /जीआइआर सं . / PAN/GIR No. : AMCPS 0195 E (अपीलाथ# /Appellant) .. ($%यथ# / Respondent)

अपीलाथ# ओर से / Appellant by : None (written submissions) $%यथ# क' ओर से/Respondent by : Shri M.K. Singh, Sr.DR

ु वाई क' तार*ख / सन Date of Hearing 23/03/2015 घोषणा क' तार*ख /Date of Pronounce ment 10/04/2015

आदे श / O R D E R

PER SHRI KUL BHARAT, JUDICIAL MEMBER :

This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-II, Surat ('CIT(A)' in short) dated 11/07/2011 pertaining to Assessment Year (AY) 2007-08. The Assessee has raised the following grounds of appeal:-

ITA No.2384/Ahd/2011 Smt. Manokanta Saraf vs. ITO Asst.Year - 2007-08 -2-

1] That on the facts and in the circumstances of the case, the Learned CIT(Appeal) erred in confirming the penalty of Rs.1,77,968/- as levied U/s.271(1)(c) of the Income Tax Act.

2] The appellant reserve his right to add, alter or delete any of the grounds of appeal at the time of hearing.

2. Briefly stated facts are that the case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 31/12/2009, thereby the Assessing Officer (AO in short) made addition u/s.69A of the Act amounting to Rs.6,52,992/- and also initiated penalty u/s.271(1)(c) of the Act. The assessee preferred an appeal (quantum appeal) before the ld.CIT(A), who after considering the submissions of the assessee, restricted the addition to Rs.1,57,668/-. However, meanwhile, the AO levied penalty amounting to Rs.1,77,968/- on addition of Rs.6,52,992/-. The assessee preferred an appeal before the ld.CIT(A) against the penalty order dated 29/06/2010. The ld.CIT(A) vide his order dated 11/07/2011 in penalty appeal confirmed the penalty. The assessee is aggrieved by the confirmation of penalty in this appeal.

3. No one appeared on behalf of the assessee. However, written submissions are placed on record. Therefore, the hearing of the appeal was taken up in the absence of the assessee. In the submission dated 06/01/2014, it is submitted by the AR of the assessee that in quantum ITA No.2384/Ahd/2011 Smt. Manokanta Saraf vs. ITO Asst.Year - 2007-08 -3-

proceedings, the addition of Rs.6,52,992/- was reduced to Rs.1,57,668/- by the ld.CIT(A) vide order dated 15/10/2013. The said order of the ld.CIT(A) is placed on record. It is submitted by the AR of the assessee that the legal heir of the assessee before the ld.CIT(A) also tried to explain that difference of peak as remains to be explained was of Rs.1,57,668/- can also be explained from the availability of cash in the hand of wife of the assessee but the legal heir fairly accepted before the Ld.CIT(A) that since her husband was expired. Hence, she is not in a position to comments on the difference. It is submitted that the assessee has expired on 23/01/2011 and there was no earning member left in his family. Under these facts, a lenient view may be adopted. The legal heir of the assessee Smt.Manokanta Saraf has filed another written submission dated 20.3.2015. It is submitted that the legal heir could not explain the source of deposit of Rs.1,57,668/- in the bank account maintained in the name of Hunny Saraf and Varnik Saraft before the CIT(A) due to fact that the bank accounts were operated by the assessee (Late Shri Rajkumar Saraf) and his legal heir, wife of the assessee, was not aware the daily affairs of assessee's business activity. It is submitted that due to unfortunate death of assessee on 23/01/2011, assessee's wife (Smt.Manokanta Saraf - legal heir) was not in a position to explain the amount of Rs.1,57,668/-. It is further submitted that this sum could also be explained.

ITA No.2384/Ahd/2011 Smt. Manokanta Saraf vs. ITO Asst.Year - 2007-08 -4-

3.1. On the contrary, ld.Sr.DR supported the orders of the authorities below.

4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. It is not disputed that the ld.CIT(A) has reduced the addition to Rs.1,57,668/- (out of addition of Rs.6,52,992 - Rs.4,95,324). Looking to the totality of the facts of the case, we are of the considered view that the authorities below were not justified in levying the penalty. Therefore, we hereby direct the Assessing Officer to delete the penalty.

5. In the result, the appeal of the assessee is allowed.

Order pronounced in the Court on Friday, the 10th day of April, 2015 at Ahmedabad.

Sd/- Sd/- (एन.एस.सैनी) (कुल भारत) लेखा सद य या यक सद य ( N.S. SAINI ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER

Ahmedabad; Dated 10/ 04 /2015

ट*.सी.नायर, व. न.स./T.C. NAIR, Sr. PS ITA No.2384/Ahd/2011 Smt. Manokanta Saraf vs. ITO Asst.Year - 2007-08 -5-

आदे श क" # त%ल&प अ'े&षत/Copy of the Order forwarded to :

1. अपीलाथ# / The Appellant

2. $%यथ# / The Respondent.

3. संबं4धत आयकर आयु6त / Concerned CIT

4. आयकर आय6 ु त(अपील) / The CIT(A)-II, Surat

5. 7वभागीय $ त न4ध, आयकर अपील*य अ4धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड; फाईल / Guard file.

आदे शानुसार/ BY ORDER,

स%या7पत $ त //True Copy//

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad

1. Date of dictation .. 24.3.15(dictation-pad 7- pages attached at the end of this File)

2. Date on which the typed draft is placed before the Dictating Member ..25.3.15

3. Other Member...

4. Date on which the approved draft comes to the Sr.P.S./P.S.................

5. Date on which the fair order is placed before the Dictating Member for pronouncement......

6. Date on which the fair order comes back to the Sr.P.S./P.S.......10.4.15

7. Date on which the file goes to the Bench Clerk.....................10.4.15

8. Date on which the file goes to the Head Clerk..........................................

9. The date on which the file goes to the Assistant Registrar for signature on the order..........................

10. Date of Despatch of the Order..................