Sasikumar V.Pillai, Mumbai vs Assessee
- CitationI.T.A. No.5382/Mum/2012
Ratio decidendi
The rule this decision rests on
The assessee who is called upon under Explanation 1 to section 271(1)(c) of the Income Tax Act must, in the first instance, furnish relevant materials, documents and explanations substantiating the claim in respect of an addition; a bare technical objection to the penalty notice is not such an explanation, and where that initial onus is not discharged the burden of proving concealment does not shift to the Revenue. Where the addition relates to cash deposits in the assessee's bank account, the rule laid down in Reliance Petro Products does not apply, because that decision is confined to situations differing from unexplained cash deposits of this kind.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
Mr.Sasikumar V Pillai, बनाम/ Income Tax Officer-23(3)(4), F-35, Sharad Industrial Estate, C-10, Vs. Lake Road, Pratyakshakar Bhavan, Bhandup (W), Bandra-Kurla Complex, Mumbai-400078 Bandra (E), Mumbai-400051.
(अपीलाथ /Appellant) .. ( यथ / Respondent)
थायी ले ख ा सं . /जीआइआर सं . /PAN/GIR No. :AABPP6472C
अपीलाथ ओर से / Revenue by: Shri S C Tiwari
यथ क ओर से/Assessee by : Shri Neil Philip
सन ु वाई क तार ख / Date of Hearing : 19.11.2014 घोषणा क तार ख /Date of Pronouncement : 9.1.2015
आदे श / O R D E R
Per B.R.BASKARAN, Accountant Member:
The assessee is challenging the order dated 15.6.2012 passed by Ld CIT(A)-11 confirming the penalty levied u/s 271(1)(c) of the Act for assessment year 2007-08.
2. The facts in brief are that the assessee is engaged in the business of manufacture of metal components, cans, metal cartridges and plastic components. The assessing officer noticed that the assessee has found to have been made cash deposits aggregating to Rs.35,17,320/- in the bank account of the assessee. The assessee simply submitted that the same represents sale proceeds of scrap and process rejections amounting to Rs.9,71,186/-. Not satisfied with the said explanation, the AO assessed the above said amount of ITA No.5382/M/2012 2
Rs.35,17,320/- as income of the assessee. In the appellate proceedings, the Ld CIT(A) considered 15% of the turnover declared by the assessee as sales pertaining to scraps and rejections, i.e., Rs.5,92,000/- and accordingly considered the amount to the extent of Rs.5,92,000/- as explained. Accordingly the Ld CIT(A) sustained the addition to the extent of Rs.29,25,320/- after giving relief of Rs.5,92,000/-.
3. In the penalty proceedings, the assessee did not furnish any explanation and hence the assessing officer levied penalty equivalent to 100% tax on the addition of Rs.29,25,320/- sustained by the Ld CIT(A). In the absence of any explanation, the Ld CIT(A) also confirmed the penalty. Aggrieved, the assessee has filed this appeal before us.
4. We have heard the rival contentions and perused the record. During the course of hearing, the Ld A.R furnished before us a letter dated January 6, 2009 addressed to the Income tax officer and submitted that the assessee had furnished explanation. However, a perusal of the said letter shows that the assessee had raised certain technical objections only to the penalty notice issued by the assessing officer. Accordingly, We find that the assessee has failed to furnish any explanation with regard to the addition of Rs.29,25,320/- confirmed by the Ld CIT(A).
5. There should not be any dispute that the Explanation 1 to section 271(1)(c) provides for treating the additions as 'deemed concealment of income' and the said Explanation also places initial onus upon the assessee to furnish relevant materials, documents and explanations. The Hon'ble Supreme Court in the case of K.P. Madhusudhan (251 ITR 99) and also in the case of MAK Data Pvt Ltd (38 taxmann.com 448) has in clear terms held that the onus is on the assessee to substantiate his claim by cogent and reliable evidence. Only when the initial onus placed by Explanation-1 to Section 271(1)(c) is discharged by the assessee, the burden of proving concealment shifts on Revenue.
6. In the instant case, we notice that the assessee has failed to discharge the initial onus placed upon him by Explanation 1 to section 271(1)(c) of the Act. During the course of hearing, the Ld A.R placed reliance on the decision of Hon'ble Supreme Court in the case of Reliance Petro Products (322 ITR 158). In ITA No.5382/M/2012 3
our view, the addition made in the instant case pertains to cash deposits made in the bank account and hence we are of the view that the Ld CIT(A) has rightly held that the decision rendered in the case of Reliance Petro Products is not applicable to the facts of the present case. Hence, we have no other option but to confirm the order of Ld CIT(A) on this issue.
7. In the result, the appeal of the assessee is dismissed.
The above order was pronounced in the open court on 9th Jan, 2015.
घोषणा खल ु े यायालय म दनांकः 9th Jan, 2015 को क गई ।
sd sd
( वजय पाल राव/VIJAY PAL RAO) (बी.आर. बा करन,/ B.R. BASKARAN) या यक सद य / Judicial Member लेखा सद य/Accountant Member
मुंबई Mumbai: 9th Jan,2015.
व. न.स./ SRL , Sr. PS
आदे श क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. आयकर आयु त(अपील) / The CIT(A)- concerned 4. आयकर आयु त / CIT concerned 5. वभागीय त न ध, आयकर अपील य अ धकरण, मंब ु ई/ DR, ITAT, Mumbai concerned 6. गाड फाईल / Guard file.
आदे शानुसार/ BY ORDER, true copy सहायक पंजीकार (Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई /ITAT, Mumbai
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