Sunita Joshi, Lucknow vs Assessee

Appellant by: Shri. B. P. Yadav, Cost Accountant Respondent by: Smt. Swati Ratna,D.R. Date of hearing: 16 04 2015 Date of pronouncement: 23 04 2015

ORDER

PER SUNIL KUMAR YADAV:

This appeal is preferred by the assessee against the order of the ld. CIT(A) confirming the penalty of Rs.78,000/- levied under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter called in short "the Act") in respect of income from other sources of Rs.2.50 lakhs.

2. During the course of hearing, the ld. counsel for the assessee has invited our attention to the fact that the assessee is a salaried employee working as Executive G.M. of M/s Jai Prakash Associates Limited. The assessee had given a loan of Rs.2.50 lakhs on 4.2.2008 to a friend, Ms. Ishita Dutta from her bank account in HDFC bank and in repayment Ms. Ishita Dutta returned to the assessee an amount of Rs.5 lakhs by cheque on 14.7.2009 which was credited to the assessee's bank account. The excess amount received by the assessee in the nature of interest or gift or :-2-:

both, inadvertently remained to be included in her return of income for the subject assessment year. The aforesaid error/omission was clearly extraordinary and isolated nature of the receipt. Therefore, there could hardly be any deliberate or willful concealment of an income amounting to Rs.2.50 lakhs on her part. The Assessing Officer was not convinced with the explanations of the assessee and he levied the penalty for concealment of income and furnishing of inaccurate particulars under section 271(1)(c) of the Act at Rs.78,000/-.

3. The assessee preferred an appeal before the ld. CIT(A), but did not find favour with him.

4. Now the assessee is before the Tribunal with the submission that this amount was received through cheque and there is no intention of the assessee to conceal this receipt, as it was reflected in his bank statement. Before the Assessing Officer, assessee has candidly admitted that this excess amount of Rs.2.50 lakhs is in the nature of interest received by the assessee from her debtor. Accordingly the addition was made by the Assessing Officer and assessee has paid tax thereon, as it was not challenged before the ld. CIT(A). The ld. counsel for the assessee has further contended that since the assessee was a salaried employee and was under a bona-fide belief with regard to the nature of receipt whether it is an interest receipt or gift from her friend, Ms. Ishita Dutta. Therefore, penalty under section 271(1)(c) of the Act should not be levied.

5. The ld. D.R., on the other hand, has placed reliance upon the order of the ld. CIT(A).

6. Having carefully examined the orders of the lower authorities in the light of the rival submissions, we find that the assessee has received excess amount from her friend and excess amount was considered by her, before the Assessing Officer, as interest income and she has also paid tax thereon. :-3-:

Undisputedly this amount was received through cheque, therefore, it cannot be a case of concealment of income, as it has been reflected in the bank statement of the assessee. Moreover, the assessee was under a bona-fide belief with regard to the nature of receipt. Therefore, under these circumstances, we are of the view that penalty under section 271(1)(c) of the Act is not sustainable. We accordingly set aside the order of the ld. CIT(A) and delete the penalty of Rs.78,000/-. Accordingly, the appeal of the assessee stands allowed.

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

Order was pronounced in the open court on the date mentioned on the captioned page.

Sd/- S Sd/- [A. K. GARODIA] [SUNIL KUMAR YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER

DATED: 23rd April, 2015 JJ:1604

Copy forwarded to: 1. Appellant 2. Respondent 3. CIT(A) 4. CIT 5. DR Assistant Registrar