TUSHAR MAHENDRA PAREKH, MUMBAI V. Commissioner of Income-tax (Appeals) Income Tax Department, DELHI

ITA 3216/MUM/2024

• Counselvise Citation: 321619914 RSA 2024
• Duration Of Justice: 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 06-08-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 17-06-2024
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.D.CHOUGULE
• Assessee Lawyers: BHAVESH PRAFULBHAI SHAH
• Keywords: Unexplained cash credit; Capital receipt
• Section: 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “E”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER AND SHRI RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER ITA No.3216/M/2024 Assessment Year: 2013-14 Shri Tushar Mahendra Parekh, 901, Nellai Heights, ST Road, Swastik Park, Chembur, Mumbai Maharashtra-400 071 PAN: AABPP4751A Vs. Commissioner of Income Tax (Appeals), National Faceless Appeal Center (NFAC), Income Tax Department, Delhi (Appellant) (Respondent) Present for: Assessee by : Shri Bhavesh Prafulbhai Shah, CA Revenue by : Shri P.D. Chougule, (Addl. CIT) Sr. DR. Date of Hearing : 07 . 08 .2024 Date of Pronouncement : 19 . 08 .2024 O R D E R Per : Narender Kumar Choudhry, Judicial Member: This appeal has been preferred by the Assessee against the order dated 16.04.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2013-14. 2. Considering the delay of three days in filing of the instant appeal, which is neither intentional nor malafide but occurred due to illness of the Assessee, the same is condoned. 3. Coming to the merits of the case, we observe from the penalty order that the Assessing Officer (AO) vide order dated 11.03.2016 u/s 143 of the Act determined the total income of the Assessee at ITA No.3216/M/2024 Shri Tushar Mahendra Parekh 2 Rs.1,51,59,015/- as against the returned income of Rs.6,31,820/- and made the additions totaling to Rs.1,35,10,887/- on account of disallowances u/s 41(i) and 41(a)(ia) of the Act and unexplained cash credit and corpus fund respectively to the tune of Rs.7,51,308/-, Rs.1,32,875/-, Rs.1,30,85,423/- and Rs.2,92,589/-. 4. The AO though not initiated the penalty proceedings qua disallowance to the tune of Rs.7,51,308/- u/s 41 of the Act, however, initiated the penalty proceedings qua rest of the additions u/s 271(1)(C) of the Act for concealment of income and furnishing of inaccurate particular of income. 5. The Assessee, being aggrieved with the assessment order and additions made by the AO, has preferred first quantum appeal before the Ld. CIT-28, Mumbai, who vide order dated 30.03.2017 dismissed the appeal of the Assessee. 6. Thereafter, on receipt of Ld. CIT(A)’s order, the AO further by issuing a show cause notice on 16.01.2019 show caused the Assessee, “as to why penalty u/s 271(1)(1) of the Act should not be levied for concealment/furnishing inaccurate particulars of income”. 7. The Assessee in response to the show cause, vide letter/submission dated 15.01.2019 filed on 21.01.2019 Tapal explained the facts of the case qua penalty proceedings. The submission filed by the Assessee has been considered by the AO, however, not found acceptable and ultimately vide penalty order dated 01.03.2019 levied the penalty of Rs.41,33,806/- being 100% of the tax sought to be evaded for concealment of income to the tune of Rs.1,33,78,012/- (Rs.1,30,85,423/- on account of unexplained cash credits and Rs.2,92,589/- on account of corpus fund). ITA No.3216/M/2024 Shri Tushar Mahendra Parekh 3 8. Subsequently the Hon’ble co-ordinate Bench of the Tribunal vide order dated 28.08.2019 in quantum appeal i.e. ITA No.3671 & 3672/M/2018 has remanded the issues pertaining to the additions made on account of unexplained cash credit to the tune of Rs.1,30,85,423/-, however, affirmed the addition to the extent of Rs.2,92,589/- on account of capital receipt and therefore the Assessee has claimed that as substantive additions are not in existence because of the aforesaid order passed by the Hon’ble co-ordinate Bench of the Tribunal, hence the penalty levied is un-sustainable. 8. On the contrary, Ld. D.R. though the supported the impugned order, however not refuted the aforesaid facts. 9. We have heard the parties and perused the material available on record. Admittedly, the penalty to the tune of Rs.41,33,806/- was levied being 100% of the tax sought to be evaded on account of unexplained cash credit of Rs.1,30,85,423/- and corpus fund of Rs.2,92,589/- and the co-ordinate Bench of the Tribunal vide order dated 20.08.2019 has already remanded the issue qua unexplained cash credit of Rs.1,30,85,423/- the addition which is substantive in nature and on the basis of which, as well as the addition of Rs.2,92,589/- on account of corpus fund the penalty was levied. As the foundation for levy of penalty has already been collapsed, hence the penalty on the amount of Rs.1,30,85,423/- does not survive. 10. Coming to the affirmation of addition of Rs.2,92,589/- on account of corpus fund by the Hon’ble Tribunal, we observe that in the penalty order the AO has not dealt with this addition for levy of penalty independently, but in fact before levying the penalty considered all the additions conjointly . As the substantive addition has already been set aside and issue pertaining to the same has already been remanded to the file of the AO for decision afresh, hence the penalty on account of corpus fund of Rs.2,92,589/- is also un-sustainable. ITA No.3216/M/2024 Shri Tushar Mahendra Parekh 4 11. Consequently, the penalty under consideration is deleted, however, with liberty to the AO to initiate the penalty proceedings afresh, if desires so in the eventuality of making the addition afresh on account of unexplained cash credit. 12. In the result, the appeal filed by the Assessee stands allowed. Order pronounced in the open court on 19.08.2024. Sd/- Sd/- (RATNESH NANDAN SAHAY) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER * Kishore, Sr. P.S. Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy/Asstt. Registrar, ITAT, Mumbai.