ANIL PATODIA, MUMBAI V. ASST CIT CEN CIR 29, MUMBAI

ITA 5765/MUM/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7880 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 14-08-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 12-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: MIHIR A TANNA
• Keywords: Unexplained cash credit; Search and seizure; Source of fund; Wrong claim; Corroborative evidences
• Section: 143(3); 153A; 68; 132

Judgement Text

ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 1 IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, M UMBAI BEFORE SHRI R.C SHARMA , AM AND SHRI RAVISH SOOD, JM ITA NO. 5765 & 5766/MUM/2014 ( / ASSESSMENT YEAR:2006 - 07 & 2007 - 08) ANIL PATODIA,SHREE SHAKAMBHARI CORPORATE PARK, 156 - 158 CHAKRAVARTI ASHOK COMPLEX, 18 NAGAR, ANDHERI (EAST), MUMBAI 400 099. / VS. ASST. COMMISSIONER OF INCOME - TAX, CENTRAL CIRCLE - 29, MUMBAI. ./ ./ PAN NO. AAJPB9774D ( / APPELLANT) : ( / RESPONDENT ) / APPELLANT BY : SHRI MIHIR A. TANNA, A.R. / RESPONDENT BY : SHRI RAJESH KUMAR YADAV, D.R. / DATE OF HEARING : 06.12.2017 / DATE OF PRONOUNCEMENT : 27 .12.2017 / O R D E R PER RAVISH SOOD, JUDICIAL MEMBER: THE PRESENT APPEALS FILED BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDERS PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 40, MUMBAI, DATED 02.06.2014, EACH FOR A.YS 2006 - 07 AND 2007 - 08, WHICH IN ITSELF ARISES FROM THE ORDERS PASSED BY THE A.O UNDER SEC . 271(1)(C) OF THE INCOME - TAX ACT, 1961 (FOR SHORT ACT), DATED 18.09.2013 AND 20.09.2013, RESPECTIVELY. THAT AS COMMON ISSUES ARE ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 2 INVOLVED IN THE APPEALS, THEREFORE, THEY ARE TAKEN UP AND DISPOSED OF BY WAY OF A CONSOLIDATE ORDER. WE SHALL FIRST TAKE UP THE APPEAL FOR A.Y. 2006 - 07, WHEREIN THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: - THE COMMISSIONER OF INCOME - TAX (APPEALS) - 40, MUMBAI HAS ERRED IN : 1. CONFIRMING THE ACTION OF THE LEARNED ASSESSING O FFICER LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 1,48,550/ - WHEREAS AS PER THE FACTS & CIRCUMSTANCES THE SAME SHOULD NOT B LEVIED. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 20 06 - 07 ON 31.03.2007 , DECLARING AN INCOME OF RS. 98,326 / - . SUBSEQUENT TO SEARCH & SEIZURE PROCEEDINGS UNDER SEC. 132 OF THE ACT IN THE CASE OF VAKRANGEE SOFTWARE LTD AND ITS GROUP ENTITIES ON 13.12.2010, THE CASE OF THE ASSESSEE WAS COVERED. THAT A NOTICE UNDER SEC. 153A WAS ISSUED TO THE ASSESSEE CALLING UPON HIM TO FILE HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2006 - 07. THE ASSESSEE IN COMPLIANCE TO THE AFORESAID NOTICE SUBMITTED THAT HIS RETURN OF INCOME FILED ON 31.03.2007 MAY BE TREATED AS THE RETURN OF INCOME FILED IN COMPLIANCE THERETO. 3. THE A.O WHILE FRAMING THE ASSESSMENT OBSERVED THAT THOUGH THE ASSESSEE HAD CLAIMED A DEDUCTION OF RS. 1,00,000/ - UNDER CHAPTER VIA, HOWEVER, HE COULD FURNISH PROOF ONLY IN RESPECT OF AN AMOUNT OF RS. 26,644/ - ONLY. THUS, THE A.O DISALLOWED THE ASSESSES CLAIM OF DEDUCTION UNDER CHAPTER VIA TO THE EXTENT OF RS. 73,356/ - . THE A.O FURTHER OBSERVED THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS. 4,81,000/ - IN HIS BANK AC COUNT, WHICH IN THE ABSENCE OF AN EXPLANATION ON THE PART OF THE ASSESSEE WERE TREATED AS AN UNEXPLAINED CASH CREDIT UNDER SEC. 68 IN THE HANDS OF THE ASSESSEE. THE A.O ON THE BASIS OF HIS AFORESAID DELIBERATIONS ASSESSED THE ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 3 INCOME OF THE ASSESSEE AT RS. 6,52,680/ - , VIDE HIS ORDER PASSED UNDER SEC. 143(3) R.W 153A , DATED 25.03.2013. THE ASSESSEE DID NOT FURTHER ASSAIL THE ORDER PASSED BY THE A.O, WHICH THUS ATTAINED FINALITY. THE A.O WHILE FRAMING THE ASSESSMENT INITIATED PENALTY PROCEEDINGS UNDER SEC. 27 1(1)(C) AS REGARDS THE AFORESAID ADDITIONS/DISALLOWANCE IN THE HANDS OF THE ASSESSEE. 4. THE A.O THEREAFTER CALLED UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY UNDER SEC. 271(1)(C) IN RESPECT OF THE ADDITIONS/DISALLOWANCE MADE IN HIS HANDS WHILE FRAM ING OF THE ASSESSMENT MAY NOT BE IMPOSED. THE ASSESSEE SUBMITTED BEFORE THE A.O THAT AS AL L THE FACTS HAD BEEN DISCUSSED AND DISCLOSED AT THE TIME OF THE ASSESSMENT PROCEEDINGS, THEREFORE, NO PENALTY U/S 271(1)(C) FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME WAS CALLED FOR IN HIS HANDS . HOWEVER, THE EXPLANATION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE A.O, WHO BEING OF THE VIEW THAT THE ASSESSEE HAD PURPOSEFULLY FURNISHED INACCURATE PARTICULARS OF INCOME WITHIN THE MEANING OF SEC. 271(1)(C), THEREFORE, IMPOSED A PENALTY OF RS. 1,48,550/ - UNDER SEC. 271(1)(C) . 5. AGGRIEVED, THE ASSESSEE ASSAILED THE ORDER OF TH E A.O IMPOSING PENALTY IN APPEAL BEFORE THE CIT(A). THE ASSESSEE SUB MITTED BEFORE THE CIT(A) THAT AS THE ASSESSEE WHO HAD CLAIMED A DEDUCTION OF RS. 1 LAC UNDER CHAPTER VIA IN HIS RETURN OF INCOME, HOWEVER, DUE TO LACK OF EVIDENCE C OULD SUBSTANTIATE HIS CLAIM ONLY TO THE EXTENT OF RS. 26,644/ - , THEREFORE, THE A.O DISALLOWED THE BALANCE CLAIM OF TH E ASSESSEE TO THE SAID EXTENT AND MADE AN ADDITION OF RS. 73,356/ - ON THE SAID COUNT IN THE HANDS OF THE ASSESSEE. THE ASSESSEE SUBMITTED BEFORE THE CIT(A) THAT AS THE DISALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS MADE MERELY FOR LACK OF EVIDENCE, THEREFOR E, THE A.O HAD ERRED IN IMPOSING PENALTY UNDER SEC. 271(1)(C) AS REGARDS SUCH DISALLOWANCE IN ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 4 HIS HANDS . THE ASSESSEE ADVERTING TO THE CASH DEPOSITS OF RS. 4,81,600/ - IN HIS BANK ACCOUNT SUBMITTED THAT HE HAD RECEIVED A LOAN/ADVANCE OF RS. 4,81,600/ - FROM THE HUF OF HIS FATHER, VIZ. CHOTAMAL PATODIA, HUF, WHICH WAS DEPOSITED BY HIM IN HIS BANK ACCOUNT. THE ASSESSEE IN ORDER TO FORTIFY HIS AFORESAID CONTENTION ALSO PLACED ON RECORD THE CONFIRMATION FROM CHOTAMAL PATODIA, HUF, WHEREIN IT WAS AFFIRMED THAT A L OAN/ADVANCE IN CASH WAS GIVEN TO THE ASSESSEE. THE CIT(A) OBSERVED THAT THE SAID CONFIRMATION WAS ALSO PRODUCED BEFORE THE A.O WHO HAD REJECTED THE SAME. THE CIT(A) FURTHER OBSERVED THAT THE FINANCIAL CREDENTIALS IN THE CASE OF CHOTAMAL PATODIA WHO DID NO T HAVE SIGNIFICANT SOURCES OF INCOME AND HAD FILED A RETURN OF INCOME SHOWING PETTY INCOME OF RS. 1,26,000/ - FOR THE YEAR UNDER CONSIDERATION , DID NOT INSPIRE MUCH OF CONFIDENCE. THE CIT(A) BEING OF THE VIEW THAT NEITHER THE FINANCIAL CAPACITY OF THE CRED ITOR STOOD ESTABLISHED NOR THE ASSESSEE HAD PRODUCED THE BANK ACCOUNT OF THE CREDITOR TO SUPPORT HIS CLAIM, THEREFORE, CONCLUDED THAT THE SOURCE OF THE AFORESAID CASH DEPOSIT REMAINED UNEXPLAINED. THE CIT(A) ON THE BASIS OF HIS AFORESAID CONVICTION CONCLUD ED THAT AS THE ASSESSEE HAD FAILED TO EXPLAIN THE SOURCE OF THE CASH DEPOSITS, THEREFORE , THE SAME WAS RIGHTLY HELD TO BE HIS UNEXPL AINED INCOME. THE CIT(A) IN THE BACKDROP OF HIS AFORESAID OBSERVATIONS UPHELD THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271( 1)(C) IN RESPECT OF THE AFORESAID EXCESS CLAIM OF DEDUCTION UNDER CHAPTER VIA, AS WELL AS THE CASH DEPOSIT IN THE BANK ACCOUNT OF THE ASSESSEE AND DISMISSED THE APPEAL . 7. THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE CIT(A) UPHOLDING THE PENALTY OF RS. 1,4 8,550/ - IMPOSED BY THE A.O HAD CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORISED REPRESENTATIVE (FOR SHORT A.R) SUBMITTED THAT THOUGH THE ADDITION/DISALLOWANCE OF RS. 73,356/ - MADE BY THE A.O WHILE FRAMING THE ASSESSMENT FOR THE REASON THAT THE ASSESSEE COULD NOT SUBSTANTIATE HIS CLAIM RAISED IN ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 5 THE RETURN OF INCOME UNDER CHAPTER VIA WAS JUSTIFIED AND HAD BEEN ACCEPTED BY THE ASSESSEE BY NOT CARRYING THE MATTER IN FURTHER APPEAL, HOWEVER, MERELY ON THE BASIS OF AN UNSUBSTANTIATED CLAIM OF DEDUCT ION PENALTY UNDER SEC. 271(1)(C) COULD NOT HAVE BEEN IMPOSED. THE LD. A.R FURTHER SUBMITTED THAT T HE ASSESSEE HAD BEFORE THE LOWER AUTHORITIES EXPLAINED THAT THE SOURCE OF CASH DEPOSIT OF RS. 4,81,600 / - IN THE BANK ACCOUNT OF THE ASSESSEE WAS THE AMOUNT OF LOAN/ADVANCE RECEIVED IN CASH FROM THE HUF OF HIS FATHER, VIZ. CHOTAMAL PATODIA, HUF, AND HAD ALSO PLACED ON RECORD THE CONFIRMATION AFFIRMING THE SAID FACTUAL POSITION. IT WAS THUS AVERRED BY THE LD . A.R THAT THOUGH THE EXPLANATION OF THE ASSESSEE FOR LACK OF EVIDENCE MIGHT NOT HAVE FOUND FAVOUR WITH THE A.O, HOWEVER, AS THE SAME WAS NOT PROVED TO BE FALSE OR INCORRECT, THEREFORE, NO PENALTY UNDER SEC. 271(1)(C) IN RESPECT OF THE SAID AMOUNT OF CASH DEPOSIT OF RS. 4,81,600/ - COULD HAVE BEEN IMPOSED IN THE HANDS OF THE ASSESSEE. THE LD. A.R IN SUPPORT OF HIS CONTENTION THAT NO PENALTY UNDER SEC. 271(1)(C) WAS CALLED FOR IN THE HANDS OF THE ASSESSEE RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. R E LI ANCE PETROPRODUCTS PVT. LTD. (2010) 230 CTR 320 (SC). PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT AS THE ASSESSEE HAD RAISED A FALSE CLAIM OF DEDUCTION OF RS. 73,356/ - UNDER CHAPTER VIA, AS WE LL AS FAILED TO EXPLAIN THE SOURCE OF THE CASH DEPOSIT OF RS. 4,81,600/ - IN HIS BANK ACCOUNT, THEREFORE, THE A.O HAD RIGHTLY IMPOSED PENALTY UNDER S EC . 271(1)(C) ON BOTH OF THE SAID TWO COUNTS IN THE HANDS OF THE ASSESSEE. THE LD. D.R IN ORDER TO DRIVE HOM E HIS AFORESAID CONTENTION RELIED ON THE JUDGMENT OF THE HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. ZOOM COMMUNICATIONS (P) LTD. (2010) 327 ITR 510 (DEL) . 8. WE HAVE HEARD THE AUTHORISED REPRESENTATIVES FOR BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIAL ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 6 AVAILABLE ON RECORD. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE SAME. WE SHALL FIRST TAKE UP THE DISALLO WANCE/ADDITION MADE BY THE A.O IN RESPECT OF THE CLAIM OF RS. 1 LAC RAISED BY THE ASSESSEE UNDER CHAPTER VIA IN HIS RETURN OF INCOME. WE FIND THAT IT REMAINS AS A MATTER OF FACT THAT THE ASSESSEE HAD FAILED TO FURNISH SUPPORTING EVIDENCE AS REGARDS THE CLA IM OF RS. 73,356/ - RAISED BY HIM UNDER CHAPTER VIA IN HIS RETURN OF INCOME. WE FIND THAT AS OBSERVED BY THE CIT(A), THE ASSESSEE HAD NOT EVEN FURNISHED THE DETAILS AS REGARDS WHICH ALL INVESTMENTS THE SAID DEDUCTION WAS CLAIMED BY HIM, THE SAME NOT ONLY FA ILS TO INSPIRE ANY CONFIDENCE AS REGARDS THE SAID CLAIM, BUT RATHER, RAISES SERIOUS DOUBTS AS REGARDS THE VERACITY OF THE SAME. WE FIND THAT IT IS NEITHER A CASE OF A BONAFIDE CLAIM OF EXCESS DEDUCTION, NOR A CASE OF MERE UNPROVED OR UNSUBSTANTIATED CLAIM OF DEDUCTION OF THE ASSESSEE. WE ARE UNABLE TO COMPREHEND THAT EVEN IF THE ASSESSEE WAS UNABLE TO PLACE ON RECORD THE SUPPORTING DOCUMENTS TO SUBSTANTIATE HIS CLAIM, THEN NOTHING STOPPED HIM FROM AT LEAST FURNISHING THE DETAILS OF THE INVESTMENTS IN RESPEC T OF WHICH SUCH DEDUCTION WAS CLAIMED BY HIM, WHICH WE FIND HAD NOT BEEN DONE BY HIM. WE ARE AFRAID THAT THERE WAS NO EFFORT AT ALL ON THE PART OF THE ASSESSEE TO PROVE THE GENUINENESS OF THE CLAIM RAISED BY HIM IN THE RETURN OF INCOME , WHICH CLEARLY PROVE S THE FALSITY OF HIS SAID EXPLANATION . WE ARE OF THE CONSIDERED VIEW THAT THE FACTS OF THE CASE CLEARLY SUPPORTS THE VIEW OF THE LOWER AUTHORITIES THAT THE ASSESSEE HAD RAISED A FALSE CLAIM OF DEDUCTION. WE THUS IN THE BACKDROP OF OUR AFORESAID OBSERVATION S ARE CONSTRAINED TO UPHOLD THE PENALTY IMPOSED BY THE A.O AND SUSTAINED BY THE CIT(A) TO THE SAID EXTENT. 9. W E SHALL NOW ADVERT TO THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) AS REGARDS THE CASH DEPOSIT OF RS. 4,81,600/ - IN THE BANK ACCOUNT OF T HE ASSESSEE. WE FIND THAT THE ASSESSEE HAD BEFORE ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 7 BOTH OF THE LOWER AUTHORITIES EXPLAINED THAT THE SOURCE OF CASH DEPOSIT OF RS. 4,81,600/ - IN THE BANK ACCOUNT OF THE ASSESSEE WAS THE AMOUNT OF LOAN/ADVANCE RECEIVED IN CASH FROM THE HUF OF HIS FATHER, VIZ. CHOTAMAL PATODIA, HUF . THE ASSESSEE IN ORDER TO FORTIFY THE AFORESAID SOURCE OF INVESTMENT HAD ALSO PLACED ON RECORD THE CONFIRMATION AFFIRMING THE SAID FACTUAL POSITION. WE FIND THAT THE AUTHORITIES BELOW NOT IMPRESSED BY THE FINANCIAL CREDIBILITY OF THE CREDITOR, THUS SUSPECTING THE GENUINENESS OF THE TRANSACTION HAD REJECTED THE EXPLANATION AND ADDED THE SAID AMOUNT AS THE UNEXPLAINED CASH CREDIT OF THE ASSESSEE UNDER SEC. 68 , WHICH HAD BEEN ACCEPTED BY THE ASSESSEE AND NOT CARRIED FURTHER IN APPEAL. 1 0. WE HAVE DELIBERATED ON THE FACTS LEADING TO AN ADDITION OF THE CASH DEPOSIT OF RS. 4,81,600/ - IN THE HANDS OF THE ASSESSEE. W E FIND SUBSTANTIAL FORCE IN THE CONTENTION OF THE LD. A.R THAT THOUGH THE AFORESAID EXPLANATION OF THE ASSESSEE WHICH HE HAD SUP PORTED BY PLACING ON RECORD THE CONFIRMATION OF THE CREDITOR, THOUGH DID NOT FIND FAVOUR WITH THE AUTHORITIES BELOW, B U T HOWEVER, THE SAME HAD ALSO NOT BEEN DISPROVED AND FOUND TO BE FALSE . WE MAY HEREIN OBSERVE THE THIN LINE OF DISTINCTION BETWEEN AN UNPR OVED AND A DISPROVED EXPLANATION. WE ARE OF THE CONSIDERED VIEW THAT A DISPROVED EXPLANATION OF THE ASSESSEE WOULD UNDOUBTEDLY LEAD TO LEVY OF PENALTY UNDER S E C. 271(1)( C), HOWEVER, THE SAME WOULD NOT BE APPLICABLE AS REGARDS AN UNPROVED EXPLANATION. WE FIND THAT OUR AFORESAID VIEW STANDS FORTIFIED BY THE JUDGMENT OF THE HONBLE HIGH COURT OF BOMBAY IN THE CASE OF THE JUDGMENT OF CIT VS. UPENDRA V. MITHANI (ITA (L) NO. 18 60 OF 2009), DATED 05.08.2009 , WHEREIN IT WAS OBSERVED AS UNDER: - THE ISSUE INVOLVED IN THE APPEAL REVOLVES A ROUND DELETION OF PENALTY UNDER SECTION 271(1)(C) OF THE I.T. ACT. THE TRIBUNAL HAS CONCURRED WITH THE VIEW TAKEN BY THE COMMISSIONER OF INCOME T AX (A). THE COMMISSIONER OF INCOME TAX (A) HAS RIGHTLY TAKEN A VIEW THAT NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 8 EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT CONCEALED INCOME AS WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED, I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE. THE VIEW TAKEN BY THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. THE APPEAL IS WITHOUT ANY SUBSTANCE. THE SAME IS DISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. WE THUS ARE OF THE CONSIDERED VIEW THAT AS THE EXPLANATION OF THE ASSESSEE AS REGARDS THE CASH DEPOSIT OF RS. 4,81,600/ - HAD THOUGH REMAIN ED UNPROVED TO THE SATISFACTION OF THE A.O, HOWEVER, THE SAME HAD AND NOT BEEN DISPROVED AND CONCLUSIVELY FOUND TO BE FALSE , THEREFORE, NO PENALTY UNDER SEC. 271(1)(C) WOULD BE CALLED FOR IN HIS HANDS ON THE SAID COUNT. WE THUS IN THE BACKDROP OF OUR AFORE SAID OBSERVATIONS SET ASIDE THE ORDER OF THE CIT(A) UPHOLDING THE PENALTY IMPOSED BY THE A.O UNDER SEC. 271(1)(C) ON THE SAID COUNT. 1 1 . THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN TERMS OF OUR AFORESAID OBSERVATIONS. ITA NO. 5766/MUM/2014 A.Y. 2007 - 08 1 2 . WE SHALL NOW TAKE UP THE APPEAL OF THE ASSESSEE FOR A.Y. 2007 - 08, WHEREIN THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAD RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: THE COMMISSIONER O F INCOME - TAX (APPEALS) - 40, MUMBAI HAS ERRED IN : 1. CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT AMOUNTING TO RS. 1,48,550/ - WHEREAS AS PER THE FACTS & CIRCUMSTANCES THE SAME SHOULD NOT B LEVIED. 1 3 . BR IEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FILED HIS RETURN OF INCOME FOR A.Y. 20 07 - 08 ON 31.10.2007 , DECLARING AN INCOME OF RS. 1,64,525 / - . SUBSEQUENT TO SEARCH & SEIZURE ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 9 PROCEEDINGS UNDER SEC. 132 OF THE ACT IN THE CASE OF VAKRANGEE SO FTWARE LTD AND ITS GROUP ENTITIES ON 13.12.2010, THE CASE OF THE ASSESSEE WAS COVERED. THAT A NOTICE UNDER SEC. 153A WAS ISSUED TO THE ASSESSEE CALLING UPON HIM TO FILE HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION, VIZ. A.Y. 2007 - 08. THE ASSESSEE IN COMPLIANCE TO THE AFORESAID NOTICE SUBMITTED THAT HIS RETURN OF INCOME FILED ON 31.10.2007 MAY BE TREATED AS THE RETURN OF INCOME FILED IN COMPLIANCE THERETO. 1 4 . THE A.O WHILE FRAMING THE ASSESSMENT OBSERVED THAT THOUGH THE ASSESSEE HAD CLAIMED A DEDUCTION OF RS. 1,00,000/ - UNDER CHAPTER VIA, HOWEVER, HE COULD FURNISH PROOF IN RESPECT OF AN AMOUNT OF RS. 95,882/ - ONLY. THUS, THE A.O DISALLOWED THE ASSESSE S CLAIM O F DEDUCTION UNDER CHAPTER VIA TO THE EXTENT OF RS.4,118/ - . THE A.O FURTHER OBSERVED THAT THE ASSESSEE HAD MADE CASH DEPOSITS OF RS. 5,87,500/ - IN HIS BANK ACCOUNT, WHICH IN THE ABSENCE OF AN EXPLANATION ON THE PART OF THE ASSESSEE WERE THUS TREATED AS AN U NEXPLAINED CASH CREDIT UNDER SEC. 68 IN THE HANDS OF THE ASSESSEE. THE A.O ON THE BASIS OF HIS AFORESAID DELIBERATIONS ASSESSED THE INCOME OF THE ASSESSEE AT RS. 8,07,850/ - , VIDE HIS ORDER PASSED UNDER SEC. 143(3) R.W 153A, DATED 25.03.2013. THE ASSESSEE DID NOT FURTHER ASSAIL THE ORDER PASSED BY THE A.O, WHICH THUS ATTAINED FINALITY. THE A.O WHILE FRAMING THE ASSESSMENT INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) AS REGARDS THE AFORESAID ADDITIONS/DISALLOWANCE IN THE HANDS OF THE ASSESSEE , AND THER EAFTER IMPOSED A PENALTY OF RS. 1,77,591/ - UNDER SEC. 271(1)(C) IN THE HANDS OF THE ASSESSEE , WHICH ON APPEAL WAS SUSTAINED BY THE CIT(A) . 1 5 . THE ASSESSEE AGGRIEVED WITH THE ORDER OF THE CIT(A) UPHOLDING THE PENALTY OF RS. 1,77,591/ - IMPOSED BY THE A.O U NDER SEC. 271(1)(C), HAD CARRIED THE MATTER IN APPEAL BEFORE US. WE FIND THAT THE FACTS AND ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 10 THE ISSUE INVOLVED IN THE PRESENT APPEAL ARE THE SAME AS THOSE INVOLVED IN THE AFORESAID APPEAL OF THE ASSESSEE FOR A.Y. 2006 - 07, MARKED AS ITA NO. 5765/MUM/2014, T HEREFORE, OUR ORDER PASSED IN THE SAID CASE SHALL APPLY MUTATIS MUTANDIS TO THE PRESENT APPEAL OF THE ASSESSE E FOR A.Y. 2007 - 08, MARKED AS ITA NO. 5766/MUM/2014. THUS, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED IN TERMS OF OUR OBSERVATIONS RECORDED IN TH E APPEAL OF THE ASSESSEE FOR A.Y. 2006 - 07, MARKED AS ITA NO. 5765/MUM/2014. ORDER PRO NOUNCED IN THE OPEN COURT ON 27 /12/2017 SD/ - SD/ - (R.C SHARMA ) ( RAVISH SOOD ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 27 .12 .2017 * PS. ROHIT KUMAR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI ITA NO. 5765 & 5766/MUM/2014 A.Y S . 20 06 - 07 & 2007 - 08 ANIL PATODIA VS. ACIT 11