ITAT deleted penalty levied for furnishing of inaccurate particulars of income

1. Assessee's case was selected for scrutiny based on AIR Information that, assessee had deposited cash of Rs.31,86,000/- in his saving bank account with Development Credit Bank, Jogeshwari Branch, Mumbai. Out of the said amount, the AO had added sums aggregating to Rs 17,62,900/-, as unexplained cash credits under section 68 (of Income Tax Act, 1961) on account of cash deposits / cash loans taken from various persons. AO also levied a penalty of Rs.5,37,292 u/s 271(1)(c) (of Income Tax Act, 1961).

2. CIT(A) upheld the penalty.

3. On appeal, the ITAT held as under:

"Here the source of bank deposits have been shown through loans taken from family members and relatives. Though in the quantum proceedings, the assessee could not substantiate the creditworthiness, but, in the penalty proceedings, the matter has to be re-examined afresh and even if in the quantum proceedings the assessee's explanation has not found to be tenable but that finding itself does not lead to any inference that assessee is guilty of furnishing of inaccurate particulars. The nature of credit has been shown out of loans and own funds and source has been explained from family members and relatives. The creditworthiness may not have been established but that factum itself could not be the case for furnishing of inaccurate particulars. The AO here in this case has levied the penalty for furnishing of inaccurate particulars and not for concealment of income, albeit there could be a case for concealment of income, but in the facts of the case it cannot be held that the particulars of income has not been furnished, because the nature of deposits and its source have been given and duly disclosed. Thus, penalty cannot be levied for furnishing of inaccurate particulars and it is not the case of the revenue before us that penalty should be levied for concealment of income. Thus penalty is directed to be deleted.”

Case Reference - Vs ITO- 21(3)(1), Mr. Akbar J Momin, Mumbai

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "A", MUMBAI

BEFORE SHRI RAJENDRA, ACCOUNTANT MEMBER AND

SHRI AMIT SHUKLA, JUDICIAL MEMBER

ITA No. : 6256/Mum/2013

(Assessment year: 2006-07)