TMI Blog2015 (3) TMI 187X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has estimated the amount spent on interior works of three flats at ₹ 40.00 lakhs and thus sustained the addition to the extent of ₹ 5.00 lakhs. Hence, we agree with the view expressed by Ld CIT(A) on this addition that the Tribunal has sustained the addition on estimate basis and the Tribunal could not come a conclusion from the seized material that there was undisclosed income in incurring interior decoration works. Hence, in respect of this issue, we agree with the Ld CIT(A) and accordingly hold that the first appellate authority was justified in directing the assessing officer to delete the penalty. - Decided in favour of assessee. - I.T. (SS) A. No. 16/Mum/2012 - - - Dated:- 31-7-2014 - Shri B. R. Baskaran (AM) And Vivek Varma, (JM),JJ. For the Appellant : Shri Santosh Kumar For the Respondent : Shri B. V. Jhaveri ORDER Per B. R. Baskaran, Accountant Member: The appeal filed by the revenue is directed against the order dated 16.01.2012 passed by Ld CIT(A)-39, Mumbai and it relates to the block period from 1990-91 to 2001-02. 2. The revenue is aggrieved by the decision of Ld CIT(A) in deleting the penalty levied u/s 158BFA(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tum appellate proceedings, the Tribunal accepted the contention of the assessee that there were overlapping in noting down the expenditure incurred in respect of the above said three flats. Hence, considering the facts and circumstances of the case, the Tribunal estimated the cost incurred on interior decoration of all the three flats at ₹ 40.00 lakhs. Since the assessee had already disclosed ₹ 34,84,082/-, the Tribunal confirmed addition to the extent of ₹ 5.00 lakhs only. Against this addition also, the AO has levied penalty u/s 158BFA(2) of the Act. 6. Since the penalty has been levied u/s 158BFA(2) of the Act, we feel it pertinent to extract the said provision below:- 2. The Assessing Officer or the Commissioner (Appeals) in the course of any proceeding under this Chapter, may direct that a person shall pay by way of penalty a sum which shall not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC. Provided that no order imposing penalty shall be made in respect of a person if- (i) such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly proposed. He submitted that the manner of receipt of ₹ 27.00 lakhs was also different from the one noted in the diary. The ld A.R further submitted that the assessee was constrained to reduce the remuneration to ₹ 27.00, since the concerned film did not fair well. Accordingly, the ld A.R submitted that the Tribunal was wrong in sustaining the addition of ₹ 9.00 lakhs without appreciating the events that took place subsequently. Accordingly, the Ld A.R submitted that the Ld CIT(A) was justified in deleting the penalty on the reasoning that the above said addition has been sustained on estimate basis. The Ld A.R further submitted that the assessee has challenged the addition of ₹ 9.00 lakhs by filing appeal before the Hon ble High Court of Bombay and the same has been admitted. He submitted that the admission of substantial question of law by the High Court would mean that the bonafides of the Assessee s stand established and in that case, the penalty is not exigible on those issues. For this proposition, the Ld A.R placed reliance on the decision rendered by the Mumbai bench of Tribunal in the case of ACIT Vs. Ekta Exports in IT(SS)A No.27/Mum/2011 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he view expressed by Ld CIT(A) that the addition of ₹ 9.00 lakhs has been sustained on estimate basis. In our view, the above said addition has been sustained on the basis of seized material only. Hence, we are of the view that the assessing officer was justified in levying penalty on the above said addition u/s 158BFA(2) of the Act. 12. The Ld A.R also contended that the penalty is not exigible since the Hon ble High Court has admitted the appeal filed by the assessee challenging the decision rendered by the Tribunal in respect of the addition of ₹ 9.00 lakhs referred above. In this regard, the Ld A.R also relied upon the decision rendered by the Co-ordinate bench in the case of M/s Ekta Exports (supra). We have gone through the said decision and we notice that the co-ordinate bench has followed decisions rendered by other co-ordinate benches in respect of penalty levied u/s 271(1)(c) of the Act. In respect of penalty levied u/s 271(1)(c) of the Act, it has been held that the admission of substantial question of law by the Hon ble High Court lends credence to the bonafides of the assessee. The said view gets support from Explanation 1 to sec. 271(1)(c) of the Act. U ..... X X X X Extracts X X X X X X X X Extracts X X X X
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