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2014 (2) TMI 1235 - ITAT AHMEDABADLvy of penalty u/s 158BFA - assessee had earned business income outside its books, which had not been disclosed in the return of income but was disguised as agricultural income - Held that:- We find that with respect to undisclosed agriculture income, CIT(A) while deleting the addition on agriculture income has noted that Assessee had claimed to have earned agricultural income of ₹ 35,72,353/- but in appellate proceedings the income of ₹ 23,11,092/- was accepted. He has further noted that during the course of penalty proceedings, Assessee had furnished evidences in the form of confirmations but the same were not considered by A.O. He has further noted that A.O. had disallowed the agriculture income by treating it as business income but for which no evidence during the search or otherwise was found to show that Assessee had earned business income outside it books and has not been disclosed in the return of income but was disguised as agriculture income. With respect to disallowance of professional fees, CIT(A) has given a finding that Assessee was engaged on 31.03.1999 and ₹ 4.50 lacs was also paid subsequently to him. The issue that whether the liability of professional fees accrued as on 31.03.1999 was a debatable issue and therefore penalty cannot be sustained on debatable issue. With respect to gross profit, he has noted that G.P. addition was made on the basis of estimate and therefore no penalty was leviable. Before us, the Revenue could not controvert the findings of CIT(A) by bringing any contrary material on record. We also do not agree with the submission of Revenue that penalty u/s. 158BFA is mandatory in view of the decision of Rajasthan High Court in the case of CIT vs. Satyendara Kumar Dosi (2009 (1) TMI 240 - RAJASTHAN HIGH COURT) where the Hon’ble High Court has held that levy of penalty u/s. 158BFA(2) is discretionary and not mandatary. - Decided in favour of assessee
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