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2012 (9) TMI 1007 - AT - Income TaxPenalty under section 271(1)(c) - return of income filed in response to notice issued u/s. 153A. - Held that:- Penalty under section 271(1)(c) cannot be imposed on the income which was included by the assessee in the return filed in response to notice under section 153A of the Act. Disallowance of expenditure - addition on the basis of seized loose - Held that:- The documents being belonging to the assessee, the assessee is in a better position to explain the same and assessee chooses not to explain the same, therefore, the claim of the assessee cannot be accepted on the face of it. The set off can be granted only if assessee is able to explain that the amount shown on the debit side are the expenditure either incurred for the purpose of business or have been incurred to earn the amount which is shown in the credit side. Here it may be the contention of the assessee that amount has come to the credit from various entities and paid also by way of various entries to various parties, therefore, aggregate of the credit entries alone cannot be taken as income as the same should considered to be credits by earlier debit entries. However, in absence of dates of the receipts and payments such claim of the assessee cannot be accepted. Such claim can be taken into account only when the dates of the credit and debit entries are known. What is known in the present case is opening balance of ₹ 46.00 lacs as on 5/9/2005 and the dates of other entries are not known. Penalty u/s 271(1)(C) - Income for which the set off /telescoping was allowed by the Ld. CIT(A) in quantum appeal - Held that:- The nature of credit as well as debit entries has not been determined to take home the point that what is depicted on the seized paper is the income of the assessee. It is not the case of the department that the parties mentioned therein cannot be approached to determine the character of the amount stated in the seized documents. No such attempt has been made by the department to ascertain the character of receipts as well as payments. Therefore, the addition itself is only on the basis of presumption laid down in section 132(4). Further, for the purpose of levy of penalty it is to be established that what is assessed is the concealed income of the assessee. The amounts stated on the seized document has also not been related to any cash or assets seized during the course of search. In absence of any such material and cogent evidence that the amount stated in the seized document is in the nature of income, we do not consider it just and proper to uphold the concealment penalty on the addition. We may also mention that Ld. CIT(A) has clearly given the set off of a sum of ₹ 79,70,191/- to the assessee on account of additional income declared by the assessee in the return field in response to section 153A of the Act, therefore, Ld. CIT(A) has wrongly rejected such claim of the assessee. Since we have held that it is not a fit case where levy of concealment penalty cannot be justified, the alternative claim of the assessee has became academic that penalty should not be levied with respect to amounts which has been held to be set off by Ld. CIT(A).
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