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2011 (5) TMI 593 - HC - Income TaxPenalty u/s 271(1)(c) - Search and seizure - unexplained investment - Held that:- A perusal of the assessment order clearly shows that the assessee had made surrender and the surrender has been accepted by the AO without doing any further verification. Further, in the course of penalty proceedings the assessee has given detailed explanation. The assessee has brought evidence on record to substantiate the case of the assessee that the surrender itself was not called for and that the carpets were taken on approval basis. These evidences as furnished by the assessee, as also the explanation as given by the assessee has nowhere been disputed by the AO. In fact the AO has levied the penalty without even making any comment on the explanation given by the assessee much less even without whispering about the falsity of the explanation. The Assessing Officer has gone on the presumption that the assessee himself agreed to the surrender on his own sweet will and consequently, penalty is leviable. This is not a reason justifiable enough for the levy of penalty. Even in the case of the partnership firm of M/s. Gallaria June 1st, wherein the assessee is a partner, similar penalty under identical circumstances imposed by the Revenue had been deleted by the Income-tax Appellate Tribunal - Decided in favour of the assessee
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