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2016 (6) TMI 533 - AT - Income TaxLevy of penalty under section 158BFA (2) - Cash Found and Jewellery - Held that:- It is now a settled issue that penalty under section 158 BFA is not automatic and cannot believe levied merely because the addition has been confirmed. On both the two additions above it is apparent that had the assessee produced the cashbook as well as the withdrawal of cash in the hands of those company where ₹ 448299 was an opening balance and the withdrawal of cash is from bank, perhaps the addition would not have been sustained. Cashbook produced before the lower authorities evidently proves that there was cash on hand available with the assessee from the company of which assessee is one of the director. Further the balance cash on hand the hands of the assessee’s parents as well as on the bedroom of the assessee is also covered by the amount of cash on hand with that company. Further, this explanation was already available by letter dated 27/09/2002 filed before the Deputy Director of Income Tax ( investigation). Similarly, the explanation for the jewellery found was also given vide same letter . Therefore, though the additions have been confirmed on the basis that this is an afterthought but merely because the addition has been confirmed, the penalty under section 158BFA , which is not automatic, cannot be levied. Therefore, on the merits on both the above additions we delete the penalty. According to the provisions of section 158BFA (2) the assessing officer is required to work out 100 % of tax sought to be evaded on account of the undisclosed income and also maximum penalty leviable at 300% of the tax on undisclosed income and then levy penalty between theses limits. In the present case, the penalty has been levied on the amount of undisclosed income without providing any working of maximum and minimum penalty leviable. Therefore, on this ground also the penalty order is vitiated. - Decided in favour of assessee
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