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2017 (5) TMI 76 - AT - Income TaxReopening of assessment - penalty u/s 271(1)(c) of the Income Tax Act, 1961 - unexplained investment in mutual funds and unexplained investment in purchase of office space - the stand of the assessee was that no material exhibiting escapement of income in the hands of the assessee was obtained by the AO to form a belief that income has escaped assessment in her hand - Held that: - The asset was in the name of the assessee. Had the case of the assessee’s husband been reopened, he could have an explanation that asset does not stand in his name and his wife has source of such investment. Therefore, it was necessary for the AO to verify the details of the assessee. As far as addition of ₹ 3,47,391/- is concerned, the assessee has shown it as opening cash balance. She has submitted that she was a graduate taking tuition and she has savings from many years - Held that: - the AO ought to have not doubted total capital balance. He should have given a credit of her past savings. Considering these aspects, we are of the view that at the most a sum of ₹ 1,47,391/- could be treated as unexplained opening capital balance and a benefit of ₹ 2,00,000/- representing small savings in the past out of non-taxable income could be estimated. The ground raised by the assessee is partly allowed. Penalty on alleged concealed income of ₹ 3,47,391/- - Held that: - According to the assessee she was not having income exhibiting taxable limit in the past, but she has made small savings. When she filed the return for this year, she computed it as an opening capital balance - the explanation of assessee does not appear to be false - penalty deleted. Appeal allowed - decided partly in favor of appellant.
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