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2018 (5) TMI 1161 - HC - Income TaxPenalty u/s 271(1)(c) - undisclosed bank accounts and sizeable cash deposits in such bank accounts - Held that:- The assessee virtually admitted that cash deposits were undisclosed. The assessee only argued that not the entire tally of cash deposited in different accounts during the year but the peak credit thereof could be added under section 68 of the Act. The Assessing Officer accepted such a contention and added a sum of ₹ 19,55,500/to the income of the assessee. It is true that during the assessment proceedings the Assessing Officer also accepted the assessee's contention of derivative loss as business loss. By offsetting such added income against the business loss, assessment did not give rise to any fresh tax demand. Nevertheless, the Assessing Officer initiated penalty proceedings because of concealment of income and particulars thereof. Even in such penalty proceedings, the assessee did not offer any explanation about the cash deposits in his different undisclosed bank accounts. In that view of the matter, the Assessing Officer was justified in imposing penalty which was levied at the minimum 100% of the tax sought to be evaded. There is nothing on record to suggest that the assessee agreed to the addition of such income to cutshort the litigation in view of the fact that in any case, even after making the additions, there would be no tax liability in the hands of the assessee. Even if we were to accept the assessee's contention that such surrender was to avoid protraction of the litigation and which is often times referred to as “to buy peace” as held by the Supreme Court in case of Mak Data P. Ltd (2013 (11) TMI 14 - SUPREME COURT), this would not necessarily avoid initiation of penalty proceedings. - Decided against assessee.
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