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2019 (2) TMI 232 - AT - Income TaxLevy of penalty u/s 158BFA(2) - AO went through the seized documents and computed the valuation of stock as on the date of search / survey i.e. 28.02.1997 as undisclosed income - gross profit rate as applied on such stock found in search - whether assessee concealed nor furnished inaccurate particulars of income in the block return? - Held that:- In respect of evidence found during the course of search in the hands of assessee the addition has been made being the value of undisclosed stock and no penalty on the said addition has been levied in the hands of assessee. However, the gross profit rate which has been applied on such stock is independent of evidence found during the course of search and though addition has been made in the hands of assessee on such account but the said addition is purely estimated addition, which is further strengthened by the fact that starting from Assessing Officer, CIT(A) and the Tribunal, various GP rates have been applied to estimate the aforesaid addition No merit in the orders of authorities below that the addition is based on material found during the course of search. Undoubtedly, there was some material found during the course of search and additional income on that account was offered by the assessee and the same has been accepted by the Revenue Department but on that account, no penalty has been levied, since the conditions of section 158BFA(2) of the Act are not attracted. Further, on the estimated income, we find no merit in levying penalty under section 158BFA(2) - Hon’ble Bombay High Court in CIT Vs. Dodsal Ltd. (2008 (7) TMI 5 - HIGH COURT BOMBAY) has also laid down the proposition that levy of penalty under section 158BFA(2) of the Act is discretionary and not mandatory. In view thereof, we direct the Assessing Officer to delete penalty levied under section 158BFA(2) - Decided in favour of assessee.
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