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2021 (9) TMI 1136 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice u/s 274 - surrendered of the income - assessee has submitted that the AO while issuing the show-cause notice has not specified whether the penalty is proposed to be levy for furnishing of inaccurate particulars of income or for concealment of particulars of income - Addition based on the surrendered of the income by the assessee being accommodation entries of share application money - HELD THAT:- Addition was made on the basis of the surrendered made by the assessee and hence this addition and the nature of the addition was very much known to the assessee right from the time when the assessee surrendered this amount in the statement recorded during the post search enquiry - this addition does not fall in the category where the Assessing Officer has made addition based on some enquiry or his decision but this addition was made on the basis of surrendered made by the assessee. Accordingly, the default and the charge for which the penalty was proposed to be levied was very much in the knowledge of the assessee being the surrendered made by the assessee. Assessing Officer has very much recorded the satisfaction in the assessment order and stated that the penalty proceedings u/s 271(1)(c) of the Act are initiated as the assessee has concealed the particulars of income. Therefore, to the extent of initiating penalty proceedings as well as levy of penalty proceedings u/s 271(1)(c) of the Act against addition based on the surrendered of the income by the assessee being accommodation entries of share application money there is no failure on the part of the Assessing Officer to make assessee known about the default of the assessee and charge for which the penalty was proposed to be levied. Addition by disallowing the claim of property tax - This was addition made by the Assessing Officer by disallowing the claim of expenditure and therefore this addition does not fall in the category of concealment of the particulars of income. The assessee is having show room on lease and for which the assessee is paying rent of ₹ 1 lakhs per month as well as the property tax. Therefore, even if the claim of the property tax is disallowed by the Assessing Officer, the same cannot be held to be the concealment of particulars of income but at the most it can be regarded as furnishing of inaccurate particulars of income. Addition based on surrender was made because of the enquiry conducted by the Investigation Wing during survey proceedings - The said addition of ₹ 50 Lakhs made by the Assessing Officer out of the surrendered made by the assessee has attained finality. The assessee has nowhere disputed the said surrender being made under coercive circumstances or under compulsion. Even otherwise, the surrender is not without any basis but the entry of share application money is very much in existence which was accepted by the assessee as accommodation entries. Therefore, there is no substance or merit in the contention of the Ld. AR that surrender was made by the assessee to buy peace of mind. Hence, the appeal of the assessee is devoid of any merit or substance so far as the levy of penalty against the addition of ₹ 50 Lakhs.
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