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2015 (4) TMI 292 - AT - Income TaxPenalty proceedings u/s 271(1)(c) - undisclosed income - additions based on seized materials / documents found at the time of search from the premises of assessee’s father - whether additional income was offered by assessee in respect of the projects and property which did not belong to him, but was made only to buy peace of mind and to avoid litigation? - Held that:- From the facts narrated it is seen that the additions which are subject mater of penalty are based on seized materials / documents found at the time of search from the premises of assessee’s father, Shri Anthony Joseph Pathathu, but the said seized material admittedly belongs to the proprietory concern of Shri Anthony Joseph Pathathu, namely, M/s.Pathathu Brothers in which assessee has no interest. Even at the time of search, when statement on oath u/s 132(4) was recorded, this aspect was made clear and it is also amply evident from the statement wherein the assessee has categorically made averment that all the documents, cash, loose papers, etc. does not belong to him but to M/s.Pathathu Brothers. From the cash flow statement as furnished before the Assessing Officer, at the time of offering of the additional income, it is seen that they are out of amount received on various dates for Roshani Project, specifically falling in the financial year 2001-2002 and financial year 2002- 2003. The other amount is on account of rent received. Admittedly, Roshani Project does not belong to the assessee or his company in which he is a Director. The said project belongs to M/s.Pathathu Brothers, wherein the assessee had no interest. Even the rental income does not belong to any of his property, albeit belongs to his father, in which the assessee has no concern. Thus, prima facie, the seized documents revealed that nothing belongs to the assessee but his father. Also that the assessee had reconciled the income and explained each and every entry has not been rebutted at any stage. The amount which was offered for additional income as stated before the authorities below, was to only buy peace of mind and to avoid protracted litigation and to save his aged father from harassment. Nothing has been brought on record by the department that, the assessee had any co-relation with the additional income offered by the assessee as worked out from the seized material which too was properly explained. It is a settled law that considerations, which arises in the penalty proceedings are separate and distinct from the assessment proceedings and the assessee can rely upon the same material and explanation to show that he is not guilty of either concealment of income or furnishing of inaccurate particulars. The assessee’s explanation that no material was found from the possession of the assessee stands unrebutted even upto this stage. Thus, we set aside the order of the CIT(A) and delete the penalty levied for all the aforementioned assessment years.- Decided in favour of assessee.
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