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2015 (7) TMI 121 - AT - Income TaxPenalty levied u/s.271(1)(c) - undisclosed income in the hands of director - CIT(A) deleted penalty levy - Held that:- CIT(A) deleted the penalty holding that the profit offered to tax by the directors of the different companies including the assessee in their hands in fact belongs to the said companies which have been earned by the said companies from their manufacturing activity. Therefore, such income has to be taxed in the hands of the respective companies and not in the hands of the directors. According to the Ld.CIT(A) it is the settled proposition of law that in order to levy penalty u/s.271(1)(c) there has to be income of the assessee in respect of which particulars have been concealed. Since in the instant case it is not the income of the assessee and the income belongs to that of the respective companies, therefore, penalty u/s.271(1)(c) of the I.T. Act cannot be levied by invoking either Explanation 1 or Explanation 5A to provisions of section u/s.271(1)(c) of the I.T. Act. No infirmity in the above finding given by the Ld.CIT(A). Even in the hands of the company, the assessee in principle has not accepted the result of such unaccounted sale which has been categorically stated by Shri Ghanshyam C. Goyal in his reply to Question No.4. As per the provisions of Explanation 5A to section 271(1)(c) penalty cannot be levied if search took place on or after 01-06-2007 and the assessee is found to be the owner of any asset such as money, bullion, jewellery or other valuables etc or owner of any income based of any entry in books of account and he claims that such entry in the books of accounts represents his income.In the instant case the income declared and accepted by the assessee in the return filed in response to notice u/s.153A as undisclosed income is actually belongs to the company and he is not the owner of such income. The Ld. Counsel for the assessee also made a statement at the Bar that the assessee has not taken any benefit out of the amount disclosed. The tax paid on such undisclosed income has gone waste as no benefit out of such income has been availed by the assessee. Therefore, we are of the considered opinion that this is not a fit case for levy of penalty u/s.271(1)(c) read with Explanation 5A - Decided in favour of assessee. Penalty proceedings u/s.271AAA - assessee has declared an amount of ₹ 1,63,58,750/- being Hundi, petty loans, sales receivable etc. - CIT(A) deleted penalty levy - Held that:- Considering the fact that the assessee has filed the return disclosing the income declared during the course of search on the basis of seized material and paid the taxes thereon we are of the considered opinion that the assessee has substantiated the manner in which the undisclosed income was derived and the immunity provided u/s.271AAA(2) are applicable. In this view of the matter and in view of the detailed order passed by Ld.CIT(A) relying on various decisions, we find no infirmity in his order cancelling the penalty levied u/s.271AAA of the I.T. Act. See CIT vs. Radha Kishan Goel (2005 (4) TMI 47 - ALLAHABAD High Court) and DCIT Vs. Pioneer Marbles & Interiors Pvt. Ltd. [2012 (2) TMI 261 - ITAT, KOLKATA] - Decided in favour of assessee
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