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2016 (5) TMI 1571 - ITAT DELHIPenalty u/s 271(1) - Search and seizure operation - Jewellery found in search - unexplained investment in jewellery - HELD THAT:- Addition sustained was an estimated one. It is well settled that if the addition is sustained on estimate basis it cannot be said that the assessee concealed the income or furnished inaccurate particulars of income in respect of the estimated addition. Therefore, the penalty was not leviable u/s 271(1)(c) - in the present case, the AO himself accepted the gold jewellery in which the diamond were studded to the extent of 700 gms out of the 793.600 gms jewellery found during the course of search and the ld. CIT(A) accepted the remaining jewellery of 93.600 gms against which the department had not preferred any appeal. When the gold jewellery in which the diamonds were studded has been accepted by the department as the jewellery received at the time of marriage or other occasion, then, it cannot be said that the diamond studded in the said jewellery were out of the undisclosed income of the assessee. It is well settled that the assessment proceedings and the penalty are two different and distinct proceedings and that the addition made in the assessment may be relevant but not a conclusive proof of concealment of income or furnishing of inaccurate particulars of income. Therefore the impugned order passed by the ld. CIT(A) is set aside and the penalty sustained u/s 271(1)(c) of the Act is deleted.- Decided in favour of assessee.
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