TMI Blog2005 (2) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... e may be hundred and one reasons for such action of surrender of the assessee. Something more is required under the penalty proceeding to nail the assessee for concealment of income or of filing of inaccurate particulars of income. This aspect is missing from the penalty order. The parameters for penal proceedings are entirely different from making addition in quantum of income declared. When the additions are made on estimation, no penalty can be levied. When explanation of the assessee is not found to be plausible and hence rejected, this is again not a just reason to levy penalty u/s 271(1)(c) of the Act. Consequently, penalty u/s 271(1)(c) is not leviable in this case. I draw support from the abovementioned decisions. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the penalty was levied on account of addition of Rs. 37,394 made on account of unexplained investment in Sahara India Corporation, an addition of Rs. 10,858 made on account of unexplained cash found during survey; an addition of Rs. 7,200 made on account of Katran of cloth , totalling to Rs. 55,452. 6. The learned Authorised Representative has submitted that from the perusal of the assessment order, it would be seen that the trading additions were simply made on estimation of the sales after rejecting the books of account and invoking the provisions of the s. 145 of the Act. The learned AO, however, did not have any material to justify the enhancement of sales by estimation because he has assumed the rotation of stock found short at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of law. In so far as investment in Sahara India are concerned, as per the papers filed on record as annex. 5 which clearly reveal that the entire deposits did not relate to the year under consideration, but to the earlier years. The appellant had admitted this as his income and had offered the same for tax, to buy peace and to avoid the levy of penalty. 7. The perusal of all the facts as stated above makes it amply clear that in the facts and circumstances of this case, the learned AO has wrongly invoked the provisions of s. 271(1)(c) and has unlawfully levied the penalty. Though the appellant has not filed appeal against the additions in question, it does not necessarily lead to levy of penalty, automatic. In this connecti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at although the assessee has surrendered these amounts during the course of survey, but the same were not reflected in the ensuing returns of income. The explanations tendered were not accepted by the learned AO. So, non-acceptance of the explanation of the assessee, and mere non-filing of appeal against the impugned additions, do not ipso facto lead to the finding that the assessee had concealed the income. There may be hundred and one reasons for such action of surrender of the assessee. Something more is required under the penalty proceeding to nail the assessee for concealment of income or of filing of inaccurate particulars of income. This aspect is missing from the penalty order. The parameters for penal proceedings are entirely diffe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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