TMI Blog2005 (8) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... ginally a return of income was filed on 31-3-1997 declaring a total income of Rs. 84,470. A survey was conducted at the business premises of assessee on 22-3-1999. During the course of survey, suppression of closing stock, unaccounted sales and other irregularities were found. The statement of Managing Partner was recorded. In the said statement, the partner confirmed having sold the goods outside the books of account. The relevant question and answer pointing towards discrepancy in sales, closing stock etc. are reproduced by learned CIT(A) at pages 5,6 and 7 of his order. The assessee thereafter filed a revised return on 31-3-1999 declaring a total income of Rs. 9,79,760. Additional stock was declared in the said revised return. The same w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decision of ITAT, Bangalore in the following cases : u IT Appeal No. 3480 (Bang.) of 2004 in the case of V. Krishnamurty v. ITO dated 31-3-2005, u IT Appeal No. 178 (Panaji) of 2002 in the case of Asstt. CIT v. G.L. Acharya dated 1-4-2005. 2.2 Learned DR on the other hand strongly supported the appellate order. He further submitted that the assessee first filed return without declaring additional income. Only when the assessee was confronted with discrepancy during survey, he came out with revised return. Thus, it can be said that the revised return is not voluntary but was filed only because of finding in the survey proceedings. The decisions of ITAT, Bangalore relied by learned counsel for assessee are distinguishable on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts. In the case of Shri V. Krishnamurthy, the discrepancy was not agreed by either of the partner but by the father of the partner. The father died later. Under what circumstances the father agreed is not brought out. Thus, the said case will not help the case of assessee before us. In the case of M/s. G. L. Acharya, the assessee never filed original return. The return of income itself was filed after the survey was conducted. Thus, it was held that there is no presumption that but for survey, the assessee would not have been declared the income. In the said case, it is held that Explanation (5) to section 271(1)( c ) will not apply, as the same applies only to search proceedings. Similarly, the decision of Hon ble Karnataka High Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee from penal consequences. 3.1 Recently, Hon ble Karnataka High Court in the case of CIT v. Sunrise Industrial Syndicate in ITRC No. 246/1998, dated 14-2-2005, wherein the facts and ratio laid down are as under: "Keeping in view of the fact, situation and the case law cited by the learned counsels for the parties to the lis before us, we have carefully perused the order passed by the assessing authority dated 30-3-1989 levying penalty u/s 271(1)( c ) of the Act. It is an admitted fact that after the search and seizure in the sister concern of the assessee in the present case, the books of account maintained by the assessee had also been seized and there was certain credit entries made and the assessee was not in a position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sugar and General Mills Ltd. s case (1987) 168 ITR 705, and after noticing the Explanation appended to section 271 of the Act, has held that if an addition is made and if there is no proper explanation for such addition, it would amount to concealment of income and the authorities under the Act are justified in levying penalty under section 271(1)( c ) of the Act. In view of the law declared by the Apex Court in the case of K.P. Madhusudanan v. Commissioner of Income-tax 251 ITR 99, we are of the opinion that the question of law referred for our opinion requires to be answered in the negative." The facts of the said case will also apply to the present set of facts. In view of the discussion above and in view of the decision of Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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