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TMI Blog2012 (7) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... ursuant to which a block assessment order had been passed in case of the assessee under section 143(3)/158BC. In the said assessment, the AO had made total addition of Rs.15,82,386/- to the undisclosed income declared by the assessee in the block return as per details given below :- (i) Unaccounted diamond jewellery Rs.6,59,125/- (ii) Unaccounted diamond jewellery Rs.3,07,560/- (iii) Unaccounted diamond jewellery Rs.79,950/- (iv) Unaccounted gold/silver jewellery/articles Rs.2,26,959/- (v) Unaccounted gold/silver jewellery/articles Rs.3,08,792/- Total Rs.15,82,386/- 2.1 In appeal, CIT(A) gave part relief and confirmed the addition of Rs.4,82,146/- in respect diamond jewellery and Rs.2,26,959/- in respect of gold/si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the domain and control of ladies. It is common knowledge that such articles are received as gift by near and dear ones and also purchased by ladies and, therefore, such assets were not brought on record as assessee and other family members were not aware of such acquisitions. It was pointed out that diamond jewellery of 7.90 carats had been received as gift from Kantilal Laxmidas Walia which had not been accepted by the department and out of difference in gold jewellery 490.100 gms, 350.100 gms had been received as gift from Late Shri Bhaidas Sanghvi on various religious and social occasions. This explanation had also not been accepted. The explanation of the assessee considering the facts and circumstances of the case had to be accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contentions raised. It was observed by him that even if the provisions of section 271(1)(c) were followed the assessee could not produce evidence for receiving gold or silver as gift nor could prove the purchase of unaccounted jewellery. The assessee had not given any cogent reasons for not disclosing these items in the block return. The assessee had not furnished evidence for receiving gold and silver from any other person nor did it submit any details of withdrawals for proving the purchases relating to unaccounted jewellery to substantiate the claim. The assessee gave only general and superfluous explanation without any supporting evidence. Thus even following the provision of section 271(1)(c), penalty was leviable. CIT(A) accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by all authorities including ITAT. The assessee could not substantiate the explanation nor could the explanation be considered as bonafide. Penalty was therefore, leviable and had been rightly levied. He placed reliance on the decisions of the Tribunal in the case of Gunanath Thakoor (132 ITD 319) and on the judgment of Hon'ble High Court of Gujarat in case of CIT vs. B.P. Parmar (341 ITR 499). 4. We have perused the records and considered the rival contentions carefully. The dispute is regarding levy of penalty under section 158 BFA(2) in relation to addition made by AO to the undisclosed income returned by the assessee in the block return. Under the said provisions, in case, an assessee does not disclose fully the undisclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed. Reliance has been placed on the judgment of Hon'ble High Court of Bombay in the case of CIT vs. Dodsal Ltd. (312 ITR 112). There is no dispute about this proposition. In fact CIT(A) has accepted that the provisions are not automatic and parameters of section 271 (1)(c) should be followed. In relation to section 271(1)(c), it has been held by the Hon'ble Supreme Court in case of Dharmendra Textiles and Processors (306 ITR 277) that penalty under section 271(1)(c) is only a Civil liability meant for compensating loss of revenue. It has also been held that mensrea or willful concealment is no longer required to be proved by the revenue before levy of penalty. The said judgment of Hon'ble Supreme Court also applies in case of penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration was made, the jewellery declared therein had merged with the jewellery declared in the returns for assessment year 1992-93. Therefore, the jewellery of 490.10 gms valued at Rs.2,22,701/- remained unexplained and was confirmed by CIT(A) as well as Tribunal. In relation to diamond jewellery, the claims of the assessee relating to jewellery declared in the wealth tax returns, in the VDIS declarations and purchases made had been duly considered and accepted to the extent of 56.76 carats by CIT(A). CIT(A) had not accepted the claim of purchase of 9.80 carats as payment for the same had been made after the date of search. The Tribunal, however accepted the claim of purchase of 9.80 carats. However, the claim of gift of 7.90 carats had not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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