TMI Blog2014 (7) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee’s explanation has been that, he has been carrying on the business of catering which he wanted to discontinue and was in the process of handing over his business to his brother, Mr. Vinod Sangoi - the assessee was under bonafide presumption that the said account has also been handed over to his brother, therefore, he did not examine the cash deposits made in the various assessment years - assessee has further submitted that the provisions of Explanation 5 to section 271(1)(c) is not applicable qua this addition on account of surrender, as he has satisfied the necessary conditions for getting the benefit under Explanation 5 - similar explanation given by the assessee in the subsequent years, wherein similar kind of deposits were found and were surrendered at the time of search, the Tribunal has dealt the assessee’s explanation in detail and has confirmed the penalty - Since similar facts are permeating in this year also, the said finding will apply mutatis mutandis in this year also qua the amount of surrender – thus, the levy of penalty on the addition of ₹ 3,04,500, which was declared during the course of search u/s 132(4) is upheld. Once the assessee has given t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 132(4). In the statement, the assessee admitted that during the previous year relevant to the assessment year 2000-01, unaccounted cash of ₹ 3,04,500, has been deposited in his bank account with Cosmos Co-operative Bank Ltd., Vile Parle (West), Mumbai. Accordingly, notice under section 148, was issued vide notice dated 26th March 2007. In response to the said notice, the assessee filed his return of income on 26th April 2007, declaring income of ₹ 4,92,390, which was also included the unaccounted income of ₹ 3,04,500, declared during the course of search. In the course of assessment proceedings, the assessee filed his bank statement in respect of his proprietary concern, M/s. Varsha Caterers, with Cosmos Co-operative Bank, wherein the total credit for the assessment year 2000-01 stood at ₹ 17,19,733. Out of the said deposits, the assessee could not give proper explanation with regard to the deposits aggregating to ₹ 7,58,233, as per the details given at Page-4 and 5 of the assessment order. The assessee s contention has been that some of the deposits relate to the sale proceeds of two motor vehicles owned by the assessee, the written down val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as the addition made on account of deposits in the bank, the assessee has duly disclosed his bank account in his balance sheet and also in the return of income not only in this year but also in the earlier years. The search had taken place after a gap of six years and therefore, it was difficult to explain each and every deposit after such a long gap. However, the assessee had explain the overall source of the deposits, which has not been rebutted or found to be false in the course of penalty proceedings, either by the Assessing Officer or by the learned Commissioner (Appeals). In the quantum proceedings, the matter has been decided against the assessee only on the ground that the assessee s explanation with regard to availability of source of money was not corroborated by other evidences. The evidences filed by the assessee with regard to sale of cars and withdrawals made for the purpose of deposits, have not been found to be false, except that the evidence furnished were not sufficient. With regard to the amount surrendered during the course of search in the statement recorded under section 132(4), the learned Counsel fairly admitted that the levy of penalty on this issue has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee. 6. From the above, it can be seen that the only ground for levying the penalty is that the learned Commissioner (Appeals) has also upheld the addition made by the Assessing Officer. This reason alone cannot be held to be the basis for levy of penalty, as it is quite a settled law that the findings given in the assessment proceedings alone, may not justify imposition of penalty, as the consideration that arise in the penalty proceedings are different from those in the assessment proceeding. The findings in the quantum proceedings, though have a probative value, but in the penalty proceedings the explanation and the materials have to be reappraise afresh to examine, whether the assessee is guilty of concealment of income or furnishing of inaccurate particulars. 7. For adjudging that the assessee is guilty of concealment of income and furnishing of inaccurate particulars of income, the explanation of the assessee, circumstances and surrounding facts leading to such additions, bonafide belief, preponderance of probability and other factors have to be examined. In the penalty proceedings, the assessee can always take a plea relying on the same material or by adducing some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. In the instant case, the appellant had an undisclosed bank account which was not shown at all in the return of income filed before the search took place and only when the details of the bank account were found and the appellant was confronted with the same, he declared the additional income. It is further pertinent to note that even in the disclosed account, the A.O. found that certain entries could not be explained and hence the appellant does not satisfy the conditions of waiver. It is also not evidenced that the declaration was made subject to waiver of penalty as such declaration is meaningless and lack the authority of law. 11. The penalty has been levied when it was detected that the appellant had concealed the income in the form of undisclosed bank account and unexplained credit entries in the declared bank account. Hence, the appellant has no satisfactory explanation for the same. 9. From the aforesaid findings, it can be seen that the learned Commissioner (Appeals) has also not tried to deal with the assessee s explanation in proper perspective and without considering the assessee s explanation in the objective manner. 10. Now that both the authorities have f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly destroyed and, therefore, the assessee could not establish the exact nature of credit entries appearing in the bank account. Further, the data pertained to the financial year 1999-2000, therefore, the explanation on the source of credits were given based on circumstantial evidences. The reconcilia-tion was made in the following manner:- 12. Besides this, it was also explained that the assessee has also sold two motorcars (owned by the assessee), during the relevant financial year, the WDV of the said cars was shown in the Balance Sheet as on 31st March 1999, amounting to ₹ 8,85,479. The sale proceeds were deposited in the said bank only. Apart from that, there were certain deposits in the form of maturity proceedings from LIC. Thus, these funds were sufficient to cover the aggregate entries of ₹ 7,58,233. Though such an addition has been confirmed in the quantum proceedings up to the stage of the Tribunal, solely on the ground that the assessee has not furnished full and complete evidence with regard to such reconciliation. However, this explanation of the assessee has not been found to be false by the authorities below, in the course of penalty proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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