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2015 (5) TMI 783 - ITAT MUMBAI

2015 (5) TMI 783 - ITAT MUMBAI - TMI - Penalty levied u/s 271(1)(c) - CIT(A) deleted penalty levy - short term capital gain treated as income from other sources - Held that:- There is no dispute that after the search, additional income was offered at ₹ 1,50,000/- and long term capital gain has been shown as short term capital gain. It is also not in dispute that the entire sale consideration has been treated as income from other sources. The offer of additional income was made u/s 132(4) o .....

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rs or has concealed the particulars of income. The decision of the Hon’ble Supreme Court in the case of Reliance Petroproducts Pvt. Ltd. (supra) squarely apply in this case. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). - Decided against revenue.

Penalty u/s 271(1)(c) - addition made on account of jewellery found at the time of search - Held that:- There is no dispute that in this group case, substantial additional income has been offered for .....

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- Decided in favour of assesse.

Penalty u/s 271(1)(c) - unaccounted cash found - Held that:- It is not a case where the assessee has not offered any explanation during the course of assessment proceedings. Not only the assessee offered the explanation but had also substantiated by cogent material evidence. Merely because of the addition of ₹ 5 lacs was accepted in the assessment proceedings would not ipso facto lead to levy of penalty u/s 271(1)(c) of the Act. Considering the fa .....

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4) certifies the manner on which the assessee is preferred to pay tax thereon. The inscribing in the books of account was taken care of by the assessee when he filed the returns in pursuance of notice u/s 153A accounting the assets. Therefore the penalty is not automatic if one of the purported conditions is not fulfilled although all the conditions have been agreed to of having fulfilled by the A.O. insofar as the tax and interest have been recovered, thus to delete the penalty so levied. - Dec .....

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ssessed income and the returned income are the same. No addition has been made in the assessment proceedings. We therefore do not find any reason for the levy of penalty u/s 271(1)(c) of the Act when no concealment of income has been detected as per the return of income of the assessee. - Decided - I.T.A. No.223/Mum/2012, I.T.A. No.222/Mum/2012, I.T.A. No.221/Mum/2012, I.T.A. No.219/Mum/2012, I.T.A. No.217/Mum/2012, I.T.A. No.218/Mum/2012, I.T.A. No.220/Mum/2012, I.T.A. No. 1358 to 1361/Mum/2012 .....

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Y. 2003-04 (Revenue s appeal). 2. This is an appeal by the Revenue against the deletion of the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961. 3. Facts as stated before us are that a search and seizure operation was carried out on 26-7-2007 in the Ravi Shetty group of concern. This group is running various hotels, liquor bar and restaurants etc. They also own airconditioned hall which are let out for functions like marriage reception, birthday party etc. The assessee group in their let .....

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5,39,837/- 5. Penalty proceedings were initiated u/s 271(1)(c) of the Act. The reason for initiating penalty is that in the original return filed, the assessee has offered long term capital gain, however, when consequent to the search, the return was filed, the said long term capital gain was offered as short term capital gain and in the assessment the entire sale consideration have been assessed as income from other sources. The A.O. was convinced that the assessee has filed in-accurate particu .....

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s further explained that the shares were purchased by account payee cheque and properly reflected in the books of account. The long term capital gain declared in the original return was rectified in the post search return and the gains were offered as short term capital and taxes were paid as per the provisions of the law. Although in the assessment the entire sale consideration was taxed under the head income from other sources , which was accepted by the assessee but that cannot be the sole re .....

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upport from the decision of Hon ble Supreme Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd., 322 ITR 158, the ld. CIT(A) deleted the penalty. Aggrieved by this, the Revenue is in appeal before us. 6. The ld. D.R. strongly supported the order of levying the penalty. The ld. D.R. also relied upon the decision of Hon ble Supreme Court in the case of Mak Data P. Ltd. vs. CIT, 358 ITR 593(SC). 7. Per contra, the ld. Counsel for the assessee reiterated what has been submitted before the .....

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ct. The share transactions, purchase and sale of shares were duly reflected in the books of account of the assessee. The assessee has suo moto offered capital gain in its return of income. The assessment has been completed merely by changing the head of income i.e capital gain was treated as income from other sources. The facts relating to the share transactions were very much there in the return of income, therefore, it cannot be said that the assessee has filed any in-accurate particulars or h .....

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6,393/-. 10. This appeal by the Revenue is late by 10 days. The delay is condoned. 11. We find that the appeal of the Revenue cannot be entertained as it is covered by the Circular of the CBDT vide Instruction No. 3 of 2011 dated 9-2- 2011 reported in (2011) 332 ITR 1 (Statutes). The Revenue s appeal is accordingly dismissed. Now, we shall take up assessee s appeal in ITA No. 217/Mum/2012 for A.Y. 2008-09 (Shri Ravindra Shetty) 12. In this year, the penalty has been levied u/s 271(1)(c) of the A .....

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f the Act holding that the assessee has furnished in-accurate particulars of income. Aggrieved by this the assessee carried the matter before the ld. CIT(A) but without any success. 13. Before us, the ld. Counsel for the assessee stated that acquisition of the diamond jewellery has come out of the additional income offered for taxation, therefore, it cannot be said that the assessee has concealed his particulars of income or has filed in-accurate particulars of income. 14. Per contra, the ld. D. .....

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not be denied. The diamond jewellery can be considered as having purchased out of the additional income, therefore, it cannot be said that it is a fit case for levy of penalty for concealment of particulars of income. We accordingly set aside the finding of the ld. CIT(A) and direct the A.O. to delete the penalty so levied. The appeal filed by the assessee is allowed. Now, we shall take up Revenue s appeal in ITA No. 1360/Mum/2012 for A.Y. 2003-04. 16. This is an appeal by the Revenue against th .....

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alty levied u/s 271(1)(c) of the Act amounting to ₹ 1,95,554/-. This appeal cannot be entertained as the amount involved is less than ₹ 3 lakhs covered by CBDT vide Instruction No. 3 of 2011 dated 9-2-2011 reported in (2011) 332 ITR 1 (Statutes). Accordingly this appeal is not maintainable, hence, dismissed. Now, we shall take up assessee s appeal in ITA No. 220/Mum/2012 for A.Y. 2008-09 (Shri Uday Shetty) 20. This is an appeal by the assessee against the levy of penalty u/s 271(1)(c .....

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ard Bar & Restaurant. Copy of the cash book for the relevant period was submitted. However, when the A.O. proposed to make addition of ₹ 5 lacs, the assessee accepted it. Penalty u/s 271(1)(c) of the Act has been levied by treating ₹ 5 lacs as amount of income sought to be evaded. The assessee agitated before the ld. CIT(A)but without any success. 22. Before us, the ld. Counsel for the assessee reiterated what has been stated before the lower authorities. 23. The ld. D.R. support .....

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that the cash in hand was duly reflected in the books of M/s Courtyard Bar & Restaurant and we do not find any reason for levy of penalty u/s 271(1)(c) of the Act. We accordingly set aside the findings of ld. CIT(A) and direct the A.O. to delete the penalty. The appeal filed by the assessee is accordingly allowed. Now, we shall take assessee s appeals in ITA 222/Mum/12 and ITA 223/Mum/2012 for AYs 2003-04 & 2004-05 (Shri Gunapal Shetty) 25. These are the two appeals filed by the assessee .....

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f the Act and we have confirmed the order of the ld. CIT(A) after giving detailed discussion and other reasons given in ITA No. 1358/Mum/2012 (supra). We direct the A.O. to delete the penalties levied u/s 271(1)(c) of the Act. 27. In the result, both these appeals are allowed. Now, we shall take up assessee s appeal in ITA No. 221/Mum/2012 for A.Y. 2008-09 (Shri Gunapal Shetty) 28. This is an appeal by the assessee against the levy of penalty u/s 271AAA of the Act. 29. The A.O. has levied the pe .....

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if the following conditions are fulfilled:- (i) In the course of search a statement made u/s 132(4) of the Act, the assessee admits undisclosed income and certified the manner in such income has been derived; (ii) Substantiated the manner in which the undisclosed income was derived and; (iii) Paid the tax, with interest if any, in respect of the undisclosed income. According to the A.O. the assessee has not explained the manner in which such income was derived. The assessee carried the matter b .....

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rted the orders of authorities below. 33. We have carefully perused the impugned orders of authorities below. There is no dispute that the assessee has offered the income under statement made u/s 132(4) of the Act. It is also not in dispute that the assessee has paid the taxes along with interest. The only reason for the levy of penalty is that the assessee has not explained the manner in which such income has been derived. The Cuttack Bench of the Tribunal in the case of Pramod Kumar Jain (supr .....

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led by the A.O. insofar as the tax and interest have been recovered. Respectfully following the decision of the Cuttack Bench of the Tribunal, we set aside the findings of the ld. CIT(A) and direct the A.O. to delete the penalty so levied. Appeal of the assessee is accordingly allowed. Now, we shall take up assessee s appeal in ITA No. 218/Mum/2012 for A.Y. 2008-09 (S.R. Enterprises). 34. This is an appeal by the assessee against the levy of penalty u/s 271AAA of the Act. 35. Facts of the case a .....

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A No. 221/Mum/2012 (supra), the penalty levied in this case also deleted. Appeal filed by the assessee is allowed. Now, we shall take up assessee s appeal in ITA No. 219/Mum/2012 for A.Y. 2007-08 (Sai Leela Hotel Pvt. Ltd.) 37. This is an appeal by the assessee against the levy of penalty u/s 271(1)(c) of the Act amounting to ₹ 2,69,280/- 38. Facts of the case are that a survey u/s 133A of the Act was conducted at the business premises on the assessee on 26-7-2007. During the course of sur .....

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