TMI Blog2010 (1) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... s for earning commission. This business was carried out with the help of one intermediatary, namely, Shri Bhushan. In view of this information, notice u/s 158BC read with section 158BD was issued to the assessee on 7.10.2003. The assessee filed return on 12.11.2003 admitting undisclosed income of ₹ 27,90,274/- being the amount of cheques received from M/s Friends Portfolio Pvt. Ltd. on account of sale of shares. In block assessment orders, the AO proposed to make further addition of ₹ 1,50,30,137 being aggregate amount of cheques received from M/s Friends Portfolio Pvt. Ltd. on account of sale of shares. During the course of hearing before the AO in block assessment proceedings, the assessee explained that a sum of ₹ 1,50,30,137/- had already been included in regular return of income for AY 2000-01. Therefore, it was requested that the amount of ₹ 1,50,30,137/- should not be treated as part of undisclosed income. However, this contention of the assessee was not accepted by the AO and consequently the entire amount of ₹ 1,78,20,431/- was assessed as undisclosed income in block assessment year. The AO further made addition in the block assessment year on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee much after the issue of notice u/s 158BD whereas regular return was filed much earlier on 30.11.2000. As regards the commission, it was submitted that commission amount was estimated at ₹ 1,78,204/- and, therefore, there was no evidence with the AO to support his allegation that commission was paid by the assessee and, therefore, addition should not have been made as per law. 6. The CIT(A) obtained comments of AO on the submissions made by the assessee. In the remand report dated 2.11.2006 it was submitted that in the return for AY 2000-01, filed on 30.11.2000, the assessee disclosed an income from other sources amounting to ₹ 1,50,30,137/- on which taxes were paid. The assessee in response to notice u/s 158BC read with section 158BD dated 7.10.2003 filed return for the block period 1.4.1990 to 31.8.2000 declaring income ₹ 27,90,274/-. It was also stated by the AO that AO for the reasons stated in assessment order had brought the amount of ₹ 1,78,20,431/- as undisclosed into to be assessed @ 60%. It was also submitted by Ld.AR of the assessee before CIT(A) that as per law, penalty was not to be levied as the impugned amounts were disclosed in the block ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as regards the penalty levied on payment commission estimated by the AO, the commission amounts were reduced by the CIT(A) to 50%. The CIT(A) accordingly reduced the penalty in respect of addition sustained on commission at ₹ 89,102/- at ₹ 53,461/-. 9. The Revenue is aggrieved by the order of CIT(A) deleting the penalty in respect of addition of ₹ 1,50,30,137 and ₹ 27,90,294/- and assessee s in cross objection for levy of penalty in respect of commission income estimated at ₹ 89,102/-. 10. Before us, ld.AR of the assessee submitted that the amount of ₹ 1,50,30,137/- was disclosed in regular return of income under the head other sources and had paid tax accordingly. Therefore, no penalty u/s 158BFA(2) could be levied. As regards amount of ₹ 27,90,294/-, it was submitted that this amount was disclosed in return for the block period and, therefore, as per proviso to section 158BFA(2), penalty was not to be levied. As regards the penalty confirmed in respect of commission, it was submitted that no penalty could be levied made when addition on estimation basis was made. Ld.AR of the assessee has challenged the proceedings u/s 158BD on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of assessment u/s 158BC which was challenged in quantum proceedings and not during the course of penalty proceedings. Therefore, this contention of the assessee is rejected. 12. Now, coming to levy of penalty on merits, there is no dispute that assessee had disclosed the amount of ₹ 1,50,30,137/- prior to date of search in the case of Manoj Aggarwal and M/s Friends Portfolio Pvt. Ltd.. The amount was received in the bank account which was disclosed in the regular books of account. The assessee had paid taxes at the time of filing of the regular return of income. Therefore, the amount of ₹ 1,50,30,137/- could not be treated as undisclosed income. As regards, the amount of ₹ 27,90,274/-, the assessee had filed return of undisclosed income in response to notice u/s 158BD. The assessee had made payment of tax. Proviso to section 158BD(2) provides that no order imposing penalty shall be made in respect of a person if (i) such person has furnished a return under clause (a) of section 158BC; (ii) the tax payable on the basis of such return has been paid or, if the assets seized consists of money, the assessee offers the money so seized to be adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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