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The Asst. Commissioner of Income Tax, Central Circle – 1, Nashik Versus Shri Rahul Shantaram Sawale

2016 (2) TMI 885 - ITAT PUNE

Penalty u/s 271(1)(c) - income offered by the assessee pursuant to search carried out at his premises - advances received in cash from the customers and gifts received - Held that:- In the facts of the present case, we hold that the declaration made by the assessee on account of advances received in cash from the customers which was shown in the books of account, balance sheet and even in the return of income, filed before the date of search, in view of the declaration of the assessee while reco .....

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for levy of penalty under section 271(1)(c) of the Act on the aforesaid amounts offered by the assessee on account of advances received in cash from customers shown in the balance sheet.

Similarly, the gifts shown in the books of account which have been offered as additional income by the assessee during the course of search itself, in the statement recorded under section 132(4) of the Act is liable for levy of penalty under section 271(1)(c) of the Act i.e. on offer of income of &# .....

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BR> In view of the amended provisions of Explanation 5A to section 271(1)(c) of the Act, the said finding of the CIT(A) is reversed and we hold that the assessee is liable to levy of penalty under section 271(1)(c) of the Act on the income offered by the assessee pursuant to search carried out at his premises, during the course of recording of statement under section 132(4) of the Act and by way of additional income in the return of income filed pursuant to issue of notice under section 153A of .....

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ld that the assessee is exigible to levy of penalty under Explanation 5A to section 271(1)(c) of the Act on the incomes offered in the return of income pursuant to issue of notice under section 153A of the Act. - Decided against assessee

Addition made on account of undisclosed rent from shop and house on estimated basis - Held that:- The assessee offered to tax the notional income in respect of the said vacant house at Malegaon and shop at Nashik. The assessee admittedly, had not rece .....

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(1)(c) of the Act are attracted, but in view of the notional income being assessed in the hands of assessee and in the absence of any evidence found during the course of search or otherwise as to the receipt of rental income from the said properties, we find no merit in the levy of penalty under section 271(1)(c) of the Act on such notional rent - Decided against revenue

Addition made on account of notional rental income from hotel - Held that:- The offer of the rental income during t .....

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de in the hands of assessee and in the absence of any evidence found during the course of search, Explanation 5A to section 271(1)(c) of the Act is not attracted. Accordingly, we upho ld the order of CIT(A) in deleting penalty - Decided against revenue

Addition on account of undisclosed profit on sale of flat - Held that:- The claim of the assessee in this regard is that the said income was voluntarily offered by the assessee and was not found during the course of search. In case, no .....

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regard and direct the Assessing Officer to levy penalty under section 271(1)(c) - Decided against assessee

Addition of on-money received on sale of plot - Held that:- Where the assessee had not offered true taxes on the income declared by the assessee and addition was made on account of on-money received on sale of plots in the hands of assessee, then the provisions of section 271(1)(c) of the Act with regard to concealment of income are attracted and the assessee is liable to levy of .....

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at source and in view of the provisions of section 40(a)(ia) of the Act. The disallowance was made in the hands of assessee on account of deeming provisions of the Act. However, it is not the case of Revenue authorities that the aforesaid amount on account of labour was not paid by the assessee. Merely because the addition has been made in the hands of assessee, does not justify the levy of penalty under section 271(1)(c) of the Act. We hold that there is no merit in the order of Assessing Offic .....

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ecause the assessee was not able to substantiate its claim before the Assessing Officer and had offered the said income to be assessed as business income, instead of under the head ‘capital gains’ as shown in the return of income, does not justify the levy of penalty under section 271(1)(c) of the Act See CIT Vs. Bennet Coleman & Co. Ltd. [2013 (3) TMI 373 - BOMBAY HIGH COURT] . Accordingly, we uphold the order of CIT(A) in this regard as where the assessee only changed head of account and in th .....

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ated order of CIT(A)-I, Nashik, dated 15.03.2013 relating to assessment years 2006-07 to 2009-10 against levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 (in short the Act ). 2. This bunch of four appeals filed by the Revenue relating to the same assessee on similar issues were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The Revenue in ITA No. 1251/PN/2013 has raised the following grounds of appeal :- 1. On the facts and .....

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/- was offered only in the return filed u/s 153A of the Act on specific issues based on incriminating seized documents for which the assessee did not offer any explanation. 3. On the facts and in the circumstances of the case the learned CIT(A) erred in not appreciating the fact that but for the search operations the assessee would not have offered additional income in the return filed under section 153A of the Act which is evidenced by his failure to offer the said additional income in the retu .....

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uments found during the search. 5. On the facts and circumstances of the case and in law, the learned CIT(A) has erred in deleting the penalty to the tune of ₹ 4,039/- levied u/s 271(1)(c) of the Act, on the additional income of ₹ 12,000/- offered by the assessee during assessment proceedings without appreciating that the offer of this income was made by the assessee only on being confronted with the fact that the income was required to be brought to tax during assessment proceedings .....

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be brought to tax during assessment proceedings and the estimate of the said income is that of the assessee himself. 7. On the facts and in the circumstances of the case the learned CIT(A) erred in holding that provisions of explanation 1 of section 271 (1 )(c) or explanation 5A of that section does not apply to the facts of the case which is contrary to the evidence on record, thus rendering his decision perverse and bad in law. 8. The appellant craves leave to add, alter, modify, delete, amend .....

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-09 and ₹ 15,08,250/- in assessment year 2009-10. The basis for levy of penalty was, first, the additional income offered by the assessee in the return of income filed in response to notice issued under section 153A of the Act. The second set of additions made in the hands of the assessee were the additional income offered during the course of assessment proceedings, on which penalty under section 271(1)(c) of the Act was levied. The facts and issues raised in the present set of appeals ar .....

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The assessee for the year under appeal i.e. assessment year 2006-07 had filed the original return of income under section 139 of the Act on 14.03.2007 declaring total income of ₹ 2,03,010/-. In response to the notice under section 153A of the Act, the assessee furnished the return of income on 30.09.2010 declaring total income of ₹ 37,66,627/-, including additional income of ₹ 34,40,700/-. The additional income of ₹ 33,50,700/- was on account of advances received against .....

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essee and issued requisite notice thereunder. In response to the notice, the assessee pointed out that during the course of recording of statement under section 132(4) of the Act, the assessee had admitted additional income of ₹ 3,11,66,761/- for assessment years 2004-05 to 2010-11, in addition further additional income was offered in the name of assessee s wife Mrs. Snehal R. Sawale at ₹ 25,03,888/-. The assessee pointed out that the additional income was assessed in the hands of as .....

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e of advances credited in cash in his books of account. The assessee stated that he had no evidence in respect of amount totaling ₹ 2,17,98,431/-. Further, the assessee also admitted that he had no documentary evidence in support of gift claimed of ₹ 90,000/- and ₹ 8,17,500/- in assessment years 2006-07 and 2007-08 respectively. He further offered ₹ 55 lakhs received as additional income for assessment year 2010-11 on account of seized documents. Another disclosure made b .....

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undisclosed income would not have been unearthed, hence, the contention of the assessee about voluntary disclosure of income to buy peace of mind and avoid litigation, was found to be incorrect by the Assessing Officer. The Assessing Officer held the assessee to have committed default within the meaning of Explanation (1) and clause (ii) of Explanation 5A to section 271(1)(c) of the Act and held the assessee exigible to levy of penalty. Further, the assessee had offered rental income of ₹ .....

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of ₹ 11,86,410/- was levied. 7. The CIT(A) held that where the assessee had recorded the entries of advances from customers in the books and shown the same in the balance sheet as liability and not as income, therefore, the first portion of clause (ii) to Explanation 5A to section 271(1)(c) of the Act was not applicable to the facts of the case. As regards the second portion that the assessee claimed such entry in the books of account as income, where the assessee has claimed the first po .....

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was not liable to penalty as per Explanation 5. In respect of other additions made on account of gift shown in the books of account, the CIT(A) observed that the assessee had claimed receipts of gift from his parents and close relatives received by cheque and in cash. The said gifts were recorded in the books of account not as income, but as gift and were reflected in the capital account and balance sheet filed along with return of income prior to the date of search. In view thereof, the CIT(A) .....

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deleted by the CIT(A) as Explanation 5A was not attracted since the loan had been reflected in the balance sheet prior to the date of search and the same was recorded in the books of account regularly maintained in the case of the business, therefore, it could not be said that the said loan was assessed as income was unearthed as a result of search under section 132 of the Act. 8. Another penalty levied for assessment year 2007-08 in respect of change of head of income from capital gain to busin .....

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0 was confirmed by the CIT(A), against which the assessee is not in appeal. The Assessing Officer had further levied penalty in respect of rent from shop and house of ₹ 12,000/- in assessment years 2006-07 to 2009-10. Since the addition was made on notional basis, the CIT(A) held that where the explanation offered by the assessee was found to be bonafide, there was no merit in levy of penalty under section 271(1)(c) of the Act. Further, addition was made on account of income from hotel of .....

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imilar addition of ₹ 10,000/- on sale of plot at Vadala in assessment year 2007-08 was also confirmed by the CIT(A). The penalty in respect of both was deleted by the CIT(A). 8. The Revenue is in appeal against the order of CIT(A). 9. The learned Departmental Representative for the Revenue pointed out that the first issue raised in the present appeal on account of offering additional income pursuant to search is decided against the assessee by the order of Tribunal in Mrs. Sarita Kaur Manj .....

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n respect of same was deleted by the CIT(A). The item 5 is on account of estimated rental for the second house and where the said rental was not shown by the assessee, the assessee is exigible to levy of penalty. In respect of item 6 i.e. disallowance made since the TDS was not deducted on labour payments under section 40(a)(ia) of the Act, the same was liable for levy of penalty under section 271(1)(c) of the Act. Further, the assessee had offered rental income during the course of assessment p .....

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gave clear finding in assessment year 2007-08, which merits to be penalty levied. The learned Departmental Representative for the Revenue placed reliance on the ratio laid down by the Mumbai Bench of Tribunal in Ajit B. Zota Vs. ACIT (2010) 40 SOT 543 (Mum-Trib). He further pointed out that the assessment head was changed because of charges during the course of search. 10. The learned Authorized Representative for the assessee pointed out that one of plots was held by the assessee for 8 years a .....

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rit levy of penalty for concealment under section 271(1)(c) of the Act. Reliance in this regard was placed on the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Bennet Coleman & Co. Ltd. (2013) 87 DTR 368 (Bom) and Hon ble High Court of Madras in CIT Vs. Ganesan Builders Ltd. (2008) 299 ITR 403 (Mad). 11. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to levy of penalty under section 271(1)(c) of the Act read wi .....

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r 2006-07, ₹ 49,10,200/- in assessment year 2007-08, ₹ 75,01,500/- in assessment year 2008-09 and ₹ 25,22,100/- in assessment year 2009-10. Further, additional income was offered during the course of search itself under statement recorded under section 132(4) of the Act on account of gift shown in the books of account amounting to ₹ 90,000/- and ₹ 8,17,200/- in assessment years 2006-07 and 2007-08 and also on account of unsecured loan shown in the books of account o .....

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, addition was made on account of undisclosed profits on sale of flat at ₹ 22,250/- and in assessment year 2009-10 at ₹ 42,250/-. Further, in respect of disallowance on labour payments in view of the provisions of section 40(a)(ia) of the Act, additional income was offered in assessment year 2009-10 at ₹ 18,61,000/-. Another addition made in the hands of assessee was the estimated rental income from hotel of ₹ 60,000/- each in assessment years 2006-07 and 2007-08. Further .....

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sessee to be liable for levy of penalty under section 271(1)(c) of the Act and sum of ₹ 11,86,410/- was levied as penalty for concealment under section 271(1)(c) of the Act in assessment year 2006- 07, ₹ 28,35,000/- in assessment year 2007-08, ₹ 25,61,400/- in assessment year 2008-09 and ₹ 15,08,250/- in assessment year 2009-10. The tabulated details of the income offered in the return of income filed pursuant to issue of notice under section 153A of the Act are available .....

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shown in the balance sheet. The aforesaid additional income was offered by the assessee during the course of search proceedings, in the statement recorded under section 132(4) of the Act. The question arises that where the assessee had admitted to the additional income, which in turn, was disclosed in its return of income and taxes there upon were paid, whether the assessee was liable for levy of penalty under section 271(1)(c) of the Act. 13. We find that similar issue of levy of penalty under .....

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nder section 132 of the Act on 09.12.2009 and residence was also searched and cash of ₹ 1.60 crores was seized during the search proceedings. In the course of recording of statement during the search proceedings, the assessee admitted that she had sold her ancestral property at Delhi for ₹ 3.40 crores, for which the Agreement was made for ₹ 1.70 crores and the balance amount was received in cash. The claim of the assessee was that though she had 50% share in the impugned proper .....

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capital gains computed at ₹ 2,41,17,168/-, the assessee also claimed exemption under section 54 of the Act at ₹ 38,40,098/-, on account of investment in Mega Polis property. The Assessing Officer while completing assessment, noted that the assessee had not declared the sale consideration of ₹ 2.55 crores in the original return of income filed and subsequently after the search, the declaration was made on account of total amount of capital gains. The Assessing Officer recorded .....

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ttings and fixtures attached to the property were inextricably linked to the building and consideration received thereon, was to be treated as capital gains. The Assessing Officer also initiated penalty proceedings under section 271(1)(c) of the Act with regard to the said addition. Consequent thereto, the Assessing Officer rejecting the claim of the assessee that it had suo motu offered the income from long term capital gains, and no malafide intention could be attributed to the said disclosure .....

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ing Officer, since in the hands of assessee, there was no addition whatsoever, as the income offered by the assessee was accepted in toto, no penalty under section 271(1)(c) of the Act could be levied. From the perusal of assessment order, it is clear that the Assessing Officer after considering the facts of the case and also the return of income filed by the assessee pursuant to issue of notice under section 153A of the Act vide para 3.2 noted that the total sale consideration of the ancestral .....

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e the assessee had not declared this amount of capital gains in her original return and subsequently, after search has declared the total amount of capital gains and thus, concealed the particulars of income and consequently, penalty proceedings under section 271(1)(c) of the Act were initiated separately by the Assessing Officer. The above said finding of the Assessing Officer is the deemed satisfaction recorded by the Assessing Officer before initiating penalty proceedings under section 271(1) .....

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cealment of income or furnishing of inaccurate particulars of income. Only on fulfillment of the conditions stipulated in section 271(1)(c) of the Act, there arises a question of exercising power under the said provision to impose penalty. The said section lays down that where the Assessing Officer or the CIT(A) in the course of any proceedings under the Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, then he may di .....

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le articles or things and the assessee claims that such assets have been acquired by him by utilizing, wholly or in part his income, for any previous year, which had ended before the date of search, but the return of income for such year had not been furnished before the said date, or where the return of income had been furnished but such income had not been declared therein or for any previous year which is to end on or after the date of search, then notwithstanding that such income was declare .....

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ome has been derived and pays the taxes together with interest. Under Explanation 5, an exemption was provided to the person who was searched and was found in possession of money, bullion, jewellery, v aluable articles or things, then in case he declared the same under the statement recorded under section 132(4) of the Act and thereafter, pays the taxes on the same, no penalty under section 271(1)(c) of the Act was levied on such person. 16. However, for searches initiated under section 132 of t .....

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ccount or other documents or transactions and he claims that the same represents his income for any previous year, then where the period has ended before the date of search and the due date for filing the return of income for such year has expired and the assessee has not filed the return of income, then notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall for the purpose of imposition of penalty under section 271(1)(c) of .....

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e had not filed the return of income, then notwithstanding the fact that the said income is declared by him in any return of income furnished on or after the date of search, he shall be deemed to have concealed the particulars of his income or furnished inaccurate particulars of his income. 17. The deeming provisions of Explanation 5A under section 271(1)(c) of the Act are applicable to all the searches initiated under section 132 of the Act on or after first day of June, 2007. The conditions la .....

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income for any previous year, then in cases where the return of income for such previous year had been furnished by the assessee prior to the date of search, but the said income had not been declared in the said return of income or the due date for filing the return of income had expired for such previous year and the assessee had not filed the return of income, it is further laid down that notwithstanding the fact that such income which has been discovered due to the search proceedings, is decl .....

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le articles or things from the possession of the assessee during the course of search conducted on or after first day of June, 2007. Further, where any income is based on any entry in any books of account or other documents or transactions and he claims that all the above said represents his income for any previous year, then the Explanation lays down to that extent, the person would be deemed to have concealed his particulars of income or furnished inaccurate particulars of income. 18. Now, com .....

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undisputed fact that the assessee came forward and declared income which was pertaining to the amount covered by the unrecorded expenditure but the fact remains that the assessee did not declare any expenditure but it is only the income. The Ld. Counsel referred to the definition of the income given in sec. 2(24) of the Act. The scope of the said definition has been explained by the Hon ble Supreme Court in the case of EMIL Webber (supra) which has been relied upon by the Ld. Counsel The relevan .....

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, of course, it is exempted under one or the other provision of the Act. It is from the said angle that we have to examine whether the amount paid by Ballarpur by way of tax on the salary amount received by the assessee can be treated as the income of the assessee. It cannot be overlooked that the said amount is nothing but a tax upon the salary received by the assessee. By virtue of the obligation undertaken by Ballarpur to pay tax on the salary received by the assessee among others, it paid th .....

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ayment had no integral connection with the salary received by the assessee. We are, therefore, of the opinion that the High Court and the authorities under the Act were right in holding that the said tax amount is liable to be included in the income of the assessee during the said two assessment years. 17. As per interpretation made by the Hon'ble Supreme Court of sec. 2(24) of the Act, it is clear that it is an inclusive definition and it covers all income come under charging provisions of .....

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laims that such assets have been acquired by him by utilizing (wholly or in part) his income for any previous year; or (ii) Any other income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and (a) where the return of income for such previous year has been furnished before t .....

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particulars of such income. 19. So far as the present assessee is concerned, clause (ii) to Explanation 5A is applicable. Admittedly, the expenditure which was not recorded has been found by way of entries in the seized documents. While explaining the scope of Explanation 5A in the case of Chandan K. Shewani (supra) the Tribunal has held that to patch out the lacuna due to the judicial interpretation of Expl. 5 of Sec. 271(1)(c) which was on the statute book upto 31-5-2007, Explanation 5A has b .....

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:- Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year; 20. So far as the Expl.- 5 which was on the statute book, the Courts have taken a view th .....

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on of the assessee is not satisfactory, then to the extent of the amount covered by such expenditure is treated as income. Ultimately what is taxed under Sec. 69 C of the Act is not the expenditure but it is basically the undisclosed income which has been applied for incurring the unrecorded expenditure. In our view, there is no merit in the argument of the Ld. Counsel that the assessee has only declared the amount expenditure. We therefore, hold that to the extent of the income offered by the a .....

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assessee pertaining to the cash seized from the assessee and the declaration of the assessee that the said cash relates to the unaccounted cash received vide the sale transaction entered into by the assessee, which in turn, was declared by the assessee in the return of income filed pursuant to issue of notice under section 153A of the Act, is the income detected during the course of search and seizure operation. The case of the assessee is squarely covered by the provisions of Explanation 5A to .....

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nd Hyderabad Bench of Tribunal in Shri PV Ramana Reddy Vs. ITO (supra). In view of binding precedent of Pune Bench on the said issue, we find no merit in the reliances placed upon by the learned Authorized Representative for the assessee on DCIT Vs. Purti Sakhar Karkhana (supra) and Shri PV Ramana Reddy Vs. ITO (supra). The other reliance placed upon by the learned Authorized Representative for the assessee on the decision of Pune Bench of Tribunal in Smt. Pramila D. Ashtekar Vs. ITO (2013) 39 t .....

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f the issue of levy of penalty us 271(1)(c) of the Act is the wrong claim of deduction made by the assessee under section 54 and 54F of the Act. The CIT(A) vide para 3.10 to 3.11 has deliberated upon the factual aspects of the issue, which are being referred, but not being reproduced for the sake of brevity. 21. The assessee having made a wrong claim in the return of income i.e. by way of claim of deduction under section 54 on account of investment in two properties and in respect of capital gai .....

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of exemption claimed u/s.54 of the Act 32,77,070 22. We uphold the order of CIT(A) in confirming the levy of penalty on the above said two accounts. Dismissing the grounds of appeal raised by the assessee, we uphold the order of CIT(A). 14. The Tribunal in the aforesaid decision had held that as per Explanation 5A to section 271(1)(c) of the Act, which was substituted by the Finance (No.2) Act, 2009 with retrospective effect from 01.06.2007, wherein it was provided that where the assessee durin .....

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t his income, whole or in part, for any previous year, which had ended before the date of search and (a) where the return of income for such previous year has been furnished before the said date, but such income had not been declared therein or (b) the due date for filing the return of income for such assessment year had expired, but the assessee had not filed the return, then notwithstanding that such income is declared by him in any return of income filed on or after the date of search, he sha .....

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assessee under section 132 of the Act was carried out on 06.01.2010, hence, the amended provisions are attracted. The Tribunal further held that where the conditions laid down in Explanation 5A are attracted, the person is deemed to have concealed particulars of his income or furnished inaccurate particulars of such income, which is equivalent to the value of any money, bullion, jewellery, valuable article or thing found from the possession of the assessee during the course of search. Further, .....

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e for filing the return of income for such previous year had expired, but the assessee had not filed the return. Even if the additional income was declared by him in the return of income furnished on or after the date of search, he would be deemed to have concealed the particulars of his income or furnished inaccurate particulars of income. 15. In the facts of the present case, the condition as in clause (ii) of Explanation 5A is applicable i.e. the income is based on the entry in books of accou .....

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te of search, he is liable to levy of penalty under section 271(1)(c) of the Act. In the facts of the present case, we hold that the declaration made by the assessee on account of advances received in cash from the customers which was shown in the books of account, balance sheet and even in the return of income, filed before the date of search, in view of the declaration of the assessee while recording the statement under section 132(4) of the Act, during the course of search and seizure action .....

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ssee on account of advances received in cash from customers shown in the balance sheet. Similarly, the assessee is thus, held to be liable for levy of penalty on the additional income of ₹ 33,50,700/-, 49,10,200/- ₹ 75,01,500/- and ₹ 25,22,100/- in assessment years 2006-07 to 2009-10. Similarly, the gifts shown in the books of account which have been offered as additional income by the assessee during the course of search itself, in the statement recorded under section 132(4) o .....

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prior to date of search does not warrant the levy of penalty under section 271(1)(c) of the Act. In view of the amended provisions of Explanation 5A to section 271(1)(c) of the Act, the said finding of the CIT(A) is reversed and we hold that the assessee is liable to levy of penalty under section 271(1)(c) of the Act on the income offered by the assessee pursuant to search carried out at his premises, during the course of recording of statement under section 132(4) of the Act and by way of addit .....

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laid down by the Pune Bench of Tribunal in Sarita Kaur Manjeet Singh Chopra Vs. ITO (supra), we hold that the assessee is exigible to levy of penalty under Explanation 5A to section 271(1)(c) of the Act on the incomes offered in the return of income pursuant to issue of notice under section 153A of the Act. 18. Now, coming to second set of additions made to the return of income in relation to the additions made by the Assessing Officer while completing assessment proceedings under section 153A r .....

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ved on sale of plot at Vadala 12,000 10,000 - 19. The first addition made in the hands of assessee is on account of undisclosed rent from shop and house added in the hands of assessee on estimated basis @ 12,000/- in each of the years. The Assessing Officer vide para 9 of the assessment order for assessment year 2006-07 had made the aforesaid addition on account of house property at Malegaon and shop at Nashik, as no income in respect of the said property has been offered to tax. The assessee of .....

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f, the provisions of Explanation 5A to section 271(1)(c) of the Act are not applicable. However, the substantive provisions of section 271(1)(c) of the Act are attracted, but in view of the notional income being assessed in the hands of assessee and in the absence of any evidence found during the course of search or otherwise as to the receipt of rental income from the said properties, we find no merit in the levy of penalty under section 271(1)(c) of the Act on such notional rent. Accordingly, .....

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sment years 2006-07 and 2007-08. The offer of the rental income during the course of assessment proceedings was to buy peace of mind and to avoid litigation. However, there is no finding of any of the authorities that the assessee had indeed received the aforesaid rental income from the said hotel. In view of the explanation of the assessee, which was not accepted by the Assessing Officer and addition was made in the hands of assessee on notional basis, does not justify the levy of penalty under .....

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on sale of flat of ₹ 22,250/- and ₹ 42,250/- in assessment years 2008-09 and 2009-10. The Assessing Officer made the aforesaid addition since the profit on sale of flats had not been declared by the assessee in the return of income filed, but was offered to tax during the scrutiny assessment. The claim of the assessee in this regard is that the said income was voluntarily offered by the assessee and was not found during the course of search. In case, no evidence was found during the .....

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ng Officer to levy penalty under section 271(1)(c) of the Act on additions of ₹ 22,250/- and ₹ 42,250/- in assessment years 2008-09 and 2009-10. 22. Now, coming to the next addition of on-money received on sale of plot of ₹ 12,000/- in assessment year 2006-07 and ₹ 10,000/- in assessment year 2007-08. Admittedly, the said on-money received by the assessee was not disclosed by him in the return of income. Though no evidence was found during the course of search in this reg .....

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on 271(1)(c) of the Act. We reverse the order of CIT(A) in this regard and uphold the levy of penalty under section 271(1)(c) of the Act on receipt of on-money of ₹ 12,000/- in assessment year 2006-07 and ₹ 10,000/- in 2007-08. 23. The next addition made in the hands of assessee is on account of disallowance of labour payment of ₹ 18,61,000/- in assessment year 2009-10 i.e. for non-payment of taxes at source. The addition was made in the hands of assessee by the Assessing Offic .....

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the order of Assessing Officer in this regard and upholding the order of CIT(A) in deleting the penalty levied on the said addition of ₹ 18,61,000/- in assessment year 2009-10, we confirm the order of CIT(A) in this regard. 24. The last addition made in the hands of assessee in assessment year 2007-08 was on account of change in head of assessing of particular income on long term capital gains offered to tax in the return of income at ₹ 24,48,300/-, was assessed as business income in .....

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al gains as shown in the return of income, does not justify the levy of penalty under section 271(1)(c) of the Act. Accordingly, we uphold the order of CIT(A) in this regard and we find support from the ratio laid down by the Hon ble Bombay High Court in CIT Vs. Bennet Coleman & Co. Ltd. (supra), wherein it has been held that where in view of the fact that where the assessee only changed head of account and in the absence of any facts that claim of assessee was not bonafide, the deletion of .....

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