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TMI Blog2016 (3) TMI 817X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- u/s 271(1) (C) of Income-tax Act on difference of surrendered and returned Income of Rs. 10,95,00/-. (2) The Learned CIT(Appeals) has erred while confirming penalty u/s 271(1)(C) of Income - tax Act disregarding judgments of Jurisdictional High Court and Judgment of Hon'ble Supreme Court of India Where it has been held that surrendered Income is not a undisclosed income of assessee. 3. Brief facts relating to the case are that return of income was filed on 31/03/2007 declaring total income of Rs. 17,23,442/-. A survey under section 133A was conducted on 10/11/2015, and the assesssee was found to be in possession of unaccounted cash, unrecorded stock and unexplained investment in construction of house property. While recording the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urnished inaccurate particulars of income and therefore levied penalty under section 271(1)(c). The matter was carried in appeal before Ld. CIT(A) before whom the assessee argued that there no concealment of income since less figure of investment in house property was taken on the basis of the report of a chartered engineer. The assessee further stated that merely because surrender had been made by the assessee did not mean that the assessee had undisclosed income. Ld. CIT(A) brushed aside the assessee's contention and held that the assessee had concealed particulars of income and therefore upheld the levy of penalty under section 271(1)(c). Ld. CIT(A) held at para 4 of his order as follows: 4. I have gone through the penalty order, writt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e undisclosed investment in house property. Ld.AR stated that there was no furnishing of inaccurate particulars of income in this case since the investment in construction of house property had been disclosed relying upon the report of the registered valuer while the addition had been upheld merely on the basis of surrender made during the course of survey without appreciating the report of the registered valuer in this context. The Ld. AR stated that at the time of making surrender the assessee had merely estimated the cost of construction in the house property. Ld. AR drew our attention to the statement recorded of the assessee during the course of survey on 10/11/2005, more specifically to the second statement recorded on 10/11/2005 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the assessee had clearly furnished inaccurate particulars of income and it was a fit case for levy of penalty under section 271(1)(c). 9. We have heard the rival submissions and the orders of the authorities below and also the documents produced before us. 10. The facts emerging in the present case are that during the course of survey the assesssee had surrendered an amount of Rs. 10,80,590/- on account of unexplained investment in construction of house property. The unexplained investment had been worked out as the total investment in house property was taken at Rs. 15,67,500/- against which the disclosed investment was shown of Rs. 4,86,910/- resulting in unexplained investment of Rs. 10,80,590/-. Thereafter the assessee engaged the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee himself which valued the house property at a lesser figure and estimated the undisclosed investment at Rs. 9,71,090/-. It is also not in dispute that the investment which was stated by the assessee to have been made in the construction of house property during survey was not based on any evidence but was a calculation based upon a rate applied to the Area constructed. The statement of the assessee recorded on 10/11/2005 and reproduced above clearly brings out this fact that the assessee had applied the rate of Rs. 350 to estimate the cost of construction of 1650 sq. ft of ground floor. The assessee had further applied a rate of Rs. 300 to estimate the cost of construction of first floor and the second floor which was again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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