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2015 (4) TMI 1094 - ITAT MUMBAI

2015 (4) TMI 1094 - ITAT MUMBAI - TMI - Levy of penalty under s. 271(1)(c) - order u/s.143(3) adding surrendered amount u/s.69A - Held that:- From the record we found that at the very first instance share application money was surrendered by assessee with a request not to initiate any penalty proceedings. The AO passed order u/s.143(3) adding surrendered amount u/s.69A on the plea that assessee has surrendered amount only after issue of notice. It is not disputed by the department that sum which .....

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and not a deliberate attempt to evade tax. Hon’ble Supreme Court in the case of CIT vs. Suresh Chandra Mittal (2001 (6) TMI 63 - SUPREME Court ) observed that where assessee has surrendered the income after persistence queries by the AO and where revised return has been regularized by the Revenue, explanation of the assessee that he has declared additional income to buy peach of mind and to come out of waxed litigation could be treated as bona fide, accordingly levy of penalty under s. 271(1)(c) .....

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of the I.T.Act. 2. Rival contentions have been heard and record perused. Facts in brief are that assessee is engaged in manufacturing of pesticides, herbicides and formulations. During the year under consideration, assessee filed its return at total income of ₹ 1.49 crores. During the course of scrutiny assessment proceedings, the AO found that the assessee received share application money of ₹ 89.50 lakhs during the year under consideration. The assessee was asked to fu .....

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e year of ₹ 89,50,000/- as income of the assessee for assessment year 2009-10. The AO being not satisfied by the above explanation, added ₹ 89.50 lakhs in assessee s income u/s.69A and also levied penalty u/s.271(1)(c). 3. By the impugned order, the CIT(A) confirmed the action of the AO imposing penalty against which assessee is in further appeal before us. 4. We have considered rival contentions, carefully gone through the orders of the authorities .....

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e. It is not disputed by the department that sum which was added u/s.69A was one which was surrendered by the assessee itself. Neither there was any detection nor there was any information in the possession of the department except for the amount surrendered by the assessee and in these circumstances it cannot be said that there was any concealment. In case of CIT vs. Suresh Chandra Mittal 251 ITR 9 (SC), Hon ble Supreme Court observed that if the assessee has offered the additional income to bu .....

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he total income of assessee merely on the basis of assessee s declaration/surrender. The AO did not point out or refer any evidence or material to show that the amount of share capital received by the assessee was bogus. It is also not the case of the revenue that material was found at the assessee s premises to indicate that share application money received was an arranged affair to accommodate assessee s unaccounted money. Thus there was no detection by the AO that share capital was not genuin .....

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ny specific query. Even surrender of amount by the assessee after receipt of questionnaire could not be lead to any inference that it was not voluntary, in the absence of any material on record to suggest that it was bogus or untrue. The contention that in every case where surrender is made inference of concealment of income must be drawn under S.58 of Evidence Act, cannot be accepted in view of the decision of Punjan & Haryana High Court in the case of Careers Education & Infotech (P) L .....

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