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2016 (4) TMI 850 - ITAT CHENNAI

2016 (4) TMI 850 - ITAT CHENNAI - TMI - Penalty u/s.271(1) (c) - assessee has voluntarily accepted and agreed for addition and paid taxes - Held that:- Additions are made on the submissions recorded during the survey operations u/s.133A of the Act and does not have evidential value without any incriminating documents supporting the statements and we rely on the jurisdictional High Court decision of CIT vs. S. Khader Khan Son [2007 (7) TMI 182 - MADRAS HIGH COURT] and the assessee in penalty proc .....

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buy peace with the department and avoid protracted litigation the assessee has paid taxes and not filed appeal against the order u/sec.143(3) of the Act, the penalty proceedings are not automatic and they are separate and distinct. We draw support from the principles laid down in case of case of CIT vs. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT ] and Accordingly direct the Assessing Officer to delete the penalty. - Decided in favour of assessee - I.T.A. No. .....

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2. The assessee has raised substantive ground against order of Commissioner of Income Tax (Appeals) erred in confirming the penalty u/s.271(1) (c) of the Act where the assessee has voluntarily accepted and agreed for addition and paid taxes. 3. The Brief facts of the case that the assessee is a Retailer in Textiles Business. The assessee filed return of income electronically on 06.11.2007 with total income of =25,740/-. Subsequently the return was processed u/s.143(1) of the Act and as per scrut .....

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21,000/- to one of the supplier and provisions of Sec.40A(3) of the Act are attracted and disallowed 20% of the cash payment =4,200/-. The ld. Authorised Representative appeared from time to time and submitted explanations. The Assessing Officer completed assessment u/s.143(3) of the Act dated 11.12.2009 with above additions and assessed income of =1,79,940/-. Subsequently, the Assessing Officer issued notice u/s.271(1) (c) of the Act for initiating levy of penalty and calling for the explanatio .....

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0,000/- to buy peace with the Department and to avoid vextious litigations. The ld. Assessing Officer overlooked the submissions and alleged that because of survey operations the assessee has come forward for surrender of income and filed consent letter offering additional income but prime facie, the assessee in order to buy peace and cooperated in the assessment proceedings but the Assessing Officer in penalty proceedings presumed that the assessee has not explained any investment of excess sto .....

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on the date of survey on 10.10.2006, the Department has not found any excess physical stock. Since the survey took place in Diwali session and the stocks have just arrived one day before date of survey the assessee inorder to buy peace has cooperated and agreed to offer additional income of =1,50,000/-. The Revenue made adhoc addition without any substantive facts on records. Assessee has established the bonafides by payment of the taxes inspite of financial crisis and genuine difficultly. The .....

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y incriminating material during the survey u/s.133A of the Act except recording of statement and addition of income in the assessment proceedings. The ld. Commissioner of Income Tax (Appeals) on the findings of the Assessing Officer and also factual matrix of the case relied on the decision of Apex Court MAK Data (P) Ltd vs. CIT, 38 taxmann.com 448 and decision of jurisdictional High Court CIT vs. M/s. Mekala Finance & Investment Co in T.C. No.495 to 497 of 2009, dated 26.11.2003 and elabora .....

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an appeal before the Tribunal. 5. Before us, the ld. Authorised Representative reiterated his submissions made before the assessment proceedings, penalty proceedings and Commissioner of Income Tax (Appeals). The only contention the Revenue emphasizing but for survey, assessee could not have offered to income tax. The assessee in the survey operations without any basis or any mathematical calculations or incrementing material unearthered by the Department came forward to offer additional income o .....

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onfession and another letter of CBDT dated 18th December, 2014 on the admission of undisclosed income under coercion/pressure during search/survey and relied on the Jurisdictional High Court decision and pleaded for deletion of penalty. 6. Contra, the ld. Departmental Representative relied on the lower authorities order and vehemently argued on the findings of the ld. Commissioner of Income Tax (Appeals) that disclosure has come only due to survey operations and supported the decisions of ld. Co .....

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afides and there is no conscious and willful attempt to evade taxes. The contention of the Department that due to survey operations only the assessee has come forward to offer the income, but either before lower authorities or before us, the Department could not substantiate their claim of finding incriminating documents of inventory of stocks except relying on the consent/confession letter of the assessee considered by the Assessing Officer for additions in assessment proceedings. The ld. Autho .....

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