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Rajiv Kumar Gupta Versus DCIT, Co. Circle -20 New Delhi

2016 (6) TMI 533 - ITAT DELHI

Levy of penalty under section 158BFA (2) - Cash Found and Jewellery - Held that:- It is now a settled issue that penalty under section 158 BFA is not automatic and cannot believe levied merely because the addition has been confirmed. On both the two additions above it is apparent that had the assessee produced the cashbook as well as the withdrawal of cash in the hands of those company where ₹ 448299 was an opening balance and the withdrawal of cash is from bank, perhaps the addition would .....

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ax ( investigation). Similarly, the explanation for the jewellery found was also given vide same letter . Therefore, though the additions have been confirmed on the basis that this is an afterthought but merely because the addition has been confirmed, the penalty under section 158BFA , which is not automatic, cannot be levied. Therefore, on the merits on both the above additions we delete the penalty.

According to the provisions of section 158BFA (2) the assessing officer is required .....

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i H. S. Sidhu Judicial Member And Shri Prashant Maharishi, Accountant Member For the Assessee : Shri Ajay Wadhwa, Adv. For the Department : Ms. Nandita Kanchan, CIT (DR) ORDER Per Prashant Maharishi, A. M. 1. This appeal is filed by the assessee against the order of Ld. CIT(A) XXXI, New Delhi dated 31.7.2012 wherein penalty u/s 158BFA(2) of ₹ 5,19,750/- levied by the AO is confirmed. The following grounds of appeal are raised by the assessee :- i) The order of Ld. CIT(A)-XI, New Delhi date .....

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Act, 1961 conducted on 17.7.2012. iv) The appellant craves leave to alter, amend or add any other ground of appeal either before or during the course of hearing. 2. The first ground of appeal is general in nature and therefore is dismissed. 3. All the other grounds of the appeal simply relates to the levy of penalty under section 158BFA (2) of ₹ 5 19750/-. Therefore we deal with the all the grounds of the appeal on the merit of the addition and on the quantum of the penalty. 4. Brief fact .....

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0/- was levied by AO vide his order dated 30.6.2009. The assessee contested this penalty in appeal before Ld. CIT(A). Ld. CIT(A) rejected the contention of the assessee holding that the appellant had not declared his income truly and acted deliberately in not showing the above income. Therefore, he upheld the penalty. Assessee filed an appeal before us against this. 5. Before us the Ld. AR of the appellant made an application for admission of additional grounds for raising an addition vide praye .....

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the cash of ₹ 3,27,000/- the addition was made based on the statement of the appellant, which was retracted on 27.9.2009, and further the source of the case found was belonged to the saving of the entire family. Further ₹ 2,85,000/- belong to M/s. Cain Technologies (India) Pvt. Ltd. wherein assessee was the director and on the date of search as per the books of accounts of the company, cash balance of ₹ 6,29,336/- was available. Therefore, he submitted that the explanation of .....

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cisions. He further stated that penalty u/s 158BFA is not automatic and cannot be levied on the simple fact that addition has been confirmed. For this proposition, he relied on the decision of Hon ble Delhi High Court in CIT vs. Harkaran Das Ved Pal (2011) 336 ITR 8 (Delhi). In view of the above facts, he submitted that the penalty may be deleted on the merits of the case. 7. Ld. DR relied on the orders of the lower authorities and submitted that assessee has not disclosed the income, which was .....

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income. The assessee has explained that cash found during the course of search being ₹ 40500 from the bedroom of the assessee, ₹ 2 85000 from the office of the assessee and ₹ 50,000 from the bedroom of the assessee s parents to be belonging to one of the company in which the appellant was one of the directors and on the date of search , that company was having cash on hand of ₹ 6.29 lakhs . This explanation of the assessee was disbelieved. Regarding, the source of the cas .....

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a private limited and the bank statement of that particular company was not produced and the books of accounts of the company were not produced supporting the contention of the availability of the cash in the hands of the company. Therefore, the addition was confirmed. During the penalty proceedings the assessee has submitted the copy of the cash account of the above company from 01/04/2002 to 31st of March 2003 the cash balance as on 10/07/2002 shows balalnce of ₹ 629336.75. Therefore, in .....

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e assessee during the penalty proceedings that it belonged to the mother of the assessee Mrs Surjeet Gupta and during the course of penalty proceedings he submitted the return of income of the mother of the assessee as well as the assessment under section 143 (3) of the act . Affidavit of the appellant s mother was also submitted on 25/09/2002 wherein she claimed ownership of the said Jewellery worth ₹ 411432/-. This affidavit has not been controverted by revenue even in appellate proceedi .....

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bove two additions sustained concurrently by the authorities. It is now a settled issue that penalty under section 158 BFA is not automatic and cannot believe levied merely because the addition has been confirmed. On both the two additions above it is apparent that had the assessee produced the cashbook as well as the withdrawal of cash in the hands of those company where ₹ 448299 was an opening balance and the withdrawal of cash is from bank, perhaps the addition would not have been susta .....

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Similarly, the explanation for the jewellery found was also given vide same letter . Therefore, though the additions have been confirmed on the basis that this is an afterthought but merely because the addition has been confirmed, the penalty under section 158BFA , which is not automatic, cannot be levied. Therefore, on the merits on both the above additions we delete the penalty. iii) Coming to the quantum of the penalty that whether the penalty u/s 158BFA is leviable on the amount of undisclo .....

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