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2016 (7) TMI 55

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..... 1349 of 2008 - - - Dated:- 16-6-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MR PRANAV G DESAI, ADVOCATE FOR THE OPPONENT : MR RK PATEL, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) By way of this appeal, the appellant-revenue has challenged the order dated 27/03/2008 passed by the ITAT in ITA No.30/RJT/2005 whereby the appeal of the revenue came to be dismissed and confirmed the order dated 28/01/2005 passed by the CIT (Appeals), Rajkot. 2. The short facts of the case are that respondent was doing business of gold and a search operation was carried out under Section 132 of the Income Tax Act at the business and residential premises on 12/01/1999 and during the said se .....

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..... 5,29,100/- against the maximum permissible of ₹ 75,85,300/- . 2.4 Against the said order passed by the A.O., the assessee preferred an appeal before the CIT (Appeals) which came to be allowed and penalty imposed upon the assessee came to be deleted by order dated 28/01/2005. 2.5 The Revenue, being aggrieved by the said order dated 28/01/2015 preferred an appeal before the ITAT which has dismissed the appeal of the revenue by order dated 27/03/2008 which has given rise to the present tax appeal. 3. While admitting the appeal, the following substantial question of law has been framed: Whether on the facts and circumstances of the case and in law, the Appellate Tribunal is justified in deleting the penalty of ₹ 25,29, .....

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..... t not concealed in the return for the block period filed by the appellant. It appears that the penalty order is passed with the presumption that penalty is leviable as soon as the undisclosed income determined by the Assessing Officer exceeds the undisclosed income declared by the appellant. In my opinion, the penalty u/s. 158BFA(2) is not automatic and cannot be levied in a mechanical manner. The provision enables the Assessing Officer to levy the penalty but does not make it mandatory. The expression used in sub section 158BFA (2) is the Assessing Officer may direct the person shall pay by way of penalty...... In the context of penalty u/s. 271(c) similar expression is interpreted by the Apex Court in the case of CIT Vs. Noorjahan (23 .....

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..... ,31,698/are on account of the rejection of the claim of the business loss as above. The other major amounts are ₹ 76,683/- in respect of ornaments not seized by the Customs department, ₹ 48,500/- on account of estimated house hold expenses not disclosed by the appellant, ₹ 44,480/- is in respect of unaccounted loan, ₹ 12,627/- is in respect of the difference between the cost and written down value of the Vehicles and ₹ 1,299/- is about deposits in bank account not disclosed. As far as house hold expenses are concerned, it is an exercise in estimate, which should not be any basis for levy of penalty. The deposits in bank account no.3471 is in the joint account of several persons. The addition is made without an .....

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