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2016 (8) TMI 864 - ITAT MUMBAI

2016 (8) TMI 864 - ITAT MUMBAI - TMI - Penalty levied u/s 271AAA - income of the assessee treated as “Unaccounted investment” - Held that:- Since the penalty u/s 271AAA has been levied on identical set of facts in both the cases, we prefer to dispose both the appeals instead of sending the appeal of Mrs. Peidade Perinchery to the file of the Ld CIT(A). According to the Ld CIT(A), these assesses have not satisfied the conditions specified in sec. 271AAA with regard to the payment of taxes, i.e, t .....

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an Vikas Patras and to adjust the proceeds thereof against the tax payable by the assessee on the disclosed income. It is a settled proposition of law that a person cannot be forced to do impossibility. Since the assessee was not having liquid funds to pay the taxes, he had no other option, but to encash the securities. Accordingly, he has requested the AO. In our view, the request so made by the assessee and subsequent encashment of the securities satisfies the conditions prescribed in sec. 271 .....

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y Shri Neelkanth Khandelwal Department by Shri Manjunatha Swamy & Shri A.K. Nayak Mr. Samson Peerinchery & Mrs. Piedade Perinchery ORDER Per B. R. Baskaran, AM All these appeals were heard together and hence they are being disposed of by this common order for the sake of convenience. The appeals numbered as 1528/Mum/2014 and 2581/Mum/2014 are cross appeals relating to AY 2009-10 in respect of the assessee named Shri Samson Perinchery Paul. The other two appeals relate to the penalty levi .....

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to offer the same as income in his hands as well as in the hands of his family members. He also made a request that the tax paid by them already in their regular returns of income be given credit. Subsequently these assessees filed returns of income for various years u/s 153A of the Act. The AO noticed that the additional income declared by these assessees work out to only ₹ 6.88 crores, resulting in a deficit of ₹ 67.46 lakhs. The assessee submitted that the total investments agreed .....

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years would cover up the deficiency, if any, pointed out by the AO. However, the AO was not convinced with the said explanations and accordingly assessed the difference of ₹ 67.46 lakhs as income of the assessee as Unaccounted investment . 3. In the appellate proceedings, the Ld CIT(A) deleted this addition and hence the revenue has filed this appeal before us. 4. We heard the parties on this issue and perused the record. We notice that the ld CIT(A) has given relief to the assessee with t .....

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00 ] Ans to Q. No. 18 on page 4 of the assessment order Total ₹ 29,00,000 ] Cash found At Mumbai ₹ 4,20,000 ] At Goa ₹ 2,38,000 ] Ans to Q. No. 19 on page No. 4 of the assessment order Total ₹ 6,58,000 ] Total disclosure (from above) ₹ 7,55,85,759 (A) Additional amounts declared Mr Samson Perinchery ₹ 4,38,49,706 Mrs. Piedade Perinchery ₹ 2,49,89,820 (wife of the appellant) ₹ 6,88,39,526 (B) Addition made by the Assessing Officer ₹ 67,46,233 .....

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ade Perinchery Total Per appellant (income per return of income under section 153A) ₹ 5,05,12,066 ₹ 2,58,48,480 ₹ 7,63,60,546 Per Assessing Officer (only additional income considered that is 153A-139(1) ₹ 4,38,49,706 ₹ 2,49,89,820 ₹ 6,88,39,526 It is pointed out by the appellant that while the total assets found and disclosed under s. 132(4) aggregates ₹ 7,55,85,777, the total income returned aggregate to ₹ 7,63,60,546/- (Rs.5,05,12,066 + 2,58,48,4 .....

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sessment year 2002- 03 ₹ 11,55,394 On the basis of the above facts and figures, it is submitted by the appellant that the impugned addition needs to be deleted. 9.4 I have very carefully considered the matter. The contention raised by the appellant before the A.0 was that in the statement recorded under s. 132(4), the appellant had declared that the disclosure as made of ₹ 7,55,85,777/- includes the sums already offered to tax in the returns as fired under s. 139(1). The A.0 had reje .....

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of ₹ 29,00,000/, and ₹ 6,58,000/- (as per question no. 18 & 19) should not be considered as your undisclosed income. Ans : I had already accepted our investments in NSC/KVPs/ F.Ds/Mutual Funds of ₹ 7,20,27.777/- as income of me and my wife and I also accept Money of ₹ 29,00,000/- given to Mr. Prabhat L. Singh as my asset and R. 6,58,000/- found in cash as also my asset. I am agreeing to pay the tax for the source of all these assets which is cash deposits in my vario .....

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the appellant that the income declared under s. 153A includes the return of income originally filed under s. 139(1) merits due consideration. Undoubtedly in the statement under oath the appellant had stated that he be given credit for taxes already paid which means that the income per 132(4) includes income per 139(1). That being so the A.0 erred in stating that nowhere in the statement recorded under s. 132(4), such a claim had been made. Since the facts on record lead to the inference that su .....

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e .interest of fair play and justice, it has to be stated that per 132(4) includes income per 139(1) to the extent taxes already paid. To the said extent the appellant will get relief. To reiterate in answer to question no.20, the appellant had requested that he be given set off the taxes paid by him and his family members in the returns filed before the department for various assessment years against the tax payable determined on the undisclosed income offered by him. Again to reiterate this me .....

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equired to disclose the sources thereof. For computing the source, one is required to take into consideration both declared and undisclosed income. Hence, there is merit in the contentions of the assessee that the aggregate income disclosed in returns filed u/s 153A of the Act (income returned u/s 139(1) plus additional income declared) should be compared with the aggregate amount of investments found during the course of search. Even if we assume for a moment that the assessee has not explained .....

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time of search relate to investments, what is required to be assessed is only those part of investments, sources of which could not be explained to the satisfaction of the AO. Further the Ld CIT(A) has found out from the answers given by the assessee that the assessee had intended to include the income declared in the returns filed u/s 139(1) of the Act in the disclosure and such an interpretation given by Ld CIT(A) is well within the scheme of the Act. Accordingly, we do not find any infirmity .....

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d from the total income. It is further submitted that the assessee has wrongly offered LIC refund, a capital receipt, as his income and accordingly it is prayed that the same may be excluded. 7. It is settled law that the tax can be collected only on the real income. The excess interest cannot be subjected to tax, even if the assessee had offered the same. Similarly the capital receipts cannot be taxed except with the authority of law. Since both the contentions have been raised for the first ti .....

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further the assessees have failed to pay the tax on the additional income. It is pertinent to note that the provisions of sec. 271AAA(2) specifies three conditions, which are required to be satisfied in order to escape from penalty under that section. According to AO, the assessees have not satisfied two conditions. In the appellate proceedings, the Ld CIT(A) examined the replies given by the assessee in the sworn statement and noticed that the assessee has stated his sources of income as broke .....

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ondition, meaning thereby, there is no dispute that the assessees have satisfied other two conditions. In the case of Mrs. Peidade Perinchery, the Ld CIT(A) dismissed the appeal for non-appearance. 9. We have heard the parties on this issue. Since the penalty u/s 271AAA has been levied on identical set of facts in both the cases, we prefer to dispose both the appeals instead of sending the appeal of Mrs. Peidade Perinchery to the file of the Ld CIT(A). According to the Ld CIT(A), these assesses .....

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