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2016 (10) TMI 364 - ITAT JAIPUR

2016 (10) TMI 364 - ITAT JAIPUR - TMI - Penalty u/s 271(1)(c) - assessment was made accepting the revised return - undisclosed income towards excess cash, excess stock and list of outstanding debtors was offered and tax was paid - Held that:- The survey was conducted on 10.7.2008, more than 3 months have been completed for the financial year 2008-09 relevant to assessment year 2009-10. During the course of survey, excess cash, excess stock and list of outstanding debtors were found which has bee .....

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ngs in assessment. However, quantum proceedings and penalty proceedings are separate. No investigation or additional evidence had been brought on record to show that assessee has concealed the particulars of income and concealed the income. The AO only imposed the penalty on the basis of returned income. In the case of Suresh Mittal, [2001 (6) TMI 63 - SUPREME Court ] held that no penalty can be imposed if the revised return accepted by the AO as such. A number of decisions also on this issue ha .....

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JCIT) ORDER Per Shri T. R. Meena, A. M. The appeal filed by assessee is emanating from the order dated 14.05.2013 passed by the learned CIT (A)-III, Jaipur for the A.Y. 2009-10. The effective grounds raised by the assessee are as under :- 1. On the facts and circumstances of the case, the CIT (A) has grossly erred in confirming the levy of penalty of ₹ 14,28.950/- u/s 271(1)(c) arbitrarily, thus the same deserves to be deleted. 1.1. That the ld. CIT (A) has further erred in ignoring the fa .....

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ation of penalty at ₹ 14,28,950/- deserves to be deleted. 2. The assessee has filed the return on 30th September, 2009 at ₹ 2,42,212/-. All the grounds of assessee s appeal are revolving around confirming the penalty under section 271(1)(c) at ₹ 14,28,950/-. There was a survey under section 133A of the IT Act on 10.07.2008. The assessee during the year under appeal was having income from wholesale trade of various grades and quality of cloth. During the course of survey proceed .....

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the business premises of the assessee. On physical verification of cash, the same was found at ₹ 15,96,715/- whereas as per books of account as on date of survey cash in hand was of ₹ 96,715/- which was excess by ₹ 15,00,000/-. The assessee had failed to justify the excess cash found in her business premises which has been offered by the assessee as an additional income during the recording of her statement, which has been disclosed by the assessee in regular return. During th .....

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account, the stock was of ₹ 1,43,003/- was lying at the transport company. Therefore, the valuation of the total stock found from physical verification was at ₹ 43,41,105/-. Similarly, the assessee after incorporating each and every purchase/sale vouchers and allowing GP rate of 5.51% had worked out the sale at ₹ 45,32,596/- and purchases at ₹ 49,42,082/- upto the date of survey and accordingly the stock as per the books of account was found to be at ₹ 39,61,557/- a .....

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itten pages, photo copy of which was taken and placed on record. As per the copy of said pages, names of various persons were written on these papers having certain entries of amount against each name totaling to ₹ 25,10,000/-. The assessee has failed to justify these entries as the same were not recorded in the regular books of account maintained by the assessee. The assessee in her statement categorically admitted that these entries are related to various debtors of her business activiti .....

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inciple. Thus the entire amount of undisclosed income at ₹ 43,89,548/- has been admitted and surrendered and also disclosed in the regular return of income. Therefore, he made the addition of ₹ 43,79,548/- under the head Undisclosed income. Notice under section 271(1)(c) had been issued separately for furnishing inaccurate particulars of income. 2.2. Before imposing penalty under section 271(1)(c), the AO gave reasonable opportunity of being heard to the assessee which was availed by .....

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She had admitted various discrepancies during the course of survey and agreed to pay the tax. The assessee cannot escape from the penalty only because she paid due tax on concealed income after detection thereof by the department. The assessee had failed to maintain complete books of account on which true and correct profit cannot be deduced. The assessee s argument that income had been estimated by the AO was also not found convincing to him. The assessee willfully, deliberately concealed the i .....

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survey proceedings in the form of excess cash, excess stock and unaccounted sales. Though the appellant agreed for the addition and paid tax4es thereon, the same can not be treated as a voluntary act. Appellant had no choice but to admit the same and pay taxes thereon. But for the survey, appellant would not have disclosed the aforesaid unaccounted income. In the 5return of income filed after survey, the appellant did not show the undisclosed income admitted during survey. This conduct of the ap .....

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r income or has furnished inaccurate particulars of income. It is submitted that concealment of income can be alleged only with respect to the disclosure made by the assessee in the return of income meaning thereby that in order to levy penalty of u/s 271(1)(c), it must be established that certain income has not been disclosed in the return of income filed by the assessee. Similarly, furnishing of inaccurate particulars of income also can be alleged after the assessee had furnished the return of .....

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rded in the books of account and thereafter, income computed on the basis of such completed books of account would have been declared in the return of income. After filing of the return of income, ld. AO had not found any concealed income on the basis of survey or scrutiny made by the AO. In the return, the assessee has shown correct income and furnished correct particulars of income. It is found that in computation of income, the surrendered income has not been taken but it directly credited in .....

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y proceedings which by settled law are distinct and separate, which has not been carried out in the case of the assessee by the AO. As the ld. AO gave the findings in the order of penalty u/s 271(1)(c) on the basis of quantum proceedings, it is settled law that quantum proceedings and penalty proceedings are separate for which he relied on the Hon ble Supreme Court decision in the case of Eilly Lilly & company, 312 ITR 225 (SC). He further relied on the following decisions and requested to d .....

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