TMI Blog2016 (10) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty u/s 158 BFA (2) of the Act can only be imposed on the amount of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return filed by the assessee for the relevant block period. From the penalty order is apparent that the penalty u/s 158BFA(2) has been imposed by observing that the assessee has not filed the return showing his correct income before the search and thereafter he imposed penalty on the assessed income including returned income which is not a proper approach and application of the mandate of secured proviso to Section 158BFA(2) of the Act. Since in the earlier part of this order we have observed that the penalty u/s 158BFA (2) of the Act can be imposed on the income assessed u/s 158BC of the Act which was in excess to the returned income. From the relevant operative part of the First Appellate order we also observe that it was the argument of the assessee that since the undisclosed income assessed by the A.O was not in excess of the returned income penalty u/s 158 BFA (2) of the Act cannot be imposed. But there were no other arguments on the imposition of penalty on the merits showing that the penalty imposed on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed penalty order without application of mind as he imposed penalty on the total assessed income including returned in case of the assessee which cannot be taken for imposing penalty u/s 158 BFA (2) of the Incometax Act, 1961 (for short the Act). The Ld. Counsel pointed out that the CIT(A) wrongly upheld penalty in contravention to provisions of Section 158BFA (2) of the Act as proviso 1 2 to said section have not been properly applied to the facts of the case. The Ld. Counsel placing reliance on the rating of the following decisions contended that penalty is not sustainable thus the same may be deleted: i. CIT Vs. Harkaran Das Ved Pal. Dated 12.11.2008 Delhi High Court ii. DCIT Vs. A.T. Invofin India Pvt. Ltd iii Super Cassettes Industries Ltd Vs JCIT, ITAT, Delhi dated 11.7.2013 iv. Dr. G. Ravindranath Sorma Kadapa Vs. ACIT dated 29.10.2010 4. The Ld. Departmental Representative (DR) supported the action of the A.O as well as impugned First Appellate Order and contended that the CIT(A) was quite correct and justified in upholding the penalty order. 5. On careful consideration of above submissions, at the very outset we note that the provision of Section 158 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old that the penalty was wrongly calculated and imposed on the total assessed income and penalty u/s 158 BFA (2) of the Act can only be imposed on the amount of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return filed by the assessee for the relevant block period. 8. Now, we proceed to evaluate the penalty order and First Appellate Order as to whether the penalty imposed and upheld by the CIT(A) is not sustainable. 9. First of all, we find it appropriate to consider the ratio of the decision relied by the assessee, as listed above, in the light of the facts and circumstances of the present case. In the case of CIT Vs. Harkarandas Vedpal (Supra), the Hon'ble High Court of Delhi upheld the order of the Tribunal which cancelled the penalty on the ground that the assessee himself had surrendered the amount and therefore, it could not be said that the assessee had either concealed or furnished inaccurate particulars of its income which is not case here as the A.O has assessed income u/s 158BC of the Act which is in excess of ₹ 3,19,475/- to the returned income. 10. In the case of DCIT Vs. M/s A.I. Infovin Pvt. Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of bills and vouchers found during the search which cannot be said on pure estimate basis. Addition on account of foreign visit is again also on the basis of actual expenditure incurred on foreign travel including Air Ticket, incidental charges of stay and local tour and pocket expenses including expenses incurred towards purchase of Sony Music System which was also not purely on estimate basis but based on the facts and documents revealed during the search and post search enquiries during the assessment. The addition on account of purchase of jewellery is also based on the seized material annexure A-5 and other details which was also not on purely estimated basis. The income of commission was also made on the basis of seized documents/papers found during the course of search in the premises of the assessee in the shape of bunch of loose papers, spiral note book, pocket note book etc. Thus it was also based on the incriminating material found and seized during the course of search thus it was also not to the estimated basis but was made on the premise of sound evidence found from the possession of the assessee. 13. From the penalty order is apparent that the penalty u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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