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2014 (7) TMI 1218 - ITAT DELHI

2014 (7) TMI 1218 - ITAT DELHI - TMI - Penalty imposed u/s 271(1)(C) - undisclosed income in response to the notice issued u/s 153A - Held that:- CIT(A) was not justified in upholding the penalty levied by the AO in the present case wherein returned undisclosed income in response to the notice issued u/s 153A was accepted by the AO in the assessment framed u/s 153A / 143(3) of the Act. We thus while setting aside orders of the authorities below direct the AO to delete the penalty in question lev .....

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the Ld. AR is that when no concealment was detected by the revenue and the income declared in the return filed u/s 153A was voluntary which was accepted as such in the assessment made u/s 153A / 143(3) of the Act, there was no question of levy of penalty u/s 271(1)© of the Act. He submitted further that the issue raised is fully covered in favour of the assessee in almost similar facts by the following decisions :- i) Prem Arora vs. DCIT (2012) 24 Taxman.Com 260 (Delhi ii) Neeraj Lal T. Gal .....

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d upon by them. He submitted that it is an admitted fact in all these appeals that only after the search conducted the assessee disclosed its income revealed during the course of search. 4. In view of above submissions and the decisions relied upon, we have considered the orders of the authorities below. The relevant facts are that the Hoover Builders (P) Ltd. was carrying on the business of constructing and sale of flats. The AO observed during assessment proceedings that the assessee had not d .....

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s for the asstt. year 2004-05, in asstt year 2005-06 it showed income of ₹ 22 lacs which included an income of ₹ 19 lac from undisclosed sources in asstt. year 2006-07 it showed an income of ₹ 18,62,746/- which included undisclosed income of ₹ 12,75,000/-. In asstt. year 2007-08 it returned income of ₹ 8,18,320/- was accepted in the assessment framed u/s 143(3) and disallowance of ₹ 15,000/- was made out of the payment made to the creditors. In all these years .....

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ll and also to provide services with the underlying objective of selling the flats the said work for the customers on no profit no loss basis has to be undertaken. Money are received from the customers for the purpose of finishing according to their satisfactions and the entire amount is spent for on the said job. This is an additional service which is being provided in order to boost sales of the flats. It was explained that this activity was being carried on by one of the Directors Mr. P.K. Gu .....

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income returned may be accepted without any penal action since the same is voluntary and bonafide and has been declared even though there is no evidence of the same having being earned. Penal proceedings were initiated and the AO levied penalty u/s 271(1)© of the Act on the declared undisclosed income. The Ld. CIT(A) has also justified the action of the AO saying that the case of the assessee falls within the general provisions of section 271(1)(C) as well as within the Explanation 5 there .....

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