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2017 (3) TMI 104 - ITAT MUMBAI

2017 (3) TMI 104 - ITAT MUMBAI - TMI - Penalty u/sec. 271(1)(c) - incidence of taxation on account of unaccounted receipts - assessee contended that the income additionally offered by the assessee did not accrue during the two years under consideration - Held that:- There is no dispute with regard to the fact that the assessee is following project completion method for offering income from the building projects. There is also no dispute with regard to the fact that both the building projects, vi .....

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r. - We notice that the assessing officer has accepted the additional income offered by the assessee only on the basis of offer made in the statement taken from the partner of the firm u/s 132(4) of the Act, i.e., the assessing officer did not examine the aspect whether the alleged unaccounted receipts are taxable in the two years under consideration. Further he did not also examine the question as to whether the entire amount can be taken as the income of the assessee. It is noticed that t .....

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m/2014 - Dated:- 1-3-2017 - Shri B.R. Baskaran (AM) and Shri Pawan Singh (JM) For The Assessee : Shri Hari Raheja For The Department : Shri B.S. Bist ORDER Per B.R. Baskaran (AM) :- Both the appeals filed by the assessee are directed against the order passed by the learned CIT(A)-41, Mumbai conforming the penalty levied by the Assessing Officer u/s. 271(1)(c) of the Act for A.Y. 2006-07 & 2007-08. 2. Both appeals were heard together and hence they are being disposed of by this common order, .....

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he assessee has received a sum of Rs. 6 lakhs in aggregate on 29.11.2005 and on 41.1.2006 by way of cash on sale of a flat in the building named Sai Radha Paradise , i.e., during the year relevant to assessment year 2006-07. Documents also revealed that the assessee has received payments by way of cash in respect of another project named Achu Nandana Apartment". Aggregate amount of cash received in respect of this project on 14.7.2007 was Rs. 61,11,550/- which included unaccounted amount of .....

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d by the Assessing Officer by issuing notice u/s. 148 of the Act. In response thereto, the assessee filed return of income admitting additional income of Rs. 6 lakhs in A.Y. 2006-07 & Rs. 69 lakhs in A.Y. 2007-08. 5. The Assessing Officer completed the assessment of A.Y. 2006-07 by accepting income declared by the assessee. In A.Y. 2007-08, the Assessing Officer disallowed a sum of Rs. 1,75,308/- u/s. 40A(3) of the Act, being 20% of the expenditure incurred by way of cash. Thereafter the Ass .....

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nting and both the building projects were completed subsequently in AY 2008-09. Accordingly he submitted that the discrepancy, if any, in not disclosing the receipts would have bearing only in AY 2008-09 and not in AY 2006-07 and 2007-08. He submitted that it is also established proposition that the entire unaccounted receipt, if any, cannot be taxed, but only the income element therein should be taxed. However, the partner of the assessee, without appreciating these legal positions, has agreed .....

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open the assessment u/s 148 of the Act. Since the additional income was offered by the partner during the course of search operation, the assessee has offered additional income accordingly. He submitted that the income can be taxed only in the appropriate assessment year and the concession given by the assessee cannot operate as estoppel. Hence the additional income offered by the assessee cannot be considered to be a case of concealment of income or furnishing of inaccurate particulars of incom .....

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., the limb mentioned in sec. 271(1)(c) of the Act under which the penalty proceedings have been initiated. Accordingly he submitted that the penalty orders are liable to be quashed on this legal point also. 8. On the contrary, the ld D.R submitted that the assessee has not accounted the amounts received by way of cash and the same is evidenced by the loose sheets found during the course of search. The assessee has come forward to admit the additional income after the search/survey operations an .....

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radise and Achu Nandana Apartments have not been completed during the years under consideration, i.e., they have been completed in the year relevant to AY 2008-09. Hence there is merit in the contentions of the Ld A.R, the incidence of taxation on account of unaccounted receipts, if any, shall arise only in AY 2008-09 and not during the years under consideration. It is well established proposition of law that the income pertaining to one year cannot be assessed in another year. The Ld A.R also c .....

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oceedings, the assessing officer is required to examine the applicability of sec. 271(1)(c) of the Act afresh and the findings given in the assessment order can only be taken as a guidance. In the instant case, the assessee has contended that the income additionally offered by the assessee did not accrue during the two years under consideration. Further the offer was made by the partner of the assessee firm during the course of search proceedings conducted in his hands, while the assessee was su .....

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