9911796707
TMI Blog2017 (3) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessee has filed his return of income on 31.3.2008 declaring total income of Rs. 1,04,76,295/-. The case of the assessee was selected for scrutiny assessment and notice under section 143(2) was issued and served upon the assessee. After an analysis of details, the ld.AO has determined taxable income of the assessee at Rs. 1,19,44,960/-. The AO has made various additions to the total income of the assessee. Such additions are summarized in penalty order. They read as under: "1. Salary income as an M.P. : Rs. 1,66,267/- 2. Agriculture income held as income from other soures in absence of evidences : Rs. 1,90,000/- 3. Cash difference : Rs. 74,696/- 4. Cost of acquisition of Rs. 2,80,150/- and cost of improvement of Rs. 91,000/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payments received for the year was reflected in Bank statement also. This addition itself is harsh to me penalty on this amount is unwarranted. 3. An Addition for cash diff of Rs. 74,996 was made. This was explained to the Ld A.O. that this addition is not correct as it was due to just the diff of date mentioned in voucher and entered in the computer, entries on vouchers were correct and there was negative cash balance because of wrong date at the time of entry in software, change of date was not done, which resulted negative cash on a particular date it was not accepted by Ld A.O. as this addition itself was harsh penalty on this is not warranted at all. 4. An Additions for cost of improvement of Rs. 91,000 for want of evidence, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of any proceedings under this Act, is satisfied that any person (a) and (b)** ** ** (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. He may direct that such person shall pay by way of penalty. (i)and (Income-tax Officer,)** ** ** (iii) in the cases referred to in Clause (c) or Clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefit the furnishing of inaccurate particulars of such income or fringe benefits: Explanation 1- Where in respect of any facts material to the computation of the tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te particulars, in certain situation, even without there being anything to indicate so, statutory deeming fiction for concealment of income comes into play. This deeming fiction, by way of Explanation I to section 271(1)(c) postulates two situations; (a) first whether in respect of any facts material to the computation of the total income under the provisions of the Act, the assessee fails to offer an explanation or the explanation offered by the assessee is found to be false by the Assessing Officer or Learned CIT(Appeal); and, (b) where in respect of any fact, material to the computation of total income under the provisions of the Act, the assessee is not able to substantiate the explanation and the assessee fails, to prove that such expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of the AO is that the assessee failed to furnish evidence showing generation of agriculture income. The explanation of the assessee is that he was having evidence for all these years and shown to the AO in subsequent years, meaning thereby, the assessee was having agriculture land. He failed to produce bills and vouchers for the expenditure incurred in connection with the agriculture activities or bills exhibiting sale of agriculture produce. But it is pertinent to keep in mind that a person has been claiming agriculture income in the past and in subsequent years and having agriculture land, then the addition to his income for not showing exact details of agriculture income can be justified, but it cannot be said that claim made was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed the income as per Form no.16. The assessee was of the opinion that the expenditure i.e. constituency allowance, office expenditure are exempt being Member of Parliament. He harboured a belief that his salary income is also exempt. To our mind the assessee failed to give any plausible explanation for non-inclusion of his salary as Member of Parliament. There cannot be any reason to habour such a belief, more so, it was not brought our notice that this was the first year of receipt of salary as an Member of Parliament. Therefore, the ld.AO was justified in visiting the assessee with penalty qua the addition of salary income amounting to Rs. 1,66,276/-. The appeal of the assessee is partly allowed and levy of penalty under section 271 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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