9911796707
TMI Blog2015 (5) TMI 1101X X X X Extracts X X X X X X X X Extracts X X X X ..... nt for the year under consideration at Rs. 79,66,750/-. In appeal the Ld.CIT(A) gave part relief to the assessee. Rejecting the various explanations given by the assessee and observing that the additional income was declared by the assessee only due to search action conducted at his residential cum business premises for which the act of the assessee of disclosing additional income cannot be held to be voluntary and further observing that the assessee concealed particulars of his income, the AO levied penalty of Rs. 16 lakhs u/s.271(1)(c) of the I.T. Act on account of various additions. 4. In appeal the Ld.CIT(A) upheld the penalty so levied by the AO. While doing so, he observed that the assessee initially filed his return on 30-10-2010 declaring total income of Rs. 18,09,360/- only. After the search the assessee enhanced the income in the return filed u/s.153A at Rs. 55,77,038/- which was finally held assessable at Rs. 79,66,750/-. He further observed that the act of concealment/filing of inaccurate particulars of income was committed at the time of filing of the original return u/s.139(1) of the I.T. Act and the additional income shown and assessed subsequent to the search is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67,679/- were offered to tax in the return filed u/s.153A of the I.T. Act due to the search that took place on 24-06-2003. He drew the attention of the Bench to the statement reconciling returned and assessed income for penalty u/s.271(1)(c) which is as under : Sr.No. Reason for addition Amount Amount I Total income as per original return u/s.139(1) filed on 31-10-2000 1809360 II Less Capital gain included in returned income 141270 III Total income taxed at Normal rate 1668090 IV Additional income declared in return u/s.153A filed on 30-09-2005 1 Profit on Unrecorded sales (Sales Rs. 4442500 less cost of sales Rs. 1252939 3189561 2 Maintenance Deposit Contribution 313118 3 Credit Balance of land owner Shri Sanjay V. Sasar 265000 3767679 V Additions made in Asst. Order u/s.154 r.w.s.250 dt. 18-01-2008 (After giving effect to CIT(A) order dt. 20-12-2007) 4 Unexplained investment in furniture (Rs.75000 less Rs. 55000) 20000 5 Capital introduced in M/s. Kirti Developers (Sourced out of loan from S.S. Soni) 100000 6 Addition for cost of land paid to Shri R.B. Mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Pune Bench of the Tribunal in the case of Chandan K. Shewani vide ITA Nos. 235 and 236/PN/2010 order dated 29-08-2012 for A.Yrs. 2002-03 and 2003-04. He submitted that the Tribunal after considering various decisions has observed that although the parliament has inserted Explanation 5A to section 271(1)(c), the said explanation is applicable in respect of the search initiated u/s.132 on or after 01-06-2007. Section 5A is introduced to patch out the lacunae in the existing provisions more particularly to overcome the judicial interpretation of Explanation 5. If the search is initiated u/s.132 on or after 01-06-2007 then there is a legal presumption that any income based on any entry in the books of account or other documents or transactions which is claimed as income by the assessee, the same would be treated as deemed concealment of the particulars of income or furnishing of inaccurate particulars of income. It was further observed that Explanation 3 to provisions of section 271(1)(c) of the I.T. Act has no application when the return is filed in response to notice u/s.153A. In that case since penalty so levied was not on the addition based on any money, bullion, jewellery, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year the assessee had declared agricultural income of Rs. 14,55,300/- which was reduced by the AO to Rs. 4,44,570/-. In appeal the Ld.CIT(A) determined such agricultural income at Rs. 8,59,434/- and penalty was levied on the difference of Rs. 5,95,866/-. He submitted that the issue of holding the number of rubber trees has been settled by the order of CIT(A). The only dispute is regarding the quantity of rubber that can be produced per tree. If the minimum quantity of 6kg/tree is considered then the difference comes, however, if the maximum production of 10kg/tree is considered then the income declared by the assessee will be less than the agricultural income that can be derived. Referring to the copy of the assessment order for A.Y. 1998-99, a copy of which is placed at paper book pages 43 to 64 he submitted that the AO had made addition of Rs. 16,53,090/- as undisclosed income out of agricultural income declared at Rs. 20,67,000/-. Referring to the order of the CIT(A) for the same assessment year, a copy of which is placed at pages 65 to 108 of the paper book, the Ld. Counsel for the assessee submitted that a part of the addition was confirmed by CIT(A) as income from undisclose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Hon'ble Supreme Court in the case of Tribhovandas Bhimji Zaveri Vs. Union of India and others reported in 204 ITR 368 he submitted that the Hon'ble Supreme Court in the said decision has held that disclosure made pursuant to search action is not voluntary. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Sreeji Traders Vs. DCIT reported in 149 TTJ 52 he submitted that the Tribunal in the said decision following various decisions including the Third Member decision of the Ahmedabad Bench of the Tribunal in the case of ACIT Vs. Kirti Dahyabhai Patel reported in (2009) 129 ITD 159 (Ahd) (TM) has held that penalty on additional income declared in the returns pursuant to search is clearly leviable. He accordingly submitted that the order of the CIT(A) should be upheld and the grounds raised by the assessee should be dismissed. 17. The Ld. Counsel for the assessee in his rejoinder submitted that the decision of the Hon'ble Delhi High Court in the case of Zoom Communications (Supra) is based on regular assessment and not relating to penalty levied on the basis of search proceedings. So far as the decision of the Ahmedabad Bench of the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land owner Shri Sanjay V. Sasar 265000 19. So far as the levy of penalty u/s.271(1)(c) of the I.T. Act on account of above 3 additions are concerned we find the same are based on the loose papers found and seized during the course of search which took place on 24-06-2003. The assessee declared the additional income on the basis of the entries found in those loose papers and filed the return in response to notice u/s.153A which has been accepted by the AO and no further addition on this account has been made. Therefore, the question that arise is as to whether penalty can be levied u/s. 271(1)(c) of the I.T. Act on account of the above 3 additions. Admittedly, the above additions are not due to any money, bullion or jewellery or other valuable article or thing found during the course of search which was owned by the assessee. We find the addition to income was based on entries found in the books of account and other documents or transactions which is covered under Explanation 5A to provisions of section 271(1)(c) of the I.T. Act which was inserted by the Finance Act, 2007 w.e.f. 0104-2006. Therefore, the penalty, if any, can be levied in such type of cases as per Explanation 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levied u/s. 271(1)(c) of the I.T. Act on account of the following additions: Unexplained investment in Furniture Rs.20,000/- Capital introduced in Kirti Developers Rs. 1 lakh Cost of land paid to R.B., Moze Rs. 1 lakh Interest paid to Shriram Soni Rs.81,000/- We therefore uphold the order of the CIT(A) in confirming the levy of penalty on the above 4 additions. 23. So far as the levy of penalty on account of sales unrecorded amounting to Rs. 55,000/- is concerned, we find some force in the submission of the Ld. Counsel for the assessee that the addition being debatable, no penalty on this addition is warranted. The submission of the Ld. Counsel for the assessee that as against the sale consideration of Rs. 44,97,500/- the assessee has received only Rs. 44,42,500/- and the balance amount of Rs. 55,000/- has not been received even till date could not be controverted by the Ld. Departmental Representative. Since the assessee is a land developer and the addition of Rs. 55,000/- made by the AO was on account of sales unrecorded which was due to non receipt of the amount, therefore, we find force in the submission of the Ld. Counsel for the assessee that it is a debatable issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable legal position. 5. We find force in the submission of the learned counsel for the assessee that when the similar notes enclosed with the returns for the assessment years 2000-01, 2002-03, and 2003-04, the Assessing Officer had dropped penalty proceedings, it was not open to the Assessing Officer to impose penalty, on the admittedly identical facts, for this assessment year. A co-ordinate bench of this Tribunal, in the case of Orient Press Ltd. [99 TTJ 1091], has held that if the Assessing Officer has dropped penalty on similar set of facts in the other years, the penalty needs to be dropped on that ground alone. In the said case, the Tribunal has observed as follows : "4. It is difficult to understand as to how can Revenue defend imposition of penalties for assessment years 1993-94 and 199495, when, on the materially similar set of facts, no penalty is imposed for the assessment year 1995-96. The dropping of penalty proceedings for the assessment year 1995-96 is a conscious act by the AO as evident from the specific order dropping the penalty proceedings for that year. During the course of hearing before us, we did ask the Departmental Representative to explain this ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
