TMI Blog2008 (7) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 11,76,446. In this case, a survey action under s. 133A was conducted on 9th Dec., 1994 at the factory premises of the assessee at Kandivali. A statement of Mr. Anjan Kejriwal, partner of the firm was recorded at the time of survey in which he had declared an additional income of ₹ 20 lakhs as commission income. In his statement, he stated that that there was cash transaction of ₹ 15 lakhs to 18 lakhs including commission received in cash. He also stated that cash of ₹ 10 lakhs was lying at his residence and remaining amount was represented by cash loans and advances given to friends and relatives. The partner later on retracted his statement vide letter dt. 12th Dec., 1994, stating that the assessee firm was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal s order and treated the entire income of ₹ 20 lakhs declared by the assessee as income of the assessee and added back the same to the total income, inter alia, observing that the submission of the assessee that there was no evidence found during the long search operation to justify the addition, it was worth mentioning that there was no search operation but survey under s. 133A which covered only business premises. This action of the AO was confirmed by learned CIT(A) after considering the submissions of the assessee that the retraction letter was quite elaborate and justifying reasons for the retraction were given and for disregarding the same, the AO had not given any reason. Learned CIT(A) observed in para 8 of his order tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the declaration of additional income of ₹ 20 lakhs. We examined the possibility of assessee giving a statement declaring ₹ 20 lakhs without the presence of any evidence or materials like the incriminating papers with entries of cash transaction. We have also examined that possibility with the ability of the assessee in retracting and introducing the fresh claims relating to suppression of sales. We find that the answer is negative and is in favour of the Revenue. In the backdrop of this factual position, the penalty has been imposed by the AO vide his order dt. 24th March, 2005 under s. 271(1)(c). At this juncture, it may be clarified that when the penalty order was passed by the AO, the decision dt. 29th April, 2008 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r these circumstances, penalty is not leviable. He relied on the decision of the Hon ble Supreme Court in the case of Asstt. CIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 210 CTR (SC) 30 : (2007) 291 ITR 500 (SC). We have heard both the sides and perused the record of the case. The facts are not disputed. In order to decide whether the assessee deliberately concealed the particulars of his income or furnished inaccurate particulars of his income, it is necessary to refer to the retraction made by the assessee vide his letter dt. 12th Dec., 1994, which has been reproduced in the assessment order passed on 16th Dec., 1997. The contents of retracted letter are contained at pp. 1 to 5 of the paper book. In the retraction, it is, inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort of readymade garments. We also incidentally sell locally export rejected readymade garments. (iv) We also do not have any income by way of commission as recorded in the statement. In the retraction statement, the assessee had clearly pointed out that no unrecorded documents, papers and unreconciled stock were found and this retraction was accepted by the Department in the first round. In the second round of proceedings, after passing order under s. 263 by learned CIT, the main reason for not accepting the assessee s retraction was that without there being no (sic) documents, the assessee would not have disclosed the commission of ₹ 20 lakhs. Thus, presumption has been drawn for treating this commission income as the undi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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