TMI Blog2018 (5) TMI 1389X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions contained in section 27 envisage penalty which would be 100% of the tax sought to be evaded and which may go up to 300% thereof. The Tribunal, however, found a way to bypass this minimum limit by suggesting that the profit element embedded in the cash deposits could be subjected to penalty. When the proceedings of assessment in which the additions in the hands of the assessee were made, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Brief facts are as under: Respondent-assessee for the assessment year 2010-11 had filed the return of income. During the assessment of the return, the Assessing Officer noticed that the assessee had deposited a sum of ₹ 43,72,650/- by cash in his savings bank account. The assesee contended that he was in the business of used clothes in which, the profit margin is as low as 3% to 4%. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 13,00,990/- to the extent relatable to addition of ₹ 4,37,265/-. The Tribunal, in principal, accepted the assessee's version that he was running a small business. The Tribunal, therefore, held that the penalty could be imposed in proportion to the profit of the business which the assessee might not have offered to tax. Without saying so effectively, the Tribunal considered 10% of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue to argue that the monetary limits set out by CBDT are for filing appeals before various foras including the High Court and the Supreme Court. These limitations imposed under the circular cannot be applied to a writ petition that may be filed by the Revenue. However, when we recognize the philosophy behind issuance of the said circular which happens to be to .reduce litigation, such li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way to bypass this minimum limit by suggesting that the profit element embedded in the cash deposits could be subjected to penalty. When the proceedings of assessment in which the additions in the hands of the assessee were made, the Tribunal could not have ignored such final conclusions by simply adopting the different mode or yardstick to judge the amount of tax sought to be evaded by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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