TMI Blog2015 (12) TMI 1813X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the course of search the impugned addition could not have been made in the proceedings u/s 153A. The law is well settled that assessment proceedings and penalty proceedings are two independent proceedings and that the assessee in penalty proceedings is entitled to show that the very addition for which penalty is sought to be imposed ought not to have been made in the assessment proceedings. We, therefore, are of the view that even on this ground penalty imposed on the assessee deserves to be cancelled. - Decided in favour of assessee. - ITA Nos. 469 & 470/Kol/2013 - - - Dated:- 16-12-2015 - Shri N.V. Vasudevan, JM AND Shri M. Balaganesh, AM For the Appellant : Shri Ravi Tulsiyan, FCA For the Respondent : Shri Rajat Subhra Biswas, CIT(DR) ORDER PER N.V. VASUDEVAN, JM: These appeals are filed by the Assessee against two orders both dated 26.12.2012 of CIT(A)-Central -III, Kolkata, relating to AY 2003-04 and 2004-05. 2. In both these appeals the assessee has challenged the order of CIT(A) whereby the CIT(A) confirmed the order of AO in imposing penalty on the assessee u/s 271(1)(c) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een done by the broker is not a concern of the assessee. The assessee pointed out that in support of the long term capital gain the assessee had submitted copies of purchase bills, copies of contract note for sale, copy of demat account. The assessee also pointed out that the entire sale proceeds was received through banking channels. The assessee pleaded that the fact that there was mismatch between the shares sold by the broker on enquiry from the stock exchange cannot be the basis to hold that the assessee is guilty of having furnished inaccurate particulars of income. It was submitted that the assessee agreed to taxing the long term capital gain under the head Income from other sources only to buy peace and therefore the assessee cannot be said to have concealed particulars of income. It was further pointed out that the income as reported in the original return of income filed for the relevant year by the assessee u/s 139(1) of the Act, the income declared in the return filed in response to notice u/s 153A of the Act and the income that was brought to tax by the AO in the assessment completed u/s.153A of the Act are one and the same amount. It was submitted that it was only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submissions that the issue in dispute is also covered by the' decision of the Hon'ble Jurisdictional High Court in the case of CIT(Central)-III vs. Kabul Chawla in ITA No. 707, 709, 713IDe112014 wherein the Hon'ble High Court has held that if the additions are made, but not based on any incriminating material found during search operation, then these additions were not sustainable in the eyes of law. In our considered opinion, the Ld. CIT(A) has rightly adjudicated the issue in dispute and accordingly rightly deleted the additions in dispute. Keeping in view of the above discussion, we uphold the Ld. CIT(A)'s order which is a well reasoned order and therefore, the same does not need any interference on our part and also by respectfully following the decision of the Hon 'ble Jurisdictional High Court in the case of CIT(Central)-III vs. Kabul Chawla (Supra), we are of the view that Ld. CIT(A) has rightly ITA NO. 39961De112011 deleted the additions in dispute. Accordingly, the issues in dispute are decided against the Revenue and in favour of the Assessee. In the given case, the assessment for the assessment years 2003-04 2004-05 stood concluded and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... poses of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income. Explanation 5A to section 271(1)(c) of the Act, after its substitution by the Finance Act, 2009, w.r.e.f. 1.6.2007, read as follows: Explanation 5A.- Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of- (i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and,- (a) where the return of income for such previous year has been furnished before t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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