TMI Blog2020 (1) TMI 911X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly brought to tax. The dispute is not that the salary income was not offered to tax by assessee in his return of income which is an admitted position but the question is whether such salary income has been found during the course of search and the answer to that in not in affirmative. In the present case, we therefore find that none of the conditions specified in explanation 5A to section 271(1)(c) is satisfied in the instant case and therefore, levy of penalty is hereby directed to be deleted. - Decided in favour of assessee. - ITA. No. 1142/JP/2019 - - - Dated:- 9-1-2020 - Shri Vijay Pal Rao, JM And Shri Vikram Singh Yadav, AM For the Assessee : Shri P.C. Parwal (C.A.) For the Revenue : Smt. Roonipal (JCIT) ORDER PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A)-II, Udaipur dated 28.06.2019 for the Assessment Year 2011-12 wherein the assessee has taken the following grounds of appeal:- 1. Under the facts and circumstances of the case, the order passed U/s 271(1)(c) is illegal and bad in law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making additions even without any incriminating material being available against the assessee in the search u/s 132. He further held that M/s Bhatia Infrastructure Pvt. Ltd. is a group concern wherein Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors. Assessee is the son of Sh. Prem J. Bhaita. The assessee not being aware of salary credited to him by such group company is not a credible explanation. In the immediately preceding year, the assessee has been credited salary by another group concern Bhatia Automobiles Pvt. Ltd. wherein also Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors but the salary was not declared by him in the return of income filed u/s 153A. Similarly in case of other group company namely M/s Bhatia Corporation Pvt. Ltd. wherein also Sh. Prem J. Bhatia and Sh. Ram J. Bhatia are directors, the company credited salary to Smt. Shiva Bhatia who is the daughter of Sh. Ram J. Bhatia but the salary was not declared by her in the return of income filed u/s 153A. Thus, the explanation furnished by the assessee as to why salary from M/s Bhatia Infrastructure Pvt. Ltd. was not offered to tax in the return of income filed u/s 153A is not a bonafide explanation. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incriminating material found or seized during the course of search, addition cannot be made by the AO in the proceedings u/s 153A of the Act when the assessment for the year under consideration was not pending as on the date of search. Thus, where two views are possible, the view favoring the assessee has to be adopted as held by Hon ble Supreme Court in case of CIT Vs. M/s Vegetable Products Ltd. (1973) 88 ITR 192. 5. It was further submitted by the ld AR that during the course of assessment proceedings u/s 153A when the assessee prepared his statement of affairs, it came to his notice that salary of ₹ 70,000/- from M/s Ganpati Royal Residency (unit of M/s Bhatia Infrastructure Pvt. Ltd.) which was credited in his account but not actually received was left to be included in the income by mistake. Accordingly, he filed revised computation of total income and offered the same for taxation. Thus, the omission of salary from income declared in the ROI filed u/s 153A is a bonafide mistake. On such bonafide mistake, no penalty is leviable. For this reliance is placed on the decision of Hon ble Supreme Court in case of Price Waterhouse Coopers (P. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... available on record. The limited point of dispute is whether addition towards salary income made by the Assessing officer during the course of proceedings u/s 153A r/w 143(3) can form the basis for levy of penalty by invoking provisions of explanation 5A to section 271(1)(c) of the Act which reads as under: 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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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