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TMI Blog2020 (3) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 3. The roots for levy of penalty lie in the search and seizure operation carried out at the business and residential premises of the assessee on 11.11.2010. 4. Notice u/s 142(1) of the Act was issued and served upon the assessee, requiring the assessee to file his return of income. In response to the said notice, the assessee enclosed return of income for Assessment Year 2011-12 including therein an amount of Rs. 4 crores as additional income over and above the income filed in income returned on 30.09.2011. 5. During the course of scrutiny assessment proceedings, the Assessing Officer observed that in the statement recorded u/s 132(4) of the Act, during the course of search, the assessee, inter alia, surrendered a sum of Rs. 2.60 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee. It is respectfully submitted that the assessee has duly surrendered the whole amount of Rs. 2.60 crores while filing its return of income and offered to pay tax on the entire amount of Rs. 2.60 crores which in fact is the total unaccounted sales turnover and not the profit arising to the assessee out of such unaccounted sales turnover. It is further submitted that if the profit on such unaccounted sales turnover of Rs. 2.60 crores is calculated by applying the g.p. rate of 4% then in such a case the profit arising to the assessee on the aforesaid unaccounted sales turnover would only be Rs. 10.40 lacs (4% of Rs. 2.60 crores). As against this profit of Rs.lU.40 lacs, the assessee has already included an amount of Rs. 2.60 crores in it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces as declared Rs. 13,46,051/- Add: undisclosed income as discussed above Total: Rs. 2.44.00.000/- Less deduction under chapter VIA as claimed -Rs. 6,74,38,487/- Total taxable income - Rs. 1.00.000/- Assessed u/s 143(3) at Rs. 6,73,38,487/-. Rs. 6,73,38,487/- 7. It can be seen from the above that the addition of Rs. 2.44 crores is over and above income of Rs. 4 crores offered u/s 132(4) of the Act as declared in the return of income by the assessee. Subsequently, the Assessing Officer initiated penalty proceedings u/s 271AAA of the Act and levied penalty of Rs. 64.40 lakhs, which was confirmed by the ld. CIT(A). 8. Having heard the rival submissions, we have carefully perused the orders of the authorities below. In so f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd from the diary of Rs. 2.44 crore could be adjusted. After this, there remains no amount to be brought to tax. 19. The reasons given by the authorities below that these two amounts are surrendered separately, as such, they cannot be telescoped against each other is not sound and cannot be accepted. These two transactions have an intrinsic link as submitted by the learned AR that it is only out of the sale amount the receivable from the persons listed on the leaf relating to 1.1.1998 arise. We accept the same and direct the authorities to telescope Rs. 2.44 crores into Rs. 2.60 crores in which event nothing over and above the declaration of Rs. 4 crore is taxable. We accordingly answer Ground No.4 in favour of the assessee." 9. In light ..... X X X X Extracts X X X X X X X X Extracts X X X X
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