TaxTMI 
TaxTMI 
2010 (6) TMI 649
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....on. The names of the persons and the amounts taken from them as loan are as under : Sl.No. Name Amount Rs. 1. Pawan Kumar Mishra 18,500 2. Satya Prakash 17,500 3. Surender Kumar 18,800 4. Ram Babu 19,800 5. Ravir Singh 16,700 6. Subhash Kumar 18,500 7. Manoj Kumar 17,800 8. Sameer Kumar 19,200 9. Bhola Prasad 18,500 10. R K Chaudhary 16,800 11. Sushil Nagar 17,600 12. Jitender Singh 15,800 13. Ram Vir 18,900 14. Nadim 19,500 15. Jamaluddin 18,500 16. Ashok Kumar 19,700 17. BNJha 15,900 18. Jibacha Jha 15,900 19. S.K. Jha 18,500 20. Hari Narain 15,600 21. Mukesh Goyal 17,000 22. Vinita Dhawan 17,800 23. Naveen Kumar Jha 16,800 24. Satish Kumar 16,800 25. Nazimuddin 18,900 26. Heera ....
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.... total income. In the course of penalty proceedings before the A.O. the assessee submitted vide letter dt. 22.3.2009 that the amount was surrendered just to buy peace of mind and on the condition that no penal action shall be initiated against the assessee. But this explanation of the assessee was not accepted by the A.O. by giving the reason that income surrendered by the assessee was not voluntary but the assessee surrendered the income because of the detection made by the department through enquiries conducted by it. The AO, therefore, had taken a view that the assessee had concealed particulars of its income making it liable for penalty u/s 271(1)(c) of the Act. The AO, therefore. levied the penalty equal to the amount of 100% of the tax sought to be evaded on the concealed income assessed to tax in the assessment. 5. On an appeal, the CIT(A) confirmed the AO's order by observing that the assesee surrendered the amount after pointing out the same by the AO and the asses see has brought into its books unaccounted income in the shape of cash credits. 6. Still aggrieved, the assessee is in appeal before us. 7. The ld. counsel for the assessee has submitted that during the....
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....tence. He further submitted that the argument of the ld.counsel for the assessee that the sum was surrendered voluntarily does not hold any water as the surrender was made subsequent to the detection made by the A.O. and after a show cause notice issued by the A.O to the assessee. He, therefore, submitted that since the surrender was not voluntary and the addition has been made by the A.O. as a result of enquiry conducted by him, the various decisions relied upon by the assessee would be of no assistance to the assessee's case rather they support the revenue's case. In support of the revenue's case, the ld. D.R. has relied upon the certain decisions. 9. We have considered the rival contentions of both the parties and have carefully perused the orders of the authorities below. We have deliberated upon the various decisions cited at the Bar in the light of the factual matrix of the present case. 10. From the perusal of the provisions of section 271(1)(c) of the Act, it is clear that penalty in this section is leviable if the Assessing Officer is satisfied in the course of any proceedings under the Act that any person has concealed the particulars of his income or furnished inac....
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....unts. The assessee has given an explanation that the aforesaid amount of Rs. 6 lacs has been surrendered voluntarily as assessee found it difficult to substantiate the cash credit inasmuch as number of creditors were involved and there whereabouts could not be ascertained at the time when the assessment proceedings had taken up. The assessee has also given an explanation that the assessee has surrendered this income with the condition that no penalty under sec.271(1)(c) shall be initiated by the AO. In other words, it is the case of the assessee that the assessee has surrendered the amount voluntarily with the condition that no penalty shall be levied under sec. 271(1)(c) of the Act by the AO. 13. Now, let us examine as to whether the income surrendered by the assessee is voluntary or bona fide one. In this case, the Assessing officer had taken up the case for scrutiny and issued notice under sec. 143(2) that was served upon the assessee. The AO also raised certain questionnaire and in response thereto certain details were filed by the assessee. During the course of assessment proceedings, it was noticed by the AO that the assessee had shown unsecured loans amounting to Rs. 6 la....
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....the assessee. The assessee is a private limited company, and it is beyond imagination that the 34 persons without having any close relation or connection to the business of the assessee company would advance amount in cash to the assessee. The assessee has not been able to explain as to under what circumstances the amount was received in cash from 34 persons in the denomination of below Rs. 20,000 in each case. The very transaction of receiving money from respective persons has not been established. The assessee has also not given any details as to when and by what mode this amount has been repaid by the assessee to the creditors. Even in the course of penalty proceedings, no prima-facie evidence or details as to the identity and/or the creditworthiness of the creditors, and genuineness of transaction were furnished by the assessee. Mere several cash loan entries in the name of different persons made in the books is not sufficient to show even prima-facie that the amount was actually received by the assessee as loan from these persons. The assessee should have furnished at least some piece of evidence to show prima-facie that the assessee had accepted the amount as loan. But that m....
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....e case of CIT v. Shri Rakesh Suri IT Appeal No. 38 of 2005, dated 13-5-2010 as under:- "41. A Full Bench of the Allahabad High Court in the case reported in (1998) 230 ITR 855 : Bhairav Lal Verma v. Union of India [1998] 230 ITR 855 , while interpreting the word vonutarily given in Section 273(A) of the Act held that voluntarily means out of free will without any compulsion. When the assessee concealed the incriminating material with regard to income so disclosed cannot be held to be voluntarily. It shall be appropriate to reproduce the relevant portion from the judgment of Bhairav Lal Verma [1988] 230 ITR 855 (All) as under (page 862): 'The position thus settled is that the word "voluntarily" in section 273A of the Act means out of free will without any compulsion. Disclosure of concealed income after the Department has seized the incriminating material with regard to the income so disclosed, cannot be voluntary disclosure, because it was made under the constraint of exposure to adverse action by the Department. But it cannot be held as a principle of law that the disclosure of income made after the search/raid cannot be voluntary. It is a question which ahs to be decided by....
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....t not something done under a legal duty." "Where a person obtained a passport acted on his own volition and knew the nature of his act and did not act in performance of a legal duty, nor due to coercion or fraud or misrepresentation or mistake he has acted voluntarily.' Abdul Salam v. Union of India, AIR 1969 All. 223 at 228. [Citizenship Rules (1956) R. 30]" 15. From the said decision it is thus clear that voluntarily means out of free will without any compulsion. It is also observed therein that when the assessee concealed incriminating material with regard to the income disclosed by the assessee, disclosure cannot held to be voluntarily. Disclosure of income after the department has collected incriminating material with regard to the income so disclosed, cannot be voluntary disclosure, because it was made under the constraint of exposure to adverse action by the Department. In the present case, the department has collected sufficient material against the assessee with regard to the identity and existence of the creditor and genuineness of the transaction, and only after incriminating material collected by the department was brought to the knowledge of the assessee, the disclo....
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....in the case of CIT v. D.K.B. & Co. [2000] 243 ITR 618 (Ker.). Since, in the present case, the addition has been made on the basis of the enquiry conducted by the AO and not merely on the basis of disclosure made by the assessee agreeing to the addition, the condition imposed by the assessee that no penalty under sec. 271(1)(c) should be levied, has no force in the eyes of law. Hence, this contention of the assessee is also rejected. The various decisions cited by the learned counsel for the assessee in support of the contention that no penalty under sec. 271(1)(c) should be imposed in the case of conditional surrender would not advance any further the assessee's case inasmuch as all those cases relied upon by the learned counsel for the assessee were rendered in the different context as discussed hereunder. 18. In the case of CIT v. Suresh Chandra Mittal [2001] 251 ITR 9 (SC), the income was offered to tax in the return filed in response to the notice issued by the AO. However, in the present case, in the return of income the assessee has not offered the aforesaid amount of Rs. 6 lacs as income liable to tax but the said concealed income has been detected by the AO after making ....
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....ught on record by the AO. In the case of Kumar Agencies (India) (supra) transactions were made through banks and parties were assessed to tax, and the assessee surrendered the amount to buy peace and avoid litigation as the assessee expressed its inability to produce creditors, who were not directly known persons nut the transactions were made through brokers. The loan was received and repaid by account payee cheques, confirmations from creditors were filed which bore P.A. No. of the depositors. However, in the present case, no such facts are available where transactions were made in cash, and no evidence as to the identity, and existence of the depositors was filed. Thus, this case does not support at all the assessee's case. 21. In Dr. Sameer Kant Agarwal's case (supra), the penalty levied by the department was deleted as the AO had failed to prove by independent material that assessee had concealed his income or had furnished inaccurate particulars of income. But, in the instant case before us, the AO has been able to bring on record the incriminating material even as to very existence or identity of the depositors, and the genuineness of the transaction. 22. The case of S....