TaxTMI 
TaxTMI 
2010 (2) TMI 777
X X X X Extracts X X X X
X X X X Extracts X X X X
....he ITAT to the extent of Rs.31,60,920/-, the submissions of the assessee regarding the merits of additions and the relief granted by the appellate authorities has got no importance with reference to the levy of penalty. The assessee has relied upon 8 case laws relating to levy of penalty u/s.271(1)(c) contending that levy of penalty u/s.271(1)(c) is more or less identical with the provisions of levy of penalty u/s.158BFA(2). The assessee's contention were found not acceptable because separate provisions are given in the I.T. Act for levy of penalty u/s.271(1)(c) and 158BFA(2) and the same are not identical. The Assessing Officer further noted that reliance placed on 8 decisions by the assessee is of no relevance, since those are given in contest with levy of penalty u/s.271(1)(c) and not for penalty u/s.158BFA(2). Further, the assessee has placed reliance on 6 case laws relating to levy of penalty u/s.158BFA(2). The submissions in this regard are considered. It is seen that the facts of the cases relied upon by the assessee are not exactly identical with the facts of the assessee's case, therefore, the assessee cannot get any relief from these decisions. In view of the above facts,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lanation of the assessee has been reproduced by the Learned CIT(A) at page 4 to 6 of his order. 7. After considering the detailed submissions and perusing the material on record the CIT(A) found that this is not a fit case of levy of penalty u/s.158BFA(2) and, therefore, he cancelled the penalty. The following findings have been given by the ld CIT(A) while deleting the penalty. "The issue has been carefully examined and I am in agreement with the arguments of the Ld. Counsel that the AO has erred both in law and on facts in imposing the penalty. The decisions of the Hon'ble Mumbai Tribunal in the case of DCIT vs. Koatex Infrastructure Limited [286 ITR (AT) 40 - Mumbai] and ITO vs. Smt. Pramila Pratap Shah (Mumbai) [2006] 285 ITR (AT) 1 (Mumbai) clearly establishes that the imposition of penalty u/s.158BFA(2) was not automatic and the discretion must be exercised judiciously. "In sub-section (2) of section 158BFA of the Income-tax Act, 1961, the Legislature has used the two words 'may' and 'shall'. The word 'may' relates to levy of penalty while the word 'shall' relates to the quantum of penalty to be imposed. The word 'may' is generally used....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellant's representative has been considered. The claim in this direction is in regard to the deduction of an amount Rs.2,20,328/- out of Rs.6,51,171/- recorded in the document. The reason on the basis of claim has been justified by the appellant in the submission reproduced above. Considering that the appellant is carrying on the development of plots, certain expenditure has to be incurred. A part of the expenditure has been recorded in the regular books of accounts and only in respect of the balance amount of Rs.2,20,328/- and further claim of deduction has been requested for. There is merit in the claim in this regard considering the facts of the case. The appellant is rather reasonable in making a claim of a lower amount arrived at after making adjustment of the expenses recorded in the books. This is unlike in respect of other entries. However, this might be only on account of substantiating similar claim made in Ground No.1 to 4 that have been rejected. Therefore, considering that the claim of the appellant is only to allow set off of the amount of Rs.2,20,328/- the Assessing Officer is therefore, directed to allow expenditure as deduction in the computation of profits. Ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....fficer had made addition of Rs.1.19 crores; however, they have been restricted to 31 lakhs. Therefore, it cannot be said that the assessee has concealed any particulars of income in respect to additions made by the Assessing Officer. It was submitted that a document showing debit and credit entries along with some annexures were also found. The paper containing debit and credit entries was summary of the Annexures found during the course of search. The assessee had accepted the undisclosed income on the basis of that paper and has disclosed the same while filing the return u/s.158BD of the I.T. Act. 10. The Assessing Officer has made further additions on the basis of Annexure by not accepting the explanations in respect to seized papers containing debit and credit entries. It was submitted that once a paper containing debit and credit entry has been accepted containing the undisclosed income then, there is no scope remain to explain various entries. The Assessing Officer has made addition of Rs.1.19 crores and major portion of the additions have been deleted by the CIT(A) and then by the Tribunal. 11. However on 3 points, the additions have been sustained by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....,13,250/- and the same was added to the income of the assessee. However, on appeals at the level of the CIT(A) and at the level of the Tribunal, major additions were deleted by accepting the explanation of the assessee. However, the three additions i.e. disallowances of Rs.9,26,600/-, Rs.4,63,343/- and Rs.13,44,900/- were sustained. 16 In respect to these three additions, detailed explanations were filed; however, as stated above, the Tribunal was not satisfied with the explanation and therefore, these three additions were sustained. Penalty proceedings are separate and distinct to the assessment proceedings. It was explained before the CIT(A) that the amount of Rs. 9,26,600/- was recorded on the debit side of the rough trial balance found during the course of search and seizure action. It was explained that the narration on the rough paper showing credit entry has been accepted; however, some of the debit entries were not accepted. It was explained that once the credit side entry has been accepted; therefore, debit entry side entry has also to be accepted. Accordingly, it was submitted that there is no need to explain further the debit entry. The nature of liability was ....