2011 (7) TMI 637

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..... The facts, in brief, necessary for adjudication as narrated in the appeal, are that the assessee - Shri Radha Raman Aggarwal was an individual. The appellant is the legal heir of the assessee - Shri Radha Raman Aggarwal. The return for the assessment year 2006-07 was filed on 17.01.2007 showing income of Rs. 7,88,620/-. The income was assessed under Section 143(3) of the Act at the returned amount. The assessment was completed on 31.10.2007 which contained the surrendered amount of Rs. 7,25,000/- in consequence of the search carried under Section 132 of the Act on 8.11.2005. The assessee made disclosure under Section 131(1) of the Act on 5.1.2006 and offered to surrender the amount attributable to him in the investment in property. Thereafter, proceedings for imposing penalty under Section 271(1)(c) of the Act were initiated and a penalty in the sum of Rs. 1,90,318/- was levied on the appellant-assessee on 20.03.2008. 4. The assessee preferred appeal before the Commissioner of Income Tax (Appeals) {in short the CIT(A)}. The CIT(A) dismissed the appeal on 18.11.2009. 5. The assessee preferred further appeal before the Tribunal and the same was also dismissed vide order dated 31.....

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....o clarifies that the examination referred to in the subsection is not restricted to the books of account, other documents or assets or articles found during the search, but can also be for the purposes of investigation connected with any proceedings under the Act. 12. Explanation 5 to Section 271(1)(c) of the Act is in the following terms:- "Explanation-5: Where in the course of a search initiated under section 132 before the Ist day of June, 2007, the assessee is found to be the owner of 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 utilizing (wholly or in part) his income, - (a)  For any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date, such income has not been declared therein; or (b)  for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a pe....

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....ch return has been furnished before the said date, such income has not been declared in the return, the assessee shall, for the purposes of imposition of penalty under section 271(1)(c) of the Income-tax Act, be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income unless such income is, or the transactions resulting in such income are, recorded before the date of the search in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissioner before the date of the search. Where the assessee claims that the aforesaid assets have been acquired by him by utilising (whether wholly or in part) his income for any previous year which is to end on or after the date of the search, he shall for the purposes of section 271(1)(c) of the Act be deemed to have concealed the particulars of his income or furnished inaccurate particulars of such income, unless such income is or the transactions resulting in such income are, recorded on or before such date in the books of account, if any, maintained by him for any source of income or such income is otherwise disclosed to the Commissi....

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.... and Explanation 5 to Section 271(1)(c) of the Act with the following observations: "We have given out thoughtful consideration to the rival submissions, perused the relevant material placed on record, including the case laws cited and the synopsis filed by the Ld. Counsel for the assessee. It is evident from the above discussions and clear findings given by the lower authorities that the assessee has not declared any income in the statement recorded under section 132 (4) of the Act. Thus, the assessee has failed to comply with the statutory requirements as contained under section 271(1)(c) read with Explanation 5 thereunder. The assessee admitted post search investigation in the statement recorded on 5.1.2006 under Section 131 of the Act and, the concealed income, in the form of unaccounted investment made in the purchase of immovable property. He, subsequently, disclosed the said unexplained investment in the return of income. The argument of the Ld. Counsel for the assessee that there is no difference between the returned income and assessed income and as no addition was made to the returned income, is not legally and factually tenable. Similarly, the contention of the Ld. Coun....