TaxTMI 
TaxTMI 
2012 (12) TMI 203
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....sis of these papers the assessee admitted that unaccounted sales of Rs.25 lakh escaped from tax. The partners accepted that the unaccounted sale consideration has been utilized by the partners in repair of their residence and other expenses. Hence, this income had already been earned and invested by he assessee-firm and its partners. The AO also stated that had there not been the survey operation, the unaccounted income of the assessee would not have been shown in the return of income. Further, return filed by the assessee cannot be treated as return filed u/s.139(5) of the Income-tax Act, 1961 ('the Act" for short) as the assessee has not recovered any omission on its own, but this income is additional income, which has been detected by the Revenue as a result of survey operation. The AO has relied on the following decisions:- i) CIT V. Glamour Restaurant (2003) 80 TTJ 763 (Mum) ii) Man Mohan Gupta v. CIT (2004) 189 CTR 331 (Raj) iii) CIT v. Lad Devi Khothari (2005) 97 TTJ 421 (Jp) In the penalty order it is stated by the Assessing Officer that during the assessment proceedings, it was also found that the assessee has given interest free loans/advances to various gr....
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....ealed its income. On this ground, the AO has relied on the following case laws:- 1. CIT v. Musadilal Ram Bharose 165 ITR 14,20 (SC) 2. CIT v. K. R. Sadyappan 185 ITR 49 (SC) 3. CIT v. Jeevan Lal Shah 205 ITR 244 (SC) 4. B.A Balasubramaniam & Bros. Co. v. CIT (1999) 236 ITR 977, 978 5. K.P. Madhusudan v. CIT 251 ITR 99 The Assessing Officer held that the assessee had concealed its income willfully of Rs.30,98,611 (Rs.25 lakh + Rs.5,98,644). The AO worked out and levied penalty u/s 271(1)(c) on both the additions at Rs.12.15 lakh. 4. Ld. CIT(A) confirmed the action of Assessing Officer. 5. Learned Counsel for the assessee, Mr. J.P. Shah argued that return of income originally was filed on 18-09-2001. The survey operation u/s 133A of the Act was carried out on 05-11-2001. The revised return of income was filed on 22-11-2001. The assessee is engaged as a retail dealer of Raymond Collection is a partnership firm. On the basis of certain loose torn papers, Shri Mukund Shah, the partner with the firm admitted the unaccounted sales of Rs.25 lakh, which was declared in the revised return. As per note appended to the return of income, it has been mentioned that....
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....rasad Granites c) ACIT v. Goutham Public School (2004) 88 TTJ 933 (Visakha) d) CIT v. K.P. Smpath Reddy (1993) 197 ITR 232 (Kar) e) Biland Ram Hargan Dass v. CIT (1988) 171 ITR 390 (All) f) LMP Precision Engg. Co. Ltd. v. DCIT (2011) 330 ITR 93 (Guj) 7. We have heard the rival contentions and perused the facts of the case. The assessee in the present case had filed the original return on 18-09-2001. Thereafter a survey proceedings u/s 133A of the Act was carried out on 05- 11-2001 and the revised return of income was filed on 22-11-2001. During the course of survey it is not under dispute that the partner of the assessee-firm had admitted the unaccounted sale of Rs.25 lakh as appearing from the statement of the said partner pointed out by both the parties filed separately. The Assessing Officer had accepted the said revised return of income. On the revised income taxes had been paid and there is no dispute to that extent. The AO did not make any dispute with regard to said additional income declared in the revised return. The AO initiated the penalty proceedings u/s 271(1)(c) of the Act. There is no dispute to the fact that assessee had submitted the expl....
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.... to buy peace of mind and avoid litigation. Penalty orders were passed and the Commissioner (Appeals) confirmed the orders. But the Appellate Tribunal held that the Department had not discharged its burden of proving concealment and had simply rested its conclusion on the act of voluntary surrender done by the assessee in good faith, and that penalty could not be levied. On a reference, the High Court held that no penalty could be levied for concealment (see [2000]241 ITR 124). The Department preferred appeals to the Supreme Court. The Supreme Court dismissed the appeals holding that no interference with the order of the High Court was called for." In the circumstances and facts of the case, the order of the Ld. CIT(A) is reversed and Assessing Officer is directed to cancel the penalty so levied. 9. The Assessing Officer has also levied the penalty since the assessee had given interest free loans to various group concerns on which no interest is charged. The entire transactions have been found to be routed through the cash credit account. It was observed by the AO that interest bearing funds had been diverted to the group concern to which no interest has been charged. The ....