TaxTMI 
TaxTMI 
2013 (11) TMI 1375
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....under Section 143(3) of the Income Tax Act (Act) on 30.03.1999, on a total income of Rs.26,12,140/-. The assessee owns quarries and is also a dealer in granite. There was a search conducted under Section 132 of the Act, and in which it was revealed that in a real estate dealings, there were "on-money" transactions and cash of Rs.27,00,000/- was seized. The assessee offered to admit the "on-money", but claimed that they will do so on completion of the projects under the 'completed contract method' and therefore, no income was offered by the assessee in the said year, namely, 1996-97. The assessee took a stand that the cash found at the time of search represented "on-money" and the notings and workings made in the slips of paper, were not of ....
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.... in the habit of receiving "on-money" in respect of sale of each and every flat at the rate of 50% of the sale consideration. Further, it held that this fact was borne out by various entries in the seized documents. Further, the first Appellate Authority observed that the entries relating to "on-money" received from J.B.Exports are clearly recorded in the seized documents and there is no escape from inevitable and infallible conclusion that the assessee had received "on-money" of Rs.86,50,250/. Taking note of the findings recorded by the Tribunal in its order in the quantum appeal, the first Appellate Authority held that there is no reason for deviating from the view and there is no infirmity in the imposition of the penalty under Section 2....
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....n cancelling the penalty of Rs.24,25,700/- levied under Section 271 (1)(c) of the Income Tax Act made on the basis of evidence relating to 'on money' receipts on sale of flats found during the search without properly applying the ratio of the Supreme Court in the case of Union of India vs. Dharmendra Textile Processors (306 ITR 277). 5. The short question which falls for consideration is whether the order of penalty under Section 271(1)(c) of the Act passed by the Assessing Officer and confirmed by the first Appellate Authority, is just and proper. 6. The case of the Revenue is that the quantum appeal had attained finality as the assessee's appeals in T.C.(A) Nos.1150 to 1152 of 2006, were dismissed by this Court, by order dated 03.08.201....
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....he assessee that there may be a mistake in recording the rate and there may be a possibility that the rate of two flats are merged and recorded. Considering the facts and circumstances, the Tribunal observed that the possibility of wrong entry cannot be ruled out and the department having failed to prove concealment without any doubt, by relying upon the decision of the Hon'ble Supreme Court in the case of Dharmendra Textile Processors,(supra), allowed the assessee's appeal. 9. Firstly, it is to be stated that the findings recorded by the Tribunal is a finding of fact. Therefore, unless it is shown that such finding is perverse, the same cannot be interfered, while considering an appeal which can be entertained only on a question of law. F....
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....penalty provision could not be invoked. Thus, the Hon'ble Supreme Court pointed out that a mere making of a claim, which is not sustainable in law, by itself, would not amount to furnishing of inaccurate particulars regarding the income of the assessee. The reading of the decision of the Hon'ble Supreme Court referred to above, thus points out that for sustaining penalty, the bonafide explanation of the assessee must be looked at, so that the contumacious conduct of the assessee for the purpose of sustaining the penalty would be taken as condition that is the main requirement under Section 271(1)(c) of the Act. Referring to the decision in the case of Dharmendra Textile Processors, (supra), the Hon'ble Supreme Court pointed out that in the ....