TaxTMI 
TaxTMI 
2014 (3) TMI 505
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...., for short] was initiated and a penalty of Rs. 13,72,200/- was imposed vide order dated 29.11.2012. Aggrieved, the assessee filed appeal and the ld. CIT(A) has restricted to a penalty with respect to undisclosed income of Rs. 44,28,239/-. The assessee is further aggrieved and filed this second appeal by raising the following grounds: "1. On the facts and in the circumstances of the case, the order passed by the ld. CIT(A) is bad in law, bad in facts and perverse. 2. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in holding that the appellant is not entitled to the benefit contained in sub-section (2) to section 271AAA. 3. On the facts and in the circumstances of the case, the ld. CIT(A) has erred in sustaining penalty on the investment to the extent of Rs. 44,28,239/- which was acquired out of the income surrendered in the statement recorded u/s 132(4) r.w. sub-section 2 of section 271AAA. 4. Without prejudice to the above and in the alternative: a. That on the facts of the case, no penalty u/s 271AAA is imposable. b. The concealed income estimated for levy of penalty is patently erroneous. 5. That the petitioner may kindly....
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....1,311/- in place of income against which penalty has been imposed. Copy of the order passed in MA is enclosed in the paper book. Any income disclosed in the form of assets u/s 132(4) r.w. sub-section (2) of section 271AAA cannot be a ground for imposition of penalty as the assessee has paid taxes alongwith interest as per statement itself which was modified on the basis of accrual working of income. This finding gets supported from the decision of the Hon'ble Rajasthan High Court in the case of CIT Vs. Kanhaiyalal reported in 299 ITR 19. The decisions on which the ld. D.R. has relied and on which the ld. A.R. has also placed reliance are rendered on different facts. None of these decisions is relating to search proceedings and sub-section (2) of section 271AAA or Explanation (5) appended to section 271(1)(c) of the Act. In our opinion, mere failure of assessee to furnish accounts of the clients in which modification was done due to necessity of business and as per norms of exchange of the institution, an act of concealment of income or furnishing of inaccurate particulars of income, particularly, when complete identity of the clients were given with whom business of brokerage w....
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....e additions made to the returned income. b)That on the facts and in the circumstances of the case, the Ld. CIT(A) erred in rejecting the submission that the assessee declared income on the basis of investment in the AY 2008-09 accrued to the date of search and declared the same in the statement recorded u/s 132(4) read with section 271AAA and paid the tax on such income and as such the assessment of income on accrual basis in each year cannot be a ground for imposition of penalty u/s 271(1)(c). c) That on the facts and in the circumstances of the case, the CIT(A) erred in enhancing the penalty on the income surrendered at Rs. 3,07,729/- in the return filed u/s 153A. d) That on the facts and in the circumstances of the case, the imposition of penalty is unjustified particularly when the assets disclosed in the return of income on the basis of statement recorded u/s 132(4) read with explanation 271AAA for the AY 2008-09 is much more than the total income computed from the clients code in the AY 2005-06, AY 2006- 07, AY 2007-08 and AY 2008-09. 4] That on the facts and in the circumstances of the case, the addition of Rs. 29,68,808/- made by the AO and the additional income....
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....7. 5] That the petitioner may kindly be permitted to raise any additional or alternative ground at or before the time of hearing." 6. As we have already narrated the relevant and material facts of these cases while narrating for A.Y. 2008-09, the arguments raised by the parties for and against their cases are almost same and similar. After surrender was made on the basis of assets as income earned while making statement u/s 132(4) of the Act, the assessee filed return of income on the basis thereof in view of Explanation 5A and of section u/s 271(1)(c) and sub-section (2) of section 271AAA of the Act which is as under: a. Construction of house Rs. 4000000 b. Investment in clients code for which no confirmation was filed Rs. 1150593 c. Unexplained cash Rs. 4555303 d. Gold ornaments Rs. 1888743 7. The break-up of income of Rs. 44,28,239/- on which penalty is sustained is as under: Income disclosed in form of assets in the A.Y. 2008-09: Less income declared in [CIT(A) para D page 16 Rs. 1,15,94,639/- a. A.Y. 2006-07 Rs. 3,07,729/- b. A.Y. 2007-08 Rs. 16,84,860/- c A.Y. 2008-09 Rs. 51,73,811/- Rs. 71,66,400/- Income on which penalty....