TaxTMI 
TaxTMI 
2014 (5) TMI 546
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....n 06.8.2008 at the residential /business premises of the persons associated with the JMD Group. Among others residence of Shri Arun Dudeja and Smt. Sangeeta Dudeja were also subjected to search and seizure operation and some books, documents, cash, jewellery were found and impounded during the course of search. Consequent upon the above, assessment proceedings u/s. 153A were initiated. Assessee made the following disclosure of additional income as follows :- "i. Unexplained cash Rs. 2622450 ii. On account of unexplained entries discussed above Rs. 5600000 Total Rs. 8222450 The above surrender is voluntary without any coercion or force but with a request that no penalty or prosecution may be initiated against me for the said disclosure. I will duly file the IT return for A.Y. 2009-10 in due course. It is requested that the cash seized from me may kindly be adjusted against the tax liability for the said year in the form of advance tax." 5. During the course of regular scrutiny assessee was asked to explain how he had accounted for and paid taxes on the amounts surrendered which included this cash of Rs. 26,22,450/- and diaries with entries, found du....
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....ending Seminars and note down for my personal references which can be used for actual production universally. The nothings in the diaries and loose documents speak nothing more than this." That the additions made in this case are based on merely the statement given by the assessee and his cooperation with the department to buy peace and not to involve in an unending litigation. He was given an understanding at the time of search and seizure proceedings that if he cooperated with the department no penalty under section 271(1)(c) would be leviable in his case. Therefore, he surrendered the income at an estimated figure of Rs. 8222450/- with the specific request and understanding that no penalty u/s. 271(1)(c) would be levied in his case. That the notings in the diary speak nothing more than what has been stated above the assessee. These nothings in the diaries / loose documents are dumb and do not speak of any income earned by the assessee. It was only an estimate that the income to the extent of Rs. 8222450/- was surrendered. That the cash found amounting to Rs. 2622450/- at the time of search and seizure proceedings on 6.8.08 cannot be related to the income returned or assess....
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....mate that the income to the extent of Rs. 8222450/- was surrendered. AO referred to the statement of section 132(4) and his conduct before the assessment order before the assessment proceedings. AO noted that it is amply clear that the assessee during the course proceedings u/s. 132(3) as well as during assessment proceedings has accepted his inability to explain the cash found maintained in the lockers and the entries made in the diaries with regular books of account or with other documentary evidence. That rather he has accepted the fact that the entries pertain to the cash commission received by him on sale of immovable property. AO also rejected the case law referred by the assessee. He placed reliance upon the decision of the Hon'ble Apex court in the case of UOI vs. Dharmendera Textile Processors 306 ITR 227 and levied the penalty u/s. 271(1)(c). 6. Upon assessee's appeal Ld. CIT(A) considered the issue and affirmed the penalty by holding as under:- "I have considered the submissions of the assessee and the impugned order. The Ld. AO proceeded to levy penalty u/s 271 (1) (c) r.w. Explanation 5A, on the basic premise that the assessee had not declared the actual income i....
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....in these cases, assessee has surrendered Rs. 82,22,450/- u/s. 153A on account of cash found in lockers and unexplained entries in diaries. This was done during the course of search and seizure operation, where some books, documents, cash were found and impounded during the course of search. In this regard, during the course of assessment proceedings assessee was asked to explain how he had accounted for and paid tax on the amount surrendered which included cash of Rs. 26,22,450/- and diaries with entries found during search. In this regard, assessee has given breakup of the amount surrendered as referred in para 5 above. The assessee has admitted that the difference (Rs. 82,22,450 - Rs. 80,81,000) i.e. Rs. 1,41,450/- may be taken into consideration in the year of search i.e. asstt. year 2009-10. 8.1 Thereafter, AO has further referred to the seized diaries of the assessee and from the entries noted therein assessee was confronted that total income not disclosed amounted to Rs. 8368900. Thus there was a difference of Rs. 2,87,900/-. In this regard, also the assessee conceded that this amount may also be added to the income of the assessee for the asstt. year 2004-05. Thus, we fin....
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....lment of income. In this case we find that assessee has been clearly been guilty of concealment and the same came to the light only during search operation where diaries and documents were seized. We further find that Explanation 5A to Section 271(1)(c) clearly covers the situation as in this case. It has been provided in the said Explanation as under:- "Explanation 5A - Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of - (i) 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 utilising (wholly or in part) his income for any previous year; or (ii) Any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and - (a) Where the return of income for such previous year has been furnished before the said date but such income....