TaxTMI 
TaxTMI 
2015 (2) TMI 112
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....(Rs.13,69,715/- for AY 20001-02, Rs. 16,07,025/- for AY 2002-03, Rs. 27,37,111/- for AY 2003-04, Rs. 46,07,024/- for AY 2004-05 & Rs. 35,14,624/- for AY 2005-06) levied by the Assessing Officer by holding that penalty cannot be levied in respect of the additions made on estimate basis by applying the gross profit rate. 2. In doing so, the ld.CIT(A) failed to appreciate that where there is a justification for the admission of income, as in the instant case, the burden is on the assessee to prove that there is no concealment and where there is failure in that direction to discharge the burden, penalty is leviable. 3. On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have upheld the order passed u/s.271(1)(c) of the Act. 2. The facts as recorded by the ld.CIT(A) vide paras-3.0 & 3.1 in the appellate order, are reproduced hereunder (extracted from IT(ss)A 15/Rjt/2011):- "3.0. The second, third and fourth ground of appeal are in respect of the imposition of penalty of Rs. 12,76,429/- u/s.271(1)(c) of the Act on the additional income of Rs. 30,06,000/- voluntarily disclosed in the return furnished in response to notice issued u/s.153A of the Act as well as on ....
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....e." 2.1. The ld.CIT(A), after considering the submissions and following the decision of the Coordinate Bench (ITAT Rajkot) rendered in the case of DCIT vs. M/s. Balaji Multiflex P. Ltd. in IT(ss)A Nos.64 & 65/RJT/09 for AYs 2004-05 & 2005-06) dated 10/08/2010, allowed the appeal of the assessee by deleting the penalty. 3. The ld.CIT-DR submitted that the ld.CIT(A) was not justified in deleting the addition and supported the order of the AO. 3.1. On the contrary, ld.counsel for the assessee reiterated the contentions as were made in the synopsis. He submitted that this issue is squarely covered by the catena of judgements in favour of assessee and against the Revenue. He further submitted that out of the addition made by the AO, majority of the additions were deleted by the ld.CIT(A) in quantum proceedings. He submitted that even otherwise also, the AO was not justified in initiating the proceedings on the addition made on the basis of estimation. He also submitted that immunity available under Explanation 5 to section 271(1)(c) of the Act is available in favour of the assessee. Apart from the above, the ld.counsel for the assessee placed reliance on the following case-laws:- 1.....
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....decision of the Hon'ble ITAT Ahmedabad Bench rendered in the case of ACIT vs. Shri Kirit Dahyabhai Patel (in ITA Nos.2344, 2345, 2346, 2348 and 2389/Ahd/2007). The said decision of the Hon'ble ITAT has been reversed by the Hon'ble Gujarat High Court in a recent judgement in Tax Appeal Nos.1181, 1182 and 1185 of 2010, dated 03/12/2014 and decided the issue in favour of the assessee. 4. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below as well as the judgements relied upon by the ld.counsel for the assessee. The assessee has filed a written synopsis and the contentions of the same are reproduced hereunder:- "SYNOPSIS 1.0 Search u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as the "Act") carried out at the premises of the directors of the respondent Company on 27.10.2005. Consequent Survey u/s 133A was also carried out at the premises of the respondent. During the course of search at the residential premises of directors as also survey at the factory premises nothing was found to suggest and/or establish any unaccounted transactions. 2.0 During the course of post search inqu....
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....e recorded during search. It is in this context of plain language of the law, the concurrent finding of the first appellate authority and the Tribunal was upheld in CIT Vs Chhabra Emporium 264 ITR 249 (Delhi). Penalty was found to be not leviable in Gebilal Kanaiyalal (HUF) Vs ACIT) 270 ITR 523 (Raj). Reliance is also placed on the following decisions: a. Hon'ble ITAT, Rajkot Bench Rajkot in the case of DCIT vs M/s. Balaji Multiflex P. Ltd., in IT(SS) Nos. 64 & 65/RJT/09 [Paper book Page 1 to 9] wherein on identical facts the order of the Id. CIT(A) deleting the penalty was upheld. The appeals filed by the revenue against the order of the Hon'ble ITAT vide Tax Appeal Nos. 83 & 84 have dismissed by the Hon'ble High Court of Gujarat vide orders dated 19.10.2011 [copies attached at Page (6 to 9 ]. b. Hon'ble ITAT, Rajkot Bench, Rajkot in the case of ACIT vs Shri Shantilal J. Maheshwari IT(SS)A No. 69/RJT/2009 [Paper book Page 10 to 12]. c. Hon'ble ITAT, Rajkot Bench, Rajkot in the case of ACIT vs Shri Samat A. Jaria IT(SS)A No. 71 to 73/RJT/2010 [Paper book Page 13 to 16]. d. Hon'ble ITAT, Rajkot Bench, Rajkot in the case of ACIT vs Shri Mukesh B. Zaveri IT....