TaxTMI 
TaxTMI 
2015 (3) TMI 409
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....sidence of its Directors. The books of accounts, documents and other materials were seized. The assessee, when called upon to file the return, filed a NIL return for the relevant block period, on 11.10.2002. The Assessing Officer (AO) completed assessment under Section 158BC(c) at `8,90,36,597/- which comprised of inter alia undisclosed provisional income of Rs. 1,57,15,409/- arrived at by adopting a flat rate of 1.5% on the aggregate of all credit entries in the bank account statements of the assessee. Other than this amount, the AO also added sums of money on the basis of unexplained cash deposits and negative balances; the Commissioner of Income Tax (Appeals) [hereafter referred to as "CIT(A)] directed the cancellation of the sums added on account of negative balances. However, the CIT(A) rejected the assessee's contentions with respect to addition of Rs. 1,57,15,409/-. The assessee had, in the original returns, declared the amounts to be derived on account of share trading transactions. The assessee's contentions were rejected because the AO and the CIT(A) found that in the statement recorded under Section 132(4) of the Income Tax Act, 1961 (hereafter referred to as "the Act"),....
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.... does reflect that the assessee had charged a rate as high as 1%. As against this, the revenue authorities have applied @ 1.5% to the entire turnover irrespective of the nature of entries whether long term, short term gain etc. It is also note worthy that the gross rate of commission charged by the assessee can also not be said to be profit exigible to tax. The credit for the expenses incurred in running the business is also required to be considered while estimating the income from business of providing accommodation entries. The total turnover also includes some genuine transactions carried on by the assessee on which rate of commission was admittedly much lower ranging between 0.25% to 0.50%. Therefore, having regard to the entire gamut of facts, circumstances and material which is available on record, there does not appear to be justifiable reasons to estimate the commission/brokerage of the assessee by applying rate of 1.5% of the total turnover. In our view it would be in the fitness of the things that the income earned by the assessee by way of commission/brokerage on the turnover including accommodation entries provided to its clients is computed @ .6% on the total turnover....
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....the first proviso. Thereafter, the Court observed as follows: 11. The contention raised by the learned counsel on the strength of the provisions of Sections 273B and 158BFA(3) is also devoid of any merit. Of course, as per the provision of Section 273B no penalty shall be imposable on the persons or the assessee as the case may be, on their failure referred to in the said provisions if he proves that there was reasonable cause for the said failure. But then, the said provision in no manner leads to the presumption that in respect of the cases other than covered by Section 273B for any failure or violation imposition of the penalty is automatic. Each provision of penalty has to be construed independently keeping in view the language employed therein. XXXXXX XXXXXX XXXXXX 13. Moreover, in the instant case, after due examination of the facts and the material on record, the CIT(A) and learned Tribunal have concurrently found that the difference of the undisclosed income assessed and the undisclosed income shown in the return does not relate to the block period as such. The Tribunal has arrived at the finding that the assessees had claimed to give reduction of amounts calculate....
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....ll not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC : Provided that no order imposing penalty shall be made in respect of a person if- (i) such person has furnished a return under clause (a) of section 158BC; (ii) the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable; (iii) evidence of tax paid is furnished along with the return; and (iv) an appeal is not filed against the assessment of that part of income which is shown in the return : Provided further that the provisions of the preceding proviso shall not apply where the undisclosed income determined by the Assessing Officer is in excess of the income shown in the return and in such cases the penalty shall be imposed on that portion of undisclosed income determined which is in excess of the amount of undisclosed income shown in the return." 9. The plain terms of the provision - which Harkaran (supra) emphasised occ....