2011 (8) TMI 1102

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....nt of two additions i.e. Rs. 57,128/- on account of excess cash detected and Rs. 16,04,024/- on account of alleged unexplained investment in stock. 3. The brief fact of the case are that there was a survey action u/s 133A of the Act against the assessee and in the course of such survey, unexplained investment in stock of Rs. 16,04,024/- and excess cash amounting to Rs. 57,128/- was detected. These two amounts were added to the total income of the assessee in the assessment proceedings u/s 143(3) of the Act. In quantum appeal before CIT(A), the said additions were confirmed. In the meantime, the A.O. initiated penalty proceedings and after hearing the assessee, the A.O. imposed penalty of Rs. 4,98,500/- u/s 271(1)(c) of the Act. Being agg....

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....me of survey, our attention was drawn to para 12 of this tribunal decision in quantum proceedings as per which the tribunal has confirmed the addition of Rs. 8,128/- only and the matter regarding the balance amount of addition of Rs. 49,000/- was restored back to the file of the A.O. for a fresh decision. It was submitted that under these facts, levy of penalty is not justified and in support of this contention, reliance was placed on the tribunal decision in the case of Krishna Developers Vs ITO in I.T.A.No. 4447, 4448 and 4449/Ahd/2007 dated 23.07.2010. Reliance was also placed on the judgment of Hon'ble Gujarat High Court rendered in the case of New Sorathia Engineering Co. Vs CIT as reported in 282 ITR 642. It was submitted that in this....

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....planation to offer against the charge of concealment or furnishing inaccurate particulars of income and, therefore, in that case Explanation (1) to Section 271(1)(c) is clearly applicable." Under these facts, it was held by the Hon'ble Gujarat High Court that in the penalty order and in the order of CIT(A), no clear cut finding has been reached and hence, the penalty imposed by the A.O. is not sustainable. While deciding this, Hon'ble Gujarat High Court had made reference to its own decision rendered in the case of CIT Vs Manu Engineering Works, as reported in 122 ITR 306 and reproduced relevant para of this judgment in which it was held that it was incumbent upon IAC to come to a positive finding as to whether there was concealment of inco....