TaxTMI 
TaxTMI 
2015 (11) TMI 798
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.... CIT(A) against the penalty orders passed by the AO u/s 271(1)(c) for assessment years 2005-06 to 2008-09 and u/s 271AAA for the assessment year 2008-09. Since all these appeals arise out of common set of facts, they were heard together and are being disposed of by this common order, for the sake of convenience. 3. The facts relating to the case are set out in brief. The assessee is a dentist and carries on his profession from different places and also through different hospital names. He was subjected to search and seizure operations on 17-01-2008. On the very same day, some of his concerns were also surveyed u/s 133A of the Act. During the course of search operations, cash balance of Rs. 1,13,57,110/- was found as against the book balance of Rs. 9,10,548/-. In the statement recorded from him u/s 132(4) of the Act, he admitted the excess cash balance of Rs. 1,04,68,512/- as his unaccounted income. The assessee agreed to offer a sum of Rs. 1,25,00,000/- (including excess cash balance) as his income for the years stated below:- Assessment year Amount 2005-06 5,00,000 2006-07 5,00,000 2007-08 10,00,000 2008-09 1,05,00,000 Accordingly, the....
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....his regard, he placed reliance on the decision rendered by the special bench of Tribunal in the case of All Cargo Global logistics Ltd (137 ITD 287) which has since been upheld by the Hon'ble jurisdictional Bombay High Court. 9. The Ld D.R, on the contrary, submitted that the assessee has admitted additional income for various years in the statement recorded from him u/s 132(4) of the Act. Accordingly he submitted that there were incriminating materials available with the AO and hence the impugned additions were made by him. 10. We heard the parties on this issue and perused the record. Admittedly, these are estimated disallowances made out of expenses that were already claimed in the original return of income filed by the assessee. The assessee has submitted that the assessment years up to 2006-07 fall in the category of concluded assessments, i.e., assessments of those years were not pending on the date of initiation of search. Hence, in our view, the assessing officer could not have made these additions for AY 2004-05 to 2006-07 in the absence of any incriminating materials. Alternative contentions of the assessee also merits acceptance, i.e., the assessee has made additio....
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.... that, even if it is assumed that the additions made u/s 69C is required to be sustained, the same should be telescoped against the above said amount of Rs. 20.00 lakhs. This is for the reason that the addition towards source and also investments made out of said source cannot be made and if made, the same would result in double assessment of same item of income. Further, since it is stated that the assessee has not capitalized the above said amount of Rs. 20.00 lakhs, in our view, the telescoping benefit should be given. Hence the net result would be that there is no necessity to make any addition u/s 69C of the Act. Even otherwise, we notice that the assessing officer has made the additions u/s 69C of the Act without examining the claim of availability of sources out of drawings made by the assessee and his wife. Accordingly, we set aside the order of Ld CIT(A) on this issue in all the assessment years referred above and direct the AO to delete the impugned additions. 14. We shall now take up the appeals filed by the revenue. As stated earlier, the assessing officer proceeded to estimate the professional income of the assessee for assessment years 2002-03 to 2007-08. The reaso....
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....h 6.5.4 and 6.5.5 of the order passed for AY 2004-05:- "6.5.4 In my considered opinion, whether estimate can be made in search assessment or not depends on the facts of the case and how a subject matter of estimate is linked to any paper seized. I found that there is no material in the possession of the AO on the basis of which the AO has worked out extra receipts and extra profits. Whatever books of account and loose sheets were found during the course of search are in the possession of the department, the only addition that could be sustained was in respect of unexplained cash found during the course of search at Rs. 1,13,57,110/-(sic). The appellant has already offered Rs. 1,25,00,000/- for tax as additional income. As per provision of section 69A, the cash found and not recorded in books of accounts for which no reasonable explanation is available is to be deemed to be the income of the financial year. This cash cannot be taken as a piece of evidence for estimation of income of the earlier year, in the absence of any documentary evidence. The AO has not given any findings in the assessment order that the receipts recorded on the loose papers found during the course of search....
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....d CIT(A) has rightly concluded that the assessing officer did not bring any material on record to support his case of estimation of professional receipts of earlier years. We also notice that the assessing offer has assessed the net profit on the alleged suppressed professional receipts, meaning thereby, the assessing officer has presumed that the assessee would have suppressed corresponding expenses also. Again it is only a guess work only, unsupported by any material. Similarly, the average daily collection estimated by the AO was also mere guess work. In effect, there is no material available with the AO to show that the assessee has suppressed professional receipts as well as expenses in order to substantiate the estimation made by him. During the course of hearing, the Ld D.R placed reliance on the decision rendered by Hon'ble Punjab & Haryana High Court in the case of Ved Prakash Vs. CIT (265 ITR 642) to support the estimation made by the assessing officer. However, we notice that the Hon'ble Punjab & Haryana High Court has considered a case, wherein materials were found during the course of search. However, in the instant case, no material relating to suppression of professi....
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....placed reliance on the decision rendered by Delhi bench of Tribunal in the case of JRD Stock Brokers (P) Ltd Vs. ACIT (2009)(124 TTJ 566). 20. We heard rival contentions and perused the record. We notice that the decision in the case of JRD Stock brokers (P) Ltd (supra) has been rendered in the context of penalty levied u/s 158BFA of the Act. Further, we notice that the assessee therein did not disclose additional income in the return of income filed by it u/s 158BC of the Act. Further it is stated that the undisclosed income was discernible from the seized materials. Where as in the instant case, the penalty has been levied u/s 271(1)(c) of the Act, the assessee has disclosed additional income in the return of income filed by him and further there was no seized material to support the additional disclosure made by the assessee. Hence, we are of the view that the decision rendered in the case of JRD Stock Brokers (P) Ltd (supra) is not applicable to the instant case. 21. If we analyze the facts behind the additional disclosure of about Rs. 20.00 lakhs made by the assessee, we notice that he has voluntarily offered the same and no material was seized during the course of searc....
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....sclosed income was derived; and (c) pays the tax, together with interest, if any, in respect of the undisclosed income. 25. There is no dispute with regard to the fact that the assessee has complied with conditions that the assessee has disclosed the income in the statement taken u/s 132(4) of the Act and the assessee has paid the tax together with interest, if any, in respect of the undisclosed income. The Ld CIT(A) has taken the view that the assessee has not disclosed/substantiated the manner in which undisclosed income was derived. The Ld A.R submitted that the assessee has disclosed the undisclosed income in the return of income as his professional income and hence the disclosure so made satisfied the condition of "manner in which the undisclosed income was derived". In this regard, he placed reliance on the decision rendered by the Cuttack bench of Tribunal in the case of Ashok Kumar Sharma Vs. DCIT (2012)(149 TTJ (Ctk)(UO) 33), wherein it was held as under:- "Undisputedly the assessees have shown the undisclosed income under the head "income from business" in the returns filed by them and that was accepted by the Department by passing the assessment orders according....