AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (12) TMI 121
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....holding the levy of penalty of Rs. 6,53,882/- u/s 271(1) (c) of the Income Tax Act, 1961 is being challenged on facts and law while relying upon the decision reversed by the Hon'ble Jurisdiction High Court. 3. After hearing both the parties we find that the survey was conducted in the premises of the assessee. During the survey certain incriminating documents were found. Assessee ultimately surrender the sum of Rs. 14 Lacs however, assessee filed return declaring income of Rs. 48,054. During the assessment proceeding it was noticed that assessee has shown sale of paddy at Rs. 523/- per quintal in respect of the opening stock of paddy of 4879.18 quintals which was valued at Rs. 635/- per quintal. It was noticed in the comparable cases tha....
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....ssing officer noted at the time of survey physical cash was only Rs. 6500 therefore no cash was available and therefore he made addition of Rs. 14 Lacs and initiated penalty proceedings under section 271(1)(c). 5. It seems later on the Ld. CIT(A) on appeal reduced the addition ofRs. 11,62,215/- on account of loss of sale of paddy to Rs. 5,47,639/- and addition on account of loss of sale of rice amounting to Rs. 6,38,241/- was reduced to Rs. 34,743/-. The addition on account of surrender amount and unexplained cash was upheld the order of Ld. CIT(A). Assessee as well as revenue challenge the order of Ld. CIT(A) before the Tribunal. The Tribunal confirmed the order of Ld. CIT(A). 6. In response to the show cause notice for levy of penal....
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....s regards unexplained cash of Rs. 14,00,000/- it is submitted that the assessee surrendered the above at the time of survey conducted at the business premises on 19.01.2007 to buy peace of mind and to avoid litigation with the department subject to no penal action. The amount was deposited in the books of account on different dates after the survey out of the surrender amount. The addition of this amount alleging the same to be out of undisclosed income is totally unjustified and arbitrary. From the above it is clear that all the above addition have been made on the basis of conjectures and surmises against natural justice. In view of the above the penalty proceedings initiated against the assessee be kindly dropped." 7. After conside....
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....than 90 lacs to the various sundry creditors. In any case the sale transactions have been accepted by the Sales Tax Authority. The addition has been finally made by the Ld. CIT(A)on estimate basis and therefore penalty provision are not attracted. 11. In respect of issue regarding cash deposits is concerned, he referred to the page 143 of the paper book which is copy of the surrender letter which clearly shows that sum of Rs. 14 lacs was surrendered during the survey and this amount was shown in the P&L Account and accepted by the revenue. Later on miscellaneous assets were purchased which were sold and cash was deposited in the bank though addition has been confirmed by the Tribunal. It cannot be said that penalty provision are also att....
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....estimate and not on account of any concrete evidence of concealment, then the penalty is not leviable." Therefore we are of the opinion that penalty on these two items deserves to be deleted and accordingly we deleted the same. 14. As far as the penalty on the addition of Rs. 14 Lacs is concerned we are unable to agree with the submissions of Ld. Counsel for the assessee. The surrender letter referred to by the Ld. Counsel for the assessee which is available at page 143 of the Paper Book which reads as under : To, The Joint Commissioner of Income Tax, Kurukshetra Range, Kurukshetra Subject: Survey under section 133-A(1) of IT Act 1961 conducted at M/s Mahavir Trading Company, Kurukshetra on 19.01.2007 Respected Madam, T....
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....fully, Sd/- M/s Mahavir Trading Company Kurukshetra The above clearly shows that surrender has been made mainly on account of discrepancies found in the books of account, loose papers, found of various products etc. The cash available was only Rs. 6500/-therefore, no cash could possibly have been deposited. The assessee though incorporated the surrender amount in the P&L Account but by showing the sale of opening stock at lower price the income was again reduced to Rs. 48,054/- this clearly shows that the amount surrendered was nullified while filing return. However, later on assessee became wise and deposited the amount of Rs. 14 lacs in the bank and before us it was stated that the assessee purchased miscellaneous assets which we....