2016 (3) TMI 448

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....ef facts of the case are that the assessee derives income from speculative business and other sources. The original return declaring income of Rs. 97,700/- was filed on 11-09-2004 by the assessee which was processed u/s 143(1) of the Act. Thereafter, the Investigation Wing of the Department consequent to searches on entry provider M/s. B.C. Purohit & Group (Tax Consultant) on 12-04-2005 observed that this group was engaged in the widespread racket of providing accommodation entries. AO on the basis of ADI information found that the assessee was a beneficiary of the racket as it had received bogus gifts from following persons:- (i) Rs. 1,11,000/- from Shri Raj Kumar Agarwal on 22-12-2003. (ii) Rs. 7,5000/-from Shri Pawan Kumar Agarwal on....

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....department thus inaccurate particulars of income were furnished. 2.2 Being aggrieved, the assessee preferred first appeal where the ld. CIT(A) confirmed the penalty by following observation. ''3.2 I have duly considered assessee's submission and carefully gone through penalty order passed by the ld. AO. I have taken a note of factual matrix of the case. I have also carefully gone through the assessment order passed u/s 143(3) r.w.s. 147 and the penalty order passed u/s 271(1)(c) of the Act. I have also taken a note of original return and revised return filed by the assessee. It is a fact that assessee after detection of accommodation entries found during the course of search operation conducted against B.C. Purohit of Kolkata assessee....

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....der:- (1) Jai Narain Upadhyay vs. ACIT (2012) 75 DTR 361 (Luck) (Tribunal) (T.M.) (2) Raghuveer Saran Agarwal and Shri Rajesh Agarwal vs. ITO in ITA No. 1193and 1994/JP/2010 A.Y. 2003-04 (3) Smt. Archana Jain vs. DCIT (ITA No. 701/JP/2008 - A.Y. 2003-04) (4) CIT vs. Suresh Mittal, 251 ITR 9 (SC) (5) CIT vs. Shyamlal Soni, 276 ITR 156 (M.P.) 2.4 On the other hand, the ld. DR vehemently contends as under:- (i) The assessee was a willing a party to a nefarious accommodation entry racket which was a means to launder black money. (ii) In the original return, the assessee had claimed these gifts to be genuine. (iii) The search by the Investigation Wing on the kingpin of black money racket B.C. Purohit (tax consultant) Group creat....

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.... itself in the case of K.P. Madhusudan Vs. CIT , 252 ITR 99 (SC). Consequently, cases cited by the ld. AR have no factual parity with assessee's case. In view of the above facts, circumstances and contentions, ld. DR pleads that the penalty has been rightly imposed. 2.5 I have heard the rival contentions and perused the materials available on record. The entirety of the facts reveals the facts narrated above reveals that the assessee's entire defense qua penalty is to the effect that he filed the revised return voluntarily. The statement of the assessee is to be examined in the back drop of the facts, human conduct and preponderance of probabilities; not on mere assessee's assertion. It is not disputed that search in the case of B....