TaxTMI 
TaxTMI 
2016 (9) TMI 913
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....,000/- by the police at Hyderabad. This information was received by the Income Tax department and a warrant U/s. 132A(1) of the Income Tax Act was issued and the cash of Rs. 49,95,000/- was requisitioned from the police authorities. AO observed that as per the provisions of Sec. 132(4A) of IT Act, money found in possession of the person is held to belong to him i.e., in this case the money was in control of the assessee. The assessee vide letter dated 25.03.2013, stated that the cash belonged to him. Accordingly the assessee filed his return of income for A.Y. 2013-14 on 26.04.2013 declaring income of Rs. 49,95,043/- . 2. The AO issued a Notice U/s. 143(2) issued on 31.10.2013 to the assessee. Thereafter, an order U/s. 143(3) of the Income....
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....Ranga Reddy District. The matter was compromised between the parties before the Lok Adalat held at L.B. Nagar, Ranga Reddy, District, on 26.05.2012. The suit was disposed off by the Lok Adalat in terms of compromise as per order dated 26.05.2012. On the day of compromise, the plaintiffs paid Rs. 50 lakhs to the defendants viz., (1) Wah Magna Retails Pvt. Ltd., (2) assessee Mirza Farhatullah Baig and (3) Y. V. Ramana. 5. After considering the submissions of the assessee, the AO observed that the assessee has once again failed to substantiate the manner in which the undisclosed income was derived. He has not been able to explain why no document was found in his possession in support of his claim. Even if the argument that the Lok Adalat dis....
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....IT(Appeals) ought to have appreciated that penalty under section 271AAA is not attracted in the facts and circumstances of assessee's case. 4. The CIT(Appeals) ought to have cancelled the penalty of Rs. 4,99,504/- in the facts and circumstances of assessee's case." 8. Before us, the ld. AR submitted that the penalty is related to assessment of income of Rs. 49,95,000/-. As explained, this is the amount which the assessee got by the terms of a compromise as per order of Lok Adalat dated 26.05.2012. While carrying the cash, the police intercepted and seized the entire cash. On passing the information, the Income Tax Department initiated action u/s 132 and took custody of the cash on 30.05.2012. He submitted that the assessee expl....
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....000/- was received in lieu of the compromise by all the parties on the day the Lok adalat passed orders of compromise. The relevant term of compromise for the assessee is the withdrawal of the suit filed by the assessee against the plaintiffs in O.S.No.1446/2010 on the file of II Sr. Civil Judge, RR District at L.B. Nagar. This very cash was received and was being carried. At that very time, the police intercepted and seized the cash which was later requisitioned by Income Tax Department and taken custody of. Thus, the assessee fulfilled his obligation of substantiating the manner in which the income was derived. This income was admitted in the Return of Income filed on 26.04.2013 for the relevant Asst. Year. Therefore, the AO's remark ....
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.... DR, on the other hand, relied on the orders of revenue authorities. 10. Considered the submissions of both the counsels and perused the material facts on record as well as the orders of revenue authorities. The assessee had carried the cash on 26/05/2012 after reaching the compromise with the land lord in Lok Adalat. The assessee did not have any documentary proof while carrying the cash. After confiscation of cash, assessee had disclosed before Police and AO about the source of the cash. He had substantiated the claim by submitting the relevant order of Lok Adalat before the authorities. The provisions of section 271AAA(2) are as below: "(2) Nothing contained in sub-section (1) shall apply if the assessee,-- (i) in the course of the....