TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1037
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....uring the course of search action, valuables being gold bullion, loose diamonds, jewellery etc. which was valued at Rs. 2,84,19,380/- and cash amounting to Rs. 46,22,500/- aggregating to Rs. 3,30,41,880/- were seized from the locker no. 378 and the contents thereof were found to be belonging to Smt. Sudha Patni, the assessee on the basis of the statement recorded u/s 131 by the DDIT (Unit-III), Jaipur on 03.08.2011. The assessee further claimed in the said statement that all valuables and cash as described above which were found and seized from this locker belonged to her. Accordingly, the assessee surrendered a sum of Rs. 3,30,41,880/- as her undisclosed income for the A.Y. 2012-13. Thereafter, the assessment under section 143(3) of the I.T. Act, 1961 was framed vide order dated 10.03.2014. While framing the assessment, the AO initiated penalty proceedings under section 271AAA on the ground that undisclosed income of Rs. 2,71,91,880/- were found during the course of search u/s 132 of the Act. Accordingly, penalty u/s 271AAA of the Act is initiated on such amount of Rs. 2,71,91,880/- by way of issue of notice u/s 274 read with section 271AAA of the Act. The assessee aggrieved by th....
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....DI wing the assessee admitted the undisclosed income. (ii) The manner in which the undisclosed income derived was also explained. The assessee has spelled out in detail the nature of the transaction. In answer to question no 11, 13, 16 and 17 she said that the valuables were received to assessee at the time of her marriage from her parents and in laws and in gift from time to time from nephews of assessee Shri Amit Patni and Shri Abhishek Patni (Son of brother in law of assessee) who are residing in USA. Further the seized cash was lying out of sales proceeds of 20 gold biscuits which were sold in April-2011. These biscuits were also received to assessee in gift. However the assessee was not having any proof of receiving the Jewellery and other valuables in gift or selling of the gold biscuits therefore in order to buy peace and avoid litigation she surrendered the entire Jewellery, valuables and cash found at the time of search as her income for AY 2012-13. The surrender was made in the statement recorded by DDIT. Section 271AAA has been inserted by Finance Bill 2007 and is applicable in a case where search has been initiated on or after 1.6.2007 but before 1.7.2012. Expl 5 to....
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.... guilty of conduct contumacious or dishonest, or has not acted in conscious disregard of its obligation, penalty cannot be levied. In this regard your kind attention is drawn towards the Supreme Court decision in the case of Hindustan Steels Ltd. Vs. State of Orissa, 83 ITR 26 (SC). Hon'ble Apex Court has held that - "An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that ....
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..../- Cash Rs. 46,22,500/- Rs. 2,71,91,880/- We find that the case of the assessee is squarely covered by the decision of the coordinate bench of the Jaipur Tribunal rendered in the case of DCIT vs. Shri Rahul Mangal & Others in ITA No. 1026/JP/2015 & Ors. wherein on similar facts the claim of the assessee was allowed by deleting the addition made by the AO, thereby dismissed the appeals of the of the revenue. We also find support from the decision of the Coordinate Bench rendered in the case of ACIT (OSD) vs. M/s. Kanakia Spaces Pvt. Ltd. ITA No. 6763/Mum/2011 A.Y. 2007-08, wherein the Hon'ble Tribunal has held as under :- " 3.1. Ld. CIT (A) after considering the submission deleted the penalty by stating as under:- "I have carefully considered the submissions made by the appellant in respect of the penalty levied by the ld. AO. It is seen that the ld. AO has written two sentences at para-8 to conclude that the appellant has not been able to substantiate the source of acquisition of the movable assets. The fact of the matter is that the requirement on the part of an assessee to substantiate the source of income cannot be taken to mean that all evidences in the res....