TaxTMI 
TaxTMI 
2015 (10) TMI 2592
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.... referred to as the 'Act'). 2. Shri. Sunil Surana, ACA,DISA, the Learned AR argued on behalf of the assessee and Shri.Pinaki Mukherjee, JCIT, the Learned DR argued on behalf of the revenue. 3. The only issue to be decided in this appeal as to whether the penalty u/s 271(1)(c ) of the Act is leviable in the facts and circumstances of the case. 4. The brief facts of this issue is that the assessee firm is engaged in the business of manufacturing and sale of gold , silver jewellery and ornaments. There was a search in the premises of the assessee firm on 13.10.1993. During the course of search, the valuables such as jewellery , cash , silver utensils and articles were found by the search party, among others. The partners of the assess....
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....ccount of stock Rs. 50,000 Sustained by CITA Investment towards pawn broking business Rs.4,98,924 CITA deleted Rs. 88,924/- Unrecorded investment towards Acquisition of loose stones Rs.2,20,000 Sustained by CITA Unrecorded investment towards Acquisition of Silver Utensils Rs.1,76,900 CITA deleted Rs. 56,900/- The Learned AR argued that ultimately the addition in the sum of Rs. 8,00,000/- was sustained by Learned CITA in respect of the aforesaid items. The Learned AR argued that no second appeal was preferred by the revenue against the relief granted by the Learned CITA as stated above and accordingly no penalty u/s 271(1)(c ) also could lie on the same. 5.1. Apart from the above, two in....
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....ingly pleaded that the same shall not be entertained at this stage. In defence, the Learned AR assailed the argument of the Learned DR by referring to ground no.2 raised by the assessee before the Learned CITA which is on the impugned issue. 6. We have heard the rival submissions and perused the materials available on record. The facts stated supra are not disputed by both the parties and hence are not reproduced herein for the sake of brevity. We find that the Learned AO had made two independent additions in the sum of Rs. 1,70,000/- and out of which a sum of Rs. 1,45,000/- got sustained upto tribunal on quantum proceedings. We find from the records that the Learned AO had not initiated any penalty proceedings u/s 271(1)(c ) of the Act ....
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....(2013) 359 ITR 565 (Kar) wherein at page 603 , their Lordships had laid down various principles for levy of penalty and one such principle in clause (s) is as follows:- "(s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law". 6.1. It is well settled that the penalty proceedings are distinct and separate from assessment proceedings and just because an addition has been sustained in quantum proceedings, levy of penalty is not automatic. What has to be seen is whether there was a bonafide belief and bonafide explanation given by the assessee. If it is so, no penalty could be levied u/s 271(1)(c ) of the Act. 6.2 Moreover, we also find that the additions sustained by this t....