TaxTMI 
TaxTMI 
2017 (2) TMI 1120
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....e books were seized/impounded by the Department from the premises of Shri Pandoo P. Naig. Incriminating documents seized from Shri Pandoo P. Naig indicated receipt of unaccounted sale proceeds and its utilization for development of the project by the assessee. Shri Vishwajeet Subhash Jhavar, Managing Director of the company in his statement recorded u/s. 132(4) admitted undisclosed income of Rs. 11,00,00,000/- for all its group concerns on the basis of material found during search and agreed to pay taxes on the same. The assessee claimed before the Assessing Officer that unaccounted income on the basis of material found in search was admitted from the real estate business, therefore, the same are required to be computed and assessed on project completion method. The Assessing Officer accepted the method of computation of income as proposed by the assessee in respect of disclosed transaction appearing in the regular books of account but in respect of unaccounted transaction, the Assessing Officer held that the same is assessable in the year of its taking place. The Assessing Officer, thereafter, computed undisclosed profit from different group concern by bifurcating the receipts and....
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....me for levying penalty u/s. 271(1)(c) after giving telescopic benefit on negative cash balance of Rs. Rs. 65,62,669/- although question of benefit of telescopy does not arise; 2. The Appellant prays that the order of the Ld. CIT(A) be vacated and the of the AO's order may be restored. 3. The appellant craves leave to add, alter, amend, modify any of the above grounds raised, any other grounds at the time of proceedings before the Hon'ble Tribunal which may please be granted." 4. The grounds raised by the assessee impugning the order of Commissioner of Income Tax (Appeals) are as under : 1. "On facts and circumstances prevailing in the case and as per provisions & scheme of the Act it be held that, no penalty is leviable in terms of provisions of Section 271(1)(c). It further be held that, penalty proceedings initiated by the AO u/s. 271 (1) (c) & levy of penalty by the AO in terms of the said section is unwarranted, unjustified improper and deserves to be deleted. The penalty imposed by the AO u/s. 271(1)(c) be deleted. The 1st appellate authority should have deleted the penalty imposed by the Assessing officer as per provisions of law and facts prevailing in the case....
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....TAL 7,31,39,000 5.1 The ld. AR submitted that the Hon'ble Punjab and Haryana High Court in the case of Smt. Shanta Devi Vs. Commissioner of Income Tax reported as 171 ITR 532 has held that addition in respect of cash credit entries found in the books of account of partnership firm in which the assessee was a partner cannot be made in assessee's hand. The ld. AR submitted that if the addition itself is not sustainable then there is no question of levy of penalty on such addition. Merely because assessment proceedings have been completed resulting in some additions and the additions have not been challenged would not result in necessarily imposition of penalty. Penalty proceedings are not continuations of assessment proceedings. To support his submissions the ld. AR placed reliance on the decision of Hon'ble Bombay High Court in the case of Commissioner of Income Tax Vs. Dharamchand L. Shah reported as 204 ITR 462. 5.2 The ld. AR further submitted that in respect of addition made u/s. 69C the assessee has furnished detailed submissions before the authorities below but the same were brushed aside in an arbitrary and unjustified manner. The ld. AR pointed that Rs. ....
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.... of penalty. 8. The ld. AR has pointed that the addition of Rs. 3.70 crores made u/s. 68 of the Act is not sustainable as the addition has been made in violation of provisions of section 68 of the Act. Before proceedings further it would be relevant to explain section 68 of the Act : "68. Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year." A bare perusal of the provisions of section 68 would show that addition u/s. 68 can be made only where any amount is found credited in the books of assessee and the assessee has failed to offer any valid explanation or the explanation furnished by the assessee in the opinion of Assessing Officer is not satisfactory. In the present case, we find that addition u/s. 68 has been made on the basis of entries in the diaries found during survey at the premises of one of the former Director of the assessee company. There is no evidence....
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....100% of the tax sought to be evaded at Rs. 1,46,63,195/- on the undisclosed income determined in the assessment order at Rs. 4,35,62,669/-, it is noted that undisputedly the same suffers from some defects. The AO has computed the aforesaid income after disallowing undisclosed expenses available in the seized documents u/s 40A(3) and u/s 40(a)(ia) and also without giving the telescopic benefit of shortage of Rs. 65,62,669/- (receipt over expenses in this year). However the appellant has claimed in their letter dtd. 17/7/2012, which has been further elaborated in their letter dtd. Nil filed on 20/7/2012, that the computation of the undisclosed income on which penalty can be held to be leviable was defective. This claim of the appellant has been carefully considered, and I am of the considered view that even though the appellant has accepted the finding given in the assessment order by not filing any appeal, it is an admitted fact that application of sec.40A(3) and sec.40(a)(ia) are issues on which different Courts have different views and therefore it will be incorrect to include the impact of these disallowances for computing the penalty u/s 271(1)(c). Similarly the issue of grantin....