TaxTMI 
TaxTMI 
2018 (3) TMI 1097
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....eclaring loss of Rs. 46,95,261/-. Thereafter the assessee revised its return of income on 8th February, 2006 and declared loss of Rs. 22,58,484/-. Thereafter, a survey under section 133A of the IT Act was conducted at the business premises of the assessee on 10th March, 2006 wherein various discrepancies were found. After the survey the assessee again revised its return of income on 28th March, 2006 declaring profit of Rs. 23,41,516/-. The assessment under section 143(3) was completed on 28.12.2007 on the total income of Rs. 42,26,934/-. The matter was carried upto the stage of Tribunal in quantum proceedings against the additions/disallowances made by the AO. The additions/disallowances confirmed by this Tribunal are as under :- Undeclared sales Rs. 5,04,985/- Disallowance u/s 40(a)(ia) Rs. 7,26,512/- Disallowance of expenditure Being not incidental to the Business. Rs. 37,827/- Addition u/s 69 being Unexplained expenditure Rs.3,15,750/- Apart from the above additions/disallowances, there was an addition on account of undisclosed cash receipt of Rs. 46,00,000/- which was declared by the assessee in the revised return filed after the survey proceedings. The AO initiated pr....
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....58 ITR 593 (SC) and submitted that Hon'ble Supreme Court has held that surrender of income is not voluntary in the sense that the offer of surrender was made in view detection made by the AO in the search conducted in the sister concern of the assessee. Thus the ld. D/R has submitted that it is clearly a case of concealment of income and the assessee disclosed the said income of Rs. 46,00,000/- only because of survey action taken by the AO. He has relied upon the order of the A.O. 3.1. As regards the other addition on which the penalty was deleted or reduced by the ld. CIT (A), the ld. D/R has relied upon the order of the AO. 3.2. On the other hand, the ld. A/R of the assessee has submitted that the return of income was filed within the period of limitation permissible under section 139 of the Act and, therefore, the same cannot be considered as undisclosed income of the assessee when there is no addition made by the AO in the return of income. When a valid revised return of income was filed and accepted by the AO then the amount offered to tax in the return of income cannot be held as concealed income. Further, the ld. A/R has submitted that even otherwise this was not a real in....
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....f disclosure of income in the revised return after the survey has observed and held in para 20-22 as under :- "20. In the judgment by a Division Bench of this Court in CIT v. SAS. Pharmaceuticals [2011] 335 ITR 259/199 Taxman 255/11 taxmann.com 207 the factual position was different. A survey was carried out at the business premises and godown of the assessee on 06.01.2003 during which certain discrepancies in cash, stock and renovation details were found. The assessee surrendered an amount of Rs. 88.14 lakhs during the survey on account of the discrepancies. However, at the time of the survey, the assessee was not under any obligation to file the return of income for the year ended 31.03.2003 as he still had time to do so. In the return filed for the assessment year 2003-04, relevant to the year ended on 31.03.2003, the assessee included the surrendered amount and filed a return of income declaring Rs. 87.71 lakhs. The assessment was made including the surrendered amount obviously on the basis of return filed. Penalty proceedings for concealment of income were initiated on the ground that the surrender was made during the survey only when the discrepancies were brought to the no....
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....all pay the costs of the revenue, which we assess at Rs. 20,000/-." Thus the Hon'ble High Court has upheld the order of the AO levying the penalty wherein it was held that if there is no survey the assessee would have succeeded in concealing the income and evading the tax. Similar view has been taken by the Hon'ble Jurisdictional High Court in the case of Grass Field Farms & Resorts Pvt. Ltd. vs. DCIT (supra) in para 17 to 26. The Hon'ble High Court has considered the judgment of the Hon'ble Supreme Court in the case of Mak Data Pvt. Ltd. vs. CIT (supra) and upheld the levy of penalty in respect of the amount disclosed by the assessee after the survey conducted by the AO. The Hon'ble Supreme Court in the case of Mak Data Pvt. Ltd. vs. CIT (supra) has laid down the law on this point in para 9 to 11 as under :- "9. We are of the view that the surrender of income in this case is not voluntary in the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that....
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....y in respect of undisclosed sales, the ld. CIT (A) has restricted the levy of penalty from 200% to 100%. 6. We have heard the ld. D/R as well as the ld. A/R and considered the relevant material on record. Though the addition made by the AO was sustained by this Tribunal and the same has attained the finality, however, we find that the penalty equivalent to 100% of tax to be evaded on this amount is a reasonable and proper decision taken by the ld. CIT (A) which does not require any interference. Accordingly, we uphold the finding of the ld. CIT (A) qua this issue. 7. As regards the penalty in respect of disallowance made under section 40(a)(ia), the ld. CIT (A) has deleted the penalty. 8. We have heard the ld. D/R as well as the ld. A/R and considered the relevant material on record. The AO has levied the penalty in respect of the disallowance made under section 40(a)(ia) because of non compliance of provisions of deduction of TDS. It is not the case of the AO that the expenditure claimed by the assessee is bogus or not allowable under sections 28 to 37 of the IT Act. However, the disallowance was made only because of non deduction of TDS by the assessee. The remedy against the ....