TaxTMI 
TaxTMI 
2018 (7) TMI 462
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....S.P. No.22/Coch/2018. 2. The facts of the case are that during the course of assessment, it was noticed that the assessee had transferred a total amount of Rs. 1,11,65,080/- through his bank account in South Indian Bank, Thrissur. In the assessment it was held that the amount so transferred does not belong to him and he has facilitated the transfer of money for some other persons. The assessee had only earned certain commission from this activity. The commission so earned was determined at Rs. 27,912/-. The total income determined in the assessment was Rs. 75,912/-. In reply to the notice u/s. 271(1)(c), the assessee stated that he has not earned any income from such activity. He was getting only a monthly salary of Rs. 4,000/- from his ....
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....to wage war against the (Government of India). The facts that B procured some arms in Europe for the purpose of the conspiracy, C collected in Calcutta for a like object D persuaded persons to join the conspiracy in Bombay, E published writings advocating the object in view at Agra, and F transmitted from Delhi to G at Kabul the money which C had collected at Calcutta, and the contents of a letter written by H giving an account of the conspiracy, and to prove A's complicity in it, although he may have been ignorant of all of them, and although the persons by whom they were done were strangers to him, and although they may have taken place before he joined the conspiracy or after he left it." 3.1 The CIT(A) relied on the judgment....
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....al before us. 4. We have heard the rival submissions and perused the record. Admittedly, in this case, the assessee filed the return of income declaring income of Rs. 48,000/- as salary. Later while completing the assessment, the Assessing Officer observed that the assessee had deposited a sum of Rs. 1,11,65,080/- into his bank account. The Assessing Officer found that the assessee's SB account with South Indian Bank was used to deposit the amount belonging to the assessee's employer Shri Bhaskar Sait who is in hawala business. Accordingly, the Assessing Officer estimated the income at 0.25% of Rs. 1,11,65,080/- which worked out to Rs. 27,912/-. Consequently, the Assessing Officer levied penalty on this income which was worked out to Rs.....
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....the claim of the assessee was proved to be bogus or that any amount was actually earned by the assessee was proved by the assessee, the addition itself cannot be reason for levy of penalty. The addition was only on account of assessment of income on the deposits made into the account of the assessee's bank. The assessee could not prove that there was willful or gross negligence on the part of the assessee, resulting thereby the assessee concealed the income to that extent. There was no deliberate concealment on the part of the assessee. In our opinion, when the income is estimated as above, it is not proper to levy penalty as held by different High Courts in the following cases: 1) New Plaza Restaurant vs. ITO (301 ITR 259) ....