TaxTMI 
TaxTMI 
2018 (12) TMI 203
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....e undisclosed income of Rs. 3,95,58,272/- only to the extent to which it was in respect of the undisclosed income of Rs. 17,58,272/-. 2. The assessee in the present case is an individual. A search and seizure action was conducted at the residence of the assessee on 13.02.2013 as well as on subsequent dates. During the course of the said action, the assessee surrendered his undisclosed income to the extent of Rs. 3,95,58,272/- in the statement recorded under section 132(4) of the Act. Thereafter the return of income for the year under consideration was filed by the assessee on 10.02.2014 declaring total income of Rs. 3,88,57,160/-. In the assessment completed under section 143(3) vide an order dated 13.10.2015, the entire income of Rs. 3,95....
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....sessee has brought on record the case law of Dilip N Shroff vs CIT (2007) 291 ITR 519 (SC). In this case law the Hon'ble Supreme Court has held that imposition of penalty is not automatic. Levy of penalty is not only discretionary in nature, but such discretion is required to be exercised on the part of the Assessing Officer keeping the relevant factors in mind. The AR has also brought on record the case of Pubjab Tyres (Pubjab Tyres [1986] 162 ITR 517 (Madhya Pradesh), the Hon'ble High Court of Madhya Pradesh) in which it was held that when surrender is made to purchase peace or for other similar reason, surrender cannot amount to admission, constituting evidence of concealment in penalty proceedings. I have considered the findin....
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....sed upon the aforesaid offerings, even if no assurance in writing is given by the searching party, it may be clearly inferred that such an inducement must have been given by the searching party. When only partial evidence or no evidence in support of concealment was detected during the search, why would a person go to offer a higher amount unless he was promised some reciprocal benefits like not being visited by penalty. Thus, it was held that where additions have been made based on assessee's own offerings, penalty provision shall not lie. I find that during the search and seizure operation ix] s 132 in this case evidences regarding concealment/undisclosed income in the form of cash seizure / papers / documen ts / stock etc were foun....
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....u/s 271AAB(I)(c) on the amount offered by the assessee suo moto to buy peace of mind, cannot be justified. The Hon'ble Supreme Court has also categorically decided the ratio that penalty cannot be levied on the amount offered by the assessee in order to buy peace of mind [in the case of Sudarshan Silk & Saries (supra)]. Thus, respectfully following the ratio decided by the Hon'ble Supreme Court, the AO is directed to calculate and levy penalty u/s 271AAB(I)(c) on Rs. 17,58,272/- only. Accordingly, assessee's appeal on grounds no 1 and 2 are partly allowed". Aggrieved by the order of the ld. CIT(Appeals), the Revenue has preferred this appeal before the Tribunal. 4. We have heard the arguments of both the sides and also perused....