TaxTMI 
TaxTMI 
TaxTMI 
2013 (7) TMI 1251
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.... of accounts as on 27.02.2002 (Trading Account drawn by the assessee) 4599.840 gms. 19,08,928/- Excess stock of gold ornaments found 6008.350 gms. 24,93,465/- When the assessee was confronted at the time of survey regarding the excess stock valuing at Rs.24,93,465/- found, he had declared in his statement as additional income of Rs.21,00,000/- on account of excess stock found. The assessee furnished his return of income for A.Y. 2002-03 on 10.03.2003 declaring total income of Rs.24,71,863/- . The assessee had declared the additional income on account of excess stock found of Rs. 21,00,000/- surrendered by him during survey u/s 133A in the return of income furnished. The assessment was completed u/s 143(3) on 31.03.2005 determining taxable income at Rs.28,83,250/-. In the assessment order, the AO inter-alia has made addition of the balance amount of Rs.3,93,465/- (Rs.24,93,465 - Rs.21,00,000) representing unexplained investment in the excess stock found which was not disclosed in the return of income. The AO also initiated penalty proceedings u/s 271(1)(c) of the Act. 3. Against the quantum proceedings the assessee filed an appeal before the CIT(A) who confirmed the addition ....
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.... Rs.21,00,000/- surrendered and disclosed by the assessee in his return of income and further addition of Rs.3,93,465/- made in the assessment order. As regards, the amount of Rs.21,00,000/-, the assessee had since disclosed this income in the return of income furnished u/s 139 and paid taxes thereon, the assessee had not furnished any inaccurate particulars of income or concealed particulars of income in the income tax return filed to the extent of investment of Rs.21,00,000/- . Therefore, there cannot be a case for penalty u/s 271(1)(c) on this amount of Rs.21,00,000/- It may be relevant to refer the decision of Hon'ble Delhi High Court in the case of CIT Vs. SAS Pharmaceuticals (2011) 335 ITR 259 (Del.), where in the Hon'ble High Court had an occasion to consider the identical issue and decided that where the assessee had disclosed particulars of income in the return filed, penalty u/s 271(1)(c) cannot be imposed on the ground that discrepancy was detected during survey u/s 133A. The brief facts of this case are that a survey was carried out at the business premises and godown of the assessee on January 6, 2003. In that survey, discrepancies in cash, stock and renovation....
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....y. The decision to initiate penalty proceedings was taken while making the assessment order. Thus, the expression "in the course of any proceedings under this Act" could not have the reference to survey proceedings, in this case. The concealment of particulars of income or furnishing of inaccurate particulars of income by the assessee had to be in the return filed by it. No penalty could be imposed unless the conditions stipulated in the provisions were duly and unambiguously satisfied. Since the assessee was exposed during the survey, may be, it would have not disclosed the income but for the survey. However, there could not be any penalty only on surmises, conjectures and possibilities. Section 271(1)(c) of the Act had to be construed strictly. Unless it was found that there was actually concealment or non-disclosure of the particulars of income, penalty could not be imposed. There was no such concealment or non-disclosure as the assessee had made a complete disclosure in the return and offered the surrendered amount for the purposes of tax." In view of the above, no penalty u/s 271(1)(c) was leviable on the surrendered amount of Rs.21,00,000/- which was duly disclosed in the ....
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....s around Rs. 21 lacs which was duly surrendered as income of the relevant previous year which was going to end after the date of survey. The assessee had also given post dated cheques of Rs. 6,42,600/- to the survey Officers towards payments of tax against the income surrendered. The assessee had also declared Rs. 21 lacs in the return of income for the relevant assessment year i.e. A.Y. 2002-03. In the assessment order the AO also accepted the said declared income of Rs. 21 lacs who had made further addition of Rs. 3,93,465/- on account of valuation difference. We find that the excess trading stock was accumulation over a period of time. Moreover such items contained different purity ranging from 82% to 87%. Thus, the addition of Rs. 3,93,465/- was only on account of difference of opinion regarding the valuation by the registered Valuer vis-a-vis valuation of the assessee. With regard to income of Rs.21 lacs surrendered and accepted by the department the CIT(A) deleted the penalty by following the decision of Delhi High Court in the case of SAS Pharmaceuticals (supra). The facts of the instant case are in para material with the decision relied on by the CIT(A) wherein also excess ....