2026 (3) TMI 366

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....(A)"), arising out of the penalty order levied under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year 2013-14. 2. Brief facts of the case is that the assessee is a Partnership Firm engaged in the business of manufacturing and trading in gold, silver and diamond ornaments as well as making jewellery in the name of Radhika Jewellers. A survey action under section 133A of the Act was conducted in the business premises of the assessee on 19-10-2012. During the course of survey, the assessee admitted unaccounted income to the tune of Rs. 2,01,00,050/- on account of difference in stock of gold, silver ornaments, bullion as well as excess cash found. For the Asst. Year 2013-14,....

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....me of the year under consideration. The appellant further states that the income admitted during survey is shown in the return of income and is accepted during assessment proceedings. The appellant further states that there is no concealment, no inaccurate particulars in respect of the Income declared during survey proceedings. Further, the addition made to the return Income, is of Rs. 1,31,263/- which comprises of disallowance on account of PF (31,950/-), subscription expenses (Rs. 6000/-) and out of car and petrol expenses (Rs. 93,313/-). The AO has, in para 5 of the penalty order, tried to justify the levy of penalty on the additional income declared during survey proceedings. The reasoning offered by the AO is that the amount d....

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....t appreciating the facts that the disclosure was on account of the detection made during the course of survey proceedings, and mere disclosure of the same would not absolve the assessee from penalty u/s. 271(1)(c) of the Act. [2] The appellant craves leaves to add, modify, amend or alter any grounds of appeal at the time of, or before the hearing of appeal. 5. Heard rival submissions and perused the materials available on record. It is undisputed fact that the Partner of the assessee Firm admitted undisclosed stock of Rs. 1,69,25,900/- and undisclosed cash of Rs. 31,74,600/- both totaling to Rs. 2,01,00,500/-. The above unaccounted stock found during the course of survey on 12- 10-2012 were duly recorded by the assessee firm in ....

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....ssee Partnership Firm has admitted undisclosed unaccounted stock and cash as 'business income' at the time of survey as well as during the assessment proceedings. No material has been brought on record during the survey to disprove the assessee's contention regarding the source of business income which was out of business of gold and silver ornaments. Therefore the income has been credited into the profit and loss account and have never been considered as "other sources of income" which has been accepted by the assessing officer in the regular assessment proceedings. 6. Jurisdictional High Court in the case of PCIT Vs. Shree Sai Developers reported in 418 ITR 306 wherein held that a survey took place on 17/07/2012 wherein unaccounted inc....