9911796707
TMI Blog1997 (4) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... ooks of account, loose papers and other documents were found and seized. The assessee has filed a return declaring taxable income of Rs. 3,88,542 and agricultural income of Rs. 30,000. The income disclosed by the assessee included a sum of Rs. 3,77,475 in respect of investment in pawned articles. The Assessing Officer completed the assessment at Rs. 5,50,460, which on appeal was reduced to Rs. 3,90,460. The Assessing Officer levied a penalty of Rs. 2,85,000 under section 271(1)(c) of the Income-tax Act, 1961. The penalty was levied by invoking the Explanation 5 to the section 271(1)(c) of the Income-tax Act. 3. On appeal, the CIT(Appeals) cancelled the penalty. Hence this appeal by the Revenue. 4. At the time of hearing before us the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,475 for investment in pawning business. The Assessing Officer worked out the same at Rs. 5,39,395 which, after appeal, was reduced to Rs. 3,79,395. (b) That the assessee derived income from pawning of gold and silver ornaments. The assessee had maintained Girvi Register in the regular course of its pawning business. All the pawned articles found and seized at the time of search were duly found recorded in the said girvi register. Thus, the girvi transaction is found duly recorded in the books of account found and seized at the time of search itself. The assessee's case is duly covered by the exception provided in Explanation 5 to section 271(1)(c) itself. The CIT(Appeals) was fully justified in cancelling the penalty and his order shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income, (a) for any previous year which has ended before the date of the search, but the return of income for such year has not been furnished before the said date or, where such return has been furnished before the said date, such income has not been declared therein; or (b) for any previous year which is to end on or after the date of the search, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of the search, he shall, for the purposes of imposition of a penalty under clause (c) of sub-section (1) of this section, be deemed to have concealed the particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such income in the return of income filed after the date of search the assessee shall be deemed to have concealed the particulars of such income. However, this Explanation itself reduced the rigour of the deemed concealment by providing following two exceptions:-- (1) (a) Such income or the transaction resulting in such income are found recorded in the books of account maintained by the assessee for any source of income; or (b) Such income is otherwise disclosed to Chief Commissioner and/or Commissioner before the date of search; or (2) The assessee during the course of search makes a statement under section 132(4) that such money, bullion, jewellery, etc. had been acquired by the assessee out of his income not disclosed so far in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is argument of the learned Departmental Representative. As per the Girvi Register total investment in the pawning business was Rs. 5,53,475. The assessee has not disputed this investment as per the Girvi Register but has reduced it by the amount which was invested out of explained sources. In our opinion, there is nothing wrong in the claim of the assessee. Moreover, as per the exception the income or the transaction resulting in such income should be found recorded in the books of account maintained by the assessee. In this case it is undisputed that the transaction giving rise to the income was the money advanced by the assessee against the pawning of articles. All these transactions are found to be correctly recorded in the books of acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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