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TMI Blog2012 (7) TMI 241X X X X Extracts X X X X X X X X Extracts X X X X ..... se of silver items the amount being small (Rs.4258/-) it will not be appropriate to levy penalty in respect of such addition - penalty confirmed on gold/diamond jewellery - partly allowed in favour of assessee. - IT(SS)A No.: 34/M/2011 - - - Dated:- 30-5-2012 - SHRI N.V. VASUDEVAN, SHRI RAJENDRA SINGH, JJ. Appellant by : Shri Vijay Mehta Respondent by : Ms. Usha Nair O R D E R PER RAJENDRA SINGH, AM: This appeal by the assessee is directed against order dated 25.1.2011 of CIT(A) in relation to the block assessment. The only dispute raised by the assessee in this appeal is regarding levy of penalty under section 158 BFA(2) of the Income tax Act. 2. The facts in brief are that a search under section 132(1) had been conducted in case of the assessee on 7.11.2001 pursuant to which a block assessment order had been passed in case of the assessee under section 143(3)/158BC. In the said assessment, the AO had made total addition of Rs.15,82,386/- to the undisclosed income declared by the assessee in the block return as per details given below :- (i) Unaccounted diamond jewellery Rs.6,59,125/- (ii) Unaccounted diamond jew ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and out of difference in gold jewellery 490.100 gms, 350.100 gms had been received as gift from Late Shri Bhaidas Sanghvi on various religious and social occasions. This explanation had also not been accepted. The explanation of the assessee considering the facts and circumstances of the case had to be accepted and in that case no penalty was leviable. The AO, however, did not accept the contentions raised. It was observed by him that there was no evidence regarding plea of the assessee that un-dislcosed jewellery had been accumulated over a period of years. Further, merely because no other unaccounted income was found during search, could not be the basis to hold that source of jewellery was un-explained. The AO also observed that judgment of Hon'ble Supreme Court in the case of T. Ashok Pai vs. CIT (supra), was not applicable in case of section 158 BFA92) as the same related to section 271(1)(c). The AO further observed that the jewellery found would have remained unaccounted, had a search not been conducted in case of the assessee. The AO therefore, levied minimum penalty @ 60% of concealed income which came to Rs.2,58,107/-. 2.3 The assessee disputed the decision of AO an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 158 BFA(2) which were similar to provisions of section 271(1)(c) . The ld. AR relied on the judgment of Hon'ble High Court of Bombay in the case of CIT Vs Dodsal Ltd. (312 ITR 112) for the said proposition. It was accordingly urged that the penalty should be deleted. 3.1 Ld. DR on the other hand strongly supported the order of authorities below. It was submitted by him that the penalty had been levied only in respect of additions which had been sustained by all authorities including ITAT. The assessee could not substantiate the explanation nor could the explanation be considered as bonafide. Penalty was therefore, leviable and had been rightly levied. He placed reliance on the decisions of the Tribunal in the case of Gunanath Thakoor (132 ITD 319) and on the judgment of Hon'ble High Court of Gujarat in case of CIT vs. B.P. Parmar (341 ITR 499). 4. We have perused the records and considered the rival contentions carefully. The dispute is regarding levy of penalty under section 158 BFA(2) in relation to addition made by AO to the undisclosed income returned by the assessee in the block return. Under the said provisions, in case, an assessee does not disclose fully the u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1)(c) as per which there will be a case of penalty if in respect of any additions made to the total, the assessee offers no explanation or explanation offered is found to be false or the assessee offers explanation which he is not able to substantiate and is also not able to prove that the explanation is bonafide and all necessary details have been given. 4.2 In this case, in relation to addition on account of gold jewellery, it has been submitted that shortage had been found in case of the father of the assessee and excess in case of the sons. It has also been submitted that father of the assessee at the time of search had stated that the shortage found represented gifts given to various family members. However, it is to be noted that statement of the father was not supported by any gift tax paid nor full details/particulars of items gifted had been given. Moreover, as noted by CIT(A) in the reply dated 24.11.2003, the assessee had admitted that the jewellery found was 2158.100 gms and jewellery declared in the wealth tax return till 1992-93 was 1688 gms and thus balance jewellery of 490.10 gms was admitted as unexplained. During the appellate proceedings as noted by CIT(A), the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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