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TMI Blog2015 (5) TMI 783X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Reliance Petroproducts Pvt. Ltd. (supra) squarely apply in this case. We, therefore, do not find any reason to interfere with the findings of the ld. CIT(A). - Decided against revenue. Penalty u/s 271(1)(c) - addition made on account of jewellery found at the time of search - Held that:- There is no dispute that in this group case, substantial additional income has been offered for taxation, therefore, possession of diamond jewellery at ₹ 7,41,320/- cannot be ruled out. However, we are not in appeal against the quantum addition but against the levy of penalty. Since the assessee group has already offered substantial amount, the benefit of telescoping cannot be denied. The diamond jewellery can be considered as having purchased out of the additional income, therefore, it cannot be said that it is a fit case for levy of penalty for concealment of particulars of income - Decided in favour of assesse. Penalty u/s 271(1)(c) - unaccounted cash found - Held that:- It is not a case where the assessee has not offered any explanation during the course of assessment proceedings. Not only the assessee offered the explanation but had also substantiated by cogent materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of 11 appeals, seven appeals filed by the assessee and four appeals filed by the Revenue, were heard together as these belong to one Shetty group and the issues being identical, we dispose of by this common consolidated order for the sake of convenience. First, we shall take up ITA No. 1358/Mum/2012 for A.Y. 2003-04 (Revenue s appeal). 2. This is an appeal by the Revenue against the deletion of the penalty levied u/s 271(1)(c) of the Income Tax Act, 1961. 3. Facts as stated before us are that a search and seizure operation was carried out on 26-7-2007 in the Ravi Shetty group of concern. This group is running various hotels, liquor bar and restaurants etc. They also own airconditioned hall which are let out for functions like marriage reception, birthday party etc. The assessee group in their letter dtd. 24-9-2009 made u/s 134(4) of the Act admitted undisclosed income of ₹ 2 crores in the various hands and head. 4. For the year under consideration, return was filed on 17-11-2003 declaring total income at ₹ 13,54,908/-. After the search and pursuant to the notice, return was filed on 1-12-2008 which included additional income as per the statement made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the penalty. The ld. D.R. also relied upon the decision of Hon ble Supreme Court in the case of Mak Data P. Ltd. vs. CIT, 358 ITR 593(SC). 7. Per contra, the ld. Counsel for the assessee reiterated what has been submitted before the lower authorities. 8. Having heard the rival submission, we have carefully perused the orders of the authorities below. We have also gone through the assessment order. There is no dispute that after the search, additional income was offered at ₹ 1,50,000/- and long term capital gain has been shown as short term capital gain. It is also not in dispute that the entire sale consideration has been treated as income from other sources. The offer of additional income was made u/s 132(4) of the Act. The share transactions, purchase and sale of shares were duly reflected in the books of account of the assessee. The assessee has suo moto offered capital gain in its return of income. The assessment has been completed merely by changing the head of income i.e capital gain was treated as income from other sources. The facts relating to the share transactions were very much there in the return of income, therefore, it cannot be said that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in appeal against the quantum addition but against the levy of penalty. Since the assessee group has already offered substantial amount, the benefit of telescoping cannot be denied. The diamond jewellery can be considered as having purchased out of the additional income, therefore, it cannot be said that it is a fit case for levy of penalty for concealment of particulars of income. We accordingly set aside the finding of the ld. CIT(A) and direct the A.O. to delete the penalty so levied. The appeal filed by the assessee is allowed. Now, we shall take up Revenue s appeal in ITA No. 1360/Mum/2012 for A.Y. 2003-04. 16. This is an appeal by the Revenue against the deletion of levy of penalty u/s 271(1)(c) of the Act at ₹ 3,09,618/-. 17. This appeal is late by 10 days. The delay is condoned. 18. This appeal by the Revenue cannot be entertained as it is covered by the CBDT Instruction No. 5/2014 (F.No. 279/MISC.142/2007-ITJ (PT) dt. 10.7.2014. We accordingly dismiss this appeal as not maintainable. Now, we shall take up Revenue s appeal in ITA No. 1361/Mum/2012 for A.Y. 2004-05. 19. This appeal by the Revenue is preferred against the deletion of penalty levied u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2004-05 (Shri Gunapal Shetty) 25. These are the two appeals filed by the assessee against the levy of penalties u/s 271(1)(c) of the Act. 26. The facts for the levy of penalties are that the long term capital gain returned in the original return of income were shown as short term capital gain in the return filed after the dated of search and in the assessment proceedings, the entire sale consideration has been treated as income from other sources . On identical set of facts in ITA No. 1358/Mum/2012 (supra) wherein the ld. CIT(A) has deleted the penalty levied u/s 271(1)(c) of the Act and we have confirmed the order of the ld. CIT(A) after giving detailed discussion and other reasons given in ITA No. 1358/Mum/2012 (supra). We direct the A.O. to delete the penalties levied u/s 271(1)(c) of the Act. 27. In the result, both these appeals are allowed. Now, we shall take up assessee s appeal in ITA No. 221/Mum/2012 for A.Y. 2008-09 (Shri Gunapal Shetty) 28. This is an appeal by the assessee against the levy of penalty u/s 271AAA of the Act. 29. The A.O. has levied the penalty on the undisclosed income of ₹ 3 laks which was offered during the course of search u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreed to of having fulfilled by the A.O. insofar as the tax and interest have been recovered. Respectfully following the decision of the Cuttack Bench of the Tribunal, we set aside the findings of the ld. CIT(A) and direct the A.O. to delete the penalty so levied. Appeal of the assessee is accordingly allowed. Now, we shall take up assessee s appeal in ITA No. 218/Mum/2012 for A.Y. 2008-09 (S.R. Enterprises). 34. This is an appeal by the assessee against the levy of penalty u/s 271AAA of the Act. 35. Facts of the case are that during the course of search, the assessee offered income of ₹ 4 lacs. The A.O. has levied penalty holding that the assessee has not fulfilled all the conditions given u/s 271AAA of the Act. The assessee also failed before the ld. CIT(A) and therefore further appeal on before us. 36. On identical set of facts in the case of Shri Gunapal Shetty in ITA No. 221/Mum/2012 for A.Y. 2008-09, we have deleted the penalty so levied u/s 271AAA of the Act. In our detailed discussion given in ITA No. 221/Mum/2012 (supra), the penalty levied in this case also deleted. Appeal filed by the assessee is allowed. Now, we shall take up assessee s appeal in ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X
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