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TMI Blog2013 (1) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... of income filed by the appellant in response to the notice u/s 153A of the Act, while ignoring that such penalty cannot be imposed on the basis of entries in the books of account or documents/loose papers seized in a search carried between 01.06.03 to 31.05.07 neither within the general provision of Section 271 (1)(c) nor in terms of Explanation 5. Thus, the penalty so levied should be cancelled. 2. The Ld. Appellate Authority erred in law and on facts in confirming levy of penalty of ₹ 36,54,925/- u/s 271 (1)(c) on the additional income offered by the appellant, which was assessed in the hands of the appellant on protective basis. Thus, the penalty so levied should be cancelled. ITA No.5659/Del/2012 1. The Ld. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponse to notice u/s 153A was due to additional undisclosed income from trading and commission on spices amounting to ₹ 1,07,99,303/-. The assessment u/s 153A was completed on 31.12.2008 at an income of ₹ 1,15,99,588/-. Penalty proceedings were also initiated during the assessment u/s 153A and penalty of ₹ 36,54,925/- was imposed u/s 271(1)(c) vide order dated 29.06.2009. 3. By virtue of the orders under appeal, the Ld. CIT (A) confirmed both the penalties. 4. Aggrieved, the assessee has filed the present appeals before us. 5. At the outset, the ld. counsel for the assessee has pointed out that the matter is covered in favour of the assessee by the Tribunal Order dated 09.03.2012 (copy at pages 1-43 of the case la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) also, the facts were entirely similar. In Prem Arora (supra), the penalty was deleted by the Tribunal holding as follows:- 29. We also find that the Finance Act, 2007 has inserted words search initiated under sec. 132 before the first day of June, 2007 in Explanation 5 of sec. 271(1) of the Act. Further Explanation 5A was inserted in the Statute by the Finance Act, 2007 in respect of a search initiated under section 132 on or after the 1st day of June, 2007. Thus Explanation 5 will not be applicable in respect of a search initiated on or after 1.6.2007. Further the words search initiated under sec. 132 before the first day of June, 2007 have been inserted by the Finance Act, 2007 w.e.f. 1.6.2007. In our considered opinion the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and,- (a) where the return of income for such previous year has been furnished before the said date but such income has not been declared therein; or (b) the due date for filing the return of income for such previous year has expired but the assessee has not filed the return, then, notwithstanding that such income is declared by him in any return of income furnished on or after the date of search, he shall, for the purposes of imposition of a penalty under clause (c) of sub- section (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, surmises and conjectures. It is settled law that suspicion howsoever strong, it cannot take place of actual evidence and hence the contention of the Revenue that assessee was in possession of cash throughout the period of six assessment years has to be rejected. In view of above discussion we are of the considered opinion that even the amended provisions of Explanation 5 cannot be applied in assessment year 2004-05. Consequently penalty u/s 271(c) cannot be imposed by invoking Explanation 5 of the Act in assessment year 2004-05 in respect of cash found in previous year relevant to assessment year 2007-08. 32. Now coming to the decisions relied by Ld CIT (DR) in the case of Ajit B Zota (supra) and in Kirit Dahyabhai Patel (Ahd)(sup ..... X X X X Extracts X X X X X X X X Extracts X X X X
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