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TMI Blog2016 (5) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... firm consisting of three partners and is engaged in the business of money lending and chit fund business. On 28th June, 2001, a search u/s. 132 of the Act was conducted in the premises of the assessee. Subsequently notice u/s. 158BC was issued to the assessee on 16/11/2001. On the basis of the statement given by one of the partners u/s. 132(4) of the Act and the material seized during the course of search, the Assessing Officer, vide order dated 27/06/2003 determined the undisclosed income at ₹ 31,00,724/-. The Assessing Officer observed from the books of account seized during the course of search that it was clear that the unaccounted transactions were carried out. It was further observed that the entries recorded were 1/100th of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rved that the language of section 158BFA(2) makes it obligatory upon the Assessing Officer to impose penalty on the portion of the undisclosed income determined. The assessee is in appeal before us and has challenged the aforesaid order of the Ld. CIT(A) who confirmed the penalty imposed by the Assessing Officer. 8. The Ld. AR has argued that the penalty levied on the assessee should be deleted as there was no evidence to suggest that the assessee had earned unaccounted income except for the statement made by one of the partners. The Ld. AR further argued that the addition has been made on an estimation basis and therefore, penalty cannot be levied. 9. The ld. DR on the other hand has rebutted the submissions made by the Ld. AR. He re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been advanced by the assessee had been examined. It is not the case of the Revenue that the unaccounted cash balance was recovered during the course of search from the premise of the assessee, so as to suggest the earning of unaccounted income. Also, the Assessing Officer has not brought on record any document pertaining to loan transaction which was executed for a higher amount than what is reflected in the books of account. The Assessing Officer had computed the addition on lumpsum basis rather than making separate additions for each year. 12. As regards the interest income is concerned, the Assessing Officer had relied upon the statement made by one of the partners of the assessee and the addition is not made on the basis of concrete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stified the addition in the quantum proceedings on the basis of estimation and so far as the estimation is concerned, even the DVO has estimated the investment in the property near about the same amount as declared by the assessee in the account books. The CIT(A) in the quantum proceedings estimated the value of investment at ₹ 30 lakhs as against ₹ 40 lakhs made by the Assessing Officer. Under these circumstances, in our view, the CIT(A) has correctly appreciated the facts and circumstances of the case and held that the impugned addition on account of unexplained investment in house property of ₹ 11,71,687/- was on estimation basis and not on the basis of any concrete evidence found in the course of search towards incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,96,335/- has been made on estimate basis only. 11. We have perused the case setup by the assessee before the CIT(A) and find that the CIT(A) has thoroughly examined it and his inference that addition is based on estimate basis is a reasoned one. Before us, no cogent material or reasoning has been advanced by the Ld. Departmental Representative to say that any document or evidence was found in the course of search which would indicate clinchingly incurrence of unaccounted expenditure on marriage of assessee s daughters. Merely because, assessee s explanation with respect to the loose papers was rejected in the quantum proceedings and the marriage expenses estimated cannot be a ground to levy penalty u/s 158BFA(2) of the Act in the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he jewellery from her sister in Nairobi but in the absence of any supporting declaration filed before customs/immigration, addition to the extent of 190 gms. of jewellery was sustained. In the present case there is nothing to suggest that the explanation of the Assessee was found to be untrue. 8. In the case of Mahendra Vyas (supra), the coordinate Bench has held as under:- 8. We do not agree with the submission of Revenue that penalty u/s. 158BFA is mandatory in view of the decision of Rajasthan High Court in the case of CIT vs. Satyendra Kumar Dosi (2009) 315 ITR 172 where the Hon ble High Court has held that levy of penalty u/s. 158BFA(2) is discretionary and not mandatory. 9. In the case of CIT vs. Becharbhai Parmar ( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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