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TMI Blog2017 (3) TMI 1044X X X X Extracts X X X X X X X X Extracts X X X X ..... on of income and it cannot be made both for source of income and application of income. In the present case, the Assessing Officer in the assessment order has nowhere observed that the assessee was having any source of investment in stock, cash etc other than the sales. In such circumstances, the apparent source of investment in stock, cash, furniture and fixture, renovation in shop etc. is the sales appearing in loose papers and the Assessing Officer should have allowed the telescoping of the income appearing in loose papers against the investment in stock, cash etc. It appears to us that the Assessing Officer has simply made addition for the amount offered by the assessee, without going into whether said addition could have been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61 (for short the Act ) by the Assessing Officer, which has been confirmed by the learned Commissioner of Income-tax (Appeals). The grounds of appeal raised by the assessee are reproduced as under: i. On the facts and in the circumstances of the case and in law the authorities below erred in holding the assessee guilty of concealing the particulars of income and imposing penalty u/s 271(1)(c) of the Act.] ii. The action being arbitrary, erroneous and unjust must be quashed with directions for appropriate relief. 2. The facts in brief of the case are that in the case of assessee a survey under section 133A of the Act was carried out on 04/03/2010. The survey party found following discrepancies: (i) excessive stock of ͅ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings under section 271(1)(c) of the Act. During the penalty proceedings, the assessee submitted: (i) that during the course of survey proceeding, the assessee surrendered a sum of ₹ 60,03,015/- under pressure and to buy peace of mind, however, at the time of filing return of income the excess amount of ₹ 13,83,330/-, which was surrendered on account of loose papers, was not included in the income due to debatable view of inclusion of margin of sales instead of total amount of sales included in the loose papers. (ii) that to buy peace of mind and to avoid further litigation on the issue accepted the addition of ₹ 13,83,330/- during assessment proceeding subject to the condition that no penalty or prosecution proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation or harassment and on the condition that no penalty would be levied and thus no penalty could be levied in such circumstances. In the support of the contention, the learned counsel relied on the decision of the Tribunal Amritsar bench in the case of Income Tax Officer Vs. Manjit Singh Baldev Singh Commission Agents reported in (1999) 69 ITD 97 (ASR). He further submitted that the assessee had already explained as why the amount in reference was not included while filing return of income and said explanation was bonafide , no penalty could have been levied by the Assessing Officer. 9. The learned Senior Departmental Representative, on the other hand, relied on the order of the lower authorities. 10. We have heard the rival submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ked Explanation-1, of the section 271(1) of the Act. The Assessing Officer, however, has not recorded any finding whether the explanation filed by assessee was bonafide or not. In this regard, we would like to extract the relevant Explanation of section 271(1)(c) of the Act as under: Failure to furnish returns, comply with notices, concealment of income, etc. 271. (1) . Explanation 1. - Where in respect of any facts material to the computation of the total income of any person under this Act, - (A) such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the 48[Principal Commissioner or] Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of ₹ 13,83,775/- was not included due to debatable view of inclusion of margin of sales instead of total amount of sales included in the loose papers. The learned Commissioner of Income-tax (Appeals) has not given any reasoning as to why the said explanation was not bonafide. We also find that out of amount of ₹ 17,99,955/- appearing in loose papers, the assessee already accepted ₹ 4,16,220/- in the return of income filed. 15. Further we find that, in the course of survey action, the survey team found unexplained stock, unexplained cash, unexplained investment in furniture and fixture and unexplained investment in renovation of shop alongwith loose papers indicating sales. In the circumstances, where in the cours ..... X X X X Extracts X X X X X X X X Extracts X X X X
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