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TMI Blog2017 (3) TMI 1179X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation 5 to section 271(1)(c) of the Act was limited to any money, bullion, jewellery or other valuable articles or thing, found during the course of search and where the assessee claims that It was acquired by him by utilizing his income, then conditions are provided therein, to hold, whether the assessee is liable to levy of penalty for concealment or not. The Explanation 5 to section 271(1)(c) of the Act is silent about the working of income on the basis of any books of account or other documents found during the course of search which represent the income of the person searched for any previous years. In the absence of same and where the sole basis for the addition in the hands of assessee is the document found during the course of search and admittedly no cash being found, then Explanation 5 to section 271(1)(c) of the Act is not attracted. We hold so and delete the penalty levied under section 271(1)(c) of the Act on this alternate plea also. - Decided in favour of assessee - ITA No. 305, 306/PUN/2014 - - - Dated:- 17-3-2017 - MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM Appellants by : Shri Pramod Shingte Respondent by : Shri Suhas Kulkarni ORDER Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. Thereafter, during the penalty proceedings, the Assessing Officer held the assessee to have concealed its income of long term capital gains and thereby committed the default within the meaning of Explanation 5 to section 271(1)(c) of the Act. 5. The CIT(A) while deciding the appeal relating to the levy of penalty under section 271(1)(c) of the Act had elaborately considered the documents found during the course of search and established the cash receipt in the hands of assessee on account of development agreement. He also then referred to the submission of the assessee in the quantum appeal before the CIT(A) wherein in order to buy peace of mind and to settle the matter, the quantum appeal was withdrawn by assessee. Further, the assessee had agitated levy of penalty but the order of the Assessing Officer was upheld holding the assessee to have furnished inaccurate particulars of income and also concealed the income and hence the levy of penalty under section 271(1)(c) of the Act amounting to ₹ 25,25,570/-, was held to be justified. 6. The assessee is in appeal against the order of CIT(A). 7. The Ld. Authorised Representative for the assessee pointed out that cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st the application of Explanation 5 to section 271(1)(c) of the Act. 9. The Ld. Departmental Representative for the Revenue on the other hand stressed that the cash consideration has been received by the assessee in the captioned assessment year and the same merits to be brought to tax. Since the assessee had not furnished any return of income and had not declared such receipts in his hands, there was merit in levy of penalty under section 271(1)(c) of the Act. 10. We have heard the rival contentions and perused the record. The issue which arises in the present appeal is against levy of penalty for concealment under section 271(1)(c) of the Act. In the facts of the present case, during the course of search on the premises of the assessee, various documents were found and impounded by the Investigation Wing. The said documents had details of the transaction in relation to development agreement entered into by the assessee with the developer under which in addition to the said consideration, cash component was also detailed. The assessee admittedly had received cash during Financial Year 2005-06. The assessee claims that in order to buy peace it had offered the said amount to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act against which the assessee is in appeal before us. The perusal of attachment order reflects the name of the assessee and other coowners being mentioned in respect of the plots at Adgaon, Nashik with Gat Numbers and the area of each plot. Once the same is compared with the development agreement which is placed from page 87 onwards with special mention at pages 90 and 91 of the paper book, the survey numbers are same including the area. Where the assessee had entered into a development agreement but the same could not be completed because of the dispute between the parties, though the capital gains on the amounts received in assessment year 2006-07 has been offered to tax, but the possession and the retention of the property by the assessee establishes the case of assessee that there is no transfer and the transaction has not been completed till date. The Talati vide order dated 19-04-2010 has also acknowledged that the properties owned by the assessee and the co-owners is under attachment to the Commissioner of Income Tax. In such circumstances, we find no merit in levying penalty and holding the assessee to have concealed the income under section 271(1)(c) of the Act. We ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the old Explanation 5 to section 271(1)(c) of the Act, which has limited scope and in the case of assessee, since no money, bullion or jewellery was found, the Explanation 5 to section 271(1)(c) of the Act is not attracted. He referred to the order of Assessing Officer and pointed out that the addition in the hands of assessee has been made on the basis of entries in the documents seized during the course of search. He stressed that under the Explanation 5A to section 271(1)(c) of the Act there are two parts, i.e. (a) addition to be made where the assessee is found to be the owner of money, bullion, jewellery or other valuable articles or thing; or (b) any income based on any entry in any books of account or other documents etc. found during the course of search, and second limb is missing in Explanation 5 to section 271(1)(c) of the Act. 15. We find merit in the plea of the assessee. The operation of Explanation 5 to section 271(1)(c) of the Act was limited to any money, bullion, jewellery or other valuable articles or thing, found during the course of search and where the assessee claims that It was acquired by him by utilizing his income, then conditions are provided ther ..... X X X X Extracts X X X X X X X X Extracts X X X X
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