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TMI Blog2018 (11) TMI 1254X X X X Extracts X X X X X X X X Extracts X X X X ..... on search or otherwise. Here, the sale consideration, which was detected on search and seizure, was not reflected in the books of accounts nor the profit returned as income for the subject years. The sale consideration was also for the purchase of apartments in different complexes, the development of which was promoted by the respondent/assessee. The income of the assessee, which stood undisclosed, has to be determined for the purpose of levying income tax. The Tribunal, after looking into the net profit of the assessee in the different projects, directed 15% of the total undisclosed receipts to be taken as the undisclosed income. We are of the opinion that the said direction was perfectly in tune with the provision under Section 150BB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The questions of law arising in I.T.A No.1549 of 2009, which deals with the assessment proceedings, are as follows: (i) Whether the Tribunal was correct in having directed levy of income tax only on 15% of the total receipts disclosed in proceedings under Section 158BC of the Income Tax Act, 1961 [for brevity, the Act]? (ii) Ought not the Tribunal have found that when an undisclosed income is detected on search, then the entire income has to be treated as subject to levy of income tax? 2. I.T.A. No.1312 of 2009 is with respect to the penalty proceedings on the basis of the assessment completed under Section 158BC read with Section 143(3) of the Act. 3. The question raised is reframed as follows: (i) Has not the Tribunal err ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rojects, in which, there was found suppression of sale consideration. The net profit worked out to 14.47% as per the statement of the assessee and the Tribunal directed adoption of 15% as profits and hence the undisclosed income for the purpose of levy of tax. 6. We do not see any infirmity in the said direction. We specifically notice sub-section (2) of Section 158B of the Act, which defines undisclosed income as including inter alia any income based on an entry in the books of accounts or other documents or transactions representing whole or part of the income, which has not been or would not have been disclosed for the purposes of this Act. The provision does not permit tax to be levied on the entire receipt of money by an assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l not be less than the amount of tax leviable but which shall not exceed three times the amount of tax so leviable in respect of the undisclosed income determined by the Assessing Officer under clause (c) of section 158BC: Provided that no order imposing penalty shall be made in respect of a person if- ( i) such person has furnished a return under clause (a) of section 158BC; ( ii) the tax payable on the basis of such return has been paid or, if the assets seized consist of money, the assessee offers the money so seized to be adjusted against the tax payable; ( iii) evidence of tax paid is furnished along with the return; and ( iv) an appeal is not filed against the assessment of that part of income which i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... closed income in the subject assessment years, which were taken up for block assessment based on the search conducted under Section 158BC of the Act. 10. Obviously the details recovered on search, indicated the entire receipts received by the assessee having not been disclosed in the books of accounts or conceded in the returns. There is a statutory obligation to file a return as provided under the Act conceding the income received in the year and paying the applicable tax. This is definitely a civil liability and even otherwise the fact of discovery of the details from the premises of the assessee itself postulates a deliberate defiance in complying with the applicable provisions of law. However, penalty could only be with respect to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmination of income at 15% of the undisclosed receipts. We have upheld the order of the Tribunal and rejected the appeal of the Revenue. Hence a re-computation of the undisclosed income is warranted. Penalty can be imposed only on the excess amounts determined @ 15% of the undisclosed receipts, from that conceded in the returns filed under Section 158BC. We hence answer the question of law in favour of the Revenue and against the assessee and allow ITA No.1312 of 2009 to the limited extend of a remand for computation and determination of income as directed by the Tribunal and imposition of penalty only in circumstances as detailed by us on interpretation of the statutory provision. Ordered accordingly. There is no order as to costs. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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