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TMI Blog2016 (5) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Smt. Deepika Bhalla. The grievance of the assessee in this appeal relates to the confirmation of penalty of Rs. 2,00,000/- u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act). 4. Facts of the case in brief are that a search and seizure operation was conducted at Manav Rachna Education Society of cases on 04.08.2005. Accordingly, the residential premises of the assessee were also searched on the said date, as the husband of the assessee was the trustee in the said society. During the course of search operation, certain documents were seized from the residential premises of Sh. O. P. Bhalla father-in-law of the assessee. A jewellery valuing Rs. 11,06,711/- was found from the bed room of the assessee out of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the assessee has concealed/furnishing inaccurate particulars of her income to the extent of Rs. 5,57,375/-. The provisions of penalty proceedings u/s 271(1)(c) are clearly attracts on this addition of Rs. 5,57,375/-. Income Declared in the return 5,63,810 Addition as discussed above 1,23,000 Addition as discussed 5,57,375 Total taxable income 12,44,185 Assessed: Issue necessary forms. Charge interest u/s 234B & 234C of IT Act. Issue penalty notice u/s 271(1)(c) of the I.T. Act for concealing/wrong/inaccurate particulars of income of Rs. 6,80,375/- (1,23,000 + 5,57,375)" 5. The assessee carried the matter to the ld. CIT(A) who deleted the addition of Rs. 84,000/- made in respect of gold jewellery and sustained the addi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he nature and source of acquisition of the jewellery or the explanation offered by the appellant is not satisfactory and this jewellery is deemed income of the appellant. (iv) The explanation 5A to section 271(1)(c) of the Act thus would apply against the assessee for levy of penalty and it would be a case of deemed concealment of the particulars of income or furnishing inaccurate particulars of income. In view of the above, the AO was justified in imposing penalty. However, the AO is directed to restrict penalty on undisclosed investment in jewellery at Rs. 2,00,000/- only." 7. Now the assessee is in appeal. The ld. Counsel for the assessee reiterated the submissions made before the authorities below and further submitted that the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. CIT(A). 9. I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that the ld. CIT(A) sustained the penalty in respect of the estimated addition of Rs. 2,00,000/- which was restricted by the ITAT by observing in para 11 of the order dated 31.03.2011 in ITA No. 550/Del/2010 which read as under: "11. In our view, in the given facts and circumstances, i.e. VDIS declaration and assessee search statement at the most, the diamonds which are studded in the gold jewellery may be held to be unexplained. Since no details of diamonds have been argued by assessee before us and the amount being small, it will not be desirable of justice to set a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or furnishing of inaccurate particulars of income. Therefore, considering the totality of the peculiar facts of the present case, I am of the view that the penalty u/s 271(1)(c) of the Act, sustained by the ld. CIT(A) was not justified, particularly when the department had accepted the gold jewellery in which the diamond were studded. Accordingly, the impugned order passed by the ld. CIT(A) is set aside and the penalty sustained u/s 271(1)(c) of the Act is deleted. 11. As regards to the appeal of Smt. Satya Bhalla in ITA 5714/Del/2015 is concerned. The facts are similar as were involved in the case of Smt. Deepika Bhalla, the only difference is that the addition sustained in this case was of Rs. 3,23,900/- on account of diamond jewellery ..... X X X X Extracts X X X X X X X X Extracts X X X X
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