Case Law Details
Brief of the Case
In the present facts of the case the Hon’ble Tribunal held that whenever the consideration is received in advance for the particular sale, The money will be taxed in the year in which the sale is made and not in the assessment year in which the advances are received. Therefore, no penalty could be levied u/s 271(1)(c).
Facts of the Case
The assessee is a partnership firm engaged in the business of building construction. A search action u/s.132 of the I.T. Act was carried out at the business and residence premises. Simultaneously, the factory premises and residence of other business concerns of brothers and the close associates were covered either in search u/s.132 or survey u/s.133A.
During the course of assessment proceedings, the AO noted that during the search documentary evidence of cash receipt of Rs.25 lakhs was found and seized. The statement of partner of the assessee firm was recorded u/s.132(4) of I.T. Act, 1961 on 24-09-2004. In the said statement he had stated that these are the cash receipts related to booking advance for shops of Nath Plaza received from various customers and has agreed to offer Rs.25,00,000/- as income. However, the assessee did not offer these receipts in the income-tax return filed in response to notice u/s.153A. The, entire amount of Rs.25 lakhs was received on 21-05-2002, therefore, the AO held that this unrecorded, unaccounted cash receipts amounting to Rs.25 lakhs were taxable in the F.Y. 2002-03. He accordingly made an addition of Rs.25 lakhs to the total income of the assessee on account of unaccounted cash receipts. The penalty proceedings were initiated u/s 271(c).
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