Reliance in this connection can be placed on a recent judicial pronouncement of Hon’ble Calcutta Tribunal in case of SPS Steel & Power Limited vs. ACIT [I.T.A Nos. 1391 & 1414/Kol/2011] pronounced on 30-06-2015 wherein a search & seizure operation was conducted on the premises of the appellant under Section 132 and income to the tune of INR 6.84 crores was disclosed & substantiated. Further, a sum of INR 1.13 crores was disclosed but not substantiated and therefore the Ld. AO imposed a penalty on the total disclosed income. Being aggrieved by the order of Ld. AO appeal was filed before the Ld. CIT(A) wherein demand of penalty on the disclosed & substantiated income was dropped and restricted the penalty imposed on disclosed & unsubstantiated income.

The Revenue and the assessee filed an appeal before the Hon’ble Tribunal against the order of the Ld. CIT(A). The revenue contended that the penalty dropped should be retained. In this regard, Hon’ble Tribunal placed reliance on Section 292C of the Act and stated that all the documents seized are correct unless contrary is proved and relying on the decision in case of Ashok Kumar Sharma v. DCIT 149 TTJ 33 affirmed the decision of Ld. CIT(A) in this regard. The appeal filed by the revenue was dismissed.

The assessee challenged the order of Ld. CIT(A) against the retention of penalty against unsubstantiated income of INR 1.13 crores which was levied on the premise that the conditions dictated under Section 271AAA of the Act has not been satisfied. The assessee stated that the department has obtained statements during the course of search under duress and coercion and relying on a board Circular it was further contended that the department did not produced evidence to corroborate the said statement of the Director. The Hon’ble Tribunal relied on the various judicial pronouncements made in this connection as the issue is not res integra and deleted the penalty imposed by the Ld. AO on the ground that no evidence was produced by the department to corroborate such income. In the result, the appeal of the assessee was allowed and the appeal of the department was dismissed.

Author – Aditya Singhania & Nischal Agarwal

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