Deputy Commissioner of Income Tax Vs. G.S. Entertainment - Court Judgment

Excerpt:
.....the amount of rs. 15 lakhs was assessed by the ao as undisclosed income of the assessee for the block period of the assessee and therefore, the provision of section 269ss of the it act, 1961 does not apply to the facts of the case. he submitted that the issue is covered in favour of the assessee with the decision of the hon'ble delhi high court cit v.standard brands ltd. (2006) 204 ctr (del) 48 : (2006) 285 itr 295 (del).4. we have considered the rival submissions. we find that it is not a case of regular assessment of the assessee. the block assessment of undisclosed income for the block period was framed by the ao and the amount of rs. 15 lakhs was added as undisclosed income of the assessee for the financial year 1998-99. once the amount in question is assessed as the undisclosed.....

Judgment:
1. This appeal by the Revenue for the block period 1st April, 1990 to 26th Sept., 2000 is directed against the order of CIT(A). The only issue in this appeal is regarding validity of penalty of Rs. 15 lakhs imposed on the assessee under Section 271D of the Act.

2. The learned Departmental Representative has relied on the order of the AO. He submitted that the amount of Rs. 15 lakhs was received by the assessee in cash as is recorded in the CD seized by the Department.

He submitted that Shri Gautam Gupta has failed to confirm the transaction in the form of affidavit before the Revenue authorities. He submitted that CIT(A) should have taken note of the fact that cash receipt of Rs. 15 lakhs was towards part payment of the finance agreement dt. 28th July, 1998.

3. The learned Counsel for the assessee has opposed the submission of the learned Departmental Representative. He submitted that the amount of Rs. 15 lakhs was assessed by the AO as undisclosed income of the assessee for the block period of the assessee and therefore, the provision of Section 269SS of the IT Act, 1961 does not apply to the facts of the case. He submitted that the issue is covered in favour of the assessee with the decision of the Hon'ble Delhi High Court CIT v.Standard Brands Ltd. (2006) 204 CTR (Del) 48 : (2006) 285 ITR 295 (Del).

4. We have considered the rival submissions. We find that it is not a case of regular assessment of the assessee. The block assessment of undisclosed income for the block period was framed by the AO and the amount of Rs. 15 lakhs was added as undisclosed income of the assessee for the financial year 1998-99. Once the amount in question is assessed as the undisclosed income of the assessee in the block assessment for the block period of the assessee, the provision of Section 269SS r/w Section 271D cannot be resorted to. The issue in the present case is covered in favour of the assessee with the decision of Hon'ble Delhi High Court in the case of Standard Brands Ltd., cited supra, wherein held that where the amount was undisclosed income in the hands of the assessee, it could not resort to proceedings under Section 269SS r/w Section 271D of the Act. Accordingly, the issue is decided in favour of the assessee and the order of the CIT(A) is confirmed and the ground of appeal of the Revenue is dismissed.