Section 271(1)(c) No penalty on seizure of gold if:-

No penalty on seizure of gold if assessee admitted that it was derived out of undisclosed income and paid taxes thereon

[2015] 57 taxmann.com 382 (Andhra Pradesh and Telangana)

HIGH COURT OF ANDHRA PRADESH AND TELANGANA

L. Giridharlal & Co.

v.

Income-tax Officer

Section 271(1)(c), read with sections 69A and 271, of the Income-tax Act, 1961 - Penalty - For concealment of income (Explanation 5) - Assessment year 1986-87 - Search was conducted in assessee's premises and gold was seized - Assessing Officer did not accept explanation of assessee regarding unaccounted gold and initiated penalty proceedings - However, it was found that assessee had made statements under section 132(4) regarding said gold and explained manner in which same was derived - Further, value of seized gold was treated as income of assessee and assessee paid tax thereon - Whether assessee's case fitted into clause (2) of Explanation 5 of section 271(1) which brought immunity to assessee and, hence, penalty was not to be levied - Held, yes [Paras 10,11 and 12] [In favour of assessee]