Shri Liadhar Agarwala, Kolkata V. DCIT, Central Circle - 2(2), Kolkata, Kolkata

CO 99/KOL/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8914 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 26-12-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 28-08-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A K TIBREWAL
• Assessee Lawyers: RADHYEY SHYAM
• Keywords: Search and seizure; Principle of natural justice; Revised return
• Section: 271(1)(c); 143(3); 142(1); 132; 139

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND SHRI, M. BALAGANESH, ACCOUNTANT MEMBER ITA NO. 1605 / KOL / 20 17 & C.O.NO.99/KOL/2017 (A/O ITA NO.1605/KOL/2017) ASSESSMENT YEAR :2013-14 DCIT, CENTRAL CIRCLE- 2(2), AAYAKAR BHAWAN, POORVA, 110, SHANTIPALLY, KOLKATA-107 V/S . SHRI LIADHAR AGARWALA FLAT NO.4A & 4B, 4 TH FLOOR, SHANTI KUNJ APARTMENT, 52/2B, HAZRA ROAD, KOLKATA-19 [ PAN NO.ACYPA 6161 C ] /APPELLANT .. / RESPONDENT / / CO-OBJECTOR /BY ASSESSEE SHRI RADHYEY SHYAM, CIT-DR /BY RESPONDENT SHRI A.K. TIBREWAL, AR /DATE OF HEARING 04-12-2018 /DATE OF PRONOUNCEMENT 26-12-2018 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS REVENUES APPEAL AND ASSESSEES CROSS OBJECTIO N FOR ASSESSMENT YEAR 2013-14 ARISE FROM COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATAS ORDER DATED 21.03.2017 PASSED IN CASE NO.264/CIT(A) -20/CC-2(2)15-16 PARTLY REVERSING ASSESSING OFFICERS ACTION IMPOSING PENAL TY OF 27,91,507 IN PROCEEDINGS U/S 271AAB OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE(S) PERUSED. 2. IT IS NOTICED AT THE OUTSET THAT THE REVENUES I NSTANT APPEAL ITA NO.1605/KOL/2017 SUFFERS FROM 25 DAYS DELAY IN FIL ING. THE REVENUE/APPELLANT ITA NO.1605 & CO. 99/KOL/2017 A. Y. 2013-14 DCIT, CC-2(3), KOL. VS. SH LIAD HAR AGARWALA PA GE 2 HAS PREFERRED A CONDONATION PETITION DATED 06.07.20 17 QUOTING REASONING THEREOF TO VARIOUS PROCEDURAL FORMALITIES AND COMPI LATION OF NECESSARY RECORDS. LEARNED AUTHORIZED REPRESENTATIVE IS VERY FAIR IN N OT DISPUTING THE SAME DURING THE COURSE OF HEARING. WE THUS CONDONE THE IMPUGNED DELAY OF 25 DAYS IN FILING. THIS MAIN APPEAL IS TAKEN UP FOR ADJUDICATI ON ON MERITS. 3. THE REVENUES / APPELLANTS SOLE SUBSTANTIVE GRO UND RAISED IN THE INSTANT APPEAL PLEADS THAT CIT(A) HAS ERRED IN LAW AND ON FACTS IN REVERSING THE ASSESSING OFFICERS ACTION IMPOSING SEC. 271AAB PENALTY OF 26 LAC. IMPOSED BY THE ASSESSING OFFICER IN HIS ORDER DATED 27.03.2015. THE CIT(A)S DETAILED DISCUSSION ON ABOVE SOLE ISSUE READS AS FO LLOWS:- 3. I HAVE CONSIDERED THE FINDING OF THE AO IN THE A SSESSMENT ORDER AND THE WRITTEN SUBMISSIONS AS WELL AS ORAL SUBMISSIONS MADE BY THE AR DURING THE APPELLATE PROCEEDINGS. 4. APPEAL ON GROUNDS NO 1, 2 AND 3 ARE AGAINST THE IMPOSITION OF PENALTY U/S 271AAB (1)(A). BRIEF FACTS OF THE CASE ARE THAT A) SEARCH AND SEIZURE PROCEEDINGS WERE CONDUCTED ON 20-12-2012 AND THEREAFTER AT THE RESIDENTIAL AS WELL AS BUSINESS P REMISES OF BLA GROUP. PANCHANARNA WAS ALSO DRAWN IN THE NAME OF THE ASSES SEE. B) DURING THE COURSE OF SEARCH PROCEEDING, WHILE MA KING THE STATEMENT U/S 132(4) OF THE ACT, AN AMOUNT OF RS.2,79,15,065/- WA S OFFERED TO TAX IN THE HANDS OF ASSESSEE AS ADDITIONAL INCOME IN FY 2012-1 3. BREAK-UP OF DISCLOSURE OF RS.2,03,96,750/- CONSISTS OF FOLLOWIN G- CASH SEIZURE 1,00,000/- JEWELLERY INVENTORISED 18 ,15,065/- OTHERS 2,60,00,000/- TOTAL 2,7 9,15,065/- C) IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2013-14, THE ASSESSEE FILED ITS RETURN OF INCOME U/S 139 OF THE ACT ON 07-03-2014 DECLARING TOTAL INCOME AT RS.3,95,95,810/- INCLUDIN G THE OFFERED INCOME OF RS.2,79, 15,065/-. D) THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT. COMPLIANCE TO NOTICES U/S 143(2) AND 142(1) WERE DULY MADE. ASSESSMENT OR DER FOR AY 2013-14 WAS PASSED U/S 143(3) ON 06-06-2014 AT A TOTAL INCO ME OF RS.3,96,04,140/-. E) PENALTY PROCEEDINGS WAS INITIATED SEPARATELY ON THE DISCLOSURE AMOUNT OF RS.2,79,15,065/- U/S 271AAB OF THE INCOME TAX ACT, 1961 F) DURING THE COURSE OF PENALTY PROCEEDING, IT HAD BEEN STATED THAT OUT OF SUCH OFFERING OF RS.2,79, 15,065/-, AN AMOUNT OF RS.2,60 ,00,0001 - WAS NOT BACKED BY ANY EVIDENCE OF UNDISCLOSED INCOME OR ANY UNDISC LOSED ASSETS 1 ITEMS THAT HAD BEEN FOUND / INVENTORISED BY THE DEPARTMEN T. HENCE, SUCH SUO MOTO OFFERING OF RS.2,60,00,0001- DOES NOT COME UNDER TH E PURVIEW OF ' UNDISCLOSED INCOME ' AS EXPLAINED IN EXPLANATION (C) OF SECTION 271AAB AND HENCE THE PENALTY PROVISION CANNOT BE INVOKED O N SUCH FIGURE OF RS. RS.2,60,00,000/-. FURTHER, SUCH SUO MOTO OFFERING O F RS. RS.2,60,00,000/- HAS BEEN MADE IN ORDER TO BUY PEACE, TO AVOID UNNECESSA RY LONG DRAWN LITIGATIONS ITA NO.1605 & CO. 99/KOL/2017 A. Y. 2013-14 DCIT, CC-2(3), KOL. VS. SH LIAD HAR AGARWALA PA GE 3 WITH THE DEPARTMENT AND TO DEMONSTRATE UTMOST COOPE RATIVE ATTITUDE WITH THE DEPARTMENT. G) HOWEVER; THE ASSESSING OFFICER DID NOT PAY ANY H EED TO SUCH SUBMISSION AND WENT ON TO PASS AN ORDER U/S 271AAB OF THE ACT CONSIDERING THE OFFERED AMOUNT OF RS.2,79,15,065/- AS UNDISCLOSED INCOME AN D IMPOSED A PENALTY OF RS.27,91,507/-. 5. BECAUSE OF THE ACT OF THE AO OF IMPOSING PENALT Y U/S 271AAB(1)(A) IN THIS CASE, THIS APPEAL HAS BEEN FILED. IN THE PENALTY ORDER TH E AO HAS BROUGHT IT ON RECORD THAT THE CONTENTION OF THE ASSESSEE THAT THE AFORESAID A MOUNT OF RS.2,60,00,000/- IS NOT ' UNDISCLOSED INCOME ' IS CONTRARY TO THE FACT THAT THE SAID ADDITIONAL INCOME OF RS.2,60,00,000/- WAS OFFERED FOR TAXATION DURING TH E COURSE OF SEARCH OPERATION AND WAS SUBSTANTIATED BY THE ASSESSEE AS EARNED OUT OF THE BUSINESS IN WHICH THE ASSESSEE IS ENGAGED. BY DINT OF ASSESSES OWN SUBMIS SIONS, THE ASSESSEE WAS FOUND TO HAVE ACCUMULATED AN UNDISCLOSED INCOME OF RS.2,6 0,00,000/- WHICH WAS NOT RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOO KS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE OF BUSINESS. BY VIR TUE OF THE VERY NATURE OF DISCLOSURE BY THE ASSESSEE HIMSELF, THAT SUCH UNACC OUNTED INCOME WAS GENERATED OUT OF TRANSACTIONS IN BUSINESS IT WAS INVOLVED IN THE ADDITIONAL INCOME OF RS.2,60,00,000/- DISCLOSED ONLY DURING THE COURSE O F SEARCH & SEIZURE OPERATION PARTAKES THE CHARACTER OF UNDISCLOSED INCOME. 6. DURING THE APPELLATE PROCEEDINGS THE AR HAS MADE ORAL SUBMISSION AS WELL AS FILED A WRITTEN SUBMISSION ON THIS ISSUE WHICH IS A S UNDER: AGGRIEVED BY THE SAID PENALTY ORDER OF THE ASSESSIN G OFFICER, I HAVE FILED AN APPEAL BEFORE YOUR GOOD-SELF TO CONSIDER THE ABOVE MATTER IN THE PRINCIPLE OF NATURAL JUSTICE. I RE-ITERATE T.HAT SUCH OFFERING O F RS. RS.2,60,00,0001- WAS MADE SUO MOTO AND TO BUY PEACE AND WAS NOT BACKED B Y ANY EVIDENCE OF UNDISCLOSED INCOME OR ANY UNDISCLOSED ASSETS / ITEM S THAT HAD BEEN FOUND / INVENTORISED BY THE DEPARTMENT AND AS SUCH NO PENAL TY U/S 271AAB SHOULD BE IMPOSED. THE SIMILAR VIEW HAS ALSO BEEN EXPRESSE D BY THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF GIRISH DEVCHAND RAJ ANI [2013] 33 TAXMANN.COM 174 (GUJARAT) WHERE IT HAD BEEN HELD TH AT WHERE ASSESSEE TO BUY PEACE AND TO AVOID PROTRACTED LITIGATION FILED REVISED RETURN DISCLOSING ADDITIONAL INCOME, IMPOSITION OF PENALTY UNDER SECT ION 271(1)(C) UPON ASSESSEE ON PLEA THAT HE HAD FURNISHED INACCURATE P ARTICULARS OF INCOME WAS NOT JUSTIFIED. FURTHER, IN THE CASE OF PUNJAB TYRES [1986] 162 ITR 517 (MADHYA PRADESH), THE HON'BLE HIGH COURT OF MADHYA PRADESH ALSO HELD THAT WHEN SURRENDER IS MADE TO PURCHASE PEACE OR FOR OTHER SIMILAR REASON, SURREND ER CANNOT AMOUNT TO ADMISSION, CONSTITUTING EVIDENCE OF CONCEALMENT IN PENALTY PRO CEEDINGS. I ALSO RELY ON THE JUDGEMENT OF THE SUPREME COURT O F INDIA IN THE CASE OF DILIP N. SHROFF V. .JT.CIT (2007) 291 ITR 519 (SC) WHEREIN I T WAS HELD THAT IMPOSITION OF PENALTY IS NOT AUTOMATIC. LEVY OF PENALTY IS NOT ON LY DISCRETIONARY IN NATURE, BUT SUCH DISCRETION IS REQUIRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER, KEEPING THE RELEVANT FACTORS IN MIND. IN THIS REGARD, I WOULD LIKE TO STATE THAT ASSESSME NT HAS BEEN COMPLETED BASED ON THE EXPLANATIONS GIVEN AND DOCUMENTS PRODUCED DURIN G THE COURSE OF ASSESSMENT WITHOUT MAKING ANY FURTHER ADDITION ON THE GROUND O F DISCLOSURE. I HAD BEEN A CO- OPERATIVE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDING. ITA NO.1605 & CO. 99/KOL/2017 A. Y. 2013-14 DCIT, CC-2(3), KOL. VS. SH LIAD HAR AGARWALA PA GE 4 7. I HAVE CONSIDERED THE FINDINGS GIVEN BY THE AO I N THE PENALTY ORDER AND SUBMISSIONS MADE BY THE AR DURING THE APPELLATE PRO CEEDING. I FIND .HAT THE AO HAS TAKEN THE UNDISCLOSED INCOME OF THE ASSESSEE FOUND DURING THE SEARCH OPERATION U/S 132 (FOR WHICH EVIDENCES, DOCUMENTS/PAPERS, STOCK, CASH CTC WERE FOUND) ALONG WITH THE AMOUNT DECLARED SUO MOTO BY THE ASSESSEE (FOR W HICH NO EVIDENCE, PAPERS/DOCUMENTS, STOCK, CASH ETC WERE FOUND DURING THE SEARCH OPERATION) IN ORDER TO BUY PEACE OF MIND AND AVOID ANY FURTHER LITIGATI ON. THE ASSESSEE HAS BROUGHT ON RECORD THE CASE LAW OF DRLIP N SHROFF VS CIT (2007) 291 ITR 519 (SC). IN THIS CASE LAW THE HON'BLE SUPREME COURT HAS HELD THAT IMPOSIT ION OF PENALTY IS NOT AUTOMATIC. LEVY OF PENALTY IS NOT ONLY DISCRETIONARY IN NATURE , BUT SUCH DISCRETION IS REQUIRED TO BE EXERCISED ON THE PART OF THE ASSESSING OFFICER K EEPING THE RELEVANT FACTORS IN MIND. THE AR HAS ALSO BROUGHT ON RECORD THE CASE OF PUBJAB TYRES (PUBJAB TYRES [1986] 162 ITR 517 (MADHYA PRADESH), THE HON'BLE HI GH COURT OF MADHYA PRADESH) IN WHICH IT WAS HELD THAT WHEN SURRENDER IS MADE TO PURCHASE PEACE OR FOR OTHER SIMILAR REASON, SURRENDER CANNOT AMOUNT TO ADMISSIO N, CONSTITUTING EVIDENCE OF CONCEALMENT IN PENALTY PROCEEDINGS. THE AR HAS BROUGHT ON RECORD THE CASE LAW OF SUDHAR SAN SILK AND SAREES, 300 ITR 30 (SUPREME COURT) IN THIS CASE, THE HON'BLE SUPREM E COURT HAS HEID THAT IF THE APPELLANT OFFERS ANY AMOUNT FOR TAXATION FOR THE PU RPOSE OF PURCHASING PEACE AND ASSESSMENT HAS' BEEN MADE BASED UPON THE AFORESAID OFFERINGS, EVEN IF NO ASSURANCE IN WRITING IS GIVEN BY THE SEARCHING PART Y, IT MAY BE CLEARLY INFERRED THAT SUCH AN INDUCEMENT MUST HAVE BEEN GIVEN BY SEARCHIN G PARTY. WHEN ONLY PARTIAL EVIDENCE OR NO EVIDENCE IN SUPPORT OF CONCEALMENT W AS DETECTED DURING THE SEARCH, WHY WOULD A PERSON GO TO OFFER A HIGHER AMOUNT UNLE SS HE WAS PROMISED SOME RECIPROCAL BENEFITS LIKE NOT BEING VISITED BY PENAL TY. THUS, IT WAS HELD THAT WHERE ADDITIONS HAVE BEEN MADE BASED ON ASSESSEE'S OWN OF FERINGS, PENALTY PROVISION SHALL NOT LIE. I FIND THAT DURING THE SEARCH AND SEIZURE OPERATION U/S 132 IN THIS CASE EVIDENCES REGARDING CONCEALMENT/UNDISCLOSED INCOME IN THE FOR M OF CASH SEIZURE PAPERS/ DOCUMENTS/ STOCK ETC WERE FOUND AND SEIZED OF THE V ALUE OF RS.19,15,065/- ONLY. NOTHING INCRIMINATING/NO EVIDENCES WERE FOUND REGAR DING RS.2,60,00,000/- WHICH WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO I N ORDER TO BUY PEACE OF MIND. I ALSO FIND THAT NEITHER THE OFFICERS IN THE INVESTIG ATION WING IN THE POST SEARCH INVESTIGATION NOR THE ASSESSING OFFICER DURING ASSE SSMENT PROCESS FOUND ANY DISCRIMINATING EVIDENCE OF UNDISCLOSED INCOME OTHER THAN THE ASSESSEE FOR MAKING THE ADDITION OF RS.2,60,00,000/-. FURTHER I HAS LEV IED PENALTY U/S 271AAB(1)(A). THIS SECTION READS LIKE SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. 8. THUS, IT IS CLEAR THAT IN ORDER TO LEVY PENALTY TWO THINGS ARE ESSENTIAL (1) UNDISCLOSED INCOME AND (2) SPECIFIED PREVIOUS YEAR. HERE IN THIS CASE RS.2,60,00,000/- WAS OFFERED FOR TAXATION BY THE AS SESSEE SUO MOTU IN THE STATEMENT RECORDED AT THE TIME OF SEARCH. FORM THE RATIO DECI DED BY THE HON'BLE SUPREME COURT IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA), IT IS CLEAR THAT ONLY THE STATEMENT OF THE ASSESSEE WITHOUT ANY CORROBORATING EVIDENCE CAN NOT BE THE ONLY BASIS FOR LEVYING PENALTY. HERE IT IS ALSO CLEAR THAT FROM THE STATEM ENT OF THE ASSESSEE ONE CANNOT POINT OUT WHICH AMOUNT OF UNDISCLOSED INCOME PERTAI NS TO WHICH SPECIFIED PREVIOUS YEAR. IN THIS SITUATION, WHERE NOTHING IS CLEAR FRO M ASSESSEES STATEMENT TO LEVY PENALTY U/S. 271AAB(1) ON THE AMOUNT OFFERED BY THE ASSESSEE SUO MOTO TO BUY PEACE OF MIND, CANNOT BE JUSTIFIED. THE HON'BLE SUP REME COURT HAS ALSO CATEGORICALLY DECIDED THE RATIO THAT PENALTY CANNOT BE LEVIED ON THE AMOUNT OFFERED BY THE ASSESSEE IN ORDER TO BUY PEACE OF MIND [ IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA) ]. THUS, RESPECTFULLY FOLLOWING THE RATIO DECIDED B Y THE HON'BLE SUPREME ITA NO.1605 & CO. 99/KOL/2017 A. Y. 2013-14 DCIT, CC-2(3), KOL. VS. SH LIAD HAR AGARWALA PA GE 5 COURT, THE AO IS DIRECTED TO CALCULATE AND LEVY PEN ALTY U/S 271AAB(1)(A) ON RS.19,15,065/- ONLY. ACCORDINGLY, ASSESSEES APPEAL ON GROUNDS NO 1, 2 AND 3 ARE PARTLY ALLOWED. 4. LEARNED CIT.DR VEHEMENTLY CONTENDS DURING THE CO URSE OF HEARING THAT THE ASSESSING OFFICER HAD RIGHTLY INVOKED THE IMPUG NED PENAL PROVISION AS STIPULATED U/S 271AAB ON ACCOUNT OF SEARCH OPERATIO N IN ISSUE CONDUCTED IN ASSESSEES CASE ON 20.12.2012. HE HEAVILY RELIES UP ON ASSESSEES ADMISSION STATING HIS UNDISCLOSED INCOME OF 2,79,15,065/-. HIS CASE THEREFORE IS THAT THE SAME FORMED SUFFICIENT REASONS FOR THE ASSESSING OF FICER TO IMPOSED THE IMPUGNED PENALTY. WE SOUGHT TO KNOW FROM LEARNED CI T-DR AS TO WHETHER THE AUTHORIZED OFFICER HAD FOUND ANY SPECIFIED ASSET I. E. ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS AS PE R EXPLANATION (C) FORMING OF SEC. 271AAB. THERE IS NO SUCH MATERIAL INDICATED DU RING THE COURSE OF HEARING. WE FIND THAT CO-ORDINATE BENCHS ORDER IN ITA NO.538/KOL/2017 IN ACIT VS. SRI KANWAR SAIN GUPTA DECIDED ON 29.06.201 8 DECLINES REVENUES IDENTICAL ARGUMENTS PARA 3-4 FOLLOWS AS UNDER:- 3. WE NOW COME TO THE IMPUGNED PENALTY PROCEEDINGS. THE ASSESSING OFFICER LEVIED PENALTY IN QUESTION IN HIS ORDER DATED 23.02.2016 B Y QUOTING SECTION 27LAAB OF THE ACT ON THE GROUND THAT ALL THE RELEVANT CONDITIONS STIPULATED THEREIN STOOD DULY SATISFIED QUA THE ABOVE STATED UNDISCLOSED INCOME. THE CIT(A) REVERSES THE ASSESSING OFFICER'S ACTION AS FOLLOWS: 'I FIND THAT DURING THE SEARCH AND SEIZURE OPERATIO N U/S 132 IN THIS CASE NO EVIDENCES REGARDING CONCEALMENT/UNDISCLOSED INCOME IN THE FORM OF CASH SEIZURE/PAPERS/DOCUMENTS/STOCK ETC WERE FOUND AND S EIZED. NOTHING INCRIMINATING/NO EVIDENCES WERE FOUND REGARDING RS. 1 CRORE WHICH WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN OR DER TO BUY PEACE OF MIND. I ALSO .FIND THAT NEITHER THE OFFICERS IN THE INVESTI GATION WING IN THE POST SEARCH INVESTIGATION NOR THE ASSESSING OFFICER DURING ASSE SSMENT PROCESS FOUND ANY DISCRIMINATING EVIDENCE OF UNDISCLOSED INCOME OTHER THAN THE STATEMENT OF THE ASSESSEE FOR MAKING THE ADDITION OF RS.1 CRORE. FURTHER I FIND THAT THE AO HAS LEVIED PENALTY U/S 2 71AAB (1)(A). THIS SECTION READS LIKE SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. THUS, IT IS CLEAR THAT IN ORDER TO LEVY PENALTY TWO THINGS ARE ESSENTIAL (1) UNDISCLOSED INCOME AND (2) SPECIFIED PREVIOUS YEAR. HERE IN THIS CASE RS.1 CRORE WAS OFFERED FOR TAXATION BY THE ASSESSEE SUO MOTO IN THE STATEMENT RECORDED AT THE TIME OF SEARCH. FROM THE RATIO DECI DED BY THE HON'BLE SUPREME COURT IN THE CASE OF SUDARSHAN SIIK & SARIE S (SUPRA), IT IS CLEAR THAT ONLY THE STATEMENT OF THE ASSESSEE WITHOUT ANY CORR OBORATING EVIDENCE ITA NO.1605 & CO. 99/KOL/2017 A. Y. 2013-14 DCIT, CC-2(3), KOL. VS. SH LIAD HAR AGARWALA PA GE 6 CANNOT BE THE ONLY BASIS FOR LEVYING PENALTY. HERE IT IS ALSO CLEAR THAT FROM THE STATEMENT OF THE ASSESSEE ONE CANNOT POINT OUT WHIC H AMOUNT OF UNDISCLOSED INCOME PERTAINS TO WHICH SPECIFIED PREVIOUS YEAR. I N THIS SITUATION, WHERE NOTHING IS CLEAR FROM ASSESSEE'S STATEMENT RECORDED AT THE TIME OF SEARCH, THE ACTION OF THE AO TO LEVY PENALTY U/S 271AAB(1)(A) O N THE AMOUNT OFFERED BY THE ASSESSEE SUO MOTO TO BUY PEACE OF MIND, CANNOT BE JUSTIFIED. THE HON'BLE SUPREME COURT HAS ALSO CATEGORICALLY DECIDED THE RA TIO THAT PENALTY CANNOT BE LEVIED ON THE AMOUNT OFFERED BY THE ASSESSEE IN ORD ER TO BUY PEACE OF MIND (IN THE CASE OF SUDARSHAN SILK & SARIES (SUPRA)]. T HUS, RESPECTFULLY FOLLOWING THE RATIO DECIDED BY THE HON'BLE SUPREME COURT, THE AO IS DIRECTED TO DELETE THE PENALTY U/S 271AAB(1)(A). ACCORDINGLY, ASSESSEE 'S APPEAL ON GROUNDS NO 1, 2 AND 3 ARE ALLOWED. ' 4. LEARNED DEPARTMENTAL REPRESENTATIVE ARGUED THAT THE ASSESSING OFFICER HAD RIGHTLY IMPOSED THE IMPUGNED PENALTY IN ASSESSEE'S CASE @ 10% OF HIS UNDISCLOSED INCOME OF RS.1 CRORE COMING RS.10,00,000 IN QUESTIO N. WE FIND NO SUBSTANCE IN REVENUE'S INSTANT ARGUMENTS. WE FIRST OF ALL MAKE I T CLEAR THAT SECTION 271AAB OF THE ACT APPLIES IN RELATION TO THE IMPUGNED PENALTY @ 1 0% OF THE UNDISCLOSED INCOME AS STOOD DEFINED IN EXPLANATION (C) THERETO. THERE IS NO MATERIAL IN THE CASE FILE TO INDICATE THAT THE ASSESSEE'S UNDISCLOSED INCOME REP RESENTS ANY MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE OR ANY ENTRY IN THE B OOKS OR OTHER DOCUMENTS THEREIN. WE MAKE IT CLEAR THAT WE ARE DEALING WITH A PENALTY PR OVISION IN TAX STATUTE WHICH IS TO BE STRICTLY INTERPRETED. WE THEREFORE ARE OF THE OPINI ON THAT THE CIT(A) HAS RIGHTLY DELETED THE IMPUGNED PENALTY AS THE ASSESEE'S SEARCH STATEM ENT NOWHERE INDICATED THE CORRESPONDING UNDISCLOSED INCOME AS PER SPECIFIC RE QUIREMENT IN THE ACT. THE CIT(A),S FINDINGS UNDER CHALLENGE DELETING PENALTY IN QUESTION ARE ACCORDINGLY CONFIRMED. WE ADOPT ABOVE DETAILED REASONING MUTATIS MUTANDIS TO AFFIRM THE CIT(A)S FINDINGS UNDER CHALLENGE DELETING THE IMPUGNED PENA LTY. THE REVENUES APPEAL ITA NO.1605/KOL/2017 FAILS THEREFORE. 5. NEXT COMES ASSESSEES CROSS OBJECTION NO.99/KOL /2017. HIS FORMER GROUND SUPPORTS THE CIT(A)S FINDINGS DELETING THE IMPUGNED PENALTY QUA UNDISCLOSED INCOME OF 2 CRORES FORMING SUBJECT MATTER OF REVENUES GRIEVANCE. THE SAME IS RENDERED INFRUCTUOUS IN VIEW OF OUR FINDING IN REVENUES APPEAL AFFIRMING THE CIT(A)S ACTION QUA THIS FORMER LIMB. 6. NEXT COMES ASSESSEES LATTER SUBSTANTIVE GROUND SEEKING TO REVERSE CIT(A)S ACTION CONFIRMING THE IMPUGNED PENALTY @ 1 0% OF 19,15,065/- (SUPRA). MR. TIBREWAL FAILS TO DISPUTE THE CLINCHIN G FACTS THAT THIS LATTER PENALTY IS VERY MUCH BASED ON ASSESSEES UNDISCLOSED INCOME IN THE FORM OF CASH SEIZURE / PAPERS / DOCUMENTS / STOCK FOUND DURING T HE COURSE OF SEARCH. BOTH ITA NO.1605 & CO. 99/KOL/2017 A. Y. 2013-14 DCIT, CC-2(3), KOL. VS. SH LIAD HAR AGARWALA PA GE 7 THE LOWER AUTHORITIES HAVE THEIR RIGHTLY INVOKED S EC. 271AAB EXPLANATION (C) IN CASES OF THE INSTANT CASE. THE ASSESSEE FAILS IN IT S LATTER SUBSTANTIVE GROUND. 7. THIS REVENUES APPEAL ITA NO.1605/KOL/2017 AND A SSESSEES CROSS OBJECTION NO.99/KOL/2017 ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 26 /12/2018 SD/- SD/- ( ) () ) (M.BALAGANESH) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S *- 26 / 12 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /ASSESSEE-SHRI LIADHAR AGARWALA FLAT NO.4A & 4B, 4 TH FLOOR, SHANTI KUNJ APARTMENT, 52/2B, HAZRA ROAD, KOLKATA-19 2. /REVENUE-DCIT, C.C-2(2), AAYAKA BHAWAN, POORVA, 110 , SHANTIPALLY, KOLKATA-107 3. 5 6 / CONCERNED CIT KOLKATA 4. 6- / CIT (A) KOLKATA 5. 9 ))5, 5, / DR, ITAT, KOLKATA 6. > / GUARD FILE. BY ORDER/ , /TRUE COPY/ / 5,