Asst. Commissioner of Income Tax, Central Circle-1, Nashik V. Dr. Babulal Devisa Agrawal, Nashik

ITA 1042/PUN/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2547 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 23-05-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Keywords: Unexplained investment; Search and seizure; Document seized; Retrospective amendment; Wrong claim; Documents seized
• Section: 69C; 54F; 153A; 69; 54; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI PRADIP KUMAR KEDIA , A M . / ITA NO. 1042 /PN/201 2 / ASSESSMENT YEAR : 20 0 6 - 07 THE ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK . / APPELLANT VS. DR. BABULAL DEVISA AGRAWAL, MAITRA BUNGLOW, SRIHARI KUTE MARG , JANAKPURI, N EAR DIVTYA BUDHLYA HOTEL, NASHIK 422002 . / RESPONDENT PAN: A EFPA0187D / APPELLANT BY : SHRI DHEERAJ KUMAR JAIN / RESPONDENT BY : SHRI NIKHIL PATHAK / / / DATE OF HEARING : 03 . 0 3 .201 6 / DATE OF PRONOUNCEMENT: 23 . 0 3 .201 6 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - I , NASHIK , DATED 0 5 . 03 .20 1 2 RELATING TO ASSESSMENT YEAR 20 0 6 - 07 AGAINST DELETION OF PE NALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN DELETING PENALTY LEVIED UN DER SECTION 271(1)(C) AMOUNTING TO RS . 14,55,140 / - W ITHOUT APPRECIATING THAT THE ASSESSEE FAILED TO OFFER ANY EXPLANATION REGARDING THE DIFFERENCE IN INCOME RETURNED VIDE RETURN FILED U/S 139 AND 153A AT RS . 2,59,174/ - AND RS 45,17,2301 - . ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 2 2. ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE ADDITIONAL INCOME OF RS . 42,50,054/ - WAS OFFERED ONLY IN THE RETURN FILED U/S 153A ON SPECIFIC ISSUES SUCH AS UNEXPLAINED INVESTMENT IN STOCK AND OTHER ASSETS ETC FOR W HICH THE ASSESSEE DID NOT OFFER ANY EXPLANATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) ERRED IN APPLYING EXPLANATION 1 TO SECTION 271 (1)(C) INST E AD OF EXPLANATION 5A OF THAT SECTION ON THE FACT OF THE CASE THUS RENDERIN G HIS DECISION PERVERSE AND BAD IN LAW. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT BUT FOR THE SEARCH OPERATIONS THE ASSESSEE WOULD NOT HAVE OFFERED ADDITIONAL INCOME IN THE RETURN FILE D UNDER SECTION 153A WHICH IS EVIDENCED BY HIS FAILURE TO OFFER THE SAID ADDITIONAL INCOME IN THE RETURN FILED UNDER SECTION 139. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(A) ERRED IN IGNORING THE DECISION OF JURISDICTIONAL TRI BUNAL IN THE GROUP CASES OF THAKKAR AND KALANTRI GROUP IN APPEAL NOS.911 TO 930/PN/2009 AND 1006 TO 100 8 /PN/2009 DATED 10 - 02 - 2010 WHICH WAS A DIRECT DECISION. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE LEARNED CIT(A) ERRED IN HOLDING THAT T HE ASSESSEE DISCLOSED ADDITIONAL INCOMES ONLY TO BUY PEACE OF MIND WHILE ACKNOWLED G ING VIDE PARA 6 OF HIS ORDER T H AT THE ASSESSEE RETURNED ADDITIONAL INCOME IN THE RETURN FILED 153A ON SPECIFIED ISSUES, THUS RENDERING HIS DECISION CONTRADICTORY AND PERVERS E. 7. A NY OTHER GROUND THAT MAY BE URGED AT THE TIME OF HEARING. 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF TRIBUNAL IN MRS. SARITA KAUR MANJEET SINGH CHOPRA VS. ITO IN ITA NO.1562/PN/2013, RELATING TO ASSESSMENT YEAR 2009 - 10, ORDER DATED 30.10.2015. 4. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT READ WITH EXPLANATION 5A . 5. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE WAS AN INDIVIDUAL AND WAS A MEDICAL PRACTITIONER . SEARCH AND SEIZURE OPERATION WAS TAKEN AGAINST THE ASSESSEE ON 16.01.2009. DURING THE COURSE OF SEARCH PROCEEDINGS, ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 3 CERTAIN DOCUMENTS WERE FOUND, AS PER WHICH T HERE W ERE VARIOUS EXPENDITURES NOT ROUTED THROUGH THE BOOKS OF ACCOUNT ON ACCOUNT OF EXPENDITURE RELATABLE TO PROFESSION OF THE ASSESSEE AND OTHER EXPENSES. FURTHER DOCUMENTS WERE FOUND ON ACCOUNT OF ADDITIONAL RECEIPTS AND ALSO INVESTMENTS IN FDRS. THE ASSESSEE DECLARED ADDITIONAL INCOME FOR ASSESSMENT YEARS 2004 - 05 TO 2009 - 10 AS PER THE TABULATED DETAILS INCORPORATED UNDER PARA 5 AT PAGES 2 AND 3 OF THE APPELLATE ORDER DECIDING LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. FOR THE YEAR UNDER CONS IDERATION , ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND AND SEIZED, ADDITION ON ACCOUNT OF PROFESSIONAL RECEIPTS TO THE EXTENT OF RS.42,58,054/ - WAS MADE IN THE HANDS OF ASSESSEE. FURTHER, ADDITION WAS MADE ON ACCOUNT OF DEPOSITS IN SAVINGS BANK ACCOUNT NO.100230 IN THE NAME OF ASSESSEES WIFE TOTALING RS.56,583/ - . DURING THE COURSE OF PENALTY PROCEEDINGS INITIATED UNDER SECTION 271(1)(C) OF THE ACT, THE CLAIM OF THE ASSESSEE WAS THAT IT HAD MADE TRUE DISCLOSURE OF ITS INCOME BY WAY OF OFFERING ADDITIONA L INCOME IN THE RETURN OF INCOME AND HENCE, NO MERIT IN LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. FURTHER, ADDITION WAS MADE ON ACCOUNT OF DEPOSITS IN THE BANK ACCOUNT OF WIFE OF THE ASSESSEE. THE ASSESSING OFFICER WAS OF THE VIEW THAT IN RESPE CT OF BOTH THESE ADDITIONS, THE ASSESSEE WAS LIABLE FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT WITHIN MEANING OF EXPLANATION 5A THEREUNDER. THE ASSESSING OFFICER LEVIED PENALTY OF RS.14,55,140/ - . 6. THE CIT(A) ON THE OTHER HAND, DELETED PENAL TY LEVIED UNDER SECTION 271(1)(C) OF THE ACT HOLDING THAT EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT WAS NOT APPLICABLE TO THIS CASE. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 4 8. AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES AND AS FAIRLY CONCEDED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE, THE ISSUE ARISING IN THE PRESENT APPEAL IS COVERED AGAINST THE ASSESSEE BY THE ORDER OF TRIBUNAL IN MRS. SARITA KAUR MANJEET SINGH CHOPRA VS. ITO (SUPRA) . THE TRIBUNAL VIDE ORDER DATED 30.10.2015 HAD CONSIDERED THE ISSUE AT LENGTH, WHEREIN THE ASSESSEE HAD OFFERED ADDITIONAL INCOME AFTER CASH WAS FOUND FROM HER POSSESSION AND WHERE THE SAID INCOME HAS BEEN DECLARED IN THE RETURN OF INCOME FILED PURSUANT TO NOTICE ISSUED UNDE R SECTION 153A OF THE ACT, WHETHER THE ASSESSEE IS LIABLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE TRIBUNAL HAD DELIBERATED UPON THE ISSUE HOLDING AS UNDER: - 13. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. SEARCH AND SE IZURE ACTION WAS CARRIED OUT AGAINST THE ASSESSEE ON 09.12.2009. WHILE TRAVELLING FROM PUNE TO DELHI BY AIR, THE ASSESSEE WAS FOUND TO BE IN POSSESSION OF CASH OF RS.1,60,76,800/ - . THE ASSESSEE WAS SEARCHED BY THE INVESTIGATION WING UNDER SECTION 132 OF THE ACT ON 09.12.2009 AND RESIDENCE WAS ALSO SEARCHED AND CASH OF RS.1.60 CRORES WAS SEIZED DURING THE SEARCH PROCEEDINGS. IN THE COURSE OF RECORDING OF STATEMENT DURING THE SEARCH PROCEEDINGS, THE ASSESSEE ADMITTED THAT SHE HAD SOLD HER ANCESTRAL PROPERT Y AT DELHI FOR RS.3.40 CRORES, FOR WHICH THE AGREEMENT WAS MADE FOR RS.1.70 CRORES DELHI FOR RS.3.40 CRORES, FOR WHICH THE AGREEMENT WAS MADE FOR RS.1.70 CRORES AND THE BALANCE AMOUNT WAS RECEIVED IN CASH. THE CLAIM OF THE ASSESSEE WAS THAT THOUGH SHE HAD 50% SHARE IN THE IMPUGNED PROPERTY AND THE BALANCE 50% SHARE WAS OWNED BY HER SISTER MRS. TRIPTA KAUR, BUT SHE HAD RECEIVED THE ENTIRE CASH CONSIDERATION AND THE CHEQUE CONSIDERATION WAS DIVIDED 50 : 50. IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT, THE ASSESSEE OFFERED 50% OF THE AGREEMENT VALUE I.E. RS.85 LAKHS AND 100% OF THE CASH ELEMENT I.E. RS.1.70 CRORES IN HER HAND AND COMPUTED THE INCOME FROM CAPITAL GAINS AND DECLARED TOTAL INCOME OF RS.2,04,91,850/ - ON 13.09.2010. AGAINST THE INCOME FROM CAPITAL GAINS COMPUTED AT RS.2,41,17,168/ - , THE ASSESSEE ALSO CLAIMED EXEMPTION UNDER SECTION 54 OF THE ACT AT RS.38,40,098/ - , ON ACCOUNT OF INVESTMENT IN MEGA POLIS PROPERTY. THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT, NOTED THAT THE ASSESSEE HAD NOT DECLARED THE SALE CONSIDERATION OF RS.2.55 CRORES IN THE ORIGINAL RETURN OF INCOME FILED AND SUBSEQUENTLY AFTER THE SEARCH, THE DECLARATION WAS MADE ON ACCOUNT OF TOTAL AMOUNT OF CAPITAL GAINS. THE ASSESSING OFFICER RECORDED SATISFACTION IN THE BODY OF THE ASSESSMENT ORDER TO THE EXTENT THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS OF INCOME AND PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED. BESIDE THE ABOVE SAID, THERE WAS ANOTHER ASPECT OF SALE OF PROPERTY, WHEREIN THE ASSESSEE HAD CLAIMED THAT IT HAD SOLD FITTINGS AND FIXTURES OF THE SAID B UNGALOW FOR RS.10 LAKHS. HOWEVER, IN THE ABSENCE OF LIST OF FURNITURE OR PERSONAL EFFECTS SOLD, THE ASSESSING OFFICER WAS OF THE VIEW THAT THE FITTINGS AND FIXTURES ATTACHED TO THE PROPERTY WERE INEXTRICABLY LINKED TO THE BUILDING AND CONSIDERATION RECEIV ED THEREON, WAS TO BE TREATED AS CAPITAL GAINS. THE ASSESSING OFFICER ALSO INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WITH REGARD TO THE SAID ADDITION. CONSEQUENT THERETO, THE ASSESSING OFFICER REJECTING THE CLAIM OF THE ASSESSEE TH AT IT HAD SUO MOTU OFFERED THE INCOME FROM LONG TERM CAPITAL GAINS, AND NO MALAFIDE INTENTION COULD BE ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 5 ATTRIBUTED TO THE SAID DISCLOSURE, HENCE, THERE WAS NO MERIT IN LEVY OF PENALTY, HELD THE ASSESSEE EXIGIBLE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND LEVIED PENALTY OF RS.47,11,104/ - . THE CIT(A) ELABORATELY CONSIDERED THE ISSUE AND UPHELD THE LEVY OF PENALTY. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A) IN CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 14. TH E FIRST ASPECT OF THE ISSUE RAISED BY THE ASSESSEE BEFORE US IS THAT WHERE NO SATISFACTION HAS BEEN RECORDED BY THE ASSESSING OFFICER, SINCE IN THE HANDS OF ASSESSEE, THERE WAS NO ADDITION WHATSOEVER, AS THE INCOME OFFERED BY THE ASSESSEE WAS ACCEPTED IN T OTO, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT COULD BE LEVIED. FROM THE PERUSAL OF ASSESSMENT ORDER, IT IS CLEAR THAT THE ASSESSING OFFICER AFTER CONSIDERING THE FACTS OF THE CASE AND ALSO THE RETURN OF INCOME FILED BY THE ASSESSEE PURSUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF THE ACT VIDE PARA 3.2 NOTED THAT THE TOTAL SALE CONSIDERATION OF THE ANCESTRAL PROPERTY WAS RS.3.40 CRORES, OUT OF WHICH RS.1.70 CRORES WAS RECEIVED IN CASH AND RS.1.70 CRORES WAS RECEIVED IN CHEQUE. THE CHEQUE AMOUNT WAS S HARED BY THE CO - OWNER. HOWEVER, THE ENTIRE CASH AMOUNT WAS CLAIMED TO BE RECEIVED BY THE ASSESSEE. THE ASSESSING OFFICER FURTHER CONSIDERED THAT THE ASSESSEE HAD OFFERED THE CHEQUE AMOUNT AND CASH AMOUNT AGGREGATING TO RS.2.55 CRORES FOR TAXATION UNDER T HE HEAD LONG TERM CAPITAL GAINS. THE ASSESSING OFFICER FURTHER OBSERVED THAT SINCE THE ASSESSEE HAD NOT DECLARED THIS AMOUNT OF CAPITAL GAINS IN HER ORIGINAL RETURN AND SUBSEQUENTLY, AFTER SEARCH HAS DECLARED THE TOTAL AMOUNT OF CAPITAL GAINS AND THUS, CONCEALED THE PARTICULARS OF INCOME AND CONSEQUENTLY, PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WERE INITIATED SEPARATELY BY THE ASSESSING OFFICER. THE ABOVE SAID FINDING OF THE ASSESSING OFFICER IS THE DEEMED SATISFACTION RECORDED BY THE ASS ESSING OFFICER BEFORE INITIATING PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND IN VIEW THEREOF, WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE IN THIS REGARD. 15. NOW, COMING TO THE ISSUE THAT WHERE THE ASSESSEE HAD OFFERED THE 15. NOW, COMING TO THE ISSUE THAT WHERE THE ASSESSEE HAD OFFERED THE INCOME IN THE RETURN OF INCOME FILED AFTER SURRENDERING THE ADDITIONAL INCOME, CAN THE ASSESSEE BE HELD TO HAVE CONCEALED ITS INCOME VIS - - VIS ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE. SECTION 271(1) OF THE ACT MAKES PROVISION FOR LEVYING PENALTIES ON ASSESSEE I N DIFFERENT EVENTUALITIES, ONE SUCH EVENTUALITY IS FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. ONLY ON FULFILLMENT OF THE CONDITIONS STIPULATED IN SECTION 271(1)(C) OF THE ACT, THERE ARISES A QUESTION OF EXERCISING POWER U NDER THE SAID PROVISION TO IMPOSE PENALTY. THE SAID SECTION LAYS DOWN THAT WHERE THE ASSESSING OFFICER OR THE CIT(A) IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACC URATE PARTICULARS OF SUCH INCOME, THEN HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY STIPULATED IN THE AFORESAID PROVISION. THE EXPLANATION/S UNDER SECTION 271(1)(C) OF THE ACT SET OUT THE CIRCUMSTANCES, WHICH JUSTIFIES THE LEVY OF PENALTY. FOR SEARCHES INITIATED UNDER SECTION 132 OF THE ACT BEFORE FIRST DAY OF JUNE, 2007, EXPLANATION 5 WAS INTRODUCED BY THE FINANCE ACT, 2007 WITH RETROSPECTIVE EFFECT FROM 01.04.2003. UNDER THE SAID SECTION, WHERE THE ASSESSEE WAS FOUND TO BE OWNER OF ANY MO NEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THINGS AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING, WHOLLY OR IN PART HIS INCOME, FOR ANY PREVIOUS YEAR, WHICH HAD ENDED BEFORE THE DATE OF SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAD NOT BEEN FURNISHED BEFORE THE SAID DATE, OR WHERE THE RETURN OF INCOME HAD BEEN FURNISHED BUT SUCH INCOME HAD NOT BEEN DECLARED THEREIN OR FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH, THEN NOTWITHSTANDING T HAT SUCH INCOME WAS DECLARED BY HIM IN THE RETURN OF INCOME, HE WAS DEEMED TO HAVE CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME, UNLESS THE INCOME OR THE TRANSACTIONS WERE ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 6 RECORDED IN THE BOOKS OF ACCOUNT OR THE PERSON IN THE COURSE OF SEARCH MAKES A STATEMENT UNDER SECTION 132(4) OF THE ACT THAT THE SAID MONEY, BULLION, JEWELLERY, VALUABLE ARTICLES OR THINGS, HAS BEEN ACQUIRED BY HIM OUT OF HIS INCOME, WHICH HAS NOT BEEN SO FAR DISCLOSED, BUT SPECIFIES THE MANNER IN WHI CH THE SAID INCOME HAS BEEN DERIVED AND PAYS THE TAXES TOGETHER WITH INTEREST. UNDER EXPLANATION 5, AN EXEMPTION WAS PROVIDED TO THE PERSON WHO WAS SEARCHED AND WAS FOUND IN POSSESSION OF MONEY, BULLION, JEWELLERY, VALUABLE ARTICLES OR THINGS, THEN IN CAS E HE DECLARED THE SAME UNDER THE STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT AND THEREAFTER, PAYS THE TAXES ON THE SAME, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED ON SUCH PERSON. 16. HOWEVER, FOR SEARCHES INITIATED UNDER SECTION 132 OF THE ACT ON OR AFTER FIRST DAY OF JUNE, 2007, ANOTHER EXPLANATION 5A WAS APPLICABLE, WHICH WAS INTRODUCED BY THE FINANCE ACT, 2007 W.E.F. 01.06.2007. THE ORIGINAL EXPLANATION 5A PROVIDED THAT WHERE IN THE COURSE OF SEARCH, THE ASSESSEE WAS FOUND TO BE T HE OWNER OF ANY MONEY, BULLION, JEWELLERY, VALUABLE ARTICLES OR THINGS AND THE ASSESSEE CLAIMS THAT SUCH ASSET HAD BEEN ACQUIRED BY HIM BY UTILIZING WHOLLY OR IN PART HIS INCOME FOR ANY PREVIOUS YEAR OR ANY INCOME IS BASED ON ANY ENTRY IN BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT THE SAME REPRESENTS HIS INCOME FOR ANY PREVIOUS YEAR, THEN WHERE THE PERIOD HAS ENDED BEFORE THE DATE OF SEARCH AND THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH YEAR HAS EXPIRED AND THE ASSESSE E HAS NOT FILED THE RETURN OF INCOME, THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. THE SAID EXPLANATION 5A WAS SUBSTITUTED BY THE FINANCE (NO.2) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 01.06.2007 WITH THE AMENDMENT THAT WHERE THE RETURN OF I NCOME FOR SUCH PREVIOUS YEAR HAD BEEN FURNISHED BEFORE THE DATE OF SEARCH, BUT SUCH INCOME HAD NOT BEEN DECLARED THEREIN OR WHERE THE DUE DATE OF FILING THE RETURN OF INCOME FOR OTHER PREVIOUS YEAR HAS WHERE THE DUE DATE OF FILING THE RETURN OF INCOME FOR OTHER PREVIOUS YEAR HAS EXPIRED, BUT THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME, THEN NOTWITHSTANDING THE FACT THAT THE SAID INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF HIS IN COME. 17. THE DEEMING PROVISIONS OF EXPLANATION 5A UNDER SECTION 271(1)(C) OF THE ACT ARE APPLICABLE TO ALL THE SEARCHES INITIATED UNDER SECTION 132 OF THE ACT ON OR AFTER FIRST DAY OF JUNE, 2007. THE CONDITIONS LAID DOWN IN THE EXPLANATION 5A IS WHERE D URING THE COURSE OF SEARCH, THE ASSESSEE IS FOUND TO BE IN POSSESSION OF ANY MONEY, BULLION, JEWELLERY, VALUABLE ARTICLES OR THINGS AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING WHOLLY OR IN PART HIS INCOME, FOR ANY PREVIO US YEAR ON ANY INCOME BASED ON ANY ENTRIES IN BOOKS OF ACCOUNT, OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRIES IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENT HIS INCOME FOR ANY PREVIOUS YEAR, THEN IN CASES WHERE TH E RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAD BEEN FURNISHED BY THE ASSESSEE PRIOR TO THE DATE OF SEARCH, BUT THE SAID INCOME HAD NOT BEEN DECLARED IN THE SAID RETURN OF INCOME OR THE DUE DATE FOR FILING THE RETURN OF INCOME HAD EXPIRED FOR SUCH PREVIOUS Y EAR AND THE ASSESSEE HAD NOT FILED THE RETURN OF INCOME, IT IS FURTHER LAID DOWN THAT NOTWITHSTANDING THE FACT THAT SUCH INCOME WHICH HAS BEEN DISCOVERED DUE TO THE SEARCH PROCEEDINGS, IS DECLARED BY HIM IN ANY RETURN FURNISHED ON OR AFTER THE DATE OF SEAR CH, BUT IRRESPECTIVE OF THE SAME, HE WOULD BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. READING THE ABOVE SAID PROVISIONS OF THE EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT, IT IS NOTED THAT THE P ERSON IS DEEMED TO HAVE ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 7 CONCEALED PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, WHICH IS EQUIVALENT TO THE VALUE OF MONEY, BULLION, JEWELLERY, VALUABLE ARTICLES OR THINGS FROM THE POSSESSION OF THE ASSESSEE DURING THE COURSE OF SEARCH CONDUCTED ON OR AFTER FIRST DAY OF JUNE, 2007. FURTHER, WHERE ANY INCOME IS BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT ALL THE ABOVE SAID REPRESENTS HIS INCOME FOR ANY PREVIOUS YEAR, THEN TH E EXPLANATION LAYS DOWN TO THAT EXTENT, THE PERSON WOULD BE DEEMED TO HAVE CONCEALED HIS PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 18. NOW, COMING TO THE MAIN PROVISIONS WHICH CONSTITUTE TWO PORTIONS I.E. WHAT IS CONCEALMENT AND QUANTUM OF PENALTY TO BE LEVIED. THE QUESTION IS QUANTUM OF INCOME ON WHICH PENALTY IS TO BE LEVIED. THE SAID ISSUE WAS BEFORE THE PUNE BENCH OF TRIBUNAL IN ACIT VS. MULAY CONSTRUCTION P. LTD. & ORS. IN ITA NOS.116 TO 119/PN/2012 & ORS. AND IT WAS HELD AS UNDER: - 16. THE NEXT LIMB OF ARGUMENT OF THE LD. COUNSEL IS THAT EXPLANATION 5A(II) CONTEMPLATES INCOME AND NOT THE EXPENDITURE. IN THIS CASE, IT IS UNDISPUTED FACT THAT THE ASSESSEE CAME FORWARD AND DECLARED INCOME WHICH WAS PERTAINING TO THE AMOUNT COVERED BY THE UNRECORDED EXPENDITURE BUT THE FACT REMAINS THAT THE ASSESSEE DID NOT DECLARE ANY EXPENDITURE BUT IT IS ONLY THE INCOME. THE LD. COUNSEL REFERRED TO THE DEFINITION OF THE INCOME GIVEN IN SEC. 2(24) OF THE ACT. THE SCOPE OF THE SAID DEFINITION HAS BEEN EXPLAINED BY THE HONBLE SUPREME COURT IN THE CASE OF EMIL WEBBER (SUPRA) WHICH HAS BEEN RELIED UPON BY THE LD. COUNSEL THE RELEVANT PORTION IS IN PARA NO 7 WHICH READS AS UNDER: 7. THE DEFINITION OF 'INCOME' IN CLAUSE (24) OF SEC TION 2 OF THE ACT IS AN INCLUSIVE DEFINITION. IT ADDS SEVERAL ARTIFICIAL CATEGORIES TO THE CONCEPT OF INCOME BUT ON THAT ACCOUNT THE CATEGORIES TO THE CONCEPT OF INCOME BUT ON THAT ACCOUNT THE EXPRESSION 'INCOME' DOES NOT LOSE ITS NATURAL CONNOTATION. INDEED, IT IS REPEATEDLY SAID THAT IT IS DIFFICULT TO DEFINE THE EXPRESSION 'INCOME' IN PRECISE TERMS. ANYTHING WHICH CAN PROPERLY BE DESCRIBED AS INCOME IS TAXABLE UNDER THE ACT UNLESS, OF COURSE, IT IS EXEMPTED UNDER ONE OR THE OTHER PROVISION OF THE ACT. IT IS FROM THE SAID ANGLE THAT WE HAVE TO EXAMINE WHETHER THE AMOUNT PAID BY BALLARPUR BY WAY OF TAX ON THE SALARY AMOUNT RECEIVED BY THE ASSESSEE CAN BE TREATED AS THE INCOME OF THE ASSESSEE. IT CANNOT BE OVERLOOKED THAT THE SAID AMOUNT IS NOTHING BUT A TAX UPON THE SALARY RECEIVED BY THE ASSESSEE. BY VIRTUE OF THE OBLIGATION UNDERTAKEN BY BALLARPUR TO PAY TAX ON THE SALARY RECEIVED BY THE ASSESSEE AMONG OTHERS, IT PAID THE SAID TAX. THE SAID PAYMENT IS, THEREFORE, FOR AND ON BEHALF OF THE ASSESSEE. IT IS NOT A GRATUITOUS PAYMENT. BUT FOR THE SAID AGREEMENT AND BUT F OR THE SAID PAYMENT, THE SAID TAX AMOUNT WOULD HAVE BEEN LIABLE TO BE PAID BY THE ASSESSEE HIMSELF HE COULD NOT HAVE RECEIVED THE SALARY WHICH HE DID BUT FOR THE SAID PAYMENT OF TAX. THE OBLIGATION PLACED UPON BALLARPUR BY VIRTUE OF SECTION 195 OF THE INCO ME TAX ACT CANNOT ALSO BE IGNORED IN THIS CONTEXT. IT WOULD BE UNREALISTIC TO SAY THAT THE SAID PAYMENT HAD NO INTEGRAL CONNECTION WITH THE SALARY RECEIVED BY THE ASSESSEE. WE ARE, THEREFORE, OF THE OPINION THAT THE HIGH COURT AND THE AUTHORITIES UNDER THE ACT WERE RIGHT IN HOLDING THAT THE SAID TAX AMOUNT IS LIABLE TO BE INCLUDED IN THE INCOME OF THE ASSESSEE DURING THE SAID TWO ASSESSMENT YEARS. ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 8 17. AS PER INTERPRETATION MADE BY THE HON'BLE SUPREME COURT OF SEC. 2(24) OF THE ACT, IT IS CLEAR THAT IT IS AN INCLUSIVE DEFINITION AND IT COVERS ALL INCOME COME UNDER CHARGING PROVISIONS OF THE ACT. IF THE ARGUMENT OF THE LEARNED COUNSEL IS TO BE ACCEPTED THEN NO INCOME CAN BE TAXED U/S. 68, 69, 69A, 69B, 69C & 69D. 18. IT IS NECESSARY TO REFER TO EXPLA NATION 5A WHICH READS AS UNDER: EXPLANATION 5A WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR BEFORE THE 1 ST DAY OF JUNE 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ( I ) ANY MONEY, BULLION, JEWELER OR OTHER VALUABLE ARTICLE OR THIN G (HEREINAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; OR ( II ) ANY OTHER INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND ( A ) WHERE THE RETURN O F INCOME FOR SUCH PREVIOUS YEAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN OR ( B ) THE DUE DATE FOR FILING THE RETURN OF INCOME FOR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN THEN, NOTW ITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB - SECTION (1) OF THIS SECTION, HE DEEMED TO HAVE CONCEALED THE PAR TICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 19. SO FAR AS THE PRESENT ASSESSEE IS CONCERNED, CLAUSE (II) TO EXPLANATION 5A IS APPLICABLE. ADMITTEDLY, THE EXPENDITURE WHICH WAS NOT RECORDED HAS BEEN FOUND BY WAY OF ENTRIES IN THE SEIZED DOCUMENTS. WHILE EXPLAINING THE SCOPE OF EXPLANATION 5A IN THE CASE OF CHANDAN K. SHEWANI (SUPRA) THE TRIBUNAL HAS HELD THAT TO PATCH OUT THE LACUNA DUE TO THE JUDICIAL INTERPRETATION OF EXPL. 5 OF SEC. 271(1)(C) WHICH WAS ON THE STATUTE BOO K UPTO 31 - 5 - 2007, EXPLANATION 5A HAS BEEN SUBSTITUTED FOR EXPL. 5 BY THE FINANCE ACT, 2007 W.E.F 1 - 6 - 2007. THE SAID EXPLANATION WAS FURTHER AMENDED BY THE FINANCE(NO.2) ACT, 2009 WITH RETROSPECTIVE EFFECT FROM 01 - 07 - 2007 WHICH IS REPRODUCED HEREINABOVE. T HE LD. COUNSEL HAS RAISED AN IMPORTANT LEGAL QUESTION WHETHER THE INCOME DECLARED BY THE ASSESSEE WHICH IS PERTAINING TO THE UNRECORDED EXPENDITURE CAN SAID TO BE THE INCOME WHICH IS CONTEMPLATED IN EXPLANATION 5A(II)? THE ANSWER TO THIS QUESTION IS IN SE C. 69 - C WHICH READS AS UNDER: - ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 9 WHERE IN ANY FINANCIAL YEAR AN ASSESSEE HAS INCURRED ANY EXPENDITURE AND HE OFFERS NO EXPLANATION ABOUT THE SOURCE OF SUCH EXPENDITURE OR PART THEREOF, OR THE EXPLANATION, IF ANY, OFFERED BY HIM IS NOT, IN THE OPINION OF TH E [ASSESSING] OFFICER, SATISFACTORY, THE AMOUNT COVERED BY SUCH EXPENDITURE OR PART THEREOF, AS THE CASE MAY BE, MAY BE DEEMED TO BE THE INCOME OF THE ASSESSEE FOR SUCH FINANCIAL YEAR; 20. SO FAR AS THE EXPL. - 5 WHICH WAS ON THE STATUTE BOOK, THE COURTS HAVE TAKEN A VIEW THAT IT WAS HAVING A LIMITED APPLICATION ONLY TO THE EXTEND OF THE MONEY, BULLION, JEWELLERY OR ANY VALUABLE ASSETS OR THINGS WHICH WERE FOUND DURING THE COURSE OF SEACH AND SEIZER OPERATION AND OWNED BY THE ASSESSEE. BUT THE OTHER INCOM E WHICH WAS FOUND RECORDED BY ANY ENTRY IN THE DOCUMENT SEIZED OR OTHERWISE WAS NOT COVERED. IT IS PERTINENT TO NOTE THAT SEC. 69C PROVIDES THAT IF ANY UNRECORDED EXPENDITURE IS FOUND AND THE ASSESSEE FAILS TO EXPLAIN THE SOURCE OF THE SAID EXPENDITURE OR EXPLANATION OF THE ASSESSEE IS NOT SATISFACTORY, THEN TO THE EXTENT OF THE AMOUNT COVERED BY SUCH EXPENDITURE IS TREATED AS INCOME. ULTIMATELY WHAT IS TAXED UNDER SEC. 69 C OF THE ACT IS NOT THE EXPENDITURE BUT IT IS BASICALLY THE UNDISCLOSED INCOME WHI CH HAS BEEN APPLIED FOR INCURRING THE UNRECORDED EXPENDITURE. IN OUR VIEW, THERE IS NO MERIT IN THE ARGUMENT OF THE LD. COUNSEL THAT THE ASSESSEE HAS ONLY DECLARED THE AMOUNT EXPENDITURE. WE THEREFORE, HOLD THAT TO THE EXTENT OF THE INCOME OFFERED BY THE ASSESSEE PERTAINING TO THE EXPENDITURE IN THE RETURNS FILED IN RESPONSE TO NOTICE U/S 153A, EXPLANATION - 5A IS APPLICABLE AND AS THERE IS A LEGAL PRESUMPTION AGAINST THE ASSESSEE IN RESPECT OF THE SAID INCOME DETECTED DURING THE COURSE OF SEARCH AND SEIZUR E OPERATION, THE ASSESSEE CASE IS SQUARELY COVERED BY EXPLANATION - 5(II) AS THE ASSESSEE HIMSELF HAS ADMITTED THE SAID UNDISCLOSED INCOME. 19. APPLYING THE SAID PROPOSITION TO THE FACTS OF THE PRESENT CASE, WE HOLD THAT THE INCOME OFFERED BY THE ASSESSE E PERTAINING TO THE CASH SEIZED FROM THE ASSESSEE AND THE DECLARATION OF THE ASSESSEE THAT THE SAID CASH RELATES TO THE UNACCOUNTED CASH RECEIVED VIDE THE SALE TRANSACTION ENTERED INTO BY THE ASSESSEE, WHICH IN TURN, WAS DECLARED BY THE ASSESSEE IN THE RET URN OF INCOME FILED PURSUANT TO ISSUE OF NOTICE UNDER SECTION 153A OF THE ACT, IS THE INCOME DETECTED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE CASE OF THE ASSESSEE IS SQUARELY COVERED BY THE PROVISIONS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT AND THE ASSESSEE IS EXIGIBLE TO LEVY OF PENALTY ON SUCH INCOME WHICH WAS DETECTED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, WHICH IN TURN HAS BEEN OFFERED BY THE ASSESSEE IN RETURN OF INCOME FILED PURSUANT TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE OTHER HAND HAS PLACED RELIANCE ON THE RATIO LAID DOWN IN DCIT VS. PURTI SAKHAR KARKHANA (SUPRA), WHICH IS A DECISION OF NAGPUR BENCH OF TRIBUNAL AND HYDERABAD BENCH OF TRIBUNA L IN SHRI PV RAMANA REDDY VS. ITO (SUPRA). IN VIEW OF BINDING PRECEDENT OF PUNE BENCH ON THE SAID ISSUE, WE FIND NO MERIT IN THE RELIANCES PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON DCIT VS. PURTI SAKHAR KARKHANA (SUPRA) AND SHRI PV RAMANA REDDY VS. ITO (SUPRA). THE OTHER RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE ON THE DECISION OF PUNE BENCH OF TRIBUNAL IN SMT. PRAMILA D. ASHTEKAR VS. ITO (2013) 39 TAXMANN.COM 103 (PUNE TRIB.), IT MAY B E POINTED OUT THAT THE SAID ORDER OF PUNE BENCH OF TRIBUNAL HAS BEEN RECALLED IN MA NO.112/PN/2013, ORDER DATED 21.06.2013 AND HAS NO BINDING EFFECT FOR DECIDING THE PRESENT ISSUE. FURTHER REFERENCE WAS MADE TO THE DECISION OF CIT VS. CONTINENTAL WAREHOUS ING CORPORATION (NHAVA SHEVA) LTD. ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 10 & ANR. (SUPRA), WHERE THE HONBLE BOMBAY HIGH COURT HAS DELIBERATED UPON THE SCOPE OF 153A PROVISIONS AND HAS NO RELEVANCE TO THE ISSUE BEFORE US. 20. ANOTHER ASPECT OF THE ISSUE OF LEVY OF PENALTY US 271(1)(C) OF THE AC T IS 20. ANOTHER ASPECT OF THE ISSUE OF LEVY OF PENALTY US 271(1)(C) OF THE AC T IS THE WRONG CLAIM OF DEDUCTION MADE BY THE ASSESSEE UNDER SECTION 54 AND 54F OF THE ACT. THE CIT(A) VIDE PARA 3.10 TO 3.11 HAS DELIBERATED UPON THE FACTUAL ASPECTS OF THE ISSUE, WHICH ARE BEING REFERRED, BUT NOT BEING REPRODUCED FOR THE SAKE OF BREVITY . 21. THE ASSESSEE HAVING MADE A WRONG CLAIM IN THE RETURN OF INCOME I.E. BY WAY OF CLAIM OF DEDUCTION UNDER SECTION 54 ON ACCOUNT OF INVESTMENT IN TWO PROPERTIES AND IN RESPECT OF CAPITAL GAINS ACCOUNT WITH BANK NOT HAVING BEEN MADE BY THE ASSESSEE, TANT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME AND JUSTIFIABLY, PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE ON SUCH FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN A WRITTEN NO TE HAD FURNISHED THE BREAK - UP OF INCOME ON WHICH PENALTY WAS LEVIED, WHICH IS AS UNDER: - PARTICULARS AMOUNT (RS.) UNACCOUNTED SALE PROCEEDS ON SALE OF PROPERTY 1,70,00,000 WITHDRAWAL OF EXEMPTION CLAIMED U/S.54 OF THE ACT 32,77,070 22. WE UPHOLD THE ORDER OF CIT(A) IN CONFIRMING THE LEVY OF PENALTY ON THE ABOVE SAID TWO ACCOUNTS. DISMISSING THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE, WE UPHOLD THE ORDER OF CIT(A). 9. THE ISSUE ARISING BEFORE US IS IDENTICAL TO THE ISSUE RAISED BEFORE THE TRIBUNAL IN MRS. SARITA KAUR MANJEET SINGH CHOPRA VS. ITO (SUPRA) . IN THE FACTS OF THE PRESENT CASE ALSO, THE ASSESSEE HAD OFFERED ADDITIONAL INCOME AS ITS INCOME WHILE FILING RETURN OF INCOME IN RESPONSE TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT. THE ADDIT IONAL INCOME WORKED OUT IN THE HANDS OF ASSESSEE WAS ON THE BASIS OF SEIZED DOCUMENTS FOUND / IMPOUNDED DURING THE COURSE OF SEARCH AND SEIZURE PROCEEDINGS. EVEN IN THE CASES WHERE THE ASSESSEE HAD DECLARED THE SAID INCOME IN ITS RETURN OF INCOME IN RESPO NSE TO NOTICE ISSUED UNDER SECTION 153A OF THE ACT , IT IS INCOME DETECTED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION. THE CASE OF THE ASSESSEE IS SQUARELY COVERED UNDER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT AND THE ASSESSEE IS LIABLE TO LE VY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE SECOND ADDITION MADE IN THE HANDS OF ASSESSEE IS ON ACCOUNT OF DISCLOSURE NOT MADE BY THE ASSESSEE, BUT ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH. THE ASSESSEE IS ITA NO. 1042 /PN/20 1 2 DR. BABULAL DEVISA AGRAWAL 11 ALSO LIABLE FOR LEV Y OF PENALTY ON SUCH ADDITION IN HIS HANDS. ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) AND CONFIRM THE ORDER OF ASSESSING OFFICER IN LEVYING PENALTY UNDER SECTION 271(1)(C) OF THE ACT AMOUNTING TO RS.14,55,140/ - . 10 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY OF MARCH , 201 6 . SD/ - SD/ - (PRADIP KUMAR KEDIA) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 23 RD MARCH , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CI T (A) - I , NASHIK ; 4. / THE CIT - (CENTRAL) , NA GPUR ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIV ATE SECRETARY , / ITAT, PUNE