Asst.CIT, Circle 1, Nashik V. Vilas Ramchandra Bagad, Nashik

ITA 1388/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1116 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-03-2015
• Assessment Year: misc
• Appeal Filed On: 01-07-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: A K MODI
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Document seized; Corroborative evidences; Documents seized
• Section: 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO. 1388 /PN/20 1 3 BLOCK PERIOD : 1997 - 98 TO 2003 - 04 THE DY . COMMISSIONER OF INCOME TAX, CIRCLE 1, NASHIK . / APPELLANT VS. VILAS RAMCHANDRA BAGAD, PROP. AMRUTA LAND DEVELOPERS, RAMTIRTH PARK, KULKARNI GARDEN, NASHIK 422001 . / RESPONDENT PAN: ABTPB2060R / APPELLANT BY : S/ SHRI A.K. MODI, CIT AND RAJESH DAMOR / DEPARTMENT BY : SHRI NIKHIL PATHAK / DATE OF HEARING : 15.06.2015 / DATE OF PRONOUNCEMENT: 11 .0 9 .2015 / ORDER PER SUSHMA CHOWLA, J M : TH IS APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - I , NASHIK DATED 0 2 . 0 4 .20 1 3 RELATING TO B LOCK P ERIOD 1997 - 98 TO 2003 - 04 AGAINST PENALTY LEVIED UNDER SECTIO N 158BFA(2) OF THE INCOME - TAX ACT , 1961 . 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) - I, NASHIK WAS JUSTIFIED IN DELETING THE PENALTY OF RS. 10,85,180/ - U/S 158BFA( 2) OF THE INCOME TAX ACT, 1961. 2. THE APPELLANT PRAYS THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 3. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE HIS CASE. ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 2 4. THE APPELLANT PRAYS LEAVE TO ADD , ALTER , CLARIFY, AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCASION DEMANDS. 3. THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE DELETION OF PENALTY LEVIED UNDER SECTION 158BFA (2) OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, SEARCH AND SEIZURE OPER ATIONS UNDER SECTION 132 OF THE ACT WERE CARRIED OUT AT THE BUSINESS PREMISES OF M/S R U SHIRAJ BUILDERS AND DEVELOPERS AND ALSO AT THE RESIDENTIAL PREMISES OF SHRI Y.P. TRIVEDI AND SHRI J.M. JHALA , THE PARTNERS OF THE SAID FIRM ON 25.03.2003 . CERTAIN BOOKS OF ACCOUNT AND DOCUMENTS WERE SEIZED FROM THE SAID PREMISES. THE DOCUMENT MARKED A T ANNEXURE A - 2 , SEIZED FROM THE RESIDENCE OF SHRI Y.P. TRIVEDI REFLECTED CERTAIN PAYMENT S IN CASH WERE MADE BY M/S. R U SHIRAJ BUILDERS AND DEVELOPERS ON VARIOUS DATES IN RES PECT OF LANDS / PLOTS PURCHASED FOR DEVELOPMENT BY THEM FROM M/S. AMRUTA LAND DEVELOPERS, PROPRIETOR SHRI VILASH RAMCHANDRA BAGAD I.E. THE ASSESSEE BEFORE US. CERTAIN INFORMATION WAS RECEIVED FROM THE ASSESSING OFFICER, CENTRAL CIRCLE 3, NASHIK V IDE LETTER DATED 22.03.2005 . AS PER THE SAID INFORMATION, THE DEVELOPMENT AGREEMENT DATED 30.06.1997 IN RESPECT OF PLOT NO.2 OF S.R.NO.704/2A/5+6/2 ADMEASURING 775 SQ. MTRS. BETWEEN THE ASSESSEE AND M/S. R U SHIRAJ BUILDERS AND DEVELOPERS WAS FOR CONSIDERAT ION OF RS. 4,96,000/ - WITH RS.84,431/ - AS STAMP AND REGISTRATION CHARGES, TOTALLING RS. 5,80,431/ - . HOWEVER, AS PER SEIZED DOCUMENT I.E. ANNEXURE A - 2, M/S. R U SHIRAJ BUILDERS AND DEVELOPERS HAD FURTHER PAID CASH CONSIDERATION OF RS. 18,22,500/ - IN RESPECT OF THE SAID PLOT NO.2 , A S PER THE DETAILS TABULATED AT PAGE 2 OF THE ASSESSMENT ORDER. SHRI Y.P TRIVEDI AND SHRI J.M. JHALA HAD FILED AN AFFIDAVIT DATED 21.03.2005, IN WHICH THEY HAD DECLARED ON OATH THAT THEY HAD PURCHASED THE AFORESAID PLOT NO.2 FOR THE DE VELOPMENT FROM M/S. AMRUTA LAND DEVELOPERS THROUGH THE ASSESSEE. AFTER DISCUSSIONS AND NEGOTIATIONS, CONSIDERATION WAS FIXED AT RS. 23,18,500/ - , OUT OF WHICH RS. 4,96,000/ - WAS PAID BY CHEQUE AND BALANCE OF RS. 18,22,500/ - WAS PAID FOR PLOT CONSIDERATION DEV ELOPMENT EXPENSES TO THE ASSESSEE. ON THE ABOVE SAID BASIS, NOTICE ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 3 UNDER SECTION 158BD OF THE ACT WAS ISSUED TO THE ASSESSEE. THE ASSESSEE IN TURN, FILED THE BLOCK RETURN ON 30.05.2005 DECLARING TOTAL UNDISCLOSED INCOME OF RS.1 LAKH. THE ASSESS MENT WAS ORIGINALLY COMPLETED UNDER SECTION 158BD R.W.S. 158BC OF THE ACT ON 27.04.2007 ON ASSESSED TOTAL UNDISCLOSED INCOME OF RS. 18,22,500/ - . THE CIT(A) DELETED THE SAID ADDITION AND THE REVENUE FILE D AN APPEAL BEFORE THE TRIBUNAL, WHICH VIDE ITS ORDER DATED 25. 02.2011 SET - ASIDE THE MATTER BACK TO THE FILE OF ASSESSING OFFICER , WITH DIRECTION TO CARRY OUT THE APPROPRIATE EXERCISE IN ACCORDANCE WITH LAW AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE. 5. IN THE SECOND ROUND OF PROCEEDINGS, NOTICE WAS ISSUED T O THE ASSESSEE AND THE ASSESSEE WAS ASKED TO EXPLAIN WHY ON THE BASIS OF THE MATERIAL AND THE AFFIDAVIT OF SHRI Y.P. TRIVEDI AND SHRI J.M.JHALA, SUM OF RS. 18,22,500/ - SHOULD NOT BE TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. THE WR ITTEN SUBMISSIONS FILED BY THE ASSESSEE IN THIS REGARD ARE INCORPORATED AS PART OF THE ASSESSMENT ORDER. THE FIRST CONTENTION OF THE INCORPORATED AS PART OF THE ASSESSMENT ORDER. THE FIRST CONTENTION OF THE ASSESSEE THAT REASONS FOR INVOKING THE PROVISIONS OF SECTION 158BD OF THE ACT WERE NOT BASED ON SUPPORTING EVIDENCE, WAS F OUND BY THE ASSESSING OFFICER NOT CORRECT AS THE SEIZED PAPERS WERE SUFFICIENT EVIDENCE TO INITIATE THE PROCEEDINGS UNDER SECTION 158BD OF THE ACT. THE SECOND CONTENTION OF THE ASSESSEE AS TO WHETHER THE PRESUMPTION UNDER SECTION 132 (4A) (III) OF THE ACT T HAT THE CONTENTS OF SUCH BOOKS OR ACCOUNTS AND OTHER DOCUMENTS ARE TRUE, CAN BE DRAWN ONLY AGAINST THE PERSON FROM WHOM THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS WERE SEIZED AND NOT AGAINST ANY OTHER THIRD PERSON . T HE ASSESSING OFFICER REJECTED THE CONTENT ION S OF THE ASSESSEE AND HELD THAT IN THE PARTICULAR CASE WHEREIN ON THE SEIZED DOCUMENTS IT WAS CATEGORICALLY WRITTEN PLOT PAYMENT BA G A D , THERE WAS NO REASON AS TO WHY THE CONTENTS OF THOSE PAPERS SHOULD NOT BE PRESUMED TO BE TRUE AGAINST THE ASSESSEE. FURTHER, ENQUIRIES WERE MADE BY THE ASSESSING OFFICER IN THIS REGARD. DURING THE SECOND ROUND OF PROCEEDINGS, SUMMONS UNDER SECTION 131 OF THE ACT ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 4 WERE ISSUED TO SHRI YOGENDRA P TRIVEDI, PARTNER OF M/S. RUSHIRAJ BUILDERS & DEVELOPERS AND HIS STATEMENT WA S RECORDED ON 14.12.2011 . IN REPLY TO QUESTION NO.2 , SHRI Y.P. TRIVEDI STATED THAT HE HAS PAID SUM OF RS. 18,22,500/ - TO SHRI VILAS BAGAD I.E. THE ASSESSEE BEFORE US IN CASH AND RS. 4,96,000/ - BY CHEQUE FOR THE PURPOSE OF PLOT NO.2. HE HAS FURTHER CONFIRME D THAT THEY HAVE FURNISHED AN AFFIDAVIT DATED 21.03.2005 IN RESPECT OF THE ABOVE TRANSACTION. THE ASSESSEE HAS ALSO FURNISHED AN AFFIDAVIT ON 12.03.2007 DENYING THE RECEIPT OF RS.18,22,500/ - IN CASH FROM M/S. RUSHIRAJ BUILDERS & DEVELOPERS AGAINST PURCHAS E OF PLOT NO.2. THEREFORE, SUMMONS WERE ALSO SERVED UPON THE ASSESSEE DURING THE COURSE OF STATEMENT RECORDED ON OATH OF SHRI Y.P. TRIVEDI AND OPPORTUNITY OF CROSS - EXAMINATION WAS GIVEN TO THE ASSESSEE AND IN THE CROSS - EXAMINATION, SHRI Y.P. TRIVEDI STATE D THAT THEY HAVE PAID CASH OF RS. 18,22,500/ - FOR THE PURCHASE OF THE PLOT, WHEREAS THE ASSESSEE DENIED THE RECEIPT OF CASH OF RS. 18,22,500/ - . TH E ASSESSEE THUS, WAS REQUISITIONED TO PROVE CLAIM OF NON - RECEIPT OF CASH OF RS. 18,22,500/ - . IN REPLY, VIDE LET TER DATED 16.12.2011 , THE ASSESSEE OFFERED THE SAID SUM TO TAX AND STATED THAT WE ARE READY TO OFFER INCOME OF RS. 17,22,500/ - , AS RS.1 LAKH WAS ALREADY OFFERED, FOR THE ABOVE SAID BLOCK PERIOD, TO BUY PEACE OF MIND AND ALSO TO COOPERATE WITH THE DEPARTMENT TO AVOID LITIGATION, SUBJECT TO THE CONDITION THAT NO PENALTY UNDER SECTION 158BFA(2) OF THE ACT WOULD BE LEVIED. 6 . ON THE SAID BASIS, THE ASSESSING OFFICER COMPUTED SUM OF RS. 18,22,500/ - AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD. HO WEVER, SINCE THE ASSESSEE HAD DISCLOSED RS.1 LAKH, THE BALANCE SUM OF RS. 17,22,500/ - WAS ADDED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD AND PENALTY PROCEEDINGS UNDER SECTION 158 BFA(2) OF THE ACT WERE SEPARATELY INITIATED AGAINST THE SAID ASSESSMENT OF UNDISCLOSED INCOME IN THE HANDS OF THE ASSE SSEE . N OTICE FOR LEVY OF PENALTY UNDER SECTION 158BFA(2) OF THE ACT WAS ISSUED TO THE ASSESSEE . ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 5 7. IN THE PENALTY PROCEEDINGS, THE CLAIM OF THE ASSE SSEE WAS THAT THE PRESUMPTION UNDER SECTION 132( 4) OF THE ACT, THE PRESUMPTION THAT THE NOTINGS ARE TO BE RECORDED AS TRUE, IS APPLICABLE ONLY TO THE PERSON, FROM WHOM THE SAID NOTING S WERE FOUND IN SEARCH ACTION AND IT WAS NOT APPLICABLE TO THE THIRD PARTY. ANOTHER POINT RAISED BY THE ASSESSEE WAS THA T SINCE 15 YEARS HAD PASSED, IT WAS DIFFICULT TO COLLECT THE INFORMATION AND RECORD ABOUT THE SAID TRANSACTION AND CONSEQUENTLY, IN ORDER TO BUY PEACE, THE ASSESSEE HAD OFFERED THE SAID SUM OF RS. 18,22,500/ - AS ADDITIONAL INCOME. ANOTHER POINT RAISED BY T HE ASSESSEE WAS THAT THE ORIGINAL ADDITION MADE BY THE ASSESSING OFFICER WAS DELETED BY THE CIT(A) AND THE TRIBUNAL HAD SET - ASIDE THE MATTER AND HENCE THE ISSUE WAS DEBATABLE AND THERE WAS NO MERIT IN THE LEVY OF PENALTY UNDER SECTION 158BFA (2) OF THE ACT. THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD NOT VOLUNTARILY ADMITTED THE INCOME AND IT WAS ONLY AFTER ROUND OF PROCEEDINGS, WHEN THE MATTER WAS SET - ASIDE TO THE FILE OF ASSESSING OFFICER BY THE TRIBUNAL, THE ASSESSEE OFFERED THE SAID ADDITIONAL INC OME. THE UNDISCLOSED INCOME OF RS. 17,22,500/ - WAS ASSESSED IN THE HANDS OF ASSESSEE ON ACCOUNT OF CASH RECEIPT RECEIVED FROM M/S. RUSHIRAJ BUILDERS & DEVELOPERS, EVIDENCE OF WHICH WAS FOUND DURING THE SEARCH CONDUCTED ON M/S. RUSHIRAJ BUILDERS & DEVELOPER S. THE CONTENTION OF THE ASSESSEE VIS - A - VIS PRESUMPTION UNDER SECTION 132(4) OF THE ACT WAS ALSO NOT ACCEPTED BY THE ASSESSING OFFICER. CONSEQUENTLY, PENALTY UNDER SECTION 158BFA(2) OF THE ACT WAS LEVIED AT RS. 10,85,180/ - . 8 . THE CIT(A) DELETED THE SAID PENALTY ACCEPTING THE CLAIM OF THE ASSE SSEE THAT WHERE THE ADDITION ITSELF WAS DEBATABLE, NO PENALTY UNDER SECTION 158BFA OF THE ACT WAS LEVIABLE. THE CIT(A) HELD THAT WHERE THE ADDITION WAS NOT PROVED TO THE HILT, NO PENALTY UNDER SECTION 158BFA (2) OF T HE ACT WAS LEVIABLE. 9 . THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A) . ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 6 10 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE POINTED OUT THAT DURING THE COURSE OF SEARCH ON THE PREMISES OF M/S.RUSHIRAJ BUILDERS & DEVELOPERS ON 25.03.2003, DOCUMENTS WERE FOUND IN WHICH THERE WAS NOTING THAT THE ASSESSEE HAD RECEIVED ON - MONEY OF RS.18,22,500/ - . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE FURTHER POINTED OUT THAT THE ASSESSEE HIMSELF HAD DECLARED SUM OF RS.1 LAKH IN THE RETURN OF INCOME FILED PURSUANT TO NOTICE UNDER SECTION 158BD OF THE ACT AND THE ASSESSMENT WAS COMPLETED AFTER MAKING AN ADDITION OF RS. 17,22,500/ - . FURTHER, IT WAS POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT THE ASSESSING OFFICER R ELIED ON THE AFFIDAVIT OF DIRECTOR OF M/S. RUSHIRAJ BUILDERS & DEVELOPERS THAT ON - MONEY WAS PAID AND DOCUMENTS IN RELATION THERETO WERE SEIZED. THOUGH THE ASSESSEE BY WAY OF AFFIDAVIT DENIED THE RECEIPT OF ON - MONEY , BUT ON A LATER DATE I.E. IN THE SECOND ROUND OF PROCEEDINGS, WHEN SHRI Y.P. TRIVEDI, PARTNER OF M/S. RUSHIRAJ BUILDERS & DEVELOPERS CONFIRMED THE PAYMENT OF ON - MONEY AND EVEN IN CROSS - EXAMINATION BY THE ASSESSEE, THERE WAS CONFIRMATION OF PAYMENT OF ON - MONEY OF RS. 1 8 , 22,500/ - , THE ASSESSEE ON 1 6.12.2011 ACCEPTED THE SAID ADDITIONAL INCOME TO BUY PEACE AND AVOID LITIGATION. HOWEVER, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 158BFA(2) OF THE ACT AND CIT(A) DELETED THE SAME BEING A DEBATABLE ISSUE. OUR ATTENTION WAS DRAWN TO THE PROVISIO NS OF SECTION 158BFA(2) OF THE ACT AND THE PROVIS O THEREUNDER AND ALSO REFERENCE WAS MADE TO THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN MAK DATA (P.) LTD. V. CIT REPORTED IN 31 TAXMAN 35 (SC). 1 1 . THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASS ESSEE IN REPLY, REFERRED TO THE SEIZED DOCUMENTS PLACED AT PAGES 49 AND 57 OF PAPER BOOK AND ALSO POINTED OUT THAT IN THE AFFIDAVIT FILED BY SHRI Y.P. TRIVEDI , WHICH IS PLACED AT PAGES 36 AND 37 OF PAPER BOOK, IT WAS CONFIRMED THAT CASH CONSIDERATION WAS P AID FOR DEVELOPMENT EXPENSES. THE SALE DEED WAS EXECUTED ON 30.06.1997 . IT WAS FURTHER POINTED OUT BY THE LEARNED AUTHORIZED ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 7 REPRESENTATIVE FOR THE ASSESSEE THAT SUM OF RS.1 LAKH WAS OFFERED IN THE RETURN OF INCOME ON ADHOC BASIS. OUR ATTENTION W AS DRAW N TO THE ORDER OF TRIBUNAL, WHICH IS PLACED AT PAGE S 19 ONWARDS OF PAPER BOOK , UNDER WHICH THE MATTER WAS SET - ASIDE TO THE FILE OF ASSESSING OFFICER, WHO IN TURN, RECORDED THE STATEMENT OF SHRI Y.P. TRIVEDI AND THE ASSESSEE WAS GIVEN THE OPPORTUNITY TO CRO SS - EXAMINE THE SAME AND COPIES OF BOTH STATEMENTS ARE PLACED AT PAGES 64 AND 65 OF THE PAPER BOOK. IT WAS FURTHER POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT LEVY OF PENALTY WAS NOT AUTOMATIC AND FACT S OF THE CASE HAVE TO BE SEEN, WHERE THE PAPERS WERE FOUND THAT M/S. RUSHIRAJ BUILDERS & DEVELOPERS AND WHERE THERE IS CONTRADICTION IN THE AFFIDAVIT OF M/S. RUSHIRAJ BUILDER S & DEVELOPERS, MERELY ON THE BASIS OF NOTINGS IN THE DIARY WHETHER ANY ADDITION COULD BE MADE IN THE HAND S OF THE ASSESSEE. IT WAS FURTHER POINTED OUT BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE THAT NOTINGS IN THE SAME DIARY WERE B ASIS FOR MAKING ADDITION IN ACIT VS. M/S. MANOJ MARKETING PVT. LTD. IN ITA NO. 965/PN/2008 AND CO NO. 28/PN/2009 , RE LATING TO BLOCK PERIOD 1997 - 98 TO 2003 - 04 AND THE TRIBUNAL VIDE ORDER DATED 30.01.2015 , DELETED THE ADDITION IN THE HANDS OF THE SAID ASSESSEE. ANOTHER ISSUE RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT WHERE THE ISSUE WAS DEB ATABLE, NO PENALTY UNDER SECTION 158BFA COULD BE LEVIED. FURTHER, WHERE THE PROVISIONS OF SECTION 132(4A) OF THE ACT COULD NOT BE APPLIED, O NUS WAS UPON THE DEPARTMENT TO PROVE THAT THE ASSESSEE HAD RECEIVED ON - MONEY. FURTHER, RELIANCE WAS PLACED UPON TH E DECISIONS OF PUNE BENCH OF TRIBUNAL IN ACIT VS. SHRI CHAND RAKANT KASHINATH KELE IN ITA NO.804/PN/ 2013, RELATING TO BLOCK PERIOD 1990 - 91 TO 2000 - 01, ORDER DATED 13.03.2015 AND IN DCIT VS. SHRI SANDEEP MANIKRAO JAGDHANE IN ITA NO S .363/ PN/2013 AND 2212/PN/2 013 , RELATING TO ASSESSMENT YEAR S 2008 - 09 AND 2009 - 10 RESPECTIVELY, ORDER DATED 27. 05.2015 . ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 8 1 2 . THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE IN REJOINDER STATED THAT WHERE THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN SECTION 158 BFA (2) OF THE ACT, LEVY OF PENALTY IS THUS, COMPULSORY. IT WAS FURTHER POINTED OUT BY THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE THAT IN THE FACTS OF THE CASE BEFORE THE HONBLE SUPREME COURT IN MAK DATA (P.) LTD. V. CIT (SUPRA) , THERE WAS NO SURRENDER, WHEREAS IN THE CASE OF THE ASSESSEE, THERE WAS SURRENDER OF INCOME IN THE SECOND ROUND OF PROCEEDINGS AND ADDITION WAS MADE AFTER CROSS - EXAMINATION S OF WITNESS . RELIANCE IN THIS REGARD WAS PLACED UPON THE RATIO LAID DOWN BY THE HONBLE GUJARAT HIGH COURT IN KANDOI BHOGILAL MULCHAND VS. DCIT (2012) 21 TAXMANN.COM 153 (GUJARAT) . 1 3 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE PENALTY LEVIED UNDER SECTION 158BFA(2) OF THE ACT. UNDER THE PROVISIONS OF SECTION 158BFA(2) OF THE ACT, BOTH THE ASSESSING OFFICER OR CIT(A) MAY DIRECT THAT A PERSON SHALL THE ACT, BOTH THE ASSESSING OFFICER OR CIT(A) MAY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALTY, A SUM WHICH SHALL NOT BE LESS THAN THE AMOUNT OF TAX LEVIABLE, BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE , IN RESPECT OF UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER UNDER SECTION 158BC(C) OF THE ACT. AS PER THE PROVISO UNDER THE SAID SECTION, NO ORDER IMPOSING PENALTY SHALL BE MADE IN RESPECT OF A PERSON IF (I) SUCH P ERSON HAS FURNISHED A RETURN UNDER CLAUSE (A) OF SECTION 158BC; (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HAS BEEN PAID OR, IF THE ASSETS SEIZED CONSIST OF MONEY, THE ASSESSEE OFFERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; (III) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RETURN; AND (IV) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN. IT IS FURTHER PROVIDED THAT THE PROVISIONS OF PROVISO WOULD NOT APPLY WHERE THE UNDISCLOSE D INCOME DETERMINED BY THE ASSESSING OFFICER WAS IN EXCESS OF INCOME SHOWN IN THE RETURN AND IN SUCH CASES, THE PENALTY SHALL BE IMPOSED ON SUCH PORTION OF UNDISCLOSED INCOME DETERMINED, ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 9 WHICH IS IN EXCESS OF UNDISCLOSED INCOME DECLARED IN THE RETURN OF IN COME. UNDER CLAUSE (3), IT IS PROVIDED THAT NO ORDER IMPOSING PENALTY UNDER SECTION 158BFA(2) OF THE ACT SHALL BE MADE UNLESS THE ASSESSEE HAD BEEN GIVEN A REASONABLE OPPORTUNITY OF HEARING AND SUCH OTHER CONDITIONS WHICH ARE NOT RELEVANT FOR DECIDING THE PRESENT ISSUE ARISING BEFORE US. 14. UNDER SECTION 132(4) OF THE ACT, IT IS PROVIDED THAT THE AUTHORIZED OFFICER IN - CHARGE OF THE SEARCH AND SEIZURE OPERATIONS, MAY EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OF OR IN CONTROL OF ANY BOOKS OF ACCOUNT, DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENT MADE BY SUCH PERSON DURING THE EXAMINATION, MAY BE USED IN EVIDENCE IN ANY PROCEEDINGS UNDER THE INCOME - TAX ACT. UNDER SUB - SECTION (4)(A) TO SECTION 132 OF THE ACT, WHERE ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING S ARE FOUND IN THE POSSESSION OR IN CONTROL OF ANY PERSON, DURING THE COURSE OF SEARCH, THE PRESUMPTION IS THAT SUCH BOOKS OF ACCOUNT, DOC UMENTS, MONEY, SEARCH, THE PRESUMPTION IS THAT SUCH BOOKS OF ACCOUNT, DOC UMENTS, MONEY, BULLION, JEWELLERY, ETC. BELONG OR BELONGS TO SUCH PERSON AND THAT THE CONTENTS OF SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS ARE TRUE AND ALSO WHERE THE DOCUMENTS OR BOOKS OF ACCOUNT ARE SIGNED OR ARE IN WRITING OF PARTICULAR PERSON, IT WOUL D BE ASSUMED THAT THE SAME WOULD BE IN HIS HAND - WRITING. 15. IN THE FACTS OF THE PRESENT CASE BEFORE US, SEARCH AND SEIZURE OPERATIONS WERE CARRIED OUT ON THE PREMISES OF M/S. RUSHIRAJ BUILDERS AND DEVELOPERS . DURING THE COURSE OF SEARCH AT THE BUSINESS PREMISES OF THE SAID CONCERN AND THE RESIDENTIAL PREMISES OF ITS PARTNERS ON 25.03.2003 , CERTAIN BOOKS OF ACCOUNT AND DOCUMENTS WERE FOUND AND SEIZED. THE SEIZED DOCUMENTS MARKED AS ANNEXURE A - 2 REFLECTED CERTAIN PAYMENTS IN CASH MADE BY M/S. RUSHIRAJ BUI LDERS AND DEVELOPERS ON VARIOUS DATES IN RESPECT OF LANDS / PLOTS PURCHASED FROM M/S. AMRUTA LAND DEVELOPERS I.E. THE PROPRIETARY CONCERN OF THE ASSESSEE BEFORE US. THE ASSESSING OFFICER IN - CHARGE OF THE SEARCHED PERSON FORWARDED THE INFORMATION TO THE AS SESSING ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 10 OFFICER IN - CHARGE OF THE ASSESSEE ALONG WITH RELEVANT DOCUMENTS. ADMITTEDLY, THE ASSESSEE HAD ENTERED INTO A DEVELOPMENT AGREEMENT DATED 30.06.1 997 IN RESPECT OF PLOT NO.2 FOR CONSIDERATION OF RS.4,96,000/ - ALONG WITH STAMP CHARGES OF RS.84,431/ - AND REGISTRATION CHARGES, TOTALLING RS.5,80,431/ - . THE SEIZED DOCUMENTS REFLECTED CASH PAYMENT OF RS.18,22, 5 00/ - IN RESPECT OF THE SAID PLOT NO.2, AS PER THE DETAILS WHICH ARE TABULATED AT PAGE 2 OF THE ASSESSMENT ORDER. IN RESPECT OF THE SAID CASH PAYME NTS, SHRI Y.P. TRIVEDI AND SHRI J.M. JHALA , PARTNERS OF M/S. RUSHIRAJ BUILDERS AND DEVELOPERS DECLARED ON OATH THAT THEY HAD PURCHASED PLOT NO.2 FROM THE ASSESSEE AND THE CONSIDERATION WAS FIXED AT RS.23,18,500/ - , OUT OF WHICH RS.4,96,000/ - WAS MADE IN CHE QUE AND THE BALANCE OF RS. 18,22,500/ - WAS MADE IN CASH. IN VIEW OF THE ABOVE SAID INFORMATION, THE ASSESSING OFFICER IN - CHARGE OF THE ASSESSEE ISSUED NOTICE UNDER SECTION 158BD OF THE ACT TO THE ASSESSEE. IN RESPONSE, RETURN OF INCOME DECLARING ADDITIONA L INCOME OF RS.1,00,000/ - WAS FILED BY THE ASSESSEE. HOWEVER, THE ASSESSING OFFICER MADE AN ADDITION OF TOTAL UNDISCLOSED INCOME AT RS. 18,22,500/ - IN THE HANDS OF THE ASSESSEE. THE CIT(A) DELETED THE SAME AND THE TRIBUNAL VIDE ORDER DATED 25.02.2011 SET - ASIDE THE ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH DIRECTION TO CARRY OUT APPROPRIATE EXERCISE IN THE MATTER. IN THE SECOND ROUND OF PROCEEDINGS, THE ASSESSEE WAS AGAIN CONFRONTED WITH THE INFORMATION AVAILABLE WITH THE REVENUE AUTHORITIES. THE C ASE OF THE ASSESSEE IN THE SECOND ROUND OF PROCEEDINGS WAS THAT THE PRESUMPTION UNDER SECTION 132(4)(A)(III) OF THE ACT COULD ONLY BE DRAWN IN RESPECT OF SEARCHED PERSONS AND COULD NOT BE DRAWN AGAINST THE ASSESSEE, WHO WAS NOT SEARCHED. ANOTHER CONTENTIO N RAISED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS WAS THAT IT HAD NOT RECEIVED THE SAID CASH PAYMENT OF RS. 18,22,500/ - FROM M/S. RUSHIRAJ BUILDERS AND DEVELOPERS. CROSS - EXAMINATION OF SHRI Y.P. TRIVEDI WAS D EMANDED BY THE ASSESSEE AND THE ASSESSING OFFICER SUMMONED THE SAID PERSON FOR CROSS - EXAMINATION, IN WHICH HE FURTHER ADMITTED THAT HE IS PARTNER OF M/S. RUSHIRAJ BUILDERS AND ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 11 DEVELOPERS AND PAID CASH CONSIDERATION OF RS.18,22,500/ - TO THE ASSESSEE . T HE A SSESSEE HOWEVER, DENIED TO HAVE RECEIVED ANY CASH CONSIDERATION OF RS.18,22,500/ - . HOWEVER, WHEN THE ASSESSEE WAS ASKED TO PROVE ITS CLAIM OF NON - RECEIPT OF CASH OF RS.18,22,500/ - , VIDE REPLY DATED 16.12.2011, THE ASSESSEE OFFERED THE ADDITIONAL INCOME OF RS.18,22,500/ - . THE CASE OF THE ASSESSEE BEFORE THE ASSESSING OFFICER WAS THAT THE SAID ADMISSION WAS MADE TO BUY PEACE OF MIND AND ALSO TO COOPERATE WITH THE DEPARTMENT TO AVOID LITIGATIONS. HOWEVER, THE SAME WAS SUBJECT TO THE CONDITION THAT NO PENALT Y UNDER SECTION 271(1)(C) OF THE ACT W OULD BE LEVIED. THE ASSESSING OFFICER IN THE SET - ASIDE PROCEEDINGS INCLUDED THE SAID INCOME IN THE HANDS OF THE ASSESSEE AND THEREAFTER, HELD THE ASSESSEE LIABLE FOR LEVY OF PENALTY UNDER SECTION 158BFA(2) OF THE ACT AT RS.10,85,180/ - . 16. THE ISSUE ARISING BEFORE US IS WHETHER WHERE THE DOCUMENTS WERE FOUND FROM THE POSSESSION OF SEARCHED PERSON AND THE ASSESSEE BEING NOT THE SEARCHED PERSON, EVEN IF THE SAID DOCUMENTS RELATE TO THE ASSESSEE, THE SEARCHED PERSON, EVEN IF THE SAID DOCUMENTS RELATE TO THE ASSESSEE, WHETHER ANY PENALTY CO ULD BE LEVIED UNDER SECTION 158BFA(2) OF THE ACT. ANOTHER CONTENTION RAISED BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE WAS THAT THE SAID INFORMATION IN THE DOCUMENTS WAS FOUND FROM THE POSSESSION OF THE SEARCHED PERSON AND IN THE ABSENCE OF ANY SEARCH UPON THE ASSESSEE, NO COGNIZANCE COULD BE TAKEN OF THE SAID DOCUMENTS AND NO PRESUMPTION COULD BE DRAWN AGAINST THE ASSESSEE UNDER THE PROVISIONS OF SECTION 132(4 A ) OF THE ACT. THE NEXT PLEA RAISED BY T HE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE IN THIS REGARD WAS THAT THE ADDITION WAS MADE IN THE HANDS OF THE ASSESSEE ON AN OFFER MADE BY IT, WHICH WAS SUBJECT TO THE CONDITION THAT NO PENALTY UNDER SECTION 158BFA(2) OF THE ACT WOULD BE LEVIED. THE ASSESSEE ALSO CLAIMS THAT THE ISSUE BEING DEBATABLE AND IN THE ABSENCE OF CLEAR - CUT FINDING ON THE ISSUE, NO PENALTY UNDER SECTION 158BFA(2) OF THE ACT COULD BE LEVIED AGAINST THE ASSESSEE. ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 12 17. WE HAVE ALREADY REFERRED TO THE PROVISIONS OF SECTION 158BFA(2) OF THE ACT IN THE PRECEDING PARAG RAPHS, WHEREIN IT HAS BEEN LAID DOWN THAT IN CASES OF SEARCH AND SEIZURE PROCEEDINGS, WHETHER THOSE CASES ARE COVERED UNDER SECTION 158BC OR 158BD OF THE ACT. WHERE IN THE FACTS OF THE PRESENT CASE UNDISCLOSED INCOME HAS BEEN DETERMINED BY THE ASSESSING O FFICER UNDER SECTION 158BC(C) OF THE ACT, THEN BOTH THE ASSESSING OFFICER OR THE CIT(A) IS EMPOWERED TO LEVY PENALTY UNDER SECTION 158BFA(2) OF THE ACT ON SUCH PERSON EQUAL TO THE SUM WHICH WAS NOT LESS THAN THE AMOUNT OF TAX LEVIABLE. THE CONDITIONS PROV IDED IN THE PROVISO UNDER SECTION 158BFA(2) OF THE ACT ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AS THE ASSESSEE HAS THOUGH FURNISHED HIS RETURN OF INCOME UNDER SECTION 158BD OF THE ACT, BUT HAD NOT INCLUDED THE ADDITIONAL INCOME DETERMINED ON TH E BASIS OF SEIZED DOCUMENTS, IN ITS HANDS. THE QUESTION ARISING BEFORE US IS THAT IN SUCH CIRCUMSTANCES, WHERE THE ASSESSEE HAS FAILED TO DECLARE ADDITIONAL INCOME IN ITS RETURN OF INCOME, WHERE SUCH ADDITIONAL INCOME WAS DETERMINED ON THE BASIS OF DOCUME NTS FOUND DURING THE COURSE OF SEARCH ON ANOTHER PERSON, CAN THE ASSESSEE BE HELD TO BE LIABLE FOR LEVY OF PENALTY UNDER SECTION 158BFA(2) OF THE ACT. ADMITTEDLY, THE ASSESSEE DECLARED ADDITIONAL INCOME OF RS.1,00,000/ - IN THE RETURN OF INCOME FILED PURSU ANT TO NOTICE ISSUED UNDER SECTION 158BD OF THE ACT. THE ASSESSEE HAS NOT FURNISHED ANY DETAILS AS TO THE NATURE OF THE SAID UNDISCLOSED INCOME OF RS.1,00,000/ - EXCEPT TO ITS CLAIM THAT WHILE TREATING THE UNDISCLOSED INCOME OF RS.18,22,500/ - , THE CREDIT F OR THE SUM OF RS.1,00,000/ - DECLARED, SHOULD BE ALLOWED TO IT, WHILE COMPUTING PENALTY UNDER SECTION 158BFA(2) OF THE ACT. 18. IN THE ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE HAD ENTERED INTO A TRANSACTION WITH M/S. RUSHIRAJ BUILDERS AND D EVELOPERS FOR THE SALE OF PLOT OF LAND OWNED BY IT AND INCRIMINATING DOCUMENTS IN CONNECTION WITH SUCH TRANSACTION WERE FOUND FROM THE PREMISES OF M/S. RUSHIRAJ BUILDERS AND DEVELOPERS, WHICH ESTABLISHED CASH PAYMENTS OVER AND ABOVE THE ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 13 AMOUNT DECLARED IN THE DEVELOPMENT AGREEMENT, WHICH HAS BEEN ADMITTED BY THE SEARCHED PERSON TO HAVE BEEN PAID TO THE ASSESSEE. EVEN DURING THE CROSS - EXAMINATION OF THE SAID PERSON, THE ASSESSEE HAS NOT BEEN ABLE TO BUILD ITS CASE OF NON - RECEIPT OF CASH CONSIDERATION, WE FI ND NO MERIT IN THE PLEA OF THE ASSESSEE. FURTHER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, THE ASSESSEE HAD DECLARED THE SAID ADDITIONAL INCOME AS UNDISCLOSED INCOME TO BE ASSESSED IN ITS HANDS CONSEQUENT TO WHICH, THE ASSESSMENT WAS COMPLETED AFTER MAKING ADDITION TO THAT EXTENT. IN VIEW THEREOF, IT CANNOT BE SAID THAT NO PENALTY UNDER SECTION 158BFA(2) OF THE ACT IS NOT LEVIABLE SINCE THE ISSUE IS DEBATABLE. WE REVERSE THE FINDINGS OF CIT(A) IN THIS REGARD. IN VIEW THEREOF, WHERE INCRIMINAT ING DOCUMENTS WERE FOUND FROM THE POSSESSION OF SEARCHED PERSON, WHICH ARE RELATABLE TO THE ASSESSEE AND PURSUANT TO THE PROCEEDINGS INITIATED UNDER SECTION 158BD OF THE ACT, THE ASSESSMENT IN THE CASE HAVING BEEN COMPLETED UNDER SECTION 158BC OF THE ACT, WHERE THE ASSESSED INCOME WAS HIGHER THAN THE RETURNED INCOME, THE ASSESSEE IS LIABLE FOR LEVY OF PENALTY UNDER SECTION 158BFA(2) OF THE ACT. ACCORDINGLY, WE REVERSE THE ORDER OF CIT(A) AND UPHOLD THE ORDER OF ASSESSING OFFICER IN LEVYING PENALTY UNDER SE CTION 158BFA(2) OF THE ACT AT RS.10,85,180/ - . 19. IN THIS REGARD, WE FIND SUPPORT FROM THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF GUJARAT IN KANDOI BHOGILAL MULCHAND VS. DCIT (2012) 21 TAXMANN.COM 153 (GUJARAT) , WHEREIN IT HAS BEEN HELD THAT THE P ENALTY UNDER SECTION 158BFA(2) OF THE ACT IS ATTRACTED WHERE THE ASSESSING OFFICER COMPUTES THE INCOME IN EXCESS OF WHAT IS DECLARED BY THE ASSESSEE FOR THE BLOCK PERIOD. THE HONBLE HIGH COURT OF GUJARAT FURTHER HELD AS UNDER: - 12 THIS PROVISO THUS IS V ITALLY DIFFERENT FROM THE PENALTY PROVISIONS CONTAINED IN SECTION 271(1)(C) OF THE ACT, WHICH PROVIDES FOR PENALTY WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME, OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS, THEREFORE, OFTEN STATED BY DIFFERENT COURTS THAT MERE DISALLOWANCES OF A CLAIM OR ADDITIONS MADE BY THE ASSESSING OFFICER WOULD NOT IPSO FACTO GIVE RISE TO PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. WHAT IS FURTHER REQUIRED TO BE ESTABLISHED IS THAT THE ASSE SSEE HAD EITHER CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN CONTRAST, NO SUCH LANGUAGE IS USED IN SECTION 158BFA OF THE ACT. WE MAY RECALL THAT UNDER SECTION 158BFA(2) OF THE ACT, PENALTY PROCEEDINGS WOU LD ARISE WHILE THE ASSESSING OFFICER HAD ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 14 ASSESSED INCOME FOR THE BLOCK PERIOD IN EXCESS OF THE INCOME DECLARED BY THE ASSESSEE. 20 . THE HONBLE BOMBAY HIGH COURT IN CIT VS. DODSAL LTD. (2008) 218 CTR 430 (BOM) HAS HELD THAT IN THE CONTEXT OF SECTION 158BF A(2) OF THE ACT, THAT THE SECTION PROVIDES DISCRETION TO THE ASSESSING OFFICER IN LEVY OF PENALTY. IN THIS BACKGROUND, IT IS TO BE SEEN WHETHER APPROPRIATE REASONS HAVE BEEN RECORDED FOR EXERCISE OF DISCRETION IN LEVYING THE PENALTY UNDER SECTION 158BFA(2 ) OF THE ACT HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 21. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE HAD PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN ACIT VS. SHRI CHANDRAKANT KASHINATH KELE (SUPRA) FO R THE PROPOSITION THAT NO PENALTY UNDER SECTION 158BFA(2) OF THE ACT IS LEVIABLE IN RESPECT OF ADDITIONS MADE IN THE HANDS OF THE ASSESSEE. WE FIND THAT THE FACTS BEFORE PUNE BENCH OF TRIBUNAL IN ACIT VS. SHRI CHANDRAKANT KASHINATH KELE (SUPRA) WERE AT VA RIANCE TO THE FACTS OF THE PRESENT CASE BEFORE US. IN THE FACTS OF ACIT VS. SHRI CHANDRAKANT KASHINATH KELE (SUPRA), THE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTMENT IN HOUSE PROPERTY WAS MADE ON ESTIMATE BASIS IN TURN RELYING ON THE REPORT OF THE APPROV ED VALUER AND WHO HAD VALUED THE INVESTMENT IN THE PROPERTY AT A HIGHER VALUE THAN THE VALUE DECLARED IN THE BOOKS OF ACCOUNT. IN SUCH CIRCUMSTANCES, WHERE THE ADDITION WAS MADE ON THE BASIS OF ESTIMATION OF INVESTMENT IN PROPERTY, THE TRIBUNAL HELD THAT IN THE ABSENCE OF ANY EVIDENCE FOUND IN THE COURSE OF SEARCH THAT THE ASSESSEE HAD INCURRED ANY UNACCOUNTED EXPENDITURE ON CONSTRUCTION OF THE SAID PROPERTY, THERE WAS NO MERIT IN LEVY OF PENALTY UNDER SECTION 158BFA(2) OF THE ACT. HOWEVER, AS POINTED OUT BY US IN THE PARAS HEREINABOVE, EVIDENCE OF SALE CONSIDERATION RECEIVED IN CASH, OVER AND ABOVE THE CONSIDERATION STATED IN THE SALE DEED IN RESPECT OF PROPERTY SOLD BY THE ASSESSEE, WAS FOUND DURING THE COURSE OF SEARCH OF THE PERSON WHO HAD PURCHASED TH E PROPERTY OF THE ASSESSEE. IN ITA NO. 1388 /PN/20 13 VILAS RAMCHANDRA BAGAD 15 VIEW OF DIRECT EVIDENCE OF A TRANSACTION ENTERED INTO BY THE ASSESSEE WITH THE PURCHASER, THOUGH NOT FOUND FROM THE PREMISES OF THE ASSESSEE, BUT FROM THE PREMISES OF THE PURCHASER, DURING THE SEARCH OPERATIONS AND ALSO IN V IEW OF THE ADMISSION OF THE PARTNERS OF SEARCHED PERSON AND THEIR CROSS - EXAMINATION BY THE ASSESSEE, WHERE COMPLETE EVIDENCE HAS BEEN FOUND AGAINST THE ASSESSEE ON THE BASIS OF WHICH ADDITION OF UNDISCLOSED INCOME HAS BEEN MADE IN THE HANDS OF ASSESSEE, WE FIND NO MERIT IN THE RELIANCE PLACED UPON BY THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE . ACCORDINGLY, SETTING - ASIDE THE ORDER OF CIT(A), WE DIRECT THE ASSESSING OFFICER TO LEVY PENALTY UNDER SECTION 158BFA(2) OF THE ACT ON DIFFERENTIAL INCOME OF RS.17,22,500/ - . THE GROUNDS OF APPEAL RAISED BY THE REVENUE ARE THUS, ALLOWED. 22 . IN THE RESULT, THE APPEAL OF THE REVENUE IS ALLOWED. ORDER P RONOUNCED ON THIS 11 TH DAY OF SEPTEMBER , 201 5 . SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 11 TH SEPTEMBER , 2015 . GCVSR / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - I , NASHIK ; 4. / THE CIT I, NASHIK ; 5. , , / DR A , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE