Shri Umiyashankar Lalji Gor,`, Bhuj V. The Assistant Commissioner of Income Tax, Central Circle-2, RAJKOT-GUJARAT

ITA 143/RJT/2012

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2211 (ITAT-RAJKOT)
• Duration Of Justice: 3 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 13-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Assessee Lawyers: MJ RANPURA
• Keywords: Income from undisclosed sources; Retraction; Documents seized
• Section: 153A; 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT [CONDUCTED THROUGH E-COURT AT AHMEDABAD] BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER SHRI S.S. GODARA, JUDICIAL MEMBER ./ ITA NOS. 140 TO 145/RJT/2012 ASSESSMENT YEAR : 2003-04 TO 2008-09 SHRI UMIYASHANKAR LALJI GOR, MAHARAJA PAU BHAJI, NR. S.T. BUS STAND, BHUJ PAN : ACKPG 4938 P VS ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, RAJKOT / (APPELLANT) / (RESPONDENT) ASSESSEE(S) BY : SHRI M.J. RANPURA, AR REVENUE BY : SHRI C.S. ANJARIA, DR / DATE OF HEARING : 15/03/2016 / DATE OF PRONOUNCEMENT: 18/03/2016 / O R D E R PER S.S. GODARA, JUDICIAL MEMBER :- THIS BATCH OF ASSESSEES SIX APPEALS FOR ASSESSMEN T YEARS 2003-04 TO 2008-09, ARISES FROM A COMMON ORDER OF C IT(A)-IV, AHMEDABAD DATED 23.02.2012 PASSED IN APPEAL NOS. CI T(A)- IV/191 TO 196-R/CC-2/10-11 CONFIRMING PENALTIES OF RS.6,45,000/-, RS.82,000/-, RS.1,36,000/-, RS.25,00 0/-, RS.59,000/- AND RS.1,00,000/-; RESPECTIVELY, IMPOSED IN PROCEED INGS U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961, IN SHORT TH E ACT. 2. WE COME TO THE FACTS OF THE CASES FIRST. THIS A SSESSEE DERIVES INCOME FROM FOOD OUTLETS, AGRICULTURE AND OTHER SOU RCES. HE APPEARS TO HAVE FILED REGULAR RETURNS STATING INCOM ES OF ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 2 RS.74,820/-, RS.93,140/-, RS.96,060/-, RS.97,643/-, RS.1,32,430/- AND NO RETURN, IN THE IMPUGNED ASSESSMENT YEARS 20 03-04 TO 2008-09; RESPECTIVELY. THIS WAS FOLLOWED BY THE I MPUGNED SEARCH ACTION CONDUCTED ON 15.09.2008 AT HIS RESIDENTIAL P REMISES. THE ASSESSEE APPEARS TO HAVE DISCLOSED ADDITIONAL INCOM E OF GROSS AMOUNT OF RS.38,10,000/- AS PERTAINING TO THE IMPUG NED ASSESSMENT YEARS IN HIS LETTER DATED 01.11.2008. T HIS CULMINATED IN INITIATION OF SECTION 153A PROCEEDINGS. THE ASS ESSEE RESPONDED THERETO BY ADMITTING INCOMES OF RS.21,34,820/-, RS. 3,68,140/-, RS.4,96,060/-, RS.2,00,640/-, RS.3,32,430/-, RS.4,4 6,670/- THEREBY INCLUDING ADDITIONAL INCOME OF RS.20,60,000/-, RS.2 ,75,000/-, RS.4,00,000/-, RS.1,03,000/- AND RS.4,46,670/- TO T HE ONES ALREADY RETURNED. THERE IS NO ISSUE THAT THE ASSESSING OFF ICER FRAMED ASSESSMENTS ON 25.06.2010 ADMITTING THE SAME. QUAN TUM ASSESSMENT ACCORDINGLY ATTAINED FINALITY WITHOUT R ESULTING IN ANY ADDITION BEING MADE. THE ASSESSING OFFICER THE REAFTER INITIATED THE IMPUGNED PENALTY PROCEEDINGS QUA THE ABOVE STATED ADDITIONAL UNACCOUNTED INCOMES HEREINABOVE BY ALLEG ING THAT THE SAME WERE NEVER DISCLOSED IN THE REGULAR RETURNS. 3. WE COME TO THE IMPUGNED PENALTY PROCEEDINGS. TH E ASSESSEE STRONGLY CONTESTED THE PENALTY PROPOSALS I N QUESTION BY HIGHLIGHTING THE FACT THAT HE HAD DISCLOSED HIS ADD ITIONAL INCOME IN ORDER TO AVOID LITIGATION AND TO BUY MENTAL PEAC E. HE FURTHER HIGHLIGHTED THE FACT THAT THE ABOVE STATED SEARCH A SSESSMENT STOOD ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 3 FRAMED WITHOUT ANY ADDITION BEING MADE. THE ASSESS ING OFFICER OBSERVED IN PENALTY ORDERS THAT SECTION 271(1)(C) E XPLANATION 5A APPLIED IN THE INSTANT CASE SINCE THE IMPUGNED SEAR CH WAS CONDUCTED AFTER 01.06.2007. HE APPLIED DEEMED CONC EALMENT CLAUSE THEREIN BY OBSERVING THAT THE ASSESSEE WAS L IABLE TO BE PENALISED NOTWITHSTANDING THE INCOME IN QUESTION HA D BEEN DECLARED ON OR AFTER THE DATE OF SEARCH. THE CIT(A) CONFIRMS THE ASSESSING AUTHORITYS ACTION. THIS LEAVES ASSESSEE AGGRIEVED. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE C ASE FILES. RELEVANT FACTS NARRATED IN THE PRECEDING PARAGRAPHS ARE NOT REPEATED FOR THE SAKE OF BREVITY. THE ASSESSEES C ASE MADE OUT IN THE COURSE OF ARGUMENT IS THAT BOTH THE AUTHORITIES BELOW NOWHERE REFERRED TO ANY SPECIFIC INCRIMINATING MATERIAL IN THE FORM OF MONEY, BULLION OR JEWELLERY AS CORRESPONDING TO HIS ADDITIONAL INCOME DISCLOSED IN THE IMPUGNED SEARCH. HE RELIES UPON A CO- ORDINATE BENCH DECISION IN ITA NOS. 211 TO 216/RJT/ 2012, M/S. SARVODAY ENGINEERING WORKS VS. DCIT, DECIDED ON 03. 02.2016, HOLDING AS UNDER:- 5. WE HAVE HEARD BOTH THE PARTIES. RELEVANT FACTS ALREADY STAND NARRATED IN THE PRECEDING PARAGRAPHS. THERE IS NO DISPUTE THAT THE ASSESSEES PARTNER MADE A DISCLOSURE STATEMENT ADMI TTING ITS UNDISCLOSED INCOME TO THE TUNE OF RS. 50,000/- IN T HE IMPUGNED ASSESSMENT YEAR AND OTHER SUCH SUMS IN THE REMAININ G ASSESSMENT YEAR. THE ASSESSEE HAD NOT DECLARED THE SAME IN IT S ORIGINAL RETURN (SUPRA). BOTH THE AUTHORITIES BELOW INVOKE PENALTY PROVISION U/S. 271(1)(C) OF THE ACT TO HOLD THAT THE ABOVE STATED AD DITIONAL INCOME OF RS. 50,000/- DECLARED IN POST SEARCH RETURN AMOUNTS TO CONCEALED ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 4 INCOME. THE ASSESSEES SOLE ARGUMENT RAISED BEFORE US THAT THERE IS NO SPECIFIC INCRIMINATING MATERIAL FOUND IN THE COURSE OF SEARCH BASED ON WHICH ANY INFERENCE OF UNDISCLOSED WOULD BE DRAWN. IT ARGUES THAT THE MERE FACT THAT ITS PARTNERS ADMITTED ADDITIONAL INC OME WITHOUT SPECIFICALLY REFERRING TO ANY EVIDENCE IN THE FORM OF MONEY, BULLION, OR JEWELERY ETC DOES NOT ATTRACT THE IMPUGNED PENALTY SECTION. THE REVENUE STRONGLY SUPPORTS THE LOWER APPELLATE ORDER . WE FIND IN THIS BACKDROP OF FACTS THAT A CO-ORDINATE BENCH OF THE T RIBUNAL IN IT(SS)A 46/RJT/2012 SHRI MANSUKHBHAI R. SORATHIA VS. JCIT DE CIDED ON 04-11- 2015 DELETES AN IDENTICAL PENALTY FOR LACK OF SPECI FIC INCRIMINATING EVIDENCE AS UNDER:- 8. A PERUSAL OF BOTH THESE SECTIONS TOGETHER WOULD INDICATE THAT THE IMMUNITY AKIN TO EXPLANATION 5 IS AVAILABL E TO THE ASSESSEE UNDER EXPLANATION-5A ALSO, IF HE FULFILLS THE CONDI TIONS NARRATED IN SECTION 271AAA. THE EXPLANATION APPENDED TO SECTIO N 271AAA PROVIDES THE DEFINITION OF UNDISCLOSED INCOME AND S PECIFIED PREVIOUS YEAR. A PERUSAL OF THE EXPRESSION SPECIFIED PREVI OUS YEAR WOULD INDICATE THAT THE YEAR OF SEARCH AND IMMEDIATELY EA RLIER YEAR, IF DUE DATE OF FILING OF THE RETURN HAS NOT EXPIRED AND IN COME-TAX RETURN FOR SUCH YEAR HAS NOT BEEN FILED. SINCE THE ASSESS MENT YEARS INVOLVED BEFORE US ARE THE ASSTT.YEARS 2008-09 AND 2009-10, THE DUE DATE FOR FILING OF THE RETURN FOR THE ASSTT.YEA R 2009-10 WAS EXPIRED BEFORE THE SEARCH ACTION. THUS, BOTH THESE YEARS DO NOT FALL WITHIN THE AMBIT OF SPECIFIED YEARS. SINCE THE P ERIOD OF THESE TWO ASSESSMENT YEARS DOES NOT FALL WITHIN THE EXPRESSIO N SPECIFIED YEAR PROVIDED IN SECTION 271AAA, THEREFORE, WE DO NOT DEEM IT NECESSARY TO CONSTRUE AND EXPLAIN THE MEANING OF EX PLANATION 5A WITHIN THE SCOPE OF SECTION 271AAA. THE ASSESSEES AS SUCH CANNOT CLAIM IMMUNITY AKIN TO ONE AVAILABLE IN SUB-CLAUSE (1) AND (2) OF THE EXPLANATION 5, MORE PARTICULARLY, ON THE STRENG TH OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA). THE LD.FIRST APPELLATE AUT HORITY HAS DEALT WITH THESE SITUATION IN AN ANALYTICAL MANNER AND IN RIGHT PERSPECTIVE. AS FAR AS THE CONSTRUCTION OF MEANING OF EXPLANATION 5A TO SECTION 271AAA BY THE LD.FIRST APPELLATE AUTH ORITY IS CONCERNED, WE DO NOT FIND ANY ERROR. 9. AT THE COST OF REPETITION, WE WOULD LIKE TO OBSE RVE THAT AS PER EXPLANATION 5A, IF IN THE COURSE OF SEARCH INITIATE D UNDER SECTION 132 ON OR AFTER THE 1 ST JUNE, 2007, THE ASSESSEE IS FOUND TO BE OWNER ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 5 OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAVE BEEN ACQUI RED BY HIM BY UTILSING THE WHOLE OR PARTLY OF HIS INCOME FROM ANY PREVIOUS YEAR OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE O F SEARCH, AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME FRO M ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, TH EN, NOTWITHSTANDING SUCH INCOME IS DECLARED BY HIM IN A NY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION BE DEEMED TO HAVE BEEN CONCEALED PA RTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS. THE MO OT QUESTION FOR ATTRACTING THIS EXPLANATION IS THAT IN THE COURSE O F SEARCH MONEY, BULLION, JEWELLERY OR INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OUGHT TO HAVE BEEN FOUN D. IN A GIVEN SITUATION, NO MONEY OR BULLION OR JEWELLERY OR INCO ME MIGHT HAVE FOUND FROM THE ASSESSEES FOR THE ASSESSMENT YEARS W HICH WERE NOT PART OF SPECIFIED PREVIOUS YEAR CONTEMPLATED IN S ECTION 271AAA OR IMMUNITY AVAILABLE TO THE ASSESSEES UNDER SUB-CL AUSE (A) AND (B) OF EXPLANATION 5A, THEN ALSO, IF IN RESPONSE TO THE NOTICE UNDER SECTION 153A, THE ASSESSEE DISCLOSED SOME ADDITIONA L INCOME VOLUNTARILY, WOULD HE BE DEEMED TO HAVE CONCEALED T HE INCOME FOR VISITING HIM WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT ? THE LD.REVENUE AUTHORITIES HAD DRAWN INFERENCE THAT SIN CE THE ASSESSEE HAS NOT DISCLOSED ADDITIONAL INCOME IN THE ORIGINAL RETURNS, MEANING THEREBY, IT IS TO BE ASSUMED THAT THEY HAVE DISCLOSED THIS AMOUNT ONLY WHEN SOME INCRIMINATING MATERIAL WAS FO UND. TO OUR MIND THIS ASSUMPTION OUGHT TO BE SUPPORTED WITH REF ERENCE OF THAT INCRIMINATING MATERIAL. LET US SEE THE FINDING IN THE ASSESSMENT ORDER. 10. WE HAVE PERUSED THE ASSESSMENT ORDER OF SHRI MANSUKHBHAI R. SORATHIA IN THE ASSTT.YEAR 2008-09. ALL OTHER ASSESSMENT ORDERS ARE ALSO SIMILARLY WORDED. IT IS A VERY BRIEF ASSESSMENT ORDERS RUNNING ONE-AND-HALF PAGES. IN T HE FIRST PAGE, THE LD.AO HAS NARRATED PROCEDURAL ASPECT ABOUT THE SEARCH ACTION, ISSUANCE OF NOTICE AND FILING OF THE RETURN, SERVIC E OF NOTICE UNDER SECTION 143(2) ETC. IN THE NEXT PAGE FINDING OF T HE AO READ AS UNDER: ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 6 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABR ICATION AND ENGINEERING JOB WORK AND ALSO DERIVES INCOME FROM AGRICULTURAL ACTIVITIES, REMUNERATION AND INTEREST FROM PARTNERSHIP FIRMS ETC. COPIES OF P&L ACCOUNT, CAPIT AL ACCOUNT AND BALANCE SHEET, WAS FILED WITH THE RETURN. VARIO US ISSUES WERE DISCUSSED AT LENGTH. 2.1 IT IS SEEN THAT THE ASSESSEE HAD MADE DISCLOSU RE UNACCOUNTED INCOME OF RS 22,00,000/- WHICH WAS NOT DISCLOSED IN THE RETURN FILED U/S. 139(1). THIS BEING CONCEALE D INCOME, PENALTY PROCEEDINGS U/S. 271(L)(C) OF THE I T ACT IS BEING INITIATED. 3. AFTER VERIFICATION, THE TOTAL INCOME IS DE TERMINED AS UNDER:- TOTAL INCOME AS PER RETURN OF INCOME RS 28,45,960/ - TOTAL ASSESSED INCOME RS 28,45,960/- AGRICULTURAL INCOME FOR RATE PURPOSE RS.6,14,131/- 4. ASSESSED U/S. 153A OF THE I T ACT, 1961. CHARGE TAX. CHARGE INTEREST U/S. 234A, 234B AND 234C OF THE I T ACT, I F ANY. GIVE CREDIT FOR PREPAID TAXES AFTER DUE VERIFICATION. DE MAND NOTICE AND CHALLAN ISSUED ACCORDINGLY. ISSUE NOTICE U/S. 2 71(1)(C)OF THE IT ACT. 11. WE HAVE PERUSED THE PENALTY ORDER ALSO. THERE ARE ONLY THREE PARAGRAPHS I.E. PARA-4, 6 AND 7, WHERE THE AO HAS M ADE SOME OBSERVATION AT HIS OWN, OTHERWISE, IN REST OF THE P ARAGRAPHS HE REPRODUCED THE SUBMISSIONS OR THE HEAD-NOTES OF THE CASE LAWS. THE OBSERVATION OF THE AO IN THESE PARAS READ AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE ASSESSES. THE CONTENTION OF THE ASSESSEE IS NOT ACC EPTABLE BECAUSE, THE ADDITIONAL INCOME OFFERED BY THE ASSESSES ONLY SURFACED DUE TO THE SEARCH ACTION CARRIED BY THE DEPARTMENT. HAD TH ERE BEEN NO SEARCH, THE PORTION OF ADDITIONAL INCOME WOULD HAVE REMAINED CONCEALED ETERNALLY. IF IN A REGULAR CASE, ON DETEC TION OF CONCEALMENT, PENALTY U/S. 271(1)(C) IS LEVIABLE, HOW MUCH MORE PENALTY BECOMES TRUE AND POTENT IN A CASE WHERE THE CONCEALMENT HAS BEEN DETECTED ON ACCOUNT OF PROACTIVE SEARCH AC TION INITIATED ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 7 BY THE DEPARTMENT. IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS NOT RECORDED DETAILS OF HIS INCOME AND THE SAME WAS WOR KED OUT ONLY DURING SEARCH AND THAT TOO ON THE BASIS OF THE SEIZ ED MATERIALS. IN FACT, IT IS AN ESTABLISHED JUDICIAL DECISION THAT ' DOCUMENTS SEIZED DURING THE SEARCH CANNOT BE SAID THE BOOKS OF ACCOU NTS MAINTAINED FOR ANY SOURCE OF INCOME, FOR THE PURPOS ES OF EXPLANATION 5 (CIT VS GLAMOUR RESTAURANT (2003) 80 T TJ (MUM) 763. DIARIES FOUND AND SEIZED DURING COURSE OF SEARCH CANNOT BE CONSIDERED AS BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR THE PURPOSE OF IMMUNITY TO BE GRANTED TO HIM UNDER THE PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) - DR T P KULKARNI VS CIT (2003) 86 ITD 696 (MUM). IT HAS ALSO BEEN HELD THAT ONLY BOOKS OF ACCOUNT MAINTAINED IN THE R EGULAR COURSE CAN MAKE THE ASSESSEE ELIGIBLE FOR GRANT OF IMMUNIT Y FROM PENALTY AND NOT JUST ANY OF SUCH BOOKS, WHICH HAVE NOT BEEN MAINTAINED IN REGULAR COURSE OF BUSINESS - BRIJ LAL GOYAL VS C IT (2004) 88 ITD 413 (DELHI). 12. IN THIS BACKGROUND, IF WE APPRECIATE THE EVIDEN CES AVAILABLE ON THE RECORD, THEN IT WOULD REVEAL THE WHOLE CASE OF THE REVENUE FOR VISITING THE ASSESSEE WITH PENALTY IS BASED ON THE STATEMENT OF SHRI JAYANTILAL R. SORATHIA RECORDED DURING THE COURSE OF SEARCH. WE HAVE EXTRACTED THE RELEVANT PART OF THE STATEMENT I N THE FOREGOING PARAGRAPHS OF THIS ORDER. THE EVIDENTIARY VALUE OF SUCH STATEMENT HAS BEEN EXPLAINED IN VARIOUS AUTHORITATIVE PRONOUN CEMENTS. LET US FIRST TAKE NOTE OF SECTION 132(4) OF THE ACT. THE AUTHORISED OFFICER MAY, DURING THE COURSE OF T HE SEARCH OR SEIZURE, EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCU MENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATI ON MAY THEREAFTER BE USED IN EVIDENCE IN ANY PROCEEDING UN DER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDER THIS ACT. EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB- SECTION MAY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT, O THER DOCUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH, BUT ALSO IN RESPECT OF ALL MATTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGAT ION CONNECTED ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 8 WITH ANY PROCEEDING UNDER THE INDIAN INCOME- TAX AC T, 1922 (11 OF 1922 ), OR UNDER THIS ACT. 13. A BARE PERUSAL OF SECTION WOULD REVEAL THAT IT EMPOWERS THE AUTHORIZED OFFICER TO EXAMINE DURING THE COURSE OF SEARCH OR SEIZURE ANY PERSON ON OATH. THE DISCLOSURE MADE DU RING THE STATEMENT RECORDED UNDER THIS SECTION WILL BE ADMIT TED IN THE EVIDENCE AND CAN BE USED AGAINST THE ASSESSEE IN TH E PROCEEDING. 14. NO DOUBT, THE DISCLOSURE OR ADMISSION MADE UNDE R SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCEE DINGS IS AN ADMISSIBLE EVIDENCE BUT NOT CONCLUSIVE ONE. THIS P RESUMPTION OF ADMISSIBILITY OF EVIDENCE IS A REBUTTABLE ONE, AND IF AN ASSESSEE IS ABLE TO DEMONSTRATE WITH THE HELP OF SOME MATERIAL THAT SUCH ADMISSION WAS EITHER MISTAKEN, UNTRUE OR BASED ON M ISCONCEPTION OF FACTS, THEN SOLELY ON THE BASIS OF SUCH ADMISSION N O ADDITION IS REQUIRED TO BE MADE. IT IS TRUE THAT ADMISSION BEI NG DECLARATION AGAINST AN INTEREST ARE GOOD EVIDENCE, BUT THEY ARE NOT CONCLUSIVE, AND A PARTY IS ALWAYS AT LIBERTY TO WITHDRAW THE AD MISSION BY DEMONSTRATING THAT THEY ARE EITHER MISTAKEN OR UNTR UE. IN LAW, THE RETRACTED CONFESSION EVEN MAY FORM THE LEGAL BASIS OF ADMISSION, IF THE AO IS SATISFIED THAT IT WAS TRUE AND WAS VOLUNT ARILY MADE. BUT THE BASING THE ADDITION ON A RETRACTED DECLARATION SOLELY WOULD NOT BE SAFE. IT IS NOT A STRICT RULE OF LAW, BUT ONLY RULE OF PRUDENCE. AS A GENERAL RULE, IT IS UNSAFE TO RELY UPON A RETRACTED CONFESSION WITHOUT CORROBORATIVE EVIDENCE. DUE TO THIS GREY SITUATION , CBDT HAS ISSUED CIRCULAR NO.286/2/2003 PROHIBITING THE DEPAR TMENTAL OFFICIALS FROM TAKING CONFESSION IN THE SEARCH. TH E BOARD IS OF THE VIEW THAT OFTEN THE OFFICIALS USED TO OBTAIN CONFES SIONS FROM THE ASSESSEE AND STOP FURTHER RECOVERY OF THE MATERIAL. SUCH CONFESSIONS HAVE BEEN RETRACTED AND THEN THE ADDITION COULD NOT WITHSTAND THE SCRUTINY OF THE HIGHER APPELLATE AUTHORITY, BECAUSE NO MATERIAL WAS FOUND SUPPORTING SUCH ADDITION. 15. AN ISSUE WHETHER ADDITION SOLELY ON THE BASIS O F STATEMENT U/S.132(4) CAN BE MADE WAS CONSIDERED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF KIALASHBEN MANHARLAL CHOKSHI VS. CIT, 220 CTR (GUJ) 138. IN THIS CASE, S EARCH WAS CONDUCTED UPON THE ASSESSEE UNDER SECTION 132 OF TH E INCOME TAX ACT ON 4.11.1988. THE STATEMENT OF THE ASSESSEE WA S RECORDED UNDER SECTION 132(4) OF THE ACT. HE MADE DISCLOSUR E OF RS.7 LAKHS. ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 9 LATER ON, IN JANUARY, 1989, THE ASSESSEE RETRACTED F ROM THE DISCLOSURE AND STATED THE DISCLOSURE OF RS.50,000/- WAS ACCEPTABLE TO HIM. THE LD.AO MADE AN ADDITION OF RS.7 LAKHS ON T HE BASIS OF HIS STATEMENT AND OBSERVED THAT THE RETRACTION WAS MADE AFTER A LAPSE OF 2 MONTHS. THE ASSESSEE DID NOT HAVE ANY REASON FOR RETRACTING FROM THE DISCLOSURE. THE LD.FIRST APPELLATE AUTHORITY C ONCURRED WITH THE AO AND CONFIRMED THE ADDITION OF RS.7 LAKHS TO HIS INCOME. THE TRIBUNAL HAS ALSO CONFIRMED THE ADDITION BY OBSERVI NG THAT THERE WAS NOTHING ON RECORD WHICH INDICATED THAT THE DISC LOSURE WAS TAKEN FROM THE ASSESSEE UNDER DURESS, PRESSURE OR C OERCION. THE RETRACTION AFTER LAPSE OF TWO MONTHS FROM THE DATE OF DISCLOSURE BY THE ASSESSEE WAS CONSIDERED AS AFTER-THOUGHT. THE ISSUE TRAVELLED BEFORE THE HONBLE HIGH COURT. THE HONBLE HIGH CO URT HAS DELETED THE ADDITION BY OBSERVING THAT MERELY ON TH E BASIS OF DISCLOSURE, ADDITION CANNOT BE MADE. THERE SHOULD BE SOME CORROBORATIVE MATERIAL. THE FOLLOWING OBSERVATION S IN PARA-26 OF THE JUDGEMENT OF HONBLE COURT ARE WORTH TO NOTE. IT READS AS UNDER: 26. IN VIEW OF WHAT HAS BEEN STATED HEREINABOVE WE ARE OF THE VIEW THAT THIS EXPLANATION SEEMS TO BE MORE CONVINC ING, HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ADDITI ONS WERE MADE AND/OR CONFIRMED MERELY ON THE BASIS OF STATEM ENT RECORDED UNDER SECTION 132(4) OF THE ACT. DESPITE THE FACT T HAT THE SAID STATEMENT WAS LATER ON RETRACTED NO EVIDENCE HAS BE EN LED BY THE REVENUE AUTHORITY. WE ARE, THEREFORE, OF THE VIEW T HAT MERELY ON THE BASIS OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO SUCH ADDITIONS UNLESS AND UNTIL, SOME CORROBORAT IVE EVIDENCE IS FOUND IN SUPPORT OF SUCH ADMISSION. WE ARE ALSO OF THE VIEW THAT FROM THE STATEMENT RECORDED AT SUCH ODD HOURS CANNOT BE CONSIDERED TO BE A VOLUNTARY STATEMENT, IF IT IS SU BSEQUENTLY RETRACTED AND NECESSARY EVIDENCE IS LED CONTRARY TO SUCH ADMISSION. HENCE THERE IS NO REASON NOT TO DISBELIE VE THE RETRACTION MADE BY THE ASSESSING OFFICER AND EXPLAN ATION DULY SUPPORTED BY THE EVIDENCE. WE ARE, THEREFORE, OF TH E VIEW THAT THE TRIBUNAL WAS NOT JUSTIFIED IN MAKING ADDITION OF RS . 6 LAKHS ON THE BASIS OF STATEMENT RECORDED BY THE ASSESSING OF FICER UNDER SECTION 132(4) OF THE ACT. THE TRIBUNAL HAS COMMITT ED AN ERROR IN IGNORING THE RETRACTION MADE BY THE ASSESSEE. ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 10 27. IN THE ABOVE VIEW OF THE MATTER, ADDITION OF RS . 1 LAKH MADE ON ACCOUNT OF UNACCOUNTED CASH IS CONFIRMED AND THE ADDITION OF RS. 6 LAKHS IS HEREBY DELETED. 16. THIS DECISION HAS BEEN FOLLOWED BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMAL KOCHAR, 55 TAXMANN.COM 292 (GUJ). THE HONBLE HIGH COURT HAS R EPRODUCED THE DISCUSSION MADE BY THE TRIBUNAL, AND THEREAFTER , CONCURRED WITH THE CONCLUSIONS OF THE TRIBUNAL BY OBSERVING AS UND ER: 6. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE PRINCIPAL LAID DOWN IN THE CASE OF KAILASHBEN MANHARLAL CHOKSHI (SUPRA),WE ARE OF THE CONSIDERED OPINION TH AT THE VIEW TAKEN BY THE TRIBUNAL IS JUST AND PROPER. WE ARE NO T CONVINCED WITH THE SUBMISSIONS MADE BY MR. MEHTA, LEARNED ADV OCATE FOR THE APPELLANT THAT THE TRIBUNAL HAS NOT GIVEN COGEN T REASONS. THEREFORE, THE ANSWER TO THE FIRST QUESTION WOULD B E AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE SECOND Q UESTION WILL ALSO ENURE FOR THE BENEFIT OF THE ASSESSEE AS FROM THE RECORD IT IS CLEAR THAT OTHER CONCERNS WERE NOT BENAMI CONCERNS OF THE ASSESSEE. 7. FOR THE FORGING REASONS, THE PRESENT APPEAL IS D ISMISSED. ACCORDINGLY, BOTH THE QUESTIONS WHICH WERE REFERRED TO THIS COURT ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE. 17. HAD THIS STATEMENT BEEN RETRACTED BY THE ASSE SSEE, AND THEY HAVE NOT OFFERED THIS UNDISCLOSED INCOME, FORGET TO TAKE ACTION OF LEVYING THE PENALTY, EVEN ADDITIONS WOULD NOT HAVE BEEN SUSTAINED. THE INFERENCE OF OWNERSHIP OF ANY MONEY, BULLION, J EWELLERY OR OTHER VALUABLE ARTICLES, TO OUR MIND, OUGHT NOT TO BE BAS ED ON THIS STATEMENT. WHEN THE ASSESSEES HAVE TAKEN SPECIFIC PLEA THAT NO MONEY, BULLION OR JEWELLERY OR INCOME BASED ON ANY ENTRIES FOR THESE TWO ASSESSMENT YEARS WAS FOUND DURING THE COURSE OF SEARCH, THE AO OUGHT TO HAVE IMMEDIATELY REFERRED THE DOCUMENTS , ENTRIES OR ANY ASSET FOUND WHICH IS RELEVANT TO THESE ASSESSME NT YEARS IN THE PENALTY PROCEEDINGS. HE SHOULD HAVE REJECTED THE E XPLANATION OF THE ASSESSEE BY DEMONSTRATING IT AS FACTUALLY INCORRECT . RATHER, THE AUTHORITIES HAVE PROCEEDED ON THE ASSUMPTION THAT H AD THERE BEEN NO MONEY, BULLION, JEWELLERY OR INCOME BASED ON ENTRIE S WAS NOT FOUND, ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 11 THE ASSESSEE WOULD HAVE NOT MADE VOLUNTARY DISCLOSU RE OF THE INCOME IN THESE RETURNS. THEY FAILED TO NOTE THE Q UESTION NO.25 ALSO, WHERE THE ASSESSEES CLAIMED IMMUNITY FROM PENALTY, AND PEACE FROM LITIGATION. TO OUR MIND INFERENCE OF AVAILABILITY OF MONEY, BULLION OR ASSETS EMBEDDED IN THE ENTRIES CANNOT BE DRAWN F ROM THE STATEMENT OF THE ASSESSEE (EXTRACTED SUPRA). THEY S HOULD HAVE BEEN FOUND IN PHYSICAL FORM AND PERTAINING TO THESE YEAR S, ONLY THEN, DEEMING FICTION OF CONCEALMENT WOULD TRIGGER. THUS, THE REVENUE AUTHORITIES HAVE NOT REFERRED ANY DOCUMENTARY EVIDE NCES DEMONSTRATING THE FACT THAT VOLUNTARY INCOME OFFERE D BY ASSESSEES IN THESE TWO YEARS ACTUALLY UNEARTHED DURING THE COURS E OF SEARCH. THEREFORE, TO OUR MIND, THE ASSESSEES DO NOT DESERV E TO BE VISITED WITH PENALTIES. WE ALLOW ALL THE APPEALS OF THE AS SESSEES AND DELETE PENALTIES. THE LEARNED CO-ORDINATE BENCH IN ITS ABOVE EXTRACT ED PORTION OF THE ORDER CONCLUDES THAT INFERENCE OF ANY UNDISCLOS ED MONEY, BULLION OR ASSETS CANNOT BE DRAWN MERELY ON THE BASIS OF A SEA RCH STATEMENT IN ABSENCE OF SPECIFIC MATERIAL AS PER BOARDS CIRCULA R NO. 286/02/2003 AS WELL AS HONBLE JURISDICTIONAL HIGH COURT DECISION IN KAILASHBEN MANHARLAL CHOCKSHI VS. CIT 220 CTR (GUJ) 138. THE R EVENUE IS UNABLE TO POINT OUT ANY DISTINCTION ON FACTS OR LAW SO IN THE ABOVE EXTRACTED DECISION VIS--VIS IN THE INSTANT CASE. WE ACCEPT ASSESSEES CORRESPONDING ARGUMENT AND HOLD THAT THE AUTHORITIE S BELOW HAVE WRONGLY IMPOSED PENALTY OF RS. 17,850/-. THE SAME STANDS DELETED. ITA 221/RJT/2012 IS ALLOWED. 4.1 THE REVENUE STRONGLY SUPPORTS THE IMPUGNED PENA LTIES. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE RIVA L CONTENTIONS. IT IS TO BE SEEN THAT BOTH THE LOWER AUTHORITIES AP PLY DEEMED CONCEALMENT PRINCIPLE U/S 271(1)(C) EXPLANATION 5A BY QUOTING CHRONOLOGY OF SEARCH ACTION FOLLOWED BY ASSESSMENT OF ASSESSEES ADDITIONAL INCOME WITHOUT RESULTING INTO ANY ADDITI ON. THEY DO NOT SPECIFICALLY CORRELATE THIS ADDITIONAL INCOME T O ANY INCRIMINATING MATERIAL IN THE NATURE OF MONEY, BULL ION OR ITA NO. 140 TO 145/RJT/2012 SHRI UMIYASHANKAR LALJI GOR.VS. ACIT AYS 2003-04 TO 2008-09 12 JEWELLERY ETC., AS CONTEMPLATED U/S 153A OF THE ACT . WE APPLY ABOVE EXTRACTED CO-ORDINATE BENCH DECISION IN THESE CIRCUMSTANCES HOLDING THEREIN THAT MERE ADMISSION OF ADDITIONAL I NCOME IN SEARCH ACTION DOES NOT LEAD TO ANY PRESUMPTION OF D EEMED PENALTY IN ABSENCE OF ANY SPECIFIC INCRIMINATING MA TERIAL. THE REVENUE FAILS TO POINT OUT ANY DISTINCTION ON FACTS OF THE INSTANT CASES. WE ACCEPT ASSESSEES ARGUMENTS. ALL THE IM PUGNED PENALTIES SUBJECT MATTER OF THESE SIX APPEALS STAND DELETED. ASSESSEE SUCCEEDS IN ALL THESE SIX APPEALS. 5. IN THE RESULT, ALL SIX APPEALS FILED BY THE ASSE SSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 18 TH MARCH, 2016 AT AHMEDABAD. SD/- SD/- (ANIL CHATURVEDI) ACCOUNTANT MEMBER (S.S. GODARA) JUDICIAL MEMBER AHMEDABAD; DATED 18/03/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! / CONCERNED CIT 4. ! ( ) / THE CIT(A) 5. $%&'' , , / D R, ITAT, AHMEDABAD 6. &,-. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) ' #$%, / ITAT, AHMEDABAD