Dy. CIT, Aurangabad V. Shri Sunil N Goyal, Jalna

ITA 1438/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93847 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 08-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y K BHASKAR
• Keywords: Income from undisclosed sources
• Section: 131; 132; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO . 1436 /PN/201 3 ASSESSMENT YEAR : 20 10 - 11 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AURANGABAD VS. SHRI BANARASIDAS R. JINDAL, JINDAL HOUSE, SAMBHAJI NAGAR, JALNA-431203 (APPELLANT) (RESPONDENT) PAN NO. AAQPJ5272C ITA NO . 1438 /PN/201 3 ASSESSMENT YEAR : 20 10 - 11 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AURANGABAD VS. SHRI SUNIL N. GOYAL, PLOT NO. 18-19, PRITI SUDHA NAGAR, MANTHA ROAD, JALNA-431203 (APPELLANT) (RESPONDENT) PAN NO. AAWPG1295K ITA NO. 1440/PN/2013 ASSESSMENT YEAR : 2010 - 11 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AURANGABAD VS. SHRI JAIBHAGWAN B. JINDAL, JINDAL HOUSE SAMBHAJI NAGAR, JALNA-431203 (APPELLANT) (RESPONDENT) PAN NO. AAQPJ5374E REVENUE BY: SHRI Y.K. BHASKAR ASSESSEE BY: SHRI J.P. BAIRAGRA DATE OF HEARING : 11-06-2015 DATE OF PRONOUNCEMENT : 26-06-2015 ORDER PER VIKAS AWASTHY, JM:- THESE APPEALS HAVE BEEN FILED BY THE REVENUE AGAINST TH E ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), AURANGABAD DATED 0 1-04-2013 FOR ASSESSMENT YEAR 2010-11 CANCELLING PENALTY LEVIED U/S. 271AAA OF 2 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) IN THE CASE OF ALL THE THREE ASSESSEES. SINCE, THE FACTS AND ISSUES INV OLVED IN THE APPEALS ARE IDENTICAL THE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICA TION. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEES BELONG TO KALIKA GROUP, JALNA. A SEARCH U/S. 132 WAS CONDUCTED ON THE GROUP CONCERNS ON 16-06-2009. IN R ESPONSE TO NOTICE U/S. 153A, THE ASSESSEES FILED RETURN OF INCOME IN THEIR RES PECTIVE CASES. ON THE BASIS OF DISCLOSURE STATEMENT RECORDED U/S. 132(4), ADDITION WAS MADE IN THE HANDS OF THE ASSESSEES. THE DETAILS OF INCOME RETURNED BY THE ASSESSEES, INCOME ASSESSED, INCOME DISCLOSED AND PENA LTY LEVIED U/S. 271AAA ARE AS UNDER: ITA NO. INCOME RETURN INCOME DISCLOSED U/S. 132(4) INCOME ASSESSED PENALTY U/S. 271AAA 1436/PN/2013 RS.68,05,574/- RS.50,00,000/- RS.68,95,959/- RS.5,00,000/- 1438/PN/2013 RS.1,46,85,821/- RS.1,40,10,384/- RS.1,46,89,938/- RS.13,48,625/- 1440/PN/2013 RS.1,56,64,772/- RS.1,38,85,272/- RS.1,57,89,770/- RS.13,48,625/- 3. THE ASSESSING OFFICER HELD THAT THE ASSESSEES HAVE N OT SUBSTANTIATED THE INCOME DECLARED AT THE TIME OF SEARCH. THEREFORE, THEY ARE LIABLE FOR PENALTY U/S. 271AAA. ACCORDINGLY, PENALTY W AS LEVIED VIDE SEPARATE ORDERS DATED 28-06-2012 IN THE CASE OF EACH ASSESS EE. AGGRIEVED BY THE PENALTY ORDER U/S. 271AAA, THE ASSESS EES PREFERRED APPEALS BEFORE THE COMMISSIONER OF INCOME TAX (A PPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER CANCELLED THE LEVY OF PENALTY U/S. 271AAA IN THE CASE OF RESPECTIVE ASSESSEES. NOW, THE REVENUE HAS COME IN APPEAL BEFORE THE TRIBUNAL A SSAILING THE FINDINGS OF THE FIRST APPELLATE AUTHORITY IN DELETING PE NALTY IN RESPECT OF ALL THE THREE ASSESSEES. 3 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 4. SHRI Y. K. BHASKAR REPRESENTING THE DEPARTMENT, VEHEM ENTLY DEFENDING THE ORDER LEVYING PENALTY SUBMITTED THAT THE AS SESSEES HAVE SATISFIED ONLY TWO CONDITIONS I.E. NO. (I) AND (III) AS SET OUT IN S ECTION 271AAA(2) OF THE ACT. THE ASSESSEES HAVE NOT BEEN ABLE TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DER IVED. FOR SEEKING IMMUNITY U/S. 271AAA(2), ALL THE THREE CONDITIONS HAV E TO BE SATISFIED. THE LD. DR PRAYED FOR SETTING ASIDE THE IMPUGNED ORDERS AND RESTORING THE ORDER OF PENALTY IN ALL THE THREE APPEALS. 5. ON THE OTHER HAND, SHRI J.P. BAIRAGRA APPEARING ON BEH ALF OF THE ASSESSEES SUBMITTED THAT THE STATEMENT OF SHRI GHANSHY AM CHUNNILAL GOYAL WAS RECORDED U/S. 132(4) OF THE ACT DURING THE COUR SE OF SEARCH ACTION. SUBSEQUENTLY, STATEMENT U/S. 131 OF THE ACT WA S ALSO RECORDED WHEREIN SHRI GHANSHYAM CHUNNILAL GOYAL GAVE THE DETAILS OF A MOUNT DISCLOSED IN THE HANDS OF VARIOUS MEMBERS OF THE GROUP. DURING THE COURSE OF RECORDING STATEMENT U/S. 132(4), A SPECIFIC QUEST ION (Q. NO. 50) WAS ASKED, WHETHER FOR AVAILING THE BENEFIT OF SECTION 271AA A THE ASSESSEE (SHRI GHANSHYAM CHUNNILAL GOYAL) WANTS TO SAY ANY THING? IN REPLY TO THE QUESTION, IT WAS ADMITTED THAT INCOME OF RS.1 4 CRORES WAS EARNED BY THE MEMBERS OF THE GROUP, BY UNACCOUNTED T RANSACTION IN THEIR BUSINESS LIKE STEEL, COTTON, TRADING IN LAND AND PLOTS, C LOTH TRADING, SCRAP TRADING ETC. THE SAME IS DECLARED AS ADDITIONAL INC OME OVER AND ABOVE THE REGULAR INCOME. THE STATEMENT RECORDED BY S HRI GHANSHYAM CHUNNILAL GOYAL WAS ADMITTED AND ACCEPTED BY OTHER MEMBE RS OF THE GROUP. ACCORDINGLY, ADDITION WAS MADE IN THE HANDS OF THE GROUP MEMBERS. THE SUBSTANTIAL PART OF ADDITIONAL INCOME DECLARE D IS WITH RESPECT TO AMOUNTS RECEIVABLE ON ACCOUNT OF HUNDI/PETTY LOANS/UNACCOUNTED SALES AND UNACCOUNTED PURCHASES TOT AL TO THE TUNE OF RS.6,54,35,000/- AND UNACCOUNTED INCOME FROM BADLA TRANS ACTION OF LAND RS.85,10,000/-. THE LD. AR ALSO REFERRED TO Q. NO. 10 AND Q. NO. 13 4 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 OF THE STATEMENT RECORDED U/S. 131 TO SHOW THAT THE A DDITIONAL INCOME OFFERED WAS SUBSTANTIATED DURING THE COURSE OF SEARCH. T HE LD. AR SUBMITTED THAT ALL THE CONDITIONS AS LAID DOWN U/S. 271AAA(2 ) HAVE BEEN SATISFIED. THEREFORE, NO PENALTY IS LEVIABLE IN THE CASE OF AS SESSEES. IN SUPPORT OF HIS SUBMISSIONS LD. AR PLACED RELIANCE ON THE FOLLO WING DECISIONS: I. NEERAT SINGAL VS. ACIT; 146 ITD 152 (DELHI TRIB.). II. ACIT VS. MUNISH KUMAR GOYAL; 45 TAXMANN.COM 563 (CHANDIGA RH TRIB.). III. DCIT VS. RAJENDRA PRASAD DOKANIA IN ITA NO. 525/AHD/20 12 DECIDED ON 04-05-2012. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO EXAMINED THE DECISIONS ON WHICH THE LD. AR OF THE ASSESSEE HAS PLACED RELIANCE. THE PENALTY U/S. 271AAA HAS BEEN LE VIED ON THE GROUND THAT THE ASSESSEES HAVE NOT BEEN ABLE TO SUBS TANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME IS DERIVED. BEFORE W E PROCEED WITH THE ISSUE, IT WOULD BE APPROPRIATE TO FIRST EXAMINE THE RELEVANT PROVISIONS OF SECTION 271AAA OF THE ACT. THE SAME ARE RE PRODUCED AS UNDER: 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR A FTER THE 1ST DAY OF JUNE, 2007 [BUT BEFORE THE 1 ST DAY OF JULY, 2012], THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYA BLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCL OSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UNDER S UB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME A ND 5 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF THE UNDISCLOSED INCOME. 7. A PERUSAL OF SUB-SECTION (2) OF SECTION 271AAA SHOWS THA T FOR SEEKING IMMUNITY FROM LEVY OF PENALTY U/S. 271AAA, THREE C ONDITIONS HAVE TO BE SATISFIED: I. THE ASSESSEE SHOULD BE ABLE TO SPECIFY THE MANNER IN WHICH INCOME DISCLOSED IN STATEMENT RECORDED U/S. 132(4) HAS B EEN DERIVED. II. SUBSTANTIATE/CORROBORATE THE MANNER IN WHICH THE UNDISC LOSED INCOME IS DERIVED. III. PAYS TAX ALONG WITH INTEREST, IF ANY IN RESPECT OF UNDISCLOS ED INCOME. 8. IN THE PRESENT CASE, THE REVENUE HAS ACCEPTED THAT THE CONDITIONS NO. (I) AND (III) HAVE BEEN SATISFIED. THUS, THE ONLY CONDITION WHICH HAS NOT BEEN FULFILLED ACCORDING TO THE REVENUE IS THAT THE ASS ESSEE HAS NOT BEEN ABLE TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME IS DERIVED. THE LD. AR OF THE ASSESSEE HAS DRAWN OUR ATTE NTION TOWARDS THE STATEMENT RECORDED U/S. 132(4) ON 08-07-2009 AND U/S. 131 ON 17-08- 2009. DURING THE RECORDING OF STATEMENT U/S. 132(4), WE FIN D A SPECIFIC QUESTION WAS PUT TO THE ASSESSEE WITH RESPECT TO AVAILIN G OF BENEFIT U/S. 271AAA. THE SAME READS AS UNDER: Q. 50. DO YOU WANT TO SAY ANYTHING ELSE FOR AVAILI NG THE BENEFIT OF SECTION 271AAA? ANS. I WANT TO STATE THAT I HAVE ANSWERED THE ALL Q UESTIONS TO THE BEST OF MY KNOWLEDGE. FOR THE EXPLANATION REGARDING THE IS SUE OF THE SHARES ALLOTTED ON PREMIUM, I WANT TO STATE THAT THOUGH I HAS (SIC) A HONEST BELIEF 6 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 THAT THE SAID TRANSACTIONS ARE GENUINE, BUT THE POS SIBILITY OF SOME TECHNICAL ERRORS LIKE CONFIRMATION OF THE INVESTING COMPANIES, MODE OF ALLOTMENT, RATIONALE OF ALLOTMENT, IDENTIFICATION O F THE CONSULTANT AND DETAILS OF THE INVESTING COMPANIES ETC. MAY HAS SOM E TECHNICAL ERRORS. ON ACCOUNT OF THE SAME AND TO BUY THE PEACE OF MIND I WANT TO OFFER RS.14 CRORES AS AN ADDITIONAL INCOME OVER AND ABOVE THE R EGULAR INCOME OF THE GROUP CONCERNS FOR THE ASSESSMENT YEAR 2010-11 IN T HE HANDS OF THE FOLLOWING DIRECTORS :- 1. SHRI GHANSHYAM CHUNNILAL GOYAL 3.50 CRORES 2. SHRI ARUN SHRIKISHAN AGRAWAL 3.50 CRORES 3. SHRI ANIL NANDKISHOR GOYAL 3.50 CRORES 4. SHRI NARESH BANARASIDAS JINDAL 3.50 CRORES ----------------- TOTAL 14 CRORES THE SAID INCOME OF RS.14 CRS. WAS EARNED BY THE MEM BERS OF THE GROUP, BY UNACCOUNTED TRANSACTIONS IN THEIR BUSINES SES LIKE STEEL, COTTON, TRADING IN LAND AND PLOT, CLOTH TRADING, SCRAP TRAD ING ETC. WHICH MAY BE USED OR THE PURPOSE OF INVESTING IN THE BUSINESSES. THE SAID DISCLOSURE IS TO COVER UP THE ALL DISCREPA NCIES, DIFFERENCE IN THE BOOKS OF A/C, DIFFERENCE IN THE STOCK, AND DIFF ERENCE OF OPINION IN REGARDS TO THE ISSUES RAISED BY AS ABOVE AND ALSO I N RELATION TO PERSONAL BALANCE SHEET DISCREPANCIES OF PARTNERS, DIRECTORS OR ANY OTHER ASSESSEE OF THIS GROUP. 9. TO SHOW THAT THE UNDISCLOSED INCOME WAS SUBSTANTIATED , THE LD. AR REFERRED TO Q. NO. 10 AND Q. NO. 13 OF THE STATEMENT R ECORDED U/S. 131 OF THE ACT. THE SAME READS AS UNDER: Q. NO. 10. I AM SHOWING YOU THE CHIT SEIZED FROM Y OUR RESIDENTIAL PREMISES, DURING THE COURSE OF SEARCH ACTION AND IN VENTORIED AS ANNEXURE A/4, PAGE NO. 6 (BACK PAGE). PLEASE GO THROUGH T HE CONTENTS OF THIS PAGE AND EXPLAIN THE ENTRIES THERE IN. ANS. I HAVE GONE THROUGH THE SAID PAGE. I WANT TO STATE THAT, WE ARE DEALING IN THE SALE OF LAND AND PLOTS. SOME OF THE LAND AND PLOTS WERE SOLD BY US IN THE FY 09-10 BY BADLA SYSTEM. WE HAD MADE AGREEMENTS WITH THE OWNERS OF THE LAND TO PURCHASE SOME LAND/P LOTS AT A FIXED RATE WITHIN THE FIXED TIME FRAME. CONSEQUENT UPON THE S AID AGREEMENTS, WE HAD SOLD THESE LANDS/PLOTS TO THE DIFFERENT PARTIES AT A HIGHER RATES AND THIS AMOUNT I.E. 85,10,000/- WAS THE INCOME EARNED BY FOUR OF US I.E. 7 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 MYSELF, SHRI ARUN AGRAWAL, ANIL GOYAL AND NARESH B. JINDAL. THE SAID AMOUNT WAS SHARED BY US EQUALLY. I ACCEPT THE FACT THAT THIS AMOUNT IS NOT RECORDED IN THE REGULAR BOOKS OF A/C OF THE ASS ESSEES, HENCE I AM OFFERING THIS AMOUNT AS AN ADDITIONAL INCOME IN THE HANDS OF THE MYSELF, SHRI ARUN AGRAWAL, ANIL GOYAL AND NARESH B JINDAL F OR THE AY 10-11 @ 21,27,500/- EACH. Q. NO. 11. XXXXXXXXXX. Q. NO. 12. XXXXXXXXXX. Q. NO. 13. I AM SHOWING YOU THE CHIT SEIZED FROM YO UR RESIDENTIAL PREMISES, DURING THE COURSE OF SEARCH ACTION AND IN VENTORIED AS ANNEXURE A-3 PAGE 11 (BACK PAGE). PLEASE GO THROUGH THE CON TENTS OF THIS PAGE AND EXPLAIN THE ENTRIES THERE IN. ANS. THE SAID DETAILS ARE THE DETAILS OF THE PERSON S TO WHOM THE DIRECTORS HAD GIVEN THE HUNDI/PETTY LOANS/UNACCOUNTED SALE AN D MADE UNACCOUNTED PURCHASES. THE AMOUNT OF RS.6,54,35,00 0/- IS AMOUNT IS RECEIVABLE BY THE MEMBERS OF THE GROUP ON 10-05-200 9. THESE AMOUNT BELONGS TO SHRI ANIL N. GOYAL, SHRI ARUN S. AGRAWAL , (MENTIONED AS ARUN AG), SHRI NARESH B. JINDAL (MENTIONED NARESH JIN) A ND MY SELF (MENTIONED AS GHANSHYAM). AS PER THE SAID ENTRIES THE PEAK AM OUNT IS RS.6,54,35,000/-. I ACCEPT THE FACT THAT THIS AMOU NT IS NOT RECORDED IN THE REGULAR BOOKS OF A/C OF THE ASSESSEES; HENCE I AM O FFERING THIS AMOUNT AS AN ADDITIONAL INCOME IN THE HANDS OF THE MYSELF, SH RI ARUN AGRAWAL, ANIL GOYAL AND NARESH B JINDAL FOR THE AY 10-11 @ 1,63,5 8,750/- EACH. 10. A PERUSAL OF AFORESAID QUESTIONS AND ANSWERS, SHOW THA T THE UNDISCLOSED INCOME AND THE SOURCE OF INCOME BOTH WERE S UBSTANTIATED BY THE ASSESSEE DURING THE COURSE OF SEARCH. SINCE, NO FURTHER QUER Y WAS PUT TO THE ASSESSEE WITH RESPECT TO UNDISCLOSED INCOME THE ASSESSEE DID NOT ELABORATE THE SAME. WE OBSERVE FROM THE IMPUGNED ORDERS THAT THE ASSESSEES IN THEIR SUBMISSIONS BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS) HAVE GIVEN THE BIFURCATION AND SOURCE OF INCOME, DE CLARED IN THE HANDS OF VARIOUS MEMBERS OF THE GROUP. THE SAME IS REPRODUCED AS UNDER: 8 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 NAME OF THE APPELLANT HUNDI, PETTY LOANS, SALES RECEIVABLE RS. BADLA INCOME RS. TOTAL RS. 1) SUNIL GOYAL 1,13,58,750 21,27,500 1,34,86,250 2) NANDKISHOR GOYAL 50,00,000 - 50,00,000 3) NARENDRA AGRAWAL 1,63,88,125 21,27,500 1,85,15,6 25 4) JAIBHAGWAN JINDAL 1,13,58,750 21,27,500 1,34,86, 250 5) BANARASIDAS JINDAL 50,00,000 - 50,00,000 6) GOPAL AGRAWAL 1,63,58,750 - 1,63,58,750 7) GHANDSHYAMDAS GOAYL - 21,27,500 21,27,500 TOTAL 6,54,64,375 85,10,000 7,39,74,375 IN THE STATEMENT U/S. 131, THE ASSESSEE SHRI GHANSHYAM CHUNNILAL GOYAL HAS GIVEN THE DETAILS OF THE INCOME DECLARED, WHICH IS AS FOLLOWS: SR. NO. PARTICULARS AMOUNT 1 ON ACCOUNT OF UNACCOUNTED SALE AS PER DETAILS MENTIONED IN [QUESTION NO. 2 & 3] 2,80,79,844 2 INVESTMENT IN STOCK [QUESTION NO. 14] 2,55,52,503 3 UNACCOUNTED SALE/PETTY LOANS IN CASE OF SHRI ANIL R. GOYAL [QUESTION NO. 6] 10,00,000 4 INVESTMENT IN CONSTRUCTION [QUESTION NO. 5] 86,48,831 5 INVESTMENT IN STOCK OF SAGAR PARIDHAN PVT. LTD. [QUESTION NO. 7] 24,35,417 6 INVESTMENT IN FURNITURE IN SAGAR PARIDHAN PVT. LTD. [QUESTION NO. 7] 5,00,000 7 UNACCOUNTED INCOME FROM BADLA TRANSACTION [QUESTION NO. 10] 85,10,000 8 UNACCOUNTED TRANSACTIONS EXPLAINED [QUESTION NO. 13] 6,54,35,000 TOTAL 14,01,61,595 IT IS EVIDENT THAT THE TOTAL UNDISCLOSED INCOME UNDER BAD LA TRANSACTION AND UNACCOUNTED TRANSACTIONS HAVE BEEN OFFE RED TO TAX IN THE HANDS OF GROUP MEMBERS. 9 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 11. THUS, IN OUR CONSIDERED VIEW THE ASSESSEES HAVE BEE N ABLE TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME HAS B EEN DERIVED. SINCE, ALL THE THREE CONDITIONS AS LAID DOWN IN SUB-SECTION ( 2) OF SECTION 271AAA ARE SATISFIED. THE LEVY OF PENALTY U/S. 271AAA IS NOT WARRAN TED. 12. THE LD. AR IN SUPPORT OF HIS CONTENTIONS HAVE PLACED R ELIANCE ON THE DECISION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. MUNISH KUMAR GOYAL (SUPRA) WHEREIN UNDER SIMILAR CIRCUM STANCES THE PENALTY U/S. 271AAA WAS DELETED. THE TRIBUNAL HELD T HAT WERE THE ASSESSEE SURRENDERED CERTAIN INCOME IN THE COURSE OF SE ARCH, FILED THE RETURN DISCLOSING THE SAID AMOUNT AND PAID TAXES THEREON , THERE WAS SUFFICIENT COMPLIANCE OF PROVISIONS OF SECTION 271AAA(2). THE RE LEVANT EXTRACT OF THE ORDER OF THE TRIBUNAL IS AS UNDER: 10. PLAIN READING OF SUB-SECTION WOULD SHOW THAT I F THE ASSESSEE DURING THE COURSE OF SEARCH IN A STATEMENT ADMITS TO SOME UNDISCLOSED INCOME AND PAY TAXES ON THE SAME THEN PENALTY CANNOT BE LE VIED IN TERMS OF SUB- SEC (1) OF THIS SECTION . IN THE CASE BEFORE US, THE AMOUNT OF RS.4 CRORES WHICH WAS SURRENDERED DURING SEARCH, HAS BEEN DECLA RED BY THE ASSESSEE IN THE RETURN AND TAXES HAVE BEEN PAID ACCORDINGLY. THEREFORE THE ASSESSEE IS NORMALLY ENTITLED FOR THE IMMUNITY PROV IDED IN SEC 271AAA ITSELF. HOWEVER, THE REVENUE HAS RAISED FURTHER DIS PUTE THAT WHETHER THE ASSESSEE HAS DISCLOSED THE MANNER IN WHICH INCOME H AS BEEN EARNED. IN THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER F OLLOWING QUESTIONS AND ANSWERS HAVE BEEN EXTRACTED: Q. DO YOU WANT TO SAY ANYTHING MORE? ANS. I VOLUNTARILY SURRENDER A SUM OF RS.4.00 CRORE (RS. FOUR CRORE) FOR CURRENT FINANCIAL YEAR I.E. 2009-10 RELE VANT TO A.Y. 2010- 11 IN ANY (SHOULD BE MY) INDIVIDUAL CAPACITY. TH EY COVER ALL THE DISCREPANCIES IN THE SEIZED PAPERS DURING THE COURS E OF SEARCH PROCEEDINGS. 11. THEREFORE CLEARLY THE REVENUE HAS NOT ASKED THE ASSESSEE TO DISCLOSE THE MANNER IN WHICH SUCH INCOME WAS EARNED . IN ANY CASE ONCE THE INCOME IS SURRENDERED DURING THE COURSE OF SEAR CH U/S. 132(4) IT CAN BE SAFELY ASSUMED THAT DURING DISCUSSION THE ASSESSEE MUST HAVE DISCLOSED THE MANNER . IN ANY CASE WE FIND FORCE IN THE SUBMISSIONS OF T HE LD. 10 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 COUNSEL FOR THE ASSESSEE THAT IF THE EXPLANATION OF THE ASSESSEE HAS BEEN ACCEPTED FOR A SUM OF RS.1987500 OUT OF TOTAL SURRE NDER OF RS.4 CRORES THEN SAME MANNER SHOULD HAVE BEEN ACCEPTED FOR THE WHOLE OF THE AMOUNT. IT IS NOT CLEAR F ROM THE PENALTY ORDER HOW EXPLANATION FOR RS.1987500 WAS ACCEPTED. IN ANY CASE THE LD. CIT(A) HAS CONSIDERED ALL THESE ISSUES IN DETAIL AND THE D.R. FOR THE REVENUE HAS NOT REFERRED TO ANY MATERIAL OR DECISION WHICH CAN CONTROVERT THE FINDI NGS OF THE CIT(A). IN THE FOLLOWING CASES WHICH HAVE BEEN RELIED ON BY THE LD . COUNSEL FOR THE ASSESSEE WHICH WAS CLEARLY HELD THAT PENALTY IS NOT LEVIABLE. 12. FURTHER THE ASSESSEE HAS RELIED ON THE FOLLOWIN G DECISIONS: KANAKIA SPACES (P.) LTD. (SUPRA) A.N. ANNAMALAISAMY (HUF) (SUPRA) PRAMOD KUMAR JAIN (SUPRA) SMT. RAJ RANI GUPTA (SUPRA) 13. THE LD. D.R. FOR THE REVENUE WAS NOT ABLE TO PL ACE BEFORE US ANY DECISION WHICH SUPPORTS HIS CASE, THEREFORE WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. 14. IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1003/CHD/2013 IS DISMISSED. 13. THE CO-ORDINATE PUNE BENCH OF THE TRIBUNAL IN THE CAS E OF THE INCOME TAX OFFICER VS. SHRI SATISHCHANDRA G. MITTAL IN ITA NO . 970/PN/2011 FOR THE ASSESSMENT YEAR 2008-09 DECIDED O N 11-05-2015 BY PLACING RELIANCE OF THE DECISION OF CHANDIGARH BENCH OF TH E TRIBUNAL DELETED THE LEVY OF PENALTY U/S. 271AAA IN RESPECT OF INCOM E OFFERED TO TAX DURING SUCH PROCEEDINGS. 14. THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF NEERAT S INGHAL (SUPRA) HAS HELD THAT LEVY OF PENALTY U/S.271AAA IS NOT JUS TIFIED IN ABSENCE OF ANY QUERY RAISED BY THE AUTHORISED OFFICER DUR ING THE COURSE OF RECORDING OF STATEMENT U/S.132(4) ABOUT THE MANNER IN W HICH UNDISCLOSED INCOME HAS BEEN DERIVED AND ABOUT ITS SUBSTANTIATION. 15. THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF KANAK IA SPACES PVT. LTD. IN ITA NO. 6763/MUM/2011 DECIDED ON 10-07-201 3 WHILE 11 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 DISMISSING THE APPEAL OF THE REVENUE WHEREIN, THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS) DELETING PENALTY LEVIED U/S. 271AAA WAS CHALLENGED, OBSERVED AS UNDER : 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). THE ORDER IS IN TUNE WITH THE PRINCIPLES LAID DOWN BY VARIOUS CO-ORDINATE BENCHES AND HIGH C OURTS PARTICULARLY WITH REFERENCE TO DISCLOSURE MADE UNDER SECTION 132 (4). IN THE CASE OF CIT VS. MAHENDRA C. SHAH (299 ITR 305) THE HON'BLE GUJARAT HIGH COURT CONSIDERED SIMILAR STATEMENT UNDER SECTION 132(4) T O GRANT IMMUNITY UNDER SECTION 271(1)(C). THE HON'BLE HIGH COURT HEL D AS UNDER:- 'WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHOR IZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN TH E PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE STATEMENT. THE REASON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE, THE STATEMENT IS BE ING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCA SION FOR AN ASSESSEE TO STATE AND MAKE AVERMENTS IN THE EXACT F ORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTING IN WHICH SUC H STATEMENT IS BEING RECORDED. SECONDLY, CONSIDERING THE SOCIAL ENVIRONM ENT IT IS NOT POSSIBLE TO EXPECT FROM AN ASSESSEE, WHETHER LITERATE OR ILLITE RATE, TO BE SPECIFIC AND TO THE POINT REGARDING THE CONDITIONS STIPULATED IN TH E SECOND EXCEPTION WHILE MAKING STATEMENT UNDER SECTION 132(4). EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED, IF THE INCOME IS DECLARED AND TAX THEREON PAID, THERE WOULD BE SUBST ANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT.' 4.1 IN THIS CASE, THE ASSESSEE WAS ASKED TO EXPLAI N THE ENTRIES IN THE 'WORK-IN-PROGRESS SHEET' AND ASSESSEE IN THE COURSE OF STATEMENT OFFERED THE INCOME WITH A PLEA NOT TO INITIATE PENALTY PROC EEDINGS. THE ASSESSEE WAS NOT ASKED ABOUT THE MANNER IN WHICH SUCH INCOME WAS EARNED AND ALSO TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSE D INCOME WAS DERIVED. THE PROVISION OF CLAUSE-2 OF EXPLANATION-V APPENDED TO SECTION 271(1)(C) ARE SIMILAR TO SECTION 271AAA(2). THE SCOPE AND MEA NING HAS BEEN LUCIDLY EXPLAINED BY THE HON'BLE ALLAHABAD HIGH COURT IN TH E CASE OF CIT VS. RADHA KISHAN GOEL (2005) 278 ITR 454 (ALL.), WHICH WAS FOLLOWED BY THE HON'BLE GUJARAT HIGH COURT IN THE ABOVE REFERRED CA SE. IN VIEW OF THE ABOVE PRINCIPLES LAID DOWN, WE ARE OF THE OPINION T HAT IMMUNITY PROVIDED UNDER S/S.(2) OF SECTION 271AAA IS APPLICABLE AND A CCORDINGLY, THE ORDER OF CIT(A) DOES NOT REQUIRE ANY MODIFICATION. REVENUE'S GROUNDS ARE REJECTED. 12 ITA NOS. 1436, 1438 & 1440/PN/2013, A.Y. 2010-11 16. THUS, IN VIEW OF THE FACTS OF THE CASE AND DECISIONS DISC USSED ABOVE, WE FIND NO INFIRMITY IN THE IMPUGNED ORDERS CANCELLING LEVY OF PENALTY U/S. 271AAA OF THE ACT. THE APPEALS OF THE REVEN UE ARE DISMISSED BEING DEVOID OF MERIT. ORDER PRONOUNCED ON FRIDAY, THE 26 TH DAY OF JUNE, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 26 TH JUNE, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) , AURANGABAD 4 THE CIT , CENTRAL, NAGPUR 5 6 THE DR, ITAT, A BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE