ITO CEN -2, Nashik V. Shri Rajendra Shivaji Pawar, Malegaon

ITA 189/PUN/2012

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 66884 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 01-02-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: N O N E
• Keywords: Search and seizure; Reasonable cause
• Section: 40A(3); 153A; 148; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS.188 & 189/PN/2012 ASSESSMENT YEAR S : 2002 - 03 & 2003 - 04 ITO CEN 2, NASHIK VS. RAJENDRA SHIVAJI PAWAR, PROP RAJENDRA SHIVAJI PAWAR, SHOP NO. 2, BHADRAKALI MARKET, NEAR PANCH KANDIL, MALEGAON (APPELLANT) (RESPONDENT) PAN NO. ACIPP8657N APPELLANT BY: SRI ACHAL SHARMA RESPONDENT BY: N O N E DATE OF HEARING : 17-04-2013 DA TE OF PRONOUNCEMENT : 29-04-2013 ORDER PER R.S. PADVEKAR, JM:- THESE TWO (2) APPEALS ARE FILED BY THE REVENUE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD.CIT(A)-I, NASHIK FOR T HE A.YS. 2002- 03 AND 2003-04, DELETING THE PENALTY LEVIED BY THE ASSES SING OFFICER U/S.271(1)(C) OF THE INCOME-TAX ACT. 2. WE FIRST TAKE UP THE REVENUES APPEAL FOR THE A.Y. 200 2-03 BEING ITA NO. 188/PN/2012 . THE REVENUE HAS TAKEN THE FOLLOWING MULTIPLE GROUNDS BUT THE EFFECTIVE GROUNDS ARE 1 TO 5 WHICH READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN DELETING PENALTY LEVIED U/S 271(1) (C) AMO UNTING TO RS.3,34,7647- WITHOUT APPRECIATING THAT THE ASSESSE E FAILED TO OFFER ANY EXPLANATION REGARDING THE DIFFERENCE IN INCOME RETU RNED VIDE RETURN FILED U/S. 139 AND 153A OF THE ACT. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THAT THE ADDITIONAL INCOM E WAS OFFERED ONLY IN THE RETURN FILED U/S 153A FOR WHICH THE ASSESSEE DID NOT OFFER ANY EXPLANATION. 2 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE PROVISION OF LAW THAT EXCEPTION-2 TO EXPLANATION-5 OF SECTION OF SECTION 271(1) (C) OF THE ACT, IS NOT APPLICABLE TO THE YEAR UNDER CONSIDERATION I.E. A.Y. 2002-03, AS THE SEARCH & SEIZURE ACTION UNDER SECTION 132 OF THE ACT WAS CON DUCTED ON THE ASSESSEE ON 27/7/2005. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN APPLYING EXPLANATION 5 TO SECTION 271 (1) (C) ON THE FACTS O F THE CASE THUS RENDERING HIS DECISION PERVERSE AND BAD I N LAW. 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT THAT BUT FOR THE SEARCH OPERATIONS THE ASSESSEE WOULD NOT HAVE OFFERED ADDITIONAL INCOME I N THE RETURN FILED U/S 153A WHICH IS EVIDENCE BY HIS FAILURE TO OFFER THE SAID ADDITIONAL INCOME IN THE RETURN FILED U/S 139. 3. THE ISSUE IN CONTROVERSY IS IN RESPECT OF THE PENALTY LEVIED BY THE ASSESSING OFFICER OF RS.3,34,760/- WHICH WAS DELETED BY THE LD.CIT(A). ON PERUSAL OF THE PENALTY ORDER, THE FACTS ARE REVEALED A S UNDER. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GOLD REFINERY WORK AND MONEY LENDING. A SEARCH AND SEIZURE ACTION U/S.132 OF THE INCOM E-TAX ACT 1961 WAS CONDUCTED ON 27-01-2005. IN THE COURSE OF SEAR CH AND SEIZURE OPERATION, THE ASSESSEES BUSINESS AND RESIDENTIAL PREMISE S WERE ALSO COVERED. IN CONSEQUENCE OF THE SEARCH AND SEIZURE ACT ION, THE ASSESSMENT WAS COMPLETED U/S.153 A R.W.S. 143 (3) OF THE I NCOME-TAX ACT ON 27-12-2006 DETERMINING THE INCOME OF RS.13,25,000/- . IT APPEARS THAT THE LD.CIT(A) GRANTED SOME RELIEF TO THE EXT ENT OF RS.14,384/- THAT WAS IN RESPECT OF HOUSEHOLD EXPENSES. 4. IN THE RETURN OF INCOME FILED U/S.153A FOR A.Y. 2002-03 THE ASSESSEE HAS DECLARED THE INCOME OF RS.13,00,000/-. THE A SSESSING OFFICER HAS OBSERVED THAT IN THE ORIGINAL RETURN FILED FOR A.Y. 2002-03 ON 22-10-2001, THE ASSESSEE HAS DECLARED THE INCOME OF RS.2 ,06,000/-. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS IN R ESPECT OF DIFFERENCE BETWEEN THE INCOME DECLARED IN THE ORIGINAL RETUR N AND THE 3 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON INCOME DECLARED IN THE RETURN FILE IN RESPONSE TO NOTICE U/ S.153A WHICH WAS TO THE EXTENT OF RS.10,94,000/-, ON THE REASON FOR FILIN G INACCURATE PARTICULARS OF INCOME. 5. IN THE OPINION OF THE ASSESSING OFFICER THE ASSESSEE FILED THE HIGHER INCOME ONLY DUE TO THE SEARCH ACTION BY THE DEPARTMEN T. IT IS MENTIONED THAT TO THE EXTENT OF RS.10,94,000/- THE ASSESSEE HAS C ONCEALED THE PARTICULARS OF INCOME BUT WHILE LEVYING THE PENALTY AFTER GIVIN G EFFECT OF THE LD.CIT(A), THE ASSESSING OFFICER LEVIED THE PENALTY ON IN COME OF RS.13,10,616/-. IT IS SEEN THAT WHILE COMPLETING THE ASSES SMENT, THE ASSESSING OFFICER MADE THE ADDITION TOWARDS LOW HOUSE HOLD EXPENSES TO THE EXTENT OF RS. 25,000/- AND LD. CIT(A) GAVE SOME RELIEF. AS THE ASSESSEE IS DEALING IN GOLD, JEWELLARY AND SILVER, IT WAS FOU ND THAT THE ASSESSEE HAS EXCESS STOCK OF THE GOLD AND JEWELLARY. THE ASSESSEE DECLARED UNACCOUNTED STOCK OF GOLD JEWELLARY TO THE EXT ENT OF RS.13,62,780/-. IT APPEARS THAT THE OTHER ADDITIONAL INCOM E DECLARED BY THE ASSESSEE WAS IN RESPECT OF UNRECORDED TRADE DEBTO RS, INVESTMENT IN INVERTER ETC. THE ASSESSEE HAS CHALLENGED THE PENALTY LEVIED BY THE ASSESSING OFFICER BEFORE THE LD.CIT(A) AND LD.CIT(A) DELETED THE PENALT Y. 6. NOW THE REVENUE IS IN APPEAL BEFORE US. WE HAVE HEA RD THE LD. DR NONE WAS PRESENT FOR THE ASSESSEE. WE FIND THAT THE AS SESSEE DECLARED THE INCOME OF RS. 13,00,000/- IN THE RETURN FILE IN RESPONSE TO NOTICE U/S. 153A AND TOTAL INCOME AFTER GIVING EFFECT TO THE ORDE R OF THE LD.CIT(A) REMAINS AT RS.13,10,616/-. IT IS ALSO SEEN THAT, EX PLANATION-5 BELOW SECTION 271(1)(C) IS NOT APPLICABLE TO THE ASSESSEE. EV EN THOUGH THE ASSESSEE HAS DECLARED UNACCOUNTED STOCK OF GOLD JE WELLARY THAT CANNOT BE TREATED AS INVESTMENT AS ASSESSEE IS IN GOLD JEWELLARY BUSINESS. THE NEXT QUESTION IS WHETHER THE PENALTY CAN BE LEVIED TO THE EXTENT OF INCOME DECLARED BY THE ASSESSEE IN RETURNED FILE IN RESPONSE TO NOTICE U/S.153A. IT IS SEEN THAT IDENTICAL ISSUE HAS BEEN CONSIDERED BY 4 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON THE TRIBUNAL IN THE CASE OF SMT. PRAMILA D. ASHTEKAR & ORS . VS. ITO(C)- II, PUNE, ITA NOS. 354 TO 358/PN/2010 ORDER DATED 14-0 9-2012. IN THE SAID CASE ALSO THE ASSESSEE IS ENGAGED IN THE BUSINESS OF GOLD, JEWELLARY AND SILVER. THERE WAS A SEARCH AND SEIZURE ACTION U/S.13 2(1) OF THE ACT ON 26-10-2005. THE ASSESSEE FILED THE RETURN OF INCOME A ND INCOME DECLARED BY THE ASSESSEE IN SAID RETURNS WAS ACCEPTED BUT THE ASSESSING OFFICER PROCEEDED TO LEVY OF PENALTY U/S.271(1)(C) OF THE ACT ON THE INCOME DECLARED IN THE RETURNS FILED IN RESPONSE UNDER SEC TION 153 A. IN SOME OF THE CASES ORIGINAL RETURNS WERE FILED U/S.139 BUT WHILE FILING THE RETURNS U/S. 153A ADDITIONAL INCOME WAS DECLARED. THE ASS ESSING OFFICER LEVIED THE PENALTY ON ADDITIONAL INCOME DECLARED BY T HE ASSESSEE IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U/S.153 A. WHEN THE MATTER REACHED BEFORE THE TRIBUNAL FOLLOWING DECISION IN THE CASE OF CHANDAN K. SHEWANI VS. DCIT VIDE ITA NOS. 235 AND 236/P N/2010 THE TRIBUNAL ALLOWED THE APPEALS FILED BY THE ASSESSEE AND DELET ED THE PENALTY. THE REASONS AND FINDINGS OF THE TRIBUNAL IN THE SA ID CASE ARE AS UNDER: 5. WE HAVE ALSO HEARD THE LD. D.R., WHO SUPPORTED THE O RDERS OF THE AUTHORITIES BELOW. ON THE PERUSAL OF THE ASSESSMENT ORDERS IN ALL THESE APPEALS, IT IS ADMITTED FACT THAT THERE IS NO AD DITION OVER AND ABOVE THE INCOME DECLARED BY THESE ASSESSEES IN T HE RETURNS OF INCOME FILED IN RESPONSE TO NOTICES U/S. 153A OF THE ACT. IT IS ALSO ADMITTED FACT THAT NO DECLARATION IS BASED ON ANY MO NEY, JEWELLERY, BULLION OR ANY OTHER VALUATION ARTICLES DETECTED OR S EIZED IN THE COURSE OF THE SEARCH OPERATION. AT THE FIRST INSTAN CE, THE LD. COUNSEL PLEADED THAT THESE ASSESSEES ARE ENTITLED FOR THE IMMUN ITY IN VIEW OF EXPL.- SEC. 5 TO SEC. 271(1)(C ) OF THE ACT BECAUSE THE INCOME ADMITTED DURING THE COURSE OF THE SEARCH HAS BEEN DE CLARED IN THE RETURN OF INCOME AS WELL AS THE TAX ON THE ADMITTED I NCOME HAS ALSO BEEN PAID. THE SCOPE OF EXPLANATION-5 HAS BEEN CONSID ERED BY THE ITAT, AHMEDABAD BENCH IN THE CASE OF ACIT VS. KIRIB DAYABHAI PATEL, 121 ITD 159 (TM ) WITH SPECIFIC REFERENCE WHETH ER THE IMMUNITY IS AVAILABLE FOR ALL THE ASSESSMENT YEARS OR O NLY FOR THE ASSESSMENT YEAR IN WHICH THE DATE OF FILING OF THE RETURN HAS BEEN EXPIRED AT THE TIME OF SEARCH OR FOR THE ASSESSMENT YEAR IN RESPECT OF WHICH, THE PREVIOUS YEAR WAS YET TO END ON THE DA TE OF SEARCH. IN THIS CASE, SEARCH WAS CONDUCTED ON 26 OCTOBER, 2005, HENCE, AT THE MOST, THE BENEFIT OF THE IMMUNITY CAN BE GIVEN FOR TH E ASSESSMENT YEAR 2006-07. 5 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON 6. WE FIND THAT THE ASSESSEES CASE IS OTHERWISE SQU ARELY COVERED VIDE THE DECISION OF ITAT,PUNE IN THE CASE O F CHANDAN K. SHEWANI VS. DCIT, ITA NOS. 235 & 236/PN/2010. IN THE S AID CASE, THE ADDITIONAL INCOME WAS DECLARED DURING THE COURSE O F SEARCH TO COVER UP THE EXPENDITURE AS WELL AS DEPOSIT IN BANK A/CS. THE TRIBUNAL CONSIDERED THE EXPLANATIONS- 3, 5 & 5A TO SEC . 271(1)(C ) OF THE ACT AND HELD AS UNDER : 8. WHILE DECIDING ASSESSEES APPEAL FOR A.YS. 1999- 2000 AND 2001-02, THE PENALTY LEVIED ON THE INCOME OFF ERED TOWARDS THE PERSONAL EXPENDITURE OF THE ASSESSEE AND HIS DIVORCEE SISTER HAS BEEN DELETED. EVEN THOUGH THE PA RLIAMENT HAS INSERTED EXPLANATION 5A TO SEC. 271(1)(C), SAID EXPLANATION IS APPLICABLE IN RESPECT OF THE SEARCH I NITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007. SECTION 5A IS INTRODUCED TO PATCH OUT THE LACUNAE IN THE EXISTING PROVISIONS MORE PARTICULARLY TO OVERCOME THE JUDICIAL INTERPRETATION OF EXPLANATION -5. IF THE SEARCH IS INITIATED U/S. 132 ON OR AFTER 1 ST JUNE 2007 THEN THERE IS A LEGAL PRESUMPTION THAT ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT O R OTHER DOCUMENTS OR TRANSACTIONS, WHICH IS CLAIMED AS INCOME BY THE ASSESSEE, THE SAME WOULD BE TREATED AS DEEMED CONCEALME NT OF THE PARTICULARS OF INCOME OR FURNISHING INACCURA TE PARTICULARS OF INCOME. SO FAR AS THE PRESENT ASSESS EE IS CONCERNED, THE DATE OF SEARCH IS 15.6.2004 AND HENCE, EXPLANATION 5A TO SEC. 271(1)((C ) IS NOT APPLICABLE. IT IS WELL SETTLED RULE OF INTERPRETATION OF THE PENALTY PROVISI ONS THAT THE SAME SHOULD BE STRICTLY INTERPRETED AND THERE IS NO S COPE FOR ANY PRESUMPTION FOR LEVY OF THE PENALTY UNLESS STATUT E SPECIFICALLY PROVIDES SAME. 9. SO FAR AS THE EXPLANATION-3 TO SEC. 271(1)(C) IS CONCERNED, WHICH READS AS UNDER : EXPLANATION 3.- WHERE ANY PERSON FAILS, WITHOUT REASONABLE CAUSE, TO FURNISH WITHIN THE PERIOD SPECIFI ED IN SUB-SECTION (1) OF SECTION 153 A RETURN OF HIS INC OME WHICH HE IS REQUIRED TO FURNISH UNDER SECTION 139 IN RESPECT OF ANY ASSESSMENT YEAR COMMENCING ON OR AFT ER THE 1 ST DAY OF APRIL, 1989, AND UNTIL THE EXPIRY OF THE PERIOD AFORESAID, NO NOTICE HAS BEEN ISSUED TO HIM UNDER CLAUSE (I) OF SUB-SECTION (1) OF SECTION 142 OR SECTION 148 AND THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) IS SATISFIED THAT IN RESPECT O F SUCH ASSESSMENT YEAR SUCH PERSON HAS TAXABLE INCOME, THEN, SUCH PERSONAL SHALL, FOR THE PURPOSES OF CLAUSE (C ) OF THIS SUB-SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME IN RESPECT OF SUCH ASSESS MENT YEAR, NOTWITHSTANDING THAT SUCH PERSON FURNISHES A RETURN OF HIS INCOME AT ANY TIME AFTER THE EXPIRY OF THE PERIOD AFORESAID IN PURSUANCE OF A NOTICE UNDER SEC TION 148. THE SAID EXPLANATION PRESUMES THAT THERE IS A CONCEALM ENT OF PARTICULARS OF INCOME OR FILING OF THE INACCURATE P ARTICULARS OF INCOME IN THE SITUATION WHERE THE ASSESSEE DID NOT F ILE RETURN OF INCOME U/S. 139 OR WITHIN THE TIME LIMIT PRESCRIBED U /S. 153(1) OF THE ACT BUT FILES THE RETURN OF INCOME IN R ESPONSE TO NOTICE U/S. 148. THE SAID EXPLANATION IS ALSO SILENT IN THE SITUATION IF THE ASSESSEE HAS NOT FILED THE RETURN O F INCOME FOR ANY PARTICULAR A.Y. BUT FILED THE RETURN OF INCOME FOR THE FIRST TIME IN RESPONSE TO NOTICE U/S. 153A, THEN WHAT WOULD BE THE 6 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON LEGAL PRESUMPTION ? IN OUR OPINION, EXPLANATION-3 HAS NO APPLICATION, WHEN THE RETURN IS FILED IN RESPONSE TO NOTICE U/S. 153A. WE, THEREFORE, HOLD THAT AS PER THE FACTS OF TH IS CASE AND LAW APPLICABLE, THERE IS NO JUSTIFICATION TO LEVY THE PENALTY FOR THE A.Y. 2002-03 IN THE INCOME DECLARED BY THE ASS ESSEE IN THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 1 53A EVEN FOR THE SAID INCOME IS BASED ON SOME ENTRIES FOUND IN THE DIARIES OR OTHER DOCUMENTS OR EVEN BANK ACCOUNT DUR ING THE COURSE OF SEARCH. WE, ACCORDINGLY DELETE THE PENALTY SUSTAINED BY THE LD CIT(A). 7. IN ALL THE APPEALS BEFORE US, EXPLANATION-3 CANNOT BE APPLIED, AS HELD IN THE CASE OF CHANDAN K. SHEWANI (SUPRA). S O FAR AS EXPLANATION 5A IS CONCERNED, IT IS BROUGHT ON THE ST ATUTE BOOK W.E.F. 1.6.2007 I.E. FROM THE ASSESSMENT YEAR 2007-08 SO FAR A S THE ASSESSMENTS IN ALL THESE CASES ARE CONCERNED, NO ADDITI ON IS MADE BY THE ASSESSING OFFICER OVER AND ABOVE THE INCOME DECLARED IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A AS THE EXPRESSION TAX SOUGHT TO BE EVADED APPEARING IN CLAUSE (C) TO SEC. 271(1) IS TO BE UNDERSTOOD AS A DIFFERENCE BETWEEN T HE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME AN D THE INCOME FINALLY ASSESSED. AFTER INTRODUCTION OF SEC. 153A W.E .F. 1.6.2003, THERE IS NO SPECIFIC PENALTY PROVISION TO DEAL WITH T HE ASSESSMENTS FRAMED IN CONSEQUENCE OF SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT. IN THE PRESENT CASE, AS THE RETURNED INCOME AND INCOME ASSESSED ARE THE SAME, OTHERWISE ALSO, NO PENALTY CAN BE LEVIED. WE, THEREFORE, HOLD THAT IN ALL THE APPEALS BEFORE US, T HE ASSESSING OFFICER WAS NOT JUSTIFIED IN LEVYING THE PENALTY U/S . 271(1)(C ) OF THE ACT. WE, ACCORDINGLY, DELETE THE PENALTIES LEVIED BY THE ASSESSING OFFICER IN ALL THE APPEALS FOR THE ABOVE MENTIONED REASON S. 7. IN THE PRESENT CASE OF THE ASSESSEE THE ASSESSING OFFICER HAS ONLY MADE ADDITION TOWARDS THE HOUSE HOLD EXPENDITURE ON EST IMATE BASIS BUT OTHERWISE THE INCOME DECLARED BY THE ASSESSEE HAS BEEN ACCEPTED. IN OUR OPINION, THE PRINCIPLES LAID DOWN IN THE CASE OF SMT. PRA MILA D. ASHTEKAR (SUPRA) AS WELL AS CHANDAN K. SHEWANI (SUPRA) SQUA RELY APPLICABLE TO THE ASSESSEES CASE AND HENCE, NO PENALTY CAN BE LEVIED ON THE INCOME OFFERED OR DECLARED IN THE RETURN FILED IN RESPON SE TO NOTICE U/S.153 A OF THE ACT. SO FAR AS THE LEVY OF THE PENALTY O N THE INCOME DECLARED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153 A IS CONCERNED THE SAME IS NOT SUSTAINABLE. THE ASSESSING OFFICER HAS ALS O LEVIED THE PENALTY ON RS.10,616/- WHICH IS ADDITION SUSTAINED BY THE LD.CIT(A) IN RESPECT OF HOUSE HOLD EXPENSES. WE FIND THAT IT IS ONLY AN ESTIMATION NOT SUPPORTED BY ANY SEIZED MATERIAL. IN OUR OPINION, THE SAID ADDITION ALSO CANNOT BE SUBJECTED TO PENALTY. IN OUR OPINION, THE LD.C IT(A) HAS RIGHTLY 7 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. WE ACC ORDINGLY CONFIRM THE ORDER OF THE LD.CIT(A). 8. NOW WE TAKE UP ASSESSEES APPEAL FOR THE A.Y. 2003-0 4 BEING ITA NO.189/PN/2012. IN THE A.Y. 2003-04 THE GROUNDS TAKEN BY THE REVENUE ARE VERBATIM SAVE THE AMOUNT OF THE PENALTY I.E . RS.5,13,410/-. IN THIS YEAR THE ASSESSEE DECLARED THE INCOME OF RS.18,00 ,000/- IN THE RETURN FILED U/S.153A. THE ASSESSING OFFICER ALSO MADE THE A DDITION AS UNDER: (A) U/S. 40A(3) RS.1,45,872/- (B) HOUSE HOLD EXPENSES RS.30,000/- TOTAL ADDITION RS.1,75,872/- 9. THE LD.CIT(A) GAVE A RELIEF IN RESPECT OF HOUSEHOLD EXPENS ES AT RS.10,246/- AND RS.15,979/- IN RESPECT OF DISALLOWANCE MADE U/S.40(A)(3) OF THE ACT. SO FAR AS THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S.271(1)(C) ON THE AMOUNT OF RS.18,00,000/- WHICH IS T HE INCOME DECLARED BY THE ASSESSEE IN THE RETURN FILED IN RES PONSE TO NOTICE U/S.153A, IN OUR OPINION, THE SAME IS NOT SUSTAINABLE FOR OU R REASONS GIVEN IN THE A.Y. 2002-03. WE THEREFORE, SUPPORT THE ORD ER OF THE LD.CIT(A) DELETING THE PENALTY ON THIS AMOUNT. SO FAR AS TH E PENALTY LEVIED ON THE HOUSEHOLD EXPENSES WHICH IS MERELY ESTIMAT ION, IN OUR OPINION, THE SAME HAS TO BE DELETED AND TO THAT EXTENT WE SUPPORT THE ORDER OF THE LD.CIT(A) AS THE SAID ADDITION IS NOT BASED O N ANY SEIZED MATERIAL. 10. NOW LET US CONSIDER THE PENALTY LEVIED BY THE ASSESSIN G OFFICER OF RS.1,29,893/-. ADMITTEDLY, THE ADDITION MADE BY THE ASSESS ING OFFICER FOR THE PAYMENT MADE IN CASH TOWARDS THE PURCHASE OF T HE GOLD FOR THE BUSINESS THE SAID PAYMENTS WERE FOUND IN THE SEIZED RECO RD WHICH DETAILS ARE GIVEN IN THE ASSESSMENT ORDER. CERTAINLY FOR THIS ADDITION 8 ITA NOS.188 & 189/PN/2012, RAJENDRA SHIVAJI PAWAR, MALEGAON EXPLANATION 1 TO SECTION 271(1)(C) IS APPLICABLE AND WE HAVE T O EXAMINE WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION WHICH IS FOUND TO BE BONAFIDE AS PER THE MATERIAL ON RECORD. THE CASH PAYMEN TS WERE FOUND RECORDED IN THE SEIZED MATERIAL AND WHICH IS THE OFF SHOO T OF THE SEARCH AND SEIZURE OPERATION. WE FIND THAT AS NO BONAFIDE EXPLANA TION WAS OFFERED BY THE ASSESSEE, HENCE THE ASSESSING OFFICER LEVIED THE PENALTY ON THE SAID AMOUNT. IN OUR OPINION, THE PENALTY LEVIED ON THE S AID AMOUNT I.E. AMOUNT OF RS.1,29,893/- HAS TO BE SUSTAINED FOR CONCEALIN G THE PARTICULARS OF INCOME. HENCE, TO THAT EXTENT, WE REVERSE THE ORDER OF THE LD.CIT(A) AND DIRECT THE ASSESSING OFFICER TO RE-COMPUTE THE PENALTY . 11. IN THE RESULT, THE REVENUES APPEAL FOR THE A.Y. 2002- 03 IS DISMISSED AND THE REVENUES APPEAL FOR THE A.Y. 2003-04 IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29-04-2013 SD/- SD/- (G.S. PANNU) (R.S. PADVEKAR) ACCOUNTANT MEMBER JUDICIAL MEMBER RK/PS PUNE, DATED: 29 TH APRIL, 2013 COPY TO 1 DEPARTMENT 2 ASS ESSEE 3 THE CIT(A) - I, NASHIK 4 THE CIT ( C ) , NAGPUR 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE