ALLIANCE FINSTOCK LTD, MUMBAI V. ASST CIT CEN CIR 29, MUMBAI

ITA 1990/MUM/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0204 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GAJENDRA SINGH
• Keywords: Unexplained cash credit; Search and seizure
• Section: 143(3); 153A; 68

Judgement Text

P A G E | 1 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 IN THE INCOME TAX APPELLATE TRIBUNAL ' C ' BENCH, MUMBAI BEFORE SHRI G. MANJUNATHA , ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER ITA NO. 1990/MUM/2016 (ASSESSMENT YEAR: 2006 - 07 ) ALLIANCE FINSTOCK LTD PRAKASH CHAMBERS, 73/77, NAGINDAS MASTER ROAD, FORT MUMBAI - 400 001 VS. ASST. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 29 MUMBAI PAN AADCA9058Q APPELLANT RESPONDENT APPELLANT BY : SHRI ABHISHEK JHUNJHUNWALA, A.R RESPONDENT BY : SHRI GAJENDRA SINGH, D.R DATE OF HEARING : 12 .07 .2018 DATE OF PRONOUNCEMENT : 1 9 .09.2018 O R D E R PER RAVISH SOOD, JM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 52, MUMBAI, DATED 30.11.2015, WHICH IN TURN ARISES FROM THE ORDER PASSED BY THE A.O UNDER SEC. 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT ACT), DATED 21.03. 2013. THE ASSESSEE ASSAILING THE ORDER OF THE CIT(A) HAS RAISED BEFORE US THE FOLLOWING GROUNDS OF APPEAL: THE APPELLANT COMPANY PREFERS AN APPEAL AGAINST AN ORDER DATED 30/11/2015 PASSED BY LD. COMMISSIONER O F INCOME TAX, APPEALS - (52), MUMB AI ON FOLLOW ING AMONGST OTHER GROUNDS EACH OF WHICH ARE WITHOUT PREJUDICE TO ANY OTHER : - 1 .0 O N FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(1)(C) OF RS. 5,65,202/ - IN RESPECT OF ADDITION MADE U/S 68 OF ALLEGED CASH RECEIVED OF RS. 16,79,150/ - ; 2.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LD. CIT(A) ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271(L)(C) ON IGNORING P A G E | 2 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 THE FACT THAT LD . AO, IN ASSESSMENT ORDER, HAD NOT SPECIFIED WHETHER PENALTY I S INITIATED FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME; 3.0 ON FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE PENALTY ORDER U/S 271 (1)(C) IS BAD IN LAW SINCE THE NOTICE U/S 274 DOES NOT SPECIFY WHETHER PENALTY IS INITIATED FOR CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME; 4.0 THE LD. CIT(A), BEFORE CONFIRMING THE LEVY OF HARSH PENALTY, FAILED TO APPRECIATE THAT THE ADDITION MADE IN ASSESSMENT INVOLVES DEBATABLE ISSUES, 2 DIVERGENT VIEWS AND BONAFIDE EXPLANATIONS STATED AS UNDER : - A) THE CASH VOUCHERS IMPOUNDED DURING SURVEY STATES THAT THE MONEY IS RECEIVED/ RECEIVABLE AGAINST DEBIT BALANCE DUE FROM DEBTORS; B) THE IMPOUN DED CASH VOUCHERS ARE UNSIGNED BEING MERE PLANNING IN RESPECT OF THE MONEY YET TO B E RECEIVED, THUS CORRESPONDING DEBTOR'S ACCOUNTS WERE NOT ADJUSTED BY THE APPELLANT; C) THERE EXISTED SERIOUS DEBATE ABOUT YEAR OF TAXABILITY SINCE SAME ADD ITION WAS EVEN MADE DURING A.Y. 2008 - 09; D) THE ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR WHICH PENALTY HAD BEEN LEVIED IS ERRONEOUS SINCE THERE IS COMPLETE DISCLOSURE OF ALL MATERIAL ACTS ON RECORD. THE APPELLANT CRAVES LEAVE TO ADD, AMEN D, ALTER AND/OR WITHDRAW ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING. 2. BRIEFLY STATED, THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CON STRUCTION OF RESIDENTIAL AND COMMERCIAL UNITS SUCH AS IT SEZ PARK, CONVENTION CENTRE , MA LLS, HOTELS ETC. SEARCH AND S EIZURE PROCEEDINGS UNDER SEC. 132(1) OF THE ACT WERE CONDUCTED IN THE CASE OF THE ASSESSEE ON 09.07.2008. DURING THE COURSE OF THE SEARCH PROCEEDIN GS , DOCUMENTARY EVIDENCE VIZ. CASH VOUCHERS BEARING NARRATION B EING AMOUNT RECEIVED AGAINST DEBIT BALANCE FROM ..... WERE FOUND AND SEIZED. THE VOUCHERS PERTAINED TO THE ASSESSEE AND FOUND TO BE PREPARED IN THE MONTH OF MARCH, 2006, REVEALED CASH RECEIPT S AGGREGATING TO RS. 16,79,150/ - . THE SAID CASH RECEIPT S WERE NOT FOUND TO BE RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. FURTHER, IT WAS OBSERVED THAT THE ASSESSEE HA D ALSO NOT OFFERED FOR TAX THE AFORESAID AMOUNT IN ITS RETURN OF INCOME FILED UNDER SEC. 153A OF THE ACT . THE A.O, ACCOR DINGLY, WHILE FRAMING THE ASSESSMENT MADE AN ADDITION P A G E | 3 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 OF RS. 16,79,150/ - BY TREATING THE SAME AS AN UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE UNDER SEC. 68 OF THE ACT. THE A.O WHILE CULMINATING THE ASSESSMENT , VIDE HIS ORDER PASSED UNDER SEC. 143(3) R.W.S. 153A OF THE ACT, DATED 30.12.2010 ALSO INITIATED PENALTY PROCEEDINGS UNDER SEC. 271(1)(C) AND ISSUED A SHOW CAUSE NOTICE UNDER SEC. 271(1)(C) R.W.S. 274, DATED 30.12.2010 , THEREIN CALLING UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT B E IMPOSED ON IT. 3. AGGRIEVED, THE ASSESSEE UNSUCCESSFULLY ASSAILED THE AFORESAID ADDITION IN APPEAL BEFORE THE CIT(A). THE ORDER OF THE CIT(A) SUSTAINING THE AFORESAID ADDITION OF RS. 16,79,150/ - WAS FURTHER CARRIED IN APPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL. THE TRIBUNAL AFTER DELIBERATING AT LENGTH ON THE CONTENTIONS ADVANCED BY THE ASSESSEE WAS HOWEVER NOT PERSUADED TO ACCEPT THE SAME . IN THE BACKDROP OF THE ADMISSION OF THE ASSESSEE BEFORE THE TRIBUNAL , WHEREIN IT HAD EXPRESSED ITS INABILITY TO EX PLAIN THE AFORESAID CASH CREDIT , AND HAD CONCEDED THE AFORESAID AMOUNT OF RS. 16,79,150/ - AS AN UNEXPLAINED CASH CREDIT FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y 2006 - 07, THE TRIBUNAL CONFIRMED THE ORDER S OF THE LOWER AUTHORITIES , OBSERVING AS UNDER : 5. WE HAVE HEARD THE PARTIES AND PERUSED MATERIAL ON RECORD. FIRSTLY, THE ASSESSEE BEFORE US CONCEDED TO THE ADDITION QUA UNEXPLAINED CASH RECEIPTS FOR RS.16,79,150/ - FOR THE ASSESSMENT YEAR 2006 - 07; IT BEING UNABLE TO EXPLAIN CASH CREDITS TO THAT EXTENT IN TERMS OF SECTION 68 OF THE ACT. AS REGARDS THE ADDITION FOR A. Y. 2008 - 09, HOWEVER, WE FIND LITTLE MERIT IN THE REVENUE'S CASE IN THE ABSENCE OF ANY MATERIAL LEADING TO THE INFERENCE OF ADDITIONAL INCOME, I.E., SEPARATE AND APART FROM RS. 16.79 LACS MADE AND SUSTAINED FOR A.Y. 2006 - 07, FOR THAT YEAR, I.E., A.Y. 2008 - 09. THE DIRECTOR MAY HAVE OFFERED THE ADDITIONAL INCOME, WHAT IS THOUGH REQUIRED TO BE SEEN IS THE REASON FOR WHICH HE DOES SO. IF THE BASIS OF THE SAME, AS EXPLAINED TO US DURING HEARING BY THE L D. AR, TO NO REBUTTAL BY THE LD. DR, IS THE SAID CASH VOUCHERS, ADDITION QUA WHICH STANDS ALREADY MADE FOR A.Y. 2006 - 07, THERE IS NO SCOPE OR MERIT IN SUSTAINING ANOTHER ADDITION FOR THE CURRENT YEAR. WE, ACCORDINGLY, HAVE NOT HESITATION IN DIRECTING ITS DELETION. WE DECIDE ACCORDINGLY, CONFIRMING AND DELETING THE ADDITION FOR THE TWO SUCCESSIVE YEARS RESPECTIVELY. WE DECIDE ACCORDINGLY. 4. THE A.O AFTER RECEIVING THE ORDER OF THE CIT (A) WHEREIN THE ADDI TION OF RS. 16,79,150/ - WAS CONFIRMED, THEREIN ISSUED A NOTHER SHOW CAUSE NOTICE, UNDER SEC. 274 R.W.S. 271(1)(C) OF THE ACT, DATED 28.01.2013, CALLING UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SEC. 271(1)(C) MAY NOT BE P A G E | 4 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 IMPOSED ON IT. THE EXPLAN ATION OF THE ASSESSEE THAT NO PENALTY FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WAS LIABLE TO BE IMPOSED, HOWEVER, DID NOT FIND FAVOUR WITH THE A.O , WHO REJECTED THE SAME. THE A.O BEING OF THE VIEW THAT THE ASSESSEE HAD FAILED TO COME FORTH WITH A BONAFIDE EXPLANATION AS REGARDS THE ADDITION OF RS. 16,79,150/ - MADE IN ITS HANDS , THUS IMPOSED A PENALTY OF RS. 5,65,202/ - ON THE ASSESSEE FOR HAVING FURNISHED INACCURATE PARTICULARS OF ITS INCOME UNDER SEC. 271(1)(C) OF THE ACT . 5. AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). THE CIT(A) OBSERVED THAT THE ASSESSEE HAD OFFERED THE AFORESAID AMOUNT OF RS. 16,79,150/ - TO TAX IN A . Y 2008 - 09. HOWEVER , IT WAS NOTICED BY THE CIT(A) , THAT THE TRIBUNAL AFTER NECESSAR Y DELIBERATIONS HAD CONCLUDED THAT AS THE CASH VOUCHERS FOUND DURING THE COURSE OF THE SEARCH PR OCEEDING REVEALED THAT THE SAID AMOUNT WAS RECEIVED BY THE ASSESSEE IN THE MONTH OF MARCH, 2006, HENCE THE DISCLOSURE OF THE SAME BY THE ASSESSEE IN A . Y 2008 - 09 WAS NOT BE TREATED AS A TRUE AND COMPLETE DISCLOSURE. IT WAS OBSERVED BY THE CIT(A), THAT THE TRIBUNAL IN THE BACKDROP OF ITS AFORESAID OBSERVATIONS HAD THOUGH DELETED THE ADDITIONS IN A . Y:2008 - 09, BUT HAD SUSTAINED THE SAME FOR A . Y: 2006 - 07 IN THE HANDS OF THE ASSESSEE. FURTHER, THE CIT(A) OBSERVED THAT THOUGH EVIDENCE RE GARDING RECEIPT OF THE AFORESAID AMOUNT BY THE ASSESSEE WAS FOUND DURING THE COURSE OF THE S EARCH AND SEIZURE PROCEEDINGS, HOWEVER, THE ASSESSEE STILL DID NOT OFFER THE SAID AMOUNT FOR TAX IN ITS RETURN OF INCOME FILED UNDER SEC.153A FOR THE YEAR UNDER CONSIDERATION VIZ. AY: 2006 - 07 . RATHER, THE ASSESSEE HAD ASSAILED THE ADDITION OF THE AFORESAID AMOUNT MADE BY THE A . O IN ITS QUANTUM APPEAL BEFORE THE CIT(A), BUT IN VAIN. IT WAS NOTICED BY THE CIT(A) THAT AS THE ASSESSEE WAS UNABLE TO EXPLAIN THE CASH CREDIT, THEREFORE, IT HAD ACCEPTED THE ADDITION BEFORE THE TRIBUNAL. IN THE BACKDROP OF THE AFORE SAID FACTS , THE CIT(A) OBSERVED THAT THE PROVISIONS RELATING TO PENALTY UNDER SEC. 271(1)(C) IN SEARCH AND SEIZURE CASES AFTER 01.06.2007 WERE GOVERNED BY EXPLANATION 5A TO SEC. 271(1)(C) , AND NO IMMUNITY WAS AVAILABLE EVEN IN A CASE WHERE THE ASSESSEE ADM ITTED ANY ADDITIONAL INCOME AND HAD OFFERED THE SAME IN ITS RETURN OF INCOME FILED SUBSEQUENT TO THE SEARCH PROCEEDING. ON THE BASIS OF HIS AFORESAID P A G E | 5 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 OBSERVATIONS, THE CIT(A) WAS OF THE VIEW THAT PENALTY WAS MANDATORILY LIABLE TO BE IMPOSED ON THE ASSESSEE AS PER THE PROVISIONS OF EXPLANATION 5A TO SEC. 271(1)(C) OF THE ACT. FURTHER, THE CIT(A) OBSERVED THAT AS THE ASSESSEE HAD FAILED TO OFFER ANY E XPLANATION TO THE SATISFACTION OF THE A . O THAT NO PENALTY UNDER SEC. 271(1)(C) WAS LIABLE TO BE IMPOSED IN RES PECT OF THE AFORESAID ADDITION OF RS.16,79,150/ - , HENCE ITS CASE WAS ALSO SQUARELY COVERED BY THE EXPLANATION 1 TO SEC. 271(1)(C) OF THE ACT. THE CIT(A) WHILE CONCLUDING AS HEREINABOVE , TOOK SUPPORT OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA VS. CIT (2013) 358 ITR 593 (S.C) . ON THE BASIS OF HIS AFORESAID OBSERVATIONS , THE CIT(A) UPHELD THE PENALTY OF RS. 5,65,202/ - IMPOSED BY THE A . O UNDER SEC. 271(1)(C) OF THE ACT. 6. THE ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE CIT(A) HAS CARRIED THE MATTER IN APPEAL BEFORE US. THE LD. AUTHORIZED REPRESENTATIVE (FOR SHORT A.R) FOR THE ASSESSEE TOOK US THROUGH THE FACTS OF THE CASE . IT WAS SUBMITTED BY THE LD. A.R, THAT AS THE A.O HAD F A ILED TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE BODY OF THE SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE UNDER SEC. 274 R.W.S 271(1)(C) OF THE ACT , THUS , THE L A TTER HAD REMAINED DIVESTED OF AN OPPORTUNITY OF PUTTING FORTH AN EXPLANATION AS TO WHY NO PENALTY UNDER SEC. 271(1)(C) WAS LIABLE TO BE IMPOSED ON IT. IN ORDER TO FORTIFY HIS AFORESAID CONTENTION , THE LD. A.R TOOK US THROUGH THE COPY OF THE SHOW CAUSE NOTICE ISSUED BY THE A.O UNDER SEC. 274 R.W.S. 271(1)(C) , DATED 30.12.2010. ON THE BASIS OF THE AFORESAID CONTENTION , IT WAS THE CLAIM OF THE LD. A.R TH AT THE A.O HAD WRONGLY ASSUME D JURISDICTION AND IMPOS ED PENALTY UNDER SEC. 271(1)(C) . IN SUPPORT OF HIS AFORESAID CONTENTION , THE LD. A.R RELIED ON A HOST OF JUDICIAL PRONOUNCEMENT S . IT WAS FURTHER SUBMITTED BY THE LD. A.R THAT AS THE MERE FINDING OF THE VOUCHER S DURING THE COURSE OF THE SEARCH AND SEIZURE PROCEEDINGS WOULD NOT CONCLUSIVELY PROVE THAT THE ASSESSEE HAD RECEIVED CASH OUTSIDE ITS BOOKS OF ACCOUNT, HENCE NO PENALTY EVEN ON MERITS WAS LIABLE TO BE IMPOSED. IN ORDER TO FORTIFY HIS AFORESAID CONT ENTION S, THE LD. A.R TRIED TO DRAW FORCE FROM THE FACT THAT THE NARRATION BEING AMOUNT RECEIVED AGAINST DEBIT BALANCE FROM..... MENTIONED IN THE IMPOUNDED VOUCHERS , DID NOT CONCLUSIVELY PROVE TO THE HILT THAT THE ASSESSEE P A G E | 6 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 WAS IN RECEIPT OF THE SAID RESPE CTIVE AMOUNTS. WE FURTHER FIND THAT THE ASSESSEE HAD ALSO SUBMITTED BEFORE THE CIT(A) THAT SINCE IT WAS ENGAGED IN SHARE BROKING ACTIVITY , THUS WITH AN INTENT TO RECOVER THE LONG OUTSTANDING DUES FROM CERTAIN SUB - BROKERS ( ARBITRAGEURS) , IT HAD ISSUED PROVI SIONAL RECEIPTS TO THE ACCOUNTANT , WHICH WERE TO BE ISSUED BY HIM TO THE PARTIES AS AND WHEN AMOUNTS WERE RECEIVED FROM THEM. FURTHER, IT WAS ALSO THE CLAIM OF THE ASSESSEE THAT AS THE RECEI PTS PERTAINED TO THE CASH AMOUNT WHICH WAS RECEIVED BY THE ASSESSEE IN RESPECT OF THE MONEY RECOVERABLE FROM THE SUB - BROKERS ( ARBITRAGEURS) AND DID NOT RELATE TO FRESH CASH CREDIT S , THUS ADDITION UNDER SEC. 68 WAS IN ITSELF UNJUSTIFIED. IT WAS ALSO THE CONTEN TION OF THE ASSESSEE THAT AS THE CASH VOUCHERS FOUND DURING THE COURSE OF THE SEARCH PROCEEDINGS WERE UNSIGNED BY EITHER OF THE PARTIES, THUS THE SAME DID NOT INSPIRE ANY CONFIDENCE AND COULD NOT BE RELIED UPON FOR DRAWING OF ADVERSE INFERENCES IN THE HAND S OF THE ASSESSEE. STILL FURTHER , IT WAS SUBMITTED BY THE ASSESSEE THAT THE A.O HAD TAXED THE AFORESAID AMOUNT IN A . Y 2006 - 07 AND AGAIN IN A . Y 2008 - 09. IT WAS THUS , THE CLAIM OF THE ASSESSEE THAT THOUGH THE TRIBUNAL HAD DELETED THE ADDITION FOR A . Y 2008 - 09 AND SUSTAINED THE SAME IN THE YEAR UNDER CONSIDERATION VIZ. A . Y 2006 - 07, HOWEVER, ON A PERUS AL OF THE SAID FACTUAL POSITION , IT COULD SAFELY BE CONCLUDED THAT AS THERE EXISTED A SERIOUS DOUBT ABOUT THE YEAR OF TAXABILITY OF INCOME, HENCE NO PENALTY UNDER SEC. 271(1)(C) WAS LIABLE TO BE IMPOSED IN THE HANDS OF THE ASSESSEE. 7. PER CONTRA, THE LD. DEPARTMENTAL REPRESENTATIVE (FOR SHORT D.R) SUBMITTED THAT AS THE ASSESSEE HAD ACCEPTED THE ADDITION OF RS. 16,79,150/ - IN THE COURSE OF THE Q UANTUM APPEAL BEFORE THE TRIBUNAL, THUS NO INFIRMITY DID EMERGE FROM THE ORDER OF THE A.O IMPOSING PENALTY UNDER SEC. 271(1)(C) . 8. WE HAVE HEARD THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERI AL AVAILABLE ON RECORD. WE SHALL FIRST ADVERT TO THE CONTENTION OF THE LD. A.R THAT AS THE A.O HAD FAILED TO STRIKE OFF THE IRRELEVANT DEFAULT IN THE BODY OF THE SHOW CAUSE NOTICE , DATED 30.12.2010 ISSUED UNDER SEC. 274 R.W.S 271 , THUS HE HAD WRONGLY ASS UME D JURISDICTION AND IMPOSED PENALTY UNDER SEC. 271(1)(C) IN P A G E | 7 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 THE HANDS OF THE ASSESSEE. WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE AFORESAID CLAIM OF THE LD. A . R . WE FIND THAT THE LD. A.R IN ORDER TO FORTIFY HIS AFORESAID CONTENTION HAS TAKEN US THROUGH THE COPY OF THE S HOW CAUSE NOTICE, DATED 30.12.2010 , WHICH WAS ISSUED BY THE A.O WHILE PASSING THE ASSESSMENT ORDER UNDER SEC. 143(3) R.W.S. 153A . ADMITTEDLY, A PERUSAL OF THE AFORESAID SHOW CAUSE NOTICE, DATED 30.12.2010 REVEALS THAT THE A. O HAD FAILED TO STRIKE OFF THE IRRELEVANT DEFAULT WHILE CALLING UPON THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY MAY NOT BE IMPOSED UPON IT UNDER SEC. 271(1)(C) OF THE ACT. HOWEVER, WE FIND FROM A PERUSAL OF THE ORDER PASSED BY A.O UNDER SEC. 271(1)(C) , THAT ANOTHER SHOW CAUSE NOTICE UNDER SEC. 274 R.W.S. 271(1)(C) OF THE ACT, DATED 28.01.2013 WAS ISSUE D TO THE ASSESSEE. WE ARE OF THE CONSIDERED VIEW THAT AS NEITHER THE COPY OF THE SHOW CAUSE NOTICE, DATED 28.01.2013 HAD BEEN PLACED ON RECORD, NOR ANY CONTENTION HAS BEEN ADVANCED AS REGARDS ANY FAILURE ON THE PART OF THE A.O TO STRIKE OFF THE IR RELEVANT DEFAULT IN THE BODY OF THE SAID NOTICE, THUS , IN THE ABSENCE OF ANY CHALLENGE THROWN BY THE ASSESSEE TO THE VALIDITY OF THE SHOW CAUSE NOTICE , DAT ED 28.01.2013, WE ARE UNABLE TO PERSUADE OURSELVES TO SUBSCRIBE TO THE CLAIM OF THE ASSESSEE THAT THE A.O HAD WRONGLY ASSUME D JURISDICTION AND IMPOSED PENALTY IN THE HANDS OF THE ASSESSEE UNDER SEC. 271(1)(C) OF THE ACT. THE GROUNDS OF APPEAL NO. 2 AND 3 R AISED BY THE ASSESSEE ARE THUS DISMISSED. 9. WE SHALL NOW ADVERT TO THE MAINTAINABILITY OF THE PENALTY OF RS. 5,65,202/ - LEVIED BY THE A .O UNDER SEC. 271(1)(C) , ON MERITS . WE FIND THAT DOCUMENTARY EVIDENCE VIZ. VOUCHERS SHOWING RECEIPT OF AN AMOUNT AGGREG ATING TO RS. 16,79,150/ - IN CASH BY THE ASSESSEE IN MARCH, 2006, WERE FOUND AND IMPOUNDED DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCTED ON THE ASSESSEE UNDER SEC. 132(1) ON 0 9 .07.2008. THE AFORESAID CASH RECEIPT S WERE NOT RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE. FURTHER, THE ASSESSEE HAD NOT OFFERED THE AMOUNT FOR TAX IN ITS RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED UNDER SEC. 153 A OF THE ACT. ACCORDINGLY, THE A . O WHILE FRAMING THE ASSESSMENT ADDED THE AMOUNT OF RS. P A G E | 8 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 16,79,150 / - AS THE UNEXPLAINED CASH CREDIT IN THE HANDS OF THE ASSESSEE UNDER SEC. 68 OF THE ACT. 10. WE HAVE DELIBERATED AT LENGTH ON THE ISSUE UNDER CONSIDERATION AND FIND THAT THE ISSUE AS TO WHETHER THE RECEIPT OF AN AMOUNT OF RS. 16,79,150/ - , AS EVIDENCED BY THE VOUCHERS FOUND AND IMPOUNDED DURING THE COURSE OF THE SEARCH PROCEEDINGS REPRESENTED THE UNEXPLAINED CASH RECEIPTS OF THE ASSESSEE OR NOT, HAS BEEN PUT TO REST BY THE ASSESSEE , IN THE B ACKDROP OF HIS ADMISSION OF THE SAID AMOUNT AS AN UNEXPLAINED CASH CREDIT FOR A . Y 2006 - 07 . WE ARE OF THE CONSIDERED VIEW , THAT NOW WHEN THE ASSESSEE HAD ADMITTEDLY FAILED TO COME FORTH WITH AN EXPLANATION AS REGARDS THE ADDITIO N OF RS. 16,79,150/ - MADE IN ITS HANDS, AND RATHER HAD ACCEPTED THE SAME AS AN UNEXPLAINED CASH CREDIT FOR THE YEAR UNDER CONSIDERATION VIZ. A.Y 2006 - 07, THUS , ITS CASE IS SQ UARELY COVERED BY EXPLANATION - 1 (A) OF SEC. 271(1)(C) OF THE ACT. 11. WE FURTHER FIND OURSELVES TO BE IN AGREEMENT WITH T HE OBSERVATIONS OF THE CIT(A) THAT POST INSERTION OF EXPLANATION 5A TO SEC. 271(1)(C) OF THE ACT, VIDE FINANCE (NO.2) ACT, 2009 W.R.E.F 01.06.2007 , WHERE DURING THE COURSE OF THE SEARCH PROCEEDINGS , THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS, AND THE SAME WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED PRIOR TO THE SEARCH PROCEEDINGS , THEN , NOTWITHSTANDING THE FACT WHETHER SUCH INCOME WAS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME FILED SUBSEQUENT TO SEARCH PROCEEDINGS , IT WILL BE DEEMED THAT THE ASSESSEE HAD CONCEALED THE PARTICULARS IN RESPECT OF SUCH INCOME. WE FIND THAT IN THE CASE BEFORE US , THE ASSESSEE ON THE BASIS OF THE VOUCHERS WHICH WERE FOUND AND IMPOUNDED DURING THE COURSE OF THE SEARCH PROCEEDINGS CONDUCTED ON IT ON 09.07.2008, WAS ADMITTEDLY FOUND TO BE THE OWNER OF UNDISCLOSED INCOME OF RS. 16,79,150/ - , AS EMERGED THEREFROM , FOR THE YEAR UNDER CONSIDERATION VIZ . A.Y: 2006 - 07 . FURTHER, THE AFORESAID CASH RECEIPTS OF RS.16,79,150/ - WERE NOT DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME FILED FOR THE A.Y 2006 - 07 PRIOR TO THE SEARCH PROCEEDINGS. RATHER, THE ASSESSEE HAD NOT EVEN OFFERED THE AFORESAID AMOUNT OF R S.16,79,150/ - FOR P A G E | 9 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29 TAX IN THE RETURN OF INCOME WHICH WAS FILED UNDER SEC. 153A OF THE ACT. WE ARE OF THE CONSIDERED VIEW , THAT IN THE BACKDROP OF THE AFORESAID FACTS , THE CIT(A) HAD RIGHTLY CONCLUDED THAT THE CASE OF THE ASSESSEE WOULD ALSO SQUARELY BE COVE RED BY THE EXPLANATION 5A TO SEC.271(1)(C) OF THE ACT. WE THUS, PERSUADED TO SUBSCRIBE TO THE AFORESAID OBSERVATIONS OF THE CIT(A), UPHOLD THE SAME. 12. IN TERMS OF OUR AFORESAID OBSERVATIONS, THE ORDER OF THE CIT(A) UPHOLDING THE PENALTY OF RS.5,62,202/ - IMPOSED BY THE A . O UNDER SEC. 271(1)(C) OF THE ACT, IS UPHELD. 13. THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRO NOUNCED IN THE OPEN COURT ON 1 9 .09.2018 S D / - S D / - ( G. MANJUNATHA ) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI ; 19 .09 .2018 PS. ROHIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI P A G E | 10 ITA NO.1990/MUM/2016 AY 2006 - 07 ALLIANCE FINSTOCK LTD. VS. ASST. COMMISSIONER OF INCOME TAX, CC - 29