M/s Hillview Infrastructure Pvt. Ltd., Chandigarh V. DCIT, Chandigarh

ITA 233/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8324 (ITAT-CHANDIGARH)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 02-01-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 17-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Unexplained expenditure; Document seized; Documents seized
• Section: 69C; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 233 & 234/CHD/2016 ASSESSMENT YEAR : 2007-08 & 2009-10 M/S HILLVIEW INFRASTRUCTURE PVT.LTD., VS THE DCIT, SCO 2474, SECTOR 22-C, CENTRAL CIRCLE -1, CHANDIGARH. CHANDIGARH. PAN: AABCH6185R (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL DATE OF HEARING : 19.01.2017 DATE OF PRONOUNCEMENT : 08.02.2017 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDERS OF LD. CIT(APPEALS)-3 GURG AON DATED 06.01.2016 FOR ASSESSMENT YEARS 2007-08 AND 2009-10, CHALLENGING THE LEVY OF PENALTY UNDER SECT ION 271(1)(C) OF THE INCOME TAX ACT. 2. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. 2 ITA 233/2016 (A.Y. 2007-08) 3. IN THIS CASE, THE PENALTY UNDER SECTION 271(1)(C ) OF THE ACT IS UNDER CONSIDERATION WITH REFERENCE TO TH E ADDITION AMOUNTING TO RS. 5,94,000/- MADE BY THE ASSESSING OFFICER AS UNDER : I) RS. 94,000/- : UNEXPLAINED EXPENDITURE U/S 6 9 II) RS. 5 LACS : ON ACCOUNT OF UNDISCLOSED IN COME 4. BRIEFLY THE FACTS OF THE CASE ARE THAT A SEARCH & SEIZURE OPERATION UNDER SECTION 132 OF INCOME TAX A CT WAS CARRIED OUT ON 07.07.2009 ON BANSAL GROUP OF CA SES BY INVESTIGATION WING, CHANDIGARH. THE ASSESSEE WA S ONE OF THE PERSON/CONCERN COVERED UNDER SECTION 132 OF THE ACT. 5. AS REGARDS UNEXPLAINED EXPENDITURE OF RS. 94,000/- UNDER SECTION 69C OF THE ACT, IT IS OBSERV ED BY THE ASSESSING OFFICER THAT AS PER PAGE 81 OF ANNEXU RE A-1 SEIZED FROM THE OFFICE PREMISES OF THE ASSESSEE I.E. SCO 2474, SECTOR 22, CHANDIGARH. THIS WAS HAND WRITTEN SHEET SHOWING CERTAIN TRANSACTIONS IN THE N AME OF SHRI ASHWANI TAYAL, SHRI MANGE RAM GOYAL AND SHR I ANIL AND SHRI RAJIV BAWA ETC. THE ASSESSEE WAS DIR ECTED TO RECONCILE THE TRANSACTIONS WITH REGULAR BOOKS OF ACCOUNT. THE ASSESSEE CONTENDED THAT PAGE 81 CONSIS TED OF SOME PETTY ENTRIES OF CASH GIVEN BY SHRI ANIL AN D SHRI 3 LALIT JINDAL FOR PETTY WORKS OF PROJECTS. IT WAS F URTHER SUBMITTED THAT THIS AMOUNT WAS UNDISCLOSED ROTATION CAPITAL INVESTMENT OF SHRI J.C.BANSAL AND HE HAD ALREADY DECLARED RS. 30.70 LACS BEFORE SETTLEMENT COMMISSION. THE PLEA OF THE ASSESSEE THAT THIS AMO UNT REPRESENTS UNDISCLOSED INCOME OF SHRI J.C.BANSAL AN D HAS BEEN DECLARED IN HIS HANDS BEFORE SETTLEMENT COMMISSION WAS NOT ACCEPTABLE. THE SEIZED DOCUMENT PERTAINS TO THE ASSESSEE AND THIS WAS UNDISCLOSED EXPENDITURE OF THE ASSESSEE. THE ASSESSING OFFICER AFTER DISCUSSION MADE A PERUSAL OF THE CHART PRODUCED BEF ORE HIM NOTED THAT RS. 94,500/- WAS NOT SHOWN AS INCURR ED OUT OF ADDITIONAL INCOME SURRENDERED DURING ASSESSM ENT YEAR 2007-08. THE ASSESSEE, THUS, FAILED TO EXPLAI N THE SEIZED PAPER. THE ADDITION WAS ALSO CONFIRMED BY T HE ASSESSING OFFICER. PENALTY PROCEEDINGS WERE INITIA TED ACCORDINGLY. THE REPLY OF THE ASSESSEE WAS SAME IN THE PENALTY PROCEEDINGS THAT SHRI J.C.BANSAL HAD ALREAD Y DECLARED RS. 30.70 LACS BEFORE SETTLEMENT COMMISSIO N BUT IT WAS NOT ACCEPTED BECAUSE REPLY OF THE ASSESS EE WAS VAGUE AND WAS NOT SUPPORTED BY ANY EVIDENCE. T HE EXPLANATION OF THE ASSESSEE WAS FOUND AFTER THOUGHT AND WAS NOT BACKED BY ANY DOCUMENTARY EVIDENCE. THE ASSESSING OFFICER WAS, THEREFORE, OF THE VIEW THAT ASSESSEE HAS CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME WILLFULLY. 4 6. AS REGARDS UNDISCLOSED INCOME OF RS. 5 LACS, IT IS OBSERVED BY THE ASSESSING OFFICER THAT AS PAGE 57 O F ANNEXURE A-2 SEIZED FROM BUSINESS PREMISES WAS A HA ND WRITTEN PAGE SHOWING TRANSACTION IN CHEQUES AND CAS H RECEIVED FROM SHRI CHARANJIT LAL AND SHRI RAHUL CHHABRA. THE ASSESSEE WAS ASKED TO GIVE DETAILS OF THESE TRANSACTIONS AND ALSO TO RECONCILE THE SAME W ITH THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE SUBMITT ED THAT PAYMENT OF SHRI RAHUL CHHABRA WAS NOT REGULAR AND SINCE HIS CHEQUES WERE DISHONOURED, HE OFFERED TO PAY RS. 5 LACS IN CASH. IT WAS STATED THAT SHRI CH HABRA BACKED OUT AND THE PAYMENT OF RS. 5 LACS WAS NOT MA DE. THE ASSESSING OFFICER NOTED THAT SAID FACT DOES NOT SUPPORT CONTENTION OF THE ASSESSEE AS THE CHEQUE PAYMENTS WERE SHOWN AT RS. 7,89,760/- AND ANOTHER PAYMENT OF RS. 5 LACS HAVE BEEN SHOWN. THE TOTAL PAYMENT SHOWN WAS RS. 12,89,760/-. CONSEQUENTLY, A SUM OF RS. 5 LACS WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE. THE LD. CIT(APPEALS) CONFIRMED THE ADDITION AND PENALTY PROCEEDINGS WERE ALSO INITIATE D AGAINST THE ASSESSEE. 7. THE ASSESSEE AT THE PENALTY PROCEEDINGS FILED WRITTEN STATEMENT WHICH IS NOTED IN THE PENALTY ORD ER IN WHICH THE ASSESSEE BRIEFLY EXPLAINED THE SAME FACTS THAT SINCE CHEQUES OF SHRI RAHUL CHHABRA WERE CONTINUOUS LY DISHONOURED, THEREFORE, HE HAS OFFERED RS. 5 LACS A S CASH AND SECURITY MONEY BUT LATER ON, HE BACKED OUT TO 5 CONFIRM THE SAME. NO PAYMENT HAS BEEN RECEIVED FRO M SHRI CHARANJIT LAL AND SHRI RAHUL CHHABRA, THUS, NO INCOME SHOULD BE ADDED. THE ASSESSING OFFICER DID NOT ACCEPT CONTENTION OF THE ASSESSEE BECAUSE ASSESSEE DID NOT PRODUCE ANY EVIDENCE WITH RESPECT TO NON-PAYMEN T OF RS. 5 LACS. IT WAS, THEREFORE, HELD THAT ASSESS EE HAS CONCEALED THE INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME. THE PENALTY WAS ACCORDINGLY , IMPOSED UNDER SECTION 271(1)(C) OF THE ACT. 8. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE LD. CIT(APPEALS), DETAILED SUBMISSIONS WERE MADE, HOWEVER, LD. CIT(APPEALS) DID NOT ACCEPT CONTENTION OF THE ASSESSEE BECAUSE BOTH THE ABOVE ADDITIONS HAVE BEEN CONFIRMED BY ITAT AND ARE BASED UPON SEIZED DOCUMENT. THE LD. CIT(APPEALS) NOTED THAT ASSESSEE DID NOT DISCLOSE ALL THE FACTS IN THE RETURN OF INCOME AND BURDEN UPON ASSESSEE HAS NOT BEEN DISCHARGED AND PENALTY CAN BE IMPOSED EVEN UNDER DEEMING ADDITIONS UNDER SECTION 68/69 OF INCOME TAX ACT. THE PENALTY WAS CONFIRMED ON BOTH THESE ADDITIONS. 9. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT EVEN IF ADDITION ON QUANTUM HAVE BEE N CONFIRMED BUT PENALTY NEED NOT TO BE IMPOSED IN EAC H AND EVERY CASE. THE QUANTUM AND PENALTY PROCEEDING S ARE SEPARATE AND DISTINCT. THE ASSESSEE CAN EXPLAI N IN 6 THE PENALTY PROCEEDINGS THAT NO PENALTY IS LEVIABLE . HE HAS, HOWEVER, SUBMITTED THAT IT WAS A ROTATING CAPI TAL INVESTMENT BY SHRI J.C.BANSAL AND HE HAD ALREADY DISCLOSED RS. 30.70 LACS THEREFORE, PENALTY NEED NO T BE IMPOSED. AS REGARDS THE ADDITION OF RS. 5 LACS, CO PY OF THE SEIZED PAPER IS FILED AT PAGE 6 OF THE PAPER BO OK. COPIES OF THE ALLOTMENT LETTER AND CHEQUES DISHONOU RED IN THE NAME OF SHRI RAHUL CHHABRA ARE FILED AT PAGE 1-5 OF THE PAPER BOOK. HE HAS SUBMITTED THAT IN THE SE IZED PAPER, NO CASH RECEIPT OF RS. 5 LACS HAS BEEN MENTI ONED. HE HAS SUBMITTED THAT ASSESSEE DID NOT FILE PROOF O F DISHONOURED CHEQUES IN THE QUANTUM PROCEEDINGS BUT NOW SAME ARE FILED IN THE PAPER BOOK. HE HAS ALSO FILED DETAILS TO SHOW THAT PAYMENTS HAVE BEEN RECEIVED FR OM SHRI RAHUL CHHABRA TO WHOM FLAT HAD BEEN ALLOTTED. ON THE RIGHT SIDE OF THE SEIZED PAPER (PB-6) THE AMOUN T IS MENTIONED AS RS. 7,89,760/-. FROM THIS TOTAL OF RS . 7,89,760/-, RS. 2 LACS IS TO BE REDUCED SINCE THERE IS NOTING AT PAGE 6 THAT CHEQUE HAS BEEN DISHONOURED. HE HAS FILED TOTAL CALCULATION OF THE SAME TO SHOW THA T BALANCE PAYMENT DUE AGAINST SHRI RAHUL CHHABRA WAS RS. 7,51,340/- WHICH HAVE BEEN RECOVERED FROM SHRI RAHUL CHAHBRA LATER ON IN A SUM OF RS. 7,46,000/- I N DIFFERENT AMOUNTS STARTING FROM 22.12.2010 TO 12.11.2014. COPIES OF THE RECEIPTS ISSUED BY THE ASSESSEE IN THE NAME OF SHRI RAHUL CHHABRA ARE ALSO PLACED ON RECORD. HE HAS, THEREFORE, SUBMITTED THA T ALMOST ALL THE PAYMENTS WHICH WERE DUE AS PER 7 CALCULATION ON LEFT SIDE OF THE SEIZED PAPER HAVE B EEN RECEIVED AND PROPERLY ACCOUNTED FOR IN THE BOOKS OF ACCOUNT WHICH WILL PROVE THAT NO CASH HAS BEEN RECE IVED AGAINST THE SALE OF FLAT WHICH HAVE NOT BEEN ACCOUN TED FOR IN THE REGULAR BOOKS OF ACCOUNT. THE LD. COUNS EL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT ON THE BASI S OF THESE EVIDENCES ON RECORD, EVEN IF QUANTUM HAVE BEE N CONFIRMED, PENALTY NEED NOT BE IMPOSED. ON THE OTH ER HAND, LD. DR SUBMITTED THAT SINCE QUANTUM ADDITION HAVE BEEN CONFIRMED, THEREFORE, PENALTY APPEAL MAY BE DISMISSED. HE HAS ALSO RELIED UPON DECISIONS OF HO N'BLE SUPREME COURT IN THE CASES OF DHARMENDRA TEXTILE & PROCESSORS 306 ITR 277 AND ATUL MOHAN JINDAL 317 IT R 1 ON THE PROPOSITION THAT PENALTY IS STRICTLY A CIV IL LIABILITY. 10. WE HAVE CONSIDERED RIVAL SUBMISSIONS. AS REGAR DS FIRST ADDITION OF RS. 94,500/-, IT IS ADMITTED FACT THAT IT IS BASED UPON SEIZED DOCUMENT AND EXPLANATION OF TH E ASSESSEE WAS NOT FOUND SASTISFACTORY. THE ASSESSEE EXPLAINED THAT IT IS ROTATING CAPITAL INVESTMENT BY SHRI J.C.BANSAL WHICH HAD ALREADY BEEN DECLARED BEFORE SETTLEMENT COMMISSION IN THE AMOUNT OF RS. 30,70,000/-. HOWEVER, WHEN BREAK-UP OF THE SAME WA S GIVEN, AMOUNT OF RS. 94,500/- DID NOT FIND MENTION IN THE SAME DECLARATION. THE ASSESSEE DID NOT PRESS T HIS GROUND OF APPEAL BEFORE THE TRIBUNAL AND AS SUCH, I T WAS DISMISSED AND ADDITION WAS CONFIRMED. ON THE FACE OF 8 IT, IT IS CLEAR THAT ASSESSEE FAILED TO EXPLAIN THI S ISSUE AND WHATEVER EXPLANATION WAS OFFERED, WAS NOT SUBSTANTIATED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. THEREFORE, EXPLANATION-1 TO SECTION 271(1) (C) OF THE ACT IS CLEARLY ATTRACTED IN THE CASE OF THE ASS ESSEE. THE AUTHORITIES BELOW WERE, THEREFORE, JUSTIFIED IN LEVYING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT AGAINST THE ASSESSEE ON THIS ADDITION. WE, THEREFO RE, DISMISS THIS GROUND OF APPEAL OF THE ASSESSEE. 10(I). AS REGARDS LEVY OF THE PENALTY ON THE ADDIT ION OF RS. 5 LACS, THE QUANTUM ADDITION HAS BEEN CONFIRMED BY THE TRIBUNAL. THE TRIBUNAL CONSIDERED THE SEIZED DOCUMENT BUT DID NOT ACCEPT CONTENTION OF THE ASSES SEE THAT SHRI RAHUL CHHABRA BACKED OUT FROM GIVING SECURITY OF RS. 5 LACS IN CASH BECAUSE IT IS NOT PR OVED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. IT WAS ALSO NOTED IN THE FINDINGS OF THE TRIBUNAL THAT ASSESSEE FAILED TO RECONCILE THE ENTRIES CONTAINED IN THE SE IZED PAPER. THE TRIBUNAL ALSO NOTED THAT IN CASE CHEQUE S WERE DISHONOURED, THEN HOW THE TOTAL OF RS. 7,89,76 0/- HAS BEEN TAKEN AND IT DOES NOT TALK OF ANY DISHONOU R OF THE CHEQUES, THEREFORE, IN THE ABSENCE OF ANY EVIDE NCE ON RECORD, QUANTUM ADDITION OF RS. 5 LACS WAS UPHEL D. THE LD. COUNSEL FOR THE ASSESSEE, HOWEVER, PRODUCED ON RECORD THE ALLOTMENT LETTER IN THE NAME OF SHRI RAH UL CHHABRA ALONGWITH SCHEDULE OF PAYMENT OF RS. 15,36,100/- AND ALSO FILED COPIES OF RECEIPTS WHICH WERE 9 CANCELLED ON DISHONOUR OF THE CHEQUES. COPIES OF T HE DISHONOURED CHEQUES ARE ALSO PRODUCED ON RECORD. T HE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, SUBMITTED THAT THE TOTAL AMOUNT AS PER SEIZED PAPER IS RS. 7,89,76 0/- AND RS. 1,95,000/- ADDED OF PAYMENT MENTIONED AT LH S OF PAGE 6 OF THE PAPER BOOK AND THEN DOSHONOURED CHEQUE OF RS. 2 LACS IS REDUCED, THE ACTUAL AMOUNT RECEIVED WOULD BE RS. 7,84,760/-. THE TOTAL AMOUNT DUE WAS RS. 15,36,100/- THEREFORE, THE BALANCE PAYMENT DUE REMAINED RS. 7,51,340/-. HE HAS PLACED ON RECORD VARIOUS RECEIPTS FROM DATED 22.12.2010 TO 12.11.201 4 TOTALING TO RS. 7,46,000/- WHICH HAVE BEEN RECEIVED FROM SHRI RAHUL CHHABRA LATER ON WHICH HAVE BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT OF THE ASSESS EE. THESE RECEIPTS NOW PRODUCED ON RECORD CLEARLY SHOW THAT ALMOST ALL THE PAYMENTS WHICH WERE DUE UPON SHRI RAHUL CHHABRA HAVE BEEN RECEIVED BY ASSESSEE IN SUBSEQUENT YEARS. THEREFORE, THERE IS NO QUESTION OF ANY AMOUNT OF RS. 5 LCS PAID BY SHRI RAHUL CHHABRA IN CASH. THUS, THE ASSESSEE IS ABLE TO EXPLAIN AT THI S STAGE THAT NO AMOUNT OF RS. 5 LACS WAS PAID IN CASH BY SH RI RAHUL CHHABRA, OTHERWISE THERE WAS NO REASON TO MAK E BALANCE PAYMENT IN SUBSEQUENT ASSESSMENT YEARS. IT WOULD, THEREFORE, CLEARLY MAKE OUT THAT ASSESSEE OF FERED EXPLANATION WHICH IS SUPPORTED BY EVIDENCES AND MATERIAL ON RECORD THAT NO CASH OF RS. 5 LACS HAVE BEEN PAID AND THAT EXPLANATION OF THE ASSESSEE HAS BEEN SUBSTANTIATED THROUGH EVIDENCE AND MATERIAL ON RECO RD. 10 THE EXPLANATION OF THE ASSESSEE APPEARS TO BE BONAF IDE. THEREFORE, IT IS NOT A FIT CASE OF LEVY OF PENALTY ON THIS ADDITION. MAY BE THE ADDITION ON QUANTUM HAVE BEEN CONFIRMED BY THE TRIBUNAL BUT IT WAS CONFIRMED BECA USE ASSESSEE FAILED TO RECONCILE THE ENTRIES THAT NO AM OUNT OF RS. 5 LACS HAVE BEEN RECEIVED IN CASH FROM SHRI RAHUL CHHABRA. SINCE QUANTUM AND PENALTY PROCEEDINGS ARE DISTINCT AND INDEPENDENT AND ASSESSEE IS NOW ABLE T O EXPLAIN THAT DUE AMOUNT WAS PAID SUBSEQUENTLY AS NOTED ABOVE, THEREFORE, WE ARE OF THE VIEW IT IS NO T A FIT CASE OF LEVY OF PENALTY ON THE ADDITION OF RS. 5 LA CS. WE MAY NOTE THAT THE FINDINGS IN THIS ORDER SHALL BE RELEVANT TO THE PENALTY APPEAL ONLY AND SHALL HAVE NO BEARING ON THE QUANTUM ADDITIONS. 11. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE VIEW PENALTY NEED NOT BE IMPOSED ON THE ADDITION OF RS. 5 LACS. THE ORDERS OF AUTHORITIES BELOW ARE ACCORDIN GLY, SET ASIDE AND LEVY OF PENALTY ON THE ADDITION OF RS . 5 LACS IS DELETED. 12. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA 234/2016 (A.Y. 2009-10) 13. IN THIS YEAR, AS PER RECORD, PENALTY WAS LEVIED ON TWO ADDITIONS OF RS. 59,43,115/- AND RS. 4,80,000/- . 11 14. BRIEF FACTS RELATING TO THE ISSUES ARE THAT DUR ING THE COURSE OF SEARCH, PAGE NOS. 59 TO 67 OF ANNEXUR E A-2 WERE SEIZED FROM THE OFFICE OF THE ASSESSEE. T HE SAID DOCUMENTS WERE CONFRONTED TO SHRI LALIT JINDAL WHOSE STATEMENT WAS RECORDED ON 29.07.2009 I.E. AFT ER THE SEARCH. DOCUMENTS TABULATED CONTAIN ENTRIES RELATING TO RECEIPT OF PAYMENT FROM SHRI BUDHIRAJA FAMILY AND LETTER DATED 10.08.2008 ADDRESSED TO SHR I LALIT JINDAL WHICH CONTAINED ENTRIES RELATING TO M- 1 PLAZA. IN REPLY, SHRI LALIT JINDAL EXPLAINED THAT LETTER WAS WRITTEN BY SHRI ANIL MONGA, RESIDENT OF GREATER KAILASH-1, NEW DELHI GIVING HIM DETAILS OF INVESTME NTS MADE BY HIM IN VARIOUS PROJECTS. IN THE SAID LETTE R, HE HAS MENTIONED THE EXPECTED PRICE OF PROPERTIES HELD BY HIM AND IT WAS FURTHER STATED BY HIM THAT ALL THE PAYMENT RECEIVED FROM MR. MONGA HAD ALREADY BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUNT BUT SOME PART IN THE PAYMENT RELATING TO M-1 PLAZA, PROPERTY HAVE NO T BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNT WHICH IN TURN HAVE BEEN SURRENDERED TO THE TUNE OF RS. 2 CRORES. THE SCANNED COPY OF PAGE 67 IS AVAILABLE AT PAGE 3 OF THE ASSESSMENT ORDER WHICH IS LETTER WRIT TEN TO SHRI LALIT JINDAL ON 10.08.2008 WITH REGARD TO INVESTMENT IN VARIOUS PROPERTIES. THE SAID DOCUMEN T TALKED ABOUT THE DISCUSSION WITH MR. JINDAL AND TOT AL AMOUNT RECEIVABLE FROM MR. JINDAL AT RS. 1,28,89,36 2/- AGAINST WHICH RS. 13 LACS HAD ALREADY BEEN RECEIVED FROM MR. JINDAL AND THE BALANCE RECEIVABLE WAS RS. 12 1,15,89,362/-. AGAINST EACH TRANSACTION, LETTERS ( A) (B) (C) (D) AND (E) HAD BEEN WRITTEN AND THE SAID PAGE WAS SUPPORTED BY 5 OTHER PAGES WHICH WERE MARKED AS (A) TO (E) WHICH WERE SEIZED AS DOCUMENT NO. 63 TO 66 OF A -2. ALL THESE DOCUMENTS ARE SCANNED BY THE ASSESSING OFFICER AND REPRODUCED AT PAGES 4 TO 7 OF THE ASSESSMENT ORDER. PAGE 61 OF ANNEXURE A-2 AND PAGE 60 OF ANNEXURE A-2 ARE ALSO SCANNED AND REPRODUCED AT PAGES 7 AND 8 OF THE ASSESSMENT ORDER AND PAGE 62 O F A- 2 IS THE LETTER (E) 61, 60 AND 62 ARE REPRODUCED AT PAGES 8, 9 AND 10 OF THE ASSESSMENT ORDER. THE SAID THRE E PAGES I.E. 61, 60 AND 62 OF THE SEIZED DOCUMENTS WE RE IN RESPECT OF TRANSACTIONS AT (E). PAGE 59 OF A-2 IS SCANNED AND IS PLACED AT PAGE 11 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER NOTED FROM ALL THESE PAGES THAT O N EACH PAGE, THE ASSESSEE HAS RECORDED THE TOTAL AMOU NT AND THE BALANCE AMOUNT AFTER ADJUSTMENT WHICH ARE D UE TO HIM AND HIS FAMILY MEMBERS. THE ASSESSING OFFIC ER CONFRONTED THE ASSESSEE WITH THE SAID DOCUMENTS AND ASKED THE ASSESSEE TO GIVE DETAILS OF EACH TRANSACT ION MENTIONED ON THE SAID PAGES AND WHETHER THE SAME WE RE REFLECTED IN THE BOOKS OF ACCOUNT. IN WRITTEN REPL Y, ASSESSEE STATED THAT THE FIGURES OF THESE PAGES WER E NOTIONAL AND NOT ACTUAL FIGURES AND HE ALSO FILED P AGE- WISE REPLY OF ALL THE SAID DOCUMENTS WHICH ARE REPRODUCED BY THE ASSESSING OFFICER AT PAGE 12 OF T HE ASSESSMENT ORDER. THE ASSESSING OFFICER, THEREAFTE R, ANALYZED THE REPLY OF THE ASSESSEE AND FOUND IT WAS NOT 13 ACCEPTABLE AND MADE AN ADDITION OF RS. 1,28,68,362/ - HOLDING THAT PAGE 67 WAS NOTHING BUT SUMMARY OF PAG ES 59 TO 66. 15. THE ADDITION WAS CHALLENGED BEFORE LD. CIT(APPEALS) AND LD. CIT(APPEALS) CONSIDERED THIS I SSUE IN DETAIL AND HELD THAT ASSESSING OFFICER HAVING AD DED RS. 1,28,69,362/- WAS NOT CORRECT AS THE SAME WAS A N OUTSTANDING AMOUNT. HOWEVER, AT PAGE 15 PARA (I) O F THE ASSESSMENT ORDER, AMOUNT OF RS. 59,43,115/- WAS STA TED I.E. RS. 46,43,115/- + RS. 13 LACS AS RECEIVED BY S HRI MONGA. THE SAID CALCULATION WAS DONE BY THE ASSESS ING OFFICER. THE LD. CIT(APPEALS), THEREFORE, RESTRICT ED THE ADDITION TO RS. 59,43,115/-. 15(I) IT MAY ALSO BE NOTED HERE THAT ASSESSEE AND REVENUE PREFERRED APPEALS BEFORE THE TRIBUNAL HOWEV ER, BOTH THE APPEALS OF THE ASSESSEE AS WELL AS REVENUE WERE DISMISSED CONFIRMING THE ADDITION OF RS. 59,43,115/ -. THE ORDER OF THE TRIBUNAL IS PRODUCED ON RECORD IN WHICH THE TRIBUNAL BRIEFLY NOTED THAT ASSESSEE FAIL ED TO PRODUCE SHRI MONGA BEFORE THE ASSESSING OFFICER AND DID NOT ACCEPT CONTENTION OF THE ASSESSEE THAT FIGURES GIVEN IN THE SEIZED PAPER WERE NOTIONAL FIGURES AND ASSES SEE FAILED TO CO-RELATE ENTRIES CONTAINED IN THE SEIZED PAPER. THE ASSESSING OFFICER, AFTER CONSIDERING THE EXPLAN ATION OF THE ASSESSEE AT THE PENALTY STAGE NOTED THAT EXPLANATION OF THE ASSESSEE IS NOT ACCEPTABLE AND 14 ASSESSEE HAS CONCEALED INCOME ON THE BASIS OF SEIZE D PAPER AND LEVIED THE PENALTY ON THIS ADDITION. 16. AS REGARDS UNDISCLOSED INCOME OF RS. 4,80,000/- , IT WAS NOTED THAT AS PER SEIZED DOCUMENT, THE SAME CONTAINED DETAILS OF COMMISSION PAID BY THE ASSESSE E TO VARIOUS PERSONS. THE ASSESSEE FAILED TO RECONCILE THE SAME WITH THE BOOKS OF ACCOUNT THEREFORE, ADDITION WAS MADE WHICH WAS CONFIRMED BY THE LD. CIT(APPEALS). THE ASSESSEE DID NOT PRESS THIS GROUND OF APPEAL BEFORE THE TRIBUNAL THEREFORE, THIS GROUND OF APPEAL OF THE AS SESSEE WAS DISMISSED AND ADDITION OF RS. 4,80,000/- WAS CONFIRMED. THE ASSESSING OFFICER ON THIS ADDITION A LSO, DID NOT ACCEPT EXPLANATION OF THE ASSESSEE AND NOTE D THAT EXPLANATION OF THE ASSESSEE IS AFTER THOUGHT A ND CANNOT BE RELIED UPON. THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF INCOME AS WELL AS CONCEAL ED THE INCOME. THEREFORE, ON BOTH THESE ADDITIONS, PE NALTY WAS LEVIED BY ASSESSING OFFICER. 17. THE LD. CIT(APPEALS) ON THE SAME REASONING AS HAVE BEEN GIVEN IN ASSESSMENT YEAR 2007-08, CONFIRM ED THE LEVY OF PENALTY AND DISMISSED APPEAL OF THE ASSESSEE. 18. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. AS RE GARDS ADDITION OF RS. 4,80,000/- ON WHICH PENALTY WAS LEV IED BY THE ASSESSING OFFICER. THE LD. COUNSEL FOR THE 15 ASSESSEE ADMITTED THAT THIS ADDITION WAS NOT PRESSE D BEFORE THE TRIBUNAL AND APPEAL OF THE ASSESSEE ON T HIS ADDITION HAVE BEEN DISMISSED. THEREFORE, ADDITION IS CONFIRMED BY THE TRIBUNAL. THE IMPUGNED ORDERS SHO W THAT THOUGH THE ASSESSEE CLAIMED BEFORE THE AUTHORI TIES BELOW THAT AMOUNT WAS STATED TO BE PAID BY SHRI SUN IL BANSAL AND HE MADE SAME DECLARATION BUT ASSESSEE FAILED TO SUBSTANTIATE THE SAME EXPLANATION AND IT WAS FOUND THAT UNDISCLOSED INCOME WAS HIGHER AS AGAINST DISCLOSED ON THESE SEIZED PAPERS, THEREFORE, ADDITI ON OF RS. 4,80,000/- WAS MADE. 18(I) LD. REPRESENTATIVES OF BOTH THE PARTIES SUBMI TTED THAT THIS ISSUE IS SAME AS HAVE BEEN CONSIDERED IN ASSESSMENT YEAR 2007-08 ON THE ADDITION OF RS. 94,500/-, THEREFORE FOLLOWING THE REASONS FOR DECIS ION FOR SAME YEAR, WE CONFIRM THE LEVY OF PENALTY ON TH IS ADDITION. THIS GROUND OF APPEAL OF THE ASSESSEE IS ACCORDINGLY, DISMISSED. 19. AS REGARDS THE ADDITION OF RS. 59,43,115/- ON WHICH PENALTY WAS IMPOSED, LD. COUNSEL FOR THE ASSE SSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS REFERRED TO PB-7 WHICH IS EXPLANATIO N FILED BY SHRI ANIL MONGA EXPLAINING EACH AND EVERY SEIZED DOCUMENT. HE HAS SUBMITTED THAT SHRI ANIL MONGA EITHER BOOKED SAME PROPERTY WITH THE ASSESSEE IN HIS OWN NAME, IN THE NAME OF HIS WIFE OR AGAINST SO ME 16 CUSTOMER OR FRIEND. IN THE SEIZED LETTER DATED 10.08.2008, SHRI ANIL MONGA HAS GIVEN APPROXIMATE A ND NOTIONAL FIGURES. ALL THE INVESTMENTS MADE WITH TH E ASSESSEE WHICH HE WANTED THAT ASSESSEE SHOULD RE- PURCHASE THE SAME. NO AMOUNT HAVE BEEN PAID BY ASSESSEE TO SHRI ANIL MONGA. THE ADDITION IS MADE OF THE AMOUNT PAYABLE ON WHICH NO INQUIRY HAVE BEEN CONDUCTED ON THE CONFIRMATION FILED BY SHRI ANIL MO NGA. THE ADDITION IS CONFIRMED BECAUSE SHRI ANIL MONGA W AS NOT PRODUCED BEFORE THE ASSESSING OFFICER. THE DET AILS ARE NOTED IN THE SEIZED PAPER IN WHICH, NOTHING IS MENTIONED IF ASSESSEE PAID ANY AMOUNT TO SHRI ANIL MONGA. WHATEVER AMOUNT WAS RECEIVED ON BOOKING OF THE PROPERTIES THROUGH SHRI ANIL MONGA, SAME HAVE B EEN RECORDED IN THE BOOKS OF ACCOUNT. THE EXPLANATION O F THE ASSESSEE WAS NOT FOUND TO BE FALSE OR INCORRECT. T HE ASSESSEE HAS, THEREFORE, EXPLAINED THAT THE SEIZED DOCUMENTS. EVEN IF ADDITION ON QUANTUM HAVE BEEN MAINTAINED, BUT PENALTY IS NOT LEVIABLE IN THE FACT S AND CIRCUMSTANCES OF THE CASE. 19(I) ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW. 20. WE HAVE CONSIDERED RIVAL SUBMISSIONS. ALL THE SEIZED PAPERS ARE NOTED AND REPRODUCED IN THE ASSESSMENT ORDER. THE LETTER DATED 10.08.2008 CONTAINED CERTAIN DETAILS WITH REGARD TO THE APPROX IMATE 17 FIGURE OF THE PROPERTY BOOKED WITH THE ASSESSEE. I N THE SEIZED PAPER, IT IS STATED THAT AMOUNT OF RS. 13 LA CS HAVE BEEN RECEIVED AND BALANCE WAS STATED TO BE PAYABLE. THIS LETTER IS SUPPORTED BY CERTAIN SEIZE D SLIPS WHICH ARE ALSO REPRODUCED IN THE IMPUGNED ORDER IN WHICH IT IS NOWHERE MENTIONED WHETHER ASSESSEE PAID ANY AMOUNT TO SHRI ANIL MONGA OR NOT. IT IS INTERE STING TO NOTE THAT SHRI ANIL MONGA FILED A REPLY GIVING EXPLANATION ON EACH AND EVERY SEIZED DOCUMENT, COPY OF WHICH IS FILED AT PAGE 7 OF THE PAPER BOOK IN WHICH HE HAS EXPLAINED THE SEIZED PAPER THAT SOME OF THE PROPERTIES HAVE BEEN BOOKED IN HIS OWN NAME OR IN T HE NAME OF HIS WIFE OR SOME OTHER PERSONS. THE NAMES OF OTHER PERSONS ARE ALSO MENTIONED IN MOST OF THE LOO SE SLIPS LIKE ANIL BEHAL, SANJAY KAPOOR, VINEET MARWAH . SHRI ANIL MONGA EXPLAINED THAT THE PROPERTIES HAVE BEEN BOOKED WITH THE ASSESSEE FOR WHICH PAYMENTS HAVE BE EN MADE AND HE HAS MADE A REQUEST TO THE ASSESSEE TO R E- PURCHASE THE PROPERTIES WHICH WERE BOOKED WITH THE ASSESSEE. THE TERM PREMIUM/AMOUNT PAYABLE HAVE BEE N GIVEN IN THE SEIZED PAPER TO SHOW THAT THE NOTIONAL VALUE OF THE PROPERTY WHICH MAY BE ADJUSTED AGAINST THE AMOUNT PAYABLE TO THE ASSESSEE. SHRI ANIL MONGA CLAIMED BALANCE AMOUNT IN CASE THE PROPERTIES ARE R E- PURCHASED BY THE ASSESSEE WHICH HAVE BEEN BOOKED WI TH ASSESSEE IN HIS OWN NAME, IN THE NAME OF HIS WIFE A ND OTHERS. SINCE SHRI ANIL MONGA HAS BOOKED VARIOUS PROPERTIES WITH ASSESSEE, SO THERE IS NO QUESTION O F 18 PAYING ANY AMOUNT TO HIM WITHOUT EXECUTING ANY VALI D DOCUMENT FOR REPURCHASE OF PROPERTY BY ASSESSEE. TH E AUTHORITIES BELOW HAVE TAKEN THAT ALL THESE AMOUNTS ARE PAID BY THE ASSESSEE TO SHRI ANIL MONGA. HOWEVER, NONE OF THE SEIZED PAPERS SPEAK OF THE SAME THING. THE ADDITIONS HAVE BEEN CONFIRMED BECAUSE SHRI ANIL MON GA WAS NOT PRODUCED BEFORE AUTHORITIES BELOW AND THAT THE ENTRIES ARE NOT CO-RELATED. SHRI LALIT JINDAL, DIR ECTOR OF THE ASSESSEE IN HIS EXPLANATION ALSO ANSWERED THAT THIS LETTER WAS WRITTEN BY SHRI ANIL MONGA GIVING DETAIL S OF INVESTMENTS MADE IN VARIOUS PROJECTS. SHRI ANIL MO NGA MENTIONED THE EXPECTED PRICE OF THE PROPERTIES HELD BY HIM. ALL THE PAYMENTS RECEIVED FROM SHRI ANIL MONG A HAVE DULY BEEN ACCOUNTED FOR IN THE BOOKS OF ACCOUN T OF THE ASSESSEE. SOME PART WAS NOT MENTIONED FOR WHIC H ADDITIONAL AMOUNT WAS ALREADY SURRENDERED. IT, THEREFORE, CLEARLY PROVES THAT ASSESSEE OFFERED AN EXPLANATION ON THE SEIZED PAPER WHICH WAS NOT ACCEPTABLE TO THE REVENUE. THEREFORE, FACT REMAINE D THAT ASSESSEE EXPLAINED THE SEIZED PAPER AND EXPLANATION OF THE ASSESSEE WAS NOT FOUND TO BE FAL SE. THE EXPLANATION OF THE ASSESSEE APPEARS TO BE BONAF IDE AND THAT ALL THE FACTS RELATING TO THE SAME AND MAT ERIAL TO THE COMPUTATION OF TOTAL INCOME HAVE BEEN DISCLO SED BY THE ASSESSEE BEFORE THE SEARCH PARTY AS WELL AS BEFORE THE AUTHORITIES BELOW. IN THESE CIRCUMSTANCES, EVE N IF THE QUANTUM ADDITION HAVE BEEN CONFIRMED, PENALTY I S NOT LEVIABLE. 19 21. IT IS WELL SETTLED LAW THAT PENALTY AND QUANTUM PROCEEDINGS ARE DISTINCT AND INDEPENDENT PROCEEDING S AND IT IS NOT ALWAYS NECESSARY TO LEVY THE PENALTY IN EACH AND EVERY ADDITION MAINTAINED BY THE AUTHORITI ES BELOW. 22. CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE NOTED ABOVE, WE ARE OF THE VIEW PENALTY IS NOT LEVIABLE IN THE MATTER. WE, ACCORDINGLY, SET AS IDE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE LEVY OF THE PENALTY ON THIS ADDITION. WE MAY CLARIFY THAT THE FINDINGS GIVEN IN THIS ORDER ARE RELEVANT TO THE PE NALTY MATTER ONLY AND SHALL HAVE NO BEARING ON THE QUANTU M ADDITIONS. 23. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 24. IN THE RESULT, BOTH APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- ( ANNAPURNA GUPTA) (BHAVNESH SAINI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH FEBRUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD