Shri Pralhad Hariram Panhale, Aurangabad V. ACIT,Central, Aurangabad, Aurangabad

ITA 252/PUN/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1989 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-04-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-11-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Unexplained cash credit; Unexplained investment; Search and seizure; Salary income
• Section: 153A; 132; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E , , !'#'' $ , % & BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NOS. 251, 252 & 253/PN/2011 %' ( ')( / ASSESSMENT YEARS : 2002-03, 2004-05 & 2005-06 SHRI PRALHAD HARIRAM PANHALE, PLOT NO. 81, JAI VISHWABHARATI COLONY, GARKHEDA ROAD, AURANGABAD PAN : ACEPP9243N ....... / APPELLANT ' / V/S. ACIT, CENTRAL, AURANGABAD / RESPONDENT / ITA NO. 343/PN/2014 %' ( ')( / ASSESSMENT YEAR : 2003-04 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AURANGABAD ....... / APPELLANT ' / V/S. SHRI PRALHAD HARIRAM PANHALE, PLOT NO. 81, JAI VISHWABHARATI COLONY, GARKHEDA ROAD, AURANGABAD PAN : ACEPP9243N / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI HITENDRA NINAWE / DATE OF HEARING : 16-02-2016 / DATE OF PRONOUNCEMENT : 18-04-2016 2 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 * / ORDER PER VIKAS AWASTHY, JM : ITA NOS. 251, 252 & 253/PN/2011 HAVE BEEN FILED BY THE ASSESSEE IMPUGNING THE ORDER OF COMMISSIONER OF INCOME TA X (APPEALS), AURANGABAD DATED 27-12-2010 COMMON FOR THE AS SESSMENT YEARS 2002-03, 2004-5 & 2005-06 CONFIRMING THE LEVY OF PE NALTY U/S. 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT). THE REVENUE HAS FILED APPEAL IN ITA NO. 343/PN/201 4 AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), AURANGAB AD DATED 31-12-2013 FOR THE ASSESSMENT YEAR 2003-04 PARTLY DE LETING THE PENALTY U/S. 271(1)(C) OF THE ACT. SINCE, THE ISSUES RAISED IN THE APPEALS ARE SIMILAR, THESE APPEALS ARE TAKEN UP TOGETHER FOR ADJUDICATION. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM THE RE CORDS ARE: THE ASSESSEE IS AN INDIVIDUAL HAVING INCOME FROM SALARY AND OTHE R SOURCES. A SEARCH AND SEIZURE ACTION U/S. 132 OF THE ACT WAS CAR RIED OUT IN RUDRANI GROUP AND ITS ASSOCIATES ON 02-02-2006. DURING T HE COURSE OF SEARCH CERTAIN UNEXPLAINED INVESTMENT BY WAY OF FDR, JEWE LLERY, CASH ETC. WERE FOUND. THE ASSESSEE DURING THE COURSE OF SEAR CH MADE DISCLOSURE OF THE FOLLOWING ADDITIONAL INCOME : I. UNEXPLAINED CASH ` 17,00,000/- II. UNEXPLAINED INVESTMENT IN JEWELLERY ` 26,00,000/- III. UNEXPLAINED INVESTMENT IN FDR ` 1,14,08,455/- IV. ERRORS OF OMISSION AND COMMISSION ` 12,00,000/- ______________________ TOTAL : ` 1,69,08,455/- 3 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 15 3A OF THE ACT AND THE ASSESSED BY THE ASSESSING OFFICER ARE AS UNDER: ASST. YEAR INCOME RETURNED U/S. 139 DATE OF FILING ORIGINAL RETURN INCOME RETURNED U/S. 153A INCOME ASSESSED BY THE A.O. 2002 - 03 3,31,130 23/5/2003 & 31/3/2004 7,58,570 7,58,570 2003 - 04 3,85,630 31 - 03 - 2004 63,74,140 1,44,74,140 2004 - 05 14,02,050 31/3/2005 49,88,490 49,88,490 2005 - 06 - - 34,25,750 34,25,750 PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WERE INITIATED. THE ASSESSING OFFICER VIDE SEPARATE ORDER FOR THE RESPECTIVE A SSESSMENT YEARS LEVIED PENALTY BY INVOKING THE PROVISIONS OF EXPLANATIO N 5 TO SECTION 271(1)(C) OF THE ACT. THE ASSESSMENT YEAR WISE LE VIED PENALTY BY THE ASSESSING OFFICER IS AS UNDER: ASSTT. YEAR AMOUNT OF PENALTY LEVIED AMOUNT OF INCOME ON WHICH PENALTY LEVIED PARTICULARS OF INCOME ON WHICH PENALTY LEVIED 2002-03 1,30,796 4,27,436 INTEREST AND MISC. INCOME ` 27,436 ADDITIONAL INCOME OFFERED DURING SEARCH FROM UNDISCLOSED SOURCE ` 40,00,000 2003-04 18,84,330 59,82,000 FDRS ` 53,32,000 ADVANCE TO SHRI VIVEK DESHPANDE ` 5,00,000 CASH BALANCE ` 1,50,000 2004-05 11,80,903 35,86,447 INTEREST INCOME NET ` 7,952 INTEREST ON FDRS OUT OF UNDISCLOSED INCOME OFFERED DURING SEARCH ` 5,72,885 ADDITIONAL INCOME OFFERED DURING SEARCH FROM UNDISCLOSED SOURCE ` 30,05,610 2005-06 9,87,982 34,25,250 REGULAR INCOME ` 5,30,756 ADDITIONAL INCOME OFFERED DURING SEARCH ` 28,94,994 4 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 ITA NOS. 252, 252 & 253/PN/2011 (A.YS. 2002-03, 200 4-05 & 2005-06) AGGRIEVED BY THE ORDER LEVYING PENALTY U/S. 271(1)(C) FOR THE RESPECTIVE ASSESSMENT YEARS THE ASSESSEE FILED APPEALS B EFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF I NCOME TAX (APPEALS) VIDE CONSOLIDATED ORDER FOR THE ASSESSMENT Y EARS 2002-03, 2004-05 AND 2005-06 DISMISSED THE APPEALS OF TH E ASSESSEE AND CONFIRMED THE PENALTY. AGAINST THE FINDINGS OF COMMISSIO NER OF INCOME TAX (APPEALS), THE ASSESSEE HAS COME IN SECOND A PPEAL BEFORE THE TRIBUNAL BY RAISING IDENTICAL GROUNDS IN ALL THE IMPUGNED ASSESSMENT YEARS. FOR THE SAKE OF CONVENIENCE WE ARE PRODUCING THE GROUNDS RAISED BY THE ASSESSEE IN APPEAL FOR THE ASSESS MENT YEAR 2002-03. 1) THE LEARNED CIT((A) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.1,30,796/- U/S. 271(1)(C). 2) THE LEARNED CIT((A) ERRED IN HOLDING THAT SINCE THE APPELLANT HAD FILED THE RETURN U/S. 153A OFFERING HIGHER AMOUNT TO TAX VIS- -VIS THE ORIGINAL RETURN, PENALTY U/S. 271(1)(C) WAS LEVIABLE. 3) THE LEARNED CIT((A) FAILED TO APPRECIATE THAT THE A SSESSEE ON HIS OWN HAD DECLARED HIGHER AMOUNT TO TAX IN THE COURSE OF SEAR CH U/S. 132 AND THE SAID AMOUNT WAS DULY OFFERED TO TAX BY THE ASSESSEE IN THE RETURN U/S. 153A AND HENCE, THERE WAS NO REASON TO LEVY THE PEN ALTY. 4) THE LEARNED CIT((A) ERRED IN NOT APPRECIATING THAT NO PENALTY IS LEVIABLE U/S. 271(1)(C) READ WITH EXPLANATION 5 WHEN THE ASS ESSEE ON HIS OWN OFFERS HIGHER AMOUNT TO TAX IN THE RETURN FILED IN PURSUANCE TO THE NOTICE U/S. 153A AND NO FURTHER ADDITION HAS BEEN MADE BY THE A.O. 5) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT DURING THE SEARCH OPERATION CASH, JEWELLERY AND FDR S WERE FOUND. 5 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 THE ASSESSEE HAD MADE DECLARATION OF ADDITIONAL INCOME TO THE TUNE OF ` 1.69 CRORES. THE ADDITIONAL INCOME WAS OFFERED IN THE ASSES SMENT YEARS 2002-03 TO 2005-06. FOR THE ASSESSMENT YEARS 2002-03 TO 2004-05 THE ASSESSEE HAD FILED ORIGINAL RETURN OF INCOME U/ S. 139 OF THE ACT. THE ADDITIONAL INCOME WAS OFFERED IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A. IN ASSESSMENT YEAR 2 005-06 THE ASSESSEE HAD NOT FILED RETURN OF INCOME U/S. 139 AND THE ASSESSEE HAD ONLY FILED RETURN OF INCOME U/S. 153A OF THE ACT. THE PEN ALTY HAS BEEN LEVIED BY THE ASSESSING OFFICER ON THE DIFFERENCE BETWEEN TH E ORIGINAL INCOME RETURNED U/S. 139 OF THE ACT AND THE INCOME RETU RNED U/S. 153A OF THE ACT BY INVOKING THE PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. THE ADDITIONAL INCOME OFFERED TO TAX IN T HE IMPUGNED ASSESSMENT YEARS HAVE BEEN DECLARED UNDER TH E HEAD OTHER INCOME IN THE RETURN OF INCOME FILED U/S. 153A. THE YEAR W ISE BREAKUP OF THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS AS UNDER: SR. NO. PARTICULARS A.Y. 2002-03 A.Y. 2003-04 A.Y. 2004-05 A.Y. 2005-06 1 ADDITIONAL INCOME OFFERED TO TAX 400,000.00 5,982,000 3,578,495.00 2,987,647.00 2 AMOUNT DECLARED IN RESPECT OF A FIXED DEPOSITS 50,000.00 5,332,000.00 1,570,420.00 2,894,944.00 B ADVANCES 200,000.00 500,000.00 1,820,000.00 - C CASH 150,000.00 150,000.00 188,075.00 - D GOLD BULION - - - - E OTHER UNEXPLAINED CREDITS IN BANK - - - 92,703.00 TOTAL 400,000.00 5,982,000.00 3,578,495.00 2,987,647.00 6 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 3.1 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A PER USAL OF EXPLANATION 5 TO SECTION 271(1)(C) WOULD SHOW THAT PENALTY U /S. 271(1)(C) CAN BE LEVIED ONLY IF DURING THE COURSE OF SEARCH, T HE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING WHICH HE HAS NOT DISCLOSED IN RETURN OF INCOME. THUS, IN VIEW OF THE PROVISIONS OF EXPLANATION 5 PENALTY IS JU STIFIED IN RESPECT OF CASH FOUND DURING THE SEARCH. FIXED DEPOSIT S AND ADVANCES ARE NOT IN THE NATURE OF MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING. THEREFORE, PENALTY U/S. 271(1)(C) CANNOT BE LEVIED ON THE FIXED DEPOSITS AND ADVANCES FOUND DURING THE COURSE OF SEARCH. IN SUPPORT OF HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE DECISION RENDERED BY THE HON'BLE HIGH COURT OF ALLAHABAD IN THE CA SE OF COMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA REPORTED AS 281 ITR 384 (ALL). THE LD. AR SUBMITTED THAT IN THE AFORESAID CA SE THE HON'BLE HIGH COURT HAS CATEGORICALLY HELD THAT EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT IS NOT APPLICABLE TO FDRS. TO BUTTRESS HIS SUBMISSIONS FURTHER, THE LD. AR PLACED RELIANCE ON THE DECISIO NS OF CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI PRAKASH PREMRAJ BHANDARI VS. ITO IN ITA NOS. 1687 TO 1692/PN/2011 FOR TH E ASSESSMENT YEARS 2001-02 TO 2006-07 DECIDED ON 31-12 -2012 AND SHRI C.P. MOHANDAS VS. DCIT IN ITA NO. 957/PN/2011 FOR ASSESSM ENT YEAR 2000-01 DECIDED ON 29-05-2015. 4. SHRI HITENDRA NINAWE REPRESENTING THE DEPARTMENT VEHE MENTLY DEFENDED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT ALONG WITH EXPLANATION 5. THE LD. DR SUBMITTED THAT THE ASSESSEE HA D MADE DECLARATION AFTER THE SEARCH. THEREFORE, PENALTY HAS BEEN RIGHTLY LEVIED 7 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 ON THE DIFFERENCE OF AMOUNT DECLARED IN THE RETURN OF INCOM E U/S. 139 AND RETURNED FILED IN PURSUANCE TO NOTICE ISSUED U/S. 15 3A OF THE ACT. THE LD. DR FURTHER SUBMITTED THAT THE FIXED DEPOSITS AN D THE ADVANCES ARE THE RESULT OF UTILIZATION OF UNEXPLAINED/UNDISCLOSED INCOM E. BOTH FIXED DEPOSITS AND ADVANCES FALL WITHIN THE MEANING OF VALUA BLE ARTICLE OR THING MENTIONED IN EXPLANATION 5. THE DECISION OF HON'B LE ALLAHABAD HIGH COURT ON WHICH THE LD. AR HAS PLACED RELIANC E IS DISTINGUISHABLE, AS THE FDRS WERE DISCLOSED BY THE ASSESSE E UNDER THE AMNESTY SCHEME. THE LD. DR VEHEMENTLY PRAYED FOR DISMIS SING THE APPEALS OF THE ASSESSEE AND CONFIRMING THE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS). THE LD. DR SUBMITTED THAT THE CO MMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER HAS PLACED RELIANCE ON VARIOUS DECISIONS TO STRENGTHEN HIS FINDINGS. 5. THE LD. AR CONTROVERTING THE SUBMISSIONS MADE ON BEHA LF OF THE DEPARTMENT SUBMITTED THAT THE COMMISSIONER OF INCOME TA X (APPEALS) IN HIS ORDER HAS PLACED RELIANCE PRIMARILY ON THE FOLLOWING DECISIONS: I. INDUS ENGINEERING CO. & ANR. VS. ASSISTANT COMMISSIONER OF INCOME TAX & ORS., 323 ITR 302; II. SHERATON APPEARELS VS. ASSISTANT COMMISSIONER OF INCOME T AX, 256 ITR 20 (BOM); III. DCIT VS. OMKARESHWAR R. KALANTRI & OTHERS, 42 DTR 489 (PUNE). ALL THESE THREE DECISIONS ARE DISTINGUISHABLE ON FACTS. THER EFORE, NO RELIANCE CAN BE PLACED ON THE DECISION REFERRED TO BY THE COMMISSIONER OF INCOME TAX (APPEALS) IN HIS ORDER. THE LD. AR FURTHER SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) IN THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2003-04 DELETED TH E PENALTY ON 8 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 FDRS AND ADVANCES BY FOLLOWING THE JUDGMENT OF HON'BLE ALLA HABAD HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA (SUPRA) GRANTED RELIEF TO THE ASSESSEE BY DELETING THE PENALTY ON FIXED DEPOSITS. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. THE ONLY ISSUE BEFORE US IS WHETHER, FDRS AND ADVANCES UNEA RTHED DURING SEARCH WOULD FALL WITHIN THE AMBIT OF EXPRESSION OTHER VALUA BLE ARTICLE OR THING USED IN EXPLANATION 5 TO SECTION 271(1) OF THE ACT. THE CONTENTION OF LD. DR IS FIXED DEPOSITS (FDRS) ARE NOTH ING BUT CASH DEPOSITED IN BANK AND THUS FALL WITHIN THE MEANING OF VALUABLE ARTICLE OR THING. THE FDRS AND ADVANCES ARE MERELY MOD E OF UTILIZATION OF UNEXPLAINED/UNDISCLOSED INCOME. IF ANY INVESTMENTS ARE M ADE OUT OF UNEXPLAINED OR UNDISCLOSED INCOME, THEY WOULD NOT ESCAPE FROM EXPLANATION 5 TO SECTION 271(1) OF THE ACT. THE LD. DR HAS CONTENDED THAT IF ANY INVESTMENTS ARE MADE FROM UNEXPLAINED OR UNDIS CLOSED INCOME THEY WOULD CONSTITUTE VALUABLE POSSESSIONS. ON THE CONTRARY THE LD. AR HAS PLACED RELIANCE ON THE JU DGMENT RENDERED BY HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF C OMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA (SUPRA). IN THE SAID C ASE THE HON'BLE COURT HAS HELD THAT FDRS DO NOT FALL WITHIN THE PU RVIEW OF MONEY, BULLION, JEWELLERY OR OTHER VALUABLE THING. THE RELEVAN T EXTRACT OF THE FINDINGS OF THE HON'BLE HIGH COURT ARE REPRODUCED HERE-IN-UNDE R: IN THE PRESENT CASE, EXPLANATION 5 OF SECTION 271( 1)(C) OF THE ACT IS NOT APPLICABLE. EXPLANATION 5 IS APPLICABLE TO THE MONE Y, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR THING. THE FDRS DOES NOT FALL WITHIN THE PURVIEW OF THE AFORESAID ITEMS AND, THEREFORE, THE AMOUNT OF FDRS 9 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 CANNOT BE TREATED AS DEEMED CONCEALED INCOME IN VIE W OF EXPLANATION 5 OF SECTION 271(1)(C) OF THE ACT. 7. ONE OF THE CONTENTIONS RAISED BY LD. DR IS THAT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA (SUPRA) T HE FDRS WERE TAKEN OUT OF THE PURVIEW OF EXPLANATION 5 AS THEY WERE SURRENDERED UNDER AMNESTY SCHEME. WE DO NOT FIND MERIT IN THIS SUBMISSION OF LD. DR. THE HON'BLE HIGH COURT HAS DEALT WITH THE ISSUE OF SURRENDER OF FDRS UNDER AMNESTY SCHEME IN THE LATER PART OF THE ORDER. THE HON'BLE COURT HAS FIRST GIVEN ITS FINDINGS WITH R ESPECT TO CLASSIFICATION OF FDR, TAKING IT OUT OF THE PURVIEW OF EXPLANATION 5. 8. THE CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF C .P. MOHANDAS VS. DCIT (SUPRA) HAS ALSO FOLLOWED THE RATIO LAID D OWN IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA (SUPRA) AND HAS GRANTED RELIEF TO THE ASSESSEE. 9. RESPECTFULLY FOLLOWING THE DECISION OF HON'BLE HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA (S UPRA) WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY ON FIXE D DEPOSITS (FDRS) HELD BY ASSESSEE AND CONFIRM THE PENALTY ON ADVANCES, CASH AND OTHER COMPONENTS. 10. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PAR TY ALLOWED IN THE AFORESAID TERMS. 10 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 ITA NO. 343/PN/2014 (REVENUES APPEAL) 11. THE REVENUE HAS FILED APPEAL AGAINST THE ORDER OF CO MMISSIONER OF INCOME TAX (APPEALS) IN THE ASSESSMENT YEAR 2003-04 B Y RAISING FOLLOWING GROUNDS: A) O N THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), AURANGABAD HAS ERRED IN REDUCING THE PEN ALTY OF RS.18,84,330/- IMPOSED U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 TO RS.48,196/-. B) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) , AURANGABAD HAS ERRED IN HOLDING THAT EX PLANATION 5 TO SECTION 271 (1) ( C) IS NOT APPLICABLE TO THE ASS ESSEE, IGNORING THE FACT THAT THE PENALTY WAS INITIATED AND IMPOSED UNDER THE MAIN CLAUSE AND NOT UNDER EXPLANATION 5. C) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) , AURANGABAD HAS ERRED IN APPLYING RATIO OF THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS MOHANLAL SHARMA (281 ITR 384) ONLY PARTLY. THE L D. CIT(A) HAS ERRED IN NOT DECIDING THE ISSUE OF 'WHETHER THE RE WAS CONCEALED INCOME OR NOT?'. D) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A), AURANGABAD HAS ERRED IN HOLDING THAT EX PLANATION 5 TO 271(1)(C) DOES NOT COVER BANK FDRS IGNORING THE FACT THAT THE FDRS ARE NOTHING BUT MONEY IN BANK. IN THIS CONTEXT RELIANCE IS PLACED ON THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS NATIONAL & GRINDLAYS BANK LTD. [AIR 1969 CAL 71]( INCOME TAX ACT OF 1922, SEC. 42(1). E) ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) , AURANGABAD HAS ERRED IN NOT RELYING ON THE DECISION OF THE JURISDICTIONAL ITAT, IN THE CASE OF ACIT VS OMKARESHWAR KALANTRI & OTHERS [42 DTR (PUN E) (TRIB) 489], THE FACTS AND CIRCUMSTANCES OF WHICH ARE IDENTICAL TO THE FACTS O F THE PRESENT CASE. F) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE ORDER OF THE LD. CIT(A), AURANGABAD, MAY BE CANCELL ED AND THAT 11 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 THE ORDER OF THE ASSESSING OFFICER, PASSED U/S 27L( 1)(C) OF THE ACT MAY BE RESTORED. G) THE APPELLANT CRAVES LEAVE TO ADD, ALTER, MODIFY, D ELETE, AND AMEND ANY OF THE GROUNDS, AS PER THE CIRCUMSTANCES O F THE CASE. H) THE APPELLANT PRAYS LEAVE TO ADDUCE SUCH FURTHER EVI DENCE TO SUBSTANTIATE ITS CASE, AS THE OCCASION MAY DEMAND. 12. THE LD. DR REITERATED HIS SUBMISSIONS FOR INCLUDING THE INVESTMENTS MADE IN FDRS BY TREATING IT AS VALUABLE ART ICLE IN TERMS OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. THE LD. DR CO NTENDED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN FOLLOWING THE DECISIONS OF HON'BLE HIGH COURT OF ALLAHABAD IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MOHAN LAL SHARMA (SUPRA) AS IT IS DISTINGUISHABLE ON FACTS. 13. PER CONTRA THE LD. AR VEHEMENTLY SUPPORTED THE FIN DINGS OF COMMISSIONER OF INCOME TAX (APPEALS) AND PRAYED FOR DISMISSIN G THE APPEAL OF THE REVENUE. 14. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PE RUSED. THE ISSUE IN PRESENT APPEAL BY DEPARTMENT IS IDENTICAL TO THE ISSUE ADJUDICATED BY US IN THE APPEALS BY THE ASSESSEE FOR AS SESSMENT YEARS 2002-03, 2004-05 AND 2005-06. WE HAVE PARTLY ACCEPTE D THE APPEALS OF ASSESSEE HOLDING FDRS TO BE OUTSIDE THE PURVIEW OF EXP LANATION 5 TO SECTION 271(1) OF THE ACT. WHILE HOLDING SO WE HAVE FOLLOWED THE JUDGMENT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. MO HAN LAL SHARMA (SUPRA). WE OBSERVE THAT THE COMMISSIONER OF INCO ME TAX (APPEALS) HAS ALSO GRANTED RELIEF TO THE ASSESSEE BY FOLLOWING THE SAME JUDGMENT. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COM MISSIONER OF 12 ITA NOS. 251, 252 & 253/PN/2011 AND 343/PN/2014 INCOME TAX (APPEALS). THE APPEAL OF THE REVENUE IS THUS DISMISSED BEING DEVOID OF ANY MERIT. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE PART LY ALLOWED AND THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 18 TH DAY OF APRIL, 2016. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 18 TH APRIL, 2016 RK *+,%-.#/#)- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A), AURANGABAD 4. ' / THE CIT, CENTRAL, NAGPUR 5. !*+ %%,- , ,- , . ./0 , / DR, ITAT, B BENCH, PUNE. 6. + 1 23 / GUARD FILE. // ! % // TRUE COPY// #4 / BY ORDER, %5 ,0 / PRIVATE SECRETARY, ,- , / ITAT, PUNE