DCIT, Patiala V. Sh. Pawan Kumar Goyal, Mandi Gobindgarh

ITA 286/CHANDI/2015

• Counselvise Citation: 28621514 RSA 2015
• Duration Of Justice: 8 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 14-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: RAJIV DATTA
• Keywords: Income from undisclosed sources; Loose papers; Document seized; Transactions in derivatives; Initiation of penalty proceedings; Documents seized
• Section: 143(3); 133A; 132

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, CHANDIGARH BEFORE SHRI H.L.KARWA, HON'BLE VICE PRESIDENT & MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 286/CHD/2015 ASSESSMENT YEAR: 2010-11 THE DCIT, VS. SH. PAWAN KUMAR GOYAL, CENTRAL CIRCLE, S/O SH. GAJA NAND GOYAL, PATIALA MANDI GOBINDGARH PAN NO. ACPAG9783A (APPELLANT) (RESPONDENT) APPELLANT BY : SH. MANJIT SINGH RESPONDENT BY : SH. RAJIV DATTA DATE OF HEARING : 14.10.2015 DATE OF PRONOUNCEMENT : 08.12.2015 ORDER PER H.L.KARWA, VP THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAI NST THE ORDER OF LD. CIT(A), LUDHIANA DATED 30.12.2014 IN CANCELING THE PENALTY OF RS. 4,98200/- U/S 271AAA OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE A CT'). 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) / 153(B)(1)(B) OF THE ACT ON 30.11.2011 DETERMINING THE TOTAL INCOME AT RS. 2,28,63,080/-. THE ASSESSING OF FICER OBSERVED THAT THE RETURNED INCOME COMPRISED OF A SUM OF RS. 2,25,00,000/- SURR ENDERED U/S 132(4) OF THE ACT AT THE TIME OF SEARCH AND OFFERED THE SAME BY THE A SSESSEE AS HIS INCOME FROM OTHER SOURCES. DURING THE COURSE OF SAID PROCEEDINGS, TH E ASSESSEE WAS ASKED TO INDICATE 2 THE DOCUMENTS ON WHICH THE IMPUGNED SUM OF RS. 2,25 ,00,000/- WAS SURRENDERED. HE WAS ALSO REQUIRED TO FURNISH THE MANNER OF EARNI NG THE SAID INCOME AND TO SUBSTANTIATE THE SOURCES THEREOF WITH DOCUMENTARY E VIDENCE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271AAA OF THE ACT BY ISSUING SHOW CAUSE NOTICE ON 30.11.2011 AFTER OBTAINING THE REPLY OF THE ASS ESSEE. THE ASSESSING OFFICER, IMPOSED PENALTY OF RS. 498,200/- U/S 271AAA OF THE ACT. 3. ON APPEAL, THE CIT(A) CANCELLED THE PENALTY OBSE RVING AS UNDER:- 3.1 I HAVE CONSIDERED THE FACTS OF THE CASE, BASIS OF PENALTY IMPOSED BY THE ASSESSING OFFICER AND THE AR GUMENTS OF AR DURING PENALTY AS WELL AS APPELLATE PROCEEDIN GS. THE PERUSAL OF THE PROVISION OF SECTION 271AAA REQUIRE THE ASSESSEE TO SUBSTANTIATE THE SOURCE OF UNDISCLOSED INCOME WITH DOCUMENTARY EVIDENCE SO AS TO AVAIL IMMUNITY F ROM IMPOSITION OF PENALTY ON THE AMOUNT OF INCOME TERME D AS UNDISCLOSED INCOME. IT IS CLEAR FROM THE PENALTY OR DER THAT DOCUMENTS HAVE BEEN SEIZED DURING THE COURSE OF SEA RCH WHICH HAVE BEEN RELIED UPON BY THE AR TO SUBSTANTIATE THE EARNING OF IMPUGNED UNDISCLOSED INCOME. THE ASSESSING OFFICER HAS IN FACT ACCEPTED THE SAID DOCUMENT BEING SUFFICIENT IN THIS REGARD. HOWEVER, THE ASSESSING OFFICER HAS MADE OUT A CASE THAT THE SUBSTANTIATION HAS TO BE TO THE FULLEST EX TENT OF THE INCOME DISCLOSED AND ANY AMOUNT REMAINING COULD NOT BE AVAILABLE FOR IMMUNITY FROM IMPOSITION OF PENALTY. I DO NOT AGREE ON THE VIEW OF THE ASSESSING OFFICER ON ISSUE AS THE ASSESSEE HAS THE ONUS TO SUBSTANTIATE THE MANNER OF EARNING WHICH HAS BEEN CLEARLY DONE BASED UPON THE SEIZED D OCUMENTS AND THIS ONUS CANNOT BE EXTENDED TO THE ENTIRE AMOU NT OF INCOME DISCLOSED. THE VIEW OF THE ASSESSING OFFICER WOULD REQUIRE THE ASSESSEE TO MAINTAIN METICULOUS RECORDS PERTAINING TO EARNING OF UNDISCLOSED INCOME IN TERM S OF A PARALLEL BOOK OF ACCOUNTS WHICH WOULD BE ABSENT IN MOST OF THE CASES BUT THE REQUIREMENT OF SUBSTANTIATION IS VERY WELL SERVED AS 80 PER CENT OF UNDISCLOSED INCOME IS DIRE CTLY ON THE BASIS OF SEIZED DOCUMENTS. 3.2 THE AR HAD PLACED RELIANCE ON THE DECISION OF N EERAJ SINGHAL CIT 161 TTJ 483 WHERE THE PENALTY IMPOSED U NDER SECTION 271AAA BEEN DELETED BY MAKING THE FOLLOWING OBSERVATIONS. 3 'IN THE PRESENT CASE NO QUESTION WAS ASKED AT THE T IME OF RECORDING THE STATEMENT U/S 132(4) OF THE MANNER OF EARNING THE INCOME. THE ASSESSEE HAS HIMSELF WRITTE N A LETTER ON THE DATE OF SEARCH TO THE A.D.I, CONFIRMI NG THE SURRENDER AND SOURCE OF INCOME I.E. COMMISSION, INTEREST, BROKERAGE AND COMMODITY TRANSACTIONS WHIC H WERE RECORDED IN THE SEIZED DIARY. THE MANNER OF EARNING THE INCOME HAS BEEN SUBSTANTIATED AS HAS BE EN ACCEPTED BY THE LEARNED A.O. IN HIS PENALTY ORDER. THERE IS NO REQUIREMENT OF LAW TO SUBSTANTIATE THE INCOME EACH PENNY WISE. THE LEARNED A.O. HAS MISDIRECTED HIMSELF IN IMPOSING THE PENALTY HAVE ACCEPTED THE CONTENTION OF THE ASSESSEE THOUGH PARTLY.' 3.3 THE CASE OF APPELLANT IS OF MUCH BETTER F OOTING AS THE UNDISCLOSED INCOME HAD BEEN SUBSTANTIATED SUFFIC IENTLY IN THE CIRCUMSTANCES THE PENALTY IMPOSED BY THE ASSES SING OFFICER IS DIRECTED TO BE DELETED 4. AT THE VERY OUTSET, SHRI RAJIV DATTA, LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECISION OF ITAT CHANDIGARH BENCH DA TED 27.3.2014 PASSED IN THE CASE OF ACIT, CC, PATIALA V MUNISH KUMAR GOYAL AND ACIT, CC V HARISH KUMAR SINGLA IN ITA NO. 1003/CHD/2013 AND 1104/CHD/2013 R ESPECTIVELY RELATING TO ASSESSMENT YEAR 2010-11. THE ASSESSEES INVOLVED IN THE ABOVE CASES AND THE PRESENT ASSESSEE BELONG TO THE SAME GROUP OF ASSESS EES (MADHAV GROUP OF ASSESSEE) MANDI GOBINDGARH IN WHOSE CASE A SEARCH A ND SEIZURE OPERATION U/S 132 OF THE ACT WAS CONDUCTED ON 11.2.2010. IN THE CASE OF MUNISH KUMAR GOYAL AND SHRI HARISH KUMAR SINGLA ALSO, THE ASSESSING OFFICE R IMPOSED A PENALTY OF RS. 38,01,250/- AND RS. 16 LAKHS RESPECTIVELY U/S 271A AA OF THE ACT. THE LD. CIT(A) CANCELLED THE PENALTY IN BOTH THE CASES AND TRIBUNAL CONFIRMED THE ORDERS OF THE CIT(A) BY PASSING A CONSOLIDATED ORDER, OBSE RVING AS UNDER:- 8 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREF ULLY. THE LD. CIT(A) HAS DECIDED THIS ISSUE VIDE PARA 5 WHICH IS AS UNDER: I HAVE CONSIDERED THE BASIS OF PENALTY IMPOSED BY T HE AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. THE PERUSAL OF THE PROVISIONS OF S ECTION 271AAA MAKE IT CLEAR THAT 4 THE PENALTY CAN BE LEVIED ON UNDISCLOSED INCOME OF THE SPECIFIED YEAR IF THE CONDITIONS SPECIFIED IN SUB SECTION (2) OF SECTION 271AAA ARE NOT SATISFIED. IT, THEREFORE, FOLLOWS THAT FIRST THING TO DETERMINE IS WHAT IS THE AMOUNT OF UNDISCLOSED INCOME UNDER THE GIVEN CIRCUMSTANCES. THE CONCEPT O F UNDISCLOSED INCOME HAS BEEN CLEARLY DEFINED BY EXPLANATION TO SECTION 271AAA AN D THE SAME READS AS UNDER:- UNDISCLOSED INCOME MEANS- I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRES ENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER V ALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF SEARCH UNDER SECTION 132, WHICH HAS-A A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH I N THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE REL ATING TO SUCH PREVIOUS YEAR; OR B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMISSIO NER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE REL ATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED;. THE PERUSAL OF ABOVE DETAILED DEFINITION SHOWS THAT IT IS EXHAUSTIVE DEFINITION AND THERE IS CLEAR IDENTIFICATION OF THE INCOME REPRESE NTED EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OF TRANSACTION S FOUND IN THE COURSE OF SEARCH UNDER SECTION 132. IT IS SEEN THAT THERE IS CLEAR AND DIRECT ASSOCIATION BETWEEN THE INCOME ON ONE HAND AND ASSETS / DOCUMENTS ON THE OT HER HAND FOUND DURING THE COURSE OF SEARCH. IT FOLLOWS THAT IF CERTAIN INCOME IS NOT REPRESENTED BY ANY ASSETS/DOCUMENTS/ENTRY FOUND DURING THE SEARCH, THE SAME WOULD NOT BE COVERED UNDER THE DEFINITION OF UNDISCLOSED INCOME BUT WOUL D INVITE PENALTY PROCEEDINGS U/S 271(1)(C) ON THE FULFILLMENT OF OTHER REQUISITE CON DITIONS. THIS MEANS THAT ENTIRE DISCLOSURE OF INCOME AT THE TIME OF SEARCH OPERATIO N MAY NOT FALL UNDER THE DEFINITION OF UNDISCLOSED INCOME IF IT COULD NTO BE RELATABLE TO SOME ASSETS/DOCUMENTS/ENTRY FOUND DURING THE COURSE OF SEARCH OPERATION. IT ALS O MEANS THAT IF THE AO DURING THE COURSE OF SEARCH OPERATION. IT ALSO MEANS THAT IF T HE AO DURING THE COURSE OF SEARCH ASSESSMENT PROCEEDINGS MAKES CERTAIN ADDITIONS INDE PENDENT OF THE INCRIMINATING MATERIAL/DOCUMENTS FOUND DURING THE COURSE OF SEARC H OPERATION THEN SUCH AN ASSESSED INCOME WOULD NOT INVITE PENALTY PROCEEDING S U/S 271AAA BUT UNDER SECTION 5 271(1)(C). IT ALSO MEANS THAT INITIATION OF PENALTY PROCEEDINGS WOULD DEPEND UPON THE NATURE OF THE INCOME ASSESSED AND THERE COULD B E PENALTY PROCEEDINGS U/S 271AAA AS WELL AS 271(1)(C) FOR THE SAME ASSESSMENT YEAR, HOWEVER IN RESPECT OF DIFFERENT INCOME. THE AO IN THE PENALTY ORDER HAS C LEARLY ACCEPTED THAT DISCLOSURE OF INCOME BY THE ASSESSEE TO THE TUNE OF RS. 3,80,12,5 00/- IS NOT REPRESENTED BY ANY ASSETS/DOCUMENTS FOUND DURING THE COURSE OF SEARCH OPERATION AND HAS ALSO OBSERVED THAT THE SAME WAS PART OF THE UNDISCLOSED INCOME JU ST BECAUSE THIS DISCLOSURE HAD COME DURING THE COURSE OF SEARCH AND WAS THEREFORE AS A RESULT OF THE SEARCH. THERE IS A CLEAR ACCEPTANCE OF THE FACT THAT THE SAID DIS CLOSURE IS NOT WITH REFERENCE TO ANY ASSETS/DOCUMENTS FOUND DURING THE COURSE OF SEARCH. IT IS ONLY BECAUSE THE SAID DISCLOSURE HAPPENED DURING THE SEARCH THAT THE SAME HAS BEEN CLUBBED IN THE DEFINITION OF UNDISCLOSED INCOME REQUIRING THE ASSE SSEE TO FULFILL THE CONDITION AS SPECIFIED IN SUB SECTION (2) OF 271AAA. I AM OF THE CLEAR VIEW THAT INCOME TO THE EXTENT OF RS. 3,80,12,500/- DOES NOT COME UNDER THE DEFINITION OF UNDISCLOSED INCOME AS DEFINED UNDER SECTION 271AAA AND THEREFORE NO PE NALTY U/S 271AAA COULD BE LEVIED. THE SECOND ASPECT OF THE PENALTY ORDER PASS ED BY THE ASSESSING OFFICER IS THAT WHETHER THE ASSESSEE HAD FULFILLED THE REQUISITE CO NDITIONS AS SPECIFIED UNDER SUB SECTION (2) OF SECTION 271AAA. THE ASSESSING OFFICE R HAS ACCEPTED THAT THE ASSESSEE HAD MADE THE DISCLOSURE UNDER SECTION 132(4) DURING THE COURSE OF SEARCH OPERATION AND SPECIFIED THE MANNER OF EARNING SUCH INCOME AND IT ALSO SUBSTANTIATED THE SAME ON THE BASIS OF SEIZED DOCUMENTS TO THE TUNE OF RS. 19,87,500/-. THE AOS VIEW THAT THE ASSESSEE IS REQUIRED TO SUBSTANTIATE THE QUANTU M OF UNDISCLOSED INCOME DOES NOT SEEM LOGICAL FROM THE BARE READING OF THE PROVISION S OF SECTION 271A SUB SECTION (2). THE REQUIREMENT OF THE LAW IS THAT THE ASSESSEE SHO ULD STATE THE MANNER OF EARNING UNDISCLOSED INCOME AND ALSO SUBSTANTIATE THE SAME. IT WOULD NOT BE CORRECT INTERPRETATION OF THE PROVISIONS TO STRETCH THE REQ UIREMENT TO SUBSTANTIATE THE QUANTUM AS WELL. THERE IS NO DOUBT WITH REGARD TO T HE FACT THAT THE ASSESSEES MANNER OF EARNING UNDISCLOSED INCOME BEING FINANCIN G ACTIVITIES HAS BEEN SUBSTANTIATED BY THE SEIZED DOCUMENTS. THE REQUIREM ENT OF THE LAW HAS THEREFORE BEEN FULFILLED AS THE ASSESSEE HAD STATED THE MANNE R OF EARNING UNACCOUNTED INCOME, SUBSTANTIATING THE SAME AND ALSO PAID THE DUE TAXES ALONG WITH THE INTEREST WITHIN THE SPECIFIED TIME LIMIT. EVEN IF THE ENTIRE INCOME BY ANY LOGIC IS INCLUDED IN THE DEFINITION OF UNDISCLOSED INCOME, THE PENALTY UNDER SECTION 271AAA WOULD NOT BE LEVIABLE BECAUSE OF FULFILLMENT OF REQUIREMENT OF S UB SECTION (2) OF SECTION 271AAA. 9 WE FURTHER FIND THAT SECTION 271AAA READS AS UNDE R:- 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007 43 [BUT BEFORE THE 1ST DAY OF 6 JULY, 2012], THE ASSESSEE SHALL PAY BY WAY OF PENAL TY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN P ER CENT OF THE UNDISCLOSED 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 UN DER SUB-SECTION (4) OF SECTION 132 , ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MAN NER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF TH E UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, SO FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ART ICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 , WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE REL ATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMI SSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) NOT RELEVANT----------------- 10 PLAIN READING OF SUB-SECTION WOULD SHOW THAT IF 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 LEVIED 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 DECLARED BY THE ASSESSEE IN THE RETURN AND TAXES HAVE BEEN PAID ACCORDINGLY. THEREFORE TH E ASSESSEE IS NORMALLY 7 ENTITLED FOR THE IMMUNITY PROVIDED IN SEC 271AAA IT SELF. HOWEVER, THE REVENUE HAS RAISED FURTHER DISPUTE THAT WHETHER THE ASSESSEE HAS DISCLOSED THE MANNER IN WHICH INCOME HAS BEEN EARNED. IN THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER FOLLOWING QUESTIONS AND AN SWERS HAVE BEEN EXTRACTED: Q. DO YOU WANT TO SAY ANYTHING MORE ? ANS. I VOLUNTARILY SURRENDER A SUM OF RS. 4.00 CRO RE (RS. FOUR CRORES) FOR CURRENT FINANCIAL YEAR I.E. 2009-10 REL EVANT TO A.Y. 2010- 11 IN ANY (SHOULD BE MY) INDIVIDUAL CAPACITY. THE Y 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 SEARCH U/S 132( 4) IT CAN BE SAFELY ASSUMED THAT DURING DISCUSSION THE ASSESSEE MUST HA VE DISCLOSED THE MANNER. IN ANY CASE WE FIND FORCE IN THE SUBMISSION S OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE EXPLANATION OF THE ASSESSE E HAS BEEN ACCEPTED FOR A SUM OF RS. 1987500 OUT OF TOTAL SURRENDER OF RS. 4 CRORES THEN SAME MANNER SHOULD HAVE BEEN ACCEPTED FOR THE WHOLE OF THE AMOU NT. IT IS NOT CLEAR FROM THE PENALTY ORDER HOW EXPLANATION FOR RS. 1987500 W AS 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 DEC ISION WHICH CAN CONTROVERT THE FINDINGS OF THE CIT(A). IN THE FOLLO WING 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 FOLLOWING DECISIONS: KANAKIA SPACES P. LTD, MUMBAI VS. DEPARTMENT OF INC OME TAX, ITA NO. 6763/MUM/2011 (COPY FILED) A.N. ANNAAMALAIWSAMI (HUF) VS. DEPARTMENT OF INCOME TAX, ITA NO. 1634/MDS/2012 (COPY FILED) PRAMOD KUMAR JAIN, BARGARH VS. ASSESSEE ITA NO. 131, 132 & 133/CTK/2012 (COPY FILED) RAJ RANI GUPTA, NEW DELHI VS. ASSESSEE ITA NO. 3371/DEL/2011(COPY FILED) 8 13 THE LD. D.R. FOR THE REVENUE WAS NOT ABLE TO PLA CE 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. ITA NO. 1004/CHD/2013 15 IN THIS APPEAL THE FACTS AND CONTENTIONS ARE ID ENTICAL TO THE FACTS AND CONTENTIONS IN THE ABOVE NOTED CASE IN ITA NO. 1003 /CHD/2013 WHICH WE HAVE ADJUDICATED ABOVE EXCEPT THAT IN THIS CASE TOT AL SURRENDERED AMOUNT WAS RS. 2,60 CRORES OUT OF WHICH PENALTY WAS LEVIED ONLY AT RS. 1,.60 CRORES. THEREFORE FOLLOWING OUR ABOVE ORDER, WE CONFIRM THE ORDER OF THE LD. CIT(A) AND DELETE THE PENALTY. 16 IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 1004/CHD/2013 IS DISMISSED. 17. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED . 5. IT IS WORTHWHILE TO MENTION HERE THAT PENALTY OR DERS IN THE CASE OF SH. MUNISH KUMAR GOYAL AND HARISH KUMAR SINGLA HAVE BEE N PASSED BY THE SAME OFFICER WHO HAS PASSED THE IMPUGNED PENALTY ORDER I N THE CASE OF PRESENT ASSESSEE. A SEARCH TOOK PLACE AT THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 11.2.2010. DURING THE COURSE OF SEARCH, A POCKET DIARY WAS FOU ND IN WHICH VARIOUS TRANSACTIONS WERE RECORDED. ON THE BASIS OF THE SAI D DOCUMENTS, THE ASSESSEE SURRENDERED A SUM OF RS. 2,25,00.000/- DURING THE C OURSE OF STATEMENT RECORDED U/S 132(4) OF THE ACT. THE ASSESSEE WAS NOT ASKED TO DI SCLOSE THE MANNER OF EARNING OF INCOME BY AUTHORIZED OFFICER. HOWEVER, THE ASSESSEE VIDE HIS SEPARATE LETTER DATED 22.2.2010, EXPLAINED THE MANNER IN WHICH INCOME WAS EARNED AND ALSO DISCLOSED THE NATURE OF INCOME. THE ASSESSEE DULY COMPLIED WI TH THE PROVISIONS OF FILING OF RETURN OF INCOME AFTER INCLUDING THE SURRENDERED IN COME AND PAID THE TAX. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE CONTENTIO N OF THE ASSESSEE WAS THAT ALL THE TRANSACTIONS RECORDED ON THE LOOSE PAPERS REPRE SENTED AMOUNT ADVANCED ON 9 LOANS TO VARIOUS PERSONS OUT OF UNDISCLOSED INCOME WHICH WAS EARNED FROM COMMISSION, BROKERAGE, COMMODITY, TRANSACTIONS AND INTEREST ETC. IT IS RELEVANT TO STATE HERE THAT STATEMENT OF SHRI PAWAN KUMAR WAS R ECORDED ON 22.2.2010. THE RELEVANT QUESTION AND ANSWERS READ AS UNDER:- Q.6. DO YOU WANT TO SAY ANYTHING? ANS. DURING THE COURSE OF SEARCH AND SURVEY AT MY BUSINESS PREMISES, RESIDENCE AND LOCKERS, CERTAIN PAPERS / D OCUMENTS HAVE BEEN FOUND AND ALSO JEWELLERY, TO COVER-UP UNE XPLAINED INVESTMENT INCLUDING IN THE HOUSE FURNISHING, I SU RRENDERED VOLUNTARILY DISCLOSED RS. 2.25 CRORES (RUPEES TWO CRORE TWENTY FIVE LACS). THE SEPARATE HEADS OF UNDISCLOSED INCOM E MENTIONED IN SEPARATE LETTER WHICH IS PART OF THIS STATEMENT. I FURTHER DECLARE AN AMOUNT OF RS. 75 LACS DURING THE COURSE OF SURVEY U/S 133A AT M/S UNIQUE INTERCONTINENTAL LTD TO COVER TH E UNEXPLAINED STOCK AND OF ROLLS AND OTHER DISCREPANC IES. THIS OFFER IS BEING MADE SUBJECT TO NO PENALTY U/S 271( 1)(C) OR ANY OTHER PENAL ACTION UNDER THE ACT. 6. FROM THE ABOVE QUESTION, IT IS CLEAR THAT REVENU E HAS NOT PUT ANY SPECIFIC QUESTION TO THE ASSESSEE TO DISCLOSE THE MANNER IN WHICH SUCH INCOME WAS EARNED. HOWEVER, ON THE SAME DAY, THE ASSESSEE SUBMITTED A SEPARATE LETTER EXPLAINING THE MANNER IN WHICH THE INCOME WAS EARNED AND ALSO DISC LOSED THE NATURE OF INCOME. IN THE CASE OF MUNISH KUMAR GOYAL (SUPRA) THE TRIBU NAL HAS CATEGORICALLY OBSERVED THAT ONCE THE INCOME SURRENDERED DURING TH E COURSE OF SEARCH, IT CAN BE SAFELY ASSUMED THAT DURING DISCUSSION THE ASSESSEE MUST HAVE DISCLOSED THE MANNER. IN THE INSTANT CASE, THE ASSESSING OFFICER HAS ACCEPTED THE EXPLANATION OF THE ASSESSEE FOR A SUM OF RS. 1,75,18,000/- OUT OF RS. 2.25 CORES, THEN IN THE SAME MANNER THE ASSESSING OFFICER SHOULD HAVE ACCEPTED T HE EXPLANATION OF THE ASSESSEE FOR REMAINING AMOUNT OF RS. 49,82,000/-. IN OUR OPI NION, THE DECISION OF THE TRIBUNAL RENDERED IN THE CASE OF MUNISH KUMAR GOYAL AND ANOTHER REFERRED TO ABOVE, IS FULLY APPLICABLE TO THE FACTS OF THE PRE SENT CASE. RESPECTFULLY FOLLOWING 10 THE ORDER OF THE TRIBUNAL, PASSED IN THE CASE OF MU NISH KUMAR GOYAL AND ANOTHER (SUPRA), WE DO NOT SEE ANY MERIT IN THE APPEAL PREF ERRED BY THE REVENUE. CONSEQUENTLY, WE DISMISS THE APPEAL. 7. IN THE RESULT, THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 08.12.2015 SD/- SD/- (ANNAPURNA MEHROTRA) (H.L.KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 8 TH DEC., 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR