Vivek Vasant Gandhi, Ratnagiri V. Assistant Commissioner of Income tax,

ITA 2880/PUN/2016

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2593 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 19-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: SANJAY M VHANBATTE
• Keywords: Search and seizure; Source of fund; Retraction

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUN E BEFORE SHRI R.S.SYAL, VP AND SHRI PARTHA SARATHI CHAUDHURY, JM / ITA NOS. 2880 & 2881/PUN/2016 / ASSESSMENT YEAR : 2010-11 SHRI VIVEK VASANT GANDHI, PROP. OF M/S. SIDDESHWAR TRADERS, AT POST SAWARDE, TAL. CHIPLUN, RATNAGIRI-415 612. PAN : ABNPG3981G .... / APPELLANT / V/S. THE ASSISTANT COMMISSIONER OF INCOME TAX, RATNAGIRI CIRCLE, RATNAGIRI / RESPONDENT ASSESSEE BY : SHRI M.K. KULKARNI & SHRI SANJAY M. VHANBATTE REVENUE BY : SHRI SUDHENDU DAS / DATE OF HEARING : 06.03.2019 / DATE OF PRONOUNCEMENT : 07.03.2019 / ORDER PER PARTHA SARATHI CHAUDHURY, JM : THESE TWO APPEALS ON QUANTUM AND PENALTY PREFERRED BY THE ASSESSEE EMANATES FROM THE ORDER OF LD.CIT(APPEALS)-2, KOLHAPUR DA TED 25.10.2016 FOR THE ASSESSMENT YEAR 2010-11 AS PER GROUNDS OF APPEAL ON RECORD . 2 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 THESE CASES WERE HEARD TOGETHER. SINCE ISSUES COMMON AND FACTS ARE SIMILAR, THESE APPEALS ARE BEING DISPOSED OF VIDE THIS CONSOLID ATED ORDER. FIRST, WE WOULD TAKE QUANTUM APPEAL IN ITA NO.2880/PUN/2016. ITA NO.2880/PUN/2016 (QUANTUM APPEAL) ASSESSMENT YEAR 2010-11 2. THE BRIEF FACTS IN THIS CASE ARE THAT THE ASSESSEE IS A KIRANA TRADER AND FILED RETURN OF INCOME ON 30.09.2010 DECLARING TOTAL INCOME AT RS.12,78,330/-. THERE WAS SURVEY ACTION U/S.133A OF THE IN COME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) IN THE CASE O F THE ASSESSEE ON 03.02.2010. DURING THE COURSE OF SURVEY CERTAIN INCRIMINATING DOCUMENTS IN THE FORM OF A DIARY WAS IMPOUNDED. THESE DOCUMENTS IND ICATES THAT THE ASSESSEE HAS MADE INVESTMENTS IN HOUSE RENOVATION AND GODOWN SHED REPAIRS WHICH WERE NOT RECORDED IN THE BOOKS OF ACCOUNTS. WHEN CONFRONTED WITH THE SAME DURING THE COURSE OF HIS SWORN STATEMENT, THE ASSE SSEE OFFERED THE SAME TO TAX. HOWEVER THE ASSESSING OFFICER NOTED THAT THE GOD OWN REPAIR EXPENSES OF RS.11,80,000/- AND HOUSE RENOVATION EXPENSES OF RS.19,9 1,750/- EVEN THOUGH RECORDED IN THE DIARY AND ADMITTEDLY MADE OUTSID E THE BOOKS, WERE NOT DISCLOSED BY THE ASSESSEE IN HIS RETURN OF INCOME. SIM ILARLY DURING THE COURSE OF THE SURVEY EXCESS QUANTITATIVE STOCK WAS FOUN D WITH THE ASSESSEE WHICH HE AGREED TO SURRENDER. ONCE AGAIN THE SAME WAS NOT INCLUDED IN HIS RETURN OF INCOME. THE ASSESSING OFFICER THEREFORE ASKED THE ASSESSEE TO EXPLAIN THE CIRCUMSTANCES IN WHICH HE HAS NOT OFFERED THES E AMOUNTS AS INCOME. IN RESPONSE, THE ASSESSEE STATED BEFORE THE AS SESSING OFFICER THAT THE HOUSE RENOVATION EXPENSES NOTED IN THE DIARY ARE MEREL Y ESTIMATES AND THAT THE HOUSE HAS BEEN SHOWN IN THE BALANCE SHEET AT A VA LUE OF RS 1,92,470 AND THEREFORE THE ALLEGED EXPENSES TOWARDS REPAIR OF THE HOU SE OF RS 19,91,750 IS AN IMPOSSIBILITY. HE FURTHER STATED THAT NO PURCHASE BILLS FOR CEMENT OR OTHER 3 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 RAW MATERIALS WERE FOUND AT THE TIME OF THE SURVEY. SIMILAR LY IN THE CASE OF GODOWN REPAIR EXPENSES, THE ASSESSEE STATED THE SAME I.E NO BILLS TOWARDS THE SAME WERE FOUND AND THAT THE ENTRIES MADE IN THE DIARY WERE MERE ESTIMATES. THE ASSESSING OFFICER HOWEVER DID NOT AGREE WITH THE ASSE SSEE AND HELD THAT THE ENTRIES IN THE DIARY HAVE BEEN MADE IN THE OWN HAND WRITING OF THE ASSESSEE AS ADMITTED BY HIM AND WERE EXACT FIGURES AND THEREFORE CANNOT BE ESTIMATES. THE ASSESSING OFFICER, THEREFORE, ADDED THE AMOU NTS OF RS.11,80,000/- AND RS.19,91,750/- TO THE TOTAL INCOME OF THE ASSESSEE . 3. THE ASSESSING OFFICER ALSO NOTED THAT PHYSICAL EXCESS STOCK WAS FOUND WITH THE ASSESSEE DURING THE SURVEY AND THE INVENTORY FOR THE SAME WAS PREPARED BY THE SURVEY TEAM. ON VALUATION OF THE SAME, THE STOCK WAS FOUND IN EXCESS OF THE BOOK STOCK BY RS.38,30,310/-. THE ASSE SSEE STATED BEFORE THE ASSESSING OFFICER THAT THE INVENTORY OF THE STOCK WAS WRO NGLY MADE AND WITHOUT UNDERSTANDING THE IMPLICATION OF THE SAME AND UNDE R PRESSURE, THE DECLARATION WAS EXTRACTED FROM THE ASSESSEE. THE ASSES SEE STATED THAT THE STOCK DECLARATION PART WAS OBTAINED WITHOUT PROPER INVEN TORY AND ALSO WITHOUT CONSIDERING THE AVAILABILITY OF ANY SPACE IN THE GODO WN. HE THEREFORE STATED THAT NOTHING CAN BE ADDED ON THIS COUNT. THE AS SESSING OFFICER THEN REBUTTED THE CLAIM OF THE ASSESSEE BY EXAMINING THE STOC K INVENTORY WHEREIN THE ASSESSEE HAS SIGNED ON EACH AND EVERY PAGE. THE A SSESSING OFFICER HELD THAT IF THE STOCK WAS WRONGLY TAKEN, THEN IT IS NOT KNOW N AS TO HOW THE ASSESSEE SIGNED ON THE SAME. HE ACCORDINGLY ADDED RS.38,30,310/- . 4. AGGRIEVED BY THESE ADDITIONS, THE ASSESSEE CARRIED TH E MATTER TO THE CIT(A) KOLHAPUR. AS THERE WAS NO COMPLIANCE BEFORE THE CIT (A), THE APPEAL OF THE ASSESSEE WAS DISMISSED. 4 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 5. BEING FURTHER AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER TO THE PUNE BENCH OF THE TRIBUNAL IN ITA NO.1910/PN/2013 AND THE TRI BUNAL VIDE ORDER DATED 25.11.2014, SET ASIDE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) DIRECTING HIM TO DECIDE THE APPEAL AFRESH AFTER GRANTING R EASONABLE OPPORTUNITY TO THE ASSESSEE. 6. THAT IN THE SECOND ROUND OF APPEAL, THE LD. CIT(A) WITH REGARD TO THE ADDITIONS TOWARDS REPAIR OF HOUSE AND GODOWN HAS HELD AS UNDER: 5.1 GROUND NO.1 : THIS IS AGAINST THE ADDITIONS TOWARDS REPAIRS OF THE HOUSE AND GODOWN. FROM THE SUBMISSIONS OF THE APPEL LANT BEFORE ME AS REPRODUCED ABOVE, IT IS SEEN THAT IN RESPECT OF THE GODOWN EXPENSES, THE APPELLANT STATES THAT THE TOTAL AREA OF THE GODOWN ITSELF IS 280 SFT. CARPET AREA AND THAT EXPENSE OF RS.11,80,000/- FOR REPAIRI NG THE SAME WORKS OUT TO RS.4000/- PER SFT. THIS ACCORDING TO THE APP ELLANT IS MORE THAN THE CONSTRUCTION RATE. THE APPELLANT ALSO STATED THAT T HE ENTRIES IN THIS REGARD IN THE DIARY ARE MERE ESTIMATES AND THEREFORE HAVE NO EVIDENTIARY VALUE. I HAVE ALSO PERUSED THE RETRACTION LETTER OF THE AP PELLANT DATED 18.03.2013 WHICH ALSO MENTIONS THE SAME THINGS AS S UBMITTED BEFORE THE AO. IN RESPECT OF THE RENOVATION OF HOUSE ALSO , THE APPELLANT STATED BEFORE ME THAT THE HOUSE AREA IS 2000 SFT. OF BUILP UP AREA CONSISTING OF 6 ROOMS OF ABOUT 10FT X 30 FT. THE COST OF RENOVATI ON WORKS OUT TO RS 1000 PER SFT WHICH ACCORDING TO THE APPELLANT IS TH E COST OF NEW CONSTRUCTION. HE THEREFORE STATED THAT BY NO STRETC H OF IMAGINATION CAN THE COST OF RENOVATION BE RS 1000 PER SFT. THE SAME SUBMISSIONS ARE MENTIONED IN THE RETRACTION LETTER OF THE APPELLANT . THE APPELLANT THEN WENT ON TO RELY UPON A NUMBER OF CASE LAWS INCLUDIN G A CBDT CIRCULAR REGARDING THE EVIDENTIARY VALUE OF CONFESSIONS IN S WORN STATEMENTS. I HAVE CAREFULLY CONSIDERED THE MATTER. I SPECIFICALL Y REQUESTED THE APPELLANT TO FURNISH COPIES OF THE DIARY IMPOUNDED WHICH IS THE BASIS OF THESE ADDITIONS. THIS DIARY CONSISTS TOTALLY OF 9 W RITTEN PAGES ALL WRITTEN IN MARATHI. THE RELEVANT PAGES OF THE DIARY FOR THE HOUSE RENOVATION AND GODOWN RENOVATION ARE PAGES 2 & 3 RESPECTIVELY. THE SAME ARE REPRODUCED HEREUNDER: 5 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 6 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 FROM THE ABOVE IT COULD BE SEEN THAT THERE ARE EXAC T FIGURES MENTIONED REGARDING; EACH ITEM OF EXPENDITURE. ON P AGE 2 OF THE DIARY THERE ARE 4 ITEMS OF EXPENDITURE FOR HOUSE RENOVATI ON: FABRICATION RS 1,00,990; FURNITURE RS 11,99,870; WOODWORK RS 1,56, 533 AND TILES RS 1,90,987. SIMILARLY ON PAGE 3 IS THE DETAIL OF GODO WN RENOVATION. THERE ARE 8 ITEMS OF EXPENDITURE:- CEMENT RS 3,49,320; SA ND RS 87,890; DABAR RS 34,000; STEEL RS 3,99,877; BRICKS RS 45,667; KOB A RS 25,653; LIGHT RS 38,686 AND FABRICATION RS 1,98,907. IT IS ADMITT ED THAT THESE DIARY NOTINGS ARE IN THE HANDWRITING OF THE APPELLANT AND THESE ARE ALSO SIGNED ON EACH PAGE BY THE APPELLANT. THERE ARE OTHER ENTR IES IN THE DIARY TOO FROM PAGES 4 TO 9 WHICH MENTION SUNDRY HOUSEHOLD EX PENDITURE. IN SPITE OF THIS CLEAR EVIDENCE, THE APPELLANT WOULD HAVE ME BELIEVE THAT THE ADDITION IS BASED MERELY ON HIS SWORN STATEMENT. TH E FACTS ACTUALLY INDICATE THE OPPOSITE. THE AO HAS MADE THE ADDITION BASED ON THESE NOTING IN THE DIARY AND NOT ON THE SWORN STATEMENT OF THE APPELLANT. HIS STATEMENT IS MERELY CORROBORATIVE AND ALSO CONFIRMS THE EXISTENCE OF THE DIARY AND THE FACT THAT THE SAME IS IN HIS HANDWRIT ING. THE APPELLANT INSTEAD OF EXPLAINING THE NOTINGS IN THE DIARY OR E XPLAINING THE SOURCE OF FUNDS IN HIS HANDS IS TRYING TO SIDE STEP THE ISSUE BY RAISING THEORETICAL ISSUES ABOUT THE COST OF RENOVATION. HE HAS MADE BL AND STATEMENTS BEFORE ME THAT THE COST OF RENOVATION PER SQUARE FO OT IS EXORBITANT. IT WOULD NOT BE OUT OF PLACE TO MENTION THAT THE DIARY IS THE PRIMARY EVIDENCE AND THE OPINION OF THE APPELLANT THAT THE COST OF RENOVATION IS EXORBITANT REMAINS A MERE OPINION WITHOUT THE WEIGH T OF EVIDENCE. THE CLAIM OF THE APPELLANT THAT THE NOTINGS IN THE DIAR Y ARE MERE ESTIMATES I AGAIN A BLAND STATEMENT WITHOUT THE BACKING OF ANY EVIDENCE. IN FACT IT IS TO BE NOTED THAT THE FIGURES OF EXPENSES AS NOTED I N THE DIARY AND REPRODUCED ABOVE ARE EXACT FIGURES. I FAIL TO UNDER STAND HOW SUCH EXACT AND ODD FIGURES COULD EVER BE ESTIMATES. TO MY MIND THE NOTINGS IN THE DIARY ARE CRYSTAL CLEAR AND THE APPELLANT HAS NOT B EEN ABLE TO EXPLAIN THE SOURCE OF FUNDS IN HIS HANDS FOR INCURRING THIS EXP ENDITURE. I AM THEREFORE OF THE OPINION THAT THE AO HAS CORRECTLY ASSESSED T HE SUMS OF RS.11,80,000 AND RS 19,91,750 AS UNEXPLAINED INVEST MENT OF THE APPELLANT. THE VARIOUS CASE LAWS INCLUDING THE CBDT CIRCULAR ARE OF NO HELP TO THE APPELLANT ON FACTS. THESE REFER TO CASE S WHERE THE ADDITION HAS BEEN MADE MERELY ON THE STATEMENT RECORDED FROM THE ASSESSEE AND DO NOT APPLY TO CASES WHERE THE ADDITION IS BASED O N INCRIMINATING MATERIAL FOUND DURING SURVEY. I AM THEREFORE, OF TH E VIEW THAT THE DIARY IMPOUNDED IS THE PRIMARY EVIDENCE IN THIS CASE AND H AS TO BE BELIEVED OR DISBELIEVED IN TOTO. ONE CANNOT BELIEVE THE ENTRIES THEREIN BASED ON ONES CONVENIENCE. I THEREFORE, UPHOLD THE ADDITIONS OF R S.11,80,000/- AND RS.19,91,750/- MADE BY THE AO. GROUND NO. 1 IS DISM ISSED. 7. WE HAVE PERUSED THE CASE RECORDS AND HAVE GIVEN C ONSIDERABLE THOUGHT TO THE FINDINGS OF THE LD. CIT(APPEALS). THE FACTS EMERGED IN THIS CASE SHOW THAT IT IS ADMITTED THE NOTINGS IN THE DIARY ARE HAND WR ITING OF THE ASSESSEE AND THEY ARE ALSO SIGNED ON EACH OF THE PAGE BY ASSESS EE. THERE ARE OTHER ENTRIES IN THE DIARY TOO FROM PAGES 4 TO 9 WHICH MENTION SUNDRY HOUSEHOLD EXPENDITURE. IN SPITE OF THIS CLEAR EVIDENCE, THE ASSESSEE HAS STRONGLY ARGUED THAT THE ADDITION HAS BEEN MADE MERELY ON THE BASIS OF HIS SWORN STATEMENT. 7 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 HOWEVER, THE FACTS INDICATE OTHERWISE. THE ASSESSING OFFICE R HAS MADE THE ADDITIONS BASED ON THESE NOTINGS IN THE DIARY AND NOT ON THE SWORN STATEMENT OF THE ASSESSEE. HIS STATEMENT IS MERELY CORROBORATIVE A ND ALSO CONFIRMS THE EXISTENCE OF THE DIARY AND THE FACT THAT THE SAME IS IN HIS HAND WRITING. WE FURTHER OBSERVE THAT THE ASSESSEE HAS HIMSELF AGREE D WITH THE NOTINGS IN THE DIARY ARE IN HIS OWN HAND WRITING AND THAT IT PERTAINS TO REPAIR AND MAINTENANCE OF THE HOUSE. WE ALSO OBSERVE THAT TH ESE PAGES ARE DULY SIGNED BY THE ASSESSEE HIMSELF. THEREFORE, WE DO NOT FIND A NY INFIRMITY WITH THE FINDINGS OF THE LD. CIT(APPEALS) AND ADDITIONS MADE OF RS.1 1,80,000/- AND RS.19,91,750/- ARE SUSTAINED. THUS, THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSED. 8. THE OTHER GROUND OF APPEAL IS WITH REGARD TO THE UPH OLDING OF ADDITION OF RS.38,30,301/- TOWARDS UNDISCLOSED STOCK MADE BY THE A SSESSING OFFICER. THE LD. CIT(APPEALS) ON THIS ISSUE HAS HELD AS UNDER: 5.2 GROUND 2 : THIS IS AGAINST THE ADDITION OF EXCESS STOCK. ONC E AGAIN I FIND THAT THERE IS EXCESS STOCK QUANTITY WISE FOUND DURING THE COURSE OF THE SURVEY. THE PHYSICAL STOCK INVENTORY RUNS INTO 55 PAGES AND THE PHYSICAL STOCK INVENTORY IS VERY METICULOUSLY TAKEN . THE INVENTORY MENTIONS THE QUANTITY, DESCRIPTION OF STOCK, SALE R ATE AND THE VALUATION AT SALE PRICE. ONCE AGAIN I FIND THAT THE APPELLANT HA S SIGNED ON EACH PAGE AND CERTIFIED THE PHYSICAL STOCK AS BEING FOUND IN HIS BUSINESS PREMISES. THE ONLY DEFENCE OF THE APPELLANT BOTH BE FORE THE AO, IN APPEAL AS WELL AS IN THE SO CALLED RETRACTION LETTER IS TH AT IT IS NOT PHYSICALLY POSSIBLE TO STORE THE STOCK FOUND IN HIS BUSINESS P REMISES. THIS BEGS THE QUESTION AS WHY WASN'T THIS ISSUE RAISED AT THE TIM E OF SURVEY ITSELF. ON ONE HAND, THE APPELLANT HAS CERTIFIED THE PHYSICAL QUANTITY OF STOCK FOUND, WHILE ON THE OTHER HE LATER OFFERS AN OPINIO N AND A ROUNDABOUT THEORY ABOUT HOW THE STOCK CANNOT BE STORED IN THE QUANTITIES FOUND. THE DEFENCE OF THE APPELLANT REMAINS A MERE OPINION WITHOUT ANY BASIS OR EVIDENCE. IN SPITE OF THE CATEGORICAL CONC URRENCE OF THE APPELLANT REGARDING THE PHYSICAL STOCK FOUND DURING SURVEY, T HE APPELLANT WOULD HAVE ME BELIEVE HIS DEFENCE NOW. I AM AFRAID I CANN OT AGREE WITH THE APPELLANT. THE BASIS OF ADDITION IS THE PHYSICAL ST OCK INVENTORY AND NOT THE SWORN STATEMENT. IN FACT ON THIS ISSUE, THERE I S NO REQUIREMENT OF REFERRING TO THE SWORN STATEMENT. THEREFORE THE VAR IOUS CASE LAWS QUOTED BY THE APPELLANT ARE OF NO USE TO HIM. I THEREFORE HAVE NO HESITATION IN UPHOLDING THE ADDITION OF RS.38,30,30 1/-TOWARDS UNDISCLOSED STOCK MADE BY THE AO. GROUND 2 IS DISMI SSED. 8 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 9. WE HAVE PERUSED THE CASE RECORDS AND ANALYZED TH E FACTS AND CIRCUMSTANCES IN THIS CASE. WE FIND THAT THERE IS EXCESS S TOCK QUANTITY WISE FOUND DURING THE COURSE OF THE SURVEY. THE PHYSICAL STOCK INVENTORY RUNS INTO 55 PAGES AND THE PHYSICAL STOCK INVENTORY IS VERY METICU LOUSLY TAKEN. THE INVENTORY MENTIONS THE QUANTITY, DESCRIPTION OF STOCK, SALE RATE AND THE VALUATION AT SALE PRICE AND THE ASSESSEE HAS SIGNED ON E ACH PAGE AND CERTIFIED THE PHYSICAL STOCK AS BEING FOUND IN HIS BUSINESS PREMISES . WHEN THIS HAS BEEN DONE, THERE DOES NOT REMAIN ANY OTHER GRIEVANCE FO R THE ASSESSEE WITH RESPECT TO THIS ADDITION. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESSEE STATE D THAT HAND WRITINGS IN THE DIARY AND SIGNATURE IN EACH OF THE PAGES IN STOCK INVENTORY WERE NOT GENUINE. WE FIND THAT THIS PLEA TAKEN BY THE AS SESSEE AT THIS PARTICULAR STAGE IS OF NO HELP TO THE ASSESSEE SINCE THE ENTIRE FACTS ON RECORDS PROVES CONCLUSIVELY THAT WHATEVER ACTION THE REVENUE A UTHORITIES HAVE TAKEN IT HAS BEEN AGREED UPON BY THE ASSESSEE HIMSELF. IN VIEW OF THE MATTER, THIS ADDITION OF RS.38,30,301/- TOWARDS UNDISCLOSED STOCK MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. CIT(APPEALS) IS HEREBY SUSTA INED. THIS GROUND OF APPEAL RAISED BY THE ASSESSEE IS DISMISSE D. 10. IN THE RESULT, QUANTUM APPEAL OF THE ASSESSEE IN IT A NO.2880/PUN/2016 IS DISMISSED. ITA NO. 2881/PUN/2016 ( PENALTY APPEAL) ASSESSMENT YEAR 2010-11 11. NOW, WE WOULD TAKE UP THE PENALTY APPEAL IN ITA NO.28 81/PUN/2016. PENALTY U/S.271(1)(C) OF THE ACT HAS BEEN IMPOSED ON THE ASSESSEE WITH REGARD 9 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 TO THE QUANTUM ADDITION MADE IN RESPECT OF REPAIR OF HOUS E AND GODOWN AND EXCESS STOCK FOUND DURING SURVEY. 12. THAT AT THE OUTSET IN OUR HUMBLE UNDERSTANDING, THE QUANTUM PROCEEDINGS AND THE PENALTY PROCEEDINGS ARE ALTOGETHER DIFFERENT IN CHARACTER AND THEY CANNOT BE CLUBBED INTO ONE SINGLE TRANSACTION. IT IS TRUE IN THE CASE OF THE ASSESSEE THE QUANTUM ADDITIONS HAVE BEEN SUSTAIN ED IN RESPECT OF RENOVATION OF HOUSE AND GODOWN AND ALSO IN RESPECT OF E XCESS STOCK FOUND AT THE TIME OF SURVEY AND THESE ADDITIONS HAVE BEEN CONFIRME D BASED ON THE FACTS ON RECORDS. HOWEVER, PENALTY U/S.271(1)(C) OF THE ACT IS COMPLETELY DIFFERENT PROCEDURE. ALTOGETHER, THERE HAS TO BE DEFINITE FIND INGS AND SPECIFIC EVIDENCE EITHER FOR CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THERE CANNOT BE ANY AMBIGUITY OR D OUBT IN SO FAR AS THE CASE OF PENALTY IS CONCERNED. PROBABLY, IT IS FOR THIS REASON THAT THE LEGAL PROPOSITION GOES THAT IF THE ADDITION HAS BEEN MADE ON ES TIMATION BASIS, PENALTY U/S.271(1)(C) OF THE ACT IS NOT LEVIABLE. THIS MORE SO, IF THERE IS ANY ALTERNATIVE ARGUMENT AND PROBABILITY INVOLVED IN THE FACTS A ND CIRCUMSTANCES, LEVY OF PENALTY U/S.271(1)(C) OF THE ACT IS NOT JUSTIFIABLE. IT IS NOT THE CAS E THAT WHEN ADDITION HAS BEEN CONFIRMED, PENALTY IS AUTOMATICALLY I MPOSED. IN THE INSTANT CASE, WHEN THE ASSESSEE STATES THAT PRICE OF HIS HOUSE IS LESSER THAN THE AMOUNT OF EXPENDITURE HE HAS ALLEGED TO HAVE INCURRE D FOR RENOVATION WHICH THEREFORE IS IMPOSSIBLE, SO THIS INDICATES THAT FOR TH E PLAUSIBLE VIEW IN THE MATTER WHICH IS NOT ENTIRELY CLARIFIED IN THE ORDER OF REVENUE AUTH ORITIES. 13. SIMILARLY WITH REGARD TO THE EXCESS STOCK, THE ASSES SEE HAS CONTENDED THAT IT IS PHYSICALLY NOT POSSIBLE TO STORE THE STOCK FOUN D IN HIS BUSINESS PREMISES BECAUSE THE SPACE OF STORE IN GODOWN WAS TOO SMALL. THIS IS ALSO A MATTER OF PLAUSIBLE VIEW TAKEN BY THE ASSESSEE WHICH IS NO T DIRECTLY REBUTTED 10 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 BY THE DEPARTMENT. THE GROUND MENTIONING FOR CONFIRMATION OF ADDITION IS THE OWN SIGNATURE OF THE ASSESSEE IN ALL PAGES IN THE INVENTOR Y. THEREFORE, THOUGH THE ADDITIONS ARE CONFIRMED BUT IN THE TOTALITY OF FACTS AND CIRCUMSTANCES, LEVY OF PENALTY U/S.271(1)(C) OF THE ACT IN THE CASE OF THE A SSESSEE IS NOT JUSTIFIABLE. THUS, IN VIEW OF THE MATTER, WE SET ASIDE THE O RDER OF LD. CIT(APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY FROM THE HANDS OF THE ASSESSEE. 14. IN THE RESULT, PENALTY APPEAL OF THE ASSESSEE IN ITA NO.2881/PUN /2016 IS ALLOWED. 15. IN THE COMBINED RESULT, QUANTUM APPEAL OF THE ASSESS EE IS DISMISSED AND PENALTY APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 07TH DAY OF MARCH, 2019. SD/- SD/- R.S.SYAL PARTHA SARATHI CHAUDHURY VICE PRESIDENT JUDICIAL MEMBER / PUNE; / DATED : 07 TH MARCH, 2019. SB !'#$%&%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-2, KOLHAPUR. 4. THE PR. CIT-2, KOLHAPUR. 5. '#$ %%&' , ( &' , )*+ , / DR, ITAT, B BENCH, PUNE. 6. $,- ./ / GUARD FILE. // TRUE COPY // (0 / BY ORDER, %1 &+ / PRIVATE SECRETARY ( &' , / ITAT, PUNE. 11 ITA NOS.2880 & 2881/PUN/2016 A.Y.2010-11 DATE 1 DRAFT DICTATED ON 06 .03 .2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 07 .03 .201 9 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER