Smt. Meena D. Khakhar, RAJKOT-GUJARAT V. The Assistant Commissioner of Income Tax, Central Circle-1, RAJKOT-GUJARAT

ITA 397/RJT/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94045 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 21-05-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 14-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Section: 133A; 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH , RAJKOT BEFORE SHRI SHAILEND RA K UMAR YADAV, JUDICIAL MEMBER, AND SHRI N. S. SAINI , ACCOUNTANT MEMBER . ITA. NO S . 39 9 TO 404 / RJT /20 1 2 (ASSESSMENT YEAR S : 200 0 - 0 1 TO 200 5 - 0 6 ) S HRI DEEPAK K. KHAKHAR, C/O. D K SALES AGENCY, SHIVAM , STREET NO.1, SARDAR PATEL COLONY, KUVADWA ROAD, RAJKOT APPELLANT VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, RAJKOT. RESPONDENT PAN: ADIPK1876F & ITA. NO S . 39 7 & 398/RJT /20 12 (ASSESSMENT YEAR S : 2004 - 05 & 2005 - 06 ) SMT. MEENABEN KHAKHAR, C/O. MEERA MARKETING, SHIVAM , STREET NO.1, SARDAR PATEL COLONY, KUVADWA ROAD, RAJKOT APPELLANT I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 2 VS. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, RAJKOT. RESPONDENT PAN: ALCPK1859J / BY ASSESSEE : SHRI MEHUL RANPURA, C.A. / BY REVENUE : SHRI AVINASH KUMAR, D.R. / DATE OF HEARING : 2 1 .0 5 .2015 / DATE OF PRONOUNCEMENT : 25 .0 5 .2015 ORDER PER SHAILENDRA KUMA R YADAV, J.M: AMONG EIGHT APPEALS , SIX APPEALS FILED BY SHRI DEEPAK K. KHAKHAR AND TWO BY SMT. MEENA KHAKHAR, BOTH GROUPS ARE ARISING OUT F R OM THE RESPECTIVE CONSOLIDATED ORDER S OF CIT(A) - I V , AHMEDABAD ON SIMILAR ISSUE FOR ALL YEARS . SO, THEY ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. IN ITA NO. 39 9 / RJT /20 1 2 FOR A.Y. 200 0 - 0 1 , ASSESSEE HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 3 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE L D . COMMISSIONER OF INCOME TAX (APPEALS) - IV, AHMEDABAD [CIT(A)] ERRED ON FACTS AS ALSO IN CONFIRMING THE PENALTY U/S. 271(1)(C) OF THE ACT ON INCOME ADMITTED DURING THE COURSE OF SEARCH AT RS. 60 ,000/ - . THE PENALTY U/S.271(1)(C) OF THE ACT MAY KI NDLY BE DELETED. SIMILAR ISSUE HAS BEEN RAISED BY ASSESSEE IN A.Y.200 1 - 0 2 TO 2005 - 06 IN CASE OF DEEPAK K. KHAKHAR AND SMT. MEENABEN KHAKHAR FOR A.Y 2004 - 05 & 2005 - 06. 3 . ASSESSEE IS A SALES DEALER OF M/S. BALAJI WAFERS P . LTD. FOR MARKET S IN AND AROUND RAJKOT AND EARNED COMMISSION INCOME. ASSESSEE IS A PROPRIETOR OF FIRM M/S. D. K. SALES AGENCY. SEARCH U/S.132 OF THE INCOME TAX ACT WAS CARRIED OUT AT RESIDENTIAL PREMISES OF ASSESSEE ON 27.10.2005 AND SURVEY U/S.133A OF THE ACT WAS ALSO CONDUCTED AT BUS INESS PREMISES ON 27.10.2005. ASSESSEE, IN RETURNS FILED IN RESPONSE TO NOTICES ISSUES U/S.153A/153C OF THE ACT DISCLOSED FOLLOWING INCOME IN RESPECTIVE CASES FOR DIFFERENT FINANCIAL YEARS IN PROPORTION TO SALES AS PER BOOKS OF ACCOUNT ON AD HOC BASIS. A SSESSING OFFICER ESTIMATED UNACCOUNTED SALES AND PROFIT THEREON. HOWEVER, FINALLY AFTER GIVING EFFECT TO THE ORDER OF ITAT, RAJKOT BENCH, RAJKOT, FOLLOWING ADDITIONS HAVE BEEN SUSTAINED BY ESTIMATING UNACCOUNTED SALES AND NET PROFIT THERE ON. ASSESSING OF FICER LEVIED PENALTY ON INCOME OFFERED ON I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 4 THESE ESTIMATED ADDITIONS WHICH WAS SUSTAINED AT APPELLATE STAGE AS DETAILED HERE UNDER: ASSESSMENT YEARS AD - HOC INCOME OFFERED (`) ADDITIONS SUSTAINED AT APPELLATE STAGE (`) DEEPAK MEENABEN DEEPAK MEENABEN 2000 - 01 60,000/ - --- 90,000/ - --- 2001 - 02 90,000/ - --- 86,250/ - --- 2002 - 03 1,22,000/ - --- 89,000/ - --- 2003 - 04 1,68,000/ - --- 1,03,000/ - --- 2004 - 05 1,63,000/ - 53,000/ - 43,500/ - 36,000/ - 2005 - 06 2,11,000/ - 95,000/ - 69,500/ - 40,000/ - 2006 - 07 3,20,000/ - 1,80,000/ - TOTAL 11,34,000/ - 3,28,000/ - 14,62,000/ - ACCORDINGLY, PENALTY WAS LEVIED AS UNDER: A.Y. PENALTY LEVIED (RS.) 2000 - 01 40,000/ - 2001 - 02 53,000/ - 2002 - 03 67,000/ - 2003 - 04 80,000/ - 2004 - 05 57,000/ - 2005 - 06 83,000/ - 4 . MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, WHEREIN CIT(A) CONFIRMED THE PENALT IES IN ALL YEARS. BEFORE US, IT WAS CONTENDED ON BEHALF OF ASSESSEE THAT THERE WAS NO INCRIMINATING MATERIAL FOUND AND ASSESSING OFFICER HAD MADE AD HOC ADDITION AS OFFERED IN RETURNS OF INCOME AND BESIDES ADDITIONS SUSTAINED AT APPELLATE STAGE WERE ALSO BY WAY OF ESTIMATING UNACCOUNTED SALES AND PROFIT THEREON. ACCORDING TO LEARNED AUTHORIZED REPRESENTATIVE, PENALTY LEVIED BY ASSESSING OFFICER MECHANICALLY BY INVOKING EXPLA NATION 5 TO SECTION 271(1)(C) OF THE ACT AND CONFIRMED BY CIT(A). ASSESSEE STATED I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 5 THAT DURING SEARCH NEITHER INCRIMINATING WAS FOUND NOR ANY MONEY, BULLION, JEWELLERY ETC. WERE FOUND UNEXPLAINED. ACCORDING TO LEARNED AUTHORIZED REPRESENTATIVE, THERE IS N OTHING ON RECORD TO JUSTIFY THE PENALTY IN ASSESSEE S CASE. ASSESSEE DISCLOSED AD HOC INCOME TO COVER UP ANY ERRORS, OMISSIONS AND DISCREPANCIES THAT MAY BE FOUND IN ANY MANNER, WHICH ASSESSING OFFICER HAS ACCEPTED IN ASSESSMENT ORDER WITHOUT ANY DISCUSSI ON. IN VIEW OF ABOVE, INCOME OFFERED IN RETURN FILED IN RESPONSE TO NOTICE U/S.153A OF THE ACT WAS VOLUNTARY AND NOT RELATED TO ANY INCRIMINATING MATERIAL FOUND AS WELL AS STATEMENT RECORDED DURING COURSE OF SEARCH, SO PENALTIES IN QUESTION ARE NOT JUSTIF IED, SAME BE DELETED. LEARNED AUTHORIZED REPRESENTATIVE ALSO POINTED OUT THAT THIS ISSUE IS COVERED BY THE DECISION OF RAJKOT BENCH IN CASE OF THE ASST. CIT(A) VS. M/S. BALAJI WAFERS PVT. LTD. IN IT (SS) A NOS. 15 TO 20/RJT/2011 FOR A.Y. 2000 - 01 TO 2005 - 06 VIDE ORDER DATED 18.12.2014 WHEREIN TRIBUNAL HAS DISCUSSED AND DECIDED THE SIMILAR ISSUE IN FAVOUR OF ASSESSEE BY OBSERVING AS UNDER: 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHO RITIES BELOW AS WELL AS THE JUDGEMENTS RELIED UPON BY THE LD.COUNSEL FOR THE ASSESSEE. THE ASSESSEE HAS FILED A WRITTEN SYNOPSIS AND THE CONTENTIONS OF THE SAME ARE REPRODUCED HEREUNDER: - SYNOPSIS 1.0 SEARCH U/S 132 OF THE INCOME TAX ACT, 1961 (H EREINAFTER REFERRED TO AS THE 'ACT') CARRIED OUT AT THE PREMISES OF THE DIRECTORS OF THE RESPONDENT COMPANY ON 27.10.2005. CONSEQUENT SURVEY U/S 133A WAS ALSO CARRIED I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 6 OUT AT THE PREMISES OF THE RESPONDENT. DURING THE COURSE OF SEARCH AT THE RESIDENTIAL PRE MISES OF DIRECTORS AS ALSO SURVEY AT THE FACTORY PREMISES NOTHING WAS FOUND TO SUGGEST AND/OR ESTABLISH ANY UNACCOUNTED TRANSACTIONS. 2.0 DURING THE COURSE OF POST SEARCH INQUIRES, THE RESPONDENT HAD, VIDE LETTER DATED 30.01.2006 ADMITTED ADDITIONAL INCOME OF RS. 440 LACS ON AD - HOC BASIS FOR VARIOUS YEARS SUBJECT TO THE CONDITION THAT IMMUNITY FROM PENALTY PROCEEDINGS IS GRANTED. 3.0 IT WAS ALSO CLARIFIED IN THE SAID LETTER THAT YEAR - WISE BIFURCATION OF INCOME SHALL BE FURNISHED WHILE FILING THE RETURNS OF INCOME IN DUE COURSE. 4.0 THE RESPONDENT, IN COMPLIANCE OF THE SAID LETTER AND IN RESPONSE TO NOTICE U/S. 153C OF THE ACT, FILED ITS RETURNS OF INCOME IN RESPECT OF ASSESSMENT YEARS' UNDER CONSIDERATION WHEREIN IT OFFERED ADDITIONAL INCOME ON AD - HOC BASIS IN ALL THE YEARS AND PAID DUE TAX ALONG WITH INTEREST ON SUCH INCOME. THE ASSESSMENTS WERE FINALISED U/S 153A(A) R.W.S. 153C OF THE ACT WHEREIN ESTIMATED ADDITIONS OVER AND ABOVE DECLARED INCOME WERE MADE. HOWEVER, THE SAME WERE REDUCED SU BSTANTIALLY AT THE APPELLATE STAGE [DETAILS OF ADDITIONAL INCOME OFFERED, ADDITIONS MADE AND RELIEF GRANTED IS GIVEN IN THE CHART ATTACHED AT PAGE 5]. 5.0 THE AO LEVIED PENALTY ALLEGING THAT IF NO SEARCH WAS CONDUCTED THEN THE APPELLANT WOULD NOT HAVE FILED THE RETURN OF INCOME AND THUS, HAS CONCEALED INCOME TO THE EXTENT OF ADDITIONAL INCOME AND ADDITIONS SUSTAINED. 6.0 THE ADMISSION OF ADDITIONAL INCOME WAS ON AD - HOC BASIS WITH A VIEW TO BUY MENTAL PEACE AND SUBJECT TO THE CONDITION THAT NO PE NALTY PROCEEDINGS ARE INITIATED AND IMMUNITY FROM PENAL PROVISIONS IS GRANTED. THEREFORE, THE AO WAS NOT JUSTIFIED IN LEVYING PENALTY AND THE LD. CIT(A) HAS RIGHTLY DELETED THE SAME. I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 7 7.0 FURTHER AS PER EXPLANATION (5) TO SECTION 271(1)(C) OF THE ACT, IMMUNITY FROM PENAL PROCEEDINGS IS REQUIRED TO BE GRANTED ON FACTS OF THE RESPONDENT'S CASE. HON'BLE HIGH COURT OF MADRAS HAS IN THE CASE OF CIT VS. S.D.V. CHANDRU 266 ITR 175 (MAD) WHEREIN IT HELD THAT 'PARA (2) IN EXPLANATION 5 DOES NOT MAKE ANY DISTINC TION BETWEEN THE PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND THE PREVIOUS YEAR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH AND THEREFORE WHEN THE ASSESSEE FILED HIS RETURNS FOR EARLIER YEARS ADMITTING A LARGER INCOME AND ALSO PAID TAX TO GETHER WITH INTEREST AFTER HIS STATEMENT WAS RECORDED UNDER S. 132(4), HE WAS ENTITLED TO IMMUNITY UNDER EXPLANATION 5 TO S. 271(1)(C) AND PENALTY WAS NOT LEVIABLE'. EXPLANATION 5 TO SECTION 271(1)(C) SPECIFICALLY PROVIDES FOR IMMUNITY FROM PENALTY IN CASE OF ADMISSION OF CONCEALED INCOME RECORDED DURING SEARCH. IT IS IN THIS CONTEXT OF PLAIN LANGUAGE OF THE LAW, THE CONCURRENT FINDING OF THE FIRST APPELLATE AUTHORITY AND THE TRIBUNAL WAS UPHELD IN CIT VS CHHABRA EMPORIUM 264 ITR 249 (DELHI). PENALTY WAS FO UND TO BE NOT LEVIABLE IN GEBILAL KANAIYALAL (HUF) VS ACIT) 270 ITR 523 (RAJ). RELIANCE IS ALSO PLACED ON THE FOLLOWING DECISIONS: A. HON'BLE ITAT, RAJKOT BENCH RAJKOT IN THE CASE OF DCIT VS M/S. BALAJI MULTIFLEX P. LTD., IN IT(SS) NOS. 64 & 65/RJT/09 [P APER BOOK PAGE 1 TO 9] WHEREIN ON IDENTICAL FACTS THE ORDER OF THE ID. CIT(A) DELETING THE PENALTY WAS UPHELD. THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE HON'BLE ITAT VIDE TAX APPEAL NOS. 83 & 84 HAVE DISMISSED BY THE HON'BLE HIGH COURT OF G UJARAT VIDE ORDERS DATED 19.10.2011 [COPIES ATTACHED AT PAGE (6 TO 9 ]. B. HON'BLE ITAT, RAJKOT BENCH, RAJKOT IN THE CASE OF ACIT VS SHRI SHANTILAL J. MAHESHWARI IT(SS)A NO. 69/RJT/2009 [PAPER BOOK PAGE 10 TO 12]. C. HON'BLE ITAT, RAJKOT BENCH, RAJKOT IN THE CASE OF ACIT VS SHRI SAMAT A. JARIA IT(SS)A NO. 71 TO 73/RJT/2010 [PAPER BOOK PAGE 13 TO 16]. I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 8 D. HON'BLE ITAT, RAJKOT BENCH, RAJKOT IN THE CASE OF ACIT VS SHRI MUKESH B. ZAVERI IT(SS)A NO. 67/RJT/2010 [PAPER BOOK PAGE 17 TO 19]. E. HON'BLE ITAT , RAJKOT BENCH, RAJKOT IN THE CASE OF ACIT VS SHRI SHUKKA NEHAL CHIMANLAL IT(SS)A NO. 60 TO 63/RJT/2009 [PAPER BOOK PAGE 20 TO 22]. F. HON'BLE ITAT, 'B' BENCH, KOLKATA IN THE CASE OF DCIT VS AVNISH CH. GUPTA ITA NOS. 414 & 415/KOL/2009 [PAPER BOOK PAGE 23 TO 28]. G. HON'BLE HIGH COURT OF KOLKATA HAS IN THE CASE OF CIT VS. SURESH CHAND BANSAL 22 DTR (CAL) 1 [PAPER BOOK PAGE 29 TO 33] HELD THAT ADDITIONAL INCOME OFFERED AFTER THE SEARCH HAVING ACCEPTED IN ITS ENTIRETY WITHOUT DETAILED DISCUSSION OF THE S EIZED DOCUMENTS AND WITHOUT MAKING ANY ATTEMPT TO OBTAIN THE EXPLANATION OF THE RESPONDENT, PENALTY UNDER S. 271(1)(C) IS NOT LEVIABLE. H. HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF CIT VS. KANHAIYALAL 299 ITR 19 (RAJ) [PAPER BOOK PAGE 34 TO 37] HAS HELD 'IMMUNITY UNDER EXPLN. 5 OF S. 271(1)(C) IS NOT TAKEN AWAY FOR THE SIMPLE REASON THAT INCOME DISCLOSED BY THE RESPONDENT IN HIS STATEMENT UNDER S. 132(4) FOR A PARTICULAR YEAR WAS SPREAD OVER IN THE RETURNS OF SEVERAL YEARS, MORE SO, WHEN AO HAD ALSO MADE ASSESSMENT IN ASSESSMENT YEARS AS RETURNED BY RESPONDENT, THOUGH AFTER MAKING SOME QUANTUM RESHUFFLING.' I. HON'BLE ITAT DELHI 'G' THIRD MEMBER BENCH IN THE CASE OF ADDL CIT VS. PREM CHAND GARG 119 ITD 97 (DEL)(TM) [PAPER BOOK PAGE 38 TO 41]. J. HON'BLE ITAT DELHI 'F' BENCH IN THE CASE OF SHRI OM PRAKASH AGGARWAL VS. DCIT 2009 - TIOL - 232 - ITAT - DEL. [PAPER BOOK PAGE 42 TO 47]. K. HON'BLE ITAT JODHPUR BENCH IN THE CASE OF HISSARIA BROTHERS VS. DCIT 31 DTR (JD) 223. I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 9 I. HON'BLE ITAT, ALLAHABAD 'A' BENCH, ALLAHABAD IN THE CASE OF SHYAM BIRI WORKS (P) LTD. VS. ASST.CIT 70 TTJ (ALL) 880 AND M. HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. MUKTA SRIDHAR (2012) 205 TAXMAN 212 (KAR) [COPY ATTACHED AT PAGE 10 TO 11 ] 8.0 WITHOUT PREJUDIC E TO THE ABOVE IT IS TO SUBMIT THAT THE IMMUNITY GRANTED UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT IS APPLICABLE TO ALL THE YEAR COVERED UNDER PROVISIONS OF SECTION 153A OF THE ACT IN THE CASES WHERE SEARCH WAS CONDUC T ED PRIOR TO 01.04.2007. THE LEGISLATURE HAS WITH SPECIFIC PURPOSES INSERTED PROVISIONS OF SECTION 271AAA W.E.F. 01.04.2007 AND EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT FOR LEVY OF PENALTY W.E.F. 01.04.2007 AND 01.06.2007 RESPECTIVELY. THEREFORE, ALSO IMMUNITY IS AVAILABLE FROM THE PENALTY ACTION. 9.0 THE RESPONDENT DISCLOSED ADDITIONAL INCOME ONLY ON THE BASIS OF UNDERSTANDING THAT NO PENAL ACTION SHALL BE INITIATED. THIS FACT WAS SPECIFICALLY MENTIONED IN THE LETTER OF DISCLOSURE ALSO. UNDER THE CIRCUMSTANCES LEVY OF PENA LTY IS TOTALLY UNJUSTIFIED AND UNCALLED FOR. HON'BLE ITAT, AHMEDABAD 'C' BENCH IN THE CASE OF ASHOK NATVARLAL PATEL VS. ACIT61 TTJ(AHD)139. 10.0 IN VIEW OF THE ABOVE, THE ORDER OF THE ID. CITA(A) MAY KINDLY BE UPHELD. 4.1. THE CONTENTION OF THE LD.CO UNSEL FOR THE ASSESSEE IS THAT UNDER THE IDENTICAL FACTS, THE ISSUE OF LEVY OF PENALTY TRAVELLED UPTO THE STAGE OF HON BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. M/S.BALAJI MULTIFLEX PVT.LTD. IN TAX APPEAL NOS.83 & 84 OF 2011(SUPRA). WE FIND THAT THE LD.CIT(A) WHILE DELETING THE ADDITION HAS FOLLOWED THE DECISION OF HON BLE COORDINATE BENCH RENDERED IN THE CASE OF DCIT VS. BALAJI MULTIFLEX PVT.LTD & ORS, WHEREIN THE PENALTY LEVIED U/S.271(1)(C) OF THE ACT ON THE INCOME ADMITTED DURING THE COURSE OF SUR VEY PROCEEDINGS WAS DELETED BY THE TRIBUNAL. THE CONTENTION OF THE ASSESSEE IS I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 10 NOT CONTROVERTED BY THE REVENUE BY PLACING ANY MATERIAL ON RECORD, THEREFORE RESPECTFULLY FOLLOWING RATIO LAID DOWN BY THE HON BLE GUJARAT HIGH COURT RENDERED IN THE CASE OF KI RIT DAHYABHAI PATEL VS. ASST.CIT IN TAX APPEAL NOS.1181, 1182 & 1185 OF 2010, DATED 03/12/2014(SUPRA) AND ALSO THE DECISION OF COORDINATE BENCH IN THE CASE OF DCIT VS. BALAJI MULTIFLEX P.LTD.(SUPRA), WE DO NOT FIND ANY MERIT IN THE REVENUE S APPEAL IN IT (SS)A NO.15/RJT/2011 FOR AY 2000 - 01, SAME IS HEREBY REJECTED. 5. NOW, WE TAKE UP THE REVENUE S APPEALS IN IT(SS)A NOS.16 TO 20/RJT/2011 FOR AYS 2001 - 02 TO 2005 - 06 RESPECTIVELY. 6. SINCE THE FACTS AND GROUNDS IN ALL THESE APPEALS ARE IDENTICAL TO THE FACTS AND GROUNDS OF REVENUE S APPEAL IN IT(SS)A NO.15/RJT/2011 FOR AY 2000 - 01(SUPRA) AND REVENUE HAS NOT POINTED OUT ANY CONTRARY JUDGEMENT, THEREFORE TAKING A CONSISTENT VIEW PASSED IN REVENUE S APPEAL FOR AY 2000 - 01(SUPRA), ALL THESE APPEALS OF THE REVE NUE ARE REJECTED. 5. IN THIS BACKGROUND, LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT CIT(A) WAS NOT JUSTIFIED IN CONFIRMING PENALTY U/S.271(1)(C) OF THE ACT ON INCOME ADMITTED DURING COURSE OF SEARCH WAS RS.60,000/ - . ACCORDINGLY, PENALTY IN QUESTI ON BE DELETED AND HE RELIED ON THE DECISION OF CO - ORDINATE BENCH IN CASE OF CIT(A) VS. M/S. BALAJI WAFERS PVT. LTD. (SUPRA). ON OTHER HAND LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF AUTHORITIES BELOW. 6. AFTER GOING THROUGH RIVAL SUBMISSI ONS AND MATERIAL ON RECORD, WE FIND THAT ASSESSING OFFICER HAS ESTIMATED AMOUNT IN SALE AND PROFIT THEREON. FINALLY, AFTER GIVING TO THE EFFECT OF ORDER OF ITAT BENCH, RAJKOT, ADDITIONS WERE SUSTAINED BY I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 11 ESTIMATING UNACCOUNTED SALES AND NET PROFIT ON AD H OC BASIS AS DISCUSSED ABOVE. ASSESSING OFFICER LEVIED PENALTY ON INCOME OFFERED ON AD HOC BASIS AND ALSO ADDITION SUSTAINED AT APPELLATE STAGE AS DISCUSSED ABOVE. THERE IS NOTHING ON RECORD TO SUGGEST THAT ANY INCRIMINATING MATERIAL WAS FOUND DURING COUR SE OF SEARCH. ASSESSING OFFICER TAXED THE AD HOC INCOME AS OFFERED IN RETURN INCOME FILED. BESIDES, ADDITIONS SUSTAINED AT APPELLATE STAGE WERE ALSO BY ESTIMATING UNACCOUNTED SALE AND PROFIT THEREON. PENALTIES HAVE BEEN LEVIED BY ASSESSING OFFICER FOR T HE REASONS AS STATED ABOVE. DURING SEARCH, NOTHING INCRIMINATING WERE FOUND INCLUDING ANY MONEY, BULLION, JEWELLERY ETC. AS UNACCOUNTED. IN SUCH SITUATION, INVOKING OF EXPLANATION TO SECTION 271(1)(C) IS NOT WELL FOUNDED. ASSESSEE DISCLOSED AD HOC INCOM E TO COVER UP ANY ERROR, OMISSION, DISCREPANCY . ASSESSING OFFICER HAS ACCEPTED IN HIS ASSESSMENT ORDER WITHOUT ANY DISCUSSION. IN VIEW OF ABOVE, AS INCOME OFFERED IN RETURN FILED IN RESPONSE TO NOTICE U/S.153 OF THE ACT, WHICH WAS NOT BASED ON ANY INCRIM INATING MATERIAL FOUND. PENALTY IN QUESTION WAS NOT JUSTIFIED. MOREOVER, ADDITIONS SUSTAINED IN APPELLATE STAGE IS ON ESTIMATE BASIS AND PENALTY AT THE STRENGTH OF ESTIMATED ADDITION CANNOT BE UPHELD WITHOUT BRINGING ON RECORD ANY COGENT EVIDENCE FOR JUS TIFYING THIS ESTIMATED ADDITION. ITAT, RAJKOT BENCH IN CASE OF DCIT VS. M/S. BALAJI MULTIFLEX P. LTD. (SUPRA) ON IDENTICAL FACTS UPHELD THE ORDER OF CIT(A) WHO HAD DELETED THE PENALTY LEVIED IN SIMILAR CIRCUMSTANCES. FURTHER THE APPEAL OF REVENUE AGAINST THE ORDER OF ITAT VIDE TAX APPEAL NOS. 83 & 84 WAS DISMISSED I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 12 BY HON BLE JURISDICTIONAL HIGH COURT VIDE ITS ORDER DATED 19.10.2011. IN VIEW OF ABOVE LEGAL AND FACTUAL DISCUSSION, PENALTY IN QUESTION IS DELETED IN ALL THESE APPEALS FOR A.Y. 2000 - 01 TO 2005 - 06 . 7 . IN ITA NO. 397 / RJT /20 12 FOR A.Y. 2004 - 05, SMT. MEENABEN KHAKHAR HAS FILED THE APPEAL ON THE FOLLOWING GROUND S : 1.0 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2.0 THE LEARNED COMMISSIONER OF INCOME TAX (APPE ALS) - IV, AHMEDABAD [CIT(A)] ERRED ON FACTS AS ALSO IN CONFIRMING THE PENALTY U/S. 271(1)(C) OF THE ACT ON INCOME ADMITTED DURING THE COURSE OF SEARCH AT RS.53,000/ - . THE PENALTY U/S.271(1)(C) OF THE ACT MAY KINDLY BE DELETED. SIMILAR GROUND HAS BEEN RAI SED BY ASSESSEE IN A.Y.2005 - 06. 8 . WE FIND THAT SIMILAR PENALTY WAS LEVIED IN CASE OF ASSESSEE S HUSBAND I.E. SHRI DEEPAK K. KHAKHAR, WHICH HAS BEEN DEALT BY US IN PARA 6 OF THIS ORDER AND VIDE DETAILED REASO NING AS DISCUSSED ABOVE, PENALTIES HA VE BEEN DE LETED. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, PENALTY IN QUESTION IN A.Y. 2004 - 05 IS DIRECTED TO BE DELETED. SIMILAR SSUE AROSE IN ITA NO.398/RJT/12. FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, PENALTY IN QUESTION IN A.Y. 2005 - 06 IS DIRECTED TO BE DELETED. I T A NO S . 39 9 TO 404 /RJT/1 2, A.YS. 0 0 - 0 1 TO 05 - 06 & ITA NOS. 397 & 398/RJT/12, A.Y. 04 - 05 & 05 - 06 [ SHRI DEEPAK K. KHAKHAR & SMT. MEENABEN KHAKHAR VS. ACIT] PAGE 13 9 . AS A RESULT, APPEAL S FILED BY BOTH ASSESSEES IN ALL THESE YEARS ARE ALLOWED AS INDICATED ABOVE . PRONOUNCED IN THE OPEN COURT ON THIS THE 25 TH DAY OF MA Y , 201 5 . SD/ - SD/ - (N. S. SAINI) (SHAILENDRA K UMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT : DATED 25 /0 5 /2015 TRUE COPY S K SINHA COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, RAJKOT 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT, RAJKOT