Lilasons Industries Ltd., Bhopal V. Assisstant Commissioner of Income Tax 1(1), Bhopal, Bhopal

ITA 462/Ind/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 0909 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 20-06-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: N D PATVA ADVS
• Keywords: Business income; Income from undisclosed sources; Search and seizure; Loose papers
• Section: 271(1)(c); 143(3); 5(2); 153A; 27; 132; 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.287/IND/2017 ASSESSMENT YEAR: 2011-12 MOHAN KUMAR LILA 64, MALVIYA NAGAR, BHOPAL / VS. ACIT, 1(1), BHOPAL ( APPELLANT ) (RE VENUE) P.A. ABCPL 7638 N ITA NO.288/IND/2017 ASSESSMENT YEAR: 2011-12 ARUN KUMAR LILA E-4/132, ARERA COLONY, BHOPAL / VS. ACIT, 1(1), BHOPAL ( APPELLANT ) (RE VENUE) P.A. AARPL 5228N ITA NO.462/IND/2017 ASSESSMENT YEAR: 2011-12 LILASONS INDUSTRIES LTD. 83, MALVIYA NAGAR, BHOPAL / VS. ACIT, 1(1), BHOPAL ( APPELLANT ) (RE VENUE) P.A. - AAACL 5311 N MOHAN K. LI LA AND OTHERS, BHOPAL 2 ITA NO.467/IND/2017 ASSESSMENT YEAR: 2011-12 M/S LILASONS BREWARIES LTD. , INDUSTRIAL AREA, GOVINDPURA, BHOPAL / VS. ACIT, 1(1), BHOPAL ( APPELLANT ) (RE VENUE) P.A. AAACL5312R APPELLANT BY SHRI ASHISH GOYAL & N.D. PATVA ADVS , RESPONDENT BY SMT. ASHIMA GUPTA , CIT - DR DATE OF HEARING: 31.10.2018 DATE OF PRONOUNCEMENT: 20.11.2018 / O R D E R PER MANISH BORAD, A.M: THESE BUNCH OF FOUR APPEALS FILED AT THE INSTANCE O F DIFFERENT ASSESSEES RELATING TO PENALTY LEVIED U/S 271AAA OF THE ACT ARE DIRECTED AGAINST THE COMMON ORDER OF LD. COMMISSION ER OF INCOME TAX(APPEALS)-1, BHOPAL, (IN SHORT CIT(A)), DATED 03.02.2017 & 28.03.2017 WHICH ARE ARISING OUT OF THE SEPARATE OR DERS FRAMED ON 18.03.2016 & 22.03.2016 BY ACIT, 1(1), BHOPAL. 2. AS THE ISSUE RAISED IN ALL THESE APPEALS ARE COM MON BUT PERTAINING TO DIFFERENT ASSESSEES, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 3. THE SOLE GRIEVANCE COMMONLY RAISED IN ALL THESE FOUR APPEALS BY THE ASSESSEES IS AGAINST THE ORDER OF LD. CIT(A) CO NFIRMING THE LEVY OF PENALTY IMPOSED U/S 271AAA OF THE ACT FOR THE AL LEGED MOHAN K. LI LA AND OTHERS, BHOPAL 3 NONCOMPLIANCE OF CONDITION PROVIDED IN SECTION 271A AA SUB-SECTION (2) OF THE ACT REGARDING SUBSTANTIATING THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. FOLLOWING AMOUNT OF PENALTIES HAVE BEEN LEVIED IN THE CASE OF FOUR APPELLANTS: S.NO. PARTY NAME A.Y. PENALTIES U/S 271AAA 1 MOHAN KUMAR LILA 2011 - 12 10,00,000/ - 2 ARUN KUMAR LILA 2011 - 12 39,82,554/ - 3 M/S LILASONS INDUSTRIES LTD. 2011 - 12 15,00,000/ - 4 M/S LILASONS BREWARIES LTD. 2011 - 12 10,00,000/ - 4. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE SEARCH AND SEIZURE OPERATION U/S 132(1) OF THE ACT WERE CARRIED OUT AT THE PREMISES OF LILASONS GROUP AS WELL AS RESIDE NTIAL PREMISES OF THE ASSESSEES STATEMENTS U/S 132(4) OF THE ACT WERE RECORDED AND UNDISCLOSED INCOME WAS ADMITTED. TAX ON THE SURREND ERED INCOME ALONG WITH INTEREST WAS PAID AND OFFERED IN THE INC OME TAX RETURN. THE LD. ASSESSING OFFICER WHILE COMPLETED THE ASSES SMENT U/S 143(3) OF THE ACT R.W.S. 153A OF THE ACT, INITIATED PENALTY PROCEEDING U/S 271AAA OF THE ACT. SUBSEQUENTLY, IN THE PENALTY ORDER U/S 271AAA OF THE ACT, LD. AO LEVIED THE PENALTY @ 10% OF THE UNDISCLOSED INCOME BY ALLEGING THAT THE ASSESSEE NE ITHER SPECIFIED THE MANNER IN WHICH SUCH INCOME WAS DERIVED NOR SUB STANTIATED THE MATTER IN WHICH THE UNDISCLOSED INCOME WAS DERI VED. 5. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) BUT FAILED TO SUCCEED. MOHAN K. LI LA AND OTHERS, BHOPAL 4 6. NOW THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNA L AGAINST THE RESPECTIVE ORDER OF LD. CIT(A) CONFIRMING THE LEVY OF PENALTY U/S 271AAA OF THE ACT. 7. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT RESPECTIVE ASSESSEES HAVE ADMITTED THAT THE SOURCE OF SURRENDERED INCOME IS O N ACCOUNT OF UNDISCLOSED BUSINESS INCOME. HE FURTHER PLACED ON R ECORD, THE COPIES OF THE STATEMENT U/S 132(4) OF THE ACT SHOWI NG THAT NO SPECIFIC QUESTION WAS ASKED IN RELATION TO MANNER O F EARNING OF THE UNDISCLOSED INCOME NOR INDICATION WAS DRAWN TO THE PROVISIONS CONTAINED U/S 271AAA OF THE ACT. WRITTEN SUBMISSION GIVEN BY THE LD. COUNSEL FOR THE ASSESSEE READS AS FOLLOWS: FROM THE STATEMENT OF THE APPELLANT (PB 81-85) AN D ALSO QUOTED ABOVE, IT IS CLEAR THAT HE WAS NEVER QUESTIONED BY DRAWING HIS ATTENTION TO THE PROVISIONS CONTAINED IN SECTION 2 71(1)(C) OR 271AAA. HE TRIED TO GIVE APPROPRIATE ANSWERS TO THE BEST OF HIS ABILITY AND KNOWLEDGE TO THE QUESTIONS PUT TO HIM. HAD HE BEEN EXPRESSLY MADE AWARE OF THE PROVISION OF SECTION 27 1AAA, HE COULD HAVE PERHAPS TRIED TO FURNISH SOME MORE EVIDE NCE OR PROPER EXPLANATION. HOWEVER, NO SUCH ATTEMPT SEEMS TO HAVE BEEN MADE DURING THE SEARCH OR EVEN DURING ASSESSMENT PROCEED INGS. A. THE ISSUE IS SQUARELY COVERED BY DECISION OF HONBL E ITAT, INDORE IN KETI SANGAM INFRASTRUCTURE (I) LTD VS DCIT(CENTRAL), INDORE ITA NO. 516/IND/2017, 1341,602 & 603/IND/2016 AND ALSO IN KETI T CONSTRUCTION (INDIA) LTD, INDORE ITA NO 13 43 &601/IND/2016 WHERE IT WAS HELD THAT THE ASSESSEES ARE ELIGIBLE FOR GETTING IMMUNITY FRO M PAYING PENALTY U/S 271AAA OF THE ACT AS THE UNDISCLOSED IN COME HAS BEEN ADMITTED DURING THE COURSE OF SEARCH AND THE M ANNER OF EARNING INCOME IS FROM BUSINESS SOURCES, DUE TAXES WITH INTEREST HAVE BEEN PAID, SURRENDERED INCOME HAS BEE N OFFERED MOHAN K. LI LA AND OTHERS, BHOPAL 5 AS BUSINESS INCOME IN RETURNS OF INCOME FILED AND T HEY HAVE BEEN ACCEPTED AND ASSESSED AS BUSINESS INCOME ONLY AND IN THIS MANNER THE ASSESSEE HAS SUCCESSFULLY FULFILLED ALL THE THREE CONDITIONS U/S 271AAA OF THE ACT EVEN OTHERWISE, IF THE REVENUE HAS NOT ASKED SPECIF IC QUESTION RELATING TO THE MANNER OF DERIVING UNDISCLOSED INCO ME, THE ASSESSEE WHILE FULFILLING THE FIRST CONDITION OF AD MITTING THE UNDISCLOSED INCOME HAS ALREADY SPECIFIED THE MANNER OF EARNING THE INCOME I.E. FROM BUSINESS SOURCES AND T HE STATEMENT U/S 132(4) OF THE ACT WAS NOT FOR INDIVIDUAL BUSINE SS CONCERN, BUT WAS FOR THE GROUP CONCERNS/COMPANIES/BUSINESS ASSOCIATES/INDIVIDUALS AND AT THE POINT OF TIME OF GIVING THE STATEMENT DURING THE COURSE OF SEARCH, SPECIFIC DET AILS ABOUT EACH BUSINESS CONCERN AND THE SOURCE OF EARNING SUC H UNDISCLOSED INCOME ARE NOT PRACTICALLY POSSIBLE FOR THE PERSON GIVING THE STATEMENT ON BEHALF OF THE GROUP CONCERNS/INDIVIDUALS. ABOVE ALL, THE BUSINESS INCOM E SURRENDERED HAS BEEN OFFERED AND ASSESSED AS BUSINE SS INCOME ONLY. WE ARE, THEREFORE, OF THE VIEW THAT TH E LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFI RMING THE FINDINGS OF THE ASSESSING OFFICER LEVYING PENALTY U /S 271AAA OF THE ACT. WE ACCORDINGLY SET ASIDE THE FINDINGS OF T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND DELETE THE PENALTY. B. IN THE INSTANCE CASE ALSO, THE UNDISCLOSED INCOME W AS DULY SURRENDERED IN THE REGULAR RETURN FILED UNDER THE HEAD OTHER SOURCES FURTHER RELIANCE IS PLACED IN THE JUDGEMENT IN CASE OF ITAT DELHI BENCH ACIT VS. EMIRATES TECHNOLOGIES (P) LT D (2017)88 TAXMANN.COM 637 (DELHI- TRIB), IT WAS HELD THAT IN ABSENCE OF THE QUERY ABOUT THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED AND ABOUT ITS SUBSTA NTIATION, THE LD AO WAS NOT JUSTIFIED IN IMPOSING PENALTY UND ER SECTION 271AAA SPECIALLY WHEN HE OFFERED UNDISCLOSED INCOME WAS ACCEPTED BY THE ASSESSING OFFICER AND THE TAX DUE T HERE ON HAS BEEN PAID BY THE ASSESSEE. SIMILAR VIEW WAS TAKEN IN THE CASE OF NEERAT SINGAL BY HONBLE ITAT DELHI BENCH ([2013] 37 TAXMANN.COM 189 (DELHI - TRIB.) MOHAN K. LI LA AND OTHERS, BHOPAL 6 1. NO DEFINITION OF SPECIFIED MANNER IN THE CASE OF PRAMOD KUMAR JAIN [2012] 149 TTJ 36 (CUTTACK - TRIB.) , THE ASSESSEE HAD DISCLOSED THE UNACCOUNTED INCOME BUT HAD FAILED TO SPECIFY THE MANNER IN WHIC H SUCH INCOME HAD BEEN DERIVED. THE DEPARTMENT ACCORDINGLY LEVIED PENALTY U/S 271AAA OF THE ACT. THE SAME WAS UPHELD BY THE FIRST APPELLATE AUTHORITY. THE TRIBUNAL HAS HOWEVER DELETED THE PENALTY ON THE BASIS THAT THERE IS NO PRESCRIBED ME THOD TO INDICATE THE MANNER IN WHICH INCOME WAS GENERATED HELD THAT NO DEFINITION COULD BE GIVEN TO THE 'SPE CIFIED MANNER' INSOFAR AS THE VERY STATEMENT ON OATH UNDER SECTION 132(4) SPECIFIES THE MANNER ON WHICH THE ASSESSEE IS PREPA RED TO PAY TAX THEREON. THE INSCRIBING IN THE BOOKS OF ACCOUNT WAS TAKEN CARE OF BY THE ASSESSEE WHEN HE FILED THE RETURNS I N PURSUANCE OF NOTICE UNDER SECTION 153A ACCOUNTING THE ASSETS. THEREFORE, THE PENALTY IS NOT AUTOMATIC IF ONE OF THE PURPORTE D CONDITIONS IS NOT FULFILLED ALTHOUGH ALL THE CONDITIONS HAVE BEEN AGREED TO OF HAVING FULFILLED BY THE ASSESSING OFFICER INSOFAR A S THE TAX AND INTEREST HAVE BEEN RECOVERED. IN VIEW OF THE ABOVE THE LEVY OF PENALTY UNDER SECTION 271AAA WAS NOT JUSTIFIED. THAT BEING THE CASE, AND IN VIEW OF THE ADMISSION O F THE UNDISCLOSED INCOME IN THE RETURNS FILED AND PAYMENT OF FULL TAX WITH PENAL INTEREST THEREON THE PENALTY IS UNJUSTIF IED. 2. EXPLANATION 5 TO SEC 271(1)(C) AND SUBSECTION (2) T O SEC 271AAA ANALOGOUS :- SEC 271(1)(C) SEC 271AAA EXPLANATION 5: WHERE IN COURSE OF A SEARCH INITIATED U/S 132 ON OR AFTER 1.06.07, IF THE ASSESSEE IN THE COURSE OF SEARCH MAKES A STATEMENT UNDER SUB-SECTION (4) OF SECTION (2)- PENALTY IS NOT LEVIABLE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER 1-6-2007 BUT BEFORE 1-7-2012, AND THE ASSESSEE IN THE COURSE OF MOHAN K. LI LA AND OTHERS, BHOPAL 7 132 THAT ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139 AND ALSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME, THEN THE ASSESSEE FOR SUCH INCOME WILL NOT BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME TO ATTRACT THE PENALTY THEREIN SEARCH, IN A STATEMENT UNDER THE SUB-SECTION (4) OF SECTION 132,(I), ADMITS THE UNDISCLOSED INCOME (II) SPECIFIES AND SUBSTANTIATES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, AND (III) PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. APPLICABILITY:- WHERE SEARCH UNDER SECTION 132 WAS INITIATED BEFORE 1-6- 2007 APPLICABILITY:- WHERE SEARCH UNDER SECTION 132 HAS BEEN INITIATED ON OR AFTER 1-6-2007 BUT BEFORE 1- 7-2012. A. READING BOTH THE PENAL PROVISIONS, ONE THING IS COM MON FOR NON- ATTRACTION OF PENALTY UNDER BOTH THE SECTIONS, IS T HAT:- IF THE ASSESSEE IN HIS STATEMENTS RECORDED UNDER S ECTION 132(4) ADMITS THE UNDISCLOSED INCOME AND SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AN D PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. B. THE ONLY ADDITIONAL CONDITION IN CASE OF SEC 271AAA IS THAT:- MOHAN K. LI LA AND OTHERS, BHOPAL 8 THE ASSESSEE WILL ALSO HAVE TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED BESIDES SP ECIFICATION OF THE MANNER IN WHICH SUCH INCOME WAS DERIVED. THE INTENTION OF THE LEGISLATURE IS THAT THESE PROV ISIONS ARE THUS NOT APPLICABLE SIMULTANEOUSLY BUT THESE ARE PERIOD SPECIFIC. IN VIEW OF THIS RELATIVE STUDY OF BOTH THE PROVISIO NS WHEN WE GO THROUGH THE DECISIONS IN THE CASE OF RADHA KISHAN GOEL [2006] 152 TAXMAN 290 (ALL.) IT WAS HELD THAT IN THE ABSENCE OF ANY SPECIFIC STATEMENT ABOUT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, IT CAN BE INFER RED THAT SUCH UNDISCLOSED INCOME WAS DERIVED FROM THE BUSINE SS WHICH HE WAS CARRYING ON OR FROM OTHER SOURCES. THE OBJEC T OF THE PROVISION IS ACHIEVED BY MAKING THE STATEMENT ADMIT TING THE NON-DISCLOSURE OF MONEY, BULLION, JEWELLERY, ETC. T HUS, WE ARE OF THE OPINION THAT MUCH IMPORTANCE SHOULD NOT BE ATTA CHED TO THE STATEMENT ABOUT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. IT CAN BE INFERRED ON THE FACTS AND CIRCUM STANCES OF THE CASE, IN THE ABSENCE OF ANYTHING TO THE CONTRARY. THEREFORE, MERE NON-STATEMENT OF THE MANNER IN WHICH SUCH INCO ME WAS DERIVED WOULD NOT MAKE EXPLANATION 5(2) INAPPLICABLE. 8. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) SUPPORTED THE ORDER OF THE LOWER AUTHORITIES BUT COULD NOT CONTRO VERT THE FINDING THAT THE ISSUE STANDS SQUARELY COVERED BY THE DECIS ION OF THE ITAT, INDORE BENCH IN THE CASE OF KETI SNAGAM INFRASTRUCT URE(I) LTD. (SUPRA) WHEREIN THE JUDGMENT IN FAVOUR AND AGAINST THE ASSESSEE HAVE DULY BEEN DEALT WITH AND THE ONE FAVOURING THE ASSESSEE HAVE BEEN APPLIED IN VIEW OF THE JUDGMENT OF HON'BLE APE X COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LIMITED 88 ITR 192 (SC). 9. WE HAVE HEARD RIVAL CONTENTION AND PERUSED THE R ECORDS CAREFULLY GONE THROUGH STATEMENTS GIVEN BY EACH OF THE ASSESS EE U/S 132(4) MOHAN K. LI LA AND OTHERS, BHOPAL 9 OF THE ACT AND ALSO CAREFULLY GONE THROUGH THE JUDG MENTS REFERRED AND RELIED BY BOTH THE PARTIES. COMMON ISSUE RAISED IN ALL THESE FOUR APPEALS IS AGAINST THE ORDER OF LD. CIT(A) CON FIRMING THE LEVY OF PENALTY U/S 271AAA OF THE ACT IN THE CASE OF FOLLOW ING FOUR ASSESSES: S.NO. PARTY NAME A.Y. PENALTIES U/S 271AAA 1 MOHAN KUMAR LILA 2011 - 12 10,00,000/ - 2 ARUN KUMAR LILA 2011 - 12 39,82,554/ - 3 M/S LILASONS INDUSTRIES LTD. 2011 - 12 15,00,000/ - 4 M/S LILASONS BREWARIES LTD. 2011 - 12 10,00,000/ - 10. PENALTY U/S 271AAA OF THE ACT IS TO BE LEVIED @ 10% OF THE UNDISCLOSED INCOME UNEARTHED DURING THE COURSE OF S EARCH U/S 132 OF THE ACT CONDUCTED AFTER THE FIRST DAY OF JUNE, 2 007 BUT BEFORE THE FIRST DAY OF JULY 2012. IN THE INSTANT APPEAL SEARC H U/S 132 OF THE ACT CONDUCTED ON 28.10.2010. INCOME SURRENDERED BY EACH ASSESSEE DULY ADMITTED DURING THE COURSE OF SEARCH AND HAS BEEN OFFERED TO TAX IN THE INCOME TAX RETURN. IMMUNITY F ROM PAYING PENALTY U/S 271AAA OF THE ACT IS TO BE PROVIDED TO THE ASSESSEE IF CONDITIONS PROVIDED IN SUB-SECTION(2) OF SECTION 27 1AAA OF THE ACT ARE FULFILLED WHICH ARE NAMELY: (I) IF THE ASSESSEE IN THE COURSE OF SEARCH IN STAT EMENT UNDER SUB- SECTION (4) OF SECTION 132 ADMITS UNDISCLOSED INCOM E AND SPECIFIED THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. (II) SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED I NCOME WAS DERIVED MOHAN K. LI LA AND OTHERS, BHOPAL 10 (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. 11. IN THE INSTANT BUNCH OF APPEAL REVENUE AUTHORIT IES HAVE ACCEPTED THAT THE ASSESSEE HAS DULY FULFILL THE CON DITION NO.1 & 3. BONE OF CONTENTION REVOLVES ROUND THE CONDITION NO. 2 I.E. SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. 12. BOTH THE LOWER AUTHORITIES HAVE CONFIRMED THE P ENALTY OBSERVING THAT THE ASSESSEE HAS NOT GIVEN DETAILS AND THE MAN NER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED, WHEREAS THE LD . COUNSEL FOR THE ASSESSEE PLEADED THAT SOURCE OF INCOME SURRENDE RED HAS BEEN ACCEPTED TO BE FROM UNDISCLOSED BUSINESS INCOME. HO WEVER, THERE WAS NO SPECIFIC QUESTION RAISED BY THE SEARCH TEAM DRAWING ATTENTION OF THE ASSESSEE TO THE PROVISIONS CONTAIN ED IN SECTION 271AAA OF THE ACT. FROM THE PERUSAL OF THE STATEMENT RECORDED U/S 132 SUB-SECTION (4) OF THE ACT GIVEN BY EACH OF THE FOUR ASSESSEES, WE FIND THAT REASON ABLE EFFORTS WERE MADE TO GIVEN APPROPRIATE ANSWERS TO THE BEST OF THE ABILITY AND KNOWLEDGE TO THE QUESTIONS PUT TO THEM. FOR INSTANCE IN THE CASE OF LILASONS INDUSTRIES LIMITED , BHOPAL THE ASSESSEE ACCEPTED THAT THE SURRENDERED OF RS.1,50,0 0,000/- IS ON ACCOUNT OF BUSINESS INCOME. SAME IS A CASE FOR OTHE R ASSESSEES WHEREIN WHILE GIVING THE STATEMENT THEY GAVE AN IND ICATION OF THE SOURCE OF INCOME AND THE SAME HAS BEEN DISCLOSED IN THE INCOME TAX RETURN FILED SUBSEQUENT TO THE SEARCH PROCEEDIN GS AND THE REVENUE AUTHORITIES HAVE ASSESSED THE RESPECTIVE IN COME TAX RETURNS AS WELL AS SURRENDERED INCOME IN THE MANNER IT HAS BEEN DISCLOSED. MOHAN K. LI LA AND OTHERS, BHOPAL 11 NOW IN THESE GIVEN FACTS WHETHER THE ASSESSEE IS LI ABLE TO PAY THE PENALTY U/S 271AAA OF THE ACT. 13. WE FIND THAT THE SIMILAR ISSUE CAME UP BEFORE U S IN THE CASE OF KETI SANGAM INFRASTRUCTURE(I) LTD. (SUPRA) WHEREIN WE DELETED THE IMPUGNED PENALTY U/S 271AAA OF THE ACT OBSERVING AS FOLLOWS: WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERI AL AVAILABLE ON RECORD AND HAVE ALSO GONE THROUGH THE JUDGMENTS RELIED UPO N BY BOTH THE PARTIES. THE COMMON ISSUE RELATES TO PENALTY LEVIED U/S 271A AA OF THE ACT AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS). THE ASSESSING OFFICER HAS DENIED THE IMMUNITY TO THE AS SESSEE PROVIDED U/S 271AAA(2) OF THE ACT FOR THE SOLE REASON THAT THE A SSESSEE HAS NOT SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED. BEFORE GOING AHEAD WE WOULD FIRST LIKE TO REPRODUCE THE PROVISIONS OF SECTION 271AAA OF THE ACT :- PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012, TH E ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM, A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCO ME 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 U NDER SUB-SECTION (4) OF SECTION 132 , ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER 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 T HE 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 SECT ION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER MOHAN K. LI LA AND OTHERS, BHOPAL 12 VALUABLE ARTICLE 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 SEA RCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE PRINCIPAL CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PRINCIPAL COMMISSIONER OR COMMISSIONER BEFORE THE DATE OF SEA RCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPE CIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCT ED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BU T THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) O F SECTION 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF S EARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF IN COME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 19. FROM THE PERUSAL OF THE ABOVE SECTION WE OBSERV E THAT THE PENALTY CANNOT BE LEVIED IF THE ASSESSEE FULFILS TH REE CONDITIONS MENTIONED IN SUB-SECTION (2) OF SECTION 271AAA OF THE ACT. I N THE INSTANT CASE THERE IS NO DISPUTE AT THE END OF PARTIES THAT THE ASSESSEE HAS FULFILLED CONDITION NOS. 1 AND 3 OF SUB-SECTION (2) OF SECTION 271AAA O F THE ACT AND THAT THE ASSESSEE HAS ADMITTED THE UNDISCLOSED INCOME IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT DURING THE COURSE OF SEARCH A ND HAS ALSO PAID TAXES TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE U NDISCLOSED INCOME. THE BONE OF CONTENTION REVOLVES ROUND THE SECOND CONDIT ION WHICH SAYS THAT THE ASSESSEE SHOULD SUBSTANTIATE THE MANNER IN WHICH TH E UNDISCLOSED INCOME WAS DERIVED. THE LEARNED COUNSEL FOR THE ASSESSEE H AS CONTENDED THAT DURING THE COURSE OF GIVING THE STATEMENT, THE ASSE SSEE ADMITTED THE UNDISCLOSED INCOME AND PURSUANT THERETO THERE WAS N O FURTHER QUESTION ASKED BY THE ASSESSING OFFICER TO THE ASSESSEE FOR SUBSTANTIATING THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. IT WAS ALSO CONTENDED THAT THE UNDISCLOSED INCOME WAS EARNED OU T OF THE BUSINESS INCOME AS ACCEPTED BY MR. TIKAMCHAND GARG WHO GAVE THE STATEMENT ON BEHALF OF GROUP CONCERN AND IN THE RETURN OF INCOME FILED AFTER THE SEARCH THE SURRENDERED INCOME HAS BEEN DISCLOSED AS BUSINE SS INCOME IN VARIOUS MOHAN K. LI LA AND OTHERS, BHOPAL 13 BUSINESS CONCERNS/ASSOCIATES AND THE SAME HAS BEEN ASSESSED AS BUSINESS INCOME BY THE REVENUE AUTHORITIES. FURTHER NO OTHER ADDITION WAS MADE AND THE RETURN OF INCOME INCLUDING THE UNACCOU NTED BUSINESS INCOME WAS ACCEPTED BY THE REVENUE AUTHORITIES. THE REVEN UES CONTENTION IS THAT THE ONUS HEAVILY LIES ON THE ASSESSEE BECAUSE THE I MMUNITY HAS BEEN SOUGHT FROM PAYING PENALTY @ 10% AND IF THIS BENEFI T IS TO BE TAKEN THEN THE ONUS LIES HEAVILY ON THE ASSESSEE TO FULFILL TH E CONDITIONS ENUMERATED U/S 271AAA OF THE ACT. 20. IN ORDER TO EXAMINE THE FACTS WE HAVE PERUSED T HE STATEMENT GIVEN BY SHRI TIKAMCHAND GARG DURING THE COURSE OF SEARCH PROCEEDINGS. IN REPLY TO QUESTION NO. 3 IT WAS STATED THAT ON AC COUNT OF PAPERS AND OTHER RECORDS SEIZED FROM THE BUSINESS AND RESIDENTIAL PR EMISES OF THE GROUP CONCERNS/INDIVIDUALS AS WELL AS VALUABLE ASSETS SEI ZED BY THE REVENUE AUTHORITIES, AN AMOUNT OF RS.51 CRORES IS SURRENDER ED TOWARDS UNACCOUNTED INCOME ON BEHALF OF THE GROUP CONCERNS, COMPANIES AND RELATED INDIVIDUALS. ALONG WITH THIS REPLY, THE PO ST-DATED CHEQUES FOR TAX OF RS. 7.51 CRORES WERE ALSO OFFERED TO THE REVENUE AUTHORITIES. THEREAFTER, IN QUESTION NO. 4 IT WAS SIMPLY ASKED THAT DO YOU T O WANT TO SAY ANYTHING ELSE TO WHICH THE REPLY WAS NO. WE OBSERVE THAT TH E REVENUE AUTHORITIES HAVE NOT ASKED ANY SPECIFIC QUESTION TO THE CONCERN PERSON TO STATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED. 21. IN THESE GIVEN FACTS WHERE A SPECIFIC QUEST ION HAS NOT BEEN ASKED BY THE SEARCH TEAM ABOUT THE MANNER IN WHICH THE UNDIS CLOSED INCOME WAS DERIVED, WHETHER THE ASSESSEE SHALL STILL BE ELIGIB LE TO THE IMMUNITY GRANTED IN SECTION 271AAA OF THE ACT NEEDS TO BE EX AMINED IN THE LIGHT OF THE JUDICIAL PRONOUNCEMENTS. WE WOULD FIRST LIKE TO GO THROUGH THE FINDINGS OF THE COORDINATE BENCH GIVEN IN THE VERY SAME GROU P OF CASES DEALING WITH THE VERY SAME ISSUE OF 271AAA(2) OF THE ACT RELATIN G TO FULFILMENT OF SECOND CONDITION AND WE FIND THAT THE TRIBUNAL VIDE ITS OR DER DATED 28.6.2017 IN ITA NOS. 1027 & 1028/IND/2016, RELYING UPON THE JUD GMENT OF THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MAHINDRA C. SHAH (SUPRA) AS WELL AS OTHER JUDGMENTS AND DECISIONS, HELD THE ACTION O F THE ASSESSING OFFICER IMPOSING PENALTY U/S 271AAA OF THE ACT AS NOT JUSTI FIED OBSERVING AS FOLLOWS :- 7. WE HAVE CONSIDERED THE FACTS RIVAL SUBMISSIONS AND MATERIAL ON RECORD. WE FIND THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION A STATEMENT UNDER SECTION 132(4) OF THE A CT WAS RECORDED ON 13-05-2011 AND 27-05-2011, FROM SHRI TIKAMCHAND GARG , HEAD OF GARG FAMILY, WHEREIN IN R EPLY TO QUESTION NO.2 OF HIS STATEMENT DTD. 13-05-2011 (PAP ER BOOK PAGE NO.2) AND AGAIN ON 27-05-2013 IN REPLY TO QUES TION NO. 2, OF HIS STATEMENT DTD. 27-05-2011, HE ON BEHALF OF A LL THE INDIVIDUALS OF GARG FAMILY AND GROUP OF CONCERNS AN D COMPANIES HAD MADE A DISCLOSURE OF ADDITIONAL INCOM E OF RS. 70 CRORES, BY STATING THAT THIS AMOUNT COVERS AND R EPRESENT ANY MOHAN K. LI LA AND OTHERS, BHOPAL 14 UNDISCLOSED INCOME RECEIPTS, DISCREPANCY OR DISALLO WANCES OR ANY VALUABLE ARTICLE OR THINGS, MONEY, JEWELLERY, D OCUMENTS OR PAPERS FOUND / OR SEIZED DURING THE SEARCH OPERATIO N. SUCH UNDISCLOSED INCOME IS DISCLOSED ON THE BASIS DISCRE PANCIES FOUND IN LOOSE PAPERS AND BOOKS OF ACCOUNTS ETC. DU RING SEARCH IN THE COURSE OF OUR BUSINESS ACTIVITY. THUS, APPAR ENTLY THE SSESSEE HAS MADE DISCLOSURE OF UNDISCLOSED INCOME, WHICH HAS BEEN EARNED FROM BUSINESS ACTIVITY NOT FULLY DISCLOSED IN THE BOOKS OF ACCOUNTS. ACCORDINGLY, SHRI TIKAMCHNAD GAR G HAS ALSO GAVE POSTDATED CHEQUE AGAINST PAYMENT OF TAXES. ACC ORDINGLY, THE FAMILY MEMBERS HAVE SHOWN THIS UNDISCLOSED RETU RN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A. THE PE RUSAL OF STATEMENT RECORDED US 1324 SHOWS THAT NO SPECIFIC Q UESTION WAS PUT REGARDING MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED. HOWEVER, IMPLIEDLY THE MANNER OF INCOM E EARNED WAS FROM BUSINESS INCOME ONLY. WE ARE ALSO OF THE V IEW THAT THE ASSESSEE HAS ALREADY DISCLOSED UNDISCLOSED INCOME I N PROCEEDING AND BUT NOT CLEARLY SPECIFIED THE MANNER IN WHICH THE SAID INCOME DERIVED AS IT WAS NOT ASKED FOR. HO WEVER, THIS WILL NOT THE ASSESSEE FOR THE ASSESSEE FROM THE IMM UNITY PROVIDED UNDER SECTION 271AAA(2) OF THE ACT. AS HEL D IN THE FAASE OF CIT VS. RADHA KISHAN GOEL (2005) 278 ITR 4 54 (ALLAHABAD) (2006) 152 TAXMAN 290/200 CTR 300(ALL) WHERE THE HON'BLE HIGH COURT HAS ACCEPTED THAT UNLESS THE AUTHORISED OFFICER HAS BEEN DEPRIVED. IT IS NOT EXPECTED FROM THE PERSON TO MAKE A STATEMENT IN THIS REGARD. FOR THE BETTER APP RECIATION OF FACTS THE RELEVANT PARA OF THE ORDER ARE REPRODUCED AS UNDER :- 10. UNDER SECTION 132(4) OF THE ACT, IT IS THE AUTHORISED OFFICER, WHO EXAMINES ON OATH ANY PERSON, WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCU MENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG, THEREFORE, IT IS FOR THE AUTHORISED OFFICER TO RECORD THE STATEMENT IN HIS OWN WAY. THEREFORE, IT IS NOT EXPECTED FROM THE PERSON TO STATE THOSE THINGS, WHICH ARE NOT ASKED BY THE AUTHORISED OFFICER. 11. IT IS A MATTER OF COMMON KNOWLEDGE, WHICH CANNOT BE IGNOR ED THAT THEN SEARCH IS BEING CONDUCTED WITH THE COMPLE TED TEAM OF THE OFFICERS CONSISTING OF SEVERAL OFFICERS WITH THE PO LICE FORCE. USUALLY TELEPHONE AND ALL OTHER CONNECTIONS ARE DISCONNECTE D AND ALL INGRESS AND EGRESS ARE BLOCKED. DURING THE COURSE O F SEARCH PERSON IS SO TORTURED, HARASSED AND PUT TO A MENTAL AGONY THAT HE LOSES HIS NORMAL MENTAL STATE OF MIND AND AT THAT STAGE IT CANNOT BE EXPECTED FROM A PERSON TO PREEMPT THE STATEMENT REQUIRED TO BE GIVEN IN LAW AS A PART OF HIS DEFENSE. MOHAN K. LI LA AND OTHERS, BHOPAL 15 12. IN THESE CIRCUMSTANCES, WE ARE OF THE V IEW THAT UNDER SECTION 132(4) OF THE ACT UNLESS THE AUTHORISED OFFICER PUT S A SPECIFIC QUESTION WITH REGARD TO THE MANNER IN WHICH INCOME H AS BEEN DERIVED, IT IS NOT EXPECTED FROM THE PERSON TO MAKE A STATEMENT IN THIS REGARD AND IN CASE IN THE STATEMENT THE MANNER IN WHICH INCOME HAS BEEN DERIVED HAS NOT BEEN STATED BUT HAS BEEN STATED SUBSEQUENTLY, THAT AMOUNTS TO THE COMPLIANCE WITH E XPLANATION 5(2) OF THE ACT. WE ARE ALSO OF THE OPINION THAT IN CASE THERE IS NOTHING TO THE CONTRARY IN THE STATEMENT RECORDED U NDER SECTION 132(4) OF THE ACT, IN THE ABSENCE OF ANY SPECIFIC STATEMEN T ABOUT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED, I T CAN BE INFERRED THAT SUCH UNDISCLOSED INCOME WAS DERIVED F ROM THE BUSINESS WHICH HE WAS CARRYING ON OR FROM OTHER SOU RCES. THE OBJECT OF THE PROVISION IS ACHIEVED BY MAKING THE S TATEMENT ADMITTING THE NON-DISCLOSURE OF MONEY, BULLION, JEW ELLERY, ETC. THUS, WE ARE OF THE OPINION THAT MUCH IMPORTANCE SH OULD NOT BE ATTACHED TO THE STATEMENT ABOUT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED. IT CAN BE INFERRED ON THE FACTS AND CIRCUMSTANCES OF THE CASE) IN THE ABSENCE OF ANYTHI NG TO THE CONTRARY. THEREFORE) MERE NON-STATEMENT OF THE MANN ER IN WHICH SUCH INCOME WAS DERIVED WOULD NOT MAKE EXPLANATION 5(2) INAPPLICABLE. 7.1. THUS, APPLYING THE RATIO OF ABOVE DECISION, WHEN THE ASSESSEE HAS DISCLOSED THE INCOME DURING SEARCH AND PAID THE TAXES AND IT HAS BEEN ACCEPTED NO PENALTY UNDER SEC TION 271AAA IS CALLED FOR JUST BECAUSE THE MANNER IN WHI CH SUCH INCOME WAS EARNED NOT SPECIFIED IN STATEMENT UNDER SECTION 132(4) OF THE ACT. THE FOLLOWING THE RATIO OF SAID DECISION THE COORDINATED BENCH OF DELHI TRIBUNAL DELETED THE PEN ALTY UNDER SECTION 271AAA IN THE CASE OF RAJ RANI GUPTA V. DC IT [ITA. O.3371/DEL/2011) (PB-78-88) BY RELYING ON THE DECIS ION OF HON'BL ALLAHABAD HIGH COURT IN THE CASE OF CIT V . RADHA KISHAN GOEL [2005]; 278 LTR 454 (ALLAHABAD)[2006] 1 52 TAXRRIAN 290/ 200 CTR 300(ALL) AND HONBLE GUJARAT H IGH COURT IN THE CASE OF MAHENDRA C SHAH CIT V . MAHENDRA C. SHAH [2008] 299 ITR 305(GUJ.). IN THIS CASE, ALSO P ENALTY UNDER SECTION 271AAA WAS LEVIED ON THE BASIS THAT THE ASS ESSEE DID NOT , SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED IN COME DERIVED. THERE TRIBUNAL HAS OF OBSERVING THAT THE I MMUNITY GRANTED UNDER CLAUSE 2 OF EXPLANATION 5A SECTION 27 1(1)(C) ARE SIMILAR TO IMMUNITY GRANTED TO THE ASSESSEE UNDER C LAUSE (2) OF SECTION 271 AAA, THE LETTER DATED THE PENALTY AS TH E ASSESSEE WAS NEITHER ASKED ABOUT THE MANNER IN WHICH THE INC OME WAS FOUND NOT REQUIRED TO SUBSTANTIATE THE MANNER OF EA RNING SUCH INCOME. THE ASSESSEE HAD DISCLOSED THE INCOME UNDER SECTION MOHAN K. LI LA AND OTHERS, BHOPAL 16 132(4) AND DISCLOSED THE SAME IN THEIR RETURN OF IN COME FILED IN RESPONSE TO NOTICE UNDER SECTION 153A OF THE ACT. W E ALSO NOTE THAT THE ASSESSEE HAS PAID DUE TAXES WITH INTEREST THORN. IT IS ALSO RELEVANT TO MENTION THAT THE INCOME DECLARED B Y THE ASSESSEE HAS BEEN DULY ACCEPTED BY THE AO AND NO AD DITION HAS BEEN MADE. IN VIEW OF SUCH CIRCUMSTANCES, WE AR E OF THE CONSIDERED OPINION THAT THE ASSESSEE HAD DULY FULFI LLED THE CONDITION LAID DOWN UNDER SECTION 271AAA (2) OF THE ACT. WE ALSO FIND THAT THE ASSESSEE MADE DISCLOSURE DURING SEARCH AND SPECIFIED MANNER IN WHICH INCOME WAS EARNED IN THE STATEMENT UNDER SECTION 132(4) RECORDED FROM SHRI MANISH KALA NI ON BEHALF OF THE ASSESSEE GROUP. 7.2. SIMILARLY IN THE CASE OF D'CL'T V. SHREE SALASAR PROPERTIES & FINANCE PVT. LTD. [I.T.A. NO. 1081 I KOLL 20 13] WH EREIN PENALTY UNDER SECTION 271 AAA WERE LEVIED ON THE GROUND THA T THE ASSESSEE IS NOT ENTITLED IMMUNITY, AS THE CONDITION S STIPULATED WERE NOT FULFILLED. IT WAS OBSERVED BY THE A.O. THE ASSESSEE HAS NOT SUBSTANTIATED THE MANNER IN WHICH THE UNDIS CLOSED INCOME WAS DERIVED. PENALTY WAS LEVIED ON THE GROUN D THAT BUT FOR THE SEARCH THE ASSESSEE WOULD NOT HAVE COME FOR WARD WITH THE ADDITIONAL INCOME AS DISCUSSED IN PARAGRAPH 5 O F THE ORDER. THE ITAT IN PARA 8.3 NOTED THAT THE ADDITION AL INCOME OF RS. 1.75 CRORES WAS OFFERED VOLUNTARILY BY THE ASSE SSEE WITHOUT INCRIMINATING MATERIAL FOUND DURING THE COU RSE OF SEARCH AND HELD THAT SAME DOES NOT FALL WITHIN THE DEFINITION OF UNDISCLOSED INCOME. IN PARA 8.4 IT HAS BEEN HELD TH AT NOTHING IN IMPLEMENTING WAS FOUND WITH REGARD TO THE ASPECT OF SHARE CAPITAL AND IS LOANS WHICH WERE ULTIMATELY OFFERED BY THE ASSESSEE, HENCE IT WAS SCHOOL PROVED THAT THE OFFER OF INCOME WAS WITHOUT DETECTION OF THE DEPARTMENT AND ACCORDI NGLY THE ARGUMENT THAT BUT FOR THE SEARCH, THIS INCOME WOULD NOT HAVE BEEN OFFERED DOES NOT HOLD ANY WATER AND DESERVE TO BE DISMISSED. OUR VIEW IS ALSO SUPPORTED BY DECISION OF COORDINATED BENCH IN THE CASE OF SHRI ASHOK KUMAR SHARMA VS. DCIT (2012)31 CCH310 (CUTTACK-TRIB)/77 DTR241/149 T TJ 33 WHEREIN IT WAS HELD THAT (WHERE THE ASSESSEE HAS DI SCLOSED CONCEALED INCOME WHILE GIVING STATEMENT U/S 132 DUR ING THE COURSE OF SEARCH AND PAID TAX THEREON AND SHOWED SA ID UNDISCLOSED INCOME IN RETURN FILED UNDER HEAD INCO ME FROMJ BUSINESS AND DEPARTMENT HAS ACCEPTED THESE RETURNS AND ACCORDINGLY PASSED ASSESSMENT ORDERS. 7.3 FURTHER RELIANCE IS PLACED IN THE CASE OF DCIT VS. ASHOK NAGRATH [2015J 154 LTD 448/ 57 TAXMANN.COM 15(DELHI -TRIB) WHERE ASSESSEE AGREED FOR A DECLARATION ON ACCOUNT OF EXCESS MOHAN K. LI LA AND OTHERS, BHOPAL 17 STOCK-IN TRADE AND PAID TAX TOGETHER WITH INTEREST, NO PENALTY UNDER SECTION 271 AM WOULD BE LEVIED. 7.4. OUR VIEW IS ALSO SUPPORTED WITH DECISION IN THE CAS E OF CONCRETE DEVELOPERS VS. ACIT [2013] 34 TAXRRIANN.CO M 62 (NAG- TRIB) WHEREIN IT WAS HELD THAT WHERE ASSESSEE HAD D ISCLOSED CERTAIN AMOUNT DURING THE COURSE OF SEARCH, AND PAI D TAXES THEREON FILED RETURN SHOWING SAID INCOME AS BUSINESS INCOME AND SAME HAS BEEN ACCEPTED BY THE ASSESSJNG OFFICER UNDER THE HEAD 'BUSINESS INCOME' PENALTY UNDER SECTIUN 271 AAA OF INCOME TAX ACT, 1961, WAS NOT LEVIABLE. 7.5. THE LD. AR RELIED IN THE CASE OF NEERAJ SINGAL V. ACIT [2014J 146 LTD 152 (DEL) IT WAS HELD THAT IT WAS EVIDENT THAT DURING THE COURSE OF SEARCH PROCEEDINGS THE AUTHORISED OFFICER OF DEPARTMENT HAS NOT RAISED ANY SPECIFIC QUELY REGARDING THE MAN NER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED AND ON THE C ONTRARY ASSESSEE HAS TRIED TO EXPLAIN THE EARNING OF UNDISCL OSED INCOME IN QUESTION IN ITS REPLY DURING THE COURSE OF RECORDIN G OF THE STATEMENT UNDER SECTION 132(4) AND THEREAFTER. IN AB SENCE OF QUERY RAISED BY AUTHORISED OFFICER DURINQ THE COURSE OF RECORDING OF THE STATEMENT UNDER SECTION 132(4) ABOUT THE MAN NER IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED AND ABOUT I TS SUBSTANTIATION, THE AO WAS NOT JUSTIFIED IN IMPOSING PENALTY UNDER SECTION 271AAA ESPECIALLY WHEN OFFERED UNDISCL OSED INCOME HAS BEEN ACCEPTED AND DUE TAXES THEREON HAS B EEN PAID BY THE ASSESSEE. ORDER OF THE AO LEVYING PENALTY WA S SET ASIDE, APPEAL FAVOUR OF THE ASSESSEE. SIMILARLY PENALTY LE VIED FOR NOT SPECIFIC MANNER IN SEARCH WAS DELETED BY HON 'BLE GUJARAT HIGH COURT IN THE CASE OF CIT V. MAHENDRA C. SHAH [2008J 299 ITR 305(GUJ.) 7.6. IN VIEW OF ABOVE FACTS OF THE PRESENT CASE WHEREFRO M IT IS EVIDENT THAT DURING THE COURSE OF SEARCH PROCEEDING S, THE AUTHORISED OFFICER OF THE DEPARTMENT HAS NOT RAISED ANY SPECIFIC QUERY REGARDING MANNER IN COURT AND COORDINATED BEN CH VARIOUS TRIBUNAL AS DISCUSSED ABOVE WHICH THE UNDIS CLOSED INCOME HAS BEEN DERIVED AND ON THE CONTRARY THE ASS ESSEE HAS EXPLAINED THAT UNDISCLOSED INCOME IS BEING SURRENDE RED ON THE BASIS OF LOOSE PAPERS, DISCREPANCIES FOUND IN SEIZE D MATERIAL AND VALUABLES FOUND DURING SEARCH.' WE THUS RESPECT FULLY FOLLOWING THE ABOVE DECISIONS OF HON'BLE ALLAHABAD HIGH COURT AND HORIBLE GUJARAT HIGH COURT AND COORDINATED BENC H VARIOUS TRIBUNAL AS DISCUSSED ABOVE HOLD THAT IN ABSENCE OF QUERY RAISED BY THE AUTHORIZED OFFICER DURING THE COURSE OF SEARCH RECORDING THE STATEMENT UNDER SECTION 132(4) ABOUT THE MANNER MOHAN K. LI LA AND OTHERS, BHOPAL 18 IN WHICH THE UNDISCLOSED INCOME HAS BEEN DERIVED AN D ABOUT ITS SUBSTANTIATION, THE A.O. WAS NOT JUSTIFIED IN I MPOSING PENALTY UNDER SECTION 271AAA OF THE ACT SPECIFICALL Y WHEN THE SURRENDERED UNDISCLOSED INCOME HAS BEEN ACCEPTED AN D DUE TAXES HAS BEEN PAID BY THE ASSESSEE. HENCE, WE HERE BY SET- ASIDE THE IMPUGNED ORDERS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY LEVIED U/S. 271AAA OF IT ACT IN THE CAS ES OF THE ABOVE 7 APPEALS BY THE ASSESSEES BY ALLOWING BY ALL OWING THEIR APPEALS. 22. WE FURTHER OBSERVE THAT THE HON'BLE HIGH COURT OF GUJRAT IN ANOTHER CASE OF PRINCIPAL CIT VS. M/S SHAHLON SILK MILLS PV T. LTD.; TAX APPEAL NO. 824 OF 2017 DATED 5.2.2018 RELYING UPON THE JUDGMEN T OF CIT VS. MAHINDRA C. SHAH WHICH WAS IN CONNECTION WITH PENAL TY U/S 271(1)(C) OF THE ACT, AGAIN APPLIED THE SAME FINDINGS ADJUDICATI NG THE ISSUE RELATING TO 271AAA OF THE ACT AND HELD AS FOLLOWS :- MOHAN K. LI LA AND OTHERS, BHOPAL 19 MOHAN K. LI LA AND OTHERS, BHOPAL 20 SIMILARLY HON'BLE HIGH COURT OF DELHI IN THE CASE O F PRINCIPAL CIT VS. M/S EMIRATES TECHNOLOGIES PVT. LTD.; ITA NO. 400/2017 I N ITS DECISION DATED 18.7.2017 OBSERVING THAT NO SPECIFIC QUERY WAS PUT TO THE ASSESSEE BY DRAWING HIS ATTENTION TO SECTION 271AAA AND ASKED H IM TO SPECIFY THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED, UPHELD THE DELETION OF PENALTY BY THE ITAT AND DISMISSED THE APPEAL FIL ED BY THE DEPARTMENT. 23. SO FAR AS THE DECISION REFERRED TO AND RELIED U PON BY THE LEARNED DR IN THE CASE OF PRINCIPAL CIT VS. SMT. RITU SINGAL (SUP RA) IS CONCERNED, THE HON'BLE COURT HELD IN FAVOUR OF THE REVENUE HOLDING THAT THE ASSESSEE DID NOT DERIVE THAT INCOME AND WHAT HAD IT FELL IN AND EVEN IF THE REVENUE AUTHORITY DOES NOT RAISE A SPECIFIC QUERY, IT CANNO T BE SAID THAT THE ASSESSEE HAS FULFILLED THE REQUIREMENTS AND, THEREF ORE, SHOULD HAVE SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED I NCOME WAS DERIVED SO AS TO COMPLY WITH THE SECOND CONDITION PROVIDED IN SUB-SECTION (2) OF SECTION 271AAA OF THE ACT. 24. WE FIND THAT WHERE THERE ARE TWO VIEWS OF THE H ON'BLE HIGH COURTS ON THE VERY SAME ISSUE WHEREIN SOME JUDGMENTS ARE F AVOURING THE ASSESSEE HOLDING THAT IF THE SPECIFIC QUERY IS NOT ASKED TO THE ASSESSEE THEN THE ASSESSEE SHOULD NOT BE TREATED IN DEFAULT AND SHOULD BE GIVEN THE IMMUNITY FROM PAYING THE PENALTY IF ALL THE OTHER C ONDITIONS ARE FULFILLED WHEREAS IN THE CASE OF CIT VS. SMT. RITU SINGAL (SU PRA) THE ONUS IS PLACED ON THE ASSESSEE TO SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME HAS BEEN EARNED EVEN IF THE SPECIFIC QUERY H AS NOT BEEN ASKED. IN SUCH A SITUATION, WE ARE OF THE VIEW THAT THE JUDGM ENT OF THE HON'BLE APEX COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS LIM ITED; 88 ITR 192 (SUPREME COURT) NEEDS TO BE APPLIED WHEREIN AFTER D ETAILED DISCUSSION, IT WAS HELD BY THE HON'BLE SUPREME COURT AS UNDER :- IF WE FIND THAT LANGUAGE TO BE AMBIGUOUS OR CAPABL E OF MORE MEANINGS THAN ONE, THEN WE HAVE TO ADOPT THAT INTER PRETATION WHICH FAVOURS THE ASSESSEE, MORE PARTICULARLY SO BECAUSE THE PROVISION RELATES TO IMPOSITION OF PENALTY. MOHAN K. LI LA AND OTHERS, BHOPAL 21 WE, THEREFORE, RESPECTFULLY FOLLOWING THE ABOVE JUD GMENT OF THE HON'BLE SUPREME COURT AND THE JUDGMENT OF THE HON'BLE GUJAR AT HIGH COURT IN THE CASE OF CIT VS. M/S SHAHLON SILK MILLS PVT. LTD. (S UPRA) AS WELL AS THE DECISIONS OF THE TRIBUNAL IN THE CASES OF THE VERY SAME GROUP OF ASSESSEES RELATING TO THE INSTANT APPEALS AND IN THE GIVEN FA CTS AND CIRCUMSTANCES, FIND THAT THE ASSESSEES ARE ELIGIBLE FOR GETTING IM MUNITY FROM PAYING PENALTY U/S 271AAA OF THE ACT AS THE UNDISCLOSED IN COME HAS BEEN ADMITTED DURING THE COURSE OF SEARCH AND THE MANNER OF EARNING INCOME IS FROM BUSINESS SOURCES, DUE TAXES WITH INTEREST HAVE BEEN PAID, SURRENDERED INCOME HAS BEEN OFFERED AS BUSINESS INC OME IN RETURNS OF INCOME FILED AND THEY HAVE BEEN ACCEPTED AND ASSESS ED AS BUSINESS INCOME ONLY AND IN THIS MANNER THE ASSESSEE HAS SUC CESSFULLY FULFILLED ALL THE THREE CONDITIONS U/S 271AAA OF THE ACT. EVEN OT HERWISE, IF THE REVENUE HAS NOT ASKED SPECIFIC QUESTION RELATING TO THE MAN NER OF DERIVING UNDISCLOSED INCOME, THE ASSESSEE WHILE FULFILLING T HE FIRST CONDITION OF ADMITTING THE UNDISCLOSED INCOME HAS ALREADY SPECIF IED THE MANNER OF EARNING THE INCOME I.E. FROM BUSINESS SOURCES AND T HE STATEMENT U/S 132(4) OF THE ACT WAS NOT FOR INDIVIDUAL BUSINESS C ONCERN, BUT WAS FOR THE GROUP CONCERNS/COMPANIES/BUSINESS ASSOCIATES/INDIVI DUALS AND AT THE POINT OF TIME OF GIVING THE STATEMENT DURING THE CO URSE OF SEARCH, SPECIFIC DETAILS ABOUT EACH BUSINESS CONCERN AND THE SOURCE OF EARNING SUCH UNDISCLOSED INCOME ARE NOT PRACTICALLY POSSIBLE FOR THE PERSON GIVING THE STATEMENT ON BEHALF OF THE GROUP CONCERNS/INDIVIDUA LS. ABOVE ALL, THE BUSINESS INCOME SURRENDERED HAS BEEN OFFERED AND AS SESSED AS BUSINESS INCOME ONLY. WE ARE, THEREFORE, OF THE VIEW THAT T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE FIN DINGS OF THE ASSESSING OFFICER LEVYING PENALTY U/S 271AAA OF THE ACT. WE A CCORDINGLY SET ASIDE THE FINDINGS OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND DELETE THE PENALTY OF RS.25,14,100/- IN THE CASE OF M/S KETI SANGAM INFRASTRUCTURE (I) LIMITED, RS.43,94,610/- IN THE C ASE OF KETI-T CONSTRUCTION (INDIA) LIMITED AND RS. 25,07,250/- IN THE CASE OF KETI SANGAM INFRASTRUCTURE (I) LIMITED LEVIED U/S 271AAA OF THE ACT. 25. IN THE RESULT, ALL THE 12 APPEALS FILED AT T HE INSTANCE OF DIFFERENT ASSESSEES STAND ALLOWED. 14. FROM PERUSAL OF THE ABOVE JUDGMENT WE FIND THAT FAC T OF THE INSTANT FOUR APPEALS ARE VERBATIM SIMILAR AND REVENUE AUTHORITIES FAILED TO REBUT THE SUBMISSIONS MADE BY T HE ASSESSEES AND ALSO FAILED TO CONTROVERT THE FACT THAT THE ISSUES RAISED IN THE INSTANT FOUR APPEALS ARE SQUARELY MOHAN K. LI LA AND OTHERS, BHOPAL 22 COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT, INDORE BENCH IN THE CASE OF KETI SANGAM INFRASTRUCTURE (SUPRA). WE, THEREFORE, ARE OF THE CONS IDERED VIEW THAT BOTH THE LOWER AUTHORITIES ERRED IN LEVYING THE PENALTY U/S 271AAA OF THE ACT AND WE ACCORDINGLY DELET E THE ALLEGED PENALTY LEVIED AT RS. 10,00,000/-, RS.15,00,000/- RS. 39,82,554/- & RS. 10,00,000/- IN THE CASE OF MOHAN KUMAR LILA, M/S. LILA SONS INDUSTRIES LTD, ARUN KUMAR LILA & LILASONS BREWARIES LTD. RESPECTIVELY. 15. IN THE RESULT, ALL THE FOUR APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 20 .11.20 18. SD/- (KUL BHARAT) SD/- (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER INDORE; DATED : 20/11/2018 CTX? P.S/. . . COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUAR D FILE. BY ORDER ASSISTANT REGISTRAR, INDORE