Ms. Nutan Gupta, New Delhi V. DCIT, New Delhi

ITA 4731/DEL/2011

• Counselvise Citation: 473120114 RSA 2011
• Duration Of Justice: 9 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-08-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 31-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL SINGH
• Assessee Lawyers: SANJIV PRINDAL
• Keywords: Loose papers; Revised return
• Section: 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC: NEW DELHI BEFORE SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER ITA NOS. 4728 TO 4731/DEL/2011 ASSESSMENT YEARS: 2001-02, 02-03, 04-05 & 2006-07 NUTAN GUPTA, C/O, VINOD KUMAR BINDAL & CO., CA, SHIV SUSHIL BHAWAN, D-219, VIVEK VIHAR, PHASE-1, NEW DELHI. PAN NO. AESPG6604G VS. DCIT, CENTRAL CIRCLE 25, NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SH. SANJIV PRINDAL, CA RESPONDENT BY : SH. SATPAL SINGH, SR. DR DATE OF HEARING : 07/08/2012 DATE OF PRONOUNCEMENT : 24/08/201 2 O R D E R THESE APPEALS ARE FILED BY THE ASSESSEE AND DIRECT ED AGAINST THE ORDER OF LD. CIT(A) DATED 26/08/2011 FOR A.YS. 2001 -02, 02-03, 04-05 & 06- 07 RESPECTIVELY. 2. THE EFFECTIVE GROUND OF APPEAL IN ALL THESE APPE ALS IS THAT LD. APPELLATE AUTHORITY ERRED IN LAW AND ON FACTS IN CO NFIRMING THE PENALTY LEVIED U/S 271(1)(C) ON ADDITIONAL INCOME OFFERED I N THE RETURN OF INCOME FILED BY THE ASSESSEE IN RESPONSE TO THE NOTICE U/S 153A OF THE ACT WHILE IGNORING THAT SUCH PENALTY CANNOT BE IMPOSED ON THE BASIS OF ENTRIES IN THE BOOKS OF ACCOUNT OR DOCUMENTS/ LOOSE PAPERS SEIZED IN A SEARCH CARRIED ITA NO. 4728 TO 4731/D/2011 2 BETWEEN 1/6/03 TO 31/5/07 NEITHER UNDER THE GENERAL PROVISION OF SEC. 271(1)(C) NOR IN TERMS OF EXPLANATION 5. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH ACTION U/S 132(1) WAS CARRIED OUT IN THIS CASE ON 22/11/2006. A NOTICE U/S 153A DATED 23/11/07 WAS ISSUED AND SERVED UPON THE ASSESSEE. IN RESPONSE T O NOTICE, THE ASSESSEE FILED RETURN OF INCOME ON 17/03/08 FOR ALL THE FOUR ASSESSMENT YEARS UNDER CONSIDERATION AND OFFERED ADDITIONAL INCOME AS UNDE R: - NUTAN GUPTA CHART OF ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN THE RETURNS OF INCOME FILED U/S 153A S.NO. NATURE OF ADDITIONAL INCOME OFFERED AY 2001-02 AY 2003-04 AY 2004-05 AY 2006-07 1. INVESTMENT MADE IN KVPS 38,000 42,000 190,000 2. INVESTMENT MADE IN NSCS 217,100 3. LIFE INSURANCE PREMIA PAID (LIPS) 283,500 4. DEPOSITS MADE IN SB A/CS WITH POST OFFICE 130,766 23,987 5. INTEREST ACCRUED ON KVPS 4,000 35,513 6. INTEREST ACCRUED ON NSCS 22,958 7. INTEREST ON SB A/C (SBI) HELD BY DAUGHTER 33,291 TOTAL ADDITIONAL INCOME OFFERED (RS.) 38,000 176,766 407,100 399,249 4. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDI NGS U/S 271(1)(C). THE ASSESSEE ADVANCED FOLLOWING PLEAS BEFORE THE AO : - I) NO PENALTY U/S 271(1)(C) CAN BE LEVIED ON THE INCOME DECLARED IN ANY OF THE SAID SIX RETURNS FILED IN RESPONSE TO THE NOTICES ITA NO. 4728 TO 4731/D/2011 3 ISSUED U/S 153A AS THE INCOME DECLARED THEREIN HAS BE TREATED AS THE INCOME DULY DISCLOSED TO THE DEPARTMENT AND THERE WILL BE NO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS REGARDING THE SAID INCOME. THE INCOMES DECLARED IN THE RETURNS FILED IN RESPONSE TO THE NOTICES ISSUED U/S 153A CANNOT BE COMPARED WITH INCOMES DECLARED IN THE RETURNS FILED U/S 139 OF THE ACT EARLIER TO DETERMINE THE UNDISCLOSED INCOME AS THE RETURNS FILED U/S 139 OF THE ACT EARLIER ARE VOID/NON-EST. THIS IS CLEAR FROM THE LAW DIRECTING THE PENDING PROCEEDINGS TO ABATE. I) IN ORDER TO DERIVE HOME THE ABOVE POINT IT HAS BEEN FURTHER SUBMITTED THAT LEVY OF INTEREST U/S 234A(3) OF THE ACT HAS BEEN DETERMINED FROM THE EXPIRY OF THE PERIOD PRESCRIBED UP TO THE FILING OF THE RETURN OF INCOME IN RESPONSE TO THE NOTICE U/S 153A OF THE I.T. ACT. II) THE ASSESSEE HAS FURTHER PLACED RELIANCE ON THE INTRODUCTION OF EXPLANATION (5A) U/S 271AAA IN THE ACT W.E.F. 1/6/07 BY THE FINANCE ACT, 2007, FOR INCLUDING THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN RESPONSE TO NOTICE U/S 153A. SINCE SEARCH WAS CONDUCTED BEFORE 1/6/2007 IT WAS THE VIEW OF THE ASSESSEE THAT IN ABSENCE OF THESE SECTIONS, IN THIS YEAR THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE IN THE RETURN FILED U/S 153A CANNOT BE HELD AS CONCEALED INCOME. 5. THE AO REJECTED THE ASSESSEES CONTENTION FOR TH E FOLLOWING REASONS: I) ADDITIONAL INCOME BROUGHT TO TAX BY THE DEPARTM ENTS EFFORT (SEARCH OPERATION) AFTER FIRST RETURN U/S 139(1) WA S FILED BY THE ASSESSEE. THEREFORE, IT WAS NOT A VOLUNTARY RE TURN. IN THIS REGARD, THE AO REFERRED TO CBDT CIRCULAR DATED 30 TH SEPTEMBER, 1969. II) EXPLANATION 5 TO SEC. 271(1)(C) INTRODUCES THE FICTION OF DEEMED CONCEALMENT IN THE FOLLOWING SITUATIONS: - ITA NO. 4728 TO 4731/D/2011 4 (A) IF THE ASSETS FOUND DURING SEARCH ACTION U/S 132 AR E CLAIMED TO REPRESENT THE INCOME FRO ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH BUT THE RETURN FOR SUCH YEAR HAS NOT BEEN FURNISHED. (B) IF THE ASSETS FOUND DURING SEARCH ACTION U/S 132 AR E CLAIMED REPRESENTING THE INCOME FRO ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND THE RETURN HAS BEEN FILED WITHOUT DECLARING SUCH INCOME. (C) THE PREVIOUS YEAR RELATABLE TO THE VALUABLES FOUND REPRESENT IS YET TO END AFTER THE DATE OF SEARCH AN D ASSESSEE DECLARES SUCH INCOME IN THE RETURN OF INCOME. EXCEPTIONS TO BE DEEMED CONCEALMENT IN ABOVE SITUATIONS HAVE ALSO BEEN PROVIDED IN THE EXPLANATI ON 5. THE EXCEPTIONS CAN BE SUMMARIZED AS UNDER: (I) IN THE FIRST TWO SITUATION {I.E., (A) AND (B)}, IF THE ASSESSEE SHOWS THAT THE INCOME IN QUESTION HAS BEEN RECORDED IN HIS BOOKS BEFORE THE DATE OF SEARCH, HE CANNOT BE DEEMED TO BE GUILTY OF CONCEALMENT ; (II) IN THE THIRD SITUATION {I.E., (C)}, IF THE ASSESSEE SHOWS THAT THE INCOME IN QUESTION HAS BEEN RECORDED IN HIS BOOKS ON OR BEFORE THE DATE OF SEARCH, HE CANNOT BE DEEMED TO BE GUILTY OF CONCEALMENT ; (III) IN ALL THE THREE SITUATION {I.E., (A), (B) AND (C)} , THE ASSESSEE CANNOT BE DEEMED TO BE GUILTY OF CONCEALMENT IF THE INCOME IN QUESTION HAS BEEN OTHERWISE DISCLOSED BY HIM TO THE COMMISSIONER BEFORE THE DATE OF SEARCH. THE EXPLANATION WAS AMENDED BY THE TAXATION LAWS (AMENDMENT AND MISCELLANEOUS PROVISIONS) ACT, 1986 WHICH INSERTED THE FOLLOWING CLAUSE: UNLESS,- (2) HE, IN THE COURSE OF THE SEARCH, MAKES A STATE MENT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY , BULLION, JEWELLERY OR OTHER VALUATION ARTICLE OR TH ING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL, HAS B EEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURN ISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN CLAUSE (A) O R CLAUSE (B) OF SUB-SECTION (1) OF SECTION 139, AND A LSO SPECIFIES IN THE STATEMENT OF MANNER IN WHICH SUCH ITA NO. 4728 TO 4731/D/2011 5 INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF SUCH INCOME. III) THE ASSESSEE WAS NOT COVERED IN ANY OF THE EXC EPTIONS NOTED ABOVE. IV) REGARDING THE ASSESSEES SUBMISSION THAT INTERE ST U/S 234A(3) IS TO BE DETERMINED FROM THE EXPIRY OF THE PERIOD PRESCRIBED UPTO THE FINAL OF THE RETURN INCOME IN R ESPONSE TO THE NOTICE U/S 153A OF THE I.T. ACT. THE AO OBSERV ED THAT THE INTEREST PROVISIONS AND PENALTY PROVISIONS ARE ENTIRELY DIFFERENT AND ARE NOT DEPENDENT ON EACH OTHER. MOR EOVER, PERIOD OF CHARGING INTEREST U/S 234A(3) DOES NOT RE NDER THE ORIGINAL RETURN VOID. MOREOVER, IN PART (A) (B) OF THE EXPLANATION 5, THE LEGISLATURE HAS GIVEN IMPORTANCE TO THE FIRST RETURN U/S 139(1) WHICH IS EVIDENT FROM THE C ONTENTS OF EXPLANATION 5. V) AS REGARDS THE ARGUMENTS OF THE ASSESSEE THAT IN ABSENCE OF PROVISIONS LIKE EXPLANATION 5A U/S 271(1)(C) AND SE C. 271AAA IN THE ACT (WHICH CAME INTO EFFECT FROM 01/0 6/07), NO PENALTY FOR CONCEALMENT COULD BE IMPOSED, THE AO OBSERVED THAT THESE WERE INTRODUCED TO CURE A DEFEC T IN THE EARLIER PROVISIONS. HE ACCORDINGLY, IMPOSED MINIMU M PENALTY U/S 271(1)(C) BEING 100% OF TAX SOUGHT TO B E EVADED. 6. BEFORE LD. CIT(A) IT WAS, INTER-ALIA, SUBMITTED THAT EXPLANATION 5 IS APPLICABLE ONLY IN RESPECT OF ASSETS REPRESENTING U NDISCLOSED INCOME FOUND IN SEARCH AND NOT ON UNDISCLOSED INCOME DECLARED ON THE BASIS OF ENTRIES RECORDED IN THOSE DOCUMENTS/PAPERS FOUND DURING THE SEARCH. ITA NO. 4728 TO 4731/D/2011 6 7. LD. CIT(A) DISMISSED THE ASSESSEES APPEAL, INTE R-ALIA, OBSERVING AS UNDER: - THE FACT THAT THE INCOME SURRENDERED BY THE APPELLANT WAS ON THE BASIS OF THE DOCUMENTS/ PAPERS FOUND DURING THE SEARCH IS NOT IN DISPUTE. IN SUCH A SITUATION, NOT WITHSTANDING THE FACT THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH , HE SHALL FOR THE PURPOSES OF SECTION 271(1)(C), BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME EXCEPT IN CASES WERE SUCH TRANSACTIONS RESULTING IN SUCH INCOME ARE RECORDED IN THE BOOKS OF ACCOUNTS MAINTAINED BY HIM BEFORE THE DATE OF SEARCH. IN ORDER TO AVOID FALLING WITHIN THE PROVISIONS OF SECTION 271(1)(C) THE APPELLANT NOT ONLY HAS TO ESTABLISH THAT EXPLANATION 5 IS NOT APPLICABLE TO THE FACTS OF THIS CASE, BUT HE HAS AL SO TO ESTABLISH THAT HE DOES NOT FALL WITHIN THE ENTIR E PROVISIONS OF SECTION 271(1)(C). IN PRADIP CHANDULAL PATEL VS. P.G. KARODE [(1992) 197 ITR 385, 398 (GUJ.)], IT HAS BEEN HELD THAT, IN PASSING AN ORDER U/S 132(5), THE OFFICER WAS RIGHT IN COMING TO THE CONCLUSION THAT, INDEPENDENTLY OF THE SAID EXPLANATION 5, PENALTY WAS IMPOSABLE UNDER SECTION 271(1)(C). 8. LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE LOWER REVENUE AUTHORITIES AND SUBMITTED THAT FOLLOW ING TWO ISSUES ARISE FOR CONSIDERATION: (I) THERE WAS NO VARIATION BETWEEN I NCOME RETURNED IN PURSUANCE TO NOTICE U/S 153A AND ASSESSED INCOME, T HEREFORE, THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS OF INCOME, (II) WHETHER EXPLANATION 5 TO SEC. 271(1) IS APPLIC ABLE FOR THE PERIOD FROM 01.06.2003 TO 31.03.2007 AFTER INSERTION OF THE WOR DS SEARCH INITIATED U/S 132 BEFORE FIRST DAY OF JUNE, 2007 OR IS IT LIMITE D ONLY TO THE PERIOD FROM 01.04.2007 TO 31.05.2007. LD. COUNSEL SUBMITTED TH AT SINCE IN THIS CASE SEARCH TOOK PLACE ON 26.11.2006 THEREFORE, EXPLANAT ION 5 IS NOT APPLICABLE. IN SUPPORT OF HIS CONTENTION, LD. COUNSEL HAS VEHEM ENTLY RELIED ON THE ITA NO. 4728 TO 4731/D/2011 7 DECISION OF ITAT, DELHI BENCHES IN THE CASE OF PREM ARORA VS. DCIT (ITA NO. 4702/D/10 ORDER DATED 09.03.2012), WHEREIN IT H AS BEEN HELD AS UNDER: 29. WE ALSO FIND THAT THE FINANCE ACT, 2007 HAS INSERTED WORDS SEARCH INITIATED UNDER SEC. 132 BEFORE THE FIRST DAY OF JUNE, 2007 IN EXPLANATION 5 OF SEC. 271(1) OF THE ACT. FURTHER EXPLANATION 5A WAS INSERTED IN THE STATUTE BY THE FINANCE ACT, 2007 IN RESPECT OF A SEARCH INITIATED U/S 132 ON OR AFTER THE 1 ST DAY OF JUNE, 2007. THUS, EXPLANATION 5 WILL NOT BE APPLICABLE IN RESPECT OF A SEARCH INITIATED ON OR AFTER 1.6.2007. FURTHER THE WORD SEARCH INITIATED U/S 132 BEFORE THE FIRST DAY OF JUNE, 2007 HAVE BEEN INSERTED BY THE FINANCE ACT, 2007 W.E.F. 1.6.2007. IN OUR CONSIDERED OPINION THE AMENDED PROVISIONS OF EXPLANATION 5 WILL BE APPLICABLE ONLY FOR AY 2008-09 IF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING IS FOUND FROM THE POSSESSION OF THE SEARCHED PERSON IN RESPECT WHOM SEARCHES ARE INITIATED ON OR AFTER 1.4.2007 TO 31.05.2007. (III) LD. COUNSEL SUBMITTED THAT THE THIRD ISSUE INVOLVED IN THE PRESENT APPEAL IS WHETHER THE PHRASE MONEY BULLION JEWELLE RY OR OTHER VALUABLE ARTICLE OR THING APPEARING IN EXPLANATION 5 TO SEC . 271(1) COVERS INVESTMENT IN KVPS, NSCS, LIPS ETC. OR NOT. IN THI S REGARD LD. COUNSEL HAS RELIED ON FOLLOWING DECISIONS: - (A) CIT VS. MOHAN LAL SHARMA [2006] 281 ITR 384; (B) SOUTH INDIAN FINANCE VS. INCOME TAX OFFICER [19 92] 42 TTJ (COCH.) 347; (C) BHAGWANDAS NARAYANDAS VS. CIT [1975] 98 ITR 194 (GUJ.). 9. LD. COUNSEL SUBMITTED THAT IN ALL THE AFOREMENTI ONED DECISIONS, IT HAS BEEN HELD THAT A DOCUMENT OF TITLE RELATING TO AN I MMOVABLE PROPERTY OR FDRS ISSUED BY BANK CANNOT BE TREATED AS DEEMED CON CEALMENT INCOME IN VIEW OF EXPLANATION 5 OF SECTION 271(1)(C). ITA NO. 4728 TO 4731/D/2011 8 10. LD. DR RELIED ON THE ORDER OF LD. CIT(A) AND SU BMITTED THAT EXPLANATION 5 IS CLEARLY APPLICABLE TO THE ASSESSEE S CASE BECAUSE THE SEARCH TOOK PLACE ON 22.11.2006. HE SUBMITTED THAT KVPS AND NSCS, LIPS ARE ALL COVERED WITHIN THE PHRASE OTHER VALUABLE A RTICLE OR THING AND, THEREFORE, THE PENALTY WAS LEVIABLE. 11. LD. DR FURTHER SUBMITTED THAT RETURN HAS BEEN F ILED IN CONSEQUENCE TO SEARCH AND, THEREFORE, IT CANNOT BE HELD TO BE A VO LUNTARY RETURN. IN THIS REGARD HE RELIED ON THE DETAILED FINDINGS OF LD. CI T(A). 12. I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORD OF THE CASE. 13. AS FAR AS ASSESSEES CONTENTION REGARDING APPLI CABILITY OF EXPLANATION 5 TO SECTION 271(1)(C) FOR THE PERIOD FROM 01/06/03 TO 31/03/2007 AFTER INSERTION OF THE WORDS SEARCH INITIATED U/S 132 BE FORE FIRST DAY OF JUNE, 2007 OR TO BE LIMITED ONLY TO THE PERIOD FROM 01/0 4/2007 TO 31/05/07 ON THE BASIS OF RELIANCE PLACED IN THE CASE OF PREM ARORA (SUPRA), IS CONCERNED, I DO NOT FIND ANY SUBSTANCE IN THE SAME BECAUSE THE S AID AMENDMENTS ARE WITH REFERENCE TO AMENDED PROVISIONS OF EXPLANATION 5 TO SEC. 271(1)(C) BY WHICH THE WORDS SEARCH INITIATED U/S 132 BEFORE TH E FIRST DAY OF JUNE, 2007 HAD BEEN INSERTED BY THE FINANCE ACT, 2007 W.E.F. 0 1/06/07. THESE AMENDMENTS HAVE NO BEARING TO THE ISSUE IN HAND. T HE SEARCH TOOK PLACE IN ASSESSEES CASE ON 22/11/06 AND, THEREFORE, THE ASSESSEES CASE IS FULLY COVERED BY EXPLANATION 5 TO SEC. 271(1)(C). THE TH IRD PLEA OF ASSESSEE IS THAT SINCE THE ADDITIONAL INCOME OFFERED WAS IN THE FORM OF DOCUMENTS LIKE KVP, NSC, LIP, DEPOSITS IN SAVING BANK ACCOUNT AND INTEREST ACCRUED THEREON THE SAID ITEMS DO NOT COME WITHIN THE AMBIT OF EXPLANATION 5 AS THEY HAVE BEEN SPECIFICALLY INCLUDED BY INSERTION O F EXPLANATION 5A W.E.F. 01/06/07. THE CONTENTION IS THAT THESE ITEMS DO NO T COME WITHIN THE PHRASE ITA NO. 4728 TO 4731/D/2011 9 OTHER VALUABLE ARTICLE OR THING AS MENTIONED IN E XPLANATION 5. I FIND THAT THIS PLEA OF ASSESSEE DESERVES TO BE ACCEPTED IN VI EW OF FOLLOWING DECISIONS: - (A) CIT VS. MOHAN LAL SHARMA [2006] 281 ITR 384 , IN THIS CASE, A SEARCH WAS CONDUCTED U/S 132(1) AT THE BUSINESS AS WELL AS RESIDENTIAL PREMISES OF THE ASSESSEE. DURING THE C OURSE OF SEARCH FOUR FIXED DEPOSITS RECEIPTS IN THE NAMES OF FOUR MINOR CHILDREN OF THE ASSESSEE WERE FOUND AND SEIZED FROM THE LOCKER OF THE BANK, OWNED BY THE ASSESSEE. IN THE REVISED RETURN FILED BY THE ASSESSEE THESE FDRS WERE ACCEPTED IN HIS INC OME AND THE ASSESSMENT PROCEEDINGS WERE COMPLETED. THEREAF TER, PENALTY WAS IMPOSED WHICH WAS DELETED BY TRIBUNAL. HONBLE ALLAHABAD HIGH COURT HELD THAT EXPLANATION 5 TO SEC . 271(1)(C) IS APPLICABLE TO MONEY BULLION JEWELLERY OR OTHER VALU ABLE ARTICLE OR THING FDRS DO NOT FILE WITHIN THE PURVIEW OF AFORES AID ITEMS AND, THEREFORE, THE AMOUNT OF FDRS COULD NOT BE TREATED AS DEEMED CONCEALED INCOME IN VIEW OF EXPLANATION 5 TO SEC. 2 71(1)(C). THERE IS NO DIFFERENCE BETWEEN THE FDRS AND THE INC OME OFFERED BY ASSESSEE IN RESPECT OF VARIOUS ASSETS FOUND DURI NG THE COURSE OF SEARCH. (B) IN THE CASE OF BHAGWANDAS NARAYANDAS VS. CIT [1 975] 98 ITR 194 , IT HAS BEEN, INTER-ALIA, HELD AS UNDER: - (II) THE CONTENTION OF THE PETITIONER THAT FIXED DEPOSIT RECEIPTS AND TITLE DEED FOR IMMOVABLE PROPERTY ARE VALUABLE THINGS AND ARTICLES TO WHICH THE PROVISIONS OF RULE 112A APPLY AND THE ACTION OF THE DEPARTMENT IN RETAINING FIXED DEPOSIT RECEIPTS AND TITLE DEED FOR IMMOVABLE PROPERTY WITHOUT ISSUING A NOTICE UNDER RULE 112A IS ILLEGAL, IS NOT CORRECT. UNDER CLAUSE (E) OF SUB-SECTION (1) READ WITH THE PROVISIONS OF SUB-SECTION (5) OF SECTION 132 THE OFFICER AUTHORIZED U/S 132 CAN SEIZE AND RETAIN FOR THE PURPOSE OF SUB-SECTION (5) ONLY THOS E ARTICLES WHICH FALL WITHIN THE CATEGORY OF MONEY, ITA NO. 4728 TO 4731/D/2011 10 BULLION, JEWELLERY OR OTHER VALUATION ARTICLE OR THING. SUB-SECTION (5) SAYS THAT ALL THOSE SPECIFIED ARTICLES ARE SHORTLY REFERRED TO AS ASSETS. RULE 112A MAKES IT CLEAR THAT THE SHOW CAUSE NOTICE CONTEMPLATED BY IT IS REQUIRED TO BE GIVEN ONLY WITH REFERENCE TO THOSE SPECIFIED ASSETS IN RESPECT OF WHICH INQUIRY U/S 132(5) IS CONTEMPLATED. IT IS EVIDENT FROM THE SCHEME OF SECTION 132(5) THAT THE ASSETS WHICH ARE SEIZED DURING THE COURSE OF AN AUTHORIZED SEARCH UNDER SECTION 132 ARE EXPECTED TO BE RETAINED ONLY FOR THE PURPOSE OF SATISFYING THE TAX LIABILITY OF AN ASSESSEE AS ASCERTAINED FROM HIS UNDISCLOSED INCOME. THEREFORE, BY USING THE WORDS VALUABLE ARTICLE OR THING WHAT THE LEGISLATURE HAS INTENDED TO IMPLY IS THAT THE ASSETS COVERED BY THESE WORDS SHOULD BE SUCH AS COULD BE COVERED INTO CASH SO THAT THE TAX LIABILITY OF THE ASSESSEE CONCERNED, A S REVEALED FROM HIS UNDISCLOSED INCOME, COULD BE DULY SATISFIED. IN OTHER WORDS, THE THING OR ARTIC LE WHICH CAN BE RETAINED U/S 132(5) SHOULD BE ONE WHICH IS CARRYING ITS OWN INTRINSIC VALUE IN TERMS OF MONEY. A DOCUMENT OF TITLE RELATING TO AN IMMOVABLE PROPERTY OR EVEN A FIXED DEPOSIT RECEIPT ISSUED BY A BANK DOES NOT POSSESS ANY INTRINSIC MARKET VALUE. THEY CAN NEITHER BE NEGOTIATED NOR BE TRANSFERRED FOR VALUATION CONSIDERATION. THUS, THEY ARE NOT COVERED BY SECTION 132(5) OF THE ACT OR RULE 112A OF THE RULES. 14. FROM THE ABOVE DECISIONS, IT IS CLEAR THAT ALL THE ITEMS IN RESPECT OF WHICH INCOME WAS OFFERED BY THE ASSESSEE DO NOT COM E WITHIN THE AMBIT OF ANY OTHER VALUABLE ARTICLE OR THING. EXPLANATION 5A HAS BEEN INSERTED W.E.F. 01/06/07 TO BRING WITHIN THE AMBIT OF DEEMIN G PROVISION THE INCOME OFFERED ON THE BASIS OF ANY ENTRY IN ANY BOOKS OF A CCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS WHICH REPRESENTS ASSESSEE S INCOME. THIS EXPLANATION CANNOT BE APPLIED IN RESPECT OF SEARCH WHICH TOOK PLACE PRIOR TO FIRST DAY OF JUNE, 2007 FOR WHICH EXPLANATION 5 IS APPLICABLE. ITA NO. 4728 TO 4731/D/2011 11 15. IN VIEW OF ABOVE DISCUSSION, I SET ASIDE THE OR DER OF LD. CIT(A) FOR ALL THE FOUR ASSESSMENT YEARS UNDER CONSIDERATION. 16. THE OTHER PLEA OF THE ASSESSEE REGARDING NO PEN ALTY BEING IMPOSABLE ON ACCOUNT OF THERE BEING NO VARIATION BETWEEN INCO ME RETURNED IN PURSUANCE TO NOTICE U/S 153A AND ASSESSED INCOME NE EDS NO ADJUDICATION AS IT WOULD ONLY BE ACADEMIC. IN VIEW OF MY FINDIN GS RECORDED EARLIER, I, REFRAIN FROM MAKING ANY OBSERVATION ON THIS COUNT. 17. IN VIEW OF ABOVE DISCUSSION, THE ASSESSEES APP EALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/08/2012 SD/- (S.V. MEHROTRA) ACCOUNTANT MEMBER DATED: 24.8.12 *KAVITA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR