Shri. Ramdeobaba Steel Pvt.Limited, Nagpur V. Assistant Commissioner of Income-Tax,Central Circle-1(3), Nagpur

ITA 48/NAG/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1927 (ITAT-NAGPUR)
• Duration Of Justice: 11 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 13-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR M BHUSARI
• Keywords: Depreciation; Search and seizure; Loose papers
• Section: 40A(3); 153A; 6

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR , BENCH , ( E - COURT), MUMBAI , BEFORE SHRI R.K.GUPTA , J M & SHRI RAJENDRA , A M / ITA NO S . 48 & 49 / NAG/201 1 ( ASSESSMENT YEAR S : 2005 - 0 6 & 2006 - 07 ) SHRI RAMDEOBABA STEEL PVT. LTD., CORPORATION BUILDING, OLD MOTOR STAND, ITWARI, NAGPUR. VS. ACIT, CENT.CIR - 1(3), NAGPUR - 400 001 . PAN/ GIR NO. : A AACS 4430 K ( APPELLANT ) .. ( RESPONDENT ) /ASSESSEE BY : MR. K.P.DEWANI /REVENUE BY : D R. M. BHUSARI DATE OF HEARING : 2 4 TH JAN , 201 3 DATE OF PRONOUNCEMENT : 1 ST FEB. , 201 3 O R D E R P ER SHRI R.K.GUPTA, J.M : THE SE TWO APPEALS HAVE BEEN PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LEANED CIT(A) - I , NAGPUR (MAHARASHTRA) , RELATING TO ASSESSMENT YEAR 200 5 - 06 & 2 006 - 07 , WHO CONFIRMED THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT . 2 . T HE ASSESSEE IN BOTH THE APPEALS IS OBJECTING THE CONFIRMATION OF THE LEVY OF PENALTY FOR BOTH OF THE ASSESSMENT YEARS I.E. 2005 - 06 & 2006 - 07. ITA NO S . 48 & 49 /NAG /20 1 2 2 3 . SINCE COMMON ISSUES ARE IN VOLVED IN BOTH THE CASES , THEREFORE, FOR THE SAKE OF CONVENIENCE , BOTH THE SE CASES WHICH HAVE BEEN HEARD THROUGH E - COURT, MUMBAI , DISPOSED OF BY THIS CONSOLIDATED ORDER TOGETHER . 4 . FIRST WE WILL TAKE ITA NO .48/NAG/2012 RELATING TO ASSESSMENT YEAR 2005 - 06 . 5 . BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN THE PREMISES OF THE ASSESSEE ON 27 - 9 - 2005. A NOTICE UNDER SECTION 153A WAS ISSUED TO THE ASSESSEE. DURING THE SEARCH PROCEEDING, THE ASSESSEE HAS SURRENDERED AN AMOUNT OF RS.2,09,25,072/ - , WHICH INCLUDES PROFIT OUTSIDE THE BOOKS OF RS. 89,38,439/ - AND DISALLOWANCE UNDER SECTION 40A(3) OF RS. 91,88,553/ - . AGAINST THE SURRENDERED INCOME, THE BROUGHT FORWARD LOSSES OF EARLIER YEARS HAVE BEEN SET OFF AND INCOME FOR AY 2005 - 06 WAS SHOWN AS NIL. THEREAFTER ASSESSMENT WAS COMPLETED AT NIL INCOME AS AFTER ADJUSTING BROUGHT FORWARD DEPRECIATION FOR THE ASSESSMENT YEAR 2002 - 03 & 2003 - 04 , TAXABLE INCOME REMAINED NIL. 6 . BEFORE COMPLETION OF ASSESSMENT , THE SPECIAL AUDITOR WAS APPO INTED UNDER SECTION 142(2A) OF THE ACT. THE SPECIAL AUDITOR HAS WORKED OUT THE INCOME OF THE ASSESSEE AT RS. 1,15,47,844/ - ON THE BASIS OF LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. THE AO COMPLETED THE ASSESSMENT ON THE BASIS OF INCOME WORKED OUT BY TH E SPECIAL AUDITOR AT RS. 1,15,47,844/ - AGAINST THE INCOME OF ITA NO S . 48 & 49 /NAG /20 1 2 3 RS. 89, 38,439/ - SHOWN BY THE ASSESSEE. THE AO TREATED THE ENTIRE AMOUNT OF INCOME AS WORKED OUT BY THE SPECIAL AUDITOR AS CONCEALED INCOME AND LEVIED PENALTY AT RS. 44,00,000/ - . 7 . THE ASSESSEE P REFERRED APPEAL BEFORE THE CIT(A) . DETAIL SUBMISSIONS WERE FILED BEFORE THE CIT(A) . IT WAS SUBMITTED THAT WHATEVER THE MATERIAL WAS FOUND IN SHAPE OF LOOSE PAPERS WERE LYING WITH THE AO. THE DUE DATE OF FILING OF THE RETURN WAS NOT EXPIRED AS THE DUE DATE OF FILING OF THE RETURN WAS 31 - 10 - 2005, WHEREAS SEARCH WAS CONDUCTED ON 27 - 9 - 2005. IT WAS FURTHER SUBMITTED THAT THE SPECIAL AUDITOR HAS NOT CONSIDERED VARIOUS EXPENSES INCURRED BY THE ASSESSEE AND, THEREFORE, THERE WAS A DIFFERENCE OF INCOME OF RS. 26,09,4 05/ - . VARIOUS EXPENSES INCURRED BY THE ASSESSEE, WHICH WERE PART OF THE SEIZED MATERIAL SHOULD HAVE BEEN CONSIDERED BY THE SPECIAL AUDITOR, HOWEVER, THOSE LOOSE PAPERS WERE IGNORED. THEREFORE, NO PENALTY SHOULD BE LEVIED ON THE ASSESSEE. 8 . LEARNED CIT(A ) AFTER CONSIDERING THE SUBMISSION AND PERUSING THE MATERIAL ON RECORD, FOUND THAT THE AO WAS CORRECT IN LEVYING THE PENALTY. LEARNED CIT(A) NOTED THAT THE RETURN DECLARING INCOME OF RS.89,38,439/ - WAS FILED AFTER THE SEARCH CONDUCTED ON 27 - 9 - 2005. LEARNED CIT(A) DID NOT ACCEPT THE ARGUMENTS OF THE LEARNED AR THAT THE RETURN WAS NOT DUE AS THE DUE FOR FILING RETURN WAS 31 - 10 - 2005, AS IN HIS VIEW THE AMOUNT OF UNDISCLOSED INCOME WAS FOUND RECORDED IN THE LOOSE PAPERS AND THE ASSESSEE MIGHT NOT HAVE DISCL OSED THIS AMOUNT BY FILING THE REGULAR RETURN , IF THERE WAS NO SEARCH. IT WAS ITA NO S . 48 & 49 /NAG /20 1 2 4 FURTHER NOTED BY LEARNED CIT(A) THAT THE ASSESSEE HAS ALSO NOT COMPUTED CORRECT INCOME AS THE SPECIAL AUDITOR HAS COMPUTED THE INCOME AT RS. 1,15,47,844/ - AGAINST INCOME COMPUTED BY THE ASSESSEE AT RS. 89,38,439/ - . THEREFORE, THE LEARNED CIT(A) WAS OF THE VIEW THAT THE PENALTY LEVIED BY THE AO ON THE AMOUNT OF INCOME COMPUTED BY THE SPECIAL AUDITOR WAS CORRECT. ACCORDINGLY, LEARNED CIT(A) CONFIRMED THE LEVY OF PENALTY BY PLACING REL IANCE ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF MADRAS BANGALORE TRANSPORT CO. VS. CIT, 190 ITR 679 , IN THE CASE OF CIT VS. DR R.C.GUPTA, 122 ITR 567 (RAJ.) AND ALSO IN THE CASE OF WESTERN AUTOMOBILES (INDIA) VS. CIT, 112 ITR 1048 (BO M.) . AGAINST THE ORDER OF THE LEARNED CIT(A), THE ASSESSEE IS IN APPEAL HERE BEFORE THE TRIBUNAL. 9 . THE ARGUMENTS TAKEN BEFORE THE LOWER AUTHORITIES WERE REITERATED BEFORE THE TRIBUNAL. THE ATTENTION OF THE BENCH WAS DRAWN ON WRITTEN SUBMISSION PLACED IN THE PAPER BOOK AT PAGES 1 & 2. RELIANCE WAS PLACED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI KEWAL KISHAN DHUPPER VS. ACIT, PASSED IN ITA NOS. 133&134/NAG/2004 FOR THE ASSESSMENT YEARS 1994 - 95 & 1995 - 96 VIDE ORDER DATED 13 - 1 - 2006. COPY OF THE SAM E IS PLACED IN THE PAPER BOOK AT PAGES 5 TO 19. THE ATTENTION OF THE BENCH WAS DRAWN ON PROFIT AND LOSS ACCOUNT AND ANNEXURE THERETO ALONG WITH DETAILS OF VARIOUS EXPENSES, WHICH WERE NOT CONSIDERED BY THE SPECIAL AUDITOR. LEARNED COUNSEL OF THE ASSESSEE H AS PLEADED THAT SINCE THE TIME FOR FILING OF THE RETURN WAS NOT OVER AND THE ASSESSEE HAS INCLUDED THE INCOME ON THE BASIS OF THE ITA NO S . 48 & 49 /NAG /20 1 2 5 LOOSE PAPERS LYING WITH THE AO AND THEREAFTER RETURN WAS FILED AND DUE TAX WAS PAID. IN RESPECT TO DIFFERENCE ARRIVED BY THE S PECIAL AUDITOR, IT WAS SUBMITTED THAT THE SPECIAL AUDITOR HAS NOT CONSIDERED VARIOUS EXPENSES INCURRED BY THE ASSESSEE AND THEY WERE PART OF THE SEIZED MATERIAL AND, THEREFORE, THE INCOME AND EXPENDITURE BOTH SHOULD HAVE TO BE CONSIDERED BY THE SPECIAL AUD ITOR. ACCORDINGLY, IT WAS PRAYED THAT THE LEVY OF PENALTY IS LIABLE TO BE CANCELLED. 10 . ON THE OTHER HAND, LEARNED DR STRONGLY PLACED RELIANCE ON THE ORDER OF THE AO. PART OF THE PENALTY ORDER WAS ALSO READ BY THE LEARNED DR. 11 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND CONSIDERED THEM CAREFULLY. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE ORDERS OF THE AUTHORITIES BELOW ALONG WITH VARIOUS EVIDENCES AND THE DECISION OF THE NAGPUR BENCH OF THIS TRIBUNAL IN CASE OF SHRI KEWAL KISHAN DHUPPER (SUPRA ), WE FOUND THAT LEVY OF PENALTY WHICH IS CONFIRMED BY THE LEARNED CIT(A) IS NOT JUSTIFIED. THIS IS UNDISPUTED FACT THAT TIME OF FILING OF THE RETURN WAS NOT OVER AS SEARCH WAS CONDUCTED ON 27 - 9 - 2005 AND THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS DUE TO BE FILED ON 31 - 10 - 2005 . ON THE BASIS OF THE LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH, THE PROFIT AND LOS S ACCOUNT W AS PREPARED BY THE ASSESSEE AND THEREAFTER THE INCOME ARRIVED AT ON THE BASIS OF LOOSE PAPERS WAS DECLARED BY FILING THE RETURN OF INCOME. THE ASSESSEE HAS DECLARED ADDITIONAL INCOME OF RS. 89,38,439/ - , HOWEVER, THE ASSESSMENT HAS BEEN COMPLETED AT RS. 1,15,47, 844/ - , THIS FIGURE WAS ITA NO S . 48 & 49 /NAG /20 1 2 6 ARRIVED AT BY THE SPECIAL AUDITOR APPOINTED UNDER SECTION 142(2A) OF THE ACT. THUS, THERE WAS A DIFFER ENCE OF RS.26,09,405/ - AS PER INCOME COMPUTED BY THE ASSESSEE AND AS PER INCOME COMPUTED BY THE SPECIAL AUDITOR. THIS FACT IS ALSO NOT IN DISPUTE THAT THE INCOME COMPUTED BY THE ASSESSEE AS WELL AS THE SPECIAL AUDITOR WAS COMPUTED ON THE BASIS OF THE LOOSE PAPERS FOUND DURING THE SEARCH WHICH WERE LYING WITH THE AO AT THE TIME OF ASSESSMENT. THE ASSESSEE HAS DECLARED THE INCOME DURING THE COURSE OF SEARCH ITSELF THAT ANY AMOUNT OF ADDITIONAL INCOME AS PER LOOSE PAPER WILL BE DISCLOSED WHILE FILING THE RETUR N OF INCOME AND THE ASSESSEE HAS FILED RETURN OF INCOME OF NIL INCOME AS NO TAX WAS PAYABLE AS THERE WAS BROUGHT FORWARD LOS S ON ACCOUNT OF DEPRECIATION RELATING TO ASSESSMENT YEAR 2002 - 03 AND 2003 - 04. THERE IS NO DISPUTE IN RESPECT OF BROUGHT FORWARD LOSS ON ACCOUNT OF DEPRECIATION AS THE AO HIMSELF ALLOWED THE SET OFF ON ACCOUNT OF BROUGHT FORWARD DEPRECIATION. 12 . THE HON BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. SHRI RAJRAM CLOTH STORES, 214 ITR 262 (MAD) , HAS HELD THAT AS THERE IS NO DISCOVERY OF A NY CONCEALMENT OR INACCURATE STATEMENT BY ANY REPRESENTATIVE OF THE REVENUE OR ANY OTHER SOURCE, BUT IT HAS COME ONLY FROM THE ASSESSEE, PENALTY U/S. 271(1) (C) WAS RIGHTLY CANCELLED BY THE TRIBUNAL. 13 . THE RATIO OF THIS DECISION IS SQUARELY APPLICABLE O N THE FACTS OF THE PRESENT CASE. THE DATE OF FILING OF THE RETURN WAS NOT OVER AND THE ASSESSEE MIGHT HAVE DISCLOSED ALL THESE INCOME BY FILING REGULAR RETURN. ITA NO S . 48 & 49 /NAG /20 1 2 7 14 . THE HON BLE SUPREME COURT IN THE CASE OF K.C. BUILDERS VS. ACIT, 265 ITR 562 (SC) , HAS OBSER VED THAT MERE OMISSION FROM THE RETURN OF AN ITEM OF RECEIPT DOES N EITHER AMOUNT T O CONCEALMENT NOR DELIBERATE FURNISHING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THERE IS SOME EVIDENCE TO SHOW OR SOME CIRCUMSTANCES FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSION WAS ATTRIBUTABLE TO AN INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THEREON. 15 . IN THE CASE IN HAND , NO OTHER MATERIAL WAS GATHERED BY EITHER BY THE AO OR BY THE SPECIAL AUDITOR AS THE SPECIAL AUDITOR HAS COMPUTED THE INCOME ON THE BASIS OF SOME LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. THE SPECIAL AUDITOR HAS IGNORED CERTAIN EXPENSES AND, THEREFORE, THERE WAS A DIFFERENCE OF RS. 26LAKHS OR ODD IN THE I NCOME COMPUTED BY THE SPECIAL AUDITOR AND COMPUTED BY THE ASSESSEE. THUS, IN OUR VIEW, THIS IS A MISTAKE WHICH CANNOT BE HELD THAT THE ASSESSEE HAS DELIBERATELY FURNISHED ANY INACCURATE PARTICULARS TO CONCEAL THE INCOME SO THAT TAX CAN BE AVOIDED. IT IS AL SO A MATER OF FACT THAT THERE WAS A HUGE AMOUNT OF DEPRECIATION WHICH WAS TO BE SET OFF AGAINST THE INCOME OF THE YEAR UNDER CONSIDERATION AND, THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE HAS NOT CONCEALED ANY PART OF INCOME OR FURNISHED ANY INACCURATE PARTICULARS TO CONCEAL THE INCOME. 1 6 . IN THE CASE OF SHRI KEWAL KISHAN DHUPPER (SUPRA) , SIMILAR FACTS WERE INVOLVED. IN THIS CASE ALSO SEARCH WAS CONDUCTED AND CERTAIN ITA NO S . 48 & 49 /NAG /20 1 2 8 AMOUNT WAS DISCLOSED IN THE RETURN, HOWEVER, TIME FOR FILING RETURN WAS NOT OVER. AFT ER CONSIDERING THE VARIOUS CASE LAWS AND THE FACT THAT THE MATERIAL WAS LYING BEFORE THE AO ON WHICH BASIS THE INCOME WAS COMPUTED, IT HAS BEEN HELD THAT NO PENALTY CAN BE LEVIED. THE FINDING OF THE TRIBUNAL HAS BEEN GIVEN IN PARA 8 OF THE ORDER, WHICH IS AS UNDER : - 8. IN CASE OF ASSESSEE SEARCH HAS TAKEN PLACE BEFORE FILING OF RETURN. THE EVIDENCE COLLECTED IN SEARCH WAS TO THE KNOWLEDGE OF REVENUE MUCH BEFORE THE FILING OF RETURN OF INCOME. THE ASSESSEE CANNOT BE HELD TO HAVE CONCEALED INCOME OR HAS FUR NISHED INACCURATE PARTICULARS THEREOF IN RESPECT OF INCOME DETERMINED ON THE BASIS OF EVIDENCE AVAILABLE ON RECORD BEFORE FILING OF RETURN OF INCOME. IN SUCH CIRCUMSTANCES, IT COULD BE A MISTAKE ON THE PART OF ASSESSEE BUT NOT AN ACT OF CONCEALMENT OR FURN ISHING OF INACCURATE PARTICULARS THEREOF. IF EVIDENCE IS OTHERWISE AVAILABLE WITH REVENUE BEFORE FILING OF RETURN OF INCOME IT CANNOT BE SAID THAT ASSESSEE HAS INTENTION TO HIDE OR CONCEAL AND IN ABSENCE OF SUCH INTENTION NO PENALTY FOR CONCEALMENT CAN BE LEVIED. THE DECISION OF HON BLE DELHI HIGH COURT AT 141 ITR 203 IN THE CASE OF CIT VS. MOHANDAS HASSANAND CLEARLY SUPPORTS THE SUBMISSION OF ASSESSEE. WE ARE OF THE VIEW THAT CONCEALMENT HAS TO BE SEEN AFTER FILING OF THE RETURN TILL THE STAGE OF ASSESSMEN T AND IF THE EVIDENCE IS ALREADY ON RECORD AT THE TIME OF SEARCH BEFORE FILING OF RETURN OF INCOME THEN QUESTION OF HOLDING ASSESSEE LIABLE FOR PENALTY ON ACCOUNT OF CONCEALMENT DOES NOT ARISE. ON THE FACTS AND CIRCUMSTANCES OF THE CASE WE HOLD THAT ASSES SEE HAS NOT CONCEALED ANY INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME AND THUS NO PENALTY U/S 271(1) (C) IS IMPOSABLE. WHILE CANCELLING THE LEVY OF PENALTY THE TRIBUNAL HAS PLACED RELIANCE ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN T HE CASE OF CIT VS. MOHANDAS HASSANAND,141 ITR 203 , WHERE ON SIMILAR FACTS, THE HON BLE DELHI HIGH COURT HAS CANCELLED THE LEVY OF PENALTY. IN VIEW OF THE ABOVE DECISION OF THE TRIBUNAL, WHICH IS IN CONSONANCE WITH THE ORDER OF THE HON BLE DELHI HIGH COURT IN THE CASE OF MOHANDAS HASSANAND (SUPRA) , WE ARE OF THE VIEW THAT O N THE FACTS OF THE PRESENT CASE, PENALTY IS NOT LEVIABLE AS THE DUE DATE FOR FILING RETURN OF INCOME ITA NO S . 48 & 49 /NAG /20 1 2 9 WAS NOT OVER AT THE TIME OF SEARCH CONDUCTED AND THE ASSESSEE HAS DECLARED THE INCOME O N THE BASIS OF LOOSE PAPERS FOUND DURING THE COURSE OF SEARCH. 1 7 . WE HAVE ALSO CONSIDERED THE VARIOUS CASE LAWS RELIED UPON BY THE LEARNED CIT(A) WHILE CONFIRMING THE LEVY OF PENALTY AND FOUND THAT FACTS ARE DISTINGUISHABLE FOR THE SIMPLE REASON THAT IN THE CASES ON WHICH RELIANCE HAS BEEN PLACED BY THE LEARNED CIT (A) , THE RETURN WAS ALREADY FILED FOR THOSE YEARS AND THEREAFTER SEARCH WAS CONDUCTED AND THE CONCEALED INCOME WAS DE TECTED . THEREFORE, IN THOSE CASES, THE PENALTY WERE CONFIRMED BY THE HON BLE HIGH COURT S ON WHICH RELIANCE HAS BEEN PLACED BY THE LEARNED CIT(A) . 18 . LEARNED DR HAS ALSO PLACED R ELIANCE ON A DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILES, 306 ITR 277 . AFTER DECISION IN THE CASE OF DHARMENDRA TEXTILES (S UPRA) , ANOTHER DECISION BY THE H O N BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LTD., 322 ITR 158(SC) , HAS BEEN PRONOUNCED AND IN THIS CASE IT HAS BEEN HELD THAT , M ERE MAKING OF CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF ASSESSEE . 19 . IN THE PRESENT CASE, AS STATED EARLIER, ON THE BASIS OF LOOSE PAPERS FOUND DURING SEARCH, THE INCOME HAS BEEN COMPUTED BY THE ASSESSEE AND THEREAFTER THE RETURN HAS BEEN FI LED. DUE DATE FOR FILING RETURN WAS NOT OVER ON THE DATE OF SEARCH. THEREFORE, IT CANNOT BE SAID ITA NO S . 48 & 49 /NAG /20 1 2 10 THAT INCOME HAS BEEN CONCEALED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE HOLD THAT LEVY AND CONFIRMATION OF PENALTY WAS NOT JUSTIFIED. ACCO RDINGLY, WE CANCEL THE LEVY OF PENALTY. 20 . NOW, WE WILL TAKE UP THE APPEAL I.E. ITA NO. 49/NAG/2012 RELATING TO THE ASSESSMENT YEAR 2006 - 07. 2 1 . THE FACTS FOR THE YEAR UNDER CONSIDERATION ARE SIMILAR TO THE FACTS DISCUSSED WHILE DISPOSING THE APPEAL RELA TING TO THE ASSESSMENT YEAR 2005 - 06 . THE ONLY DISPUTE IN THIS YEAR IS THAT THE ASSESSEE HAS DECLARED INCOME OF RS. 86, 50, 519/ - WORKED OUT ON THE BASIS OF LOOSE PAPERS FOUND. THE SPECIAL AUDITOR APPOINTED UNDER SECTION 142(2A) HAS WORKED OUT THE INCOME AT RS . 82 ,06,040/ - , WHICH IS LESS THAN THE INCOME COMPUTED BY THE ASSESSEE. THE AO HAS LEVIED PENALTY ON THE ENTIRE AMOUNT OF THE INCOME DISCLOSED BY THE ASSESSEE TREATING THE SAME AS CONCEALED INCOME. LEARNED CIT(A) HAS ALSO CONFIRMED THE LEVY OF PENALTY. 22 . WE HAVE ALREADY DISCUSSED THE FACTS IN DETAIL WHILE DISPOSING THE APPEAL FOR THE ASSESSMENT YEAR 2005 - 06 AND WE HAVE ARRIVED AT A CONCLUSION THAT NO PENALTY IS LEVIABLE ON THE FACTS OF THE PRESENT CASE AS THE DUE DATE OF FILING OF THE RETURN OF INCOME WAS NOT OVER AT THE TIME OF SEARCH CONDUCTED IN THE PREMISES OF THE ASSESSEE. THEREFORE, FOLLOWING THE REASONING GIVEN WHILE CANCELLING THE LEVY OF PENALTY FOR ITA NO S . 48 & 49 /NAG /20 1 2 11 THE ASSESSMENT YEAR 2005 - 06, WE ALSO CANCEL THE LEVY OF PENALTY FOR THE ASSESSMENT YEAR 2006 - 07 . 23 . RESULTANTLY , BOTH APPEAL S OF THE ASSESSEE ARE ALLOWED . ORDER PRONOUNCED IN THE E - COURT ON THIS 1 ST DAY OF FEB .2013. - 201 3 SD/ - SD/ - ( ) ( RAJENDRA ) ( ) ( R.K.GUPTA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 0 1 / 0 2 / 201 3 . /PKM , PS COPY OF THE ORDER FORWARDED TO : 1. / THE A PPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) , MUMBAI / NAGPUR . 4. / CIT 5. / DR, ITAT, MUMBAI / NAGPUR . 6. GUARD FILE. //TRUE COPY// / BY ORDER, ( DY./ASSTT. REGISTRAR) / ITAT, MUMBAI