Parag V. Chugh, Godhra, V. The DCIT, Central-1, Baroda

ITA 585/AHD/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 6374 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-10-2019
• Assessment Year: 2011-2012
• Appeal Filed On: 09-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NK GOEL
• Assessee Lawyers: KETAN H SHAH; AMAN SHAH
• Keywords: Search and seizure; Set aside
• Section: 271(1)(c); 143(3); 153A; 274; 139(1); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NOS. 581 TO 586/AHD/2018 (ASSESSMENT YEARS : 2007-08 TO 2012-13) PARAG V. CHUGH, 1, KALALA DARWAJA, GODHRA. VS. THE DCIT, CIRCLE 1, BARODA. [PAN NO. ACAPC 7439 D] ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI KETAN H. SHAH & AMAN SHAH, A.R. REVENUE BY : SHRI N. K. GOEL, SR. D.R. DATE OF HEARING 24.09.2019 DATE OF PRONOUNCEMENT 16.10.2019 O R D E R PER SHRI WASEEM AHMED ACCOUNTANT MEMBER : THESE ARE SIX APPEALS FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDERS OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 12, AHME DABAD, DATED 23.01.2018 FOR THE ASSESSMENT YEARS (AYS) 2007-08 TO 2012-13. SINCE ALL THE APPEALS RELATE TO THE SAME ASSESSEE, HENCE THE SAME ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OFF BY WAY OF TH IS COMMON ORDER. 2. FIRST WE TAKE UP ASSESSEES APPEAL IN ITA NO. 58 1/AHD/2018 FOR ASST. YEAR 2007-08. THE ASSESSEE HAS RAISED THE FOLLOWING GROU NDS OF APPEAL:- ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 2 - 1.00 IMPOSITION OF PENLATY TO THE TUNE OF RS. 1,49 ,450/- ON ADDITION MADE ON ACCOUNT OF UNDISCLOSED INCOME. 1.01 ON THE FACTS AND CIRCUMSTANCES OF APPELLANT'S CASE AND IN LAW, THE LD. CIT (APPEALS) HAS ERRED IN CONFIRMING THE LEVY OF PENAL TY TO THE TUNE OF RS. 1,49,450/- UNDER SECTION 271(1)(C) OF THE ACT BY TH E ID. AO ON ADDITION MADE ON ACCOUNT OF DISCLOSURE OF ADDITIONAL INCOME WHILE FILING RETURN AS PART OF SEARCH PROCEEDINGS. WHILE DOING SO, THE HON'BLE CIT (APPEAL) FAILED TO APPRECIATE THAT THERE WAS NO ADDITION MADE BY THE LD. AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S 153A OF THE ACT TO THE RETURNED INCOME UNDER SECTION 153A OF THE ACT, AND THEREFORE APPELLANT CA NNOT BE TREATED TO BE ASSESSEE CONCEALING INCOME. 1.02 YOUR APPELLANT PRAYS TO HOLD SO NOW AND DEL ETE THE IMPUGNED PENALTY. 2.00 YOUR APPELLANY CRAVES LEAVE TO ADD, AMEND A ND /OR DELETE ALL OR ANY GROUND(S) TAKE HEREINABOVE. 3. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LEARNED CIT(A) ERRED IN CONFIRMING THE ORDER OF THE AO BY SUSTAINING THE PE NALTY OF 1,49,450/- AS PER THE EXPLANATION 5A OF SECTION 271(1)(C) THE OF THE ACT. 4. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUAL AND PROPRIETOR OF M/S RISHI ANAND SALES. THERE WAS A SE ARCH AND SEIZURE OPERATION UNDER SECTION 132 OF THE ACT IN THE DHANJIMAMA GROUP OF CASES DATED 3 RD JULY 2012. THE ASSESSEE BEING THE PART OF THE GROUP WAS ALSO COVER ED UNDER SUCH SEARCH AND SEIZURE OPERATION CARRIED OUT DATED 3 RD JULY 2012. THE ASSESSEE ACCORDINGLY FILED HIS RETU RN OF INCOME IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE ACT DECLARING INCOME OF RS. 7,15,520.00 INCLUSIVE OF THE ADDITIONAL INCOME OF RS. 4,99,836/- ONLY. THE ASSESSMENT WAS FRAMED BY THE AO UNDER SECTION 153A/ 143(3) OF THE ACT DATED 24 TH FEBRUARY 2015 AT THE INCOME DECLARED IN THE RETURN OF INCOME. HOWEVER, THE AO ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 3 - INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271 (1) READ WITH SECTION 274 OF THE ACT ON ACCOUNT OF THE ADDITIONAL INCOME OFFERED IN THE RETURN FILED UNDER SECTION 153A OF THE ACT. 5. THE ASSESSEE IN RESPONSE TO SUCH NOTICE VIDE LET TER DATED 24 TH JULY 2015 SUBMITTED THAT THERE WAS NO INCOME FOUND DURING THE SEARCH PROCEEDINGS. AS SUCH THE ADDITIONAL INCOME OF RS.4,99,836/- WAS VOLUNTARILY OFFERED. ACCORDINGLY, THE SAME CANNOT BE SAID AS UNDISCLOSED INCOME. HOWEVER, THE AO DISAGREED WITH THE SUBMISSION OF TH E ASSESSEE BY OBSERVING THAT THE ADDITIONAL INCOME WAS NOT DISCLO SED BY THE ASSESSEE IN THE RETURN OF INCOME FILED BEFORE THE DATE OF SEARCH UNDER SEC TION 139(1) OF THE ACT. AS SUCH THE ADDITIONAL INCOME WAS DISCLOSED IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT. THUS IT IS CLEAR THAT THE ADDITIONAL IN COME WAS OFFERED TO TAX BY THE ASSESSEE ONLY BECAUSE OF THE SEARCH PROCEEDINGS CAR RIED OUT UNDER SECTION 132 OF THE ACT. ACCORDINGLY, THE AO LEVIED PENALTY OF 1,49,449/- BEING HUNDRED PERCENT OF THE AMOUNT SOUGHT TO BE EVADED UNDER THE PROVISIONS OF SECTION 271(1) READ WITH EXPLANATION 5A OF THE ACT. 6. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LE ARNED CIT(A) WHO HAS CONFIRMED THE ORDER OF THE AO BY OBSERVING THAT THE ADDITIONAL INCOME WAS DECLARED IN THE RETURN FILED IN RESPONSE TO THE NOTICE ISSUE D UNDER SECTION 153A OF THE ACT ONLY BECAUSE OF THE SEARCH INITIATED UNDER SECTION 132 O F THE ACT. ACCORDINGLY THE LEARNED CIT (A) CONFIRMED THE ORDER OF THE AO. ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 4 - 7. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) THE ASSESSEE IS IN APPEAL BEFORE US. 8. THE LD. AR BEFORE US FILED A PAPER BOOK RUNNING FROM PAGES 1 TO 541 AND SUBMITTED THAT THAT THE ADDITIONAL INCOME WAS OFFER ED TO TAX VOLUNTARILY THE ASSESSEE AND NOT ANY SEIZED MATERIALS FOUND DURING THE SEARC H HAVING SOME INCRIMINATING VALUES. THE ADDITIONAL INCOME WAS ALSO NOT ADMITTED IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT WHICH IS PLACED ON PAGES 125 TO 133 OF THE PAPER BOOK. 9. ON THE CONTRARY, THE LD. DR SUBMITTED THAT THE A DDITIONAL INCOME WAS OFFERED TO TAX BY THE ASSESSEE AS A RESULT OF SEARCH PROCEE DING CARRIED OUT UNDER SECTION 132 OF THE ACT. THE LD. DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE PENALTY IN THE C ASE ON HAND WAS LEVIED UNDER EXPLANATION 5A OF SECTION 271(1)(C) OF THE ACT WHIC H READS AS UNDER: [EXPLANATION 5A.WHERE, IN THE CO URSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOLLY OR IN PAR T) HIS INCOME FOR ANY PREVIOUS YEAR; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH ENTRY IN THE B OOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME (WH OLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 5 - (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS YE AR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME FO R SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETURN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF TH IS SECTION, BE DEEMED TO HAVE CO NCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME.] A PLAIN READING OF THE PROVISIONS REVEALS THAT THE PENALTY SHALL BE LEVIED IF THE ASSESSEE IN THE COURSE OF SUCH INITIATED UNDER SECTION 132 OF THE ACT WAS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLE OR THERE IS SOME INCOME BASED ON THE ENTRY IN THE BOOKS OF ACCO UNTS/DOCUMENTS. THEN, IT SHALL BE PRESUMED THAT THE ASSESSEE HAS EITHER CONCEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. HOWEVER IN THE CASE ON HAND, WE NOTE THAT THERE IS NO SUCH ALLEGATION MADE BY THE AUTHOR ITIES BELOW AS DISCUSSED ABOVE. THUS, IT IS TRANSPIRED THAT THE ASSESSEE HAS DISCLO SED ADDITIONAL INCOME IN THE RETURN ISSUED UNDER SECTION 153A OF THE ACT VOLUNTA RILY AND WITHOUT HAVING FOUND ANY INCOME BY THE REVENUE IN THE MANNER PROVIDED UN DER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT. AS SUCH, THERE WAS NOT FOUND ANY UNDISCLOSED INCOME BY THE REVENUE IN THE COURSE OF SUCH CONDUCTED UNDER SECTI ON 132 OF THE ACT. 11. NOW THE QUESTION ARISES, WHETHER THE ASSESSEE C AN BE VISITED WITH THE PENALTY WITH RESPECT TO THE INCOME DISCLOSED BY HIM IN SUCH PROCEEDINGS VOLUNTARILY. TO OUR MIND THE ANSWER STANDS IN FAVOUR OF THE ASSESSEE. I N HOLDING SO WE DRAW SUPPORT AND ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 6 - GUIDANCE FROM THE ORDER OF ITAT IN THE CASE OF AJAY TRADERS VS. DCIT REPORTED IN 81 TAXMANN.COM 463, WHEREIN IT WAS HELD AS UNDER: THE ASSESSEE DISCLOSED AN ADDITIONAL INCOME ON ACC OUNT OF UNACCOUNTED SALES. BASED ON SAID DISCLOSURES, THE ASSESSING OFFICER IM POSED PENALTY UNDER SECTION 271(1)(C) BY INVOKING EXPLANATION 5A TO SAID SECTIO N. HELD THAT IT WAS UNDISPUTED FACT THAT DURING THE CO URSE OF SEARCH, NO INCRIMINATING DOCUMENTS WERE FOUND AND SEIZED. THE ASSESSEE SURRE NDERED THE ADDITIONAL INCOME UNDER SECTION 132(4) AT RS.15 LACS AND REQUESTED NO T TO IMPOSE PENALTY UNDER SECTION 271(1)(C). THE ASSESSING OFFICER IMPOSED TH E PENALTY BY INVOKING THE EXPLANATION 5A TO SECTION 271(1)(C). FOR IMPOSI NG THE PENALTY UNDER EXPLANATION 5A ON THE BASIS OF STATEMENT RECO RDED DURING THE COURSE OF SEARCH, IT IS NECESSARY TO BE FOUND INCRIMINATING D OCUMENTS AND IS TO BE CONSIDERED AT THE TIME OF ASSESSMENT FRAMED UNDER SECTION 153A . AS NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURSE OF SEARCH, T HEREFORE, EXPLANATION 5A TO SECTION 271(1)(C) IS NOT APPLICABLE. ACCORDINGLY, T HE PENALTY WAS TO BE DELETED. FROM THE ABOVE ORDER, IT IS CLEAR THAT THERE CANNOT BE ANY PENALTY UNDER EXPLANATION 5A TO SECTION 271(1) OF THE ACT UNTIL AND UNLESS IT SUPPORTED ON THE BASIS OF INCRIMINATING DOCUMENT. IT IS ALSO PERTINE NT TO NOTE THAT THE ADDITIONAL WAS ALSO NOT DISCLOSED IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT, 12. AT THE TIME OF THE HEARING, A QUERY WAS RAISED TO THE LD. DR WHETHER THE INCOME DISCLOSED BY THE ASSESSEE IN PURSUANCE TO TH E SEARCH WAS BASED ON THE INCRIMINATING DOCUMENT, BUT HE FAILED TO BRING ANY MATERIAL ON RECORD. THEREFORE, IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE, WE INFER T HAT THE ASSESSEE ADDITIONAL INCOME OFFERED TO TAX EVEN WITHOUT ADMITTING THE SA ME IN THE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT CANNOT BE SUBJECT T O THE PENALTY UNDER EXPLANATION 5A TO SECTION 271(1) OF THE ACT. ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 7 - ACCORDINGLY, WE HOLD THAT THERE CANNOT BE ANY PENAL TY UNDER SECTION 271(1) OF THE ACT IN THE GIVEN FACTS AND CIRCUMSTA NCES. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 13. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. COMING TO THE OTHER APPEALS FILED BY THE ASSESSEE B EARING ITA NOS. 582 TO 585/AHD/2018 FOR THE A.YS. 2008-09 TO 2011-12 14. AT THE OUTSET WE NOTE THAT IN THE IDENTICAL FAC TS AND CIRCUMSTANCES, WE HAVE DELETED THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT VIDE PARAGRAPH NO. 10 TO 12 OF THIS ORDER. RESPECTFULLY, FOLLOWING THE SAME, WE DELETE THE PENALTY IMPOSED BY THE AO WHICH WAS SUBSEQUENTLY CONFIRMED BY THE LD. CIT (A). HENCE, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALSO ALLOWED. COMING TO THE ASSESSEES APPEAL BEARING ITA NO. 586 /AHD/2018 FOR THE AY 2012- 13. 16. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT T HE LD. CIT-A ERRED IN CONFIRMING THE PENALTY IMPOSED BY THE AO FOR RS. 63 ,417.00 UNDER SECTION 271AAB OF THE ACT. 17. THE ASSESSEE HAS DISCLOSED ADDITIONAL INCOME OF 6,34,172.00 IN PURSUANCE TO THE RETURN FILED UNDER SECTION 153A OF THE ACT. THE AO ACCORDINGLY ON SUCH ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 8 - ADDITIONAL INCOME DISCLOSED BY THE ASSESSEE LEVIED THE PENALTY AT THE RATE OF 10% OF ADDITIONAL INCOME BEING 63,417.00 UNDER THE PROVISIONS OF SECTION 271AAB OF THE ACT. THE LEARNED CIT (A) ALSO CONFIRMED THE ORDER O F THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A) , THE ASSESSEE IS IN APPEAL BEFORE US. 18. THE LEARNED AR BEFORE US SUBMITTED THAT THERE W AS NO UNDISCLOSED INCOME AVAILABLE TO THE ASSESSEE WITHIN THE MEANING OF EXP LANATION (C) TO SECTION 271 AAB OF THE ACT. THEREFORE, THERE CANNOT BE ANY PENALTY. 19. ON THE OTHER HAND, THE LEARNED DR VEHEMENTLY SU PPORTED THE ORDER OF THE AUTHORITIES BELOW. 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THE OUTSET WE NOT E THAT THE EXPLANATION TO SECTION 271AAB OF THE ACT HAS A DIRECT BEARING ON THE ON TH E ISSUE ON HAND WHICH READS AS UNDER: 48 [ PENALTY WHERE SEARCH HAS BEEN INITIATED. 271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JULY, 2012 49 [BUT BEFORE THE DATE ON WHICH THE TAXATION LAWS (SECOND AMENDMENT) BILL, 2016 RECEIVES THE ASSENT OF THE PRESIDENT 50 ], THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADD ITION TO TAX, IF ANY, PAYABLE BY HIM, XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX ( C ) 'UNDIS CLOSED INCOME' MEANS ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 9 - ( I ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANS ACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 , WHICH HAS ( A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH I N THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR ( B ) OTHERWISE NOT BEEN DISCLOSED TO THE 54 [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 54 [PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SEARCH; OR ( II ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENT ED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN T HE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED.] FROM THE ABOVE PROVISION, IT IS CLEAR THAT THE PENA LTY SHALL BE IMPOSED UNDER SECTION 271AAB OF THE ACT WHERE THERE IS UNDISCLOSE D INCOME WITHIN THE MEANING OF THE EXPLANATION TO 271AAB OF THE ACT. HOWEVER, WE NOTE THAT THERE WAS NO DOCUMENTARY EVIDENCE FOUND BY THE SEARCH TEAM SUGGE STING THAT THERE WAS ANY UNDISCLOSED INCOME OF THE ASSESSEE. AS SUCH THE INC OME DISCLOSED BY THE ASSESSEE WAS VOLUNTARILY WITHOUT HAVING FOUND ANY DOCUMENT I N THE COURSE OF SEARCH. WE ALSO NOTE THAT THERE NO REFERENCE MADE BY THE AUTHORITIE S BELOW TO THE DOCUMENTS OF INCRIMINATING NATURE HAVING BEARING ON THE INCOME O F THE ASSESSEE IN THEIR RESPECTIVE ORDERS. THE LD. DR HAS NOT ADVANCED ANY ARGUMENTS A GAINST THE CONTENTIONS RAISED BY THE LD. AR FOR THE ASSESSEE. IN HOLDING SO WE DRAW SUPPORT AND GUIDANCE FROM THE ORDER OF THE TRIBUNAL IN THE CASE OF ACIT VS. MARVE L ASSOCIATES REPORTED IN 170 ITD 353 WHEREIN IT WAS HELD AS UNDER: 9. PENALTY U/S 271AAB ATTRACTS ON UNDISCLOSED INCOME BUT NOT ON ADMISSION MADE BY THE ASSESSEE U/S 132(4). THE AO MUST ESTABLISH T HAT THERE IS UNDISCLOSED INCOME ON THE BASIS OF INCRIMINATING MATERIAL. IN THE INST ANT CASE A LOOSE SHEET WAS FOUND ACCORDING TO THE A.O., IT WAS INCRIMINATING MATERIA L EVIDENCING THE UNDISCLOSED INCOME. IN THE PENALTY ORDER THE AO OBSERVED THAT L OOSE SHEET SHOWS THE COST PER ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 10 - SQUARE FEET IS RS.3571/- PER SFT. AND ASSESSEE STAT ED TO HAVE SUBMITTED IN SWORN STATEMENT COST PER SQ. FEET AT RS.2200/- TO RS.2300 /- PER SQ. FEET. HOWEVER NEITHER THE AO NOR THE LD.CIT(A) HAS VERIFIED THE COST OF C ONSTRUCTION WITH THE BOOKS AND PROJECTIONS FOUND AT THE TIME OF SEARCH. THE COUNSE L ARGUED THAT IT WAS MERE PROJECTION BUT NOT THE ACTUALS. THE WRITE UP HEADIN G ALSO MENTIONED THAT SUMMARY OF THE PROJECTED PROFITABILITY STATEMENT. THERE IS NO EVIDENCE TO ESTABLISH THAT PROJECTIONS REFLECTED IN THE LOOSE SHEET IS REAL. N O OTHER MATERIAL WAS FOUND DURING THE COURSE OF SEARCH INDICATING THE UNDISCLOSED INC OME. THERE WAS NO MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLE OR THING OR ENTRY IN THE BOOKS OF ACCOUNTS OR DOCUMENTS TRANSACTIONS WERE FOUND DURING THE COURSE OF SEARCH INDICATING THE ASSETS NOT RECORDED IN THE BOOKS OF ACCOUNTS OR OTH ER DOCUMENTS MAINTAINED IN THE NORMAL COURSE, WHOLLY OR PARTLY. THE REVENUE DID NO T FIND ANY UNDISCLOSED ASSET, ANY OTHER UNDISCLOSED INCOME OR THE INFLATION OF EX PENDITURE DURING THE SEARCH/ ASSESSMENT PROCEEDINGS. THOUGH A LOOSE SHEET OF PAG E NO.107 OF ANNEXURE A/GS/MA/1 WAS FOUND THAT DOES NOT INDICATE ANY SUPP RESSION OF INCOME BUT IT IS ONLY PROJECTION OF PROFIT STATEMENT. THE AMOUNT OF RS.3571/- MENTIONED IN THE PROJECTIONS REFERS TO COST AND PROFIT WHICH IS APPR OXIMATE SALE PRICE BUT NOT THE COST AS STATED BY THE AO IN THE PENALTY ORDER. THE COST OF CONSTRUCTION IN THE PROJECTIONS PROJECTED AT RS.2177/- WHICH IS IN SYNC H WITH THE STATEMENT GIVEN BY THE ASSESSEE. THE AO WAS HAPPY WITH THE DISCLOSURE GIVE N BY THE ASSESSEE AND DID NOT VERIFY THE FACTUAL POSITION WITH THE BOOKS OF ACCOU NTS AND PROJECTIONS AND BRING THE EVIDENCE TO UNEARTH THE UNDISCLOSED INCOME. NEITHER THE A.O. NOR THE INVESTIGATION WING LINKED THE COST OF PROFIT OR COST OF ASSET TO THE ENTRIES IN THE BOOKS OF ACCOUNTS OR TO THE SALES CONDUCTED BY THE ASSESSEE TO THE SA LE DEEDS. THEREFORE, WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE REVENUE THAT THE LOOSE SHEET FOUND DURING THE COURSE OF SEARCH INDICATES ANY UNDISCLOSED INCOME O R ASSET OR INFLATION OF EXPENDITURE. THE HON'BLE ITAT DELHI BENCH IN THE CA SE OF AJAY SHARMA V. DY. CIT [2013] 30 TAXMANN.COM 109 HELD THAT WITH RESPECT TO THE ADDITION ON ACCOUNT OF ALLEGED RECEIVABLES AS PER SEIZED PAPER, THERE I S NO DIRECT MATERIAL WHICH LEADS AND ESTABLISHES THAT ANY INCOME RECEIVED BY THE ASS ESSEE HAS NOT BEEN DECLARED BY THE ASSESSEE. AN ADDITION HAS BEEN MADE ON THE BASI S OF LOOSE DOCUMENT, WHICH DID NOT CLOSELY PROVE ANY CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS BY THE ASSESSEE. HENCE PENALTY U/S 158BFA (2) OF THE ACT I S NOT LEVIABLE. THE FACTS OF THE ASSESSEE'S CASE SHOWS THAT THERE W AS NO UNDISCLOSED INCOME FOUND DURING THE COURSE OF SEARCH AND NO INCRIMINATING MA TERIAL WAS FOUND, HENCE WE HOLD THAT THERE IS NO CASE FOR IMPOSING PENALTY U/S 271AAB OF THE ACT, ACCORDINGLY, WE SET ASIDE THE ORDER OF THE LOWER AUTHORITIES AND CANCEL THE PENALTY U/S 271AAB OF THE ACT. ITA NOS.581 TO 586/AHD/2018 PARAG V. CHUGH VS. DCIT ASST.YEARS 2007-08 TO 2012-13 - 11 - IN VIEW OF THE ABOVE, WE ARE NOT CONVINCED WITH THE PENALTY LEVIED BY THE AUTHORITIES BELOW. HENCE WE REVERSE THE ORDER OF TH E AUTHORITIES BELOW AND DIRECT THE AO TO DELETE THE PENALTY LEVIED BY HIM UNDER SECTIO N 271 AAB OF THE ACT. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 21. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. 22. IN THE COMBINED RESULT, ALL THE SIX APPEALS FILED BY THE ASSESSEE ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 16/10/2019 SD/- SD/- ( MADHUMITA ROY ) (W ASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 16/10/2019 PRITI YADAV, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. () / THE CIT(A)-12, AHMEDABAD. 5. , ! ', #$%% / DR, ITAT, AHMEDABAD 6. &' () / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) !, #$ / ITAT, AHMEDABAD