JOSEPH A. PATTATHU, MUMBAI V. ACIT CEN CIR 37, MUMBAI

ITA 6323/MUM/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88432 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 11-02-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 08-12-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACCHIDANAND DUBEY
• Keywords: Search and seizure; Salary income; Loose papers; Document seized; Documents seized
• Section: 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES I , MUMBAI . . , , , BEFORE SHRI N.K.BILLAIYA , A M AND SHRI AMIT SHUKLA , J M ITA NO. 6322 /MUM/20 09 : ASST.YEAR 200 2 - 200 3 ITA NO.6323/MUM/2009 : ASST.YEAR 2003 - 2004 ITA NO.6324 /MUM/20 09 : ASST.YEAR 2004 - 2005 ITA NO.6325/MUM/2009 : ASST.YEAR 2005 - 2006 SHRI JOSEPH A.PATTATHU 12 TH FLOOR, AISHWARYA APARTMENTS CST, KALINA ROAD, KALINA , SANTACRUZ (EAST) MUMBAI 400 029. PAN : ACZPP2600C. / VS. THE ASST.COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE 37 MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI SASHI TULSIYAN /RESPONDENT BY : SHRI SACCHIDANAND DUBEY / DATE OF HEARING : 11 .0 2 .2015 / DATE OF PRONOUNCEMENT : 18. 02.2015. / O R D E R PER AMIT SHUKLA (JM) : THE AFORESAID APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST SEPARATE IMPUGNED ORDER S DATED 06.11.2009 , PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) 41, MUMBAI, [CIT(A)], IN RELATION TO THE PENALTY PROCEEDINGS U/S 271(1)(C) FOR THE ASSESSMENT YEAR S 2002 - 2003, 2003 - 2004, 2004 - 2005 AND 2005 - 2006. SINCE THE ISSUES INVOLVED IN ALL THE APPEALS ARE COMMON, WHICH ARE ARISING OUT OF SIMILAR SET OF FACTS, THEREFORE, THE SAME WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY WAY OF THIS CONSOLIDATED 2 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . ORDER. I N THE GROUNDS OF APPEAL, THE ASSESSEE HAS MAINLY CHALLENGED THE CONFIRM ATION OF PENALTY U/S 271(1)(C), FOR THE AFOREMENTIONED ASSESSMENT YEARS. 2. BRIEF FACTS OF THE CASE ARE THAT , THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM SALARY AS AN EXECUTIVE DIRECTOR IN HOUSING DEVELOPMENT INFRASTRUCTURE LIMITED (HDIL). THIS COMPANY IS MAINLY ENGAGED IN THE BUSINESS OF CONSTRUCTION AND SALE OF RESIDENTIAL AND COMMERCIAL BUILDINGS. BESIDES THIS, THE ASSESSEE WAS ALSO HAVING SOME INTEREST INCOME FROM SAVING BANK ACCOUNT. THE DETAILS OF FILING OF RETURNS OF INCOME FOR THE ASSESSMENT YEARS 2002 - 2003 TO 2005 - 2006 ARE AS UNDER: - ASST.YEAR DATE OF FILING OF RETURN AMOUNT DISCLOSED OF INCOME. ------------------------------------------------------------------- --------------------- 2002 - 2003 25.03.2003 RS.4,17,893 2003 - 2004 31.12.2003 RS.4,30,520 2004 - 2005 19.11.2004 RS.1,65,620 2005 - 2006 31.03.2006 RS.1,50,000 THE RETURNS OF INCOME WERE DULY ACCEPTED U/S 143(1). 2.1 A SEARCH AND SEIZURE ACTION U/S.132(1) WAS CONDUCTED ON 18.01.2007 IN THE CASE OF MR.SUDHAKAR SHETTY GROUP AND M/S.HDIL. SINCE , THE ASSESSEE WAS DIRECTOR IN HDIL, HE WAS ALSO COVERED UNDER THE SEARCH. DURING THE COURSE OF SEARCH, CERTAIN SEIZED DOCUMENTS WAS FOUND FROM THE PRE MISES 45C, PATTATHU HOUSE, SANTACRUZ (EAST), MUMBAI, WHICH BELONGED TO SHRI ANTONY JOSEPH PATTATHU, PROPRIETOR OF M/S.PATTATHU BROTHERS. SHRI ANTONY 3 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . JOSEPH PATTATHU IS THE FATHER OF THE ASSESSEE. THE ASSESSEE DID NOT STAY WITH HIS PARENTS AND USED TO STA Y AT A DIFFERENT PLACE AT AISHWARIYA TOWER, KALINA. AT THE TIME OF SEARCH AT THE RESIDENTIAL PREMISES BELONG ING TO HIS FATHER , SHRI ANTONY JOSEPH PATTATHU, A STATEMENT ON OATH U/S 132(4) OF THE ASSESSEE WAS RECORDED, WHEREIN, HE WAS CONFRONTED WITH CERTAIN BUNCH OF PAPERS ESPECIALLY SEIZED PAPER NOS.45 AND 46 OF ANNEXURE A - 2 AND OTHER LOOSE PAPERS . THE RELEVANT EXTRACTS OF STATEMENT OF THE ASSESSEE AS RECORDED ON 18.01.2007 , WHICH ARE RELEVANT FOR THE ISSUE INVOLVED ARE AS UNDER: - Q.18 DURING THE COURSE OF SEARCH AT 45C, PATTATHU HOUSE, KURLA KALINA ROAD, MUMBAI 400 029 CASH WORTH RS.2,44,900/ - WAS FOUND AS PER ANNEXURE FROM GROUND FLOOR OF THIS PR4EMISES. PLEASE EXPLAIN THE SOURCE OF CASH. ANS. THIS CASH IS FOUND FROM THE OFFICE PREMISES OF M/S.PATTATHU BROTHERS WHICH IS A PROPRIETARY CONCERN OF MY FATHER SHRI ANTHONY JOSEPH PATTATHU AND THE SAME BELONGING TO SHRI ANTHONY JOSEPH PATTATHU. I HAVE NOTHING T O DO WITH THIS CASH. I MAY MENTION THAT I AM NOT RESIDING AT THE SAID PREMISES I.E. 45C PATTATHU HOUSE SINCE LAST 6 YEARS AND PRESENTLY RESIDING AT 12 TH FLOOR, AISHWARYA APT, C.S.T. ROAD, KALINA, MUMBAI 400 029. Q.20 DURING THE COURSE OF SEARCH CARRIED OUT AT 45C PATTHATHU HO USE JEWELLERY WORTH RS.9,96,087/ - AS PER AUTHORIZED VALUER S REPORT DATED 18/01/07 WAS FOUND. PLEASE STATE AS TO WHOM THE SAME BELONGS AND PRODUCE NECESSARY DOCUMENTARY EVIDENCE FOR IDENTIFICATION. ANS. PART OF THE JEWELLERY WAS FO UND IN THE PERSONAL CUSTODY OF MY FATHER SHRI ANTHONY PATTATHU WHICH WAS KEPT IN THE SAFE OF SHRI ANTHONY PATTATHU. THE BALANCE JEWELLERY IS FOUND FROM THE BEDROOM OF MY PARENTS. I MAY REPEAT THAT I AM NOT STAYING AT THIS PREMISES SINCE 4 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . LAST 6 YEARS AND ON LY VISIT THIS PREMISES FOR RELIGION FUNCTIONS. THE ENTIRE JEWELLERY IS BELONGING TO MY MOTHER SMT.ROSY ANTHONY PATTATHU. Q.23 I AM SHOWING YOU LOOSE PAPER FILE NO.1 CONTAINING LOOSE PAPERS FROM PAGE 1 TO 33. PLEASE GO THROUGH THE SAME AND EXPLAIN THE CON TENTS. ANS. I HAVE GONE THROUGH THE SAID LOOSE PAPER FILE. ALL THE LOOSE PAPERS FOUND ARE FROM THE OFFICE PREMISES OF M/S.PATTATHU BROTHERS AND ALL THIS BLANK AND SIGNED/UNSIGNED BILLS ARE BELONGING TO M/S.PATTATHU BROTHERS PROPRIETOR SHRI ANTHONY JOSEPH PATTATHU. I AM NOT RELATED OR SHOWING ANY INTEREST OR BUSINESS TRANSACTIONS WITH ANY OF THE CONCERNS/ FIRMS OF WHICH THESE BLANK LETTER HEADS ARE FOUND. Q.24 I AM SHOWING LOOSE PAPER FOLDER NO.2 CONTAINING PAGES FROM PAGE 1 TO 57. PLEASE GO THROUGH THE SAME AND EXPLAIN THE CONTENTS. ANS. I HAVE GONE THROUGH THE LOOSE PAPER FOLDER NO.2 AND FOUND THAT ONLY PAGE NO.1 OF IN FOLDER IN BELONGING TO ME WHICH GIVES THE DETAILS OF OFFER FOR SALE OF PROPERTY WHICH IS A SLUM MADE TO MY COMPANY AND NO TRANSACTION HAS TAKEN PLACE TILL DATE. ALL THE OTHER PAPERS FROM PAGE NO.2 TO 57 ARE BELONGING TO M/S.PATTATHU BROTHERS A PROPRIETORY CONCERN OF MY FATHER SHRI ANTHONY JOSE PH PATTATHU. I MAY ADD THAT ALL THOSE PAPER FORM PAGE 2 TO 57 ARE FOUND FROM THE OFFICE PREMISES OF M/S.PATTATHU BROTHERS AND PAGE NO.2 WAS FOUND FROM MY CAR. I HAVE ALSO CONSULTED MY FATHER WHO HAS CONFIRMED THAT ALL THE LOOSE PAPERS FORM PAGES 2 TO 57 A RE BELONGING TO HIS PROPRIETORY CONCERN M/S.PATTATHU BROTHERS. I HAVE NOTHING TO DO WITH ANY OF THESE PAPERS. 2.2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THAT ENSUED AFTER NOTICE U/S 153A ISSUED ON 25.09.2007, THE ASSESSEE AFTER EXPLAINING THE ENTIRE FACTS, THAT ALL THE SEIZED DOCUMENTS BELONG ED TO HIS FATHER AND HIS PROPRIETORY BUSINESS, WHERE IN THE ASSESSEE HAD NO INTEREST, S TILL OFFERED THE INCOME 5 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . WORKED OUT ON THE BASIS OF SEIZED DOCUMENTS IN HIS OWN HANDS TO AVOID PROTRACTED LITIGATION AND TO SAV E HIS AGED FATHER FROM HARASSMENT AND TO BUY PEACE OF MIND. ACCORDINGLY , THE ASSESSEE OFFERED ADDITIONAL INCOME IN THE YEARS UNDER APPEAL IN THE FOLLOWING MANNER: - ASST.YEAR AMOUNT (RS.) ------------- ------------------ 2002 - 03 19,31,250 200 3 - 04 8,41,000 2004 - 05 80,000 2005 - 06 3,20,000 2.3 THE COMPUTATION OF ADDITIONAL INCOME WAS EXPLAINED THROUGH CASH FLOW STATEMENT, WHICH WAS PLACED BEFORE THE ASSESSING OFFICER. T HE RELEVANT EXPLANATION GIVEN VIDE LETTER DATED 19.12 .2008 AND 01.12.2008 ARE REPRODUCED HEREUNDER: - PAGE NO.12 & 13 : AS ALREADY STATED IN OUR EARLIER SUBMISSIONS ALSO, THESE PAGES ARE ROUGH WORKING / CALCULATION. THESE PAGES WERE FOUND AT ASSESSEE S PARENTS RESIDENCE, THESE PAGES ARE RELATED TO M/S.PATT ATHU BROTHERS. ON COMPARING BOTH THE PAGES YOUR H O NOUR WILL NOTICE THAT THE ENTRIES ON PAGE NO.13 ARE MORE THAN THE ENTRIES ON PAGE NO.12. IN MONETARY TERMS ALSO THE TOTAL AMOUNT OF ALL THE ENTRIES ON PAGE NO.13 ARE HIGHER. THEREFORE WE ARE GIVING OUR EXPLANATION FOR PAGE NO.13 ARE HIGHER. THEREFORE WE ARE GIVING OUR EXPLANATION FOR PAGE NO.13 ONLY. ON GOING THROUGH THE PAGE YOUR HONOUR WILL NOTICE THAT THERE ARE TOTAL 16 ENTRIES ON THIS PAGE, OUT OF THESE 16 ENTRIES 6 ARE RELATED TO CHEQUE ENTRIES. THE TOTAL OF REMAINING 10 ENTRIES COMES TO RS.4,00,000/ - (I.E. 40,000 X 10). WE FURTHER SUBMIT THAT M/S.PATTATHU BROTHERS (PROP. ANTHONY PATTATHU) IS REGULARLY FILING HIS RETURN WITH INCOME TAX AND HE HAS OFFERED RS.3,51,161/ - FOR A.Y. 2004 - 05, RS.9,17,447/ - FOR A.Y.2005 - 06 AND RS.9,68,301/ - FOR A.Y.2006 - 07. 6 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . HOWEVER, TO PUT AN END TO THIS ISSUE AND NOT TO LITIGATE FURTHER WE HAVE ALREADY OFFERED FULL AMOUNT OF RS.4,00,000/ - TOWARDS ADDITIONAL INCOME (I.E. RENT) IN CASH FLOW STATEMENT. PAGE NO.45 & 46 : THE DETAILS ON THESE PAGES ARE RELATED TO ONE OF THE PROJECT M/S.PATTATHU BROTHERS NAMED AS ROSHANI PROJECT . THESE ARE DULY REFLECTED IN REGULAR BOOKS. IN SUPPORT OF OUR CONTENTION WE ARE ENCLOSING HEREWITH THE COPIES OF RELEVANT PAGES OF BANK STATEMENTS OF M/S.PATTATHU BROTHERS REFLECTING THE AMOUNT RECEIVED. HOWEVER, TO PUT AN END TO THIS MATTER, NOT TO LITIGATE FURTHER AND TO BUY PEACE OF MIND WE HAVE MADE DISCLOSURE IN CASH FLOW STATEMENT TO COVER ALL THE DISCREPANCIES RELATED TO THESE PAGES. 2.4 THE ASSESSING OFFICER ACCEPTED THE ASSESSEE S EXPLANATION AND TREATED THE AMOUNT AS UNDISCLOSED INCOME , VIDE ORDER DATED 23.12.2008 , PASSED FOR ALL THE ASSESSMENT YEARS U/S 153A READ WITH SECTION 143(3). 3. DURING THE COURSE OF THE PENALTY PROCEEDINGS, THE A SSESSEE HAD SUBMITTED THAT ADDITIONAL INCOME WAS OFFERED ON THE BASIS OF CASH FLOW STATEMENT, WHICH WAS DULY RECONCILED ON THE BASIS OF NOTING IN THE SEIZED DOCUMENTS , FOUND FROM THE PREMISES 45C, PATTATHU HOUSE, SANTACRUZ (EAST), MUMBAI, I.E., THE RESIDEN TIAL HOUSE OF THE ASSESSEE S FATHER. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOT CONCEALED ANY INCOME AS ALL THESE TRANSACTIONS RELATED TO THE PROPRIETORY CONCERN , OF HIS FATHER AND DOES NOT BELONG TO HIM. THE ADDITIONAL INCOME WAS OFFERED IN RESPEC T OF THE PROJECTS AND PROPERTY WHICH DI D NOT BELONG TO HIM , BUT WAS MADE ONLY TO BUY PEACE OF MIND AND TO AVOID LITIGATION DESPITE THAT MOST OF THE ENTRIES WERE RECONCILED FROM THE BOOKS OF ACCOUNT OF M/S.PATTATHU BROTHERS . HOWEVER, THE ASSESSING OFFICER D ID NOT ACCEPT THE ASSESSEE S CONTENTION AND HELD THAT PENALTY SHOULD 7 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . BE LEVIED U/S 271(1)(C) FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND ALSO UNDER THE DEEMING PROVISION CONTAINED IN EXPLANATION 5. ACCORDINGLY, HE LEVIED THE PENALTY AT 100% OF THE TAX SOUGHT TO BE EVADED, IN THE FOLLOWING MANNER: - ASST.YEAR PENALTY LEVIED (RS.) ------------- --------------------------- 2002 - 03 5,90,963 2003 - 04 2,64,915 2004 - 05 24,000 2005 - 06 97,920 ------------ TOTAL 9,77,798 ======= 4 . 1 BEFORE THE CIT(A), THE ASSESSEE REITERATED ITS EXPLANATION THAT NOTHING WAS FOUND FROM THE POSSESSION OF THE ASSESSEE AND INCOME WAS OFFERED ONLY TO BUY PEACE. FURTHER , EXPL ANATION 5 ALSO CANNOT BE HELD TO BE APPLICABLE AS THE ASSESSEE WAS NOT FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS. BESIDES TH I S, DETAILED SUBMISSIONS WERE MADE BEFORE THE CIT(A) , WHICH HAVE BEEN INCORPORATED BY THE CIT(A) FROM PAGES 2 TO 9 OF THE APPELLATE ORDER. HOWEVER, THE LEARNED CIT(A) HAS CONFIRMED THE PENALTY BY AND LARGE ON THE SAME REASONS GIVEN BY THE ASSESSING OFFICER. 5. BEFORE US, THE LEARNED COUNSEL AFTER NARRATING THE ENTIRE FACTS, SUBMITTED T HAT FIRST OF ALL, ALL THE SEIZED DOCUMENTS WERE FOUND FROM THE PREMISES OF HIS FATHER, WHICH RELATED TO HIS PROPRIETORY CONCERN , M/S.PATTATHU BROTHERS IN WHICH ASSESSEE HAD NO CONNECTION OR INTEREST . THE DOCUMENTS 8 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . PERTAIN ED TO ROSHANI PROJECT IN WHICH THE APPELLANT HAS NO INTEREST AND HAD ALSO NOT MADE ANY INVESTMENT. THUS, THE RENTAL INCOME FROM THE PROPERTY OR ANY OF THE ENTRIES RELATING TO SEIZED MATERIAL, DOES NOT BELONG TO THE ASSESSEE. THE AMOUNT SO OFFERED AS ADDITIONAL INCOME WAS ONLY TO SAVE H IS AG ED FATHER FROM HARASSMENT AND TO BUY PEACE. EVEN THE ASSESSMENT IS BASED ON ADMISSION OF THE ASSESSEE WITHOUT EVEN CO - RELATING THE SEIZED MATERIAL AND COGENT MATERIAL TO SUPPORT THE ADDITIONAL INCOME. HE SUBMITTED THAT THIS FACT IS EVIDENT FROM THE STATEME NT RECORDED ON OATH U/S 132(4) , DURING THE COURSE OF SEARCH. ONCE NOTHING BELONGS TO THE ASSESSEE, THEN NO PENALTY EITHER FOR FURNISHING OF INACCURATE PARTICULARS OR UNDER DEEMING PROVISION OF EXPLANATION 5 CAN BE LEVIED. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON CATENA OF CASE LAWS, WHICH ARE NOT BEING DISCUSSED. LASTLY, HE REFERRED TO THE PROVISIONS OF SECTION 292C, WHICH RAISES A PRESUMPTION IN CASE OF ANY BOOKS OF ACCOUNT, DOCUMENT, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING IS FOUND FROM THE POSSESSION OR CONTROL OF ANY PERSON, THAT IT BELONGS TO THE SAME PERSON. HERE IN THIS CASE, EVEN SECTION 292C CANNOT BE PRESUMED AGAINST THE ASSESSEE , BECAUSE NOTHING HAS BEEN FOUND FROM THE P OSSESSION OF THE ASSESSEE. THUS, HE SUBMITTED THAT PENALTY LEVIED IN ALL THE ASSESSMENT YEARS SHOULD BE DELETED. 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELYING UPON THE ORDER OF THE CIT(A), SUBMITTED THAT IT IS AN ADMITTED FACT THAT THE ASSESSEE HAS OWNED THE INCOME WHICH HAVE BEEN WORKED OUT ON THE BASIS OF SEIZED MATERIAL. ONCE IT HAS BEEN OWNED BY THE ASSESSEE, THEN PRESUMPTION IS THAT IT BELONGS TO THE ASSESSEE ONLY. HERE IN THIS CASE, THE 9 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . ASSESSEE HAS OFFERED THE AMOUN T NOT IN THE RETURN OF INCOME FILED U/S. 153A, BUT ONLY WHEN NOTICES WERE SENT BY THE ASSESSING OFFICER. HENCE THE AMOUNT OFFERED IS AFTER THE COMMENCEMENT OF THE ASSESSMENT PROCEEDINGS AND THEREFORE, CANNOT BE HELD TO BE VOLUNTARY . THE ASSESSEE HAS NOT GIV EN PROPER EXPLANATION WITH REGARD TO INCOME WORKED OUT ON THE BASIS OF SEIZED MATERIAL. THUS, PENALTY LEVIED SHOULD BE CONFIRMED. 7 . WE H AVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE RELEVANT MATERIAL PLACED ON RECORD. FROM THE FACTS NARRATED ABOVE, IT IS SEEN THAT THE ADDITIONS WHICH ARE SUBJECT MATER OF PENALTY ARE BASED ON SEIZED MATERIALS / DOCUMENTS FOUND AT THE TIME OF SEARCH FROM THE PREMISES OF ASSESSEE S FATHER , SHRI ANTHONY JOSEPH PATHATHU , RESIDING AT 45C, PATTATHU HOUSE, SANTACRUZ (EAST), MUMBA I. THE SAID SEIZED MATERIAL ADMITTED LY BELONGS TO THE PROPRIETORY CONCERN OF SHRI ANTHONY JOSEPH PATHATHU, NAMELY, M/S.PATHATHU BROTHERS IN WHICH ASSESSEE HAS NO INTEREST . EVEN AT THE TIME OF SEARCH, WHEN STATEMENT ON OATH U/S 132(4) WAS RECORDED, THIS ASP ECT WAS MADE CLEAR AND IT IS ALSO AMPLY EVIDENT FROM THE STATEMENT WHEREIN THE ASSESSEE HAS CATEGORICALLY MADE AVERMENT THAT ALL THE DOCUMENTS, CASH, LOOSE PAPERS, ETC. DOES NOT BELONG TO HIM BUT TO M/S.PATHATHU BROTHERS. THIS IS AMPLY BORNE OUT FROM THE A NSWERS TO THE QUESTION, WHICH HAVE BEEN REPRODUCED ABOVE. FROM THE CASH FLOW STATEMENT AS FURNISHED BEFORE THE ASSESSING OFFICER, AT THE TIME OF OFFERING OF THE ADDITIONAL INCOME, IT IS SEEN THAT THEY ARE OUT OF AMOUNT RECEIVED ON VARIOUS DATES FOR ROSHANI PROJECT, SPECIFICALLY FALLING IN THE FINANCIAL YEAR 2001 - 2002 AND FINANCIAL YEAR 2002 - 2003. THE OTHER AMOUNT IS ON ACCOUNT OF RENT RECEIVED. ADMITTEDLY, ROSHANI 10 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . PROJECT DOES NOT BELONG TO THE ASSESSEE OR HIS COMPANY IN WHICH HE IS A DIRECTOR. THE SAID PRO JECT BELONGS TO M/S.PATHATHU BROTHERS, WHEREIN THE ASSESSEE HAD NO INTEREST. EVEN THE RENTAL INCOME DOES NOT BELONG TO ANY OF HIS PROPERTY, ALBEIT BELONGS TO HIS FATHER, IN WHICH THE ASSESSEE HAS NO CONCERN. THUS, PRIMA FACIE, THE SEIZED DOCUMENTS RE V E A LED THAT NOTHING BELONGS TO THE ASSESSEE BUT HIS FATHER. NOT ONLY THAT, IT IS EVIDENT FROM THE EXPLANATION SUBMITTED BEFORE THE A.O. (THE RELEVANT EXTRACT OF WHICH HAS BEEN REPRODUCED IN EARLIER PART) THAT THE ASSESSEE HAD RECONCILED THE INCOME AND EXPLAIN ED EACH AND EVERY ENTRY. THIS EXPLANATION OF THE ASSESSEE HAS NOT BEEN REBUTTED AT ANY STAGE. THE AMOUNT WHICH WAS OFFERED FOR ADDITIONAL INCOME AS STATED BEFORE THE AUTHORITIES BELOW, WAS TO ONLY BUY PEACE OF MIND AND TO AVOID PROTRACTED LITIGATION AND TO SAVE HIS AGED FATHER FROM HARASSMENT. NOTHING HAS BEEN BROUGHT ON RECORD BY THE DEPARTMENT THAT, THE ASSESSEE HAD ANY CO - RELATION WITH THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE AS WORKED OUT FROM THE SEIZED MATERIAL WHICH TOO WAS PROPERLY EXPLAINED . T HESE FACTS HAVE BEEN DULY EXPLAINED BEFORE THE ASSESSING OFFICER , WHICH HAS NOT BEEN REBUTTED AND HAS BEEN SIMPLY ADDED BY THE A.O. ON THE GROUND THAT THE ASSESSEE HAS OFFERED IT AS ADDITIONAL INCOME, WHICH IS TO BE TREATED AS UNDISCLOSED INCOME. IT IS A S ETTLED LAW THAT CONSIDERATIONS, WHICH ARISES IN THE PENALTY PROCEEDINGS ARE SEPARATE AND DISTINCT FROM THE ASSESSMENT PROCEEDINGS AND THE ASSESSEE CAN RELY UPON THE SAME MATERIAL AND EXPLANATION TO SHOW THAT HE IS NOT GUILTY OF EITHER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. THE ASSESSEE S EXPLANATION THAT NO MATERIAL WAS FOUND FROM THE POSSESSION OF THE ASSESSEE STANDS UNREBUT TED EVEN UPTO THIS STAGE. DEPARTMENT HAS NOT BROUGHT ANY MATERIAL TO SHOW THAT 11 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . SEIZED DOCUMENT BELONG TO THE A SSESSEE OR ASSESSEE S EXPLANATION IS FALSE OR HAS NOT BEEN SUBSTANTIATED. THUS, ON THESE FACTS, IT CANNOT BE HELD THAT ANY PENALTY U/S 271(1)(C) CAN BE LEVIED AGAINST THE ASSESSEE. FURTHER, THE DEEMING PROVISION OF EXPLANATION 5 WILL ALSO NOT APPLY FOR THE REASON THAT, IT POSTULATES THAT THE ASSESSEE SHOULD BE FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE, ARTICLE OR THING, WHICH HERE IN THIS CASE, IS COMPLETELY ABSENT , BECAUSE THE ASSESSEE HAS NOT BEEN FOUND TO BE IN POSSESSION O F SUCH THINGS AS MENTIONED IN EXPLANATION 5 . THUS, WE SET ASIDE THE ORDER OF THE CIT(A) AND DELETE THE PENALTY LEVIED FOR ALL THE AFOREMENTIONED ASSESSMENT YEARS. ACCORDINGLY, GROUNDS OF APPEAL FOR ALL THE ASSESSMENT YEARS ARE ALLOWED. 8 . IN THE RESULT, ASSESSEE S APPEALS ARE ALLOWED. ORDER PRONOUNCED ON THIS 18 TH DAY OF FEBRUARY, 2015 . SD/ - SD/ - ( N.K.BILLAIYA ) (AMIT SHUKLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 18 TH FEBRUARY, 2015 . DEVDAS* 12 ITA NO. 6322 /MUM/20 09 & ORS . SHRI JOSEPH A.PATTATHU . / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A) - 41 , MUMBAI 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE.