Creelotex Engineers Pvt. Ltd., Ahmedabad V. DCIT, Central Circle-2(4), Ahmedabad

ITA 651/AHD/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7280 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 14-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Income from undisclosed sources; Tangible material; Retraction; Documents seized; Set aside
• Section: 271(1)(c); 153A; 234B; 27; 132; 2; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ./ ITA.NO.651/AHD/2018 / ASSTT. YEAR: 2007-08 CREELOTEX ENGINEERS P.LTD. C/O. MEHTA LODHA & CO. CHARTERED ACCOUNTANTS 105, SAKAR-I, NR. GANDHIGRAM RAILWAY STATION OFF ASHRAM ROAD AHMEDABAD 380 009. PAN : AACCC 2970 L VS DCIT, CENT.CIR.2(4) AHMEDABAD. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI PRAKASH D. SHAH REVENUE BY : SHRI MUDIT NAGPAL, SR.DR / DATE OF HEARING : 20/06/2019 / DATE OF PRONOUNCEMENT: 29/07/2019 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A)-12, AHMEDABAD DATED 26.2.2018 PASSED FOR THE ASSTT.YEAR 2007-08. 2. THOUGH THE ASSESSEE HAS TAKEN THREE GROUNDS OF A PPEAL, BUT HIS GRIEVANCE REVOLVES AROUND A SINGLE ISSUE VIZ. THE L D.CIT(A) HAS ERRED IN CONFIRMING PENALTY OF RS.33,32,340/- IMPOSED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER SECTION 132 OF THE ACT WAS CARRIED OUT IN THE GROUP CASES OF RIDDHI SIDDHI ON 22.9.2011. A NOTICE ITA NO.651 /AHD/2018 2 UNDER SECTION 153A WAS ISSUED UPON THE ASSESSEE, AN D IT FILED ITS RETURN OF INCOME ON 25.10.2012 DECLARING INCOME AT RS.99 LAKH S, WHEREAS IN THE ORIGINAL RETURN OF INCOME FILED UNDER SECTION 139 I T HAS DISCLOSED NIL INCOME. THE LD.AO HAS PASSED ASSESSMENT ORDER ON 31.1.2014 AND ASSESSED THE TOTAL INCOME AT RS.99,49,500/-. HE MADE AN ADDITION OF R S.49,500/-. IT IS PERTINENT TO OBSERVE THAT DURING THE SEARCH, STATEMENT OF SHR I SHANKARLAL CHOWDHARY WAS RECORDED UNDER SECTION 132(4) ON 19.11.2011. I N HIS STATEMENT, HE HAS ADMITTED AN ADDITIONAL INCOME OF RS.50 CRORES AND B IFURCATION OF SUCH DETAILS HAS BEEN NOTED BY THE AO AT PAGE NO.3 OF THE ASSESS MENT ORDER, WHICH READ AS UNDER: (1) DURING THE VARIOUS FINANCIAL YEARS, THE FOLLOW ING COMPANIES HAD RAISED SHARE CAPITAL: ASSESSMENT YEAR IN WHICH THE AMOUNT IS DISCLOSED SR. NO. NAME OF THE COMPANY 2006-07 2007-08 2008-09 2009-10 TOTAL (RS.) 1 SHREEPAL STARCH PRODUCTS PVT. LTD. - - 9000000 - 9000000 2 SIWANA- AGRI MARKETING PVT. LTD. - 13000000 3500000 - 16500000 3 VICAS VEHICLES PVT. LTD. - 9500000 8500000 500000 18500000 4 CREELOTEX BNGG. PUT. LTD. - 9900000 8500000 - 18400000 5 MARG BIOTECH PVT. LTD. 16500000 13200000 7000000 - 36700000 6 SAFARI BIOTECH PVT. LTD. 13250000 9200000 8800000 - 31250000 7 TELECON INFOTECH PVT. LTD. 10000000 9500000 9800000 - 29300000 8 VASCROFT DESIGN PVT LTD. - 9000000 12000000 - 21000000 TOTAL 39750000 73300000 67100000 500000 180650000 ON THE BASIS OF SUBMISSIONS, THE INCOME DISCLOSED B Y THE COMPANY DURING THE SEARCH & SEIZURE ACTION U/S 132(1) OF THE I.T. ACT IS RS.99,00,000/-.THE SAME AMOUNT IS OFFERED BY THE COMPANY 'AS INCOME FROM OT HER SOURCES BY FILLING RETURN OF INCOME U/S 153A. SINCE THE ASSESSEE HAS FURNISHE D INACCURATE PARTICULARS OF HIS INCOME AND THEREBY HAS CONCEALED HIS INCOME, PENALT Y PROCEEDINGS U/S 271(L)(C) R.W. EXPLANATION FILE ABOVE THE OF THE ACT ARE INIT IATED SEPARATELY. ITA NO.651 /AHD/2018 3 4. A PERUSAL OF THE ABOVE WOULD INDICATE THAT A SUM OF RS.99 LAKHS WAS ALLOCATED TO THE ASSESSEE FOR THE ASSTT.YEAR 2007-0 8 AND THE ASSESSEE HAS FILED THE RETURN ADMITTING THIS SUM OF RS.99 LAKHS. THE AO HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) READ WITH EXPLANATION 5A. THE STAND OF THE AO IS THAT ADMISSION BY THE ASSESSEE DURING THE COURSE OF SEARCH ABOUT UNDISCLOSED INCOME OF RS.99 LAKHS IS TO BE CONSTRUE D THAT UNACCOUNTED INCOME HAS BEEN UNEARTHED DURING THE COURSE OF SEAR CH WITHIN THE MEANING OF EXPLANATION 5 A ATTACHED TO SECTION 271(1)(C) AND THIS ADDITION W OULD REPRESENT CONCEALED INCOME. ACCORDINGLY, THE LD.AO HAS IMPOSED PENALTY OF RS.33,32,340/-. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 5. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE SUBMI TTED THAT APART FROM THE ASSESSEE, THE DISCLOSURE WAS ON BEHALF OF SAFARI BI OTECH P.LTD., VASCROFT DESIGN P.LTD., TELECON INFOTECH P.LTD. ETC. AND PEN ALTIES WERE IMPOSED UNDER SECTION 271(1)(C) OF THE ACT UPON ALL THESE THREE C ONCERNS. DISPUTE TRAVELLED UPTO THE TRIBUNAL IN IT(SS)A.NO.129 TO 136/AHD/2015 . THE TRIBUNAL HAS ALLOWED ALL THE APPEALS AND DELETED PENALTY. HE PL ACED ON RECORD COPY OF THE TRIBUNALS. ON THE OTHER HAND, THE LD.DR RELIED U PON THE ORDERS OF THE REVENUE AUTHORITIES. 6. WE HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GO NE THROUGH THE RECORD CAREFULLY. WE FIND THAT THE FACTS ARE IDENTICAL IN THE ABOVE CASE DECIDED BY THE TRIBUNAL. THEREFORE, IT IS IMPERATIVE UPON US TO T AKE NOTE OF THE FINDING RECORDED BY THE TRIBUNAL, WHICH READS AS UNDER: 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN THE PRESENT SET OF APPEALS, THE CONTROVERSY REVOLVES AROUND IMPOSITION OF PENALTY BROADLY ON FOUR COUNTS AS SUMMARIZED BELOW: (I) WHETHER WHEN NO INCRIMINATING DOCUMENT OR MATER IAL WAS FOUND DURING THE COURSE OF SEARCH, EXPLANATION 5A TO SECTION 271 (1)(C) OF THE ACT IS APPLICABLE IN THE LIGHT OF STANDALONE ORAL EVIDENC E IN THE FORM OF STATEMENT ITA NO.651 /AHD/2018 4 UNDER S.132(4) OF THE ACT? (II) WHETHER WHEN THERE WAS NO ADDITION OVER AND ABOVE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED UNDER S.153A OF THE ACT, PENALTY UNDER S. 271(1)(C) OF TH E ACT IS TO BE IMPOSED? (III) WHETHER THERE IS NO FURNISHING OF INACCURATE PARTIC ULARS OF INCOME AS THE ADDITIONAL INCOME DISCLOSED IN THE RETURN OF INCOME FILED UNDER S.153A OF THE ACT HAS BEEN ACCEPTED AND ASSESSED WITHOUT DEMUR? (IV) WHETHER WHEN THE AO HAS FAILED TO SPECIFY AS T O FOR WHICH LIMB OF DEFAULT UNDER SECTION 271(1)(C) OF THE ACT, PENALTY PROCEED INGS ARE INITIATED, WAS THE AO JUSTIFIED IN IMPOSING PENALTY AND WHETHER THE PE NALTY CAN BE LEVIED WHEN THE CHARGE AGAINST THE ASSESSEE IN ITSELF IS ALLEGE DLY VAGUE AND NON-DESCRIPT AND THE ACTION OF AO SUFFERS FROM ALLEGED NON-APPLI CATION OF MIND. 8. IN TERMS OF FIRST CONTENTION RAISED AS NOTED ABO VE, THE PRIMARY QUESTION THAT EMERGES FOR DETERMINATION IS WHETHER PENALTY U NDER S.271(1)(C) OF THE ACT CAN BE IMPOSED QUA THE RETURN FILED BY THE ASSE SSEE DISCLOSING HIGHER INCOME UNDER S.153A OF THE ACT (VIS-VIS EARLIER RE TURN FILED UNDER S.139 OF THE ACT) SOLELY ON THE BASIS OF CERTAIN STATEMENT R ECORDED UNDER S.139(4) OF THE ACT WITHOUT ANY REFERENCE TO AND WITHOUT CORROB ORATION OF ANY INCRIMINATING MATERIAL TO SUPPORT SUCH DECLARATION. 8.1 THE ANSWER TO THE PRIMARY QUESTION HAS TO BE DE DUCED IN TERMS OF EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT IN V OGUE AT THE RELEVANT TIME OF SEARCH EXPLANATION 5A IS A DEEMING PROVISION. WI TH REFERENCE TO SEARCH ASSESSMENTS, THE AFORESAID EXPLANATION HAS BEEN SPE CIFICALLY INSERTED TO SECTION 271(1)(C) OF THE ACT. THE PERTINENT QUESTIO N IS WHETHER EXPLANATION 5A TO SECTION 271(1)(C) OF THE ACT IS ATTRACTED IN THE PECULIAR FACTS OF THE CASE. EXPLANATION 5A IS APPLICABLE TO CASES WHERE I N THE COURSE OF A SEARCH UNDER S.132 OF THE ACT, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLES OR TH INGS OR ANY INCOME BASED ON ENTRY IN BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTIONS AND SUCH ENTRIES REPRESENT INCOME OF THE ASSESSEE. OSTENSIBL Y, THIS EXPLANATION HAS BEEN ADDED TO SPECIFICALLY ADDRESS THE SITUATIONS W HERE CONSEQUENT TO A SEARCH, ASSETS AND VALUABLES OR BOOK ENTRIES ETC. A RE DISCOVERED TO BE IN CONTROL OR POSSESSION OF THE ASSESSEE AND THEREAFTE R THE ASSESSEE FILES THE RETURN OF INCOME AFTER THE DATE OF SEARCH. 8.2 IN THE BACKDROP OF THIS POSITION, WE NOW TURN T O TAKE COGNIZANCE OF RELEVANT FACTS GERMANE TO THE ISSUE. A PERUSAL OF T HE ORDER OF THE LOWER AUTHORITIES IN QUANTUM PROCEEDINGS AND THE PENALTY PROCEEDINGS GIVES THE UNMISTAKABLE IMPRESSION THAT ADDITIONAL INCOME OFFE RED IN A STATEMENT RECORDED UNDER S.132(4) OF THE ACT IN SOME GROUP DI SCLOSURE AT THE TIME OF SEARCH HAS BEEN ACCEPTED BY THE REVENUE SIMPLICITOR . HENCE, THE ADDITIONAL INCOME DECLARED IN THE RETURN FILED UNDER S.153A IS BASED SOLELY ON CERTAIN ADMISSIONS MADE BY THE ASSESSEE AT THE TIME OF SEAR CH. SIGNIFICANTLY, IT IS ITA NO.651 /AHD/2018 5 NOTICED IN THE SAME VAIN THAT THE AFORESAID ADDITIO NAL INCOME IS NOT BACKED BY ANY DOCUMENT OF INCRIMINATING NATURE IN CORROBOR ATION PER SE IN ACCORD WITH EXPLANATION 5A, IT IS NECESSARY THAT THERE MUS T BE CERTAIN ASSETS (MONEY OR BULLION) UNEARTHED IN THE POSSESSION OF THE ASSE SSEE DURING THE SEARCH AND/OR ENTRIES ARE RECORDED IN THE ANY BOOKS/DOCUME NTS AND THE ASSESSEE MUST CLAIM THAT SUCH ASSETS/ENTRIES REPRESENT UNACC OUNTED INCOME. OSTENSIBLY, EXPLANATION 5A WOULD COME INTO PLAY ONL Y WHEN UNACCOUNTED ASSETS OF THE NATURE AS MENTIONED IN THE SAID EXPLA NATION ARE FOUND DURING THE SEARCH OR INCOME BASED ON ENTRIES IN THE BOOKS OF ACCOUNTS IS CLAIMED BY THE ASSESSEE TO BE HIS INCOME FALLING IN ANY PREVIO US YEAR. 8.3 IN THE INSTANT CASE, THE FACTS ARE QUITE DISTIN CT AND PECULIAR. WHILE NO INCRIMINATING DOCUMENTS WERE RECORDED TO HAVE BEEN FOUND TO SUPPORT THE UNDISCLOSED INCOME EXCEPT AN ELABORATE AND CONDITIO NAL STATEMENT OF ONE OF THE KEY PERSON OF THE GROUP, THE DEPONENT OF THE ST ATEMENT HAS NEVER CLAIMED THE ENTRIES IN DISPUTE TO BE INCOME OF THE ASSESS EE PER SE. A BARE READING OF THE AFORESAID STATEMENT (SUPRA) REVEALS SEVERAL PEC ULIAR FEATURES; (I) THE ASSESSEE MERELY AGREES TO PAY TAX ON THE SHARE CAPI TAL WITHOUT ADMITTING THE SAME TO BE BESET WITH INGENUITY OF ANY SORT; (II) I N CONTRAST, THE ASSESSEE ASSERTS BEFORE THE AUTHORIZED OFFICER THAT THE SHAR E CAPITAL WAS SUBSCRIBED BY THE GENUINE SHAREHOLDERS THROUGH BANKING CHANNELS A ND THE SOURCE OF SUBSCRIPTION IS IMPECCABLE AND BEYOND ANY DOUBT; (I II) WHILE THE SHARE CAPITAL RAISED IS DULY EXPLAINED AND RECORDED IN BO OKS, THE ASSESSEE AGREED TO PAY TAX THEREON WITH AN UNDERSTANDING THAT THERE WOULD BE NO PENAL CONSEQUENCES ON PAYMENT OF TAX WITH INTEREST; (IV) THE STATEMENT WAS CLAIMED TO BE MADE TO BUY PEACE WITH RESPECT TO THE SOURCE OF SOURCE THE SUBSCRIPTION WHICH MAY BE A MATTER OF DISPUTE; (V) THE DEPONENT OF THE STATEMENT NOWHERE ADMITTED ANY DISCLOSURE OF INCOME PER SE BUT SHOWED HIS WILLINGNESS TO PAY TAXES. IN SUBSTANCE, THE ASSESSEE EXPRESSED HIS WIL LINGNESS TO PAY TAXES OUT OF GENUINE CONSTRAINTS WITHOUT ADMITTING THE SHARE CAP ITALS/ENTRIES TO BE EXPROPRIATORY. 8.4 IN THE CIRCUMSTANCES, WHERE THE STATEMENT UNDER S.132(4) OF THE ACT IS CLAIMED TO BE ABSTRACT AND DEVOID OF BEING INCULPAT ORY AND DOES NOT SUGGEST ANY APPARENT SUPPRESSION OF UNDISCLOSED INCOME, THE QUESTION ARISES AS TO WHETHER FIRSTLY, THE EXPLANATION 5A IS ATTRACTED IN THE ABSENCE OF ANY CLAIM FROM THE ASSESSEE THAT ENTRIES IN BOOKS REPRESENTS INCOME AND SECONDLY WHETHER THE AO, IN THE CIRCUMSTANCES, IS UNDER DUTY TO USE STATUTORY DISCRETION IN FAVOUR OF THE ASSESSEE. AS NOTICED FR OM THE SOLITARY MATERIAL IN THE FORM OF STATEMENT, THE DEPONENT HAS NOWHERE CLA IMED THE EXISTENCE OF UNDISCLOSED INCOME PER SE BUT HAS MERELY AGREED T O PAY TAX ETC. AND THUS EXPLANATION 5A, IN OUR VIEW, COULD NOT BE APPLIED. AT THIS JUNCTURE, WE SIMULTANEOUSLY NOTICE THE PHRASEOLOGY OF THE SECTIO N 271(1)(C) OF THE ACT WHEREBY THE AO MAY DIRECT TO THE ASSESSEE TO PAY BY WAY OF PENALTY SPECIFIED SUM IN THE CASE OF CERTAIN DEFAULTS INCLU DING CONCEALMENT OF INCOME ITA NO.651 /AHD/2018 6 ETC. OSTENSIBLY, THE IMPOSITION OF PENALTY UNDER S. 271(1)(C) OF THE ACT IS NOT AUTOMATIC. IN THE CIRCUMSTANCES NARRATED ABOVE, THE RE CAN BE NO MANNER OF DOUBT THAT STATUTORY DISCRETION VESTED WITH THE AO OUGHT TO HAVE BEEN EXERCISED IN FAVOUR OF THE ASSESSEE AND NOT AGAINST THE ASSESSEE FOR SUCH UNPROVED INCOME. THE REVENUE COULD NOT LAY HANDS ON ANY TANGIBLE MATERIAL EXCEPT CONDITIONAL AND TACIT AVERMENTS, WHICH CONFE SSION IN ITSELF IS SEEN TO BE NON-ADMISSION OF ANY INGENUITY. IN THE CIRCUMSTA NCES, WE HAVE NO HESITATION TO HOLD THAT SUCH CONFESSION CANNOT BE T HE BASIS FOR IMPOSITION OF ONEROUS PENALTY. 8.5 AN INCIDENTAL BUT A PERTINENT QUESTION WOULD AR ISE ALSO AS TO WHETHER A STATEMENT RECORDED UNDER S.132(4) OF THE ACT CAN BE TREATED AS EVIDENCE FOUND IN THE COURSE OF SEARCH PER SE. AS NOTED, EXC EPT FOR AN ORAL EVIDENCE UNDER S.132(4) OF THE ACT OF ABSTRACT NATURE WITH D ISTINGUISHING FEATURES, NO INCRIMINATING MATERIAL HAS BEEN FOUND TO SUPPORT TH E ASSERTIONS MADE THEREIN. TO REITERATE, THE ASSERTIONS MADE ARE HIGH LY QUALIFIED AND WITHOUT ANY ADMISSIONS OF UNDISCLOSED INCOME PER SE. THE HO NBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HARJEEV AGRAWAL [2016] 229 D LT 33 ORDER DATED 10/03/2016 HAS RULED THAT ORAL STATEMENTS ON A STA NDALONE BASIS WITHOUT REFERENCE TO ANY OTHER MATERIAL DISCOVERED DURING S EARCH WOULD NOT EMPOWER THE AO TO MAKE ADDITIONS IN A BLOCK ASSESSM ENT (WHICH IS PERI MATERIA WITH THE PRESENT SCHEME OF SEARCH ASSESSMEN T UNDER S.153A OF THE ACT). THE HONBLE DELHI HIGH COURT IN CIT VS. RAJPA L BHATIA (2011) 333 ITR 315 (DEL) HAS ALSO ECHOED THAT AN ORAL EVIDENCE IS NEITHER BOOKS OF ACCOUNTS ETC. OR ASSETS. IT WAS A DOCUMENT WHICH CAME TO BE CREATED OWING TO SEARCH AND NOT FOUND IN THE COURSE OF SEARCH. IN TH E CIRCUMSTANCES, WHERE A JUDICIAL VIEW HAS BEEN TAKEN THAT ADDITION ITSELF O N SUCH STATEMENT IS WITHOUT AUTHORITY OF LAW, IT IS RATHER DIFFICULT TO APPRECI ATE THE ACTION OF THE REVENUE TOWARDS IMPOSITION OF PENALTY ON SUCH ADDITIONS IN AFFIRMATIVE. NEEDLESS TO SAY, THE PENALTY PROVISION STANDS ON A VERY STRINGE NT PEDESTAL QUA THE QUANTUM PROCEEDINGS. 8.6 HAVING REGARD TO PECULIAR FACTS OF THE CASE, TH E ACTION OF REVENUE IS CLEARLY BEREFT OF MERITS. CONSEQUENTLY WE HOLD THE FIRST PROPOSITION FRAMED ABOVE IN FAVOUR OF THE ASSESSEE AND AGAINST THE REV ENUE. 8.7 WE DO NOT CONSIDER IT EXPEDIENT TO ADDRESS OURS ELVES ON PROPOSITIONS (II) TO (IV) RAISED ON BEHALF OF THE ASSESSEE AT THIS ST AGE IN THE LIGHT OF OUR OBSERVATIONS ON FIRST PROPOSITION ITSELF. 9. WE ARE THUS OF THE FIRM OPINION THAT ACTION OF T HE AO IN IMPOSING THE PENALTY IS NOT SUSTAINABLE IN LAW. THE ORDER OF THE CIT(A) IS ACCORDINGLY SET ASIDE AND THE AO IS DIRECTED TO DELETE THE PENALTY IMPOSED UNDER S.271(1)(C) OF THE ACT. ITA NO.651 /AHD/2018 7 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. 11. OTHER APPEALS IN IT(SS)A NOS. 129 TO 133, 135 & 136/AHD/2015 ALSO RESTS ON SIMILAR FACTS AND INVOLVES IDENTICAL ISSUE TOWARDS IMPOSITION OF VARIED PENALTIES. IN PARITY WITH THE REASONINGS IN IT(SS)A NO. 134/AHD/2015 (SUPRA), ALL OTHER CAPTIONED APPEALS OF THE ASSESSE ES CONCERNING AYS. 2006- 07, 2007-08 AND 2008-09 ARE ALLOWED WITH CONSEQUENT IAL DIRECTIONS TO AO TO DELETE RESPECTIVE PENALTIES. 7. IT IS FURTHER OBSERVED THAT AN IDENTICAL SITUATI ON WAS CONSIDERED BY THE ITAT, RAJKOT BENCH IN IT(SS)A.NO.46 TO 52/RJT/2012 IN THE CASE OF SHRI MANSUKHBHAI R. SORATHIA AND OTHERS. THE DISCUSSION MADE BY THE TRIBUNAL IS WORTH TO NOTE. IT READS AS UNDER: 9. AT THE COST OF REPETITION, WE WOULD LIKE TO OBS ERVE THAT AS PER EXPLANATION 5A, IF IN THE COURSE OF SEARCH INITIATE D UNDER SECTION 132 ON OR AFTER THE 1 ST JUNE, 2007, THE ASSESSEE IS FOUND TO BE OWNER OF A NY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAVE BEEN ACQUIRED BY H IM BY UTILSING THE WHOLE OR PARTLY OF HIS INCOME FROM ANY PREVIOUS YEA R OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE OF SEARCH, AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DO CUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME FROM ANY PREVIOU S YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN, NOTWITHSTAND ING SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED O N OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION O F PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION BE DEEMED TO HAVE BEEN CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS. THE MOOT QUESTION FOR ATTRACTING THIS EXPLANATION IS THAT IN THE COURSE OF SEARCH MONEY, BULLION, JEWELLERY OR INCOME BASED ON ANY EN TRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OUGHT TO HAVE BEEN FOUN D. IN A GIVEN SITUATION, NO MONEY OR BULLION OR JEWELLERY OR INCO ME MIGHT HAVE FOUND FROM THE ASSESSEES FOR THE ASSESSMENT YEARS WHICH W ERE NOT PART OF SPECIFIED PREVIOUS YEAR CONTEMPLATED IN SECTION 2 71AAA OR IMMUNITY AVAILABLE TO THE ASSESSEES UNDER SUB-CLAUS E (A) AND (B) OF EXPLANATION 5A, THEN ALSO, IF IN RESPONSE TO THE NO TICE UNDER SECTION 153A, THE ASSESSEE DISCLOSED SOME ADDITIONAL INCOME VOLUNTARILY, WOULD HE BE DEEMED TO HAVE CONCEALED THE INCOME FOR VISITING HIM WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT ? THE L D.REVENUE AUTHORITIES HAD DRAWN INFERENCE THAT SINCE THE ASSESSEE HAS NOT DISCLOSED ADDITIONAL INCOME IN THE ORIGINAL RETURNS, MEANING THEREBY, IT IS TO BE ITA NO.651 /AHD/2018 8 ASSUMED THAT THEY HAVE DISCLOSED THIS AMOUNT ONLY W HEN SOME INCRIMINATING MATERIAL WAS FOUND. TO OUR MIND THIS ASSUMPTION OUGHT TO BE SUPPORTED WITH REFERENCE OF THAT INCRIMINATIN G MATERIAL. LET US SEE THE FINDING IN THE ASSESSMENT ORDER. 10. WE HAVE PERUSED THE ASSESSMENT ORDER OF SHRI MA NSUKHBHAI R. SORATHIA IN THE ASSTT.YEAR 2008-09. ALL OTHER ASSE SSMENT ORDERS ARE ALSO SIMILARLY WORDED. IT IS A VERY BRIEF ASSESSME NT ORDERS RUNNING ONE-AND-HALF PAGES. IN THE FIRST PAGE, THE LD.AO H AS NARRATED PROCEDURAL ASPECT ABOUT THE SEARCH ACTION, ISSUANCE OF NOTICE AND FILING OF THE RETURN, SERVICE OF NOTICE UNDER SECTION 143( 2) ETC. IN THE NEXT PAGE FINDING OF THE AO READ AS UNDER: 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABR ICATION AND ENGINEERING JOB WORK AND ALSO DERIVES INCOME FROM A GRICULTURAL ACTIVITIES, REMUNERATION AND INTEREST FROM PARTNERS HIP FIRMS ETC. COPIES OF P&L ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET, WAS FILED WITH THE RETURN. VARIOUS ISSUES WERE DISCUSSED AT LENGTH. 2.1 IT IS SEEN THAT THE ASSESSEE HAD MADE DISCLOSU RE UNACCOUNTED INCOME OF RS 22,00,000/- WHICH WAS NOT DISCLOSED IN THE RETURN FILED U/S. 139(1). THIS BEING CONCEALED INCOME, PENALTY P ROCEEDINGS U/S. 271(L)(C) OF THE I T ACT IS BEING INITIATED. 3. AFTER VERIFICATION, THE TOTAL INCOME IS DE TERMINED AS UNDER:- TOTAL INCOME AS PER RETURN OF INCOME RS 28,45,960/ - TOTAL ASSESSED INCOME RS 28,45,960/- AGRICULTURAL INCOME FOR RATE PURPOSE RS.6,14,131/- 4. ASSESSED U/S. 153A OF THE I T ACT, 1961. CHARGE TAX. CHARGE INTEREST U/S. 234A, 234B AND 234C OF THE I T ACT, IF ANY. GI VE CREDIT FOR PREPAID TAXES AFTER DUE VERIFICATION. DEMAND NOTICE AND CHA LLAN ISSUED ACCORDINGLY. ISSUE NOTICE U/S. 271(1)(C)OF THE IT A CT. 11. WE HAVE PERUSED THE PENALTY ORDER ALSO. THERE ARE ONLY THREE PARAGRAPHS I.E. PARA-4, 6 AND 7, WHERE THE AO HAS M ADE SOME OBSERVATION AT HIS OWN, OTHERWISE, IN REST OF THE P ARAGRAPHS HE REPRODUCED THE SUBMISSIONS OR THE HEAD-NOTES OF THE CASE LAWS. THE OBSERVATION OF THE AO IN THESE PARAS READ AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSES. THE CONTENTION OF THE ASSESSEE IS NOT ACC EPTABLE ITA NO.651 /AHD/2018 9 BECAUSE, THE ADDITIONAL INCOME OFFERED BY THE ASSES SES ONLY SURFACED DUE TO THE SEARCH ACTION CARRIED BY THE DE PARTMENT. HAD THERE BEEN NO SEARCH, THE PORTION OF ADDITIONAL INC OME WOULD HAVE REMAINED CONCEALED ETERNALLY. IF IN A REGULAR CASE, ON DETECTION OF CONCEALMENT, PENALTY U/S. 271(1)(C) IS LEVIABLE, HOW MUCH MORE PENALTY BECOMES TRUE AND POTENT IN A CASE WHERE THE CONCEALMENT HAS BEEN DETECTED ON ACCOUNT OF PROACTI VE SEARCH ACTION INITIATED BY THE DEPARTMENT. IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS NOT RECORDED DETAILS OF HIS INCOME AND THE SAME WAS WORKED OUT ONLY DURING SEARCH AND THAT TOO ON T HE BASIS OF THE SEIZED MATERIALS. IN FACT, IT IS AN ESTABLISHED JUDICIAL DECISION THAT 'DOCUMENTS SEIZED DURING THE SEARCH CANNOT BE SAID THE BOOKS OF ACCOUNTS MAINTAINED FOR ANY SOURCE OF INCO ME, FOR THE PURPOSES OF EXPLANATION 5 (CIT VS GLAMOUR RESTAURAN T (2003) 80 TTJ (MUM) 763. DIARIES FOUND AND SEIZED DURING C OURSE OF SEARCH CANNOT BE CONSIDERED AS BOOKS OF ACCOUNT MAI NTAINED BY THE ASSESSEE FOR THE PURPOSE OF IMMUNITY TO BE GRAN TED TO HIM UNDER THE PROVISIONS OF EXPLANATION 5 TO SECTION 27 1(1)(C) - DR T P KULKARNI VS CIT (2003) 86 ITD 696 (MUM). IT HAS A LSO BEEN HELD THAT ONLY BOOKS OF ACCOUNT MAINTAINED IN THE R EGULAR COURSE CAN MAKE THE ASSESSEE ELIGIBLE FOR GRANT OF IMMUNIT Y FROM PENALTY AND NOT JUST ANY OF SUCH BOOKS, WHICH HAVE NOT BEEN MAINTAINED IN REGULAR COURSE OF BUSINESS - BRIJ LAL GOYAL VS CIT (2004) 88 ITD 413 (DELHI). 12. IN THIS BACKGROUND, IF WE APPRECIATE THE EVIDEN CES AVAILABLE ON THE RECORD, THEN IT WOULD REVEAL THE WHOLE CASE OF THE REVENUE FOR VISITING THE ASSESSEE WITH PENALTY IS BASED ON THE STATEMENT OF SHRI JAYANTILAL R. SORATHIA RECORDED DURING THE COURSE O F SEARCH. WE HAVE EXTRACTED THE RELEVANT PART OF THE STATEMENT IN THE FOREGOING PARAGRAPHS OF THIS ORDER. THE EVIDENTIARY VALUE OF SUCH STATE MENT HAS BEEN EXPLAINED IN VARIOUS AUTHORITATIVE PRONOUNCEMENTS. LET US FIRST TAKE NOTE OF SECTION 132(4) OF THE ACT. THE AUTHORISED OFFICER MAY, DURING THE COURSE OF TH E SEARCH OR SEIZURE, EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN PO SSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCUMENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMINATION MAY THEREAFTER BE USED IN E VIDENCE IN ANY PROCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 ( 11 OF 1922 ), OR UNDER THIS ACT. ITA NO.651 /AHD/2018 10 EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB- SECTION M AY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT, OTHER DOCUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH, BUT ALSO IN RESPECT OF ALL MA TTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONNECTED WITH ANY PR OCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDE R THIS ACT. 13. A BARE PERUSAL OF SECTION WOULD REVEAL THAT IT EMPOWERS THE AUTHORIZED OFFICER TO EXAMINE DURING THE COURSE OF SEARCH OR SEIZURE ANY PERSON ON OATH. THE DISCLOSURE MADE DURING THE STATEMENT RECORDED UNDER THIS SECTION WILL BE ADMITTED IN THE EVIDENCE AND CAN BE USED AGAINST THE ASSESSEE IN THE PROCEEDING. 14. NO DOUBT, THE DISCLOSURE OR ADMISSION MADE UNDE R SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCEEDINGS IS AN ADMISSIBLE EVIDENCE BUT NOT CONCLUSIVE ONE. THIS PRESUMPTION OF ADMISSIBILITY OF EVIDENCE IS A REBUTTABLE ONE, AND IF AN ASSESSEE IS ABLE TO DEMONSTRATE WITH THE HELP OF SOME MATERIAL THAT SUCH ADMISSION WAS EITHER MISTAKEN, UNTRUE OR BASED ON MISCONCEPTION OF FACTS, THEN SOL ELY ON THE BASIS OF SUCH ADMISSION NO ADDITION IS REQUIRED TO BE MADE. IT IS TRUE THAT ADMISSION BEING DECLARATION AGAINST AN INTEREST ARE GOOD EVIDENCE, BUT THEY ARE NOT CONCLUSIVE, AND A PARTY IS ALWAYS AT L IBERTY TO WITHDRAW THE ADMISSION BY DEMONSTRATING THAT THEY ARE EITHER MIS TAKEN OR UNTRUE. IN LAW, THE RETRACTED CONFESSION EVEN MAY FORM THE LEG AL BASIS OF ADMISSION, IF THE AO IS SATISFIED THAT IT WAS TRUE AND WAS VOLUNTARILY MADE. BUT THE BASING THE ADDITION ON A RETRACTED D ECLARATION SOLELY WOULD NOT BE SAFE. IT IS NOT A STRICT RULE OF LAW, BUT ONLY RULE OF PRUDENCE. AS A GENERAL RULE, IT IS UNSAFE TO RELY UPON A RETRACTED CONFESSION WITHOUT CORROBORATIVE EVIDENCE. DUE TO THIS GREY SITUATION, CBDT HAS ISSUED CIRCULAR NO.286/2/2003 PROHIBITING THE DEPARTMENTAL OFFICIALS FROM TAKING CONFESSION IN THE SEARCH. TH E BOARD IS OF THE VIEW THAT OFTEN THE OFFICIALS USED TO OBTAIN CONFESSIONS FROM THE ASSESSEE AND STOP FURTHER RECOVERY OF THE MATERIAL. SUCH CONFES SIONS HAVE BEEN RETRACTED AND THEN THE ADDITION COULD NOT WITHSTAND THE SCRUTINY OF THE HIGHER APPELLATE AUTHORITY, BECAUSE NO MATERIAL WAS FOUND SUPPORTING SUCH ADDITION. 15. AN ISSUE WHETHER ADDITION SOLELY ON THE BASIS O F STATEMENT U/S.132(4) CAN BE MADE WAS CONSIDERED BY THE HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF KIALASHBEN MANHARLAL CHOK SHI VS. CIT, 220 CTR (GUJ) 138. IN THIS CASE, SEARCH WAS CONDUCTED UPON THE ASSESSEE UNDER SECTION 132 OF THE INCOME TAX ACT ON 4.11.198 8. THE STATEMENT ITA NO.651 /AHD/2018 11 OF THE ASSESSEE WAS RECORDED UNDER SECTION 132(4) O F THE ACT. HE MADE DISCLOSURE OF RS.7 LAKHS. LATER ON, IN JANUARY, 19 89, THE ASSESSEE RETRACTED FROM THE DISCLOSURE AND STATED THE DISCLO SURE OF RS.50,000/- WAS ACCEPTABLE TO HIM. THE LD.AO MADE AN ADDITION OF RS.7 LAKHS ON THE BASIS OF HIS STATEMENT AND OBSERVED THAT THE RE TRACTION WAS MADE AFTER A LAPSE OF 2 MONTHS. THE ASSESSEE DID NOT HA VE ANY REASON FOR RETRACTING FROM THE DISCLOSURE. THE LD.FIRST APPEL LATE AUTHORITY CONCURRED WITH THE AO AND CONFIRMED THE ADDITION OF RS.7 LAKHS TO HIS INCOME. THE TRIBUNAL HAS ALSO CONFIRMED THE ADDITI ON BY OBSERVING THAT THERE WAS NOTHING ON RECORD WHICH INDICATED TH AT THE DISCLOSURE WAS TAKEN FROM THE ASSESSEE UNDER DURESS, PRESSURE OR COERCION. THE RETRACTION AFTER LAPSE OF TWO MONTHS FROM THE DATE OF DISCLOSURE BY THE ASSESSEE WAS CONSIDERED AS AFTER-THOUGHT. THE ISS UE TRAVELLED BEFORE THE HONBLE HIGH COURT. THE HONBLE HIGH COURT HAS DELETED THE ADDITION BY OBSERVING THAT MERELY ON THE BASIS OF D ISCLOSURE, ADDITION CANNOT BE MADE. THERE SHOULD BE SOME CORROBORATIVE MATERIAL. THE FOLLOWING OBSERVATIONS IN PARA-26 OF THE JUDGEMENT OF HONBLE COURT ARE WORTH TO NOTE. IT READS AS UNDER: 26. IN VIEW OF WHAT HAS BEEN STATED HEREINABOVE WE ARE OF THE VIEW THAT THIS EXPLANATION SEEMS TO BE MORE CONVINC ING, HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ADDITI ONS WERE MADE AND/OR CONFIRMED MERELY ON THE BASIS OF STATEM ENT RECORDED UNDER SECTION 132(4) OF THE ACT. DESPITE T HE FACT THAT THE SAID STATEMENT WAS LATER ON RETRACTED NO EVIDEN CE HAS BEEN LED BY THE REVENUE AUTHORITY. WE ARE, THEREFORE, OF THE VIEW THAT MERELY ON THE BASIS OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO SUCH ADDITIONS UNLESS AND UNTIL, SOME CORROBORATIVE EVIDENCE IS FOUND IN SUPPORT OF SUCH ADMISSION. WE ARE ALSO OF THE VIEW THAT FROM THE STATEMENT REC ORDED AT SUCH ODD HOURS CANNOT BE CONSIDERED TO BE A VOLUNTARY ST ATEMENT, IF IT IS SUBSEQUENTLY RETRACTED AND NECESSARY EVIDENCE IS LED CONTRARY TO SUCH ADMISSION. HENCE THERE IS NO REASON NOT TO DISBELIEVE THE RETRACTION MADE BY THE ASSESSING OFFICER AND EXPLAN ATION DULY SUPPORTED BY THE EVIDENCE. WE ARE, THEREFORE, OF TH E VIEW THAT THE TRIBUNAL WAS NOT JUSTIFIED IN MAKING ADDITION OF RS . 6 LAKHS ON THE BASIS OF STATEMENT RECORDED BY THE ASSESSING OF FICER UNDER SECTION 132(4) OF THE ACT. THE TRIBUNAL HAS COMMITT ED AN ERROR IN IGNORING THE RETRACTION MADE BY THE ASSESSEE. ITA NO.651 /AHD/2018 12 27. IN THE ABOVE VIEW OF THE MATTER, ADDITION OF RS . 1 LAKH MADE ON ACCOUNT OF UNACCOUNTED CASH IS CONFIRMED AND THE ADDITION OF RS. 6 LAKHS IS HEREBY DELETED. 16. THIS DECISION HAS BEEN FOLLOWED BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMAL KOCHAR, 55 TAXMANN.COM 292 (GUJ). THE HONBLE HIGH COURT HAS REPRODUCED T HE DISCUSSION MADE BY THE TRIBUNAL, AND THEREAFTER, CONCURRED WIT H THE CONCLUSIONS OF THE TRIBUNAL BY OBSERVING AS UNDER: 6. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE PRINCIPAL LAID DOWN IN THE CASE OF KAILASHBEN MANHARLAL CHOKSHI (SUPRA),WE ARE OF THE CONSIDERED OPINION TH AT THE VIEW TAKEN BY THE TRIBUNAL IS JUST AND PROPER. WE ARE NO T CONVINCED WITH THE SUBMISSIONS MADE BY MR. MEHTA, LEARNED ADV OCATE FOR THE APPELLANT THAT THE TRIBUNAL HAS NOT GIVEN COGEN T REASONS. THEREFORE, THE ANSWER TO THE FIRST QUESTION WOULD B E AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE. THE SECOND Q UESTION WILL ALSO ENURE FOR THE BENEFIT OF THE ASSESSEE AS FROM THE RECORD IT IS CLEAR THAT OTHER CONCERNS WERE NOT BENAMI CONCERNS OF THE ASSESSEE. 7. FOR THE FORGING REASONS, THE PRESENT APPEAL IS D ISMISSED. ACCORDINGLY, BOTH THE QUESTIONS WHICH WERE REFERRED TO THIS COURT ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE. 17. HAD THIS STATEMENT BEEN RETRACTED BY THE ASSESS EE, AND THEY HAVE NOT OFFERED THIS UNDISCLOSED INCOME, FORGET TO TAKE ACTION OF LEVYING THE PENALTY, EVEN ADDITIONS WOULD NOT HAVE BEEN SUSTAIN ED. THE INFERENCE OF OWNERSHIP OF ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLES, TO OUR MIND, OUGHT NOT TO BE BASED ON THI S STATEMENT. WHEN THE ASSESSEES HAVE TAKEN SPECIFIC PLEA THAT NO MONEY, B ULLION OR JEWELLERY OR INCOME BASED ON ANY ENTRIES FOR THESE TWO ASSESS MENT YEARS WAS FOUND DURING THE COURSE OF SEARCH, THE AO OUGHT TO HAVE IMMEDIATELY REFERRED THE DOCUMENTS, ENTRIES OR ANY ASSET FOUND WHICH IS RELEVANT TO THESE ASSESSMENT YEARS IN THE PENALTY PROCEEDINGS. HE SHOULD HAVE REJECTED THE EXPLANATION OF THE ASSESSEE BY DEMONST RATING IT AS FACTUALLY INCORRECT. RATHER, THE AUTHORITIES HAVE PROCEEDED ON THE ASSUMPTION THAT HAD THERE BEEN NO MONEY, BULLION, JEWELLERY OR INCOME BASED ON ENTRIES WAS NOT FOUND, THE ASSESSEE WOULD HAVE NOT MADE VOLUNTARY DISCLOSURE OF THE INCOME IN THESE RETURNS. THEY FA ILED TO NOTE THE QUESTION NO.25 ALSO, WHERE THE ASSESSEES CLAIMED IM MUNITY FROM ITA NO.651 /AHD/2018 13 PENALTY, AND PEACE FROM LITIGATION. TO OUR MIND IN FERENCE OF AVAILABILITY OF MONEY, BULLION OR ASSETS EMBEDDED I N THE ENTRIES CANNOT BE DRAWN FROM THE STATEMENT OF THE ASSESSEE (EXTRAC TED SUPRA). THEY SHOULD HAVE BEEN FOUND IN PHYSICAL FORM AND PERTAIN ING TO THESE YEARS, ONLY THEN, DEEMING FICTION OF CONCEALMENT WOULD TRI GGER. THUS, THE REVENUE AUTHORITIES HAVE NOT REFERRED ANY DOCUMENTA RY EVIDENCES DEMONSTRATING THE FACT THAT VOLUNTARY INCOME OFFERE D BY ASSESSEES IN THESE TWO YEARS ACTUALLY UNEARTHED DURING THE COURS E OF SEARCH. THEREFORE, TO OUR MIND, THE ASSESSEES DO NOT DESERV E TO BE VISITED WITH PENALTIES. WE ALLOW ALL THE APPEALS OF THE ASSESSE ES AND DELETE PENALTIES. 8. THERE IS NO DEBATE WITH REGARD TO THE PROPOSITIO N THAT IN ORDER TO ATTRACT EXPLANATION 5A APPENDED TO SECTION 271(1)(C) THERE SHOULD BE A SE ARCH AND DURING THAT SEARCH ASSESSEE SHOULD BE FOUND TO BE O WNER OF ANY MONEY, BULLION, JEWELLERY AND OTHER VALUABLE ARTICLE OR TH INGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAS BEEN ACQUIRED BY HIM BY UTILIZING W HOLLY OR PARTLY OF HIS INCOME OF ANY PREVIOUS YEAR OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTION FOUND DURING THE COURSE OF SEARCH, AND THE ASSESSEE CLAIMS THAT SUCH ENTRIES I N THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSACTION REPRESENT HIS INCOME FROM ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN NOT WITHSTANDING SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHE D ON OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) WOULD BE DEEMED TO HAVE CONCEALED T HE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. IN OTHER WORDS, IF ANY MONEY, BULLION, JEWELLERY OR VALUABLE SHOWING INCOME IN TH E HANDS OF THE ASSESSEE, AND SUCH INCOME WAS NOT FROM EXPLAINED SOURCE, THEN AFTER SEARCH IN RESPONSE TO THE NOTICE UNDER SECTION 153A, IF THE ASSESSEE H AS ADMITTED THAT INCOME, THEN DEEMING FICTION FOR CONCEALMENT OF INCOME WOUL D ATTRACT. THE QUESTION BEFORE US IS THAT NO MONEY, BULLION, JEWELLERY OR B OOK ENTRY WAS FOUND AT THE TIME OF SEARCH. THE ONLY EVIDENCE AGAINST THE ASSE SSEE IS THAT AN ADMISSION OF ITA NO.651 /AHD/2018 14 ADDITIONAL INCOME WAS MADE IN THE STATEMENT UNDER S ECTION 132(4). THE QUESTION IS THIS ADMISSION AKIN TO DISCLOSURE OF MO NEY, BULLION, JEWELLERY OR DIARY AND INCOME DISCLOSED REPRESENTING THIS STATEM ENT IS TO BE CONSIDERED AS CONCEALED INCOME ? THIS ASPECT HAS BEEN CONSIDERED IN BOTH THESE ORDERS, WHEREIN IT HAS BEEN HELD THAT ON THE STRENGTH OF AU THORITATIVE PRONOUNCEMENT OF HONBLE HIGH COURTS THAT SOLELY ON THE BASIS OF DECLARATION ADDITION IS NOT POSSIBLE UNLESS THE ASSESSEE DID NOT RETRACT THE ST ATEMENT. - A CORROBORATION FOR SUCH DISCLOSURE WOULD REQUIRE. IN THE CASE OF SHR I MANSUKHBHAI R. SORATHIA (SUPRA) THIS ASPECT HAS DULY BEEN CONSIDERED BY THE TRIBUNAL AND DEALT WITH IN PARA-13 AND 14 OF THE EXTRACTED PORTION (ABOVE. TH EREFORE, RESPECTFULLY FOLLOWING THE ABOVE DECISIONS, WE FIND FORCE IN THE CONTENTIONS OF THE LD.COUNSEL FOR THE ASSESSEE AND DELETE THE PENALTY. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 29 TH JULY, 2019 AT AHMEDABAD. SD/- SD/- (AMARJIT SINGH) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 29/07/2019