D.N.Choudery, CHENNAI V. ACIT, CHENNAI

ITA 682/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9615 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 27-01-2016
• Assessment Year: 2003-2004
• Appeal Filed On: 06-04-2015
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Unexplained investment; Gift; Wrong claim
• Section: 32; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI . . . , ! ' , # $% BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER . /ITA NOS.679 & 680/MDS/2015 / ASSESSMENT YEARS : 2003-04 AND 2004-05 LATE SHRI D. SHRIHARI RAO, L/H BY MR. D.H.SARATH KUMAR, NO.6, RANJITH ROAD, KOTTURPURAM, CHENNAI - 600 085. PAN AACPR3014P APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(4), NUNGAMBAKKAM, CHENNAI 34. RESPONDENT) . /ITA NOS.682 & 683/MDS/2015 / ASSESSMENT YEARS : 2003-04 AND 2004-05 SHRI D. N. CHOUDERY, NO.6, RANJITH ROAD, KOTTURPURAM, CHENNAI - 600 085. PAN ACXPC3349K APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(4), NUNGAMBAKKAM, CHENNAI 34. RESPONDENT) IT(SS)A NO. 7/MDS/2015 BLOCK PERIOD : 1.4.1996 TO 2.1.2003 LATE SHRI D. SHRIHARI RAO (HUF), L/H BY MR. D.H.SARATH KUMAR, NO.6, RANJITH ROAD, KOTTURPURAM, CHENNAI - 600 085. PAN AALHS5096K APPELLANT) CA / APPELLANTS BY : / RESPONDENT : V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE 2(4), CHENNAI 34. RESPONDENT) SHRI T.T.DURAIRAJ KANDIAR, CA SHRI SANKARALINGAM, CIT - - 679, 680, 681/15 ETC. 2 IT(SS)A NO. 5/MDS/2015 BLOCK PERIOD : 1.4.1996 TO 31.1.2003 D. SUNEETA, NO.6, RANJITH ROAD, KOTTURPURAM, CHENNAI - 600 085. PAN AYBPS3637E APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE II(5)(I/C), CHENNAI 34. RESPONDENT) / APPELLANT BY : SHRI T.T.DURAIRAJ KANDIAR, CA / RESPONDENT BY : SHRI HOWARD DAISSER, JCIT ! / DATE OF HEARING : 27.01.2016 '# ! / DATE OF PRONOUNCEMENT : 06.04.2016 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER ALL THESE APPEALS ARE DIRECTED AGAINST DIFFERENT ORDERS OF THE COMMISSIONER OF INCOME-TAX(APPEALS) IN RESPECT OF THE ABOVE ASSESSEES. SINCE COMMON ISSUE IS INVOLVED W ITH REGARD TO LEVY OF PENALTY U/S.271(1)(C)/158BFA(2) OF THE A CT, THESE ARE CLUBBED TOGETHER, HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. FIRST, WE TAKE UP THE APPEALS IN ITA NOS.679 & 680/MDS/2015: THERE IS A DELAY OF 14 DAYS IN FI LING THESE - - 679, 680, 681/15 ETC. 3 APPEALS BEFORE THE TRIBUNAL. THE ASSESSEE HAS FILE D A CONDONATION PETITION EXPLAINING THE REASONS FOR THE DELAY. AFTER GOING THROUGH THE CONDONATION PETITION, WE ARE OF T HE OPINION THAT THERE IS GOOD AND SUFFICIENT REASON FOR FILING THE APPEAL BELATEDLY BEFORE THIS TRIBUNAL. ACCORDINGLY, THE DELAY IS CO NDONED IN FILING THE APPEALS AND THE APPEALS ARE ADMITTED FOR ADJUDI CATION. 3. IN THESE APPEALS THE ASSESSEE HAS CHALLENGED THE LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. THE FACTS ARE TH AT THE ASSESSEE FILED HIS RETURNS OF INCOME AS UNDER : ASST. YEAR DATE OF FILING INCOME ADMITTED IN THE RETURN INCOME ASSESSED BY THE AO ADDITION ON ACCOUNT OF 2003-04 29.10.2003 ` 2,62,790/- ` 3,20,003/- LEASE RENT (SUB-LETTING THE SHOP 2004-05 02.09.2004 ` 1,72,860/- ` 17,16,172/- AGRICULTURAL INCOME TREATED AS UNEXPLAINED CREDIT, EXPENSES INCURRED FROM LEASE HOLD SHOP FOR THE ASSESSMENT YEAR 2003-04, THE ASSESSEE HAD E ARNED INCOME OF ` 1,44,000/- FROM SUB-LETTING THE SHOP. THE SAME WA S CONTESTED BY THE ASSESSEE. ON COMPLETION OF THE AP PELLATE PROCEEDINGS THE CIT(A) SUSTAINED THE ADDITION MADE ON ACCOUNT OF INCOME EARNED FROM SUB-LETTING OF ` 1,35,300/-. PENALTY - - 679, 680, 681/15 ETC. 4 U/S.271(1)(C) OF THE ACT WAS LEVIED TO THE TUNE OF ` 42,619/- TOWARDS CONCEALMENT OF INCOME FROM SUB-LETTING WHIC H WAS ASSESSED UNDER THE HEAD INCOME FROM OTHER SOURCES . FOR THE ASSESSMENT YEAR 2004-05, THE ASSESSEE HAS SHOWN AGR ICULTURAL INCOME OF ` 16,93,300/- WHICH WAS NON-TAXABLE INCOME. AS THE ASSESSEE FAILED TO PROVE FOR HAVING CONDUCTED ANY A GRICULTURAL OPERATIONS, HAVING SOLD ANY AGRICULTURAL PRODUCE ET C. DID NOT MAINTAIN ANY SEPARATE BOOKS OF ACCOUNT THE INCOME C LAIMED TO HAVE BEEN EARNED OF ` 15,25,700/- FROM AGRICULTURAL INCOME WAS TREATED AS UNEXPLAINED CREDITS AND ASSESSED UNDER I NCOME FROM OTHER SOURCES. AFTER GOING THROUGH TWO APPELLATE S TAGES, HAVING CONSIDERED THE AGRICULTURAL HOLDING AND OTHER RELEV ANT DETAILS, EVIDENCES FURNISHED BY THE ASSESSEE, THE APPELLATE AUTHORITIES ESTABLISHED THAT THE ASSESSEE FAILED TO PROVE THE S OURCES FOR THE CREDITS TO THE EXTENT OF ` 7,53,300/-. PENALTY U/S.271(1)(C) LEVIED TO THE TUNE OF ` 2,70,060/- ON THIS COUNT AND FOR SUB-LETTING AS TH E ASSESSEE CONCEALED HIS INCOME AND FURNISHED INACCUR ATE PARTICULARS OF INCOME. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE CIT(APPEALS). - - 679, 680, 681/15 ETC. 5 4. THE COMMISSIONER OF INCOME-TAX(APPEALS) OBSERVED THAT FOR THE ASSESSMENT YEAR 2003-04, THE ASSESSEE HAS N OT FILED ANY OBJECTION FOR THE SHOW-CAUSE NOTICE ISSUED BY THE A SSESSING OFFICER FOR LEVYING PENALTY U/S.271(1)(C) OF THE AC T. IT IS ALSO OBSERVED BY THE COMMISSIONER OF INCOME-TAX(APPEALS) THAT THE ASSESSEE MADE A CLAIM OF EXPENDITURE ON SALARY AND REPAIRS AGAINST INCOME FROM SUB-LETTING OF THE SHOP WHICH I S NOT AN ALLOWABLE CLAIM. THEREFORE, THE CLAIM OF THE ASSES SEE WAS DISALLOWED AS IT IS NOT ACTUALLY INCURRED TOWARDS T HE INCOME UNDER THE HEAD SUB-LETTING. ACCORDINGLY, THE COMMISSIO NER OF INCOME-TAX(APPEALS) WAS OF THE OPINION THAT THIS IS A FALSE CLAIM MADE BY THE ASSESSEE TO REDUCE THE TAXABLE INCOME. AS THERE IS NO EXPLANATION OR BASIS FOR SUCH CLAIM, HE CONFI RMED THE LEVY OF PENALTY FOR THE ASSESSMENT YEAR 2003-04. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. ADMITTEDLY, THE ASSESSEE MADE A CLAIM O F EXPENDITURE ON SALARY AND REPAIRS AGAINST THE INCOM E FROM SUB- LETTING OF THE SHOP, WHICH IS NOT AN ALLOWABLE CLAI M. THE ASSESSEE HAS MADE NO EFFORTS TO SUBSTANTIATE THAT T HE SAID EXPENSES WERE INCURRED ON SALARY AND REPAIRS. IN T HE ABSENCE OF - - 679, 680, 681/15 ETC. 6 ANY MATERIAL, THE LOWER AUTHORITIES ARE DISALLOWED THE EXPENDITURE AND LEVIED PENALTY U/S.271(1)(C) OF THE ACT. THE DISCREPANCIES AND IRREGULARITIES NOTICED BY THE A.O. BORE TESTIMO NY TO THE FACT THAT THE BOOKS OF ACCOUNTS OF THE ASSESSEE WHOLLY U NRELIABLE. THE ASSESSING OFFICER GAVE DUE OPPORTUNITIES TO THE ASSESSEE TO EXPLAIN THE DISCREPANCIES AND THE SAME WAS NOT AVAI LED BY THE ASSESSEE. THIS FACT WAS NOT DENIED BY THE ASSESSEE . IN THESE CIRCUMSTANCES, THE LOWER AUTHORITIES LEVIED THE PEN ALTY AND THE ASSESSEE FAILED TO RETURN THE CORRECT INCOME AND TH ERE IS NO MATERIAL TO SUGGEST THAT THE EXPLANATION OFFERED BY THE ASSESSEE IS BONA FIDE. IN OUR OPINION, THE PENALTY IS LEVIE D ON THE BASIS OF NON-RELIABILITY OF BOOKS OF ACCOUNT. FOR THIS PR OPOSITION, WE TAKE SUPPORT FROM THE JUDGMENT OF THE JURISDICTIONAL HIG H COURT IN THE CASE OF SHARMA ALLOYS (INDIA) LTD. V. ITO (357 ITR 379). IN VIEW OF THE ABOVE, WE HAVE NO HESITATION IN CONFIRMING T HE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) ON THIS GROUND. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AND ITA NO.679/MDS/15 IS DISMISSED. 5.1 FOR THE ASSESSMENT YEAR 2004-05, THE FACTS ARE THAT THE ASSESSEE IN THE COMPUTATION OF INCOME FILED ALONG W ITH THE RETURN - - 679, 680, 681/15 ETC. 7 OF INCOME SHOWED AGRICULTURAL INCOME OF ` 16,93,000/-. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSEE FAILED TO PROVE HAVING CONDUCTED ANY AGRIC ULTURAL OPERATION, HAVING SOLD ANY AGRICULTURAL PRODUCE. A S SUCH, THE ASSESSING OFFICER DID NOT ACCEPT THE AGRICULTURAL I NCOME DECLARED BY THE ASSESSEE AND THE TREATED THE SAME AT ` 15,25,700/- AS INCOME FROM OTHER SOURCES. ON APPEAL, THE COMMISSI ONER OF INCOME-TAX(APPEALS) ALSO CONFIRMED THE AGRICULTURAL INCOME OF ` 7,53,300/-. FURTHER, ON APPEAL BEFORE THE TRIBUNAL , IT CONFIRMED THE AGRICULTURAL INCOME OF ` 7,53,300/-. WHILE REDUCING THE ADDITION OF ` 7,53,300/-, THE TRIBUNAL CONSIDERED LAND HOLDINGS AND OTHER RELEVANT MATERIAL. CONSEQUENT TO THE TRI BUNALS ORDER, THE ASSESSING OFFICER LEVIED PENALTY AT ` 2,70,060/- I.E. 100% OF TAX ON THE CONCEALED INCOME. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. NOW, THE CONTENTION OF THE ASSESSEES C OUNSEL IS THAT THE INCOME WAS SUSTAINED ONLY ON ESTIMATE BASIS AND THERE IS NO CONCLUSIVE EVIDENCE TO SUGGEST THE CONCEALED INCOME AND PENALTY CANNOT BE LEVIED. FURTHER, IT WAS SUBMITTE D THAT THE ASSESSEE IS OWNING 60 ACRES OF AGRICULTURAL LAND AN D THE - - 679, 680, 681/15 ETC. 8 ASSESSEE HAS FILED VAOS CERTIFICATE CONFIRMING AGR ICULTURAL INCOME. AGAINST THIS DOCUMENTARY EVIDENCE, THE ASS ESSING OFFICER HAS NOT BROUGHT ANY MATERIAL TO SUGGEST THA T THE ASSESSEE IS NOT HAVING AGRICULTURAL INCOME MORE THA N ACCEPTED BY THE DEPARTMENT. IN OUR OPINION, THE PENALTY PR OCEEDINGS ARE INDEPENDENT FROM ASSESSMENT PROCEEDINGS. SUM AND S UBSTANCE ADDITION IN QUANTUM APPEAL ITSELF CANNOT BE A REASO N TO LEVY OF PENALTY U/S.271(1)(C) OF THE ACT. THE PROCEEDINGS U/S.271(1)(C) OF THE ACT ARE QUASI CRIMINAL AND THE ASSESSING OFF ICER HAS TO BRING MATERIAL TO SUGGEST THAT THE CLAIM OF THE ASS ESSEE IN RESPECT OF AGRICULTURAL INCOME IS FALSE AND THE ASS ESSEE HAS CONCEALED THE INCOME. IN THE PRESENT CASE, THE ASS ESSING OFFICER FAILED TO BRING ANY MATERIAL ON RECORD EVEN DURING THE COURSE OF PENALTY PROCEEDINGS. ON THE OTHER HAND, THE ASSESSEE HAS FURNISHED THE CERTIFICATE FROM THE VAO TO SUPPO RT THE AGRICULTURAL INCOME. BEING SO, IN THE PRESENT CASE , IT IS NOT APPROPRIATE TO LEVY PENALTY FOR CONCEALMENT OF AGRI CULTURAL INCOME. HENCE, WE ARE INCLINED TO DELETE THE PENA LTY LEVIED FOR THE ASSESSMENT YEAR 2004-05 AND ALLOW THIS GROUND O F APPEAL. ACCORDINGLY, ITA NO. 680/MDS/2015 IS ALLOWED. - - 679, 680, 681/15 ETC. 9 7. ITA NOS.682 & 683/MDS/15. THERE IS A DELAY OF 6 DAYS IN FILING THESE APPEALS BEFORE THE TRIBUNAL. THE ASSE SSEE HAS FILED A CONDONATION PETITION EXPLAINING THE REASONS FOR T HE DELAY. AFTER GOING THROUGH THE CONDONATION PETITION, WE ARE OF T HE OPINION THAT THERE IS GOOD AND SUFFICIENT REASON FOR FILING THE APPEAL BELATEDLY BEFORE THIS TRIBUNAL. ACCORDINGLY, THE DELAY IS CO NDONED IN FILING THE APPEALS AND THE APPEALS ARE ADMITTED FOR ADJUDI CATION. 8. REGARDING THE ISSUE OF LEVY OF PENALTY IN THESE APPEALS, THE FACTS ARE THAT THE ASSESSEE FILED HIS RETURNS O F INCOME AS UNDER : ASST. YEAR DATE OF FILING OF RETURN INCOME RETURNED INCOME ASSESSED 2003-04 29.10.2003 ` 18,97,915/- ` 33,03,025/- 2004-05 02.09.2004 ` 14,41,580/ - ` 16,67,080/- THE ASSESSEE ADMITTED AGRICULTURAL INCOME OF ` 3,48,600/- AND ` 2,25,500/- FOR THE ASSESSMENT YEAR 2004-405 RESPECT IVELY WHICH WERE NON-TAXABLE INCOMES. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AS THE ASSESSEE FAILED TO P ROVE HAVING CONDUCTED ANY AGRICULTURAL OPERATIONS, HAVING SOLD ANY AGRICULTURAL PRODUCE, AND HAD ALSO NOT MAINTAINED A NY BOOKS OF ACCOUNTS WITH REGARD TO THAT, THE INCOME CLAIMED TO HAVE BEEN EARNED FROM AGRICULTURE WAS ASSESSED AS UNEXPLAINED CREDITS - - 679, 680, 681/15 ETC. 10 AND ASSESSED UNDER THE HEAD INCOME FROM OTHER SOUR CES. ON APPEAL, THE COMMISSIONER OF INCOME-TAX(APPEALS) CON FIRMED THE FINDING OF THE ASSESSING OFFICER. AGGRIEVED BY THI S, THE ASSESSEE IS IN APPEAL BEFORE US. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. THE FACTS ARE SIMILAR TO THE FACTS IN T HE CASE OF LATE SHRI D.H.SARATH KUMAR FOR THE ASSESSMENT YEAR 2004- 05 IN ITA NO.680/MDS/2015 AND IN EARLIER PARA, WE HAVE DECIDE D THE ISSUE IN FAVOUR OF THE ASSESSEE. ACCORDINGLY, IN THIS CA SE ALSO, WE ARE INCLINED TO DELETE THE PENALTY AND THE APPEALS OF T HE ASSESSEE IN ITA NOS.682 & 683/MDS/2015 ARE ALLOWED. 10. IT(SS)A NO.7/MDS/2015: IN THIS APPEAL, THE ISSU E IS WITH REGARD TO LEVY OF PENALTY U/S.158BFA(2) OF THE ACT. 11. THE FACTS OF THE CASE ARE THAT THERE WAS A SEARCH U/S.132 OF THE ACT IN THE CASE OF SHRI D. SHRI HARI RAO AND OTHERS OF M/S. COSMO GRANITES PVT. LTD. DURING THE COURSE OF SEARCH, IT WAS FOUND OUT THAT SHRI D. SHRI HARI RAO AND HIS FAMILY MEMBERS HAVE BEEN SHOWING VERY SUBSTANTIAL INCOME UNDER THE HEAD. 'AGRICULTUR E INCOME'. THE FAMILY MEMBERS WERE HOLDING - - 679, 680, 681/15 ETC. 11 AGRICULTURAL LANDS IN THEIR NAMES AND INVESTIGATION REVEALED THAT THE CLAIM OF AGRICULTURAL INCOME IS N OT SUBSTANTIATED WITH ANY EVIDENCE. PROCEEDINGS U/S.158BD WAS INITIATED AND IN RESPONSE THE ASSESSEE FILED BLOCK RETURN ADMITTING UNDISCLOSED. INCOME OF `NIL. SUBSEQUENTLY, RELEVANT STATUTORY NOTICES WER E ISSUED. THE AO DISALLOWED THE CLAIM OF AGRICULTURAL INCOME AS THE VAO HAS STATED IN THIS REPORT THAT NO AGRICULTURAL ACTIVITY WAS CARRIED OUT ON THE LAND OWNED BY THE ASSESSEE. BESIDES NO BOOKS OF ACCOUNTS OR ANY OTHER EVIDENCE WERE PRODUCED BY THE ASSESSEE IN SUPPORT OF AGRICULTURAL INCOME EARNED. IN VIEW OF THE ABOVE, THE AO COMPLETED THE ASSESSMENT BY TREATING THE INCOME SHOWN UNDER THE HEAD AGRICULTURAL INCOME AS UNDISCLOSED INCOME OF THE ASSESSEE. AGAINST THIS, THE ASSESSEE WENT IN APPEAL BEFORE TH E COMMISSIONER OF INCOME-TAX(APPEALS). 11.1 ON APPEAL, THE COMMISSIONER OF INCOME-TAX(A PPEALS) OBSERVED THAT T HE AO HAS DISCUSSED IN THE ASSESSMENT ORDER THAT ON PERUSAL OF THE DETAILS FURNISHED BY THE - - 679, 680, 681/15 ETC. 12 VAO, THERAVAI KANDEGAI VILLAGE, GUMMIDIPOONDI TALUK , THE VAO HAS CONFIRMED THAT NO CULTIVATION WHATSOEVE R HAS BEEN DONE IN THE ENTIRE LAND FOR THE PAST MORE THAN 20 YEARS AND THE LAND WAS KEPT IDLE. THE VAO HAS FURTHER CONFIRMED THAT THE ASSESSEE GROUP DID NOT O WN ANY OTHER LAND AT THERAVAI KANDIAGAI VILLAGE. THE AO ACCEPTED THE VAO'S REPORT, AS THE VAO KNOWS THE EXA CT POSITION OF THE AGRICULTURAL ACTIVITIES AND PHYSICA L FEATURES OF THE VILLAGE. 11.2 FURTHER, THE CIT(APPEALS) OBSERVED THAT FROM THE ASSESSMENT ORDER IT IS CLEAR THAT THE ASSESSEE COUL D NOT PRODUCE ANY MATERIAL OR EVIDENCE TO CONTRADICT THE STATEMENT/REPORT OF THE VAO CONFRONTED WITH DURING THE ASSESSMENT PROCEEDINGS. THE EXPLANATION GIVEN IN RE PLY TO THE VAO'S REPORT IS TOO GENERAL IN NATURE AND TH E ASSESSEE HAD NOT PRODUCED ANY MATERIAL OR DOCUMENTARY EVIDENCE TO SUBSTANTIATE THE CLAIM OF AGRICULTURAL INCOME HAVING ACTUALLY BEEN EARNED FRO M AGRICULTURAL OPERATIONS. DURING THE COURSE OF SEARC H UNDER SECTION 132 OF THE ACT, THE DDIT, INVESTIGATI ON - - 679, 680, 681/15 ETC. 13 MADE ENQUIRIES FROM THE VAOS/TEHSILDAR OF THE VILLA GES, WHEN THE ASSESSEE GROUP HAD CLAIMED TO HAVE CARRIED OUT AGRICULTURAL ACTIVITIES. IN RESPONSE TO THE SAM E THE VAO INFORMED VIDE HIS LETTER DATED 9.1.2003 THAT NO CULTIVATION WHATSOEVER HAD BEEN DONE IN THE ENTIRE LAND FOR THE PAST MORE THAN 20 YEARS AND THE SAME WAS KE PT IDLE AND THAT NO INCOME HAD BEEN DERIVED FROM THOSE LANDS IN ANY THE YEARS. BE THAT AS IT MAY, THE ASSE SSEE, APART FROM CHALLENGING THE ACTION OF THE AO IN NOT ACCEPTING THE CLAIM OF THE ASSESSEE, HAS NOT BROUGHT ANY MATERIAL OR EVIDENCE ON RECORD EVEN DURING THE COURSE OF APPEAL PROCEEDINGS TO SHOW THAT ANY AGRICULTURAL ACTIVITY WAS ACTUALLY CARRIED ON BY OR ON BEHALF OF THE ASSESSEE. NO EFFORT, WHATSOEVER, HAS BEEN MADE BY THE ASSESSEE EVEN DURING THE COURSE OF APPEAL PROCEEDINGS TO BRING ANY MATERIAL OR EVIDENC E ON RECORD WITH REGARD TO EARNING OF AGRICULTURAL IN COME VIZ EXPENDITURE ON TILLING, SEEDS, FERTILISERS, LAB OUR EXPENSES ETC. OR WITH REGARD TO SALE OF AGRICULTURA L PRODUCE OR TO THE EXTENT OF THE SAME. - - 679, 680, 681/15 ETC. 14 11.3 ACCORDING TO THE CIT(APPEALS), THE CLAIM O F THE ASSESSEE THAT THE AFORESAID AGRICULTURAL INCOME HAD BEEN RETURNED IN THE RETURNS OF INCOME FILED PR IOR TO THE SEARCH IS ALSO OF NO HELP TO THE ASSESSEE INASM UCH AS THE RESULT OF THE ENQUIRIES CONDUCTED DURING THE COURSE OF SEARCH WITH REGARD TO THE CLAIM OF AGRICU LTURAL INCOME OF THE ASSESSEE CLEARLY EVIDENCE THAT SUCH CLAIM MADE IN THE RETURNS OF INCOME WAS NOT CORRECT . THUS, THE CIT(APPEALS) OBSERVED THAT THE ACTION OF THE AO IN ASSESSING THE AGRICULTURAL INCOME AS UNDISCLOSED INCOME IS JUSTIFIED AND DISMISSED THE GROUND OF APPEAL AS UNSUBSTANTIATED. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 12. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE PENALTY IS L EVIED ON ACCOUNT OF TREATMENT OF CONCEALED INCOME AS NON- RECIPIENT, SINCE THE ASSESSEE HAS NOT SUBSTANTIATED THE ACTIVITY OF AGRICULTURAL OPERATION. HOWEVER, WE FI ND THAT HOLDING OF AGRICULTURAL LAND IS NOT DOUBTED AND THE INCOME IS SUPPORTED BY THE VAOS CERTIFICATE AS STA TED - - 679, 680, 681/15 ETC. 15 IN ITA NO.680/MDS/2015, WE ARE INCLINED TO HOLD THA T LEVY OF PENALTY IS NOT JUSTIFIED. ACCORDINGLY, THI S GROUND OF APPEAL OF THE ASSESSEE IN IT(SS)A NO.7/MDS/2015 IS ALLOWED. 13. IT(SS)A NO.5/MDS/2015: THE ISSUE IN THIS APPEA L IS WITH REGARD TO LEVY OF PENALTY U/S.158BFA(2) OF THE ACT. THE FACTS OF THE CASE ARE THAT A SEARCH U/S.1 32 OF THE ACT WAS CONDUCTED IN THE CASE OF SHRI D. SRIHAR I RAO, HUSBAND OF THE ASSESSEE ON 2.1.2005. SUBSEQUENT TO THE SEARCH, PROCEEDINGS WERE INITIATE D AND ORDER U/S.158BD R.W. SEC.143(3) OF THE ACT WAS PASSED ON 28.2.2007. IN THE ASSESSMENT ORDER, APAR T FROM OTHER ADDITIONS, UNDISCLOSED INCOME OF ` 4,07,880/- ON ACCOUNT OF INVESTMENT IN JEWELLERY WA S MADE. ON APPEAL BY THE ASSESSEE, THIS ADDITION OF UNDISCLOSED INCOME WAS UPHELD BY THE CIT(APPEALS). THE ITAT HAS ALSO CONFIRMED THE ADDITION OF UNDISCLOSED INCOME. 13.1 DURING THE PENALTY PROCEEDINGS, IT WAS SUBMITTED BEFORE THE AO THAT THE ASSESSEE HAD NEITH ER - - 679, 680, 681/15 ETC. 16 CONCEALED THE PARTICULARS OF INCOME NOR FURNISHED A NY INACCURATE PARTICULARS OF HER INCOME AND THAT THE ADDITION WAS MADE ON ACCOUNT OF ESTIMATION OF GOLD JEWELLERIES ACQUIRED RIGHT FROM HER BIRTH. HOWEVER , THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE, SINCE THERE WAS NO ESTIMATION WAS MADE AND THE ADDITION WAS MADE CORRECTLY ON ACCOUNT OF JEWELLERY PHYSICALLY FOUND IN POSSESSION OF THE ASSESSEE AND THE SOURCES OF ACQUISITION WERE NOT EXPLAINED AND THUS VERY WELL FALL UNDER THE DEFINITION OF UNDISCLOSED INCO ME AS PER THE PROVISIONS OF SEC.158B OF THE ACT. ACCORDI NGLY, THE AO HELD THAT IT IS A FIT CASE FOR IMPOSING PENA LTY U/S.158BFA(2) AND LEVIED THE PENALTY. AGGRIEVED, T HE ASSESSEE WENT IN APPEAL BEFORE THE CIT(APPEALS). 13.2 THE CIT(APPEALS) OBSERVED THAT THERE IS NO DISPUTE THAT THE QUANTITY OF 887 GMS OF GOLD JEWELL ERY VALUING ` 4,07,880/- WAS FOUND DURING THE SEARCH. THEREFORE, THE CONTENTION OF THE ASSESSEE THAT THE ADDITION ON THIS ACCOUNT WAS MADE ON ESTIMATION IS NOT CORRECT. FURTHER, THE CIT(APPEALS) OBSERVED THAT T HE - - 679, 680, 681/15 ETC. 17 SOURCE OF THE ACQUISITION OF THE AFORESAID JEWELLER Y IN THE HANDS OF THE ASSESSEE HAS NOT BE EXPLAINED WITH ANY EVIDENCE EITHER AT THE TIME OF ASSESSMENT PROCEEDINGS OR PENALTY PROCEEDINGS. THE CIT(APPEAL S) FURTHER SUBMITTED THAT THE ASSESSEE NOT BEEN BROUGH T ON RECORD BEFORE HIM ANY MATERIAL OR EVIDENCE TO EXPLAIN THE SOURCE OF ACQUISITION OF THE JEWELLERY, WHICH IS ADMITTED TO HAVE BEEN FOUND FROM THE ASSESSEE DURING THE COURSE OF SEARCH. THEREFORE, THE CIT(APPEALS) CONFIRMED THE ACTION OF THE AO IN LEVY ING PENALTY ON THE ADDITION MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE ACQUISITION OF JEWELL ERY FOUND FROM THE ASSESSEE DURING THE COURSE OF SEARCH . 14. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. DURING THE COURSE OF SEARCH, A TOTAL OF 1387.300 GMS OF JEWELLERY WAS FOUND. OUT OF THI S, THE AO CONSIDERED 887 GMS. OF JEWELLERY AS UNDISCLOSED INCOME AND MADE AN ADDITION IN QUANTUM APPEAL, THIS WAS CONFIRMED BY THE TRIBUNAL. CONSEQUENT TO THIS, PENALTY WAS LEVIED U/S.158BFA(2 ) - - 679, 680, 681/15 ETC. 18 OF THE ACT. THOUGH, THE ASSESSEE HAS GIVEN THE EXPLANATION THAT JEWELLERY WAS RECEIVED AS A GIFT A T THE TIME OF MARRIAGE AND OTHER OCCASIONS AND CERTAIN GRAMS OF JEWELLERY BELONGED TO HER SISTER WHO IS ST AYING IN U.S. HOWEVER, THERE IS NO MATERIAL TO SUPPORT T HE CLAIM OF THE ASSESSEE. IN OTHER WORDS, THE CLAIM O F THE ASSESSEE CANNOT BE SAID THAT IT IS BONA FIDE. IN T HE ABSENCE OF ANY EVIDENCE OR MATERIAL THE EXPLANATION GIVEN BY THE ASSESSEE IS NOT BONA FIDE AND PENALTY U/S.158BFA(2) TO BE LEVIED. PRIMARILY ONUS IS IN T HE HANDS OF THE ASSESSEE AND IT IS THE DUTY OF THE ASSESSEE TO SHOW THAT THE JEWELLERY WAS REQUIRED FR OM KNOWN SOURCES. IN THE ABSENCE OF BONA FIDE EXPLANATION, THE LOWER AUTHORITIES ARE JUSTIFIED IN LEVYING THE PENALTY AND THE PENALTY IS NOT LEVIED ON ESTIMA TE BASIS. ACCORDINGLY, THIS GROUND OF APPEAL OF THE ASSESSEE IS DISMISSED AND IT(SS)A NO.5/MDS/2015 IS DISMISSED. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEES IN ITA NO.680/MDS/2015, 682/MDS/2015, 683/MDS/2015 & - - 679, 680, 681/15 ETC. 19 IT(SS)A NO.7/MDS/2015 ARE ALLOWED AND ITA NO.679/MDS/2015 & IT(SS)A NO.5/MDS/2015 ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 6 TH OF APRIL, 2016 AT CHENNAI. SD/- SD/- ( $ . . $ . %& ) ( ' ( ) * ) N.R.S.GANESAN + ,-./01.2334.15+ 6 78 /JUDICIAL MEMBER ! 789::3;/<./<=>?@>1 '6 /CHENNAI, A7 /DATED, THE 6 TH APRIL, 2016. MPO* 7& BCDC /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. E+ /CIT(A) 4. E /CIT 5. CF% G /DR 6. %HI /GF.