Manish Packaging Pvt.Ltd., Surat V. The Dy.CIT.,Cent.Circle-3, Surat

ITA 78/AHD/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94535 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 05-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RASESH SHAH
• Keywords: Unexplained investment; Unexplained expenditure; Business income; Income from undisclosed sources; Loose papers; Document seized; Deemed dividend; Retraction; Documents seized
• Section: 143(3); 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER MANISH PACKAGING PVT. LTD, GHANTIWALA COMPOUND, NEAR A.S. MOTORS, A.K. ROAD, SURAT PAN: AABCM6018Q (APPELLANT) VS DEPUTY COMMISSION ER OF INCOME TAX, CENTRAL CIRCLE - 3, SURAT (RESPONDENT) REVENUE BY : S H RI RAJ DEEP SIN GH , SR. D . R. ASSESSEE BY: S H RI RASESH SHAH , A.R. DATE OF HEARING : 05 - 10 - 2 015 DATE OF PRONOUNCEMENT : 14 - 10 - 2 015 / ORDER P ER : S. S. GODARA , JUDICIAL MEMB ER : - THE ASSESSEE AND THE REVENUE HAVE FILED THESE CROSS APPEAL S FOR A.Y. 2 009 - 10 AGAINST SEPARATE ORDERS OF CIT(A) - II, AHMEDABAD DATED 18 - 10 - 2011 AND 01 - 02 - 2012 , IN APPEAL NO S. CIT(A) - II/C.3/174/2010 - 11 , AND CIT(A) - II/C.3/126/2011 - 12 , IN PROCEEDINGS I T A NO S . 78 &973 / A HD/20 12 A SSESS MENT YEAR 200 9 - 10 I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 2 UN DER SECTION 143(3) AND SECTION 271AAA OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT , RESPECTIVELY. 2. WE CO ME TO ASSESSEE S APPEAL ITA 78/AHD/2012 RAISING FOLLOWING GROUNDS: - 1. ON FACTS AND CIRCUMSTANCES OF THE CASE THE LEARNED CIT(A) HAS GR OSSLY ERRED IN UPHOLDING THE AO'S ACTION OF NOT GRANTING A REFUND OF RS. 54,85,781/ - IN RESPECT OF THE AMOUNT OF RS.1,48,00,000/ - WHICH WAS CONDITIONALLY OFFERED BY THE APPELLANT AS ITS INCOME FOR THE CURRENT YEAR, SO AS TO COVER ANY DISCREPANCIES, ERR ORS, OMISSIONS, MISTAKES, ETC., IN THE SEIZED DOCUMENTS AND SEIZED ASSETS VIS - A - VIS THE REGULAR BOOKS, EVEN THOUGH ON COMPLETION OF THE ASSESSMENT PROCEEDINGS, THE AO HAS NOT BEEN ABLE TO IDENTIFY ANY UNEXPLAINED ASSET, UNEXPLAINED INVESTMENT, UNDISCLOSE D INCOME OR EXPENDITURE OR POINT OUT ANY OTHER NOTING, ERROR OR DISCREPANCY IN THE SEIZED DOCUMENTS / ASSETS AS AMOUNTING TO INCOME. HENCE, THE APPELLANT PRAYS THAT THE TAX PAID OF RS. 54,85,781/ - ON THE AMOUNT OF RS. 1,48,00,000/ - , OFFERED CONDITIONALLY BUT REMAINING UNIDENTIFIED EVEN AFTER THE COMPLETION OF ASSESSMENT, NEEDS TO BE REFUNDED SINCE, UNDER NO SECTION OF THE INCOME TAX ACT, THE SAID AMOUNT OF RS. 1,48,00,000/ - CAN BE TREATED AS INCOME CHARGEABLE TO TAX. 3. THE ASSESSEE COMPANY MANUFACTUR ES AND SELLS PVC FILMS. IT GENERATES AND SELLS POWER AS WELL . THE DEPARTMENT CARRIED OUT A SEARCH AT BUSINESS AND RESIDENTIAL PREMISES OF M/S MANISH GROUP OF CASES ON 24 - 092008. IT RECORDED S TATEMENT OF ASSESSEE S DIRECTOR SHRI KANAIYALAL B. PATEL ON 24 - 25/09/2008 AT PLOT NO 539, 541 - 43, I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 3 ROAD NO. 5, SACHIN GITC, SURAT (PAGES 141TO 155 OF THE PAPER BOOK). HE STATED THAT FOUR ENTITIES NAMELY; M/S MANISH PACKAGING PVT. LTD (ASSESSEE), MANISH MULTI - PACK FILMS PVT. LTD, VIKASH TRADERS AND ADD PLAST AGENCIES ( LATTER TWO ARE PARTNERSHIP FIRMS) EXI S TED IN THE NAMES OF THIS PATEL FAMILY. HE ANSWERED QUESTION NO. 3 5 AT PAGE 155 OF THE PAPER BOOK AS FOLLOWS: - Q.35. DURING THE SEARCH CARRIED OUT F R O M LAST TWO DAYS (I.E. TODAY AND YESTERDAY) AT YOUR RESIDENCE AND BU SINESS PLACES WE FOUND DOCUMENTS, PROPERTY ETC. AND THUS, HAVE TAKEN YOUR STATEMENT AND STATEMENT IN THE MATTER. IN CONNECTION TO THE INFORMATION GIVEN IN YOUR SAID STATEMENTS WHETHER YOU WANT TO SAY ANYTHING MORE ON THIS. A. 35. FOR THE STATEMENT GIVEN B Y MY SONS I DON T HAVE ANY DETAIL INFORMATION. DURING THE SEARCH AT MY RESIDENCE AN D BUSINESS PLACES FOR THE DOCUMENTS, PROPERTY FOUND AND THE QUESTIONS ASKED TO ME AND CONSIDERING THE ANSWERS GIVEN BY ME UNDER SECTION 132(4) OF INCOME TAX ACT, I DECLARE UNACCOUNTED AMOUNT OF RUP EES ONE CRORE TEN LAKHS FROM BUSINESS INCOME . THE UNDERLYING REASON FOR THIS DECLARATION IS ATTRIBUTED TO OVERCOME LONG TERM DISPUTE; FOR PEAC E OF MIND; TO PROTECT MYSELF FROM PUNISHABLE OFFENCE; FOR ADMINISTRATION OF BUSINESS WH ICH I CARRY OUT IN ASSOCIATION OF MY WORKERS, SUPERVISORS, OFFICERS AND THUS, CONSIDER THE POSSIBLE MISTAKES OR PROBABILITIES OF MISTAKES AN D AS PER MY MEMORY, KNOWLEDGE AND IN GOOD FAITH I DECLARE THE ABOVE MENTIONED DISCLOSURE AMOUNT WITHOUT VERIFYING TH E VALUE OF SEIZED MATERIAL FROM MY PLACES . THE MENTIONED DECLARATION OF DISCLOSURE AMOUNT IS DONE BY ME WITH THE MOTIVE TO COMPENSATE ALL & ANY TYPE OF MISTAKES; DEFICIT; ERRORS IN ENTRIES, NOTICES, LOOSE SHEETS, BOOKS, ALL TYPES OF REGISTERS, NOTEBOOKS, LOOSE PAPERS, AND CONSIDERING TRANSACTION S DONE , BY ME, BY MY FIRMS, BY MY COMPANIES , BY M Y RELATI VE S BY MY EMPLOYEES, BY MY SISTER CONCERNS WHICH INCLUDES CASH AMOUNT JEWELLERY, INVESTMENT, INVENTORY, STOCK ETC, THAT I TAKE INTO ACCOUNT AND ACCORDINGLY SH ALL PROVIDE DETAIL I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 4 BREA K - UP ASSESSEE - WISE, YEAR - WISE F R OM TODAY ONWARDS WITHIN 10 DAYS WHICH I REQUEST YOU TO ALLOW. FOR THE ABOVE MENTIONED DECLARATION I WILL PAY APPLICABLE TAX AS PER RULES & REGULATIONS AND CONSIDERING PRINCIPLES OF ACCOUNTING. 4. TH E CASE FILE INDICATES THAT SHRI PATEL GOT RECORDED HIS SECOND STATEMENT AT THE SAME PLACE ON 29 - 09 - 2008 (PAG E 105 TO 124 OF THE PAPER BOOK) . THE DEPARTMENT PUT A QUERY ABOUT THE FACT THAT THE ASSESSEE AND ITS SISTER CONCERN M/S MANISH MULTI - PACK FILMS (SU P R A) HAD ADVANCED UNSECURED LOANS TO DIFFERENT SHARE HOLDERS FROM 2003 - 04 TO 2008 - 09 AMOUNTING TO RS. 2,10,62,605/ - AND RS. 6,60,31,650/ - RESPECTIVELY ATTRACTING DEEMED DIVIDEND U/S. 2(22)(E) OF THE ACT. SHRI PATEL EXPRESSED HIS LACK OF KNOWLEDGE ABO UT TH IS PROVISION . HIS NEXT STATEMENT CAME ON 01 - 102008 (PAGES 101 - 104 OF THE PAPER BOOK) RECORDED IN INCOME TAX OFFICE, SURAT ADMITTING FURTHER UNACCOUNTED INCOME OF RS. 1,15,00,000/ - OVER AND ABOVE RS. 1,10,00,000/ - DECLARED EARLIER. THE SAME READS AS UNDER : - Q.2 DURING THE COURSE OF SEARCH PROCEEDINGS CERTAIN BOOKS OF ACCOUNTS IN PHYSICAL AS WELL AS DIGITIZED FORM WERE SEIZED . ARE YOU WILLING EXPLAIN THE ENTRIES MENTIONED SUCH BOOKS OF ACCOUNTS? A.2 NO. THE EXPLANATION FOR EACH AND EVERY ENTRY IN SUCH BO OKS OF ACCOUNTS WILL BE SUBMITTED LATER ON. HOWEVER, HAVING GONE THROUGH SOME OF THE SEIZED MATERIALS PRESENTED TO ME AND ON THE BASIS OF FURTHER DISCUSSION WITH THE INVESTIGATING OFFICIALS, I PROPOSE TO MAKE FURTHER DISCLOSURE OF UNACCOUNTED INCOME OF RS . 1,15,00,000/ - (RUPEES ONE CRORE FIFTEEN LACS ONLY) IN ADDITION TO THE AMOUNTS DISCLOSED BY ME IN MY EARLIER STATEMENT DATED I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 5 25/09/2008 TO COVER ALL POSSIBLE CONTINGENCIES AND IRREGULARITIES THAT MAY BE FOUND AS REFERRED TO BY TIME WHILE GIVING MY EARLI ER STATEMENT AND THEREBY THE TOTAL AMOUNT OF DISCLOSURE OF UNACCOUNTED INCOME WOULD BE RS. 2,25,00,000/ - (RUPEES TWO CRORE TWENTY FIVE LACS ONLY) WHICH INCLUDES EARLIER DISCLOSURE MADE BY ME OF RS. 1,10,00,000/ - AND THE DISCLOSURE MADE BY ME OF RS. 1,15,00 ,000/ - . FURTHER TO THIS, IN REFERENCE TO QUESTION NO. 32 OF STATEMENT 29/09/2008 WITH REGARD TO FINANCIAL TRANSACTIONS CARRIED OUT BY MY COMPANIES WITH MY OTHER GROUP CONCERNS, FAMILY MEMBERS AND MYSELF OF RS. 400,00,000/ - FOR WHICH I ACCEPT THAT INCOME A RISING DUE TO THE PROVISIONS OF SECTION 2(22)(E) IS NOT DISCLOSED IN OUR BOOKS OF ACCOUNTS. IN THIS REGARD I HEREBY ABIDE TO PAY TAX ON THE SAID AMOUNT WITH INTEREST THAT ARISE FINALLY BASED ON JUDICIOUS AND LEGAL APPLICATION OF LAW ON FACTS AND MERITS IN TOTALITY OF THE RESPECTIVE TRANSACTIONS . ALTHOUGH THE AMOUNT POINTED OUT TO ME W A S RS. 8,70,94,255/ - WITH REGARD TO THE PROVISIONS OF SECTION 2(22)(E) WHICH ACCORDINGLY TO US WOULD BE RS. 400,00,000/ - . WHATEVER STATED ABOVE IS TRUE AND CORRECT TO THE BES T OF M Y KNOWLEDGE AND BELIEF. 5. THE CASE FILE REVEALS THAT SHRI PATEL S FOURTH AND LAST STATEMENT CAME TO BE RECORDED ON 03 - 10 - 2008 AT HIS BUSINESS PREMISES ( PAGES 94 - 101) OF THE PAPER BOOK AS FOLLOWS: - Q.4. DURING THE COURSE OF SEARCH PROCEEDINGS S EVERAL OTHER BOOKS OF ACCOUNTS PHYSICALLY AS WELL AS DIGITIZED FORM WERE SEIZED. SEVERAL DISCREPANCIES NOTICED WERE CONFRONTED TO YOU AND YOUR STAFF. ARE YOU WILLING TO EXPLAIN THE SAME? A.4 NO. THE EXPLANATION FOR EACH AND EVERY ENTRY IN SUCH BOOKS OF A CCOUNTS WILL BE SUBMITTED LATER ON. HOWEVER, HAVING GONE THROUGH SOME OF THE SEIZED MATERIALS PRESENTED TO ME AND ON THE BASIS OF F URTHER DISCUSSION WITH TH E INVESTIGATING OFFICIALS, I PROPOSE TO MAKE FURTHER DISCLOSURE OF UNACCOUNTED INCOME OF RS. 1,15,0 0,000/ - (RUPEES ONE CRORE FIFTEEN LACS ONLY) IN I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 6 ADDITION TO THE AMOUNTS DISCLOSED BY ME IN MY EARLIER STATEMENT DATED. 25/09/2008 TO COVER ALL POSSIBLE CONTINGENCIES AND IRREGULARITIES THAT MAY BE FOUND AS REFERRED TO BY ME WHILE GIVING MY EARLIER STATEMEN T AND THEREBY THE TOTAL AMOUNT OF DISCLOSURE OF UNACCOUNTED INCOME WOULD BE RS. 2,25,00,000/ - (RUPEES TWO CRORE TWENTY FIVE LACS ONLY) WHICH INCLUDES EARLIER DISCLOSURE MADE BY ME OF R S. 1,10,00,000/ - AND THE DISCLOSURE NOW MA D E OF RS. 1,15,00,000/ - . FURT HER TO THUS, IN REFERENCE TO QUESTION NO. 32 OF STATEMENT 29/09/2008 WITH REGARD TO FINANCIAL TRANSACTIONS CARRIED OUT BY MY COMPANIES WITH MY OTHER GROUP CONCERNS, FAMILY MEMBERS AND MYSELF OF RS. 4,00,00,000/ - (RUPEES FOUR CRORE ONLY) FOR WHICH I ACCEPT THAT INCOME ARISING DUE TO THE PROVISION OF SECTION 2(22)(E) IS NOT DISCLOSED IN OUR BOOKS OF ACCOUNTS . IN THIS REGARD, I HEREBY ABIDE TO PAY TAX ON THE SAID AMOUNT WITH INTEREST THAT ARISE FINALLY BASED ON JUDICIOUS AND LEGAL APPLICATION OF LAW ON FACTS AND ON MERITS IN TOTALITY OF THE RESPECTIVE TRANSACTIONS . ALTHOUGH THE AMOUNT POINTED OUT TO ME WAS RS. 8,70,94,255/ - WITH REGARD TO THE PROVISIONS OF SECTION 2(22)(E) WHICH ACCORDING TO US WOULD BE RS. 400,00,000/ - (RUPEES FOUR CRORE ONLY). WHATEVER STAT ED ABOVE IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND BELIEF. I HAVE GIVEN THIS STATEMENT IN SOUND STATE OF MIND AND I STICK TO IT. THE ABOVE STAMENT IS GIVEN WITHOUT ANY THREAT, COERCION, OR UNDER ANY UNDER INFLUENCE. I KNOW GIVING FALSE STATEME NT ON OATH IS AN OFFENCE PUNISHABLE UNDER I.T. ACT AND CR. P.C. 6. THE ASSESSEE FILES A WRITTEN NOTE IN THE COURSE OF HEARING BEFORE US INTER ALIA AVERRING THAT THE IMPUGNED SEARCH COMMENCED ON 24 - 09 - 2008 AT 8.35 A.M. ITS P ROCEEDINGS STOOD CLOSED ON 25 - 09 - 2008. THE SEARCH WAS TEMPORARILY CONCLUDED. A GODREJ CABINET WAS PLACED UNDER SEAL IN ADJOINING ROOM OF SHRI PATEL S CABIN. THE SEARCH RE - COMMENCED ON 29 - 09 - 2008 AT 6 P.M. AND CONTINUED UP TO 6.00 A.M. OF THE NEXT DAY I.E. 30 - 09 - 2008. IT WAS TEM PORARILY CONCLUDED. I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 7 THE RELEVANT ITEMS WERE AGAIN SEALED U/S. 132 (3). WE ARE INFORMED THAT THIS SEARCH FINALLY CONCLUDED ON 03 - 10 - 2008. THERE IS NO DISPUTE BETWEEN THE PARTIES ABOUT THIS FACTUAL POSITION OF SEARCH COMMENCEMENT AND CONCLUSION ALONG WITH SHRI PATEL S STATEMENTS REPRODUCED HEREINABOVE. 7. WE PROCEED FURTHER IN THE CASE RECORD AND NOTICE THAT THE ASSESSEE REGISTERED HIS RETRACTION CLAIM IN A LETTER DATED 01 - 09 - 2009 IN THE FORM OF A NOTE TO RETURN TO BE TREATED AS PART THEREOF. RETURN FILE D ON 16 - 09 - 2009 DECLARING INCOME OF RS. 8,57,06,733/ - . THE ASSESSING OFFICER TOOK UP SCRUTINY. HE REFERRED TO SHRI PATEL S STATEMENTS; MORE PARTICULARLY DATED 01 - 10 - 2008 (SUPRA) ADMITTING A SUM OF RS. 2.25 CRORES AS THIS GROUP S UNA CCOUNTED INCOME STATED TO THE TUNE OF RS. 1.75 CRORES IN ASSESSEE S HANDS, 10 LACS IN CASE O F SHRI PATEL HIMSELF, RS. 15 LACS IN CASE OF HIS SON VASANTI K. PATEL AND REMAINING 25 LACS A PERTAINING TO ANOTHER SON SHRI MANISH K. PATEL FOLLOWED BY RESPECTIVE TAXES ALREADY PAID OF R S. 59,48,250/ - , RS. 3,39,900/ - , RS. 5,09,850/ - AND RS. 8,49,750/ - ; RESPECTIVELY . HE ADVERTED TO ASSESSEE S RETURN OFFE RING ADDITIONAL INCOME OF RS. 1. 75 CRORES ABOVE SAID ON CONDITIONAL BASIS ONLY. THE ASSESSING OFFICER CAME ACROSS ASSESSEE S RETRACTION EXPLAINING THAT A PRELIMINARY REVIEW HAD BEEN CARRIED OUT FOR IDENTIFYING ALL DISCREPANCIES , ERRORS, OMISSIONS AND COMMISSIONS WHICH HIGHLIGHTED ONLY A SUM OF RS. 27 LACS DECLARED AS ITS UNACCOUNTED INCOME. THE ASSESSEE SOUGHT FOR REFUND IN R ELATION TO SU RPLUS SUM OF RS. 1. 48 CRORES AS THE DIFFERENTIAL I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 8 AMOUNTING BETWEEN RS. 1.75 CRORES ALLEGED UNACCOUNTED INCOME REDUCED BY THE ACTUAL SUM DECLARED OF RS. 27 LACS. 8. THE ASSESSING OFFICER FRAMED A REGULAR ASSESSMENT ON 31 - 12 - 2010 INTER ALIA TREATING THE A BOVE EXTRACTED DISCLOSURES AS VOLUNTARY, UNCONDITIONAL, UNEQUIVOCAL AND PRECISE WHICH COULD NOT BRUSHED ASIDE IN ASSESSEE S RETURN AS CONDITIONAL . HIS VIEW WAS THAT AT MOST, THE ABOVE STATED DEEMED DIVIDEND AMOUNT THEREIN (SUPRA) COULD BE HELD AS A CONDIT IONAL DISC LOSURE . SHRI PATEL S STATEMENTS WERE TAKEN AS THAT OF A FULLY CONSCIOUS ONES SINCE ADMINISTERED UNDER OATH. AND THAT THE SAME HAD GONE UN - REBUTTED FOR WANT OF TANGIBLE EVIDENCE . RETRACTION TIME PERIOD OF 11 MONTHS WAS HELD TO BE BASED ON LEGAL ADVICE ONLY. THE ASSESSING OFFICER TOOK INTO ACCOUNT ALL THESE CONCLUSIONS FOR REJECTING ASSESEE S RETRACTION QUA THE IMPUGNED SUM OF RS. 1.48 LACS AND HELD THAT THE ENTIRE SUM OF RS. 1.75 CRORES (SUPRA) WAS ITS UNACCOUNTED INCOME. 9. THE CIT(A) HAS U PHELD THE ASSESSING OFFICER S ACTION UNDER CHALLENGE. 10 . THE LEARNED AUTHORIZED REPRESENTATIVE INVITES OUR ATTENTION TO THE AB OVE EXTRACTED STATEMENT FOR TERM ING THE SAME AS A CONDITIONAL DISALLOWANCE AND NOT A CATEGORIC ONE . HE SUBMITS THAT THE SAME LA CKS ANY SUPPORTIVE EVIDENCE AS WELL I.E. THE FOUR BASIC INGREDIENTS OF THE CONCERNED ASSESSEE S IDENTITY OUT O F THE ABOVE STATED FOUR ENTITIES (SUPRA), CORRESPONDING ASSESSMENT YEAR, SOURCE THEREOF I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 9 ALONG WITH ITS APPLICATION AND UNEXPLAINED EXPENDITURE IS NOWHERE FORTHCOMING. THE ASSESSEE PLEADS THAT BOTH THE ALLEGED SUMS OF RS. 2.25 CRORES AND DEEMED DIVIDEND AMOUNT OF RS. 4 CRORES (SUPRA) STAND ON IDENTICAL FOOTING BEING BASED ON SHRI PATEL S STATEMENT S . IT HIGHLIGHTS THE FACT THAT THE LATTER DEEMED DIV IDEND AMOUNT WAS FINALLY DISCLOSED AS OF RS. 31,15,89 7/ - ONLY. IT REFERS TO BOARD S CIRCULAR NO. 286/02/2003 DATED 10 - 03 - 2003 DEALING WITH THE ISSUE OF DISCLOSURE MADE IN SEARCHES AND SEIZURES THEREBY DIRECTING THE REVENUE AUTHORITIES TO KEEP FOCUS AND CON CENTRATION ON COLLECTION OF EVIDENCE OF INCOME LEADING TO INFORMATION ON WHAT HAS NOT BEEN DISCLOSED OR IS NOT LIKELY TO D ISCLOSED BEFORE THE DEPARTMENT. THE ASSESSING AUT HORITY IN PENDING ASSESSMENT S HAVE ALSO BEEN DIRECTED TO RELY UPON EVIDENCES/MATERIALS COLLECTED DURING SEARCH/SURVEY OPERATIONS. THE ASSESSEE QUOTES A CATENA OF CASE LAW IN SUPPORT OF ITS PLEA THAT THE IMPUGNED ADDITION OF RS. 1.48 CRORES IS NOT SUSTAINABLE BEING MERELY BASED ON ITS CONDITIONAL DISCLOSURES HEREINABOVE. IT ACCORDINGLY PRA YS FOR ACCEPTANCE OF THE INSTANT APPEAL. 11. THE REVENUE STRONGLY SUPPORTS THE CIT(A) REJECTING ASSESSEE S RETRACTION IN QUESTION. IT SEEKS DISMISSAL OF THE PRESENT APPEAL. 12. THE ASSESSEE SUBMITS IN REBUTTAL THAT THE INVESTIGATION AUTHORITIES NOWHER E PIN POINT ANY SPECIFIC INCRIMINATING EVIDENCE DURING SEARCH TO SHRI PATEL. NOR IS THERE ANY QUESTION IN THIS REGARD. IT ACCORDINGLY REITERATES ITS EARLIER SUBMISSIONS. I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 10 13. WE HAVE HEARD BOTH THE PARTIES . CASE RECORDS AND JUDICIAL PRECEDENTS STAND PERUSED. WE COME TO ADMITTED FACTS FIRST. THE DEPARTMENT COMMENCED THE IMPUGNED SEARCH OPERATION IN ASSESSEE S BUSINESS PREEMIES . AND CONCLUDED THE SAME ON 03 - 10 - 2008. THIS TIME SPAN OF 10 DAYS INVOLVES FOUR STATEMENTS BEING OBTAINED FROM SHRI PATEL ( SUPRA) INTER ALIA DISCLOSING UNACCOUNTED BUSINESS INCOME OF RS. 2.25 CRORES ALONG WITH DEEMED DIVIDEND OF RS. 4 CRORES. WE HAVE EXTRACTED RELEVANT PORTIONS THEREOF IN PRECEDING PARAGRAPHS. THE SAME DO NOT REVEAL ANY SPECIFIC INCRIMINATING MATERIAL UNEART HED IN THE COURSE OF SEARCH OR THEREAFTER HIGHLIGHTING UNACCOUNTED BUSINESS INCOME. THE ABOVE STATED DISCLOSURE STATEMENTS ARE VERY MUCH VAGUE ONE S AND CONDITIONAL AS WELL WITHOUT VERIFYING NECESSARY BOOKS AND RECORDS. THE RELEVANT ARRAY OF QUESTIONS FO RMING PART OF THE PAPER BOOK ARE FOUND TO BE NOT THROWING LIGHT ON ANY SPECIFIC MATERIAL WITH CONTENTS THEREOF; WHATSOEVER. THE SAME FACTUAL POSITION CONTINUES IN ASSESSMENT , LOWER APPELLATE ORDER AND IN THE COURSE OF ARGUMENTS BEFORE US . IT IS NOT OUT OF PLACE TO REITERATE THAT WE ARE DEALING WITH THE ISSUE OF IMPUGNED UNACCOUNTED BUSINESS INCOME OF RS. 1,48,00,000/ - . WE OBSERVE IN THESE PECULIAR CIRCUMSTANCES THAT THERE IS NO SPECIFIC INCRIMINATING MATERIAL SUPPORTIVE OF THE ABOVE STATED ADDITION RIGHT FROM SEARCH TILL DATE . WE QUOTE BOARD S CIRCULAR (SUPRA) ISSUED MUCH PRIOR TO THE SEARCH IN QUESTION DIRECTING THE INVESTIGATING OFFICERS TO FOCUS ON COLLECTION OF EVIDENCE POINTING TOWARDS UNACCOUNTED INCOME RATHER THAN REQUESTING SUCH CONFESSIONAL DISC LOSURE STATEMENTS . WE I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 11 ACCORDINGLY HOLD THAT THE REVENUE HAS NOT COLLECTED ANY SPECIFIC MATERIAL SUPPORTING THE IMPUGNED ADDITION . 14. NOW WE COME TO RELEVANT CASE LAW QUOTED . THE FIRST ONE (2010) 328 ITR 411 (GUJ) KAILASHBEN MAN O HAR CHOKSI VS. CIT. T HE DEPARTMENT HAD RECORDED DISCLOSURE ST ATEMENT AT MIDNIGHT HOURS. THE SAME STOOD RETRACTED AFTER TWO MONTHS . THERE WAS NO EVIDENCE COLLECTED IN SUPPORT OF THE SAID DISCLOSURES. WE FIND THAT THEIR LORDSHIPS ACCEPTED RETRACTION SINCE THE STATEMENT WAS RE CORDED IN VERY MUCH ODD HOURS. IT HAS BEEN HELD THEREAFTER THAT THE ADDITIONS IN QUESTION ARE NOT SUSTAINABLE SINCE NO MATERIAL EVIDENCE SUPPORTING THE SAME ARE FORTHCOMING. IT IS FURTHER EVIDENT THAT THIS CASE LAW PERTAINS TO A SEARCH CONDUCTED WELL BEF ORE THE BOARD S CIRCULAR (SUPRA) QUOTED THEREIN. WHEN WE APPLY THIS RATIO VIS - - VIS FACTS BEFORE US, IT IS APPARENT THAT THERE IS NO INCRIMINATING MATERIAL OR EVIDENCE AVAILABLE WITH THE REVENUE WHICH COULD SUPPORT THE IMPUGNED ADDITION. 15. THE NEXT C ASE LAW IS DCIT VS. SHRI VIVEKANAND SHARMA ITA 1748/KOL/2012 DECIDED ON 01 - 08 - 2014. THIS SEARCH IS DATED 26 - 023 - 2010 FOLLOWED A DISCLOSURE STATEMENT U/S. 132(4) ON 06 - 05 - 2010 SUBSEQUENTLY RETRACTED ON 02 - 09 - 2011 I.E. ALMOST ONE AND HALF YEARS THEREAFTER. THE LEARNED CO - ORDINATE BENCH QUOTES ABSENCE OF SPECIFIC MATERIAL EVIDENCE SUPPORTING THE DISCLOSURE STATEMENT FOR DECIDING THE ISSUE AGAINST THE REVENUE . WE HAVE AFFORDED THE REVENUE DUE I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 12 OPPORTUNITY TO POINT OUT ANY DISTINCTION ON FACTS OR LAW. IT IS U NABLE TO DO SO. 16. WE HAVE GIVEN THOUGHTFUL CONSIDERATION TO ABOVE STATED FACTS, LOWER AUTHORITIES FINDINGS, RIVAL CONTEN TIONS AND OUR DISCUSSION KEEPING IN MIND THE RELEVANT CASE LAWS. WE ARE OF THE OPINION ACCORDINGLY THE REVENUE HAS FAILED TO PROD UCE ANY MATERIAL EVIDENCE SUPPORTING THE IMPUGNED ADDITION AMOUNT OF RS. 1.48 CRORES ADDED MERELY ON THE BASIS OF A VERY MUCH VAGUE AND CONDITIONAL DISCLOSURE STATEMENT OF SHRI PATEL WHICH STANDS RETRACTED LATER ON. WE HOLD IN THESE FACTS THE ASSESSING OF FICER AND THE CIT(A) HAVE ERRED IN MAKING THE ABOVE STATED ADDITIONS IN AS S ESSEE S AS ITS UNACCOUNTED INCOME . THE SAME STANDS DELETED. OTHER ARGUMENTS NARRATED IN PRECEDING PARAGRAPHS HAVE BEEN RENDERED INFRUCTUOUS. ITA 78/ AHD/2012 SUCCEEDS. 17. THI S LEAVES US WITH THE REVENUE S APPEAL ITA 973/AHD/2012 SEEKING RESTORATION OF THE ENTIRE SECTION 271AAA PENALTY OF RS. 17,50,000/ - @ 10% OF THE ASSESSEE S DISCLOSURE SUM OF RS. 1.75 CRORES DETERMINED IN THE COURSE OF ASSESSMENT HEREINABOVE . WE HAVE ALREAD Y DELETED ADDITION SUM OF RS. 1.48 CRORES OUT OF THE SAME. THIS LEAVES BEHIND THE ADMITTED INCOME OF RS. 27 LACS ONLY. THE REVENUE PLEADS THAT THE CIT(A) HAS DELETED PENALTY SUM OF RS. 14.8 LACS BY ACCEPTING ASSESSEE S PLEA OF RETRACTION HEREINABOVE. I.T.A NO S . 78 & 973 /AHD/20 12 A.Y. 2009 - 10 PAGE NO MANISH PACKAGING PVT. LTD VS. DCIT 13 18. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RIVAL CONTENTIONS. THERE IS NO DISPUTE THAT THIS PENALTY SUM OF RS. 14.80 LACS RELATES TO ADDITION OF RS. 1.48 CRORES MADE IN THE C OURSE OF QUANTUM PROCEEDINGS AS DELETED IN ASSESSEE S APPEAL. THAT BEING THE CASE, WE HOLD THAT THE IMPUGNED PENALTY HAS NO LEGS TO STAND. THE REVENUE S SOLE SUBSTAN TIVE GROUND IN THIS APPEAL FAILS. ITA 973/AHD/2012 IS DISMISSED. 19. THE ASSESSEE S APPEAL ITA 78/AHD/12 IS ALLOWED AND REVENUE S APPEAL ITA 973/AHD/2012 IS DISMISSED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 14 - 10 - 2015 SD/ - SD/ - ( MANISH BORAD ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 14 /10 /2015 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,