DCIT, Nashik V. Shri Narendra Mithailal Agarwal, Nashik

ITA 810/PUN/2010

• Counselvise Citation: 81024514 RSA 2010
• Duration Of Justice: 3 year(s) 3 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 30-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 26-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUNITA RAO
• Keywords: Unexplained cash credit; Gift; Search and seizure; Document seized; Documents seized
• Section: 143(3); 153A; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO S . 809 & 810 / P N/ 20 10 ASSESSMENT YEAR S : 2002 - 03 &2003 - 04 DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 1, NASHIK VS. SHRI NARENDRA MITHAILAL AGARWAL, 532, NEAR HERO HONDA SHOW ROOM, 60 FEET ROAD, SARDA CIRCLE, NASHIK (APPELLANT) (RESPONDENT) PAN NO. ABGPA9107R APPELLANT BY: SMT. SUNITA RAO RESPONDENT BY: SMT. DEEPA KHARE DATE OF HEARING : 12 - 06 - 2013 DATE OF PRONOUNCEMENT : 27 - 08 - 2013 ORDER P ER R.S. PADVEKAR , JM : - TH ESE TWO APPEALS ARE FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDERS OF THE LD. CIT(A) - II, NASHIK DATED 18 - 03 - 2010 FOR THE A.YS. 2002 - 03 AND 2003 - 04. 2. IN BOTH THESE ASSESSMENT YEARS THE PENALTIES LEVIED BY THE ASSESSING OFFICER U/S. 271(1)(C) O N THE INCOME DECLARED BY THE ASSESSEE IN CONSEQUENCE OF SEARCH AND SEIZURE ACTION HAVE BEEN DELETED BY THE LD. CIT(A ). THE ASSESSING OFFICER HAS L EVIED THE PENALTY AS UNDER: SL. NO. A.Y. QUANTUM 1 2002 - 03 RS.3,49,341/ - 2 2003 - 04 RS.6,19,163/ - FROM THE GROUNDS TAKEN BY THE REVENUE THE ISSUE BEFORE US IS WHETHER LD. CIT(A) JUSTIFIED IN DELETING PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. 2 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK 3. THE F ACTS WHICH ARE REVEALED FROM THE RECORD AS UNDER. A SEARCH AND SEIZURE ACTION U/S. 132 (1) OF THE INCOME - TAX ACT WAS CARRIED OUT AGAINST THE ASSESSEE ON 21 - 09 - 2005 AND IN CONSEQUENCE OF THE SAID SEARCH AND SEIZURE ACTION THE ASSESSMENT S OF THE ASSESSEE WE RE COMPLETED U/S. 153A OF THE ACT AS UNDER: A.Y. INCOME AS PER ORIGINAL RETURN INCOME AS PER RETURN FILED U/S. 153A INCOME ASSESSED U/S. 153A 2002 - 03 RS.3,59,900/ - RS.12,77,970/ - RS.14,24,589/ - 2003 - 04 RS.1,08,930/ - RS.16,71,840/ - RS.16,74,840/ - 4. TH E ASSESSING OFFICER LEVIED THE PENALTY U/S. 271(1)(C) ON THE FOLLOWING QUANTUM ADDITIONS: A.Y. QUANTUM ADDITION S PENALTY U/S. 271(1)(C) 2002 - 03 ON ACCOUNT OF ADDITIONAL INCOME OFFERED RS. 9,18,070/ - ADDITION ON ACCOUNT OF LOW G.P. RS. 2,23,567/ - RS.3,49,341/ - 2003 - 04 ON ACCOUNT OF ADDITIONAL INCOME OFFERED 15,62,910/ - ADDITION ON ACCOUNT OF LOW G.P. 4,14,663/ - RS.6,19,163/ - 4 .1 . THE ASSESSEE CHALLENGED THE PENALTY ORDERS BEFORE THE LD. CIT(A) . IN THE A.Y. 2002 - 03 T HE LD. CIT (A) HAS OBSERVED THAT THE ASSESSING OFFICER LEVIED THE PENALTY U/S. 271(1)(C) O N THE ADDITIONAL INCOME OF RS.9,18,070/ - OFFERED TO TAX BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S. 153A OF THE ACT. THE ASSESSING OFFICER A LSO LEVIED THE PENALTY ON THE AMOUNT OF RS.2,23,567/ - BEING THE ADDITION QUANTIFIED BY HIM ON ACCOUNT OF LOW G.P. , EVEN THOUGH NO EFFECTIVE ADDITIONS HAVE BEEN MADE IN THE ORDER AFTER GIVING THE BENEFIT OF TELESCOPING. THE ASSESSING OFFICER HAS ALSO LEVIE D PENALTY ON THE AMOUNT OF RS.1,46,620/ - THAT WAS TOWARD ADDITIONS MADE BY MAKING THE DISALLOWANCE OF ELECTRICAL EXPENSES, TELEPHONE EXPENSES, S TOCK DIFFERENCE 3 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK ETC. ORIGINALLY MADE IN THE REGULAR ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT , B UT WHILE FI LING THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 153A , THE ASSESSEE DID NOT INCLUDE SAID AMOUNT. THE LD. CIT(A) RELIED ON THE DECISION OF THE ITAT, PUNE BENCH IN THE CASE OF SMT. SARLA M. AHUJA IN ITA NO. 1301/PN/2007 AND HELD THAT THE INCOME OFFERED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT OF RS.9,18,070/ - NO PENALTY CAN BE LEVIED. I N RESPECT OF THE ADDITION OF RS.2,23,567/ - , ON THE BASIS OF DOCUMENTS SEIZED DURING THE COURSE OF THE SEARCH AND SEIZURE A CTION, THE ASSESSING OFFICER WORKED OUT THE G.P. IN RESPECT OF UNRECORDED SALES THAT WAS @ 5.90% AS AGAINST 4.70% DECLARED BY HIM IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSING OFFICER DID NOT MAKE ANY ADDITION BY GIVING BENEFIT OF TELESCOPING BUT CONSIDE RED RS.2,23,567/ - FOR LEVY OF PENALTY. THE LD. CIT(A) DELETED THE PENALTY ON THE SAID AMOUNT ALSO. IN RESPECT OF THE ADDITION OF RS. 1,46,620/ - WHICH WAS ORIGINALLY MADE BY MAKING THE DIFFERENT DISALLOWANCE S IN THE REGULAR ASSESSMENT OF THE ASSESSEE U/S. 143(3) BUT THE ASSESSEE DID NOT DECLARE THAT ADDITIONS IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153A. 5 . IN RESPECT OF A.Y. 2003 - 04 , THE ASSESSEE HAD DECLARED ADDITIONAL INCOME OF RS.15,62,910/ - IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153A OF THE ACT AND THE ASSESSING OFFICER LEVIED THE PENALTY ON THE SAID INCOME. THE ASSESSING OFFICER ALSO LEVIED THE PENALTY ON THE AMOUNT OF RS.4,14,663/ - WHICH WAS ADDITION QUANTIFIED BY HIM ON ACCOUNT OF LOW G.P. EVEN IF THE SAID ADDITION WAS NOT MADE IN TH E ORDER AFTER GIVING THE BENEFIT OF TELESCOPING. THE LD. CIT(A) DELETED THE PENALTY ON THE SAID AMOUNT ALSO. BEING AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTIES AND PERUSED THE RECORD. THE LD. DR SUBMITTED THAT IN THE CASE OF DCIT VS. KALANTRI GROUP AND THAKKAR GROUP OF CASES, ITA NO. 1004/PN/2009 ORDER DATED 4 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK 05 - 02 - 2010 IT IS HELD BY THE TRIBUNAL THAT PENALTY IS LEVIABLE ON UNDISCLOSED INCOME DECLARED BY THE ASSESSEE IN CONSEQUENCE OF SEARCH ACTION . HE PLEADED FOR FOLLOWING THE DECISION IN THE CASE OF KALANTRI GROUP. PER CONTRA THE LEARNED COUNSEL PLACED H ER RELIANCE ON THE DECISION OF TH E TRIBUNAL IN THE CASE OF SMT. PRAMILA D. ASHTEKAR AND ORS. VS. ITO, CENTRAL - II, PUNE, ITA NOS. 354 TO 367/PN/2 010 ORDER DATED 14 - 09 - 2012. THE LEARNED COUNSEL ALSO FILED THE APPLICATION WITH PRAYER FOR ADMISSION OF THE FOLLOWING ADDITIONAL GR O UNDS: THE LD. AO ERRED IN INITIATING PENALTY U/S. 271(1)(C) WITHOUT RECORDING SATISFACTION IN THE ASSESSMENT ORDER. SINCE NO SATISFACTION BEING RECORDED BY THE AO IN THE ASSESSMENT ORDER AS TO ANY CONCEALMENT ON THE PART OF THE ASSESSEE OR FURNISHING OR ANY INACCURATE PARTICULARS OF INCOME, THE PENALTY LEVIED IS BAD IN LAW AND IT IS PRAYED THAT THE SAME MAY BE QUASHED ON THE SAME GROUND. 7 . WE WILL DEAL WITH THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IN LATER PART OF THIS ORDER . IN THIS CASE, THE FACTS ARE IN A NARROW COMPASS . T HE ASSESSEE IS IN THE BUSINESS OF STEEL TRADING. THERE WAS A SEARCH ACTION U/S. 132(1) OF TH E INCOME - TAX ACT AGAINST THE ASSESSEE ON 29 - 09 - 2005. THE ASSESSEE FILED THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 153A DECLARING ADDITIONAL INCOME OF RS.9,18,070/ - AND RS.15,62,910/ - FOR A.YS. 2002 - 03 & 2003 - 04 RESPECTIVELY . THE ASSESSEE ALSO PAID THE TAX ON THE SAME. NOW THE CORE ISSUE BEFORE US IS WHETHER ON THE INCOME DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S. 153A, AN IMMUNITY FROM THE PENALTY CAN BE CLAIMED. IN THIS CASE, IT IS NOT IN DISPUTE THAT EXPLAN ATION - 5A BELOW SEC. 271(1)(C) IS NOT APPLICABLE AS SEARCH IS PRIOR TO INSERTION OF SAID EXPLANATION. THE IDENTICAL CONTROVERSY CAME FOR THE CONSIDERATION BEFORE TH IS TRIBUNAL IN THE CASE OF SMT. PRAMILA D. ASHTEKAR AND ORS. (SUPRA). IN THE SAID CASE THE SEARCH AND SEIZURE ACTION U/S. 132(1) WAS UNDER TAKEN ON 26 - 10 - 2005. THE ASSESSEE DECLARED THE INCOME IN THEIR RETURN S FILED U/S. 153A AND THE ADDITIONAL INCOME DECLARED BY THE ASSESSEES WERE SUBJECTED TO 5 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK THE PENALTY U/S. 271(1)(C). THE TRIBUNAL RELIED O N THE DECISION OF THE ITAT, PUNE IN THE CASE OF CHANDAN K. SHEWANI, ITA NOS. 235 & 236/PN/2010 AND HELD AS UNDER: 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. WE FIRST TAKE THE ASSESSEES APPEAL FOR THE A.Y. 2002 - 03 BEING ITA NO. 235/PN/2010. AS PER THE FACTS ON RECORD, SEARCH ACTION U/S. 132(1) OF THE I.T. ACT WAS CARRIED OUT AT THE RESIDENTIAL AS WELL AS BUSINESS PREMISES OF THE ASSESSEE ON 15.6.2004. DURING THE COURSE OF SEARCH, CASH OF RS. 35,59,100/ - WAS FOUND. SO FAR AS A.Y. 2002 - 03 IS CONC ERNED, IN RESPONSE TO NOTICE U/S. 153A OF THE ACT, THE ASSESSEE FILED THE RETURN OF INCOME DISCLOSING TOTAL INCOME OF RS. 14,92,138/ - . THE A.O COMPLETED THE ASSESSMENT MAKING THE ADDITION TO THE EXTENT OF RS. 1,00,000/ - . THE TOTAL INCOME OF THE ASSESSEE DECLARED IN THE RETURN WAS COMPRISED OF THE FOLLOWING INCOME - SR.NO. PARTICULARS AMOUNT RS. PS. 1. INCOME FROM HOUSE PROPERTY 1,67,389.00 2. INCOME FROM SHARE TRADING 4656.00 3. SHORT TERM CAPITAL GAIN ON SALE OF SHARES 1,36,252.00 4. IN TEREST + DIVIDEND 1,93,166.00 5. UNEXPLAINED CASH CREDIT (GIFTS + PERSONAL EXPENDITURE OF ASSESSEE AND HIS SISTER ) 9,80,000.00 6. UNEXPLAINED ENTRY 10,676.00 TOTAL 1,492,140.00 THE A.O. MADE ADDITION OF RS. 50,000/ - ON ADHOC BASIS I.E . PRESUMING THAT THE ASSESSEE MIGHT HAVE PAID 10% COMMISSION ON THE GIFT SHOWN AND ANOTHER ADHOC ADDITION OF RS. 50,000/ - PRESUMING THAT ASSESSEE MIGHT NOT HAVE DISCLOSED SOME INCOME TO THAT EXTENT. THE ASSESSEE CHALLENGED THE SAID ADDITION BEFORE THE LD CIT(A) AND THOSE ADDITIONS WERE DELETED. THE A.O. LEVIED THE PENALTY ON THE ENTIRE INCOM E DECLARED BY THE ASSESSEE U/S. 271(1)(C ) TO THE EXTENT OF RS.4,50,000/ - . THE LD CIT(A) DELETED THE PENALTY PERTAINING TO THE INCOME FROM HOUSE PROPERTY AND INTEREST INCOME BUT SUSTAINED THE PENALTY RESPECT OF THE OTHER ITEMS OF THE INCOME. 6 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK 5. THE ASSESSEE HAS DECLARED RS. 5,00,000/ - TOWARDS AMOUNT OF THE GIFT CLAIMED TO HAVE BEEN CREDITED TO THE BANK ACCOUNT AND PERSONAL AS WELL HIS SISTERS PERSONAL EXPENSES OF RS. 4,80,000/ - . ADMITTEDLY, THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. THE ASSESSEE NEVER FILED THE RETURN OF INCOME FOR THE A.Y. 2002 - 03 PRIOR TO THE DATE OF SEARCH U/S. 139 OF THE ACT BUT FOR THE FIRST TIME FILED THE RETURN OF INCOME ON 29.4.2 005. AS PER THE COPIES OF THE PANCHANAMA, IT IS SEEN THAT SUBSTANTIAL CASH WAS SEIZED FROM THE RESIDENTIAL PREMISES AS WELL AS LOCKER NO. 20 OF PDCC BANK. IT IS ALSO SEEN THAT BANK PASS BOOKS WERE SEIZED IN RESPECT OF 13 BANK ACCOUNTS. 6. THE LD COUNS EL ARGUES THAT THE INCOME DECLARED TOWARDS GIFT WHICH WAS CREDITED TO THE BANK ACCOUNT WAS THE GENUINE GIFT BUT TO BUY THE PEACE AND AVOID PROTRACTED LITIGATION, THE ASSESSEE DECIDED TO COME CLEAN AND OFFERED THE INCOME SUO MOTTO. HE SUBMITS THAT THE AS SESSEE ALSO DECLARED RS. 4,80,000/ - TOWARDS HIS PERSONAL EXPENDITURE AS WELL AS PERSONAL EXPENDITURE OF HIS SISTER WHO IS A DIVORCEE. HE SUBMITTED THAT EXCEPT THE ADHOC ADDITION OF RS. 1,00,000/ - WHICH IS ALSO OTHERWISE DELETED, THE INCOME OFFERED AS PER THE RETURN WAS ACCEPTED. HE SUBMITTED THAT NO PENALTY IS LEVIABLE AS NO MONEY, VALUABLE ARTICLE, BULLION, GOLD ETC., IS SUBJECT MATTER OF THE ASSESSMENT FOR THE A.Y. 2002 - 03. HE SUBMITTED THAT IN THE PRECEDING THREE YEARS, THE PENALTY LEVIED BY THE A.O WAS DELETED WHICH WAS IN RESPECT OF THE INCOME VOLUNTARILY OFFERED TOWARDS THE DRAWINGS OF THE ASSESSEE AND DIVORCED SISTER. HE SUBMITTED THAT THERE WAS INCRIMINATING MATERIAL FOUND AGAINST THE ASSESSEE DURING THE COURSE OF THE SEARCH. IN SO FAR AS THE CASH FOUND IN THE COURSE OF SEARCH IS CONCERNED, SAME IS OFFERED IN THE A.YS. 2004 - 05 AND 2005 - 06. PER CONTRA, THE LD. D.R. SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 7. WE FIND THAT THE A.O HAS LEVIED THE PENALTY FOR THE A.YS. 1999 - 2000, 2000 - 01 AND 2001 - 02. WE FIND THAT IN THE PRECEDING THREE YEARS, THE PENALTY LEVIED BY THE A.O IS DELETED. THE MAJOR INCOME OFFERED FOR THE SAID YEARS WAS IN RESPECT OF THE PERSONAL EXPENDITURE OF THE ASSESSEE AND HIS DIVORCEE SISTER AS SOME ENTRIES WERE FOUND IN THE DIARY AND TO AVOID FUTURE PROBE BY THE TAX SLEUTH, ASSESSEE OFFERED THE SAID AMOUNT AS THE UNDISCLOSED INCOME. IN THE PRESENT YEAR, IN ADDITION TO THE INCOME TOWARDS THE GIFT OF RS. 7 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK 5,00,000/ - , ASSESSEE ALSO OFFERED RS. 4,80,000/ - TOWARDS PERSONAL & HOUSEHOLD EXPENDITURE. THE ASSESSEE ALSO DECLARED THE INCOME FROM THE SHARE TRADING AND INCOME FROM CAPITAL GAIN. THE ASSESSEE ALSO PAID TAXES ON THE INCOME DECLARED IN THE RETURN IN RESPONSE TO NOTICE U/S. 153A THOUGH THE INCOME OFFERED BY THE ASSES SEE IN RESPECT OF ALLEGED GIFT OF RS. 5,00,000/ - AND HIS PERSONAL AND SISTER EXPENDITURE OF RS. 4,80,000/ - WHICH MAY BE BASED ON SOME ENTRIES IN THE DIARY BUT THE FACTS REMAINS THAT THE EXPLANATION - 5 TO SEC. 271(1)(C ) HAS NO APPLICATION TO THE ASSESSEES CASE FOR THE A.Y. 2002 - 03 AS NO ADDITION IS MADE WHICH IS BASED ON ANY MONEY, GOLD, JEWELLERY ETC., FOUND DURING THE COURSE OF SEARCH. 8 . IN THE PRESENT CASE, THE BENCH H AS ASKED THE ASSESSEE TO FILE THE DETAILS IN RESPECT OF NATURE OF THE INCOME DECLA RED IN THE A.YS. 2002 - 03 AND 2003 - 04. THE LEARNED COUNSEL FILED THE COPIES OF THE COMPUTATION STATEMENTS OF THE TOTAL INCOME FOR BOTH THE ASSESSMENT YEARS . O N THE PERUSAL OF THE COMPUTATION STATEMENT S , I T IS SEEN THAT THE ASSESSEE HAS DECLARED INCOME TOW ARDS UNDISCLOSED CASH AS UNDER : ASSESSMENT YEAR AM O UNT 2002 - 03 RS. 7,15,000/ - 2003 - 04 RS.1,76,500/ - 9 . THE OTHER DECLARATION WAS IN RESPECT OF THE ERRORS AND OMISSIONS AND NET PROFIT. SO FAR AS THE DECLARATION OF THE CASH IS CONCERNED , EXPLAN ATION - 5 IS APPLICABLE AND TO THAT EXTENT THE ASSESSEE CANNOT GET THE IMMUNITY FROM THE LEVY OF THE PENALTY. SO FAR AS BOTH THE ASSESSMENT YEARS ARE CONCERNED THESE ARE BEYOND ASSESSMENT YEARS RELEVANT TO THE PREVIOUS YEAR IN WHICH SEARCH ACTION HAS BEEN T AKEN AGAINST THE ASSESSEE I.E. A.Y. 2006 - 07 . I N OUR OPINION, THE LEGAL PRINCIPLES LAID DOWN IN THE CASE OF ACIT VS. KIRI T DAYABHAI PATEL, 121 ITD 159 (AHD.) (TM) ARE SQUARELY APPLICABLE AND HENCE , TO THE EXTENT OF CASH DECLARED IN THE A.YS. 2002 - 03 AND 20 03 - 04 , THERE IS A LEGAL PRESUMPTION AGAINST THE ASSESSEE AND T HE PENALT Y IS LEVIABLE ON CASH DECLARED AS UNDISCLOSED INCOME . WE, THEREFORE, HOLD THAT IN RESPECT OF 8 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK THE DECLARATION MADE BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/ S. 153A , I N VIEW OF THE EXPLANATION - 5 THE SUM OF RS .7,15,000/ - FOR THE A.Y. 2002 - 03 AND SUM OF RS.1,76,500/ - FOR THE A.Y. 2003 - 04 , CANNOT ESCAPE FROM THE PANEL CONSEQUENCES . W E ACCORDINGLY REVERSE THE ORDER S OF THE LD. CIT(A) TO THE EXTENT OF THE ABOVE TW O ADDITIONS AND HOLD THAT TO THE EXTENT OF THE AMOUNT OF THE CASH DECLARED BY THE ASSESSEE IN CONSEQUENCE OF SEARCH AND SEIZURE OPERATION IN THE RETURN FILED IN RESPONSE TO NOTICE U/S. 153A PENALTY IS LEVIABLE IN BOTH THE ASSESSMENT YEARS. 1 0 . SO FAR AS T HE OTHER ADDITIONS ARE CONCERNED I.E. AN ESTIMATION OF THE G.P. EVEN THOUGH THE SAME IS BASED ON THE SEIZED DOCUMENTS BUT IT IS OUT OF THE SCOPE OF EXPLANATION - 5. MOREOVER, THERE IS NO EFFECTIVE ADDITION BUT BENEFIT OF TELESCOPING IS GIVEN. IN OUR OPINIO N THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY. WE, ACCORDINGLY, UPH O LD THE ORDER FOR RIGHTLY DELET ING THE PENALTY. THERE IS ONE MORE ADDITION ON WHICH THE PENALTY IS LEVIED , THAT IS WHILE COMPLETING THE REGULAR ASSESSMENT U/S. 143(3) CERTAIN DISALLOWA NCE S WERE MADE AND THOSE ADDITION S W ERE NOT INCLUDED WHILE FILING THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 153A. THE ASSESSING OFFICER, THEREFORE, INCLUDED THOSE ADDITIONS WHILE COMPLETING THE ASSESSMENT U/S. 153A AND LEVIED THE PENALTY. IN OUR OP INION THERE IS NO JUSTIFICATION TO LEVY THE PENALTY ON THE SAID ADDITIONS WHICH HAVE REACHED THE FINALITY OF IN REGULAR ASSESSMENT AND NO PENALTY WAS LEVIED BY THE ASSESSING OFFICER. THE LD. CIT(A) HAS RIGHTLY DELETED THE PENALTY LEVIED ON THE SAID AMOUNT AS THE ADDITIONS ARE NOT BASED IN CONSEQUENCE OF SEARCH ACTION. 1 1 . NOW LET US DEAL WITH ADDITIONAL GROUND RAISED BY THE LEARNED COUNSEL. THE ARGUMENT OF THE LEARNED COUNSEL IS THAT AS NO SPECIFIC SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER HEN CE, ENTIRE PENALTY IS OTHERWISE ALSO NOT SUSTAINABLE. THIS PLEA IS TAKEN FOR THE FIRST TIME 9 ITA NOS. 809 & 810/PN/2010, SHRI NARENDRA MITHAILAL AGRAWAL, NASHIK BEFORE US . MOREOVER IT IS LEGAL ISSUE . W E , THEREFORE, ADJUDICATE THIS ISSUE AT OUR LEVEL . I N OUR OPINION THE GROUND RAISED BY THE ASSESSEE HAS NO MERIT. A DMITT EDLY IN THE CASE OF THIS ASSESSEE EXPLANATION - 5 IS APPLICABLE A S THE DECLARATION IS BASED TO SOME EXTENT ON THE CASH FOUND DURING THE COURSE OF SEARCH EXPLANATION - 5 BELOW SEC. 271(1)(C) HAS CRE ATED LEGAL PRESUMPTION THAT IN CASES OF THE CASH, JEWELLERY AND GOLD ETC. ARE FOUND , TH ERE WILL BE DEEMED CONCEALMENT . O NCE THERE IS A LEGAL PRESUMPTION OF CONCEALMENT AGAINST THE ASSESSEE THEN THERE IS NO BURDEN ON THE ASSESSING OFFICER TO FURTHER ESTABLISH THAT IN FACT THE ASSESSEE HAS CONCEALED THE INCOME OR PARTI CULARS OF INCOME. WE, ACCORDINGLY, DISMISS THE ADDITIONAL GROUND TAKEN BY THE ASSESSEE. WE, ACCORDINGLY, DIRECT THE ASSESSING OFFICER TO RECOMPUTE THE PENALTY IN BOTH THE ASSESSMENT YEARS IN THE LIGHT OF OUR ABOVE FINDINGS. 1 2 . IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 27 - 08 - 20 1 3 SD/ - SD/ - ( R.K. PANDA ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 27 TH AUGUST, 20 1 3 CO PY TO 1 DEPARTMENT 2 ASSESSEE 3 THE CIT(A) - II, NASHIK 4 THE CIT - II, NASHIK 5 THE DR, ITAT, B BENCH, PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE