Sh. Vishal Singal, Ludhiana V. DCIT, CC-1, Ludhiana

ITA 935/CHANDI/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7363 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 04-07-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income; Search and seizure; Document seized; Transactions in derivatives; Difference of opinion; Documents seized
• Section: 271(1)(c); 153A; 132

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B , CHANDIGARH , ! '# $ % & '# , BEFORE: SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.935/CHD/2018 / ASSESSMENT YEAR : 2014-15 SH.VISHAL SINGAL, 712-B, AGGAR NAGAR, LUDHIANA. THE D.C.I.T., CENTRAL CIRCLE-1, LUDHIANA. ./PAN NO: AQAPS6628L & ./ ITA NO.936/CHD/2018 / ASSESSMENT YEAR : 2014-15 SMT.SUNITA SINGAL, 629 B, AGGAR NAGAR, LUDHIANA. THE D.C.I.T., CENTRAL CIRCLE-1, LUDHIANA. ./PAN NO: AIZPS1477N /ASSESSEE BY : SHRI SUDHIR SEHGAL, ADV. / REVENUE BY : SHRI MANJIT SINGH, SR.DR ! /DATE OF HEARING : 05.03.2019 '#$% ! /DATE OF PRONOUNCEMENT : 30.04.2019 /ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER THE PRESENT APPEALS HAVE BEEN FILED BY DIFFERENT A SSESSEES AGAINST THE SEPARATE ORDERS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, LUDHIANA (IN SHORT CIT(A) BOTH DATED 20.4.2018 ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 2 CONFIRMING THE LEVY OF PENALTY U/S 271 AAB OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT). 2. IT WAS COMMON GROUND THAT THE ISSUE INVOLVED IN BOTH THE APPEALS WAS IDENTICAL, RELATING TO LEVY OF PENALTY U/S 271AAB OF THE ACT, SUBSEQUENT TO ASSESSMENT FRAMED IN CONSEQUENCE TO SEARCH CARRIED OUT ON DEEPAK SINGAL GROUP OF CASES, WHICH INCLUDED BOT H THE ASSESSES AND IT WAS CONTENDED THAT THE FACTS L EADING TO THE LEVY OF PENALTY IN BOTH THE CASES WERE IDENT ICAL. THEREFORE, BOTH THE APPEALS WERE TAKEN UP TOGETHER AND ARE BEING DEALT WITH BY WAY OF THIS COMMON CONSOLI DATED ORDER. WE SHALL FIRST BE DEALING WITH THE FACTS IN THE CA SE OF VISHAL SINGAL VS. DCIT IN ITA NO.935/CHD/2018. ITA NO.935/CHD/2018(VISHAL SINGAL): 3. BRIEF FACTS RELATING TO THE CASE ARE THAT A SEAR CH U/S 132(1) OF THE ACT WAS CONDUCTED ON THE ASSESSEE ON 20.3.2014. DURING ASSESSMENT PROCEEDINGS THEREAFTER , IT WAS FOUND THAT AT THE TIME OF SEARCH PROCEEDINGS TH E ASSESSEE HAD ADMITTED UNDISCLOSED INCOME AMOUNTING TO RS.10 LACS IN THE STATEMENT MADE U/S 132(4) OF THE ACT. PENALTY PROCEEDINGS U/S 271AAB OF THE ACT WERE ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 3 THEREFORE INITIATED AND SHOW CAUSE NOTICE U/S 274 R.W.S.271AAB OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE, THE ASSESSEE SUBMITTED THAT IT HAD FILED ITS RETURN OF INCOME DISCLOSING TOTAL INCOME OF RS.9,78 ,250/- , WHICH INCLUDED SURRENDERED INCOME AND WHICH HAD B EEN ACCEPTED AS SUCH. IT WAS SUBMITTED THAT THE ASSESSE E HAD SUBSTANTIATED THE MANNER IN WHICH THE UNDISCLOSED INCOME HAD BEEN EARNED AND HAD ALSO PAID TAXES ON T HE SAME. IT WAS FURTHER SUBMITTED THAT NO VALUABLE ITE MS HAD BEEN FOUND DURING SEARCH. IT WAS THUS CONTENDED THAT PENALTY PROCEEDINGS INITIATED BE THEREFORE D ROPPED. THE ASSESSING OFFICER(A.O) DID NOT FIND THE REPLY O F THE ASSESSEE TENABLE. HE REPRODUCED THE PROVISIONS OF S ECTION 271AAB OF THE ACT AND ALSO THE SURRENDER LETTER GI VING THE AMOUNT AND BASIS OF SURRENDER OF ADDITIONAL INC OME DURING SEARCH. REFERRING TO THE SAME, THE A.O. STAT ED THAT IT WAS CLEAR FROM THE SAME THAT THE SURRENDER WAS MADE TO COVER THE DISCREPANCY FOUND IN THE SEIZED DOCUMENTS DURING SEARCH AND TO COVER ANY KIND OF DISCREPANCY IN THE REGULAR BOOKS OF ACCOUNT AND ALS O INCOME YET TO BE RECORDED IN THE BOOKS OF ACCOUNT. HE, THEREFORE, HELD THAT THE ASSESSEES CASE CLEARLY FE LL UNDER THE PROVISIONS OF SECTION 271AAB(1)(A) OF THE ACT A ND ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 4 THUS LEVIED THE PENALTY ACCORDINGLY ON THE SURRENDE RED INCOME @ 10% THEREOF, WHICH AMOUNTED TO RS.1 LAC. 4. THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A), W HO UPHELD THE ORDER OF THE A.O. 5. AGGRIEVED BY THE SAME, THE ASSESSEE HAS COME UP IN APPEAL BEFORE US, RAISING THE FOLLOWING GROUNDS: 1. THAT THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) HAS ERRED IN CONFIRMING THE LEVY OF PENALTY U/S 271AAB R.W.S. 274 OF THE INCOME TAX ACT, 196,1 AMOUNTING TO RS. 1,00,000/- 2. THAT THE CONFIRMATION OF PENALTY IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUNDS OF APPEAL BEFORE THE APPEAL IS FINALLY HEARD OR DIS POSED OFF. 6. DURING THE COURSE OF HEARING BEFORE US, THE LD. COUNSEL FOR ASSESSEE REITERATED THE CONTENTIONS MAD E BEFORE THE LOWER AUTHORITIES. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT THERE WAS NO UNDISCLOSED INCOME, AS DEFINED IN SECTION 271AAB OF THE ACT AND, THEREFORE, NO PENALTY COULD BE LEVIED. THE LD. COUN SEL FOR ASSESSEE DREW OUR ATTENTION TO THE DEFINITION OF TH E UNDISCLOSED INCOME IN EXPLANATION TO SECTION 271AAB OF THE ACT AS UNDER: ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 5 271AAB:- EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) XXXX (B) XXXX (I) XXXX (II) XXXX (C) 'UNDISCLOSED INCOME' MEANS (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132, WHICH HAS (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE [PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR [PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED.] 7. REFERRING TO THE SAME, THE LD. COUNSEL FOR ASSES SEE CONTENDED THAT THE UNDISCLOSED INCOME MEANT ANY INC OME WHICH WAS REPRESENTED BY ANY ASSET FOUND DURING THE COURSE OF SEARCH OR ANY ENTRY IN THE BOOKS OF ACCOU NT OR ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 6 OTHER DOCUMENTS, WHICH HAS NOT BEEN RECORDED BEFORE THE DATE OF SEARCH OR NOT DISCLOSED EARLIER TO THE PRIN CIPAL, CHIEF COMMISSIONER OR COMMISSIONER OF INCOME TAX AC T. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT SOME INCRIMINATING MATERIAL REPRESENTING EARLIER UNDISCL OSED INCOME OF THE ASSESSEE OUGHT TO HAVE BEEN FOUND DUR ING THE COURSE OF SEARCH WHICH WOULD QUALIFY AS UNDISC LOSED INCOME FOR THE PURPOSE OF LEVY OF PENALTY U/S 271A AB OF THE ACT. THE LD. COUNSEL FOR ASSESSEE CONTENDED THA T IN CASE OF THE ASSESSEE THERE IS NO REFERENCE TO ANY DOCUMENT OR ASSET FOUND DURING THE COURSE OF SEARCH EITHER IN THE ASSESSMENT ORDER OR IN THE PENALTY O RDER AND, THEREFORE, THERE WAS NO CASE OF LEVY OF PENALT Y AT ALL. THE LD. COUNSEL FOR ASSESSEE CONTENDED THAT AS PER THE DEFINITION OF UNDISCLOSED INCOME, IF ANY ENTRY IS FOUND TO BE FALSE, THE SAME ALSO QUALIFIES AS UNDIS CLOSED INCOME BUT EVEN THAT HAS NOT BEEN FOUND IN ASSESSEE S CASE. THE LD. COUNSEL FOR ASSESSEE RELIED UPON THE FOLLOWING CASE LAWS IN SUPPORT OF HIS CONTENTION TH AT IN THE ABSENCE OF ANY UNDISCLOSED INCOME NO PENALTY U/ S 271AAB WAS LEVIABLE: 1. DCIT VS. HARI SINGH, ITA NO.598/CHD/2017 CHD-TRIB ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 7 2. DCIT VS. MANISH AGARWAL, ITA NO.1479/KOL/2015 KOL-TRIB 3. DCIT VS. AMIT AGARWAL, ITA NO.1471/KOL/2015 KOL-TRIB 4. ACIT VS. S.MARTIN, ITA NO.2382/CHENY/2016 CHENAI-TRIB 5. DCIT VS. M/S ARYAN MINING & TRADING CORPORATION LTD., ITA NO.1601/KOL/2017 KOL- TRIB 6. DCIT VS. RASHMI CEMENT LTD., ITA NO.1606/KOL/2017 KOL-TRIB 7. DCIT VS. RASHMI METALIKS LTD., ITA NO.1608/KOL/2017 KOL-TRIB 8. THE LD. DR AT THIS JUNCTURE COUNTERED BY DRAWING OUR ATTENTION TO THE SURRENDER LETTER OF THE ASSESS EE REPRODUCED IN THE PENALTY ORDER AS UNDER: THE JOINT/ADDITIONAL DIRECTOR OF INCOME TAX DT. 11-4-2014 (INV.), LUDHIANA SIR, RE: SEARCH AND SEIZURE OPERATIONS AT THE RESIDENT IAL AND BUSINESS PREMISES OF M/S DEEPAK BUILDERS AND OTHER GROUP OF CASES. THIS HAS A REFERENCE TO THE SEARCH AND SEIZURE OPER ATIONS CARRIED OUT BY THE DEPARTMENT ON 20,03.2014 AT THE VARIOUS BUSINESS PR EMISES OF M/S DEEPAK BUILDERS GROUP OF COMPANIES AND RESIDENTIAL PREMISES OF THE DIRECTORS/PARTNERS. DURING THE COURSE OF SEARCH, CERTAIN DISCREPANCIES WERE THERE IN THE CASES OF DEEPAK BUILDERS .AND OTHER COMPANIES, PARTNERSHIP FIRMS AND INDIVID UALS CASES OF (GROUP; THESE DISCREPANCIES WERE IN .RESPECT. OF; THE BOOKS OF AC COUNTS OF THE BUSINESS MAINTAINED BY THE ASSESSEE AND ALSO, THERE WERE CERTAIN ENTRIES W HICH HAD NOT YET BEEN RECORDED IN THE REGULAR BOOKS OF ACCOUNT FOR THE DIFFERENT A SSESSMENT YEARS. THE-SAID DISCREPANCIES RELATE TO THE SAME NATURE OF BUSINESS AS REFLECTED IN THE REGULAR BOOKS OF ACCOUNTS ARID OTHERWISE AND IS A PART AND PARCEL OF THE SAME BUSINESS ACTIVITY AS REFLECTED IN THE RETURN OF INCOME FILED WITH THE DE PARTMENT AND IN ORDER TO COVER SUCH DISCREPANCIES AND OTHERS, WE HEREBY OFFER A SUM OF RS. 23 CRORES (RUPEES TWENTY THREE CRORES ONLY) AS ADDITIONAL INCOME AS DECLARED IN TH E RETURN OF INCOME ALREADY FILED WITH THE DEPARTMENT OVER AND ABOVE THE REGULAR INC OME AND THE SAID INCOME HAS BEEN DERIVED FROM THE SAME SOURCE.. WE .HAD ALREADY GIVEN AN OFFER OF SURRENDER OF TWENTY THREE CRORES IN THE GROUP AS A WHOLE AND, NO W, IN THIS LETTER, THE OFFER REMAINS THE SAME AND ALSO PERSONS IN WHOSE HANDS TH E AMOUNT HAS BEEN OFFERED ARE ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 8 ALSO THE SAME BUT THERE ARE SOME ADJUSTMENTS AND, N OW, THE HEAD-WISE BIFURCATION AFTER EXAMINATION THE SEIZED DOCUMENTS, THE AMOUNT OFFERED AS BUSINESS INCOME FROM THE BUSINESS ACTIVITIES IS AS UNDER.- S.NO. NAME OF THE CONCERN/INDIVIDUAL ASSESSMENT YEAR . AMOUNT SURRENDERED BASIS 1. M/S DEEPAK BUILDERS 2014-15 2013-14 14,02,00,000.00 21,00,000.00 OFFERED AS BUSINESS INCOME TO COVER ANY DISCREPANCIES IN THE SEIZED DOCUMENTS AS FOUND AND SEIZED DURING THE COURSE OF SEARCH AND ALSO TO COVER ANY KIND OF DISCREPANCY IN THE REGULAR BOOKS OF ACCOUNT AND THE ABOVE INCOME WAS EARNED IN THE SAME MANNER AS ST ATED ABOVE AS PER REGULAR BOOKS OF ACCOUNT AND THAT INCOME IS YET TO BE RECORDED IN THE BOOKS OF ACCOUNT. THE ABOVE INCOME IS REFLECTED IN VARIOUS EXPENSES I.E. PAYMENT OF LABOUR EXPENSES ETC. AND OTHER SEIZED RECORDS AND ANY KIND OF PROFIT ELEMENT FOUND DURING THE COURSE OF SEARCH. THE INCOME FOR THE ASSESSMENT YEAR 2013-2014 IS BEING OFFERED SUBJECT TO NO PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 AND THE SAME MAY PLEASE BE ACCEPTED. 2. SH DEEPAK SINGAL 2014-15 2013-14 2012-13 2011-12 2009-10 2008-09 6,70,00,000.00 10,00,000.00 16,00,000.00 60,00,000.00 60,00,000.00 21,00,000.00 OFFERED AS BUSINESS' INCOME TO COVER ANY DISCREPANCIES IN THE SEIZED DOCUMENTS AS FOUND AND SEIZED DURING THE COURSE OF SEARCH AS PER VA RIOUS ANNEXURE AND FOR ANY KIND OF DISCREPANCY IN THE REGULAR BOOKS OF ACCOUNTS AND THE ABOVE INCOME WAS EARNED IN THE SAME MANNER AS REFLECTED IN MY RETURN OF INCOME. THE ABOVE INCOME IS REFLECTED IN VARIOUS PERSONAL ASSETS INCLUDING AMOUNT SPEND ON CONSTRUCTION, CASH AND TO COVER ANY INVESTMENT IN THE IMMOVABLE/MOVEABLE ASSET. THE INCOME FOR THE ASSESSMENT YEAR 2008-2009 TO 2013-2014 IS BEING OFFERED SUBJECT TO NO PENALTY U/S 271(1 )(C) OF THE INCOME TAX ACT, 1961 AND THE SAME' MAY PLEASE BE ACCEPTED. ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 9 3. SMT. SUNITA SINGAL 2014-15 15,00,000.00 OFFERED INCOME EARNED FROM SALE OR PURCHASE OF PROPERTY AND THE SAME INCOME REFLECTED IN CONSTRUCTION/INVEST MERIT TO IMMOVABLE ASSETS AND TO COVER ANY OTHER ASSET OR, DOCUMENTS AS FOUND DURING THE COURSE OF SEARCH AND JEWELLERY, CASH ETC. AND OTHER MISC. ACTIVITIES. 4. SH.KAMAL SINGAL 2014-15 15,00,000.00 TO COVER ALL THE DOCUMENTS AS FOUND DURING THE COURSE OF SEARCH AND THE INCOME HAS BEEN DERIVED FROM COMMISSION/BROKERAGE FROM PROPERTY DEALING. 5. SH.VISHAL SINGAL 2014-15 10,00,000.00 TO COVER ALL THE DOCUMENTS AS FOUND DURING THE COURSE OF SEARCH AND THE INCOME HAS BEEN DERIVED FROM COMMISSION/ BROKERAGE FROM PROPERTY DEALING . 2. IT IS PERTINENT TO MENTION HERE THAT THERE WAS A . SURVEY OPERATION ON THE BUSINESS PREMISES OF THE ASSESSES ON 8,1,2010 I.E. IN THE AS SESSMENT YEAR 2010-2011 AND DURING THE COURSE OF SURVEY THE ASSESSEE HAD MADE A SURRENDER OF RS.4 CRORES (RS. 3 CRORES IN THE CASE OF M/S DEEPAK BUILDERS AND RS.1 CRORE IN THE CA SE OF SHRI DEEPAL SINGAL, PROPRIETOR M/S DEEPAK BUILDCON). THE ABOVE SURRENDER IN THE CASE OF M/S D EEPAK; BUILDERS OF RS.3 CRORES COVERS ALL THE LOOSE DOCUMENTS OR ANY KIND OF I MPLICATION OF INCOME IN THE SEIZED DOCUMENTS FOR THE ASSESSMENT YEAR 2010-11 AS FOUND DURING THE COURSE OF SE A RCH, IF ANY AND RS.1 CRORE IN THE CASE OF SHRI DEEPAK SINGAL PROPRIETOR M/S DEEPA K BUILDCON COVERS THE CASH RECEIVED ON ACCOUNT OF THE SALE OF FLATS OVER AND ABOVE THE AMO UNT REFLECTED IN THE BOOKS OF ACCOUNT FOR THE ASSESSMENT YEARS 2009-010 ARID 2010-2011. THE ASS ESSES SHRI DEEPAK SINGAL HAD BEEN EARNED THE INCOME ON ACCOUNT OF THE SALE OF FLATS AND THE SAME INCOME AS OFFERED DURING THE COURSE OF SURVEY HAD BEEN REFLECTED IN THE CASH, RE COVERABLE AND AMOUNT SPENDS IN THE, CONSTRUCTION OF FLATS. THE COPY OF THE STATEMENT AS RECORDED DURING THE COURSE OF SURVEY IS BEING ENCLOSED HEREWITH FOR YOUR READY REFERENCE. 3. THE ABOVE AMOUNT AS OFFERED ARE TENTATIVE AND SU BJECT TO CHANGE ANY TIME DURING PROCEEDING BEFORE YOUR GOODSELF AND ALSO FILING OF THE RETURN U/S 153A BUT OFFER WILL REMAIN THE SAME AND COVERS ALL THE ISSUES AS PER SE IZED RECORD OR ANY KIND OF DISCREPANCY IN THE REGULAR BOOKS OF ACCOUNT OR OTHERWISE AND IS THE, B USINESS INCOME OF THE ASSESSEE. THE ABOVE OFFER ALSO COVERS THE! ROUGH NOTINGS/ESTIMATES AND OTHER SLIPS ON ACCOUNT OF SALES, PURCHASES OUTSIDE THE BOOKS OF ACCOUNTS, BESIDES, PROFIT ELEM ENT ON ACCOUNT OF VARIATION IN THE SALE RATES OF RATS ETC. AND TO COVER OTHER DISCREPANCIES. 4. THE ABOVE OFFER IN, THE .DIFFERENT YEARS AS MENT IONED .ABOVE IS BEING MADE AS PER THE PROVISIONS OF INCOME TAX ACT AND THIS OFFER IS BEIN G MADE SUBJECT TO NO PENALTY U/S 271AAA/ 271AAB/271(1)(C) AND PROSECUTION AND THE ABOVE INCO ME SHALL BE DECLARED BY OUR GROUP CONCERNS IN RESPECTIVE YEARS .WHILE FILING THE RETU RN IN THE RELEVANT YEARS OVER AND ABOVE. 9. REFERRING TO THE SAME THE LD. DR POINTED OUT THA T THE ASSESSEE HAD SURRENDERED AN AMOUNT O RS.10 LACS IN HIS CASE AND AS PER THE SURRENDER LETTER IT WAS ON ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 10 ACCOUNT OF DISCREPANCY IN THE BOOKS OF ACCOUNT OF T HE BUSINESS OF THE ASSESSEE AND CERTAIN ENTRIES NOT RE CORDED IN THE REGULAR BOOKS OF ACCOUNT WHICH WERE NOTED DU RING SEARCH. THE LD. DR POINTED OUT THAT THE ASSESSEE HA D EVEN STATED IN THE SURRENDER LETTER THAT IT HAD DER IVED INCOME FROM COMMISSION/BROKERAGE FROM PROPERTY ON ACCOUNT OF WHICH THE SURRENDER HAD BEEN MADE. OUR ATTENTION WAS DRAWN TO PARA-1 OF THE SURRENDER LETT ER POINTING OUT THAT THE ABOVE FACTS HAD BEEN STATED THEREIN. THE LD. DR THEREAFTER DREW OUR ATTENTION T O PARA-3 OF THE LETTER POINTING OUT THAT THE ASSESSEE HAD REITERATED THE FACT THAT THE SURRENDER WAS BEING MA DE ON ACCOUNT OF DISCREPANCIES IN THE SEIZED RECORDS AND OTHER DOCUMENTS FOUND DURING THE COURSE OF SEARCH INCLUDI NG ROUGH NOTES/ASSESSMENTS AND OTHER SLIPS ON ACCOUNT OF SALES, PURCHASES OUTSIDE THE BOOKS OF ACCOUNT AND O THER DISCREPANCIES. THE LD.DR THEREFORE, STATED THAT THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT NO INCRIMINATING MATERIAL WAS FOUND DURING THE COURSE OF SEARCH WHICH RELATED TO THE SURRENDER MADE WAS FACT UALLY INCORRECT. THE LD. DR FURTHER RELIED UPON THE FINDI NGS OF THE LD.CIT(A) AT PARA 4.1 OF HIS ORDER AS UNDER: THE FACTS OF THE CASE, THE ORDER OF THE AO IMPOSIN G THE PENALTY AND THE ARGUMENTS OF THE AR DURING APPELLATE PROCEE DINGS HAVE ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 11 BEEN CONSIDERED. THE AR HAS REPEATED THE CONTENTION S WHICH WERE RAISED BEFORE THE AO. IT IS FAIRLY CONCEDED BY THE AR THAT IN THE PRESENT CASE PROVISIONS OF SECTION 271AAA ARE N OT APPLICABLE AND NOW THE CASE IS GOVERNED BY THE PROVISIONS OF S ECTION 271AAB. FOR DECIDING THE ISSUE AND TO HAVE CLARITY IN THE MATTER THE PROVISIONS OF SECTIONS 271AAB WHICH ARE APPLICA BLE TO THE PRESENT CASE UNDER CONSIDERATION ARE REPRODUCED BEL OW. '271AAB. (1) THE ASSESSING OFFICER MAY, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SEC TION 132 ON OR AFTER THE 1 ST DAY OF JULY, 2012, THE ASSESSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM,- (A) A SUM COMPUTED AT THE RATE OF TEN PER CENT OF T HE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB- SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLO SED INCOME WAS DERIVED; AND (III) ON OR BEFORE THE SPECIFIED DATE- (A) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, I N RESPECT OF THE UNDISCLOSED INCOME; AND (B) FURNISHES THE RETURN OF INCOME FOR THE SPECIFIE D PREVIOUS YEAR DECLARING SUCH UNDISCLOSED INCOME THEREIN; (B) A SUM COMPUTED AT THE RATE OF TWENTY PER CENT O F THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR, IF SUCH ASSESSEE- (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT UND ER SUB- SECTION (4) OF SECTION 132, DOES NOT ADMIT THE UNDISCLOSED INCOME; AND (II) ON OR BEFORE THE SPECIFIED DATE- (A) DECLARES SUCH INCOME IN THE RETURN OF INCOME FURNISHED FOR THE SPECIFIED PREVIOUS YEAR; AND (B) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, I N RESPECT OF THE UNDISCLOSED INCOME; (C) A SUM WHICH SHALL NOT BE LESS THAN THIRTY PER C ENT BUT WHICH SHALL NOT EXCEED NINETY PER CENT OF THE UNDIS CLOSED ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 12 INCOME OF THE SPECIFIED PREVIOUS YEAR, IF IT IS NOT COVERED BY THE PROVISIONS OF CLAUSES (A) AND (B). (2) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESS EE IN RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SU B SECTION (1). (3) ... AS ADMITTED BY THE AR ALSO, THAT THE INCOME OF RS. 10,00,000/- WAS SURRENDERED DURING THE SEARCH. REGA RDING THE BASIS IT WAS ADMITTED (AS PER THE SURRENDERED LETTE R REPRODUCED BY THE AO IN THE PENALTY ORDER) BY THE ASSESSEE THA T COVER ALL THE DOCUMENTS AS FOUND DURING THE COURSE OF SEARCH AND THE INCOME HAS BEEN DERIVED FROM COMMISSION/BROKERAGE F ROM PROPERTY DEALING'. THE AO HAS RIGHTLY MENTIONED THA T IN THIS CASE THE INCOME OF RS. 10,00,000/- WAS DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME AND THE SAME WAS N OT DISCLOSED TO THE DEPARTMENT TILL THE SEARCH ACTION. THE ASSES SEE HAS SURRENDERED THIS AMOUNT UNDER SECTION 132 ON 11.04. 2014. THEREFORE, PROVISIONS OF SECTION 271AAB ARE APPLICA BLE. IT IS ALSO NOT IN DISPUTE THAT THE CASE OF THE ASSESSEE IS COV ERED UNDER SUB-SECTION (L)(A) OF SECTION 271AAB AS THE ASSESSE E HAS PAID THE TAX ALONG WITH THE INTEREST AND DISCLOSED THE AMOUN T IN THE RETURN. THE LANGUAGE OF THE SECTION IS VERY CLEAR A ND UNAMBIGUOUS THAT IN A CASE WHERE THE ASSESSEE ADMIT S THE UNDISCLOSED INCOME UNDER SECTION 132(4), THEN THE A SSESSEE SHALL PAY PENALTY EQUAL TO 10% OF THE UNDISCLOSED I NCOME. IN VIEW OF THE ABOVE PROVISIONS OF LAW, THE PENALTY IM POSED BY THE AO IN THIS CASE IS FOUND AS PER LAW AND HENCE S USTAINED. ACCORDINGLY, THESE GROUNDS OF APPEAL ARE DISMISSED. 10. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTI ES AND PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE S OLE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE, AGA INST THE LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT, IS THAT NO INCRIMINATING MATERIAL REPRESENTING UNDISCLOSED IN COME OF THE ASSESSEE WAS FOUND DURING THE COURSE OF SEARCH. WE DO NOT ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 13 FIND ANY MERIT IN THIS CONTENTION OF THE LD. COUNSE L FOR THE ASSESSEE. 11. THE SURRENDER LETTER OF THE ASSESSEE, ADMITTING TO THE DISCREPANCIES IN THE BOOKS OF ACCOUNT AND CERTAIN E NTRIES NOT BEING RECORDED IN THE BOOKS, AS ALSO SPECIFIC ADMIS SION TO THE FACT THAT THE ASSESSEE HAD NOT DISCLOSED THE INCOME RELATING TO COMMISSION AND BROKERAGE, CONTRADICTS THIS CONTENTI ON OF THE LD. COUNSEL FOR THE ASSESSEE. IN THE SURRENDER LET TER, AS REPRODUCED IN THE EARLIER PART OF THIS ORDER, THE A SSESSEE HAS CATEGORICALLY ADMITTED THAT THERE WERE DISCREPANCIE S IN RESPECT OF THE BOOKS OF ACCOUNT OF THE BUSINESS MAINTAINED BY HIM AND THERE WERE CERTAIN ENTRIES WHICH HAD NOT BEEN RECOR DED IN THE REGULAR BOOKS OF ACCOUNT FOR DIFFERENT ASSESSMENT Y EARS AND THAT THE SAID DISCREPANCIES RELATED TO THE SAME NAT URE OF BUSINESS AS REFLECTED IN THE REGULAR BOOKS OF ACCOU NT. FURTHER, IN THE SURRENDER LETTER THE ASSESSEE HAS ALSO SPEC IFICALLY ADMITTED THAT HIS INCOME FROM COMMISSION AND BROKE RAGE HAD REMAINED UNDISCLOSED. THE ASSESSEE HAD SURRENDERED AN AMOUNT OF RS.10 LAKHS ON ACCOUNT OF THESE ADMITTED UNDISCLOSED INCOME AND ON ACCOUNT OF DISCREPANCIE S IN THE DOCUMENTS FOUND DURING THE SEARCH. THE LETTER ALSO MENTIONS THE NATURE OF DISCREPANCIES FOUND, BEING ROUGH NOTINGS/ESTIMATES, OTHER SLIPS ON ACCOUNT OF SALES, PURCHASES ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 14 OUTSIDE THE BOOKS OF ACCOUNT, BESIDES PROFIT ELEMEN T ON ACCOUNT OF VARIATION IN THE SALE RATES OF FLAT, ETC. CLEAR LY, THE SURRENDER BEING SO SPECIFIC CANNOT NOT BE SAID TO BE MERELY T O BUY PEACE OF MIND. FURTHER, THE ASSESSEE HAS NEVER RETRACTED THE SURRENDER SO MADE; ON THE CONTRARY, HE HAS DISCLOSE D THE AMOUNT SURRENDERED AS HIS BUSINESS INCOME IN THE RE TURN OF INCOME FILED AND ACCEPTED THE ASSESSMENT OF THE SAM E AS SUCH, BY THE A.O. ALL THE ABOVE FACTS HAVE REMAINED UNCON TROVERTED BEFORE US. THIS SPECIFIC UNRETRACTED ADMISSION OF THE ASSESSEE OF EARLIER UNDISCLOSED INCOME AND DISCREPANCIES IN THE BOOKS OF ACCOUNT, WE HOLD, IS WITHOUT ANY DOUBT THE BEST PI ECE OF EVIDENCE AGAINST THE ASSESSEE AND IS INCRIMINATING MATERIAL ENOUGH REPRESENTING UNDISCLOSED INCOME FOR THE PURP OSE OF LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT. THE AS SESSEE HAD HIMSELF ADMITTED TO THE FACT OF HAVING NOT DISCLOSE D THE INCOME ON ACCOUNT OF BROKERAGE AND COMMISSION EARNED AND H AD HIMSELF ADMITTED TO THE FACT THAT THERE WERE DISCRE PANCIES AND UNRECORDED ENTRIES IN HIS BOOKS OF ACCOUNT AND ALS O CERTAIN ROUGH NOTINGS AND ESTIMATES. HAVING HIMSELF ADMITTE D TO ALL THESE FACTS AND AT NO POINT OF TIME HAVING EVER RET RACTED THIS ADMISSION, THE SAME CONSTITUTES INCRIMINATING MATER IAL AGAINST THE ASSESSEE AND THERE WAS NO FURTHER REQUIREMENT F OR THE ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 15 REVENUE IN SUCH CIRCUMSTANCES TO HAVE UNEARTHED EVI DENCE SUPPORTING THIS ADMISSION OF THE ASSESSEE. 12. THE RELIANCE PLACED BY THE LD.COUNSEL FOR THE A SSESSEE ON VARIOUS CASE LAWS ,WE FIND ARE OF NO ASSISTANCE SIN CE THEY ARE ALL DISTINGUISHABLE ON FACTS. IN NONE OF THE CASE L AWS THE ASSESSEE HAD SPECIFICALLY ADMITTED TO EARLIER UNDIS CLOSED INCOME. IN THE CASE OF HARI SINGH (SUPRA) PENALTY L EVIED U/S 271 AAB OF THE ACT, ON ADDITION MADE ON ACCOUNT OF DIFFERENCE IN VALUATION OF JEWELLERY WAS DELETED HOLDING THAT THE DIFFERENCE IN VALUE OF RS.1.3 LACS ON VALUATION OF RS.1.2 CROR ES WAS NOT UNNATURAL AND COULD BE ON ACCOUNT OF DIFFERENCE OF OPINION AND WAS THEREFORE NOT IN THE NATURE OF UNDISCLOSED INCO ME OF THE ASSESSEE. IN THE CASE OF MANISH AGGARWAL(SUPRA),IT WAS NOTED THAT THE ASSESSEE WAS NOT ENGAGED IN ANY BUSINESS O R PROFESSION AND WAS NOT REQUIRED TO MAINTAIN ANY BOO KS OF ACCOUNTS AND THE DOCUMENTS FOUND DURING SEARCH DISC LOSING SPECULATIVE COMMODITY TRANSACTION UNDERTAKEN BY THE ASSESSEE WHICH WAS SURRENDERED ,WAS HELD TO BE RECORDED IN T HE OTHER DOCUMENTS OF THE ASSESSEE AND HENCE HELD TO BE NOT UNDISCLOSED INCOME OF THE ASSESSEE AS PER THE DEFIN ITION OF THE SAME IN SECTION 271AAB OF THE ACT. IN THE CASE OF S . MARTIN (SUPRA) THE SURRENDER MADE BY THE ASSESSEE WAS FOUN D TO BE NOT ADMITTED ON THE BASIS OF ANY MATERIAL ,DOCUMENT AND WAS JUST A ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 16 GENERAL SURRENDER, WHICH THEREFORE WAS NOT HELD TO CONSTRUE UNDISCLOSED INCOME FOR THE PURPOSES OF LEVY OF PENA LTY. IN THE CASE OF RASHMI CEMENT(SUPRA) IT WAS NOTED THAT THE SURRENDER MADE WAS SUO MOTO, GENERAL ,TO BUY PIECE OF MIND AN D NOT BASED ON ANY MATERIAL. IN SUCH CIRCUMSTANCES IT WAS HELD THAT THE SURRENDER DID NOT IN ITSELF CONSTITUTE INCRIMIN ATING MATERIAL/UNDISCLOSED INCOME OF THE ASSESSEE. THE FA CTS LEADING TO THE DELETION OF PENALTY IN THE CASE OF RASMI MET ALIKS(SUPRA) WE FIND ARE IDENTICAL TO THAT IN THE CASE OF RASHMI CEMENTS (SUPRA). THUS CLEARLY NONE OF THE CASE LAWS ARE OF ANY ASSISTANCE TO THE ASSESSEE SINCE IN THE IMPUGNED CA SE THE ASSESSEE HAS MADE SPECIFIC ADMISSION OF HAVING UND ISCLOSED INCOME RELATING TO COMMISSION/BROKERAGE AND DISCRE PANCIES IN THE BOOKS OF ACCOUNTS WHICH HAS REMAINED UNRETRACTE D. 13. IN VIEW OF THE ABOVE, WE CONCUR WITH THE FINDIN GS OF THE LD. CIT(A) THAT THE SPECIFIC ADMISSION OF THE ASSES SEE TO THE UNDISCLOSED INCOME AND DISCREPANCIES IN ITS ACCOUNT S CONSTITUTED INCRIMINATING MATERIAL REPRESENTING UND ISCLOSED INCOME OF THE ASSESSEE FOR THE PURPOSES OF LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT. WE, THEREFORE, UPHOLD T HE ORDER OF THE LD. CIT(A) CONFIRMING THE LEVY OF PENALTY. IN VIEW OF THE ABOVE THE APPEAL FILED BY THE ASSESS EE IS DISMISSED. ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 17 14. NOW, TAKING UP THE APPEAL OF THE ASSESSEE IN IT A NO.936/CHD/2018, THE FACTS OF THE CASE WE FIND ARE IDENTICAL, WITH THE ASSESSEE, SMT. SUNITA SINGAL, ALSO BEING O NE OF THE PERSONS SEARCHED IN THE DEEPAK SINGAL GROUP OF CASE S AND THE ASSESSEE HAVING SURRENDERED AN AMOUNT OF RS.15 LAKH S DURING THE COURSE OF SEARCH, ON WHICH PENALTY UNDER SECTIO N 271AAB OF THE ACT WAS LEVIED. THE ARGUMENTS OF THE LD.COUNSE L FOR THE ASSESSEE, AGAINST LEVY OF PENALTY WERE IDENTICAL AS IN THE CASE OF SH. VISHAL SINGAL IN ITA NO.935/CHD/2018 DEALT W ITH US ABOVE, THAT NO INCRIMINATING MATERIAL REPRESENTING UNDISCLOSED INCOME WAS FOUND DURING THE COURSE OF SEARCH. 15. IN THIS CASE, WE HAVE NOTED FROM THE SURRENDER LETTER OF THE ASSESSEE REPRODUCED ABOVE IN PARA , THAT THE SU RRENDER OF RS.15 LAKHS WAS IDENTICAL AS IN THE CASE OF VISHAL SINGAL IN ITA NO.935/CHD/2018 TO COVER ALL DOCUMENTS FOUND DURING THE COURSE OF SEARCH AND TO COVER THE INCOME DERIVED FR OM SALE OR PURCHASE OF PROPERTY, WHICH REMAINED UNDISCLOSED EA RLIER AND THE SAME REFLECTED IN CONSTRUCTION/INVESTMENT IN IM MOVABLE ASSETS. SINCE THE FACTS LEADING TO LEVY OF PENALTY IN THE PRESENT CASE ARE IDENTICAL TO THAT IN THE CASE OF THE ASSES SEE IN ITA NO.935/CHD/2018 AND THE ARGUMENTS OF THE ASSESSEE A GAINST THE SAME ARE ALSO IDENTICAL, OUR DECISION RENDERED IN THE CASE OF THE ASSESSEE IN ITA NO.935/CHD/2018 WILL SQUAREL Y APPLY TO ITA NOS.935 & 936/CHD/2018 A.Y.2014-15 18 THE PRESENT CASE ALSO, FOLLOWING WHICH WE UPHOLD TH E ORDER OF THE LD. CIT(A) CONFIRMING THE LEVY OF PENALTY UNDER SECTION 271AAB OF THE ACT, AMOUNTING TO RS.1.50 LAKHS. THE APPEAL OF THE ASSESSEE IS ACCORDINGLY DISMISSED. 16. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- $ % & '# (SANJAY GARG) (ANNAPURNA GUPTA) /JUDICIAL MEMBER () /ACCOUNTANT MEMBER +$ /DATED: 30 TH APRIL, 2019 * # * #&' ()*) / COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT 2. ',+ / THE RESPONDENT 3. - / CIT 4. - ( )/ THE CIT(A) 5. )./' 0 , !0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35 / GUARD FILE #& / BY ORDER, / ASSISTANT REGISTRAR