C.P. Mohandas, Pune V. DCIT, Cent. Cir.-1(1), Pune

ITA 957/PUN/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93791 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 18-02-2015
• Assessment Year: 2000-2001
• Appeal Filed On: 18-07-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Business income; Income from undisclosed sources; Loose papers
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 957/PN/2011 (ASSESSMENT YEAR : 2000-01) SHRI C.P. MOHANDAS, B.O. BHAVAN, SURVEY NO.47, PLOT NO.01, PARVATI, PUNE-SATARA ROAD, PUNE 411009 PAN NO.AAXPM1656M .. APPELLANT VS. DCIT, CENTRAL CIRCLE-1(1), PUNE .. RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 06-05-2015 DATE OF PRONOUNCEMENT : 29-05-2015 ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER DATED 11-11-2010 OF THE CIT(A)-I, PUNE RELATI NG TO ASSESSMENT YEAR 2000-01. 2. LEVY OF PENALTY OF RS.16 LAKHS BY THE AO U/S.271 (1)(C) OF THE I.T. ACT AND UPHELD BY THE CIT(A) IS THE ONL Y ISSUE RAISED BY THE ASSESSEE IN THE VARIOUS GROUNDS OF APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND FILED HIS RETURN OF INCOME ON 31-10- 2010 DECLARING TOTAL INCOME OF RS.18,09,360/-. PURSUANT TO SEARCH ACTION U/S.132(1) OF THE I.T. ACT AT THE RESIDENTIA L AS WELL AS 2 BUSINESS PREMISES OF THE ASSESSEE ON 24-06-2003 THE ASSESSEE FILED THE RETURN OF INCOME ON 30-09-2005 IN RESPONS E TO NOTICE U/S.153A DECLARING TOTAL INCOME OF RS.55,77,038/-. THUS, THE ASSESSEE HAD DISCLOSED ADDITIONAL INCOME OF RS.37,6 7,678/-. THE AO COMPLETED THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION AT RS.79,66,750/-. IN APPEAL THE LD. CIT(A) GAVE PART RELIEF TO THE ASSESSEE. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND OBSERVING THAT THE ADDITI ONAL INCOME WAS DECLARED BY THE ASSESSEE ONLY DUE TO SEARCH ACT ION CONDUCTED AT HIS RESIDENTIAL CUM BUSINESS PREMISES FOR WHICH THE ACT OF THE ASSESSEE OF DISCLOSING ADDITIONAL IN COME CANNOT BE HELD TO BE VOLUNTARY AND FURTHER OBSERVING THAT THE ASSESSEE CONCEALED PARTICULARS OF HIS INCOME, THE AO LEVIED PENALTY OF RS.16 LAKHS U/S.271(1)(C) OF THE I.T. ACT ON ACCOUN T OF VARIOUS ADDITIONS. 4. IN APPEAL THE LD.CIT(A) UPHELD THE PENALTY SO LE VIED BY THE AO. WHILE DOING SO, HE OBSERVED THAT THE ASSES SEE INITIALLY FILED HIS RETURN ON 30-10-2010 DECLARING TOTAL INC OME OF RS.18,09,360/- ONLY. AFTER THE SEARCH THE ASSESSEE ENHANCED THE INCOME IN THE RETURN FILED U/S.153A AT RS.55,77,038 /- WHICH WAS FINALLY HELD ASSESSABLE AT RS.79,66,750/-. HE FURT HER OBSERVED THAT THE ACT OF CONCEALMENT/FILING OF INACCURATE PA RTICULARS OF INCOME WAS COMMITTED AT THE TIME OF FILING OF THE O RIGINAL RETURN U/S.139(1) OF THE I.T. ACT AND THE ADDITIONAL INCOM E SHOWN AND ASSESSED SUBSEQUENT TO THE SEARCH IS NOT SUOMOTO BU T HAS BEEN THE OUTCOME OF THE SEARCH CARRIED OUT BY THE DEPART MENT. 3 5. SO FAR AS THE EXPLANATION OF THE ASSESSEE THAT E ACH AND EVERY ITEM WAS EXPLAINED DURING THE COURSE OF ASSES SMENT PROCEEDINGS AS WELL AS APPEAL PROCEEDINGS IS CONCER NED HE OBSERVED THAT THOSE EXPLANATIONS WERE CONSIDERED AT THE TIME OF ASSESSMENT AND APPEAL AND THE FIGURE HAS FINALLY CR YSTALLIZED. THOSE EXPLANATIONS HAVE NO RELEVANCE FOR THE PURPOS E OF LEVYING PENALTY. SINCE THE ASSESSEE HAS FILED INAC CURATE PARTICULARS OF INCOME/CONCEALED HIS INCOME WHICH WE RE NOT SHOWN IN THE RETURN ORIGINALLY FILED U/S.139(1) OF THE I.T. ACT, THEREFORE, THE ACT OF CONCEALMENT/FILING OF INACCUR ATE PARTICULARS OF INCOME CAN BE ONLY ESTABLISHED. RELYING ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF UNION OF I NDIA AND OTHERS VS. DHARMENDRA TEXTILE PROCESSORS REPORTED I N 166 TAXMANN (SC) REPORTED IN 295 ITR 244 WHERE IT HAS B EEN HELD THAT PENALTY U/S.271(1)(C) IS A CIVIL LIABILITY, TH E LD.CIT(A) UPHELD THE ACTION OF THE AO AND DISMISSED THE GROUN DS RAISED BEFORE HIM CHALLENGING THE LEVY OF PENALTY. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY CHALLE NGED THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF LAND DEVELOPER AND ALSO DERIVES INCOME FROM RUBBER PLANTATION. THE ASSESSEE HAS FILED HIS ORIG INAL RETURN OF INCOME ON 31-12-2010 DECLARING TOTAL INCOME OF RS.1 8,09,360/-. PURSUANT TO THE SEARCH IN THE BUSINESS AS WELL AS R ESIDENTIAL 4 PREMISES OF THE ASSESSEE ON 24-06-2003, THE ASSESSE E DECLARED ADDITIONAL INCOME OF RS.37,67,678/-. REFERRING TO PAGE 30 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DRE W THE ATTENTION OF THE BENCH TO THE STATEMENT RECONCILING THE RETURNED INCOME AND ASSESSED INCOME FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE I.T. ACT. HE SUBMITTED THAT AN AMOUNT OF RS.31 ,89,561/- BEING PROFIT ON UNRECORDED SALES WAS EARLIER OFFERE D TO TAX IN THE HANDS OF THE BROTHER. AFTER THE SEARCH THE MISTAKE WAS FOUND AND THE INCOME WAS DECLARED IN THE HANDS OF THE ASS ESSEE. SIMILARLY, THE AMOUNT OF RS.3,13,118/- WAS SHOWN AS ADVANCE RECEIVABLE BY THE ASSESSEE WHICH WAS SUBSEQUENTLY O FFERED TO TAX. THE AMOUNT OF RS.2,65,000/- WAS ORIGINALLY SH OWN AS PAYABLE TO THE LAND OWNER WHICH WAS OFFERED TO TAX AFTER THE SEARCH. THUS, THE ABOVE 3 ITEMS TOTALING TO RS.36, 67,679/- WERE OFFERED TO TAX IN THE RETURN FILED U/S.153A OF THE I.T. ACT DUE TO THE SEARCH THAT TOOK PLACE ON 24-06-2003. HE DREW THE ATTENTION OF THE BENCH TO THE STATEMENT RECONCILING RETURNED AND ASSESSED INCOME FOR PENALTY U/S.271(1)(C) WHICH IS AS UNDER : SR.NO. REASON FOR ADDITION AMOUNT AMOUNT I TOTAL INCOME AS PER ORIGINAL RETURN U/S.139(1) FILED ON 31-10-2000 1809360 II LESS CAPITAL GAIN INCLUDED IN RETURNED INCOME 141270 III TOTAL INCOME TAXED AT NORMAL RATE 1668090 IV ADDITIONAL INCOME DECLARED IN RETURN U/S.153A FILED ON 30-09-2005 1 PROFIT ON UNRECORDED SALES (SALES RS.4442500 LESS COST OF SALES RS.1252939 3189561 2 MAINTENANCE DEPOSIT CONTRIBUTION 313118 3 CREDIT BALANCE OF LAND OWNER SHRI SANJAY V. SASAR 265000 3767679 V ADDITIONS MADE IN ASST. ORDER U/S.154 R.W.S.250 DT. 18-01-2008 (AFTER GIVING EFFECT TO CIT(A) ORDER DT. 20-12-2007) 4 UNEXPLAINED INVESTMENT IN FURNITURE (RS.75000 LESS RS.55000) 20000 5 5 CAPITAL INTRODUCED IN M/S. KIRTI DEVELOPERS (SOURCED OUT OF LOAN FROM S.S. SONI) 100000 6 ADDITION FOR COST OF LAND PAID TO SHRI R.B. MOZE (SOURCED OUT OF LOAN FROM S.S. SONI) 100000 7 SALES NOT RECORDED (DISPUTED CONSIDERATION NOT RECEIVED FROM CUSTOMER) 55000 8 50% OF DONATIONS RS.73000 CLAIMED AS ADVERTISEMENT EXPENSES 36500 9 INTEREST PAID TO SHRIRAM SONI (SOURCED OUT OF LOAN FROM S.S. SONI) 81000 10 DISALLOWANCE OF AGRICULTURE INCOME CLAIM ADDED AS BUSINESS INCOME 595866 11 ESTIMATED DISALLOWANCE OUT OF CAR, PETROL AND TELEPHONE EXPENSES 54500 1042666 VI TOTAL INCOME AS PER ORDER U/S.154 R.W.S. 250 T. 18-01-2008 6478453 VII TOTAL INCOME ON WHICH PENALTY U/S.271(1)(C) IS LEVIED (IV_V) (I.E. ADDITIONAL INCOME RS.3767679 PLUS ADDITIONS IN ASSESSMENT RS.1042666 4810345 VIII PENALTY LEVIED U/S.271(1)(C) 1600000 8. THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENT ION OF THE BENCH TO PROVISIONS OF EXPLANATION 5 AS WELL AS EXP LANATION 5A TO SECTION 271(1)(C) OF THE I.T. ACT. HE SUBMITTED THAT EXPLANATION 5A WAS INSERTED BY THE FINANCE ACT, 200 7 W.E.F., 01-06-2007 WHICH SPEAKS OF ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OR TRANSAC TIONS AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCO ME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR. HOWEVER, AS PER EXPLANATION 5 WHEN DURING THE COURSE OF ANY SEARCH THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLE OR THING FOUND FROM THE PREMISES OF THE ASS ESSEE DURING THE SEARCH AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILIZING HIS INCOME ETC. THUS, THE INCOME WHICH WAS BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUN T OR OTHER DOCUMENTS OR TRANSACTIONS ETC., WERE NOT EARLIER IN THE 6 EXPLANATION 5. THEREFORE, THE ASSESSEE FALLS UNDER THIS PROVISION AND NO PENALTY U/S. 271(1)(C) OF THE I.T. ACT CAN B E LEVIED. SINCE THE ASSESSEE IN THE INSTANT CASE HAS FILED A RETURN IN RESPONSE TO NOTICE ISSUED U/S.153A OF THE I.T. ACT, THEREFORE, THE ORIGINAL RETURN DOES NOT SURVIVE AND THE RETURN FIL ED U/S.153A ONLY SURVIVES. SINCE THE ASSESSEE AFTER THE SEARCH HAS DECLARED THE ABOVE 3 ITEMS IN THE RETURN FILED U/S.153A WHIC H HAS BEEN ACCEPTED BY THE AO, THEREFORE, NO PENALTY U/S. 271( 1)(C) OF THE I.T. ACT CAN BE LEVIED ON THE ABOVE 3 ITEMS. FOR T HE ABOVE PROPOSITION THE LD. COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE C ASE OF CHANDAN K. SHEWANI VIDE ITA NOS. 235 AND 236/PN/201 0 ORDER DATED 29-08-2012 FOR A.YRS. 2002-03 AND 2003- 04. HE SUBMITTED THAT THE TRIBUNAL AFTER CONSIDERING VARIO US DECISIONS HAS OBSERVED THAT ALTHOUGH THE PARLIAMENT HAS INSER TED EXPLANATION 5A TO SECTION 271(1)(C), THE SAID EXPLA NATION IS APPLICABLE IN RESPECT OF THE SEARCH INITIATED U/S.1 32 ON OR AFTER 01-06-2007. SECTION 5A IS INTRODUCED TO PATCH OUT THE LACUNAE IN THE EXISTING PROVISIONS MORE PARTICULARLY TO OVE RCOME THE JUDICIAL INTERPRETATION OF EXPLANATION 5. IF THE S EARCH IS INITIATED U/S.132 ON OR AFTER 01-06-2007 THEN THERE IS A LEGA L PRESUMPTION THAT ANY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS WHICH IS CLAIMED AS INCOME BY THE ASSESSEE, THE SAME WOULD BE TREATED AS DEEMED C ONCEALMENT OF THE PARTICULARS OF INCOME OR FURNISHING OF INACC URATE PARTICULARS OF INCOME. IT WAS FURTHER OBSERVED THA T EXPLANATION 3 TO PROVISIONS OF SECTION 271(1)(C) OF THE I.T. AC T HAS NO 7 APPLICATION WHEN THE RETURN IS FILED IN RESPONSE TO NOTICE U/S.153A. IN THAT CASE SINCE PENALTY SO LEVIED WAS NOT ON THE ADDITION BASED ON ANY MONEY, BULLION, JEWELLERY, ET C. FOUND DURING THE COURSE OF SEARCH AND SINCE THE INCOME WA S DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME IN RESPONSE TO NOTICE U/S.153A WHICH WAS BASED ON SOME ENTRIES FOUND IN T HE DIARIES OR OTHER DOCUMENTS AND BANK ACCOUNTS FOUND DURING T HE COURSE OF SEARCH, THE TRIBUNAL DIRECTED TO DELETE THE PENA LTY. 9. SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF UNEXP LAINED INVESTMENT IN FURNITURE-RS.20,000, CAPITAL INTRODU CED IN KIRTI DEVELOPERS-RS. 1 LAKH AND COST OF LAND PAID TO M/S. R.B. MOZE- RS. 1 LAKH, THE LD. COUNSEL FOR THE ASSESSEE DID NO T PRESS FOR THE LEVY OF PENALTY ON THE ABOVE ADDITIONS. SIMILARLY, HE ALSO DID NOT PRESS FOR THE ADDITION SUSTAINED BY THE LD.CIT( A), I.E. RS.81,000/- BEING INTEREST PAID TO SHRIRAM SONI. 10. NOW COMING TO THE ADDITION OF RS.55,000/- SUSTA INED BY THE LD.CIT(A) ON ACCOUNT OF SALES UNRECORDED HE SU BMITTED THAT THE ASSESSEE HAD SOLD A PLOT FOR RS.44,97,500/ - AGAINST WHICH HE HAS RECEIVED ONLY RS.44,42,500/-. THE BAL ANCE AMOUNT OF RS.55,000/- WAS NOT RECEIVED EVEN TILL TO DAY. THEREFORE, THE TAXABILITY OF THE AMOUNT NOT RECEIVE D BY THE ASSESSEE ON ACCOUNT OF SALE OF PLOT WHERE THE ASSES SEE IS A LAND DEVELOPER IS A DEBATABLE ISSUE. RELYING ON VARIOUS DECISIONS HE SUBMITTED THAT NO PENALTY IS LEVIABLE U/S.271(1)(C) ON DEBATABLE ISSUES. 8 11. SO FAR AS THE PENALTY LEVIED ON ADDITION OF RS. 36,500/- BEING 50% DONATION CLAIMED AS ADVERTISEMENT EXPENSE S AND RS.54,500/- ON ACCOUNT OF ESTIMATED DISALLOWANCE IN RESPECT OF CAR, PETROL AND TELEPHONE EXPENSES ETC., IS CONCERN ED, HE SUBMITTED THAT THE DISALLOWANCES WERE ON ESTIMATE B ASIS AND THE ENTRIES WERE RECORDED IN THE BOOKS OF ACCOUNT PRIOR TO THE DATE OF SEARCH. RELYING ON THE DECISION IN THE CASE OF CIT VS. VIJAY KUMAR JAIN REPORTED IN 325 ITR 378 AND THE DECISION IN THE CASE OF CIT VS. AJAIB SINGH AND CO REPORTED IN 253 ITR 630 HE SUBMITTED THAT PENALTY CANNOT BE LEVIED ON ESTIMATE D ADDITION. 12. AS REGARDS THE AGRICULTURAL INCOME TREATED AS B USINESS INCOME AMOUNTING TO RS.5,95,866/- ON WHICH PENALTY HAS BEEN LEVIED HE SUBMITTED THAT THE ASSESSEE HAS RUBBER PL ANTATION IN KERALA. THE ASSESSEE WAS DECLARING INCOME FROM RUB BER TREES OWNED BY SELF, HIS FATHER, HIS MOTHER AND HIS WIFE. 13. REFERRING TO THE CHART FILED AT PAGE 149 OF THE PAPER BOOK HE SUBMITTED THAT THE ASSESSEE WAS SHOWING REGULARL Y AGRICULTURAL INCOME IN HIS INCOME-TAX RETURN AND FO R THE IMPUGNED ASSESSMENT YEAR THE ASSESSEE HAD DECLARED AGRICULTURAL INCOME OF RS.14,55,300/- WHICH WAS RED UCED BY THE AO TO RS.4,44,570/-. IN APPEAL THE LD.CIT(A) DETER MINED SUCH AGRICULTURAL INCOME AT RS.8,59,434/- AND PENALTY WA S LEVIED ON THE DIFFERENCE OF RS.5,95,866/-. HE SUBMITTED THAT THE ISSUE OF HOLDING THE NUMBER OF RUBBER TREES HAS BEEN SETTLED BY THE ORDER OF CIT(A). THE ONLY DISPUTE IS REGARDING THE QUANT ITY OF RUBBER THAT CAN BE PRODUCED PER TREE. IF THE MINIMUM QUAN TITY OF 9 6KG/TREE IS CONSIDERED THEN THE DIFFERENCE COMES, H OWEVER, IF THE MAXIMUM PRODUCTION OF 10KG/TREE IS CONSIDERED T HEN THE INCOME DECLARED BY THE ASSESSEE WILL BE LESS THAN T HE AGRICULTURAL INCOME THAT CAN BE DERIVED. REFERRING TO THE COPY OF THE ASSESSMENT ORDER FOR A.Y. 1998-99, A COPY OF WHICH IS PLACED AT PAPER BOOK PAGES 43 TO 64 HE SUBMITTED TH AT THE AO HAD MADE ADDITION OF RS.16,53,090/- AS UNDISCLOSED INCOME OUT OF AGRICULTURAL INCOME DECLARED AT RS.20,67,000/-. REFERRING TO THE ORDER OF THE CIT(A) FOR THE SAME ASSESSMENT YEA R, A COPY OF WHICH IS PLACED AT PAGES 65 TO 108 OF THE PAPER BOO K, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT A PART OF T HE ADDITION WAS CONFIRMED BY CIT(A) AS INCOME FROM UNDISCLOSED SOURCES OF SUCH AGRICULTURAL INCOME. HOWEVER, NO PENALTY W AS LEVIED U/S.271(1)(C) OF THE I.T. ACT ON THIS ISSUE. 14. REFERRING TO THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DYNAMIC LOGISTICS PVT. LTD. , VS. DCIT VIDE ITA NO.07/PN/2006 ORDER DATED 29-02-2008 FOR A .Y. 2001-02 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION HAS HELD THAT WHEN SIMILAR NOTES ENCLOSED WITH RETURN F OR A.YRS. 2000-01, 2002-03 AND 2003-04 AND THE AO HAS DROPPED PENALTY PROCEEDINGS FOR THOSE YEARS THEN IT WAS NOT OPEN TO THE AO TO IMPOSE PENALTY ON THE ADMITTED IDENTICAL FACTS FOR THE IMPUGNED ASSESSMENT YEAR. WHILE DOING SO, THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ORIENT PRESS LTD., REPORTED IN 99 TTJ 1091 WHERE IT HAS BEEN HELD THAT IF THE AO HAS DROPPED PENALTY ON SIMILAR SET OF FACTS IN 10 THE OTHER YEARS, THE PENALTY NEEDS TO BE DROPPED ON THAT GROUND ALONE. HE ACCORDINGLY SUBMITTED THAT NO PENALTY IS LEVIABLE ON THE AGRICULTURAL INCOME TREATED AS UNDISCLOSED INCO ME. 15. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBM ITTED THAT THE ADDITIONAL INCOME WAS DECLARED BY THE ASSESSEE ONLY DUE TO THE SEARCH. HAD THERE BEEN NO SEARCH THE ASSESSEE WOULD NOT HAVE DECLARED THE ADDITIONAL INCOME. REFERRING TO THE D ECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. ZOO M COMMUNICATIONS REPORTED IN 327 ITR 510 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION CONSIDERING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD. REPORTED IN 322 ITR 158 HAS HELD THAT SO LONG AS THE ASSESSEE HAS NOT CONCEALED ANY MATERIAL FACT OR THE FACTUAL INFORMATION GIVEN BY HIM HAS NOT BEEN FOUND TO BE INCORRECT HE WILL NOT BE LIABLE TO PENALTY U/S.271( 1)(C) OF THE I.T. ACT EVEN AFTER THE CLAIM MADE BY HIM IS UNSUSTAINAB LE IN LAW PROVIDED THAT HE EITHER SUBSTANTIATES THE EXPLANATI ON OFFERED BY HIM OR THE EXPLANATION EVEN IF NOT SUBSTANTIATED IS FOUND TO BE BONAFIDE. IF THE EXPLANATION IS NEITHER SUBSTANTIA TED NOR SHOWN TO BE BONAFIDE EXPLANATION 1 TO SECTION 271(1)(C) W OULD COME INTO PLAY AND THE ASSESSEE WILL BE LIABLE FOR THE P RESCRIBED PENALTY. SINCE IN THE INSTANT CASE THE ASSESSEE WA S UNABLE TO SUBSTANTIATE AND THE EXPLANATION DOES NOT APPEAR TO BE BONAFIDE, THEREFORE, THE PENALTY IS LEVIABLE. 11 16. REFERRING TO THE DECISION OF THE HONBLE SUPREM E COURT IN THE CASE OF TRIBHOVANDAS BHIMJI ZAVERI VS. UNION OF INDIA AND OTHERS REPORTED IN 204 ITR 368 HE SUBMITTED THA T THE HONBLE SUPREME COURT IN THE SAID DECISION HAS HELD THAT DISCLOSURE MADE PURSUANT TO SEARCH ACTION IS NOT VO LUNTARY. REFERRING TO THE DECISION OF THE MUMBAI BENCH OF TH E TRIBUNAL IN THE CASE OF SREEJI TRADERS VS. DCIT REPORTED IN 149 TTJ 52 HE SUBMITTED THAT THE TRIBUNAL IN THE SAID DECISION FOLLOWING VARIOUS DECISIONS INCLUDING THE THIRD MEMBER DECISI ON OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. KIRTI DAHYABHAI PATEL REPORTED IN (2009) 129 ITD 159 (AHD ) (TM) HAS HELD THAT PENALTY ON ADDITIONAL INCOME DECLARED IN THE RETURNS PURSUANT TO SEARCH IS CLEARLY LEVIABLE. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) SHOULD BE UP HELD AND THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 17. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOIND ER SUBMITTED THAT THE DECISION OF THE HONBLE DELHI HI GH COURT IN THE CASE OF ZOOM COMMUNICATIONS (SUPRA) IS BASED ON REGULAR ASSESSMENT AND NOT RELATING TO PENALTY LEVIED ON TH E BASIS OF SEARCH PROCEEDINGS. SO FAR AS THE DECISION OF THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF KIRTI DAHYABHA I PATEL (SUPRA) IS CONCERNED WHICH HAS BEEN RELIED ON BY TH E MUMBAI BENCH OF THE TRIBUNAL IN SREEJI TRADERS (SUPRA) HE SUBMITTED THAT THE HONBLE GUJARAT HIGH COURT HAS RECENTLY RE VERSED THE SAME. HE SUBMITTED THAT THE DECISION OF THE PUNE B ENCH OF THE TRIBUNAL IN THE CASE OF CHANDAN K. SHEWANI HAS NEIT HER BEEN 12 REVERSED NOR THE LD. DEPARTMENTAL REPRESENTATIVE CO ULD DISTINGUISH THE SAID DECISION. IF THE CONTENTION O F THE DEPARTMENTAL REPRESENTATIVE THAT PENALTY IS LEVIABL E ON ACCOUNT OF ADDITIONAL INCOME DECLARED DUE TO THE SEARCH AND THEREFORE PENALTY IS LEVIABLE IS ACCEPTED THEN THERE WAS NO R EASON TO INSERT THE EXPLANATION 5A TO PROVISIONS OF SECTION 271(1)( C) OF THE I.T. ACT. SO FAR AS THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF TRIBHOVANDAS BHIMJI ZAVERI (SUPRA) IS CONCE RNED THE SAID DECISION RELATES TO VDIS SCHEME AND NOT ON THE ISSUE OF ADDITIONAL INCOME DECLARED DUE TO SEARCH/SURVEY. H E ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE REVERSED. 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE AS SESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BE FORE US. THERE IS NO DISPUTE TO THE FACT THAT DUE TO A SEARC H CONDUCTED AT THE RESIDENTIAL CUM BUSINESS PREMISES OF THE ASSESS EE THE ADDITIONAL INCOME OF RS.37,67,679/- WAS DECLARED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A. THIS ADDITIO NAL INCOME WAS ACCEPTED BY THE AO IN THE ORDER PASSED U/S.143( 3) R.W.S.153A. SIMILARLY, THE AO ALSO MADE CERTAIN OT HER ADDITIONS AND AFTER THE PART RELIEF GIVEN BY THE CIT(A) THE A DDITION TO THE EXTENT OF RS.10,42,666/- MADE BY THE AO WAS SUSTAIN ED. PENALTY HAS BEEN LEVIED ON ACCOUNT OF ABOVE ADDITIO NS WHICH HAS BEEN UPHELD BY THE CIT(A) AND THE ADDITIONAL IN COME OF RS.37,67,679/- DECLARED IN THE RETURN FILED IN RESP ONSE TO NOTICE 13 U/S.153A. THUS, FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE WE FIND PENALTY HAS BEEN LEVIED ON ACCOUNT OF 2 TYPES OF ADDITIONS. 18.1 THE ADDITION OF RS.37,67,679/- RELATES TO THE ADDITIONAL INCOME DECLARED BY THE ASSESSEE PURSUANT TO THE SEA RCH ACTION WHICH CONSIST OF 3 ITEMS, THE DETAILS OF WHICH ARE AS UNDER : 1 PROFIT ON UNRECORDED SALES (SALES RS.4442500 LESS COST OF SALES RS.1252939 3189561 2 MAINTENANCE DEPOSIT CONTRIBUTION 313118 3 CREDIT BALANCE OF LAND OWNER SHRI SANJAY V. SASAR 265000 19. SO FAR AS THE LEVY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT ON ACCOUNT OF ABOVE 3 ADDITIONS ARE CONCERNED WE FI ND THE SAME ARE BASED ON THE LOOSE PAPERS FOUND AND SEIZED DURI NG THE COURSE OF SEARCH WHICH TOOK PLACE ON 24-06-2003. T HE ASSESSEE DECLARED THE ADDITIONAL INCOME ON THE BASIS OF THE ENTRIES FOUND IN THOSE LOOSE PAPERS AND FILED THE RETURN IN RESPO NSE TO NOTICE U/S.153A WHICH HAS BEEN ACCEPTED BY THE AO AND NO F URTHER ADDITION ON THIS ACCOUNT HAS BEEN MADE. THEREFORE, THE QUESTION THAT ARISE IS AS TO WHETHER PENALTY CAN BE LEVIED U /S. 271(1)(C) OF THE I.T. ACT ON ACCOUNT OF THE ABOVE 3 ADDITIONS. ADMITTEDLY, THE ABOVE ADDITIONS ARE NOT DUE TO ANY MONEY, BULLI ON OR JEWELLERY OR OTHER VALUABLE ARTICLE OR THING FOUND DURING THE COURSE OF SEARCH WHICH WAS OWNED BY THE ASSESSEE. WE FIND THE ADDITION TO INCOME WAS BASED ON ENTRIES FOUND IN TH E BOOKS OF ACCOUNT AND OTHER DOCUMENTS OR TRANSACTIONS WHICH I S COVERED UNDER EXPLANATION 5A TO PROVISIONS OF SECTION 271(1 )(C) OF THE I.T. ACT WHICH WAS INSERTED BY THE FINANCE ACT, 200 7 W.E.F. 01- 04-2006. THEREFORE, THE PENALTY, IF ANY, CAN BE LE VIED IN SUCH 14 TYPE OF CASES AS PER EXPLANATION 5A TO SECTION 271( 1)(C) OF THE I.T. ACT AND THAT TOO IN CASE OF AN ASSESSEE WHERE THE SEARCH TOOK PLACE ON OR AFTER 01-06-2007. SINCE THE SEARC H HAS TAKEN PLACE IN THE INSTANT CASE ON 24-06-2003, THEREFORE, THE EXPLANATION 5A TO PROVISIONS OF SECTION 271(1)(C) O F THE I.T. ACT IS NOT APPLICABLE TO THE FACTS OF THE PRESENT C ASE. 20. IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF CHANDAN K. SHEWANI (SUPRA). THE TRIBUNAL A FTER CONSIDERING VARIOUS DECISIONS HAS HELD THAT EXPLANA TION 5 TO SECTION 271(1)(C) OF THE I.T. ACT HAS NO APPLICATIO N TO A CASE WHERE NO ADDITION IS MADE ON THE BASIS OF ANY MONEY , GOLD, JEWELLERY ETC. FOUND DURING THE COURSE OF SEARCH. THE TRIBUNAL FURTHER OBSERVED THAT EVEN THOUGH THE PARLIAMENT HA S INSERTED EXPLANATION 5A TO SECTION 271(1)(C) OF THE I.T. ACT , THE SAID EXPLANATION IS APPLICABLE IN RESPECT OF THE SEARCH INITIATED U/S.132 ON OR AFTER 01-06-2007. EXPLANATION 5A WAS INTRODUCED TO PATCH OUT THE LACUNAE IN THE EXISTING PROVISIONS MORE PARTICULARLY TO OVERCOME THE JUDICIAL INTERPRETATIO N OF EXPLANATION 5. WHEN THE SEARCH IS INITIATED U/S.13 2 ON OR AFTER 01-06-2007 THEN THERE IS A LEGAL PRESUMPTION THAT A NY INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHE R DOCUMENTS OR TRANSACTIONS WHICH IS CLAIMED AS INCOME BY THE A SSESSEE, THE SAME WOULD BE TREATED AS DEEMED CONCEALMENT OF PART ICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME. THEREFORE, SINCE THE DATE OF SEARCH IN THAT CASE W AS 15-06-2004 AND THE ADDITION WAS NOT MADE ON THE BASIS OF ANY M ONEY, 15 BULLION, JEWELLERY ETC. FOUND DURING THE COURSE OF SEARCH IT WAS HELD THAT EXPLANATION 5A TO SECTION 271(1)(C) OF TH E I.T. ACT IS NOT APPLICABLE AND THE PENALTY WAS ACCORDINGLY DELE TED. 21. SINCE ADMITTEDLY IN THE INSTANT CASE NO MONEY, BULLION, JEWELLERY OR ANY VALUABLE ARTICLE WERE FOUND WHICH WERE OWNED BY THE ASSESSEE AND THE ADDITIONAL INCOME WAS DECLA RED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S.153A ON THE BASIS OF ENTRIES IN LOOSE PAPERS ETC. FOUND DURING THE COURS E OF SEARCH, WHICH HAS BEEN ACCEPTED BY THE AO IN ASSESSMENT, TH EREFORE, WE ARE OF THE CONSIDERED OPINION THAT NO PENALTY U/ S. 271(1)(C) OF THE I.T. ACT IS LEVIABLE ON ACCOUNT OF ABOVE 3 A DDITIONS. WE THEREFORE DIRECT THE AO TO CANCEL THE PENALTY ON AC COUNT OF THE ABOVE 3 ADDITIONS. 22. THE LD. COUNSEL FOR THE ASSESSEE COULD NOT SUBS TANTIATE AS TO WHY PENALTY SHALL NOT BE LEVIED U/S. 271(1)(C) O F THE I.T. ACT ON ACCOUNT OF THE FOLLOWING ADDITIONS: UNEXPLAINED INVESTMENT IN FURNITURE RS.20,000/- CAPITAL INTRODUCED IN KIRTI DEVELOPERS RS. 1 LAKH COST OF LAND PAID TO R.B., MOZE RS. 1 LAKH INTEREST PAID TO SHRIRAM SONI RS.81,000/- WE THEREFORE UPHOLD THE ORDER OF THE CIT(A) IN CONF IRMING THE LEVY OF PENALTY ON THE ABOVE 4 ADDITIONS. 23. SO FAR AS THE LEVY OF PENALTY ON ACCOUNT OF SAL ES UNRECORDED AMOUNTING TO RS.55,000/- IS CONCERNED, W E FIND SOME FORCE IN THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ADDITION BEING DEBATABLE, NO PENA LTY ON THIS ADDITION IS WARRANTED. THE SUBMISSION OF THE LD. C OUNSEL FOR 16 THE ASSESSEE THAT AS AGAINST THE SALE CONSIDERATION OF RS.44,97,500/- THE ASSESSEE HAS RECEIVED ONLY RS.44 ,42,500/- AND THE BALANCE AMOUNT OF RS.55,000/- HAS NOT BEEN RECEIVED EVEN TILL DATE COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. SINCE THE ASSESSEE IS A LAND DEVEL OPER AND THE ADDITION OF RS.55,000/- MADE BY THE AO WAS ON ACCOU NT OF SALES UNRECORDED WHICH WAS DUE TO NON RECEIPT OF THE AMOU NT, THEREFORE, WE FIND FORCE IN THE SUBMISSION OF THE L D. COUNSEL FOR THE ASSESSEE THAT IT IS A DEBATABLE ISSUE AS TO WHE THER THE AMOUNT RECEIVED HAS TO BE OFFERED AS THE SALE PROCEEDS OR THE AMOUNT AGREED TO BE RECEIVED HAS TO BE OFFERED AS SALE PRO CEEDS. IN VIEW OF THIS, WE ARE OF THE CONSIDERED OPINION THAT PENALTY CANNOT BE LEVIED ON THIS AMOUNT OF RS.55,000/-, THE ISSUE BEING DEBATABLE. 24. SO FAR AS THE LEVY OF PENALTY ON ACCOUNT OF ADD ITION OF RS.36,500/- ON ACCOUNT OF 50%OF DONATIONS CLAIMED A S ADVERTISEMENT EXPENSES AND ADDITION OF RS.54,500/- ON ACCOUNT OF ESTIMATED DISALLOWANCE OF CAR, PETROL AND TELEPH ONE EXPENSES ARE CONCERNED, WE AGREE WITH THE LD. COUNS EL FOR THE ASSESSEE THAT PENALTY CANNOT BE LEVIED ON ACCOUNT O F ESTIMATED ADDITION. THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. AJAIB SINGH AND CO REPORTED IN 253 ITR 630 HAS HELD THAT PENALTY CANNOT BE LEVIED ON ACCOUNT O F ADDITION TO INCOME BASED ON ESTIMATE AND DISALLOWANCE OF EXPEND ITURE. THE HONBLE CHATTISGARH HIGH COURT IN THE CASE OF C IT VS. VIJAY KUMAR JAIN REPORTED IN 325 ITR 378 HAS ALSO U PHELD THE 17 DECISION OF THE TRIBUNAL WHERE THE TRIBUNAL HAS UPH ELD THE ORDER OF THE CIT(A) IN CANCELLING THE PENALTY LEVIE D ON ACCOUNT OF ESTIMATED GP ADDITION. 25. IN VIEW OF ABOVE DECISIONS WE HOLD THAT PENALTY IS NOT LEVIABLE ON ACCOUNT OF ADDITION OF RS.36,500/- BEIN G 50% OF DONATIONS CLAIMED AS ADVERTISEMENT EXPENSES AND RS. 54,500/- ON ACCOUNT OF ESTIMATED DISALLOWANCE IN RESPECT OF CAR, PETROL AND TELEPHONE EXPENSES. 26. SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF AGRI CULTURAL INCOME TREATED AS BUSINESS INCOME IS CONCERNED WE F IND SIMILAR ADDITION WAS MADE IN A.Y. 1998-99 WHICH WAS UPHELD BY THE CIT(A). HOWEVER, NO PENALTY WAS LEVIED BY THE AO O N SUCH TREATMENT OF AGRICULTURAL INCOME AS UNDISCLOSED INC OME. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DYNAMIC L OGISTICS PVT. LTD., (SUPRA) FOLLOWING THE DECISION OF THE CO ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ORIENT PRESS L TD., REPORTED IN 99 TTJ 1091 HAS HELD THAT UNDER IDENTICAL FACTS WHEN THE AO HAD NOT LEVIED PENALTY U/S.271(1)(C) OF THE I.T. AC T IN THE PRECEDING YEAR, THEREFORE, IT IS NOT OPEN TO THE AO TO IMPOSE PENALTY ON THE ADMITTEDLY IDENTICAL FACTS FOR THE I MPUGNED ASSESSMENT YEAR. THE RELEVANT OBSERVATION OF THE T RIBUNAL AT PARA 4 TO 6 OF THE ORDER READ AS UNDER : 4. WE HAVE CONSIDERED THE RIVAL CONTENTIONS, PERUSED THE RELEVANT MATERIAL ON RECORD AND DULY CONSIDERED, TH E FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITIO N. 5. WE FIND FORCE IN THE SUBMISSION OF THE LEARNED COUN SEL FOR THE ASSESSEE THAT WHEN THE SIMILAR NOTES ENCLOSED WITH THE RET URNS FOR THE ASSESSMENT YEARS 2000-01, 2002-03, AND 2003-04, THE ASSESSING OFFICER HAD DROPPED PENALTY PROCEEDINGS, IT WA S NOT 18 OPEN TO THE ASSESSING OFFICER TO IMPOSE PENALTY, ON THE ADMITTEDLY IDENTICAL FACTS, FOR THIS ASSESSMENT YEAR. A CO-ORDINATE BENCH OF THIS TRIBUNAL, IN THE CASE OF ORIENT PRESS LTD. [99 TTJ 1091], HAS HELD THAT IF THE ASSESSING OFFICER HAS DROPPED PENALTY ON SIMILAR SET OF FACTS IN THE OTHER YEARS, THE PENALTY NEEDS TO B E DROPPED ON THAT GROUND ALONE. IN THE SAID CASE, THE TRIBUNAL HAS OBSERVED AS FOLLOWS : '4. IT IS DIFFICULT TO UNDERSTAND AS TO HOW CAN REVENU E DEFEND IMPOSITION OF PENALTIES FOR ASSESSMENT YEARS 1993-94 AND 1994- 95, WHEN, ON THE MATERIALLY SIMILAR SET OF FACTS, NO P ENALTY IS IMPOSED FOR THE ASSESSMENT YEAR 1995-96. THE DROPPING OF PENALTY PROCEEDINGS FOR THE ASSESSMENT YEAR 1995-96 IS A CONSCIOUS ACT BY THE AO AS EVIDENT FROM THE SPECIFIC OR DER DROPPING THE PENALTY PROCEEDINGS FOR THAT YEAR. DURI NG THE COURSE OF HEARING BEFORE US, WE DID ASK THE DEPARTMENTAL REP RESENTATIVE TO EXPLAIN THIS CONTRADICTION IN THE STAND BUT HE WAS NOT ABLE TO EXPLAIN THE SAME AND HE MADE A VAGUE STATEMENT TO THE EFFECT THAT THE FACTS OF THAT YEAR MAY BE DIFFERENT. THIS IS UNACC EPTABLE. IN ANY CASE, THE MATERIAL FACTS AS EVIDENT FROM THE DOCUMENT S BEFORE US, WERE CLEARLY THE SAME SO FAR AS THE QUESTION OF DECLARA TION WAS CONCERNED. ON ONE SET OF FACTS, IN ONE YEAR, THE PENA LTY IS DROPPED, AND FOR THE REMAINING YEARS, THE PENALTIES ARE IMPOSE D, ARE POINTED OUT, FOR THIS REASON ALONE, PENALTIES IMPOSED A RE NOT SUSTAINABLE IN LAW.' 6. WE HAVE NO REASONS TO TAKE ANY OTHER VIEW OF THE M ATTER THAN THE VIEW SO TAKEN BY A CO ORDINATE BENCH. THE MATERI AL FACTS BEING IDENTICAL INASMUCH AS ON SIMILAR SET OF FACTS, AS WERE B EFORE THE ASSESSING OFFICER IN THIS YEAR, THE PENALTY PROCEEDINGS H AVE BEEN DROPPED FOR OTHER YEARS, WE HOLD THAT IT WAS NOT A FI T CASE FOR IMPOSITION OF PENALTY. THE CIT(A) OUGHT TO HAVE DELE TED THE SAME. IN ANY EVENT, EVEN ON MERITS, SINCE ASSESSEE HAD DISCLOSED ALL MATERIAL FACTS BY WAY OF A NOTE ATTACHED TO THE INCO ME TAX RETURN, IT CANNOT BE SAID TO BE A CASE OF CONCEALMENT OF INCO ME OR FURNISHING OF INACCURATE PARTICULARS. BEARING IN MIND THESE FACTS, AS ALSO ENTIRETY OF THE CASE, WE DEEM IT FIT AND PROPE R TO DELETE THE IMPUGNED PENALTY OF RS.95,39,005. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 27. SINCE IN THE INSTANT CASE THE AO HAS NOT LEVIED ANY PENALTY U/S.271(1)(C) OF THE I.T. ACT ON ACCOUNT OF TREATMENT OF A PART OF THE AGRICULTURAL INCOME AS BUSINESS INCOM E IN THE ASSESSMENT YEAR 1998-99, THEREFORE, FACTS BEING SIM ILAR WE FIND NO REASON AS TO WHY PENALTY SHOULD BE LEVIED FOR TH E IMPUGNED ASSESSMENT YEAR. WE FURTHER FIND MERIT IN THE SUBM ISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE COMPUTATION O F AGRICULTURAL INCOME FROM RUBBER PLANTATION WAS PURELY ON ESTIMAT E BASIS 19 WHICH IS ON THE BASIS OF MINIMUM QUANTITY OF 6KG/TR EE. HOWEVER, IT CANNOT BE SAID THAT THE PRODUCTION OF R UBBER FROM A TREE WILL ALWAYS BE AT THE MINIMUM OF 6KG/TREE. IT MAY VARY FROM TREE TO TREE. SOMETIMES IT MAY BE MORE AND SO METIMES IT MAY BE LESS. THEREFORE, ADDITION MAY BE JUSTIFIED IN QUANTUM PROCEEDINGS. HOWEVER, THE SAME IN OUR OPINION CANNO T BE THE BASIS FOR IMPOSING PENALTY U/S.271(1)(C) OF THE I.T . ACT. IN THIS VIEW OF THE MATTER WE ARE OF THE CONSIDERED OPINION THAT NO PENALTY IS LEVIABLE ON ACCOUNT OF TREATMENT OF A PA RT OF THE AGRICULTURAL INCOME AMOUNTING TO RS.5,95,866/- AS U NDISCLOSED INCOME. WE THEREFORE DIRECT THE AO TO CANCEL THE L EVY OF PENALTY ON THIS ADDITION. IN VIEW OF THE ABOVE DIS CUSSION, THE ORDER OF LD.CIT(A) IS MODIFIED AND THE AO IS DIRECT ED TO RECOMPUTE THE PENALTY IN THE LIGHT OF THE DIRECTION S GIVEN ABOVE. 28. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON 29-05-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PAN DA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 29 TH MAY, 2015 SATISH COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE