Shri Jayesh P. Patel, Anand V. The Dy.CIT.,Anand Circle, Anand

ITSSA 17/AHD/2012

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5552 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 3 month(s) 15 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 15-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 29-06-2017
• Assessment Year: misc
• Appeal Filed On: 30-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASEEM L THAKKAR CA
• Keywords: Unexplained investment; Unexplained expenditure; Search and seizure; Set aside
• Section: 143(3); 250

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD , , BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER (SS) ./ IT(SS)A NO.17/AHD/2012 (BLOCK PERIOD : 01/04/1988 TO 18/03/1997) SHRI JAYESH P.PATEL 23, ARYANAGAR AMUL DAIRY ROAD ANAND / VS. THE DCIT ANAND CIRCLE ANAND # ./ ./ PAN/GIR NO. : AEQPP 4782 E ( #& / APPELLANT ) .. ( '#& / RESPONDENT ) #&( / APPELLANT BY : SHRI ASEEM L. THAKKAR, CA '#& )( / RESPONDENT BY : SHRI O.P. SHARMA, CIT-DR *+ ), / DATE OF HEARING 18/02/2019 -./0 ), / DATE OF PRONOUNCEMENT 15/ 05/2019 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-IV, BARODA [CIT(A) IN SHORT] DATED 16/11/2011 IN THE MATTER OF ASSESSMENT ORDER UNDER S.158C(2) RWS 143(3) & 254 OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 31/12 /2007 RELEVANT TO BLOCK PERIOD 01/04/1988 TO 18/03/1997. IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 2 - 2. THE SOLITARY GROUND OF APPEAL RAISED BY THE ASS ESSEE READS AS UNDER:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IV, BARODA, ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY LEV IED BY DY.COMMISSIONER OF INCOME TAX, ANAND CIRCLE, ANAND OF RS.57,58,700/- U/S.158BFA(2) OF THE IT ACT, 1961. 3. BRIEFLY STATED, PURSUANT TO SEARCH AND SEIZURE ACTION UNDER S.132 OF THE ACT IN THE BUSINESS AND THE RESIDENTIAL PREMISE S OF THE ASSESSEE ON 18/03/1997, THE ASSESSEE WAS ALLEGEDLY FOUND TO BE OWNER OF UNDISCLOSED INCOME OF RS.96,35,468/- BY THE ASSESSING OFFICER. THE CIT(A) IN THE FIRST APPEAL IN QUANTUM PROCEEDINGS, REVISED THE AF ORESAID UNDISCLOSED INCOME OF THE ASSESSEE TO THE EXTENT OF RS.95,97,83 2/-. THE AFORESAID QUANTUM ORDER OF THE CIT(A) WAS CHALLENGED BY THE A SSESSEE BEFORE ITAT. THE ITAT VIDE ITS ORDER DATED 20/11/2017 IN IT(SS)A NO.33/AHD/2009 FOR THE BLOCK PERIOD FROM FY 1987-88 TO 18/03/1997 SET ASIDE THE BASIS FOR MAKING THE ADDITION TOWARDS UNA CCOUNTED INCOME IN A FUNDAMENTAL MANNER. THE ITAT HOWEVER, RETAINED THE ADDITION OF RS.25 LAKHS ON PURE ESTIMATION BASIS TO PUT AN END TO THE LITIGATION CROPPED UP. IT WILL BE APT TO REPRODUCE THE QUANTUM ORDER FOR R EADY REFERENCE. 1. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE ACIT, ANAND CIRCLE FRAMED U/S. 158BC R .W.S. 143(3) AND 254 OF THE ACT. 2. THIS IS THE SECOND ROUND OF LITIGATION. IN THE FIRS T ROUND OF LITIGATION, THE ASSESSMENT WAS FRAMED U/S. 158BC R.W.S. 143(3)OF TH E ACT FOR THE BLOCK IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 3 - PERIOD FROM F.Y. 1987-88 TO 18.03.1997 VIDE ORDER D ATED 23.03.1999. THE LITIGATION TRAVELLED UP TO THE TRIBUNAL AND THE TRIBUNAL VIDE ORDER DATED 11.08.2006 IN IT(SS)A NOS. 316, 299 & 58/AHD/ 2003 SET ASIDE THE MATTER FOR DECIDING THE MATTER AFRESH AFTER VERIFIC ATION OF THE CLAIM OF THE ASSESSEE. 3. THE ADDITIONS MADE BY THE A.O. AS AGITATED BY THE A SSESSEE BEFORE US CAN BE UNDERSTOOD FROM THE FOLLOWING CHART:- NO. NATURE OF ADDITION AMOUNT (RS.) 1 UNACCOUNTED INVESTMENT IN 32 GUNTHA AT R.S. NO. 813, ANAND. 75000 2 UNACCOUNTED INVESTMENT IN R.S. NO. 615/1, 615/2, 615/3 ANAND. 1061001 3 UNACCOUNTED DALALI 5000 4 UNACCOUNTED INVESTMENT IN R.S. NO. 1135/3 ANAND, 250 JITODIA 105000 5 UNACCOUNTED INVESTMENT IN 116 GUNTHA OF LAND AT R.S. NO. 1707 KARAMSAD 11000 6 UNACCOUNTED INVESTMENT IN 106.75 GUNTHA AT R.S. NO. 1314, 14.3.1, 14.3.2, JITODIA 110000 7 UNACCOUNTED INVESTMENT IN 70 GUNTHA OF LAND AT R.S. NO. 67/7 10000 8 UNACCOUNTED INVESTMENT IN 49.57 GUNTHA OF LAND AT R.S. NO. 1242/1, 2, 3 25000 9 UNACCOUNTED DALAII 5000 10 UNACCOUNTED INVESTMENT IN 53.62 GUNTHA OF LAND AT R.S. NO. 735/4 & 737/2 100000 IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 4 - 11 UNEXPLAINED EXPENDITURE 125000 12 UNACCOUNTED INVESTMENTS / PROFIT AT LAND AT R.S. 2741/1, 2741/4A, 2741/4B 26700 13 UNACCOUNTED DALALI 3000 14 UNACCOUNTED INVESTMENT IN 316 GUNTHA OF LAND AT R.S. NO. 2068 BAKROL 10000 15 UNACCOUNTED INVESTMENT IN 9.11 GUNTHAS OF LAND AT R.S. NO. 2031/2/2 280000 16 UNACCOUNTED DALALI 5000 17 UNACCOUNTED INVESTMENT IN LAND OF 26,81 GUNTHA AT R.S. NO. 1182/1 50000 18 UNACCOUNTED INVESTMENT IN 17.86 GUNTHA OF LAND AT P.P. NO. 125 71000 19 UNACCOUNTED DALALI 5000 20 UNACCOUNTED INVESTMENT AND BUSINESS PROFIT IN 44 GUNTHA OF LAND AT R.S. NO. 691 NEW, 873 OLD 353000 21 UNACCOUNTED DALALI 10000 22 UNACCOUNTED INVESTMENT IN 54.70 GUNTHA OF LAND AT R.S. NO. 380, MOGRI 50000 23 UNACCOUNTED INVESTMENT IN 66.78 GUNTHA OF LAND AT R.S. NO. 1182/1, 1182/2 147500 IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 5 - 24 UNACCOUNTED INVESTMENT IN 30.47 GUNTHA OF LAND AT R.S. NO. 1105/3A, 3B, 4A, 4B AND 1110/1, 2, 3 25000 25 UNACCOUNTED INVESTMENT IN 17.2 GUNTHA OF LAND AT R.S. NO. 1021, 1022 ANAND 86000 26 UNACCOUNTED INVESTMENT IN 15.18 GUNTHA OF LAND AT R.S. NO. 488/1, ANAND 202000 27 UNACCOUNTED DALALI 11000 28 UNACCOUNTED INVESTMENT IN 7.08 GUNTHA OF LAND AT R.S. NO. 582/4, NAVLI 3500 29 UNACCOUNTED INVESTMENT IN 16.19 GUNTHA AT R.S. NO. 1863, BAKROL 25000 30 UNACCOUNTED INVESTMENT IN 71.84 GUNTHA OF LAND AT R.S. NO. 180 & 183 51000 31 UNACCOUNTED INVESTMENT IN 220.36 GUNTHA OF LAND AT R.S. NO. 311, 320, 368 5000 32 UNACCOUNTED INVESTMENT IN 78 GUNTHA OF LAND AT R.S. NO. 1131/12B, ANAND 2500 33 UNACCOUNTED INVESTMENT IN 43,03 GUNTHA OF LAND AT R.S. NO. 1280/1,2,3, 42000 34 UNACCOUNTED INVESTMENT IN 25.29 GUNTHA OF LAND AT REVENUE SURVEY NO. 161 OF JITODIA 25000 35 UNACCOUNTED INVESTMENT IN SHARE & NSC 19000 36 UNACCOUNTED ADVANCES THROUGH PROMISSORY NOTE 600000 IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 6 - 37 UNACCOUNTED BUSINESS PROFIT AS PER ANNEXURE A/6 (RESIDENCE) 4620688 38 UNACCOUNTED GOLD ORNAMENTS 263340 39 UNACCOUNTED INVESTMENT IN KVP / FD AND OTHERS AS PER ANNEXURE K, L, M. 250712 40 UNACCOUNTED INVESTMENT IN HOUSEHOLD VALUABLES 167636 41 UNACCOUNTED DEPOSITS IN BANK ACCOUNT OF THE ASSESSEE 75000 42 UNACCOUNTED INVESTMENT IN SHARES AS DISCUSSED INVESTMENT IN SHARES 98187 43 UNACCOUNTED MONEY LENDING THROUGH PROMISSORY NOTE OF M/S. SWAMINARAYAN FINANCIER 264781 44 MISCELLANEOUS INVESTMENT IN MARUTI CAR TYPEWRITER & OTHERS 154923 4. THE ALLEGATION OF THE REVENUE IS THAT THE ASSESSEE IS MAINLY INVOLVED IN THE BUSINESS OF SALE AND PURCHASE OF LAND AND ALSO EARNING BROKERAGE TO SOME EXTENT IN SOME OF THE LAND. THE REVENUE ALLEGE S THAT THE ASSESSEE INVOLVED HIMSELF IN DISPUTED IMMOVABLE PROPERTIES A ND CHARGED HEFTY AMOUNTS FOR PUTTING HIMSELF OUT OF THE DISPUTE. THE REVENUE FURTHER ALLEGES THAT THE ASSESSEE HAS ACQUIRED VARIOUS PROP ERTIES EITHER IN HIS NAME OR IN THE NAMES OF HIS FAMILY MEMBERS AND EMPL OYEES. IT IS ALSO THE ALLEGATION OF THE REVENUE THAT BY ENTERTAINING DISPUTED LAND OR CREATING DISPUTE BY VIRTUE OF BANAKHAT WITH VARIOUS LAND PURCHASE, THE ASSESSEE HAS POCKETED HUGE AMOUNT OF UNACCOUNTED IN COME. IN SUPPORT OF THESE ALLEGATIONS, THE ASSESSING OFFICER HAS HEA VILY RELIED UPON THE IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 7 - BANAKHATS WHICH WERE FOUND AND SEIZED FROM THE PREM ISES OF THE ASSESSEE AT THE TIME OF SEARCH AND SEIZURE PROCEEDI NGS. 5. THE ASSESSEE HAS STRONGLY REFUTED THE ALLEGATIONS O F THE REVENUE BY CLAIMING THAT HE IS ONLY A LAND BROKER AND IN SUPPO RT OF HIS CONTENTIONS, THE ASSESSEE FURNISHED THE CONFIRMATIONS OF VARIOUS LAND OWNERS AT THE TIME OF THE FIRST ROUND OF LITIGATION. THE ASSESSEE FURTHER CLAIMS THAT THE PROOF OF OWNERSHIP OF THE LAND IN QUESTION WAS ALSO FURNISHED TO THE ASSESSING OFFICER. THE ASSESSEE STRONGLY CONTENDED THAT HE IS MERELY A MEDIATOR AND A CONDUIT BETWEEN THE OWNER OF THE LAN D AND THE PROSPECTIVE PURCHASERS AND HAS ONLY TRIED TO FACILI TATE THE DEALS BY EARNING SOME DALALI (BROKERAGE). THE ASSESSEE STRON GLY REFUTED THE ALLEGATION THAT THE BANAKHATS FOUND AT THE TIME OF SEARCH PERTAIN TO PURCHASE OF IMMOVABLE PROPERTIES BY HIM. IN SUPPORT OF HIS CLAIM, THE ASSESSEE STATES THAT THERE IS NOT EVEN A SINGLY EVI DENCE WHICH COULD SUGGEST THAT THE IMPUGNED PROPERTIES WERE IN THE NA ME OF THE ASSESSEE. 6. WE HAVE GIVEN A VERY DISPASSIONATE CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THERE IS NO DISPUTE THAT SEVERAL BANAKHATS WERE FOUND FROM THE PREMISES OF THE ASSESSEE. SOME OF TH E BANAKHATS ARE NOT EVEN SIGNED BY ANY PARTIES. IT IS TRUE THAT THE BAN AKHATS HAVE THE NAME OF THE ASSESSEE OR HIS FAMILY MEMBERS OR HIS EMPLOY EES. BUT, IT IS EQUALLY TRUE THAT THERE IS NOT EVEN A SINGLE EVIDEN CE WHICH COULD SHOW THAT THE ASSESSEE WAS THE OWNER OF THE IMPUGNED PRO PERTIES. IT APPEARS THAT THE ASSESSEE WAS ACTING AS A CONDUIT BETWEEN T HE PURCHASERS AND THE SELLERS OF THE DISPUTED LAND AS A BROKER. 7. OUR VIEW IS FORTIFIED BY THE FACT THAT ONE REGISTER A-6 WAS FOUND AT THE TIME OF SEARCH WHICH CONTAIN NOTINGS IN RESPECT OF PURCHASE OF LAND FROM VARIOUS PARTIES. THE ENTRIES ON THE DEBIT SIDE REFLECTED THE PAYMENT MADE TO THE LAND OWNER AND THE ENTRIES ON THE CREDI T SIDE REPRESENTED THE MONEY RECEIVED FROM THE PURCHASER. THE TOTAL OF THE RECEIPT SIDE WAS RS. 1,46,32,959/- WHEREAS THE PAYMENTS AGGREGATED T O RS.1,00,18,271/-. THE A.O. HAS ADDED THE DIFFERENCE OF RS. 46,20,688/ - AS UNACCOUNTED BUSINESS PROFITS OF THE ASSESSEE IN ADDITION TO THE AMOUNTS FOUND PAID AS PER THE BANAKHATS. IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 8 - 8. THE ENTRIES IN THE REGISTER APPEARS TO BE PERTAININ G TO THE BANAKHATS FOUND AT THE TIME OF SEARCH ON THE BASIS OF WHICH T HE ASSESSING OFFICER HAS MADE THE ADDITIONS AS EXHIBITED IN THE CHART EL SEWHERE. THE CONTENTION OF THE ASSESSEE WAS DISMISSED MERELY BEC AUSE THE AMOUNTS DID TALLY BUT THE DATES DID NOT. 9. IN OUR CONSIDERED OPINION, THE CLAIM OF THE ASSESSE E THAT HE WAS ACTING ONLY AS A BROKER/CONDUIT CANNOT BE BRUSHED ASIDE LI GHTLY. WE ARE OF THE OPINION THAT ADDITIONS OF SUCH MAGNITUDE SHOULD BE TAKEN TO ITS LOGICAL CONCLUSION. WHAT WAS FOUND FROM THE PREMISES OF THE ASSESSEE CAN BE UNDERSTOOD FROM THE FOLLOWING CHART:- ITEM RELEVANT ANNEXURE FOUND SEIZED GOLD ORNAMENTS JEWELLERY X/J 1268 GMS. RS. 5,30,285 180 GMS. RS. 42,000 CASH C/C - 1 RS. 76,820 RS. 70,000 XEROX COPY OF KVP K RS. 42,000 -- XEROX COPY OF KVP L RS. 36,000 XEROX COPY -- NSC FDR KVP M RS. 2,40,630 -- OTHER VALUABLES V HOUSEHOLD APPLIANCES -- 10. THE ABOVE CHART SHOWS THAT THE ASSESSEE WAS A MAN O F SMALL MEANS. IF THE ASSESSEE HAS MADE EXORBITANT PROFIT FROM THE LA ND TRANSACTIONS, AS ALLEGED BY THE REVENUE, THE SAME SHOULD BE REFLECTE D IN THE STANDARD OF LIVING OF THE ASSESSEE AND ALSO THE SEIZURE MADE BY THE REVENUE. THE SEIZURE OF THE VALUABLES FOUND AT THE TIME OF SEARC H AS MENTIONED HEREINABOVE SPEAKS FOR THEMSELVES. NOTHING IS COMIN G FROM THE RECORD TO SHOW ANY LAVISH CEREMONIAL FUNCTION TAKEN IN THE FAMILY IN THE BLOCK PERIOD. CONSIDERING THESE FACTS, ADDITIONS OF SUCH MAGNITUDE CANNOT BE SUSTAINED. THE A.O. IS ENTITLED TO MAKE ANY DEDUCTI ONS FROM THE SEIZED BANAKHATS AND THE DEDUCTIONS MADE BY THE A.O. MAY H AVE SOME MEANING BUT ARE DEVOID OF ANY SUBSTANCE. IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 9 - 11. IF, WE ACCEPT THE CONTENTIONS OF THE ASSESSEE THAT ALL DETAILS RELATING TO THE OWNERSHIP OF THE LAND HAVE BEEN FURNISHED ALONG WITH 7/12 ABSTRACTS IN RESPECT OF ALL THE SURVEY NUMBERS, THEN THESE GO VERNMENT DOCUMENTS AND THE DETAILS OF TRANSACTIONS WILL NEED FURTHER V ERIFICATION. 12. WE FAILED TO PERSUADE OURSELVES TO ONCE AGAIN SET A SIDE THE MATTER TO THE FILES OF THE A.O. FOR FURTHER VERIFICATION FOR THE REASON THAT 20 YEARS HAVE SINCE ELAPSED AND THE IMPUGNED LANDS MUST HAVE CHAN GED 3-4 HANDS IN THIS PERIOD. THEREFORE, IT WOULD NOT BE PRACTICAL F OR THE ASSESSING OFFICER TO DO THE NECESSARY VERIFICATION AND IT WOU LD NOT ONLY BE INJUSTICE TO THE REVENUE BUT ALSO TO THE ASSESSEE T O BRING EVIDENCES AFTER A LAPSE OF 20 YEARS. 13. BUT, THEN EVERY LITIGATION SHOULD COME TO AN END. I N OUR CONSIDERED OPINION, THERE IS NO POINT IN KEEPING THIS DISPUTE ALIVE, THEREFORE CONSIDERING THE NATURE OF TRANSACTIONS VIS--VIS TH E CONTENTIONS OF THE ASSESSEE AND POINTING OUT THAT FURTHER VERIFICATION WOULD NOT RESULT INTO ANY PURPOSEFUL AND MEANINGFUL RESULT AFTER A GAP OF 20 YEARS, THEREFORE, TO PUT AN END TO THE LITIGATION AN ADDITION OF RS. 25 LAKHS SHOULD MEET THE ENDS OF JUSTICE ON THE GIVEN PECULIAR FACTS OF THE CASE IN HAND. 14. WE ACCORDINGLY DIRECT THE A.O. TO RESTRICT THE ADDI TIONS TO RS. 25 LAKHS WHICH WILL COVER ALL THE RELATED UNEXPLAINED INVEST MENTS AS ALLEGED BY THE A.O. 15. APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 4. FROM THE APPELLATE ORDER OF THE CO-ORDINATE BENC H IN QUANTUM PROCEEDINGS, IT IS CRYSTAL CLEAR THAT ADDITIONS TOW ARDS UNDISCLOSED INCOME HAS BEEN SUSTAINED IN THE HANDS OF THE ASSESSEE PUR ELY ON ESTIMATED BASIS HAVING REGARD TO THE PECULIAR FACTS AND CIRCUMSTANC ES OF THE CASE. A QUESTION THUS ARISES AS TO WHETHER PENALTY UNDER S. 158BFA(2) IS JUSTIFIED WHERE ALLEGED UNDISCLOSED INCOME WAS FINALIZED ON T HE BASIS OF IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 10 - ESTIMATION ALONE. A PERUSAL OF PROVISIONS OF SECT ION 158BFA DEMONSTRATES THAT LEGISLATURE HAS USED DIFFERENT PH RASEOLOGY IN SUB- SECTION(1) AND SUB-SECTION(2) THEREOF WHEREBY WHILE THE PAYMENT OF INTEREST UNDER S.158BFA(1) IS MANDATORY, LEVY OF PE NALTY IS DISCRETIONARY. IT SHOWS THAT THE AUTHORITY CONCERN ED IS VESTED WITH THE DISCRETION TOWARDS LEVY OF PENALTY. IT IS TRITE PO SITION OF LAW THAT ANY DISCRETION VESTED IN AN AUTHORITY HAS TO BE EXERCIS ED IN A REASONABLE AND RATIONAL MANNER DEPENDING UPON THE FACTS AND CIRCUM STANCES OF EACH CASE. IT IS ALSO TRITE THAT THE PROCESS OF IMPOSIT ION OF PENALTY IS NOT AUTOMATIC IN THE EVENTUALITY OF ESTIMATED INCOME. ALL THE ATTENDANT CIRCUMSTANCES OF THE CASE REQUIRES TO BE CAREFULLY SCRUTINIZED. THE QUESTION WHETHER PENALTY SHOULD BE LEVIED MUST BE C ONSIDERED ON THE BASIS OF THE JUDICIAL DETERMINATION. IT MUST BE PR OVED BEYOND THE SHADOW OF DOUBT THAT THERE WAS ACTUALLY INCOME AND FURTHER SUCH INCOME WAS NOT DISCLOSED. THE MERE FACT OF ADDITION ON ESTIMATED BASIS PARTICULARLY WHEN THE UNDIDSCLOSED INCOME IS CONCLUDED ON THE INFEREN CE FLOWING FROM THE INABILITY OF THE ASSESSEE TO ESTABLISH THE CASE PLE ADED BY HIM, WILL NOT BE SUFFICIENT FOR THE PURPOSE OF IMPOSITION OF PENALTY . AN ESTIMATION SO MADE MAY BE CORRECT OR MAY NOT BE CORRECT. THE DEG REE OF PROOF REQUIRED FOR IMPOSITION OF PENALTY IS QUITE DIFFERENT FROM A ND IS ON A MUCH HIGHER PEDESTAL, THEN REQUIRED FOR THE PURPOSE OF MAKING A DDITIONS ON ESTIMATED BASIS AND DE HORS SUFFICIENT EVIDENCE, PENALTY CANNOT BE LEVIED. SU CH VIEW HAS BEEN EXPRESSED BY THE HONBLE RAJASTHAN HI GH COURT IN CIT VS. IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 11 - DR.GIRIRAJ AGARWAL GIRI 346 ITR 152 (RAJ.) AND CIT VS. BECHARBHAI P.PARMAR (2012) 341 ITR 499(GUJ.) RELIED UPON ON B EHALF OF THE ASSESSEE. 4.1. IT IS MANIFEST THAT THE UNDISCLOSED INCOME HAS BEEN ULTIMATELY DETERMINED PURELY ON ESTIMATED BASIS SHORN OF ADEQU ATE REFERENCE TO UNDERLYING MATERIAL. THE ESTIMATION HAS BEEN MAD E WITH CAVEATS LIKE TO PUT AN END TO THE LITIGATION AND MEET THE EN DS OF JUSTICE IN THE GIVEN PECULIAR FACTS ETC. SUCH BASIS OF ADDITION, IN OU R VIEW, CANNOT ENTAIL ONEROUS BURDEN IN THE FORM OF PENALTY. IN THE CIRC UMSTANCES, THE STATUTORY DISCRETION VESTED WITH THE REVENUE AUTHOR ITIES, IN OUR OPINION, REQUIRES TO BE EXERCISED IN FAVOUR OF ASSESSEE. TH EREFORE, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICE R TO CANCEL THE PENALTY IMPOSED UNDER S.158BFA(2) OF THE ACT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER PRONOUNCED IN OPEN COURT ON 15 / 05/2019 SD/- SD/- ( ) ( ) ( MAHAVIR PRASAD ) ( PRADIP KUMAR KEDIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 15/ 05 /2019 4..*,.*../ T.C. NAIR, SR. PS IT(SS)A NO.17/A HD/2012 SHRI JAYESH P.PATEL VS. CIT BLOCK PERIOD 01/04/1988 TO 18/03/1997 - 12 - !'!# / COPY OF THE ORDER FORWARDED TO : 1. #& / THE APPELLANT 2. '#& / THE RESPONDENT. 3. 567, 8, / CONCERNED CIT 4. 8, ( ) / THE CIT(A)-IV, BARODA 5. 9:;,*67 , 67 0 , 5 / DR, ITAT, AHMEDABAD 6. ;<+ / GUARD FILE. / BY ORDER, '9,, //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION ..6.5.19 (DICTATION-PAD 12- PAGES ATTACHED AT THE END OF THIS APPEAL-FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 6.5.19 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.15.5.19 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 15.5.19 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER