Shri Kirtikumar C. Thacker, GANDHIDHAM V. The Jt. CIT(OSD), CC-2, RAJKOT-GUJARAT

ITSSA 20/RJT/2013

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 2093 (ITAT-RAJKOT)
• Duration Of Justice: 2 year(s) 7 month(s) 18 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-05-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 18-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MJ RANPURA
• Keywords: Income from undisclosed sources; Document seized; Retraction; Documents seized
• Section: 153A; 234B; 27; 132; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH : E COURT, AT AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER ./ IT(SS)A.NO.16 TO 20/RJT/2013 [ASSTT.YEAR 2004-05 TO 2008-2009] SHRI KIRITKUMAR C. THACKER PLOT NO.330, SECTOR-1-A GANDHIDHAM. VS THE JCIT(OSD), CC - 2 RAJKOT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI M.J. RANPURA, CA REVENUE BY : SHRI YOGESH PANDEY, CIT - DR / DATE OF HEARING : 03/05/2016 / DATE OF PRONOUNCEMENT: 06/05/2016 $%&/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE PRESENT FIVE APPEALS ARE DIRECTED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE COMMON ORDER OF THE LD.CIT(A)-IV, AHMED ABAD DATED 18.7.2013 PASSED IN THE ASSTT.YEARS 2004-05 TO 2008 -09. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE FOLLOWING PENALTIES FOR THE RESPECTI VE ASSESSMENT YEARS: ASSTT.YEAR PENALTY LEVIED 2004-05 RS.2,36,405/- 2005-06 RS.79,560/- 2006-07 RS.1,29,196/- IT(SS)A NO.16 TO 20/RJT/2013 2 2007-08 RS.45,900/- 2008-09 RS.67,980/- 3. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION UNDER SECTION 132 OF THE INCOME TAX ACT WAS CARRIED OUT A T THE BUSINESS AND RESIDENTIAL PREMISES OF THE ASSESSEE ON 18.3.2010. IN ORDER TO GIVE LOGICAL END TO THE SEARCH PROCEEDINGS, A NOTICE UND ER SECTION 153A OF THE INCOME TAX ACT WAS ISSUED AND SERVED UPON THE ASSES SEE. IN RESPONSE TO THE NOTICE, THE ASSESSEE HAS FILED HIS RETURNS OF I NCOME FOR THESE ASSESSMENT YEARS ON 16.9.2010. THE ASSESSEE HAS DE CLARED THE FOLLOWING INCOMES: A.Y. REMARKS 2004-05 RETURN INCOME OF RS.9,66,830/- INCLUDING RS.7,00,000/- BEING INCOME OFFERED ON AD HOC BASIS 2005-06 RETURN INCOME OF RS.5,19,090/- INCLUDING RS.3,36,000/- BEING INCOME OFFERED ON AD HOC BASIS 2006-07 RETURN INCOME OF RS.8,47,210/- INCLUDING RS.4,25,000/- BEING INCOME OFFERED ON AD HOC BASIS 2007-08 RETURN INCOME OF RS.8,62,520/- INCLUDING RS.1,50,000/- BEING INCOME OFFERED ON AD HOC BASIS 2008-09 RETURN INCOME OF RS.11,10,570/- INCLUDING RS.2,00,000/- BEING INCOME OFFERED ON AD HOC BASIS 4. THE LD.AO HAS PASSED THE ASSESSMENT ORDER UNDER SECTION 153A ON 18.10.2011. HE ACCEPTED THE RETURNED INCOME. IN O THER WORDS, NO ADDITION WAS MADE BY THE AO. THE LD.AO HAS INITIAT ED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. AF TER HEARING THE ASSESSEE, HE HAS IMPOSED PENALTY AS INDICATED ABOVE . 5. APPEAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. IT(SS)A NO.16 TO 20/RJT/2013 3 6. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE, AT T HE VERY OUTSET, SUBMITTED THAT THE ISSUE IN DISPUTE IS COVERED BY T HE DECISION OF THE ITAT, RAJKOT BENCH RENDERED IN THE CASE OF MANSUKHB HAI R. SORATHIA VS. JCIT (OSD). HE CONTENDED THAT AN IDENTICAL ISS UE WAS RAISED BEFORE THE TRIBUNAL IN A BUNCH OF APPEALS, WHEREIN, THE TR IBUNAL HAS EXAMINED THE ISSUE AND DELETED THE PENALTY. HE PLACED ON RE CORD COPY OF THE TRIBUNALS ORDER. HE ALSO FILED WRITTEN SUBMISSION S. 7. ON THE OTHER HAND, THE LD.DR HAS RELIED UPON THE ORDER OF THE LD.CIT(A). HE HAS FILED A BRIEF NOTE WHICH READS A S UNDER: 2. THE ISSUE UNDER CONSIDERATION IS IMPOSITION OF PENALTY U/S 271(L)(C) OF THE I.T.ACT WHEN ASSESSEE HAS FILED A RETURN OF INCOME IN RESPONSE TO NOTICE U/S 153 A WHERE THE TOTAL INC OME DECLARED INCLUDES VOLUNTARILY DISCLOSED INCOME WHICH WAS NOT INCLUDED IN THE REGULAR RETURN FILED EARLIER U/S 139 OF THE I.T .ACT. THE OTHER FACTS ARE THAT SUCH DISCLOSURE WAS MADE AFTER THE S EARCH WAS CONDUCTED U/S 132 OF THE I.T.ACT IN THE PREMISES OF THE ASSESSEE AND THE ASSESSMENT ORDER OR THE PENALTY ORDER DO NO T SPECIFICALLY RELATE THE DISCLOSURE TO ANY ASSET OR DOCUMENT SEIZ ED DURING THE SEARCH. HON'BLE ITAT-RAJKOT BENCH HAS ALLOWED AN AP PEAL AGAINST THE IMPOSITION OF PENALTY U/S 271(L)(C) OF THE I.T. ACT UNDER SIMILAR CIRCUMSTANCES IN CASE OF SHRI MANSUKHBHAI R. SORATH IA VS. JCIT IT(SS)- 46/RJT/2012 IN THE DECISION DATED 04-1 1-20 15. THE FINDING OF THIS DECISION IS AS UNDER: 'TO OUR MIND INFERENCE OF AVAILABILITY OF MONEY, BU LLION OR ASSETS EMBEDDED IN THE ENTRIES CANNOT BE DRAWN FROM THE ST ATEMENT OF THE ASSESSEE . THEY SHOULD HAVE BEEN FOUND IN PHYSICAL FORM AND PERTAINING TO THESE YEARS, ONLY THEN, DEEMING FICTI ON OF CONCEALMENT WOULD TRIGGER. THUS, THE REVENUE AUTHOR ITIES HAVE NOT REFERRED ANY DOCUMENTARY EVIDENCES DEMONSTRATING TH E FACT THAT VOLUNTARY INCOME OFFERED BY ASSESSEES IN THESE TWO YEARS ACTUALLY UNEARTHED DURING THE COURSE OF SEARCH. THEREFORE, T O OUR MIND, THE IT(SS)A NO.16 TO 20/RJT/2013 4 ASSESSEES DO NOT DESERVE TO BE VISITED WITH PENALTI ES. WE ALLOW ALL THE APPEALS OF THE ASSESSEES AND DELETE PENALTIES. ' 3. HOWEVER, HON'BLE CALCUTTA HIGH COURT HAS CONFIRM ED THE PENALTY U/S 271(L)(C) UNDER SIMILAR CIRCUMSTANCES I N CASE OF CIT V. PRASANNA DUGAR(2015) 371 ITR 0019 (CAL-HC). I WOULD THEREFORE REQUEST THE HON'BLE BENCH TO GIVE PREFERENCE TO THE JUDGMENT OF CALCUTTA HIGH COURT OVER THE DECISION OF HON'BLE IT AT-RAJKOT. 4. EVEN PRESUMING THAT THE EXPLANATION 5A OF SECTIO N 271(1) IS NOT TRIGGERED IN OF SPECIFIC CORRELATION BETWEEN THE DI SCLOSURE OF INCOME TO ANY ASSET OR DOCUMENT SEIZED DURING THE S EARCH, STILL THE PENALTY OF CONCEALMENT OF INCOME UNDER THE MAIN SEC TION 271(1)(C) WAS TO BE IMPOSED FOR NOT DISCLOSING 'INCOME' IN TH E RETURNS ORIGINALLY FILED U/S 139. THIS VIEW HAS BEEN TAKEN BY HON'BLE ITAT- DELHI IN CASE OF SMT KIRAN DEVI [2009] 125 TTJ 631 (DELHI). THE INCOME NOT DISCLOSED IN ORIGINAL RETURN BUT DECLARE D AFTER SEARCH IS ITSELF A CONCEALED INCOME AND NEED NOT SPECIFICALLY BE RELATED TO A PARTICULAR SEIZED ASSET OR DOCUMENT BECAUSE INVOKIN G OF EXPLANATION 5A TO SECTION 271(L)(C) IS NOT AT ALL N ECESSARY IN SUCH CASES WHERE THE CONCEALMENT OF INCOME IS ESTABLISHE D FROM INACCURATE FILING OF ORIGINAL RETURN OF INCOME ITSE LF. 5. THE FILING OF RETURN AFTER THE SEARCH ACT ION WITH TOTAL INCOME HIGHER THAN THE TOTAL INCOME IN ORIGINAL RETURN, IS MAINLY TO PRE- EMPT ANY ACTION ON PART OF DEPARTMENT TO CORRELATE THE MATERIAL FOUND AT THE TIME OF SEARCH WITH THE ADDITIONAL INC OME. THEREFORE THE BACKGROUND I AND THE CIRCUMSTANCES IN WHICH SU CH RETURNS ARE FILED HOLD THE KEY TO THE ANSWER WHETHER SUCH / RET URNS ARE BONA FIDE. IN PRESENT CASE THE ORIGINAL RETURNS OF INCOM E WERE INACCURATE AND THEY / CONCEALED INCOME AND THIS FAC T IS APPARENT FROM THE RETURNS FILED AFTER THE SEARCH ACTION ITSE LF. SUCH RETURNS WERE NOT FILED ON ACCOUNT OF ANY BONA FIDE MISTAKE. HON'BLE KARNATAK HIGH COURT IN CASE OF SUDARSHAN SILKS & SA REES [2002] 253 ITR 14 (KAR-HC) HAS HELD THE SAME VIEW. 6. THE OTHER DECISIONS OF VARIOUS HIGH COURTS AND ITAT WHICH ARE MENTIONED IN THE ORDER OF CIT(A)'S ORDER, ARE I N RESPECT OF IMPOSITION OF PENALTY UNDER THE MAIN SECTION OF 271 (L)(C) WHEN A RETURN WITH HIGHER INCOME IS FILED AFTER THE SEARCH IN COMPARISON TO THE ORIGINAL RETURN. THESE DECISIONS SHOW THAT S UCH SITUATION IT(SS)A NO.16 TO 20/RJT/2013 5 DOES NOT WARRANT INVOKING OF EXPLANATION 5A OR 5 TO SECTION 271(L)(C) AT ALL. HON'BLE ITAT RAJKOT HAS ONLY DECI DED THE ISSUE OF NON TRIGGERING OF EXPLANATION 5A TO SECTION 271(L)( C) IN A PARTICULAR SITUATION. HON'BLE ITAT RAJKOT DID NOT D ECIDE THE ISSUE WHETHER THE PENALTY CAN BE LEVIED UNDER THE MAIN SE CTION 271(L)(C) ITSELF WHEN THE ORIGINAL RETURN IS INACCURATE AND I T CONCEALED INCOME. THEREFORE, IT IS SUBMITTED THAT THE DECISIO N OF HON'BLE ITAT-RAJKOT IN CASE OF SHRI MANSUKHBHAI R. SORATHIA VS. JCIT IT(SS)- 46/RJT/2012 IS INCOMPLETE AND INCORRECT. TH EREFORE THE ABOVE MENTIONED DECISIONS AND THE DECISIONS MENTION ED IN THE ORDER OF CIT(A) SHOULD BE FOLLOWED. 8. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. THE SOLE ISSUE REQUI RES TO BE ADJUDICATED BY US IS WHETHER THE ADDITIONAL INCOME DISCLOSED IN THE RETURN FILED IN RESPONSE TO THE NOTICE UNDER SECTION 153A OF THE AC T WAS A VOLUNTARY DISCLOSURE OF INCOME WITH A VIEW TO BUY PEACE, AND THEREFORE, THE ALLEGED VOLUNTARY DISCLOSURE OF INCOME DOES NOT FORM WITHIN THE MISCHIEF OF DEEMED CONCEALMENT PROVIDED IN EXPLANATION 5A OF SECTION 271(1)(C) OF THE ACT. THIS IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF SHRI MANSUKHBHAI R. SORATHIA (SUPRA). THE DISCUSSION MADE BY THE TRIBUNAL FROM PARA 6 TO 17 IS WORTH TO NOTE. I T READS AS UNDER: 6. THE LD.FIRST APPELLATE AUTHORITY HAS MADE A LUC ID ENUNCIATION OF LAW AND FACTS IN THE DETAILED ORDER IMPUGNED BEFORE US. THOUGH EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT IS NO T APPLICABLE IN THESE ASSESSMENT YEARS, BUT IN ORDER TO DEMONSTRATE, WHO CAN CLAIM IMMUNITY FROM LEVY OF PENALTY, LD. REPRESENTATIVES HAVE EXPL AINED THE POSITION OF LAW ON THE STRENGTH OF JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAYABHAI (SUPRA). THEY DREW OUR ATTE NTION TO EXPLANATION 5 AND THEREAFTER POINT OUT THE DISTINCTION BETWEEN EXPLANATION 5 AND 5A. THEREFORE, WE FIRST TAKE NOTE OF EXPLANATION-5. THE EXPLANATION-5 APPENDED WITH SECTION 271(1)(C) OF THE ACT. THIS E XPLANATION READS AS UNDER: IT(SS)A NO.16 TO 20/RJT/2013 6 EXPLANATION 5.WHERE IN THE COURSE OF A SEARCH INI TIATED UNDER SECTION 132 BEFORE THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VAL UABLE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILISING (WHOLLY OR IN PART) HIS INCOME, (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE T HE DATE OF THE SEARCH, BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFORE THE SAID DATE OR, WHERE SUCH RETURN HAS BEEN FURNIS HED BEFORE THE SAID DATE, SUCH INCOME HAS NOT BEEN DECLARED THEREI N ; OR (B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AF TER THE DATE OF THE SEARCH, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH , HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C ) OF SUB-SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTI CULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME, UN LESS, (1) SUCH INCOME IS, OR THE TRANSACTIONS RESULTING IN SUCH INCOME ARE RECORDED, (I) IN A CASE FALLING UNDER CLAUSE (A), BEFORE TH E DATE OF THE SEARCH ; AND (II) IN A CASE FALLING UNDER CLAUSE (B), ON OR BE FORE SUCH DATE, IN THE BOOKS OF ACCOUNT, IF ANY, MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE 85[PRINCIPAL CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 85[PRI NCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE SAID DATE ; OR (2) HE, IN THE COURSE OF THE SEARCH, MAKES A STATEM ENT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY, BULLION, JEWELLE RY OR OTHER VALUABLE ARTICLE OR THING FOUND IN HIS POSSESSION O R UNDER HIS CONTROL, HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT B EEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139, AND AL SO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RE SPECT OF SUCH INCOME. 7. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN INCOME TAX APPEAL NO. 1181 TO 1185 OF 2010 IN THE CASE OF KIRIT DAYABHAI PATEL VS. ACIT. COPY OF THIS DECISION HAS BEEN PLACED ON THE RECORD. THE HONBLE COURT W HILE CONSTRUING THE IT(SS)A NO.16 TO 20/RJT/2013 7 MEANING OF EXPLANATION 5 HAS PUT RELIANCE UPON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ACIT VS. GEBIL AL KANBHAIALAL (HUF), 348 ITR 561 (SC). ACCORDING TO THIS DECISIO N, THE EXPLANATION 5 IS DEEMING PROVISION. IT PROVIDES WHERE IN THE COU RSE OF SEARCH UNDER SECTION 132, THE ASSESSEE IS FOUND TO BE OWNER OF U NACCOUNTED ASSET AND HE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HI M BY UTILIZING WHOLE OR PART OF HIS INCOME FROM ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH OR WHICH IS TO END ON OR AFTER T HE DATE OF SEARCH, THEN IN SUCH A SITUATION, NOTWITHSTANDING THAT SUCH INCO ME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE D ATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECTION 271( 1)(C) OF THE ACT. THE HONBLE COURT, THEREAFTER, PROPOUNDED THAT SUB-CLAU SE (1) AND (2) EXPLANATION 5 PROVIDES EXCEPTIONS FOR DEEMING THE C ONCEALMENT OF PARTICULARS OF INCOME. IN THAT CASE, THE HONBLE C OURT WAS DEALING IN SUB-CLAUSE (2) OF EXPLANATION-5 AND OBSERVED THAT I N ORDER TO CLAIM IMMUNITY AS PER SUB-CLAUSE (2), THREE CONDITIONS HA VE TO BE SATISFIED BY THE ASSESSEE. THESE THREE CONDITIONS ARE (A) THAT T HE ASSESSEE HIMSELF MAKES A STATEMENT UNDER SECTION 132(4) OF THE ACT I N THE COURSE OF SEARCH STATING THAT THE UNACCOUNTED ASSETS AND INCRIMINATI NG DOCUMENTS FOUND FROM HIS POSSESSION DURING THE SEARCH HAVE BEEN ACQ UIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED IN THE RETURNS OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SE CTION 139(1); (B) THAT THE ASSESSEE SHOULD SPECIFY IN HIS STATEMENT UNDER SECTION 132(4) OF THE ACT, THE MANNER IN WHICH THE INCOME STOOD DERIVED, AND (C) THE ASSESSEE HAS TO PAY TAX TOGETHER WITH INTEREST, IF ANY, IN R ESPONSE TO SUCH UNDISCLOSED INCOME. ACCORDING TO THE ASSESSEES PRE SENT BEFORE US, THEY HAVE MADE VOLUNTARY DISCLOSURE, FILED RETURNS AND P AID TAXES. THEIR EXPLANATION FOR AVAILING THE BENEFIT OF JUDGMENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL (SU PRA) HAS BEEN REJECTED BY THE LD.FIRST APPELLATE AUTHORITY ON THE GROUND THAT THE EXPLANATION 5 IS APPLICABLE ON THE CASES WHERE THE SEARCH WAS INITIATED ON OR BEFORE THE 1 ST JUNE, 2007. AFTER 1 ST JULY, 2007, THE EXPLANATION 5A TO SUB-SECTION (1) OF SECTION 271(1)(C) HAS BEEN IN SERTED VIDE FINANCE ACT, 2007. ALONG WITH THIS EXPLANATION, SECTION 27 1AAA HAS ALSO BEEN INSERTED BY FINANCE ACT, 2007. THE EXPLANATION 5A AND SECTION 271AAA READ AS UNDER: EXPLANATION 5A. WHERE, IN THE COURSE OF A SEARCH INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE ASSESSEE IS FOUND TO BE THE OWNER OF (I) ANY MONEY, BULLION, JEWELLERY OR OTHER VALUAB LE ARTICLE OR THING (HEREAFTER IN THIS EXPLANATION REFERRED TO AS ASSET S) AND THE ASSESSEE IT(SS)A NO.16 TO 20/RJT/2013 8 CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM B Y UTILISING (WHOLLY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEA R; OR (II) ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS AND HE CLAIMS THAT SUCH E NTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRE SENTS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS Y EAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) THE DUE DATE FOR FILING THE RETURN OF INCOME F OR SUCH PREVIOUS YEAR HAS EXPIRED BUT THE ASSESSEE HAS NOT FILED THE RETU RN, THEN, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL, FOR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB- SECTION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULAR S OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRE CT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132ON OR AF TER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012, THE ASSE SSEE SHALL PAY BY WAY OF PENALTY, IN ADDITION TO TAX, IF ANY, PAYABLE BY HIM , A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF T HE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE, (I) IN THE COURSE OF THE SEARCH, IN A STATEMENT U NDER SUB-SECTION (4) OF SECTION 132, ADMITS THE UNDISCLOSED INCOME AND S PECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCL OSED INCOME WAS DERIVED; AND (III) PAYS THE TAX, TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE (C) O F SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE I N RESPECT OF THE UNDISCLOSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL, S O FAR AS MAY BE, APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (A) 'UNDISCLOSED INCOME' MEANS IT(SS)A NO.16 TO 20/RJT/2013 9 (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, 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 SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE 87[PRINCIPA L CHIEF COMMISSIONER OR] CHIEF COMMISSIONER OR 87[PRINCIPAL COMMISSIONER OR] COMMISSIONER BEFORE THE DATE OF SE ARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAIN ED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YE AR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) 'SPECIFIED PREVIOUS YEAR' MEANS THE PREVIOUS Y EAR (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH, BU T THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTI ON 139 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEAR BEFORE THE SAID DATE; OR (II) IN WHICH SEARCH WAS CONDUCTED. 8. A PERUSAL OF BOTH THESE SECTIONS TOGETHER WOULD INDICATE THAT THE IMMUNITY AKIN TO EXPLANATION 5 IS AVAILABLE TO THE ASSESSEE UNDER EXPLANATION-5A ALSO, IF HE FULFILLS THE CONDITIONS NARRATED IN SECTION 271AAA. THE EXPLANATION APPENDED TO SECTION 271AAA PROVIDES THE DEFINITION OF UNDISCLOSED INCOME AND SPECIFIED PREV IOUS YEAR. A PERUSAL OF THE EXPRESSION SPECIFIED PREVIOUS YEAR WOULD INDICATE THAT THE YEAR OF SEARCH AND IMMEDIATELY EARLIER YEAR, IF DUE DATE OF FILING OF THE RETURN HAS NOT EXPIRED AND INCOME-TAX RETURN FO R SUCH YEAR HAS NOT BEEN FILED. SINCE THE ASSESSMENT YEARS INVOLVED BE FORE US ARE THE ASSTT.YEARS 2008-09 AND 2009-10, THE DUE DATE FOR F ILING OF THE RETURN FOR THE ASSTT.YEAR 2009-10 WAS EXPIRED BEFORE THE S EARCH ACTION. THUS, BOTH THESE YEARS DO NOT FALL WITHIN THE AMBIT OF S PECIFIED YEARS. SINCE THE PERIOD OF THESE TWO ASSESSMENT YEARS DOES NOT FALL WITHIN THE EXPRESSION SPECIFIED YEAR PROVIDED IN SECTION 271 AAA, THEREFORE, WE DO NOT DEEM IT NECESSARY TO CONSTRUE AND EXPLAIN TH E MEANING OF IT(SS)A NO.16 TO 20/RJT/2013 10 EXPLANATION 5A WITHIN THE SCOPE OF SECTION 271AAA. THE ASSESSEES AS SUCH CANNOT CLAIM IMMUNITY AKIN TO ONE AVAILABLE IN SUB-CLAUSE (1) AND (2) OF THE EXPLANATION 5, MORE PARTICULARLY, ON THE STRENGTH OF THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI PATEL (SUPRA). THE LD.FIRST APPELLATE AU THORITY HAS DEALT WITH THESE SITUATION IN AN ANALYTICAL MANNER AND IN RIGHT PERSPECTIVE. AS FAR AS THE CONSTRUCTION OF MEANING OF EXPLANATIO N 5A TO SECTION 271AAA BY THE LD.FIRST APPELLATE AUTHORITY IS CONCE RNED, WE DO NOT FIND ANY ERROR. 9. AT THE COST OF REPETITION, WE WOULD LIKE TO OBSE RVE THAT AS PER EXPLANATION 5A, IF IN THE COURSE OF SEARCH INITIATE D UNDER SECTION 132 ON OR AFTER THE 1 ST JUNE, 2007, THE ASSESSEE IS FOUND TO BE OWNER OF A NY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THINGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAVE BEEN ACQUIRED BY H IM BY UTILSING THE WHOLE OR PARTLY OF HIS INCOME FROM ANY PREVIOUS YEA R OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE OF SEARCH, AND THE ASSESSEE CLAIMS THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DO CUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME FROM ANY PREVIOU S YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN, NOTWITHSTAND ING SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED O N OR AFTER THE DATE OF SEARCH, HE SHALL FOR THE PURPOSE OF IMPOSITION O F PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION BE DEEMED TO HAVE BEEN CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTI CULARS. THE MOOT QUESTION FOR ATTRACTING THIS EXPLANATION IS THAT IN THE COURSE OF SEARCH MONEY, BULLION, JEWELLERY OR INCOME BASED ON ANY EN TRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OUGHT TO HAVE BEEN FOUN D. IN A GIVEN SITUATION, NO MONEY OR BULLION OR JEWELLERY OR INCO ME MIGHT HAVE FOUND FROM THE ASSESSEES FOR THE ASSESSMENT YEARS WHICH W ERE NOT PART OF SPECIFIED PREVIOUS YEAR CONTEMPLATED IN SECTION 2 71AAA OR IMMUNITY AVAILABLE TO THE ASSESSEES UNDER SUB-CLAUS E (A) AND (B) OF EXPLANATION 5A, THEN ALSO, IF IN RESPONSE TO THE NO TICE UNDER SECTION 153A, THE ASSESSEE DISCLOSED SOME ADDITIONAL INCOME VOLUNTARILY, WOULD HE BE DEEMED TO HAVE CONCEALED THE INCOME FOR VISITING HIM WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT ? THE L D.REVENUE AUTHORITIES HAD DRAWN INFERENCE THAT SINCE THE ASSESSEE HAS NOT DISCLOSED ADDITIONAL INCOME IN THE ORIGINAL RETURNS, MEANING THEREBY, IT IS TO BE ASSUMED THAT THEY HAVE DISCLOSED THIS AMOUNT ONLY W HEN SOME INCRIMINATING MATERIAL WAS FOUND. TO OUR MIND THIS ASSUMPTION OUGHT TO BE SUPPORTED WITH REFERENCE OF THAT INCRIMINATIN G MATERIAL. LET US SEE THE FINDING IN THE ASSESSMENT ORDER. IT(SS)A NO.16 TO 20/RJT/2013 11 10. WE HAVE PERUSED THE ASSESSMENT ORDER OF SHRI MA NSUKHBHAI R. SORATHIA IN THE ASSTT.YEAR 2008-09. ALL OTHER ASSE SSMENT ORDERS ARE ALSO SIMILARLY WORDED. IT IS A VERY BRIEF ASSESSME NT ORDERS RUNNING ONE-AND-HALF PAGES. IN THE FIRST PAGE, THE LD.AO H AS NARRATED PROCEDURAL ASPECT ABOUT THE SEARCH ACTION, ISSUANCE OF NOTICE AND FILING OF THE RETURN, SERVICE OF NOTICE UNDER SECTION 143( 2) ETC. IN THE NEXT PAGE FINDING OF THE AO READ AS UNDER: 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABR ICATION AND ENGINEERING JOB WORK AND ALSO DERIVES INCOME FROM A GRICULTURAL ACTIVITIES, REMUNERATION AND INTEREST FROM PARTNERS HIP FIRMS ETC. COPIES OF P&L ACCOUNT, CAPITAL ACCOUNT AND BALANCE SHEET, WAS FILED WITH THE RETURN. VARIOUS ISSUES WERE DISCUSSED AT LENGTH. 2.1 IT IS SEEN THAT THE ASSESSEE HAD MADE DISCLOSU RE UNACCOUNTED INCOME OF RS 22,00,000/- WHICH WAS NOT DISCLOSED IN THE RETURN FILED U/S. 139(1). THIS BEING CONCEALED INCOME, PENALTY P ROCEEDINGS U/S. 271(L)(C) OF THE I T ACT IS BEING INITIATED. 3. AFTER VERIFICATION, THE TOTAL INCOME IS DE TERMINED AS UNDER:- TOTAL INCOME AS PER RETURN OF INCOME RS 28,45,960/ - TOTAL ASSESSED INCOME RS 28,45,960/- AGRICULTURAL INCOME FOR RATE PURPOSE RS.6,14,131/- 4. ASSESSED U/S. 153A OF THE I T ACT, 1961. CHARGE TAX. CHARGE INTEREST U/S. 234A, 234B AND 234C OF THE I T ACT, IF ANY. GI VE CREDIT FOR PREPAID TAXES AFTER DUE VERIFICATION. DEMAND NOTICE AND CHA LLAN ISSUED ACCORDINGLY. ISSUE NOTICE U/S. 271(1)(C)OF THE IT A CT. 11. WE HAVE PERUSED THE PENALTY ORDER ALSO. THERE ARE ONLY THREE PARAGRAPHS I.E. PARA-4, 6 AND 7, WHERE THE AO HAS M ADE SOME OBSERVATION AT HIS OWN, OTHERWISE, IN REST OF THE P ARAGRAPHS HE REPRODUCED THE SUBMISSIONS OR THE HEAD-NOTES OF THE CASE LAWS. THE OBSERVATION OF THE AO IN THESE PARAS READ AS UNDER: 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MADE BY THE ASSESSES. THE CONTENTION OF THE ASSESSEE IS NOT ACCEPTABLE BE CAUSE, THE ADDITIONAL INCOME OFFERED BY THE ASSESSES ONLY SURFACED DUE TO THE SEARCH ACTION CARRIED BY THE DEPARTMENT. HAD THERE BEEN NO SEARCH , THE PORTION OF ADDITIONAL INCOME WOULD HAVE REMAINED CONCEALED ETE RNALLY. IF IN A REGULAR CASE, ON DETECTION OF CONCEALMENT, PENALTY U/S. 271(1)(C) IS LEVIABLE, HOW MUCH MORE PENALTY BECOMES TRUE AND PO TENT IN A CASE IT(SS)A NO.16 TO 20/RJT/2013 12 WHERE THE CONCEALMENT HAS BEEN DETECTED ON ACCOUNT OF PROACTIVE SEARCH ACTION INITIATED BY THE DEPARTMENT. IN THE C ASE OF THE ASSESSEE, THE ASSESSEE HAS NOT RECORDED DETAILS OF HIS INCOME AND THE SAME WAS WORKED OUT ONLY DURING SEARCH AND THAT TOO ON THE B ASIS OF THE SEIZED MATERIALS. IN FACT, IT IS AN ESTABLISHED JUDICIAL D ECISION THAT 'DOCUMENTS SEIZED DURING THE SEARCH CANNOT BE SAID THE BOOKS O F ACCOUNTS MAINTAINED FOR ANY SOURCE OF INCOME, FOR THE PURPOS ES OF EXPLANATION 5 (CIT VS GLAMOUR RESTAURANT (2003) 80 TTJ (MUM) 763. DIARIES FOUND AND SEIZED DURING COURSE OF SEARCH CANNOT BE CONSID ERED AS BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR THE PURPOSE OF IMMUNITY TO BE GRANTED TO HIM UNDER THE PROVISIONS OF EXPLANATION 5 TO SECTION 271(1)(C) - DR T P KULKARNI VS CIT (2003) 86 ITD 69 6 (MUM). IT HAS ALSO BEEN HELD THAT ONLY BOOKS OF ACCOUNT MAINTAINE D IN THE REGULAR COURSE CAN MAKE THE ASSESSEE ELIGIBLE FOR GRANT OF IMMUNITY FROM PENALTY AND NOT JUST ANY OF SUCH BOOKS, WHICH HAVE NOT BEEN MAINTAINED IN REGULAR COURSE OF BUSINESS - BRIJ LAL GOYAL VS C IT (2004) 88 ITD 413 (DELHI). 12. IN THIS BACKGROUND, IF WE APPRECIATE THE EVIDEN CES AVAILABLE ON THE RECORD, THEN IT WOULD REVEAL THE WHOLE CASE OF THE REVENUE FOR VISITING THE ASSESSEE WITH PENALTY IS BASED ON THE STATEMENT OF SHRI JAYANTILAL R. SORATHIA RECORDED DURING THE COURSE O F SEARCH. WE HAVE EXTRACTED THE RELEVANT PART OF THE STATEMENT IN THE FOREGOING PARAGRAPHS OF THIS ORDER. THE EVIDENTIARY VALUE OF SUCH STATE MENT HAS BEEN EXPLAINED IN VARIOUS AUTHORITATIVE PRONOUNCEMENTS. LET US FIRST TAKE NOTE OF SECTION 132(4) OF THE ACT. THE AUTHORISED OFFICER MAY, DURING THE COURSE OF TH E SEARCH OR SEIZURE, EXAMINE ON OATH ANY PERSON WHO IS FOUND TO BE IN POSSESSION OR CONTROL OF ANY BOOKS OF ACCOUNT, DOCU MENTS, MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING AND ANY STATEMENT MADE BY SUCH PERSON DURING SUCH EXAMI NATION MAY THEREAFTER BE USED IN EVIDENCE IN ANY PROCEEDIN G UNDER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDE R THIS ACT. EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER THIS SUB- SECTION MAY BE NOT MERELY IN RESPECT OF ANY BOOKS OF ACCOUNT, O THER DOCUMENTS OR ASSETS FOUND AS A RESULT OF THE SEARCH , BUT ALSO IN RESPECT OF ALL MATTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONNECTED WITH ANY PROCEEDING UNDER T HE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDER THIS ACT. IT(SS)A NO.16 TO 20/RJT/2013 13 13. A BARE PERUSAL OF SECTION WOULD REVEAL THAT IT EMPOWERS THE AUTHORIZED OFFICER TO EXAMINE DURING THE COURSE OF SEARCH OR SEIZURE ANY PERSON ON OATH. THE DISCLOSURE MADE DURING THE STATEMENT RECORDED UNDER THIS SECTION WILL BE ADMITTED IN THE EVIDENCE AND CAN BE USED AGAINST THE ASSESSEE IN THE PROCEEDING. 14. NO DOUBT, THE DISCLOSURE OR ADMISSION MADE UNDE R SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCEEDINGS IS AN ADMISSIBLE EVIDENCE BUT NOT CONCLUSIVE ONE. THIS PRESUMPTION OF ADMISSIBILITY OF EVIDENCE IS A REBUTTABLE ONE, AND IF AN ASSESSEE IS ABLE TO DEMONSTRATE WITH THE HELP OF SOME MATERIAL THAT SUCH ADMISSION WAS EITHER MISTAKEN, UNTRUE OR BASED ON MISCONCEPTION OF FACTS, THEN SOL ELY ON THE BASIS OF SUCH ADMISSION NO ADDITION IS REQUIRED TO BE MADE. IT IS TRUE THAT ADMISSION BEING DECLARATION AGAINST AN INTEREST ARE GOOD EVIDENCE, BUT THEY ARE NOT CONCLUSIVE, AND A PARTY IS ALWAYS AT L IBERTY TO WITHDRAW THE ADMISSION BY DEMONSTRATING THAT THEY ARE EITHER MIS TAKEN OR UNTRUE. IN LAW, THE RETRACTED CONFESSION EVEN MAY FORM THE LEG AL BASIS OF ADMISSION, IF THE AO IS SATISFIED THAT IT WAS TRUE AND WAS VOLUNTARILY MADE. BUT THE BASING THE ADDITION ON A RETRACTED D ECLARATION SOLELY WOULD NOT BE SAFE. IT IS NOT A STRICT RULE OF LAW, BUT ONLY RULE OF PRUDENCE. AS A GENERAL RULE, IT IS UNSAFE TO RELY UPON A RETRACTED CONFESSION WITHOUT CORROBORATIVE EVIDENCE. DUE TO THIS GREY SITUATION, CBDT HAS ISSUED CIRCULAR NO.286/2/2003 PROHIBITING THE DEPARTMENTAL OFFICIALS FROM TAKING CONFESSION IN THE SEARCH. TH E BOARD IS OF THE VIEW THAT OFTEN THE OFFICIALS USED TO OBTAIN CONFESSIONS FROM THE ASSESSEE AND STOP FURTHER RECOVERY OF THE MATERIAL. SUCH CONFES SIONS HAVE BEEN RETRACTED AND THEN THE ADDITION COULD NOT WITHSTAND THE SCRUTINY OF THE HIGHER APPELLATE AUTHORITY, BECAUSE NO MATERIAL WAS FOUND SUPPORTING SUCH ADDITION. 15. AN ISSUE WHETHER ADDITION SOLELY ON THE BASIS O F STATEMENT U/S.132(4) CAN BE MADE WAS CONSIDERED BY THE HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF KIALASHBEN MANHARLAL CHOK SHI VS. CIT, 220 CTR (GUJ) 138. IN THIS CASE, SEARCH WAS CONDUCTED UPON THE ASSESSEE UNDER SECTION 132 OF THE INCOME TAX ACT ON 4.11.198 8. THE STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 132(4) O F THE ACT. HE MADE DISCLOSURE OF RS.7 LAKHS. LATER ON, IN JANUARY, 19 89, THE ASSESSEE RETRACTED FROM THE DISCLOSURE AND STATED THE DISCLO SURE OF RS.50,000/- WAS ACCEPTABLE TO HIM. THE LD.AO MADE AN ADDITION OF RS.7 LAKHS ON THE BASIS OF HIS STATEMENT AND OBSERVED THAT THE RE TRACTION WAS MADE AFTER A LAPSE OF 2 MONTHS. THE ASSESSEE DID NOT HA VE ANY REASON FOR IT(SS)A NO.16 TO 20/RJT/2013 14 RETRACTING FROM THE DISCLOSURE. THE LD.FIRST APPEL LATE AUTHORITY CONCURRED WITH THE AO AND CONFIRMED THE ADDITION OF RS.7 LAKHS TO HIS INCOME. THE TRIBUNAL HAS ALSO CONFIRMED THE ADDITI ON BY OBSERVING THAT THERE WAS NOTHING ON RECORD WHICH INDICATED TH AT THE DISCLOSURE WAS TAKEN FROM THE ASSESSEE UNDER DURESS, PRESSURE OR COERCION. THE RETRACTION AFTER LAPSE OF TWO MONTHS FROM THE DATE OF DISCLOSURE BY THE ASSESSEE WAS CONSIDERED AS AFTER-THOUGHT. THE ISS UE TRAVELLED BEFORE THE HONBLE HIGH COURT. THE HONBLE HIGH COURT HAS DELETED THE ADDITION BY OBSERVING THAT MERELY ON THE BASIS OF D ISCLOSURE, ADDITION CANNOT BE MADE. THERE SHOULD BE SOME CORROBORATIVE MATERIAL. THE FOLLOWING OBSERVATIONS IN PARA-26 OF THE JUDGEMENT OF HONBLE COURT ARE WORTH TO NOTE. IT READS AS UNDER: 26. IN VIEW OF WHAT HAS BEEN STATED HEREINABOVE WE ARE OF THE VIEW THAT THIS EXPLANATION SEEMS TO BE MORE CONVINCING, HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AND ADDITIONS W ERE MADE AND/OR CONFIRMED MERELY ON THE BASIS OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE ACT. DESPITE THE FACT THAT THE SAID S TATEMENT WAS LATER ON RETRACTED NO EVIDENCE HAS BEEN LED BY THE REVENUE A UTHORITY. WE ARE, THEREFORE, OF THE VIEW THAT MERELY ON THE BASIS OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO SUCH ADDITIONS UNL ESS AND UNTIL, SOME CORROBORATIVE EVIDENCE IS FOUND IN SUPPORT OF SUCH ADMISSION. WE ARE ALSO OF THE VIEW THAT FROM THE STATEMENT RECORDED A T SUCH ODD HOURS CANNOT BE CONSIDERED TO BE A VOLUNTARY STATEMENT, I F IT IS SUBSEQUENTLY RETRACTED AND NECESSARY EVIDENCE IS LED CONTRARY TO SUCH ADMISSION. HENCE THERE IS NO REASON NOT TO DISBELIEVE THE RETR ACTION MADE BY THE ASSESSING OFFICER AND EXPLANATION DULY SUPPORTED BY THE EVIDENCE. WE ARE, THEREFORE, OF THE VIEW THAT THE TRIBUNAL WAS N OT JUSTIFIED IN MAKING ADDITION OF RS. 6 LAKHS ON THE BASIS OF STATEMENT R ECORDED BY THE ASSESSING OFFICER UNDER SECTION 132(4) OF THE ACT. THE TRIBUNAL HAS COMMITTED AN ERROR IN IGNORING THE RETRACTION MADE BY THE ASSESSEE. 27. IN THE ABOVE VIEW OF THE MATTER, ADDITION OF RS . 1 LAKH MADE ON ACCOUNT OF UNACCOUNTED CASH IS CONFIRMED AND THE AD DITION OF RS. 6 LAKHS IS HEREBY DELETED. 16. THIS DECISION HAS BEEN FOLLOWED BY THE HONBLE HIGH COURT IN THE CASE OF CIT VS. CHANDRAKUMAR JETHMAL KOCHAR, 55 TAXMANN.COM 292 (GUJ). THE HONBLE HIGH COURT HAS REPRODUCED T HE DISCUSSION MADE BY THE TRIBUNAL, AND THEREAFTER, CONCURRED WIT H THE CONCLUSIONS OF THE TRIBUNAL BY OBSERVING AS UNDER: IT(SS)A NO.16 TO 20/RJT/2013 15 6. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE PRINCIPAL LAID DOWN IN THE CASE OF KAILASHBEN MANHARLAL CHOKSHI (S UPRA),WE ARE OF THE CONSIDERED OPINION THAT THE VIEW TAKEN BY THE T RIBUNAL IS JUST AND PROPER. WE ARE NOT CONVINCED WITH THE SUBMISSIONS M ADE BY MR. MEHTA, LEARNED ADVOCATE FOR THE APPELLANT THAT THE TRIBUNAL HAS NOT GIVEN COGENT REASONS. THEREFORE, THE ANSWER TO THE FIRST QUESTION WOULD BE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSE E. THE SECOND QUESTION WILL ALSO ENURE FOR THE BENEFIT OF THE ASS ESSEE AS FROM THE RECORD IT IS CLEAR THAT OTHER CONCERNS WERE NOT BEN AMI CONCERNS OF THE ASSESSEE. 7. FOR THE FORGING REASONS, THE PRESENT APPEAL IS D ISMISSED. ACCORDINGLY, BOTH THE QUESTIONS WHICH WERE REFERRED TO THIS COURT ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 17. HAD THIS STATEMENT BEEN RETRACTED BY THE ASSESS EE, AND THEY HAVE NOT OFFERED THIS UNDISCLOSED INCOME, FORGET TO TAKE ACTION OF LEVYING THE PENALTY, EVEN ADDITIONS WOULD NOT HAVE BEEN SUSTAIN ED. THE INFERENCE OF OWNERSHIP OF ANY MONEY, BULLION, JEWELLERY OR OT HER VALUABLE ARTICLES, TO OUR MIND, OUGHT NOT TO BE BASED ON THI S STATEMENT. WHEN THE ASSESSEES HAVE TAKEN SPECIFIC PLEA THAT NO MONEY, B ULLION OR JEWELLERY OR INCOME BASED ON ANY ENTRIES FOR THESE TWO ASSESS MENT YEARS WAS FOUND DURING THE COURSE OF SEARCH, THE AO OUGHT TO HAVE IMMEDIATELY REFERRED THE DOCUMENTS, ENTRIES OR ANY ASSET FOUND WHICH IS RELEVANT TO THESE ASSESSMENT YEARS IN THE PENALTY PROCEEDINGS. HE SHOULD HAVE REJECTED THE EXPLANATION OF THE ASSESSEE BY DEMONST RATING IT AS FACTUALLY INCORRECT. RATHER, THE AUTHORITIES HAVE PROCEEDED ON THE ASSUMPTION THAT HAD THERE BEEN NO MONEY, BULLION, JEWELLERY OR INCOME BASED ON ENTRIES WAS NOT FOUND, THE ASSESSEE WOULD HAVE NOT MADE VOLUNTARY DISCLOSURE OF THE INCOME IN THESE RETURNS. THEY FA ILED TO NOTE THE QUESTION NO.25 ALSO, WHERE THE ASSESSEES CLAIMED IM MUNITY FROM PENALTY, AND PEACE FROM LITIGATION. TO OUR MIND IN FERENCE OF AVAILABILITY OF MONEY, BULLION OR ASSETS EMBEDDED I N THE ENTRIES CANNOT BE DRAWN FROM THE STATEMENT OF THE ASSESSEE (EXTRAC TED SUPRA). THEY SHOULD HAVE BEEN FOUND IN PHYSICAL FORM AND PERTAIN ING TO THESE YEARS, ONLY THEN, DEEMING FICTION OF CONCEALMENT WOULD TRI GGER. THUS, THE REVENUE AUTHORITIES HAVE NOT REFERRED ANY DOCUMENTA RY EVIDENCES DEMONSTRATING THE FACT THAT VOLUNTARY INCOME OFFERE D BY ASSESSEES IN THESE TWO YEARS ACTUALLY UNEARTHED DURING THE COURS E OF SEARCH. THEREFORE, TO OUR MIND, THE ASSESSEES DO NOT DESERV E TO BE VISITED WITH PENALTIES. WE ALLOW ALL THE APPEALS OF THE ASSESSE ES AND DELETE PENALTIES. IT(SS)A NO.16 TO 20/RJT/2013 16 9. IN THE SUBMISSION MADE BY THE LD.CIT-DR AND EXT RACTED BY US, THE STAND OF THE REVENUE IS THAT HAD THE SEARCH BEEN NOT CARRIED UPON THE ASSESSEE, THEN, HE WOULD NOT HAVE DISCLOSED THI S ADDITIONAL INCOME. THEREFORE, EXISTENCE OF MONEY, BULLION, JEWELLERY A ND OTHER VALUABLE ARTICLES OUGHT TO BE ASSUMED, WHICH HAS PERSUADED T HE ASSESSEE TO DISCLOSE ADDITIONAL INCOME. IN OTHER WORDS, THE ST AND OF THE REVENUE IS THAT DISCLOSURE OF ADDITIONAL INCOME IS TO BE EQUAT ED WITH INFERENTIAL VALUABLES MUST HAVE BEEN AVAILABLE AT THE TIME OF S EARCH. THE STAND OF THE LD.CIT(A) IN THE IMPUGNED ORDER WAS ALSO ON THI S LINE. THE LD.DR IN HIS SUBMISSION HAS FURTHER CONTENDED THAT, IF CONCE ALMENT IS NOT ESTABLISHED BY DEEMING FICTION AVAILABLE IN THE EXPLANATION -5A, THEN, THE CONCEALMENT OUGHT TO BE CONSTRUED UNDER THE MAI N PROVISION. AS FAR AS THE FIRST FOLD OF STAND POINT IS CONCERNED, THAT HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE CASE OF SHRI MANSUKHBHAI R. SOR ATHIA (SUPRA). THE TRIBUNAL HAS HELD THAT DEEMED CONCEALMENT OF INCOME OUGHT TO BE SUPPORTED BY AVAILABILITY OF MONEY, BULLION, JEWELL ERY NOT BY AN INFERENCE OF EXISTENCE OF MONEY, BULLION, JEWELLERY OR VALUABLE ARTICLES OR ENTRY. AS FAR AS SECOND FOLD OF SUBMISSION RAIS ED BY THE LD.CIT(DR) IN THE WRITTEN SUBMISSIONS IS CONCERNED, WE FIND TH AT THE CASE OF THE ASSESSEE DOES NOT FALL UNDER THE MAIN PROVISION. T HERE IS NO ADDITION TO THE INCOME OF THE ASSESSEE. RETURNED INCOME HAS BE EN ACCEPTED AS IT IS. ONLY BY VIRTUE OF EXPLANATION-5 , THIS ADDITIONAL INCOME DECLARED BY THE ASSESSEE CAN BE CATEGORIZED UNDER THE DEEMED CONCEA LMENT. IN THE MAIN PROVISION, THE CASE OF THE ASSESSEE CANNOT BE BROUG HT. AS FAR AS FACTS IN THE PRESENT CASE ARE CONCERNED, THEY ARE IDENTICAL TO THE CASE OF SHRI MANSUKHBHAI R. SORATHIA VS. JCIT (OSD)(SUPRA). T HE ASSESSEE HAS PLACED ON RECORD COPY OF THE STATEMENT RECORDED UNDER IT(SS)A NO.16 TO 20/RJT/2013 17 SECTION 132(4) OF THE INCOME TAX ACT. WE HAVE PERU SED THE ASSESSMENT ORDER. THE AO HAS NOWHERE MADE A MENTION OF ANY SE IZED MATERIAL. THUS, ON FACTS THERE IS NO DISPARITY. THEREFORE, R ESPECTFULLY FOLLOWING THE ORDER OF THE ITAT IN THE CASE OF SHRI MANSUKHBH AI R. SORATHIA (SUPRA), ALL THE APPEALS OF THE ASSESSEE ARE ALLOWE D AND DELETE THE IMPUGNED PENALTY FOR THE RESPECTIVE ASSESSMENT YEAR S. 10. IN THE RESULT, ALL THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE COURT ON 6 TH MAY, 2016 AT AHMEDABAD. SD/- SD/- ( N.K. BILLAIYA ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 06/05/2016