The Dy. CIT, Central Circle-2(2), Ahmedabad V. Shri Vijay J. Trivedi, Ahmedabad

ITSSA 225/AHD/2014

• Counselvise Citation: [2017] 122 COUNSELVISE.COM (IT) 3443 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 4 month(s) 30 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 12-10-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-07-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 13-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V K SINGH
• Section: 143(3); 153A; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMEDABAD BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER, AND SHRI S. S. GODARA, JUDICIAL MEMBER. IT(SS)A NO. 225/AHD/2014 & CO NO. 239/AHD/2014 (ASSESSMENT YEAR: 2010-11) DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2(2), AHMEDABAD APPELLANT VS. SHRI VIJAY J. TRIVEDI 1, PREMANJALI SOCIETY, NEAR KHARAKUWA, NEAR JUDGES BUNGLOW, ROAD, BODAKDEV AHMEDABAD - 380015 RES PONDENT / CROSS OBJECTOR PAN: ACMPT4274D /BY REVENUE : SHRI V. K. SINGH, SR. D.R. /BY ASSESSEE : SHRI DHIREN SHAH, A.R. /DATE OF HEARING : 11.10.2017 /DATE OF PRONOUNCEMENT : 12.10.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS REVENUES APPEAL AND ASSESSEES CROSS OBJECTIO N FOR ASSESSMENT YEAR 2010-11 ARISE AGAINST THE CIT(A)-III, AHMEDABADS O RDER DATED 27.02.2014 IN CASE NO. CIT(A)-III/514/DCIT/CC-2(2)/13-14, REVERSING AS SESSING OFFICERS ACTION IMPOSING PENALTY OF RS.28,20,000/- , IN PROCEEDINGS U/S. 271AAA OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH SIDES. CASE FILE PERUSED. IT(SS)A NO. 225/AHD/14 & CO NO.239/AHD/14 [SHRI V IJAY J. TRIVEDI] A.Y. 2010-11 - 2 - 2. WE FIRST COME TO BASIC FACTS PERTAINING TO THE I NSTANT LIS. THE DEPARTMENT CARRIED OUT THE SEARCH IN QUESTION IN M/S. TRIVEDI SOMPURA GROUP ON 21.04.2010. THE ASSESSEE GOT RECORDED HIS STATEMENT IN COURSE T HEREOF ON 21.04.2010/22.05.2010 DISCLOSING INCOME OF RS.3CROR ES. THIS FOLLOWED HIS DISCLOSURE PETITION FILED BEFORE THE ADIT ON 23.07. 2010 STATING MANNER AND CORRESPONDING ASSETS QUA HIS ABOVE UNDISCLOSED INCO ME. THE ABOVE STATEMENT(S) AS WELL AS DISCLOSURE PETITION FORM PART OF THE PAPER BOOK BEFORE US. THE ASSESSING OFFICER THEREAFTER INITIATED SECTION 153A PROCEEDIN GS VIDE NOTICE DATED 08.03.2011. THE ASSESSEE FILED HIS RETURN DATED 20.07.2011 DISC LOSING HIS INCOME TO THE TUNE OF RS.2,95,47,830/-. THE ASSESSING OFFICER FRAMED REG ULAR ASSESSMENT IN HIS CASE ON 08.03.2013 ACCEPTING THE SAME. HE HOWEVER INITIATE D THE IMPUGNED PENALTY PROCEEDINGS U/S.271AAA OF THE ACT. 3. WE NOW ADVERT TO THE IMPUGNED PENALTY PROCEEDING S. THE ASSESSING OFFICER PASSED HIS PENALTY ORDER ON 25.09.2013 HOLD ING THEREIN THAT THE ASSESSEES ACT AND CONDUCT DURING AND POST SEARCH FOLLOWED BY THE ABOVE REGULAR ASSESSMENT DID NOT SPECIFY AND SUBSTANTIATE THE MANNER OF HAVI NG DERIVED HIS INCOME IN QUESTION AMOUNTING TO RS.3CRORES. HE THEREFORE LEV IED THE IMPUGNED PENALTY TO THE TUNE OF RS.28.20LACS IN ASSESSEES CASE. 4. THE CIT(A) REVERSES ASSESSING OFFICERS ACTION A S UNDER: 6. I HAVE CONSIDERED THE FACTS OF THE CASE, SUBMIS SIONS MADE BY THE AR ON BEHALF OF THE APPELLANT AND STATEMENT OF THE APPELLANT RECORD ED U/S. 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCEEDINGS AND THE RETURN OF INCO ME FILED BY THE APPELLANT COMPILED; IN THE PAPER BOOK. 6.1 IT IS SEEN THAT DURING THE COURSE OF SEARCH, TH E APPELLANT IN HIS STATEMENT RECORDED U/S. 132(4) DATED 21-04-2010 HAD SUO-MOTTO AND VOLU NTARILY DISCLOSED A SUM OF RS. 3,00,00,000/- FOR THE F.Y. 2009-10 RELEVANT TO A.Y. 2010-11 OVER AND ABOVE REGULAR BOOKS OF ACCOUNTS PERTAINING TO HIMSELF AND HIS BUS INESS CONCERN. IT WAS ALSO STATED THAT THE FINAL BREAK-UP OF THE VOLUNTARILY DISCLOSE D ADDITIONAL INCOME AMONGST DIFFERENT ASSESSEES OF HIS FAMILY AND BUSINESS CONC ERN, THE MANNER OF EARNING THE ADDITIONAL INCOME DISCLOSED AND ITS ASSETS IDENTIFI CATION WILL BE SUBMITTED SUBSEQUENTLY AS A PART AND PARCEL OF MY STATEMENT R ECORDED U/S. 132(4) OF THE ACT. SUBSEQUENTLY, HE FILED A LETTER WITH ADIT (INVN) UN IT - 1(3), WHEREIN DATED 23.07.2010,WHEREIN HE HAS GIVEN THE BREAK-UP OF THE DISCLOSURE OF RS. 3,00,00,000/- WHEREIN HE HAS BIFURCATED THE DISCLOSURE MADE OF RS .2,82,00,000/- IN HIS OWN CASE IN IT(SS)A NO. 225/AHD/14 & CO NO.239/AHD/14 [SHRI V IJAY J. TRIVEDI] A.Y. 2010-11 - 3 - RESPECT OF INCOME EARNED BY THE APPELLANT BY DOING THE BUSINESS ACTIVITY OF MARBLE SLABS BY ARRANGING MARBLE SLABS FOR VARIOUS PARTIES FROM OTHER DEALERS AND MANUFACTURES FROM THE OPEN MARKET AND RS. 13,00,000 /-IN THE PARTNERSHIP FIRM M/S. O.K. TRIVEDI MARBLES OUT OF WHICH RS.8,00,000/- FOR GROSS PROFIT MARGIN OF STOCK & RS.5,00,000/- FOR TELESCOPING EFFECT AGAINST ANY PR OPOSED ADDITION THAT MAY BE PROPOSED BY THE A.O. AT THE TIME OF ASSESSMENT PROC EEDINGS ON THE BASIS OF THE SEIZED MATERIAL/ RECORDS IN RESPECT OF WHICH EXPLANATION O FFERED BY THE ASSESSEE FIRM HAS NOT BEEN ACCEPTABLE TO THE A.O. AND ALSO FURTHER AN AMO UNT OF RS. 5,00,000/- IN HIS FIRM M/S. TRIVEDI MARMO FOR THE F.Y. 2009-10 RELEVANT TO A.Y. 2010-11 FOR TELESCOPING EFFECT AGAINST ANY PROPOSED' ADDITION THAT MAY BE P ROPOSED BY THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS ON THE BASIS OF THE SEIZED M ATERIAL/ RECORDS IN RESPECT OF WHICH EXPLANATION OFFERED BY THE ASSESSEE FIRM HAS NOT BEEN ACCEPTABLE TO THE A.O. , FOR WHICH NO INCRIMINATING MATERIAL WAS FOUND DURIN G THE COURSE OF SEARCH PROCEEDINGS. THE APPELLANT ALSO REQUESTED IN HIS ST ATEMENT THAT NO PENALTY SHOULD BE LEVIED IN RESPECT OF THE SAID DISCLOSURE IN PURSUAN CE OF PROVISIONS OF SECTION 132(4) R.W.S. 271AAA OF THE ACT. IT IS FURTHER SEEN THAT A FTER OBTAINING THE SAID DISCLOSURE STATEMENT' WITH A REQUEST OF NOT LEVYING PENALTY, T HE STATEMENT U/S. 132(4) WAS CONCLUDED BY THE AUTHORIZED OFFICER AND NO FURTHER SPECIFIC QUESTION AS REGARDS THE MANNER OF EARNING THE UNDISCLOSED INCOME OR SUBSTAN TIATION THEREOF WAS PUT FORTH BY THE AUTHORIZED OFFICER. 6.2 I EVEN DURING POST SEARCH PROCEEDINGS, WHEN THE APPELLANT IN PURSUANCE OF HIS STATEMENT U/S. 132(4) OF THE ACT SUBMITTED A LETTER TO THE ADIT (INVN.) UNIT 1(3), AHMEDABAD VIDE LETTER DATED 23.07.2010 CONFIRMING T HE DISCLOSURE STATEMENT FOR AN AMOUNT OF RS. 2,82,00,000/- IN RESPECT OF INCOME EA RNED BY THE APPELLANT BY DOING THE BUSINESS ACTIVITY OF MARBLE SLABS BY ARRANGING MARB LE SLABS FOR VARIOUS PARTIES FROM OTHER DEA ERS AND MANUFACTURERS FROM THE OPEN MARKE T IN ITS LETTER DATED 23-07-2010 FOR WHICH NO RECORDS HAVE BEEN MAINTAINED BY THE AP PELLANT AND FOR WHICH NO INCRIMINATING MATERIAL / RECORDS HAVE BEEN FOUND, N O SPECIFIC QUESTION AS REGARDS TO THE MANNER OF EARNING THE UNDISCLOSED INCOME OR SUB STANTIATION THEREOF WAS PUT FORTH BY THE ADIT (INVN.) UNIT 1(3), AHMEDABAD. IT IS FUR THER SEEN THAT ON THE BASIS OF THE STATEMENT OF THE APPELLANT RECORDED U/S. 132(4) OF THE ACT, THE APPELLANT HAS OFFERED THE INCOME OF RS.2,82,00,000/- IN THE RETURN OF INC OME OF THE FINANCIAL YEAR 2009-10 RELEVANT TO A.Y. 2010-11 FILED ON 20.07.2011 U/S. 1 53A AND EVEN PAID THE TAX THEREON ALONGWITH INTEREST. IN THE CASE OF THE APPELLANT, T HE SEARCH TOOK PLACE ON 21-4-2010 AND THEREFORE, FOR F.Y. 2009-10 RELEVANT TO A.Y. 20 10-11, THE RETURN OF INCOME WAS DUE FOR FILING SUBSEQUENT TO THE DATE OF SEARCH. HENCE, IN THE CASE OF THE APPELLANT, THE PROVISIONS OF SECTION 271AAA OF THE ACT ARE APPLICA BLE. THE UNDISCLOSED INCOME WAS SHOWN IN THE RETURN OF INCOME UNDER THE HEAD ' INCO ME FROM BUSINESS' AND IN THE NOTES FORMING PART OF STATEMENT OF TOTAL INCOME THE MANNER OF EARNING THE INCOME AND IDENTIFICATION OF ASSETS WAS REFLECTED. THE A.O ACC ORDINGLY PASSED THE ASSESSMENT ORDER U/S 153A R.W.S. 143(3) OF THE ACT ACCEPTING T HE UNDISCLOSED INCOME OFFERED BY THE APPELLANT UNDER THE HEAD ' INCOME FROM BUSINESS '. THE MANNER OF EARNING OF THE INCOME STATED BY THE APPELLANT HAS ALSO BEEN ACCEPT ED BY THE AO. 6.3 IT IS RELEVANT TO QUOTE THAT THE THREE CONDITIO NS AS ENVISAGED IN SECTION 271AAA(2) FOR EXEMPTION FROM PENALTY IN THIS SECTION :- (I) IN THE COURSE OF SEARCH, IN A STATEMENT UNDER S UB-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) PAYS THE TAX TOGETHER WITH INTEREST, IF ANY, IN RESPECT OF THE UNDISCLOSED INCOME. IT(SS)A NO. 225/AHD/14 & CO NO.239/AHD/14 [SHRI V IJAY J. TRIVEDI] A.Y. 2010-11 - 4 - CLAUSE (I) LAYS DOWN THE FIRST CONDITION THAT UNDIS CLOSED INCOME SHOULD HAVE BEEN ADMITTED BY THE ASSESSEE IN THE STATEMENT U/S. 132( 4) AND THE ASSESSEE SHOULD HAVE SPECIFIED THE MANNER IN WHICH IT HAS BEEN DERIVED. IN THE PRESENT CASE, THE APPELLANT, IN THE STATEMENT RECORDED U/S. 132(4) DATED 21-04-2010 HAD SUO-MOTTO AND VOLUNTARILY DISCLOSED A SUM OF RS. 3,00,00,000/- FOR THE F.Y. 2009-10 REL EVANT TO A.Y 2010-11 OVER AND ABOVE REGULAR BOOKS OF ACCOUNTS PERTAINING TO HIMSELF AND HIS BUSINESS CONCERN. IT WAS ALSO STATED THAT THE FINAL BREAK-UP OF THE VOLUNTARILY D ISCLOSED ADDITIONAL INCOME AMONGST DIFFERENT ASSESSEES OF HIS FAMILY AND BUSINESS CONC ERN, THE MANNER OF EARNING THE ADDITIONAL INCOME DISCLOSED AND ITS ASSETS IDENTIFI CATION WILL BE SUBMITTED SUBSEQUENTLY AS A PART AND PARCEL OF MY STATEMENT RECORDED U/S. 132 (4) OF THE ACT. FURTHER HE FILED A LETTER WITH ADIT (INVN) UNIT - 1(3), DATED 23.07.2010.WHER EIN HE HAS GIVEN THE BIFURCATION OF DISCLOSURE OF RS. 3,00,00,000/- I.E. RS.2,82,00,000 /- IN HIS OWN CASE IN RESPECT OF INCOME EARNED BY THE APPELLANT BY DOING THE BUSINESS ACTIV ITY OF MARBLE SLABS BY ARRANGING MARBLE SLABS FOR VARIOUS PARTIES FROM OTHER DEALERS AND MANUFACTURERS FROM THE OPEN MARKET, RS. 13.00.000/- IN THE PARTNERSHIP FIRM M/S . O.K. TRIVEDI MARBLES OUT OF WHICH RS.8.00.000/- FOR GROSS PROFIT MARGIN OF STOCK & RS .5,00,000/- FOR TELESCOPING EFFECT AGAINST ANY PROPOSED ADDITION THAT MAY BE PROPOSED BY THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS ON THE BASIS OF THE SEIZED MATERIAL/ RE CORDS IN RESPECT OF WHICH EXPLANATION OFFERED BY THE ASSESSEE FIRM HAS NOT BEEN ACCEPTABL E TO THE A.O. AND ALSO, AN AMOUNT OF RS. 5,00,000/- IN HIS FIRM M/S. TRIVEDI MARMO FOR T HE F.Y. 209-10 RELEVANT TO A.Y. 2010-11 FOR TELESCOPING EFFECT AGAINST ANY PROPOSED ADDITIO N THAT MAY BE PROPOSED BY THE A.O. AT THE TIME OF ASSESSMENT PROCEEDINGS ON THE BASIS OF THE SEIZED MATERIAL/ RECORDS IN RESPECT OF WHICH EXPLANATION OFFERED BY THE ASSESSEE FIRM H AS NOT BEEN ACCEPTABLE TO THE A.O., FOR WHICH NO INCRIMINATING MATERIAL WAS FOUND DURING TH E COURSE OF SEARCH PROCEEDINGS. CLAUSE (II) LAYS DOWN THE SECOND CONDITION THAT ASS ESSEE SHOULD HAVE SUBSTANTIATED THE MANNER IN WHICH UNDISCLOSED INCOME HAS BEEN DERIVED . IN THE PRESENT CASE OF THE APPELLANT, AFTER THE APPELLANT MADE THE DISCLOSURE IN HIS STATEMENTS U/S. 132(4) OF THE ACT IN HIS CASE FOR AN AMOUNT OF RS. 2,82,00,000/- FOR THE F.Y. 2009-10 RELEVANT TO A.Y. 2010- 11 BEING INCOME EARNED BY THE APPELLANT FROM DOING THE BUSINESS ACTIVITY OF MARBLE SLABS BY ARRANGING MARBLE SLABS FOR VARIOUS PARTIES FROM OTHER DEALERS AND MANUFACTURERS FROM THE OPEN MARKET, NO FURTHER QUESTION WAS ASKED BY T HE AUTHORIZED OFFICER TO THE SEARCH. WHEN THE APPELLANT ALSO FILED ITS LETTER DATED 23-0 7-2010 TO THE ADIT (INVN.) UNIT 1(3), AHMEDABAD, CONFIRMING THE DISCLOSURE MADE BY THE AP PELLANT BY STATING THE MANNER OF EARNING THE INCOME EVEN THEN THE SEARCH INCHARGE OF FICER DID NOT RAISE ANY FURTHER QUESTION TO THE APPELLANT. 6.4. IT IS FURTHER CLEAR THAT THE PRINCIPLES LAID D OWN BY THE HON'BLE HIGH COURTS IN THE CASES OF CIT V. MAHENDRA C. SHAH [2008] 299 ITR 305 (GUJ.) CIT V. RADHA KRISHNA GOEL [2005], 278 ITR 4547(2006], AND 152 TAXMAN 290 (ALL .), ARE ALSO SQUARELY APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE . 6.5 IT IS OBSERVED THAT THE HONORABLE COURTS HAVE LAID DOWN THE PRINCIPLES THAT THE AUTHORIZED OFFICER HAS TO EXPLAIN THE PROVISIONS TO THE ASSESSEE AND ASK THE RELEVANT QUESTIONS ON THE MANNER IN WHICH THE .UNDISCLOSED I NCOME WAS EARNED AND IN THE PRESENT CASE, IT IS APPLICABLE FOR SECTION 271AAA. IN THE E NTIRE STATEMENT OF THE APPELLANT RECORDED U/S. 132(4) DURING SEARCH PROCEEDINGS, THE AUTHORIZ ED OFFICER DID NOT ASK ANY FURTHER QUESTION, BUT WAS SATISFIED WITH THE MANNER IN WHIC H THE INCOME WAS EARNED BY THE ASSESSEE AND WAS SATISFIED ABOUT THE SUBSTANTIATING THE MANNER IN WHICH UNDISCLOSED INCOME WAS EARNED. 6.6. CLAUSE (III) LAYS DOWN THE THIRD CONDITION REG ARDING THE PAYMENT OF TAX ALONGWITH INTEREST ON UNDISCLOSED INCOME ADMITTED IN THE COUR SE OF SEARCH. IT IS AN UNDISPUTED FACT THAT THE TAX AND INTEREST HAS BEEN PAID BY THE APPE LLANT FIRM ON THE UNDISCLOSED INCOME ADMITTED IN THE COURSE OF SEARCH PROCEEDINGS BY DIS CLOSING IN THE RETURN OF INCOME. IT(SS)A NO. 225/AHD/14 & CO NO.239/AHD/14 [SHRI V IJAY J. TRIVEDI] A.Y. 2010-11 - 5 - 7. ON THE BASIS OF THE PRINCIPLES AND RATIO LAID DO WN BY THE HONORABLE JURISDICTIONAL HIGH COURT AND BY THE ALLAHABAD HIGH COURT CITED SU PRA, OTHER COURTS HAVE ALSO GIVEN SIMILAR VERDICTS IN CASES SUCH AS (I) DECISION OF H ONORABLE ITAT IN THE CASE OF DCIT VS. SMT. SULOCHANADEVI A. AGARWAL, ITA NO. 1052/AHD/201 2, A.Y. 2009-10, DATED 20-07- 2012,) (II) ITO VS. SHILPA V. GUPTA, ITA NO. 1784/A HD/2012 & CO.179/AHD/2012 A.Y. 2009-10, DATED 14-12-2012, (III) RAJENDRA PRASAD DO KANIA, ITA NO. 525/AHD/2012 DATED 4-5-2012, (IV) DCIT, CENTRAL, SURAT VS. RIVVA EXPO RTS LTD., (V) DCIT, CENTRAL, SURAT VS. SHRI HARIKISHAN S. VIRMANI (ITA NO. 2718 & 2719/AHD /2012) DATED 7-6-2013. 8. IN VIEW OF FACTS OF CASE AS MENTIONED ABOVE, IT CAN BE STATED THAT ALL THE THREE CONDITIONS LAID DOWN IN THE PROVISIONS OF SECTION 2 71AAA (2) OF THE ACT ON THE BASIS OF WHICH THE ASSESSEE CAN BE ELIGIBLE FOR IMMUNITY FRO M PENALTY HAVE BEEN FULFILLED IN APPELLANT'S CASE. THE APPELLANT CAN BE SAID TO HAVE SUBSTANTIALLY DISCHARGED THE ONUS OF SUBSTANTIATING THE MANNER OF EARNING UNDISCLOSED IN COME. THE ASSESSING OFFICER MADE THE ASSESSMENT ON THE BASIS OF THE DISCLOSURE MADE BY T HE PARTNER OF THE APPELLANT FIRM IN HIS STATEMENT U/S. 132(4) OF THE ACT AND INCOME DISCLOS ED BY THE APPELLANT FIRM IN ITS RETURN OF INCOME. THE A.O HAS ACCEPTED THE INCOME DECLARED BY THE APPELLANT FIRM IN THE ASSESSMENT ORDER WITHOUT MAKING ANY FURTHER ADDITION TO THE IN COME. THIS SHOWS THAT THE A.O HIMSELF WAS SATISFIED ABOUT THE INCOME DISCLOSED IN THE RET URN OF INCOME. 9. TAKING INTO ACCOUNT ENTIRE FACTS AND CIRCUMSTANC ES OF THE CASE AND LEGAL POSITION, I AM OF THE CONSIDERED VIEW THAT ALL THE EXEMPTION CONDITIONS AVAILABLE U/S. 271AAA TO THE APPELLANT, HAVE BEEN FULFILLED INCLUDING THE PAYMEN T OF TAXES. IN THIS BACKGROUND, NO PENALTY CAN BE LEVIED U/S.271AAA OF THE ACT IN THE CASE OF APPELLANT. PENALTY OF RS.28,20,000/- IS DIRECTED TO BE DELETED. THE APPEL LANT GETS RELIEF. 5. LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY ARG UES IN FAVOUR OF ASSESSING OFFICERS TWIN FINDINGS THAT NEITHER THE ASSESSEE H AS SPECIFIED THE RELEVANT MANNER OF HAVING DERIVED HIS ABOVE INCOME DISCLOSED DURING SEARCH NOR HAS HE SUBSTANTIATED THE SAME THROUGHOUT IN THE COURSE OF ASSESSMENT SO AS TO BE HELD ELIGIBLE FOR IMMUNITY U/S.271AAA(2)(I & II) OF THE ACT. WE FIND NO MERIT IN EITHER OF THESE TWO ARGUMENTS. A PERUSAL OF ASSESSEES SE ARCH STATEMENT IN THE PAPER BOOK REVEALS THAT THE AUTHORIZED OFFICER NEVER ASKED THE ASSESSEE TO SPECIFY THE RELEVANT MANNER OF DERIVING HIS INCOME IN QUESTION OF RS.3CR ORES AS ASSESSED IN HIS HANDS TO THE TUNE OF RS.2.82CRORES AND BALANCE INCOME OF RS. 18LACS IN GROUP CONCERNS HANDS. THE ASSESSEES DISCLOSURE PETITION (SUPRA) NOT ONLY SPECIFIED THE MANNER OF HAVING DERIVED THE IMPUGNED INCOME BUT ALSO IT WOUL D IDENTIFY CORRESPONDING ASSETS AS WELL. THERE IS NO QUARREL THAT THE ASSES SING AUTHORITY NEVER ASKED THE ASSESSEE TO SUBSTANTIATE HIS ABOVE ASSERTIONS. RAT HER THE ABOVE MANNER OF DERIVING THE INCOME IN QUESTION WAS NEVER PUT TO TEST. WE F IND IN THESE FACTS THAT HONBLE JURISDICTIONAL HIGH COURTS RECENT JUDGMENT IN TAX APPEAL NO. 434 OF 2017 PCIT VS. MUKESHBHAI RAMANLAL PRAJAPATI DECIDED ON 24.07. 2017 HOLDS THAT IT IS IT(SS)A NO. 225/AHD/14 & CO NO.239/AHD/14 [SHRI V IJAY J. TRIVEDI] A.Y. 2010-11 - 6 - MANDATORY FOR THE DEPARTMENTAL AUTHORITIES TO SEEK AN ASSESSEE TO SPECIFY THE MANNER OF DERIVING UNDISCLOSED INCOME DURING SEARCH IN ABSENCE OF WHICH THE IMPUGNED PENALTY U/S.271AAA OF THE ACT OUGHT NOT TO BE IMPOSED ALLEGING VIOLATION OF FORMER TWO CONDITIONS OF SPECIFYING MA NNER FOLLOWED BY SUBSTANTIATION OF HAVING EARNED THE INCOME UNEARTHED DURING SEARCH . WE RESPECTFULLY FOLLOW THE SAME IN FACTS OF THE INSTANT CASE TO AFFIRM THE CIT (A)S CONCLUSION UNDER CHALLENGE DELETING THE IMPUGNED PENALTY OF RS.28.2LACS. THE REVENUES SOLE SUBSTANTIVE GROUND AS WELL AS MAIN APPEAL IT(SS)A NO. 225/AHD/2 014 FAIL. THE ASSESSEES CO NO.239/AHD/2014 SUPPORTIVE OF THE CIT(A)S ORDER IS RENDERED INFRUCTUOUS. 6. THIS REVENUES APPEAL IT(SS)A NO.225/AHD/2014 I S DISMISSED AND ASSESSEES CO NO.239/AHD/2014 IS DISMISSED AS RENDE RED INFRUCTUOUS. [PRONOUNCED IN THE OPEN COURT ON THIS THE 12 TH DAY OF OCTOBER, 2017.] SD/- SD/- (PRAMOD KUMAR) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD: DATED 12/10/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 45 / GUARD FILE. BY ORDER / . // . /0