Shri Rajendra A. Makhijani, Godhra V. The ACIT, Central Circle-1, Baroda

ITSSA 252/AHD/2014

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7200 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-07-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-07-2019
• Assessment Year: 2006-2007
• Appeal Filed On: 06-06-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APOORVA BHARADWAJ SR DR
• Assessee Lawyers: URVASHI SODHAR
• Keywords: Capital asset; Income from undisclosed sources; Loose papers; Retraction; Documents seized
• Section: 271(1)(c); 143(3); 153A; 234B; 27; 132; 139

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIPKUMAR KEDIA, ACCOUNTANT MEMBER ./ IT(SS)A NO.251 TO 255/AHD/2014 [ASSTT.YEARS: 2005-06 TO 2009-10] RAJENDRA A. MAKHIJANI 7,8,9 VARDHMAN SOCIETY NR. SHUKLA SOCIETY POLICE CHOWKI NO.8 PRABHA ROAD GODHRA 389 001. PAN : ACLPM 1246 P VS. ACIT, CENT.CIR.1 BARODA. ( APPLICANT ) (RESPONDENT) ASSESSEE BY : SMT.URVASHI SODHAR, AR REVENUE BY : SHRI APOORVA BHARADWAJ, SR.DR ! '#$ % &' / DATE OF HEARING : 12/07/2019 ()* % &' / DATE OF PRONOUNCEMENT: 30/07/2019 +, / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT FIVE APPEALS ARE DIRECTED AT THE INSTANCE O F THE ASSESSEE AGAINST COMMON ORDERS OF THE LD.CIT(A)-IV, AHMEDABAD DATED 2.4.2014 PASSED FOR THE ASSTT.YEARS 2005-06 T O 2009-10. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 AMOUNTING TO ASSTT.YEAR PENALTY LEVIED IT(SS)A NO.251 TO 255/AHD/2014 2 2005-06 RS.21,38,580/- 2006-07 RS.15,88,782/- 2007-08 RS. 5,69,912/- 2008-09 RS.28,38,934/- 2009-10 RS. 3,50,415/- 3. FACTS ON ALL VITAL POINTS ARE COMMON THEREFORE, FOR THE FACILITY OF REFERENCE, WE TAKE THE FACTS MAINLY FROM THE ASS ESSMENT YEAR 2005-06. 4. BRIEF FACTS OF THE CASE ARE THAT A SEARCH UNDER S ECTION 132 OF THE ACT WAS CARRIED OUT IN THE R.K. CONSTRUCTION GR OUP OF CASES INCLUDING THE CASE OF THE ASSESSEE ON 9.4.2010. IN ORDER TO GIVE LOGICAL END TO THE PROCEEDINGS A NOTICE UNDER SECTI ON 153A WAS ISSUED ON 27.1.2011 AND IN COMPLIANCE THEREOF THE A SSESSEE HAS FILED HIS RETURN OF INCOME. THE LD.CIT(A) HAS TABU LATED INCOME RETURNED BY THE ASSESSEE UNDER SECTION 139(1) AS WE LL AS UNDER SECTION 153A. SUCH DETAILS READ AS UNDER: AY INCOME U/S 139(1) INCOME U/S 153A ADDITIONAL INCOME 2005-06 4,98,613/- 68,11,981/- 62,84,168/- 2006-07 38,700/- 48,44,421/- 48,05,721/- 2007-08 6,02,468/- 22,51,650/- 16,49,182/- 2008-09 3,26,393/- 86,61,572/- 83,35,179/- 2009-10 4,43,440/- 14,65,768/- 10,22,328 5. ASSESSMENTS WERE FINALIZED UNDER SECTION 153A R. W. SECTION 143(3) ON 28.2.2013 VIDE WHICH THE LD.AO HAS ACCEPT ED THE RETURNED INCOME. HE INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WITH THE HELP OF EXPLANATION 5A. AFTER HEARING THE IT(SS)A NO.251 TO 255/AHD/2014 3 ASSESSEE, HE IMPOSED PENALTY AS NOTICED ABOVE. APP EAL TO THE CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 6. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET CONTENDED THAT IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF ARVINDBHAI V. BHANSUSALI VS. ACIT, IT(SS)A.NO.271 TO 273/AHD/2013. THE TRIBUNAL HAS DECIDED THE APPEAL OF THAT ASSESSEE ON 6.4.2017. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE, IN THIS ORDER, ORDER OF THE TRIBUNAL IN T HE CASE OF SHRI MANSUKHBHAI R. SORATHAI AND OTHERS VS. JCIT, RAJKOT IN IT(SS)A.NO.46/RJT/2012 HAS BEEN RELIED UPON. [THE UNDERSIGNED IS THE AUTHOR OF BOTH THESE ORDERS]. ON THE STRENGTH OF THESE ORDERS, SHE CONTENDED THAT PENALTY UNDER SECTION 27 1(1)(C) WITH HELP OF EXPLANATION 5A CAN BE IMPOSED UPON THE ASSESSEE, IF ADDITIONAL INCOME DECLARED IN RESPONSE TO THE NOTIC E UNDER SECTION 153A WAS REPRESENTED/ SUPPORTED BY ANY MATERIAL UNE ARTHED DURING THE COURSE OF SEARCH. IF THIS ADDITIONAL IN COME IS BASED ONLY ON THE STATEMENT GIVEN UNDER SECTION 132(4) TH EN PENALTY UNDER SECTION 271(1)(C) R.W.S EXPLANATION 5A WOULD NOT BE IMPOSABLE. SHE FURTHER CONTENDED THAT IN THE CASE OF SHRI ASHOK ARJANDAS MAKHIJANI, WHO IS ONE OF THE ASSESSEES IN THE GROUP CONCERN, PENALTY HAS BEEN DELETED BY THE TRIBUNAL. SHE PLACED ON RECORD COPY OF THE TRIBUNALS ORDER DATED 25.6.2019 PASSED IN IT(SS)A.NO.310 TO 314/AHD/2014. ON STRENGTH OF THE SE ORDERS SHE CONTENDED THAT PENALTY IS NOT IMPOSABLE IN THE CASE OF THE ASSESSEE BECAUSE DURING THE COURSE OF SEARCH NO INC RIMINATING MATERIAL WAS FOUND ON THE BASIS OF WHICH IT COULD B E ALLEGED THAT ADDITIONAL INCOME WAS DECLARED BY THE ASSESSEE. IT(SS)A NO.251 TO 255/AHD/2014 4 7. THE LD.SR.DR, ON THE OTHER HAND, HAS PLACED ON R ECORD COPY OF THE RETURN. HE INVITED OUR ATTENTION TOWARDS NO TE NO.3 APPENDED WITH INCOME-TAX RETURN FILED BY THE ASSESS EE. HE EMPHASISED THAT A PERUSAL OF THIS NOTE WOULD INDICA TE THAT THE ASSESSEE HAS ADMITTED DISCOVERY OF INCRIMINATING SE IZED PAPERS ON THE BASIS OF WHICH DECLARATION WAS MADE AND THE INC OME WAS QUANTIFIED. THIS IS THE BASIC DIFFERENCE OF FACTS BETWEEN THE RATIO OF LAW LAID DOWN BY EARLIER ORDERS OF THE TRIBUNAL VIS--VIS THE ASSESSEE. THE LD.COUNSEL FOR THE ASSESSEE WAS UNAB LE TO CONTROVERT THIS SUBMISSION MADE BY THE LD.SR.DR. 8. WE HAVE DULY CONSIDERED RIVAL SUBMISSIONS AND GO NE THROUGH THE RECORD CAREFULLY. THE SCOPE OF EXPLANATION 5A HAS BEEN CONSIDERED BY US ELABORATELY IN THE CASE OF SHRI MA NSUKHBHAI R. SORATHAI AND OTHERS (SUPRA). THE DISCUSSION MADE B Y THE TRIBUNAL READS AS UNDER: 7. THE LD. COUNSEL FOR THE ASSESSEE RELIED UPON TH E 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. TH E HONBLE COURT WHILE CONSTRUING THE MEANING OF EXPLANATION 5 HAS PUT RELIANCE UPON THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF ACIT VS. GEBILAL KANBHAIALAL (HUF), 348 ITR 561 (SC). ACCORDING TO THIS DECISION, THE EXPLANATION 5 IS DE EMING PROVISION. IT PROVIDES WHERE IN THE COURSE OF SEAR CH UNDER SECTION 132, THE ASSESSEE IS FOUND TO BE OWNER OF U NACCOUNTED ASSET AND HE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQU IRED BY HIM BY UTILIZING WHOLE OR PART OF HIS INCOME FROM ANY P REVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH OR WHICH IS TO END ON OR AFTER THE DATE OF SEARCH, THEN IN SUCH A SITUATI ON, NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF SEARCH, HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS O F HIS INCOME FOR THE PURPOSE OF IMPOSITION OF PENALTY UNDER SECT ION 271(1)(C) IT(SS)A NO.251 TO 255/AHD/2014 5 OF THE ACT. THE HONBLE COURT, THEREAFTER, PROPOUN DED THAT SUB- CLAUSE (1) AND (2) EXPLANATION 5 PROVIDES EXCEPTION S FOR DEEMING THE CONCEALMENT OF PARTICULARS OF INCOME. IN THAT CASE, THE HONBLE COURT WAS DEALING IN SUB-CLAUSE (2) OF EXPL ANATION-5 AND OBSERVED THAT IN ORDER TO CLAIM IMMUNITY AS PER SUB -CLAUSE (2), THREE CONDITIONS HAVE TO BE SATISFIED BY THE ASSESS EE. THESE THREE CONDITIONS ARE (A) THAT THE ASSESSEE HIMSELF MAKES A STATEMENT UNDER SECTION 132(4) OF THE ACT IN THE CO URSE OF SEARCH STATING THAT THE UNACCOUNTED ASSETS AND INCRIMINATI NG DOCUMENTS FOUND FROM HIS POSSESSION DURING THE SEARCH HAVE BE EN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED IN T HE RETURNS OF INCOME TO BE FURNISHED BEFORE THE EXPIRY OF TIME SP ECIFIED IN SECTION 139(1); (B) THAT THE ASSESSEE SHOULD SPECIF Y IN HIS STATEMENT UNDER SECTION 132(4) OF THE ACT, THE MANN ER IN WHICH THE INCOME STOOD DERIVED, AND (C) THE ASSESSEE HAS TO PAY TAX TOGETHER WITH INTEREST, IF ANY, IN RESPONSE TO SUCH UNDISCLOSED INCOME. ACCORDING TO THE ASSESSEES PRESENT BEFORE US, THEY HAVE MADE VOLUNTARY DISCLOSURE, FILED RETURNS AND P AID TAXES. THEIR EXPLANATION FOR AVAILING THE BENEFIT OF JUDGM ENT OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAH YABHAI PATEL (SUPRA) 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 INSERTED VIDE FINANCE AC T, 2007. ALONG WITH THIS EXPLANATION, SECTION 271AAA HAS ALS O 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 ASSE SSEE 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 ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILISING (WHOL LY OR IN PART) HIS INCOME FOR ANY PREVIOUS YEAR; 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 REPRESEN TS HIS INCOME (WHOLLY OR IN PART) FOR ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH AND, IT(SS)A NO.251 TO 255/AHD/2014 6 (A) WHERE THE RETURN OF INCOME FOR SUCH PREVIOUS Y EAR HAS BEEN FURNISHED BEFORE THE SAID DATE BUT SUCH INCOME HAS NOT BEEN D ECLARED 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 RETURN, 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-SEC TION (1) OF THIS SECTION, BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INC OME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 271AAA. (1) THE ASSESSING OFFICER MAY, NOTWITHSTAND ING ANYTHING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT, DIRECT THAT, IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132ON OR AFTER THE 1ST DAY OF JUNE, 2007 BUT BEFORE THE 1ST DAY OF JULY, 2012, THE ASSESSEE 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 THE 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 SPECIFIES TH E 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 IN RESPECT O F 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 (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REP RESENTED, EITHER WHOLLY OR PARTLY, BY ANY MONEY, BULLION, JEWELLERY OR OTHE R 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 IT(SS)A NO.251 TO 255/AHD/2014 7 (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEAR CH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE 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 EXPENSE RE CORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NOR MAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FO UND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH N OT 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 SECTION 1 39 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE A SSESSEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEA R 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 CONDI TIONS NARRATED IN SECTION 271AAA. THE EXPLANATION APPENDED TO SECTIO N 271AAA PROVIDES THE DEFINITION OF UNDISCLOSED INCOME AND S PECIFIED PREVIOUS YEAR. A PERUSAL OF THE EXPRESSION SPECIF IED PREVIOUS YEAR WOULD INDICATE THAT THE YEAR OF SEARCH AND IM MEDIATELY EARLIER YEAR, IF DUE DATE OF FILING OF THE RETURN H AS NOT EXPIRED AND INCOME-TAX RETURN FOR SUCH YEAR HAS NOT BEEN FILED. SINCE THE ASSESSMENT YEARS INVOLVED BEFORE US ARE THE ASSTT.Y EARS 2008- 09 AND 2009-10, THE DUE DATE FOR FILING OF THE RETU RN FOR THE ASSTT.YEAR 2009-10 WAS EXPIRED BEFORE THE SEARCH AC TION. 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 271AAA, THEREFORE, WE DO NOT DEEM IT NECESSARY TO C ONSTRUE AND EXPLAIN THE MEANING OF EXPLANATION 5A WITHIN THE SC OPE 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 JUDGME NT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF KIRIT DAHYABHAI P ATEL (SUPRA). THE LD.FIRST APPELLATE AUTHORITY HAS DEALT WITH THE SE SITUATION IN AN ANALYTICAL MANNER AND IN RIGHT PERSPECTIVE. AS FAR AS THE IT(SS)A NO.251 TO 255/AHD/2014 8 CONSTRUCTION OF MEANING OF EXPLANATION 5A TO SECTIO N 271AAA BY THE LD.FIRST APPELLATE AUTHORITY IS CONCERNED, WE D O 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 ANY MONEY, BULLION, JEWELLERY OR OTHER VAL UABLE ARTICLE OR THINGS AND THE ASSESSEE CLAIMS SUCH ASSETS HAVE BEEN ACQUIRED BY HIM BY UTILSING THE WHOLE OR PARTLY OF HIS INCOME FROM ANY PREVIOUS YEAR OR ANY INCOME BASED ON ANY E NTRY IN ANY BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND DURING THE COURSE OF SEARCH, AND THE ASSESSEE CLAIM S THAT SUCH ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS REPRESENTS HIS INCOME FROM ANY PREVIOUS YEAR, WHICH HAS ENDED BEFORE THE DATE OF SEARCH, THEN, NOTWITHSTANDING SU CH 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 IMPOSIT ION OF PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION BE DEEMED TO HAVE BEEN CONCEALED PARTICULARS OF INCOME OR FURNIS HED INACCURATE PARTICULARS. THE MOOT QUESTION FOR ATTR ACTING THIS EXPLANATION IS THAT IN THE COURSE OF SEARCH MONEY, BULLION, JEWELLERY OR INCOME BASED ON ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OUGHT TO HAVE BEEN FOUND. IN A GIVEN SITUATION, NO MONEY OR BULLION OR JEWELLERY OR INCO ME MIGHT HAVE FOUND FROM THE ASSESSEES FOR THE ASSESSMENT YEARS W HICH WERE NOT PART OF SPECIFIED PREVIOUS YEAR CONTEMPLATED IN SECTION 271AAA OR IMMUNITY AVAILABLE TO THE ASSESSEES UNDER SUB-CLAUSE (A) AND (B) OF EXPLANATION 5A, THEN ALSO, IF IN RES PONSE TO THE NOTICE UNDER SECTION 153A, THE ASSESSEE DISCLOSED S OME ADDITIONAL INCOME VOLUNTARILY, WOULD HE BE DEEMED T O HAVE CONCEALED THE INCOME FOR VISITING HIM WITH PENALTY UNDER SECTION 271(1)(C) OF THE ACT ? THE LD.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 INCRIM INATING MATERIAL. LET US SEE THE FINDING IN THE ASSESSMENT ORDER. 10. WE HAVE PERUSED THE ASSESSMENT ORDER OF SHRI MA NSUKHBHAI R. SORATHIA IN THE ASSTT.YEAR 2008-09. ALL OTHER A SSESSMENT ORDERS ARE ALSO SIMILARLY WORDED. IT IS A VERY BRI EF ASSESSMENT IT(SS)A NO.251 TO 255/AHD/2014 9 ORDERS RUNNING ONE-AND-HALF PAGES. IN THE FIRST PA GE, THE LD.AO HAS NARRATED PROCEDURAL ASPECT ABOUT THE SEARCH ACT ION, ISSUANCE OF NOTICE AND FILING OF THE RETURN, SERVICE OF NOTI CE UNDER SECTION 143(2) ETC. IN THE NEXT PAGE FINDING OF THE AO RE AD AS UNDER: 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF FABR ICATION AND ENGINEERING JOB WORK AND ALSO DERIVES INCOME FR OM AGRICULTURAL ACTIVITIES, REMUNERATION AND INTEREST FROM PARTNERSHIP FIRMS ETC. COPIES OF P&L ACCOUNT, CAPIT AL ACCOUNT AND BALANCE SHEET, WAS FILED WITH THE RETURN. VARIO US 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 BEI NG CONCEALED INCOME, PENALTY PROCEEDINGS 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. GIVE CREDIT FOR PREPAID TAXES AFTER DUE VERIFI CATION. DEMAND NOTICE AND CHALLAN ISSUED ACCORDINGLY. ISSUE NOTICE U/S. 271(1)(C)OF THE IT ACT. 11. WE HAVE PERUSED THE PENALTY ORDER ALSO. THERE ARE ONLY THREE PARAGRAPHS I.E. PARA-4, 6 AND 7, WHERE THE AO HAS MADE SOME OBSERVATION AT HIS OWN, OTHERWISE, IN REST OF THE PARAGRAPHS HE REPRODUCED THE SUBMISSIONS OR THE HEA D-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 ACC EPTABLE BECAUSE, THE ADDITIONAL INCOME OFFERED BY THE ASSES SES ONLY SURFACED DUE TO THE SEARCH ACTION CARRIED BY THE DE PARTMENT. HAD THERE BEEN NO SEARCH, THE PORTION OF ADDITIONAL INCOME WOULD HAVE REMAINED CONCEALED ETERNALLY. IF IN A RE GULAR IT(SS)A NO.251 TO 255/AHD/2014 10 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 WHERE THE CONCEALMENT HAS BEEN DETECTED ON A CCOUNT OF PROACTIVE SEARCH ACTION INITIATED BY THE DEPARTM ENT. IN THE CASE OF THE ASSESSEE, THE ASSESSEE HAS NOT RECORDED DETAILS OF HIS INCOME AND THE SAME WAS WORKED OUT ONLY DURI NG SEARCH AND THAT TOO ON THE BASIS OF THE SEIZED MATE RIALS. IN FACT, IT IS AN ESTABLISHED JUDICIAL DECISION THAT ' DOCUMENTS SEIZED DURING THE SEARCH CANNOT BE SAID THE BOOKS O F ACCOUNTS MAINTAINED FOR ANY SOURCE OF INCOME, FOR T HE PURPOSES OF EXPLANATION 5 (CIT VS GLAMOUR RESTAURAN T (2003) 80 TTJ (MUM) 763. DIARIES FOUND AND SEIZED D URING COURSE OF SEARCH CANNOT BE CONSIDERED AS BOOKS OF A CCOUNT MAINTAINED BY THE ASSESSEE FOR THE PURPOSE OF IMMUN ITY TO BE GRANTED TO HIM UNDER THE PROVISIONS OF EXPLANATI ON 5 TO SECTION 271(1)(C) - DR T P KULKARNI VS CIT (2003) 8 6 ITD 696 (MUM). IT HAS ALSO BEEN HELD THAT ONLY BOOKS OF ACC OUNT MAINTAINED IN THE REGULAR COURSE CAN MAKE THE ASSES SEE ELIGIBLE FOR GRANT OF IMMUNITY FROM PENALTY AND NOT JUST ANY OF SUCH BOOKS, WHICH HAVE NOT BEEN MAINTAINED IN RE GULAR COURSE OF BUSINESS - BRIJ LAL GOYAL VS CIT (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 COU RSE OF SEARCH. WE HAVE EXTRACTED THE RELEVANT PART OF THE STATEMEN T IN THE FOREGOING PARAGRAPHS OF THIS ORDER. THE EVIDENTIAR Y VALUE OF SUCH STATEMENT HAS BEEN EXPLAINED IN VARIOUS AUTHORITATI VE 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 EXAMINATION MAY THEREAFTER BE USED IN EVIDENCE IN A NY PROCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 ( 11 OF 1922 ), OR UNDER THIS ACT. IT(SS)A NO.251 TO 255/AHD/2014 11 EXPLANATION.- FOR THE REMOVAL OF DOUBTS, IT IS HERE BY DECLARED THAT THE EXAMINATION OF ANY PERSON UNDER T HIS SUB- SECTION MAY BE NOT MERELY IN RESPECT OF ANY BOOKS O F ACCOUNT, OTHER DOCUMENTS OR ASSETS FOUND AS A RESUL T OF THE SEARCH, BUT ALSO IN RESPECT OF ALL MATTERS RELEVANT FOR THE PURPOSES OF ANY INVESTIGATION CONNECTED WITH ANY PR OCEEDING UNDER THE INDIAN INCOME- TAX ACT, 1922 (11 OF 1922 ), OR UNDER THIS ACT. 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 DU RING THE STATEMENT RECORDED UNDER THIS SECTION WILL BE ADMIT TED IN THE EVIDENCE AND CAN BE USED AGAINST THE ASSESSEE IN TH E PROCEEDING. 14. NO DOUBT, THE DISCLOSURE OR ADMISSION MADE UNDE R SECTION 132(4) OF THE ACT DURING THE COURSE OF SEARCH PROCE EDINGS IS AN ADMISSIBLE EVIDENCE BUT NOT CONCLUSIVE ONE. THIS P RESUMPTION 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 M ISCONCEPTION OF FACTS, THEN SOLELY ON THE BASIS OF SUCH ADMISSIO N NO ADDITION IS REQUIRED TO BE MADE. IT IS TRUE THAT ADMISSION BEI NG DECLARATION AGAINST AN INTEREST ARE GOOD EVIDENCE, BUT THEY ARE NOT CONCLUSIVE, AND A PARTY IS ALWAYS AT LIBERTY TO WITHDRAW THE AD MISSION BY DEMONSTRATING THAT THEY ARE EITHER MISTAKEN OR UNTR UE. IN LAW, THE RETRACTED CONFESSION EVEN MAY FORM THE LEGAL BA SIS OF ADMISSION, IF THE AO IS SATISFIED THAT IT WAS TRUE AND WAS VOLUNTARILY MADE. BUT THE BASING THE ADDITION ON A RETRACTED DECLARATION SOLELY WOULD NOT BE SAFE. IT IS NOT A STRICT RULE OF LAW, BUT ONLY RULE OF PRUDENCE. AS A GENERAL RULE, IT I S UNSAFE TO RELY UPON A RETRACTED CONFESSION WITHOUT CORROBORATIVE E VIDENCE. DUE TO THIS GREY SITUATION, CBDT HAS ISSUED CIRCULAR NO. 286/2/2003 PROHIBITING THE DEPARTMENTAL OFFICIALS FROM TAKING CONFESSION IN THE SEARCH. THE BOARD IS OF THE VIEW THAT OFTEN THE OF FICIALS USED TO OBTAIN CONFESSIONS FROM THE ASSESSEE AND STOP FURTH ER RECOVERY OF THE MATERIAL. SUCH CONFESSIONS HAVE BEEN RETRACTED AND THEN THE ADDITION COULD NOT WITHSTAND THE SCRUTINY OF THE HI GHER 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 IT(SS)A NO.251 TO 255/AHD/2014 12 JURISDICTIONAL HIGH COURT IN THE CASE OF KIALASHBEN MANHARLAL CHOKSHI VS. CIT, 220 CTR (GUJ) 138. IN THIS CASE, SEARCH WAS CONDUCTED UPON THE ASSESSEE UNDER SECTION 132 OF TH E INCOME TAX ACT ON 4.11.1988. THE STATEMENT OF THE ASSESSEE WA S RECORDED UNDER SECTION 132(4) OF THE ACT. HE MADE DISCLOSUR E OF RS.7 LAKHS. LATER ON, IN JANUARY, 1989, THE ASSESSEE RE TRACTED FROM THE DISCLOSURE AND STATED THE DISCLOSURE OF RS.50,000/- WAS ACCEPTABLE TO HIM. THE LD.AO MADE AN ADDITION OF RS.7 LAKHS O N THE BASIS OF HIS STATEMENT AND OBSERVED THAT THE RETRACTION WAS MADE AFTER A LAPSE OF 2 MONTHS. THE ASSESSEE DID NOT HAVE ANY R EASON FOR 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 AD DITION BY OBSERVING THAT THERE WAS NOTHING ON RECORD WHICH IN DICATED THAT THE DISCLOSURE WAS TAKEN FROM THE ASSESSEE UNDER DU RESS, PRESSURE OR COERCION. THE RETRACTION AFTER LAPSE O F TWO MONTHS FROM THE DATE OF DISCLOSURE BY THE ASSESSEE WAS CON SIDERED AS AFTER-THOUGHT. THE ISSUE TRAVELLED BEFORE THE HON BLE HIGH COURT. THE HONBLE HIGH COURT HAS DELETED THE ADDITION BY OBSERVING THAT MERELY ON THE BASIS OF DISCLOSURE, ADDITION CANNOT BE MADE. THERE SHOULD BE SOME CORROBORATIVE MATERIAL. THE FOLLOW ING 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 CON VINCING, HAS NOT BEEN CONSIDERED BY THE AUTHORITIES BELOW AN D ADDITIONS WERE MADE AND/OR CONFIRMED MERELY ON THE BASIS OF STATEMENT RECORDED UNDER SECTION 132(4) OF THE A CT. DESPITE THE FACT THAT THE SAID STATEMENT WAS LATER ON RETRACTED NO EVIDENCE HAS BEEN LED BY THE REVENUE AUTHORITY. WE ARE, THEREFORE, OF THE VIEW THAT MERE LY ON THE BASIS OF ADMISSION THE ASSESSEE COULD NOT HAVE BEEN SUBJECTED TO SUCH ADDITIONS UNLESS AND UNTIL, SOME CORROBORATIVE EVIDENCE IS FOUND IN SUPPORT OF SUCH ADMISSION. WE ARE ALSO OF THE VIEW THAT FROM THE STATEMENT REC ORDED AT SUCH ODD HOURS CANNOT BE CONSIDERED TO BE A VOLUNTA RY STATEMENT, IF IT IS SUBSEQUENTLY RETRACTED AND NECE SSARY EVIDENCE IS LED CONTRARY TO SUCH ADMISSION. HENCE T HERE IS NO REASON NOT TO DISBELIEVE THE RETRACTION MADE BY THE ASSESSING OFFICER AND EXPLANATION DULY SUPPORTED BY THE EVIDENCE. WE ARE, THEREFORE, OF THE VIEW THAT THE T RIBUNAL WAS NOT JUSTIFIED IN MAKING ADDITION OF RS. 6 LAKHS ON THE BASIS OF STATEMENT RECORDED BY THE ASSESSING OFFICE R UNDER IT(SS)A NO.251 TO 255/AHD/2014 13 SECTION 132(4) OF THE ACT. THE TRIBUNAL HAS COMMITT ED AN ERROR IN IGNORING THE RETRACTION MADE BY THE ASSESS EE. 27. IN THE ABOVE VIEW OF THE MATTER, ADDITION OF RS . 1 LAKH MADE ON ACCOUNT OF UNACCOUNTED CASH IS CONFIRMED AN D THE ADDITION 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 THE DISCUSSION MADE BY THE TRIBUNAL, AND THEREAFTER , CONCURRED WITH THE CONCLUSIONS OF THE TRIBUNAL BY OBSERVING A S UNDER: 6. IN VIEW OF THE ABOVE DISCUSSION AND CONSIDERING THE PRINCIPAL LAID DOWN IN THE CASE OF KAILASHBEN MANHA RLAL CHOKSHI (SUPRA),WE ARE OF THE CONSIDERED OPINION TH AT THE VIEW TAKEN BY THE TRIBUNAL IS JUST AND PROPER. WE A RE NOT CONVINCED WITH THE SUBMISSIONS MADE BY MR. MEHTA, L EARNED ADVOCATE FOR THE APPELLANT THAT THE TRIBUNAL HAS NO T GIVEN COGENT REASONS. THEREFORE, THE ANSWER TO THE FIRST QUESTION WOULD BE AGAINST THE REVENUE AND IN FAVOUR OF THE A SSESSEE. THE SECOND QUESTION WILL ALSO ENURE FOR THE BENEFIT OF THE ASSESSEE AS FROM THE RECORD IT IS CLEAR THAT OTHER CONCERNS WERE NOT BENAMI 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 AG AINST 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 SUSTAINED. THE INFERENCE OF OWNERSHIP OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE S, TO OUR MIND, OUGHT NOT TO BE BASED ON THIS STATEMENT. WHE N THE ASSESSEES HAVE TAKEN SPECIFIC PLEA THAT NO MONEY, B ULLION OR JEWELLERY OR INCOME BASED ON ANY ENTRIES FOR THESE TWO ASSESSMENT YEARS WAS FOUND DURING THE COURSE OF SEA RCH, THE AO OUGHT TO HAVE IMMEDIATELY REFERRED THE DOCUMENTS , ENTRIES OR ANY ASSET FOUND WHICH IS RELEVANT TO THE SE ASSESSMENT YEARS IN THE PENALTY PROCEEDINGS. HE SH OULD HAVE REJECTED THE EXPLANATION OF THE ASSESSEE BY IT(SS)A NO.251 TO 255/AHD/2014 14 DEMONSTRATING IT AS FACTUALLY INCORRECT. RATHER, T HE AUTHORITIES HAVE PROCEEDED ON THE ASSUMPTION THAT H AD THERE BEEN NO MONEY, BULLION, JEWELLERY OR INCOME BASED O N ENTRIES WAS NOT FOUND, THE ASSESSEE WOULD HAVE NOT MADE VOLUNTARY DISCLOSURE OF THE INCOME IN THESE RETURNS . THEY FAILED TO NOTE THE QUESTION NO.25 ALSO, WHERE THE A SSESSEES CLAIMED IMMUNITY FROM PENALTY, AND PEACE FROM LITIG ATION. TO OUR MIND INFERENCE OF AVAILABILITY OF MONEY, BUL LION OR ASSETS EMBEDDED IN THE ENTRIES CANNOT BE DRAWN FROM THE STATEMENT OF THE ASSESSEE (EXTRACTED SUPRA). THEY SHOULD HAVE BEEN FOUND IN PHYSICAL FORM AND PERTAINING TO THESE YEARS, ONLY THEN, DEEMING FICTION OF CONCEALMENT WO ULD TRIGGER. THUS, THE REVENUE AUTHORITIES HAVE NOT REF ERRED ANY DOCUMENTARY EVIDENCES DEMONSTRATING THE FACT THAT VOLUNTARY INCOME OFFERED BY ASSESSEES IN THESE TWO YEARS ACTUALLY UNEARTHED DURING THE COURSE OF SEARCH. TH EREFORE, TO OUR MIND, THE ASSESSEES DO NOT DESERVE TO BE VIS ITED WITH PENALTIES. WE ALLOW ALL THE APPEALS OF THE ASSESSE ES AND DELETE PENALTIES. 9. SIMILARLY, WE WOULD LIKE TO TAKE NOTE OF FINDING OF THE CO- ORDINATE BENCH IN THE CASE OF ASHOK ARJANDAS MAKHIJA NI (SUPRA). THE TRIBUNAL AFTER REPRODUCING THE EXPLANATION 5 HAS RECORDED THE FOLLOWING FINDING: THE ABOVE PROVISION REVEALS THAT THE PENALTY UNDER EXPLANATION 5A TO SECTION 271 (L)(C), THE OF THE AC T CAN BE ATTRACTED IF THE ASSESSEE WAS FOUND TO BE THE OWNER OF ANY MONEY, BULLION, JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY INCOME BASED ON ANY ENTRY IN ANY BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS. 7.4 BUT, IN THE CASE ON HAND, THERE WAS NO SUCH ALLE GATION MADE AGAINST THE ASSESSEE EITHER IN THE ASSESSMENT OR PENALTY OR THE CIT (A) ORDER. THUS THE ISSUE ARISES WHETHER THE PENALTY CAN BE LEVIED UNDER SECTION 271 (1) (C) R.W. THE EXPLANATION 5 A OF THE ACT MERELY ON THE BASIS OF T HE STATEMENT FURNISHED UNDER SECTION 132(4) OF THE ACT . IN THIS REGARD, WE ARE INCLINED TO REFER TO THE ORDER OF IT AT IN THE CASE OF AJAY TRADERS VS. DCIT REPORTED IN SI LAXMAN N.COM 463 WHEREIN IT WAS HELD AS UNDER: IT(SS)A NO.251 TO 255/AHD/2014 15 'THE ASSESSEE DISCLOSED AN ADDITIONAL INCOME ON ACCOUNT OF UNACCOUNTED SALES. BASED ON SAID DISCLOSURES, THE ASSESSING OFFICER IMPOSED PENALTY ORDER SECTION 271(L)(C) BY INVOKING EXPLANATION 5A TO SAID SECTION. HELD THAT IT WAS UNDISPUTED FACT THAT DURING THE CA ME OF SEARCH, NO INCRIMINATING DOCUMENTS WERE FOUND AN D SEIZED. THE ASSESSEE SURRENDERED THE ADDITIONAL INC OME UNDER SECTION 132(4) AT RS.15 LACS AND REQUESTED NO T LO OPPOSE PENALTY UNDER SECTION 271(L)(C). THE ASSESSI NG OFFICER IMPOSED THE PENALTY BY INVOKING THE EXPLANA TION 5A TO SECTION 271(L)(C). FOR IMPOSING THE PENALTY U NDER EXPLANATION 5A ON THE BASIS OF STATEMENT RECORDED DURING THE COURSE OF SEARCH, IT IS NECESSARY TO BE FOUND INCRIMINATING DOCUMENTS AND IS TO BE CONSIDERED AT THE TIME OF ASSESSMENT FRAMED UNDER SECTION 153A. AS NO INCRIMINATING DOCUMENTS WERE FOUND DURING THE COURS E OF SEARCH, THEREFORE, EXPLANATION 5A TO SECTION 271(1)(C) IS NOT APPLICABLE. ACCORDINGLY, THE PENAL TY WAS TO BE DELETED. ' FROM THE ABOVE ORDER, IT IS CLEAR THAT THERE CANNOT BE ANY PENALTY UNDER EXPLANATION 5 A TO SECTION 271(1)C OF THE ACT MERELY ON THE BASIS OF THE STATEMENT FURNISHED UNDE R SECTION 132(4) OF THE ACT, UNTIL AND UNLESS IT SUPPORTED WI TH THE INCRIMINATING DOCUMENT. ACCORDINGLY, WE HOLD THAT T HERE CANNOT BE ANY PENALTY UNDER SECTION 271(1)C OF THE ACT IN THE GIVEN FACTS AND CIRCUMSTANCES. HENCE THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. 10. A PERUSAL OF BOTH THE ORDERS WOULD INDICATE THA T THE TRIBUNAL WAS UNANIMOUS IN ITS APPROACH IN HOLDING THAT IF DU RING THE COURSE OF SEARCH ANY INCRIMINATING MATERIAL; MONEY, BULLIO N OR JEWELLERY WAS NOT UNEARTHED, THEN ADDITIONAL INCOME DECLARED BY THE ASSESSEE IN RESPONSE TO NOTICE UNDER SECTION 153A, THE DEEMING FICTION OF CONCEALMENT UNDER EXPLANATION 5A WOULD NOT BE IT(SS)A NO.251 TO 255/AHD/2014 16 ATTRACTED. WE DO NOT HAVE ANY HESITATION IN CONCUR RING WITH THE ABOVE CONSTRUCTION OF EXPLANATION 5A. BUT BASIC DIFFERENCE OF APPLYING IT ON THE FACTS WOULD ARISE AS UNDER IN TH E PRESENT APPEAL. THE ASSESSEE HAS APPENDED THE FOLLOWING NOTE IN THE COMPUTATION OF INCOME: NOTES: 1. THE ORIGINAL RETURN OF INCOME WAS FILED ON 31.12 .2006 VIDE ACKNOWLEDGEMENT NO.13089 WITH ITO, WD-1, GODHR A. 2. SEARCH PROCEEDINGS U/S 132 WERE CARRIED OUT AT M Y RESIDENTIAL PREMISES AND BUSINESS PREMISES ON 9/4/2 010. 3. DURING THE COURSE OF SEARCH VARIOUS LOOSE PAPERS , DOCUMENTS ELECTRONIC DATA WERE FOUND AND SEIZED. I HAD MADE DISCLOSURE BEFORE THE AUTHORISED OFFICERS BASE D ON THE LOOSE PAPERS, DOCUMENTS, ELECTRONIC DATA FOUND / SE IZED. I HAVE OBTAINED ZEROX COPIES / COPIES OF OF SYCG SEIZ ED PAPERS, DOCUMENTS, ELECTRONIC DATA BASED ON WHICH I HAVE IN CLUDED THE INCOME IN THE DISCLOSURE SHOWN IN MY COMPUTATIO N ABOVE. 4. ME AND MY FAMILY MEMBERS ARE ASSOCIATED IN THE F AMILY CONCERNS AS A GROUP. THE INCOME DISCLOSED BY ME OR MY FAMILY MEMBERS HAVE BEEN SPENT BY ME OR BY FAMILY MEMBERS. THESE INCOME HAVE ALSO BEEN SPENT ON ACQUI SITION / PAYMENTS FOR CAPITAL ASSETS/ INVESTMENTS IN MY NA ME OR IN THE NAME OF MY FAMILY MEMBERS. HOWEVER THE DISCLOSU RE HAS BEEN MADE ON INCOME BASIS IN THE ABOVE RETURN OF IN COME. 5.1 HAVE INCLUDED ALL THE INCOME AS COMPUTED BY ME FROM THE COPIES OF LOOSE PAPERS, DOCUMENTS, ELECTRONIC D ATA ETC. MADE AVAILABLE TO US. IN CASE ANY INCOME IS LEFT OU T TO BE DISCLOSED IN THE SAID COMPUTATION THROUGH OVERSIGHT THE SAME MAY BE INCLUDED. 11. A PERUSAL OF NOTE NO.3 WOULD INDICATE THAT THE ASSESSEE HAS ADMITTED DISCOVERY OF LOOSE PAPERS, DOCUMENTS/ELECT RONIC DATA AND WHOSE BASIS HE HAS PREPARED HIS RETURN SHOWING ADDITIONAL IT(SS)A NO.251 TO 255/AHD/2014 17 INCOME. IN THE FACE OF THE ABOVE DISCOVERY OF EVID ENCE, IT COULD NOT BE SAID THAT EXPLANATION 5A IS NOT APPLICABLE. THEREFORE, THE FACTS IN THE PRESENT APPEAL ARE QUITE DISTINGUISHAB LE. EXPLANATION 5A HAS BEEN INVOKED ON THE BASIS OF SEIZED MATERIAL ADMITTED BY THE ASSESSEE PERSUADING IT TO DISCLOSE ADDITIONAL I NCOME. THEREFORE, WE DO NOT FIND ANY MERIT IN THESE APPEAL S. THEY ARE DISMISSED. 12. IN THE RESULT, APPEALS OF THE ASSESSEE ARE DISM ISSED. ORDER PRONOUNCED IN THE COURT ON 30 TH JULY, 2019. SD/- SD/- (PRADIPKUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 30/07/2019