Smt. Kalpana Ben Shah, Vidisha V. The ACIT 3(1), Bhopal

ITSSA 3/IND/2014

• Counselvise Citation: [2016] 122 COUNSELVISE.COM (IT) 1722 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 2 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 03-03-2016
• Assessment Year: misc
• Appeal Filed On: 02-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: N D PATWA S
• Keywords: Search and seizure; Peak credit; Fair market value; Block assessment
• Section: 143(3); 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.(SS).A.NO. 01/IND/2014 BLOCK PERIOD : 1.4.2015 TO 03.01.2002. SHRI MAGANLAL SHAH, ACIT, M/S. BHARAT KUMAR MAGANLAL, VS 3(1), BHOPAL TEONDA ROAD, GANJBASODA, VIDISHA APPELLANT RESPONDENT PAN NO. ACIPS9419N I.T.(SS).A.NO. 02/IND/2014 BLOCK PERIOD : 1.4.2015 TO 03.01.2002. SHRI CHETAN KUMAR SHAH, ACIT, GANJBASODA, VIDISHA VS 3(1), BHOPAL APPELLANT RESPONDENT PAN NO. ADAPS8414M SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 2 2 I.T.(SS).A.NO. 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 03.01.2002 SMT.KALPANA BEN SHAH, ACIT, 3(1), TEONDA ROAD, GANJBASODA VS BHOPAL VIDISHA APPELLANT RESPONDENT PAN NO. ADAPS8059K APPELLANTS BY : SHRI ASHISH GOYAL AND SHRI N. D. PATWA, ADVOCATES RESPONDENT BY : SHRI R. A. VERMA, DR O R D E R PER D.T.GARASIA, J.M. THESE THREE APPEALS BY THE ASSESSEES ARE DIRECTED A GAINST THE CONSOLIDATED ORDER PASSED BY THE CIT(A)-II, BHO PAL, DATED 21.10.2013 FOR THE BLOCK PERIOD 01.04.1995 TO 03.01 .2002. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEES ARE GRAIN DEALERS. A SEARCH AND SEIZURE OPERATION U/S 1 32(1) OF THE DATE OF HEARING : 03 .0 3 .2016 DATE OF PRONOUNCEMENT : .0 3 .2016 SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 3 3 INCOME-TAX ACT, 1961, HAS BEEN CARRIED OUT BETWEEN 12.12.2001 TO 03.01.2002 AT BUSINESS AND RESIDENTIA L PREMISES OF VARIOUS MEMBERS OF SHAH GROUP , GANJ BA SODA INCLUDING THE ASSESSEES ALONGWITH SURVEY OPERATIONS U/S 133A AT SOME BUSINESS PREMISES OF THE GROUP. ASSESSMENTS HAVE BEEN COMPLETED U/S 158BC READ WITH SECTION 143(3) O F THE ACT VIDE ORDERS DATED 30.01.2004. THE ASSESSEES HAVE DE CLARED UNDISCLOSED INCOME IN BLOCK RETURNS ON ACCOUNT OF B OGUS PEAK CREDITS WHEREBY AO HAS MADE ADDITION U/S 68ON TOTAL AMOUNTS OF SUCH CREDITS. THE APPELLATE AUTHORITIES HAVE ACCEPTED THE THEORY OF PEAK CREDIT AND CONFIRMED PA RT ADDITIONS ON THIS ACCOUNT AS UNDER :- S.NO. NAME OF THE APPELLANT AMOUNT OF ADDITION BY AO (RS.) RELIEF BY CIT(A) (RS.) FURTHER RELIED BY HON'BLE I.T.A.T. (RS.) BALANCE/DIFFER ENCE (RS.) (A) (B) (C) (D) (E) (F) 1. SHRI MAGANLAL SHAH 84,76,142/- 72,72,005/- NIL 12,04,137/- 2. SHRI CHETAN KUMAR SHAH 90,29,938/- 78,31,039/- NIL 11,98,899/- 3. SMT. KALPANA BEN SHAH 22,25,095/- 17,54,444/- NIL 4,70,651/- SINCE THE ASSESSEES HAVE DECLARED UNDISCLOSED INCOM E IN THEIR RETURNS FILED IN RESPONSE TO NOTICE ISSUED U/S 158B C, AO HAS SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 4 4 IMPOSED PENALTY U/S 158BFA(2) ON THE DIFFERENCE AMO UNT AS PER FOLLOWING :- S.NO. NAME OF THE APPELLANT DIFFERENCE/UNDISCLOSED CASH CREDITS CONFIRMED AS (F) ABOVE (RS.) CASH CREDIT DISCLOSED IN RETURN AS UNDISCLOSED INCOME (RS.) UNDISCLOSED INCOME PENALTY LEVIABLE & IMPOSED @ 100% ( RS.) (I) (II) (III) (IV) (V) (VI) 1. SHRI MAGANLAL SHAH 12,04,137/- 5,25,000/- 6,79,137/- 4,76,750/- 2. SHRI CHETAN KUMAR SHAH 11,98,899/- 5,00,000/- 6,98,900/- 4,90,630/- 3. SMT. KALPANA BEN SHAH 4,70,651/- 50,000/- 4,20,651 2,95,300/- 3. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. C IT(A) HAS CONFIRMED THE ADDITIONS BY OBSERVING AS UNDER : - 4.3 APPELLANTS SUBMISSIONS MADE IN THE CASES OF SHRI MAGANLAL SHAH, SHRI CHETAN KUMAR SHAH AND SMT. KALPANA BEN SHAH HAVE BEEN CONSIDERED CAREFULLY ALONGWITH PENALTY AND ASSESSMENT ORDERS IN EACH CAS E. THERE IS NO DENYING THE FACT THAT THE APPELLANTS HA VE INDEED FURNISHED INACCURATE PARTICULARS OF THEIR IN COMES BY INTRODUCING BOGUS CASH CREDITS IN THEIR BOOKS OF ACCOUNTS UNDER THE HEAD KISAN UDRAT PARCHI ACCOUN T. DURING THE COURSE OF SEARCH AND POST SEARCH INVESTIGATION, CREDITS IN THE NAMES OF FARMERS, AS MENTIONED YEAR WISE IN THE ASSESSMENT ORDER, HAVE SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 5 5 BEEN FOUND TO BE BOGUS. RATHER THE APPELLANTS THEMSELVES HAVE ADMITTED THIS FACT BY MENTIONING IN THEIR RETURNS, AS UNDER, IN CASE OF SHRI MAGANLAL S HAH AS PER THE ASSESSMENT ORDER. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE REPRESENTATIVES RELIED UPON THE NOTING MADE IN BRIE F FACTS ENCLOSED WITH THE RETURNS OF BLOCK PERIOD. I HAVE REFERRED THE BRIEF FACTS. THE DISCUSSION OF CREDITS & KISAN UDRAT PARCHI ACCOUNT IS IN PARAS 2 & 4 PAGES 1 & 3. FOR THE SAKE OF CONVENIENCE THE CONTENTS OF THESES PARA S ARE REPRODUCED BELOW: (2) THAT IN THE ACCOUNT YEAR 1.4.94 TO 31.03.1995 (A.Y.95-96) THERE IS A PEAK CREDIT OF RS. 717566/- WHICH WAS EARLIER CYCLED AND RECYCLED THROUGH KISAN UDRAT PARCHI ACCOUNT AND LATER WITHDRAWN FORM THAT ACCOUN T TILL THE END OF EACH YEAR AND ACCOUNT FOR BEING AGA IN ROTATED THROUGH SUCH KISAN UDRAT PARCHI ACCOUNT APPEARING IN SUBSEQUENT YEAR COMPRISED IN BLOCK PER IOD I.E. IN THE YEAR SUBSEQUENT TO 31.03.95. SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 6 6 THE SUBSEQUENT PEAK OF THE ABOVE SAID MONEY BARRING THE THOSE CREDITS WHICH GENUINELY APPEAR & IN SAID PARCHI ACCOUNT DISCHARGED/PAID BELATEDLY ARE AS UNDER :- A.Y. PEAK AMOUNT INCREASE IN PEAK AMOUNT FROM PEAK OF A.Y. 1995-96 HENCE UNDISCLOSED INCOME IN RELEVANT YEAR RETURNED ON AD HOC BASIS 1995-96 717566/- PRIOR TO COMMENCEMENT OF BLOCK PERIOD IN BLOCK PERIOD 1996-97 605059 NONE NONE 1997-98 871654 154088 155000 1998-99 989608 117042 125000 1999-00 881340 - - 2000-01 1203284 205718 220000 2001-02 1178036 - - 2002 TO 12.12.2001 1204137 - - IN. A.Y>2002-03 TOTAL 5,00,000 (THIS FORMS A PART OF THE TOTAL UNDISCLOSED AS APPEARING IN THE COMPUTATION ON PAGE NO.3) (4) NOTWITHSTANDING THE ABOVE, HOWEVER, TO PURCHASE PEACE AND TO COVER ANY DOCUMENT OR INVESTMENT, I ANY, FOUND IN SEARCH OR IN ASSESSMENT PROCEEDING AND THE PROFIT ON STOCK FOUND SHORT THE ASSESSEE IS DISCLOSING HEREWITH AN UNDISCLOSED INCOME OF RS. 5,25,000/- FOR THE ENTIRE BLOCK PERIOD. ALONGWITH THE RETURN OF BLOCK PERIOD THE ASSESSEE ALSO ENCLOSED ACCOUNTS OF KISANI SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 7 7 UDRAT PARCHI A/C FOR THE FINANCIAL YEAR 94-95 TO 2000-01 & 1.4.01 TO 11.12.01. SIMILARLY, IN COMPLIANCE TO THE QUESTIONNAIRE ON THE BOGUS CREDITS OF FARMERS THE APPELLANT HAS ENCLOSED A NOTE ON PAGE 54 OF REPLY IN THE CASE OF M/S. RAMESH CHAND KANTILAL, A FAMILY CONCERN, FILED ON 12.12.03. THE REPLY IS REPRODUCED HEREBELOW :- IST 22&23 DK IZU DZEKAD 40 FDLKUH MNJR IPHZ CYKWD FJVUZ DS LAYXU IHD DZSFMV LVSVESAV IJ DJNKRK US MU LHKH YSUNSUKSA ,OA O;OGKJKSA DKS LN~HKKOUKIWOZD 'KKFEY DJ FY;K GS TKS IWOZ ESA MLDS }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~HKKOUK IWOZD CYKWD FJVUZ ESA 'KKFEY DJ FY;K X;K GS VKSJ BL IZDKJ DJNKRK DH LO;A DH FUNSZFKR JKFK DKS LO;A MLDS O;OGKJ ESA FDLKUKSA DS UKE LS TEK FKH OGHA VFRFJDR IHD DZSFMV MLDS O;OLK; ESA CYCLE VKSJ RECYCLE GKSRH JGHA TSLK FD EKUUH; EGKSN; DS EQRKFCD :I;S 7]61]370@& GKSRK GS DS LACA/K ESA DJNKRK IQU% LI'V DJRK PKGRK GS FD ,SLH MFYYF[KR LELR IZFOF'V;KA DJNKRK DH JKSDM+ E SA NTZ GSA PWAFD JKSDM+ ESA [KKRS ESA [KRKSUH VIW.KZ FKH TSLK FD EK UUH; EGKSN; US LO;A IK;K GS VKSJ NKIS DH DK;ZOKGH DS I'PKR QKSVKS DKWIH FEY US IJ TC JKSDM+ ESA NTZ LELR IZFOF'V;KSA DH [KRKSUH DH X;H RC FDLKU MNJ R IPHZ [KKRS DH LGH FLFKFR FUFEZR GQBZ] RFKK ,SLH OKLRFOD FLFKFR DK IW.KZ FOOJ.K DJNKRK US VIUS CYKWD FJVUZ ESA NS FN;K GS] BL IZDKJ ;G RF; LO;AESO LI'V ,OA FL/N DJRK GS FD DJNKRK US VIUS IHD DZSFMV DH FLFKFR DK VKADYU FD;K GS TKS FOLRKJ LS EKUUH; EGKSN; DKS IQU% TKUDKJ H GSRQ BL I= DS LKFK IST ----------------- LS ------------ RD IQU% IZLRQR GSA ** IT HAS BEEN MENTIONED SIMILARLY IN OTHER TWO APPELLANTS ALSO. 4.4 FROM ABOVE, IT CLEARLY TRANSPIRES THE APPELLANTS THEMSELVES HAVE ACCEPTED NATURE OF CREDITS IN THE NAMES OF FARMERS AS BOGUS AND INTRODUCTION OF OWN FUNDS THROUGH KISAN UDRAT SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 9 9 PARCHI ACCOUNT. THE ONLY PLEA TAKEN BY THEM IS THAT FOR CYCLING AND RECYCLING OF FUNDS, PEAK CREDI T THEORY MAY BE APPLIED IN THEIR CASES. THOUGH THE SAME PLEA HAS NOT BEEN ACCEPTED BY THE ASSESSING OFFICER, BUT CIT(A)-II, BHOPAL, IN ORDERS DATED 17.11.2004 AND 18.03.2005 AND HON'BLE I.T.A.T., INDORE IN COMMON ORDER DATED 31.07.2008 HAVE ACCEPTED THE THEORY OF PEAK CREDIT BEING APPLICABLE TO THE APPELLANTS AND HAVE ACCORDINGLY CONFIRMED THE ADDITIONS MADE ON THIS ACCOUNT, AS MENTIONED IN PARA 2 ABOVE, THOUGH REDUCED THAN SUBSTANTIALLY. HOWEVER, PENALTY HAS BEEN IMPOSED BY THE ASSESSING OFFICER, B Y IMPUGNED ORDERS UNDER APPEAL, ON THE BASIS THAT THERE IS DIFFERENCE BETWEEN INCOME ASSESSED AND THE INCOME RETURNED WHICH IS CONCEALED I NCOME RETURNED WHICH IS CONCEALED INCOME AS THE CONFIRMED ADDITION IS ON ACCOUNT OF BOGUS FANNERS CREDITS AND AS ADMITTED BY THE APPELLANTS THEMSELVES. ADMITTEDLY, APPELLANTS ACCOUNTS ARE UNRELIABLE AND THE. SAME SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 10 10 RATHER STANDS ACCEPTED BY THEMSELVES. DURING SEARCH AND, ASSESSMENT PROCEEDINGS, A.O. HAS ESTABLISHED BOGUS CREDIT ENTRIES THROUGH KISAN UDRAT PARCHI ACCOUNTS. THE SAME HAS BEEN REAFFIRMED BY THE APPELLATE AUTHORITIES ALSO, ALBEIT AT A LESSER AMOU NT. SO EVEN THOUGH THE ASSESSMENTS HAVE BEEN MODIFIED IN APPEALS BY REDUCING THE ADDITION MADE ON THIS ACCOUNT BY ESTIMATING PEAK CREDIT IN EACH CASE, THE NET RESULT IS CONCEALMENT OF INCOME AS THE ADDITION CONFIRMED AND THE INCOME THAT HAS BECOME FINAL IS S TILL SUBSTANTIALLY HIGHER THAN THE RETURNED INCOMES OF E ACH OF THE APPELLANT. THE SCHEME OF LEVY OF PENALTY U/S 158BFA (2) IS NOT DIFFERENT FROM AND IS RATHER AKIN TO WHAT IS STIPULATED U/S 271(1)(C) THEREBY MAKING EXPLAIN I(B) TO SEC. 271(1)(C) APPLICABLE TO THE APPELLANTS. IN THE INSTANT CASE, INFERENCE REGARDIN G BOGUS CREDITS HAS BEEN DRAWN BY THE A.O. AND VARIOU S APPELLATE AUTHORITIES AS PER DOCUMENTS AND RECORDS FOUND DURING SEARCH OPERATIONS AND NOT MERELY ON TH E BASIS OF ADMISSION OF THE APPELLANTS. THE FACT THAT THE SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 11 11 THEORY OF PEAK CREDIT HAS BEEN ACCEPTED BY THE APPELLATE AUTHORITIES AND SUBSEQUENT REDUCTION THER EOF AND PART ADDITION CONFIRMED PERTAINS TO AMOUNTS NOT COVERED BY BLOCK ASSESSMENT PERIOD IS OF NO HELP FO R THE APPELLANTS AS THE FACT OF BOGUS CREDITS STANDS PROVED AT EACH STAGE. 4.5 KEEPING IN VIEW ABOVE AND AFTER CAREFUL CONSIDERATION OF APPELLANTS' SUBMISSIONS, MINIMUM PENALTY IMPOSED BY THE A.O. U/S 158,BFA(2) IN CASE OF EACH OF THE APPELLANT AT RS.4,76,750/-, RS.4,90,630/- & RS.2,95,300/- RESPECTIVELY IS, HEREBY, CONFIRMED. 4. THE LD. AUTHORIZED REPRESENTATIVE HAS FILED THE WRI TTEN SUBMISSION, WHICH READS AS UNDER :- THE ASSESSEE SUBMITS AS UNDER :- WITH DUE RESPECT, IT IS SUBMITTED THAT SINCE PRIOR TO BLOCK PERIOD, THE ASSESSEE ALREADY HAD AN OPENING CREDITS OF RS. 7,17,566/-, CREDIT OF SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 12 12 SAME SHOULD HAVE BEEN GIVEN AS THIS REPRESENTED CREDITS AVAILABLE WITH THE ASSESSEE PRIOR TO BLOCK PERIOD. SINCE THE AMOUNT WAS AVAILABLE EVEN PRIOR TO BLOCK PERIOD, THE SAME IS BEYOND BLOCK PERIOD AND NO ADDITION CAN BE MADE DURING THE BLOCK PERIOD. ITEMS PRIOR TO BLOCK PERIOD CANNOT BE ADDED IN BLOCK PERIOD. ACIT VS SHAILESH KUMAR NATHALAL PATEL (2011) 132 ITD 526 (AHD).. THE FACT THAT THE CREDITS WERE PRIOR TO BLOCK PERIOD WAS ACCEPTED BY THE DEPARTMENT. THE LEDGER ACCOUNT OF CREDITS CLEARLY SHOW THAT THE CREDITS ARE PRIOR TO BLOCK PERIOD. EACH YEAR, ASSESSEE INTRODUCED FARMER CREDITS, AND SQUARED OFF THE SAME AT THE YEAR END. THIS AMOUNT WAS AVAILABLE WITH THE ASSESSEE AT THE YEAR END FOR INTRODUCING THE CREDITS IN THE NEXT YEAR. THE HON'BLE ITAT HAS ACCEPTED THIS PROPOSITION AS THEY HAVE ADDED ONLY THE DIFFERENCE IN THE CREDITS, I.E. THE NET SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 13 13 INCREASE IN THE CREDITS EACH YEAR. LIKE IN F. Y. 1996-97, THE PEAK CREDIT IS RS. 8,71,654; BUT ONLY RS. 1,54,088 HAS BEEN ADDED, AS THE CREDIT OF RS. 6,05,059 OF THE EARLIER YEAR WAS AVAILABLE IN CASH WITH THE ASSESSEE FOR INTRODUCING THE CREDIT IN THE SUBSEQUENT YEAR. THE WELL ESTABLISHED PROPOSITION IS THE PROFIT OF ONE YEAR IS AVAILABLE IN THE SUBSEQUENT YEAR. THIS PROPOSITION IS ACCEPTED BY THE HON'BLE ITAT ITSELF AS ADDITION IS MADE ONLY FOR INCREASE IN CREDITS. ON THE SIMILAR PROPOSITION, RS. 7,17,566/- WHICH IS A PART OF PEAK CREDIT OF F.Y. 1994-95, WAS AVAILABLE TO THE ASSESSEE FOR INTRODUCING THE SAME IN F. Y. 1995-96. F.Y. 1994-95 IS PRIOR TO BLOCK PERIOD AND NO ADDITION CAN BE MADE IN RESPECT TO SAME. ALL FACTS WERE ALREADY ON RECORD. KISAN UDARAT KHATA WAS A PART OF THE BOOKS OF ACCOUNT OF ASSESSEE. SAME WAS FOUND DURING SEARCH ALSO. SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 14 14 THE ASSESSEE IN THE BLOCK RETURN HIMSELF SURRENDERED THE FARMER CREDITS. IT HAS NEVER BEEN THE ARGUMENT OF THE DEPARTMENT THAT THE CREDITS OF RS. 7,17,566, WHICH THE ASSESSEE HAS BEEN CLAIMING TO BE OF F.Y. 1994-95 (BEYOND BLOCK PERIOD) IS WITHIN THE BLOCK PERIOD. ALL THE FACTS WERE ALREADY ON RECORD WHILE FRAMING THE BLOCK ASSESSMENT ORDER. LD ASSESSING OFFICER DID NOT GRANT THE BENEFIT OF PEAK. UNLESS THE EXPLANATION OF THE ASSESSEE IS FOUND TO BE FALSE, PENALTY IS NOT LEVIABLE. EXPLANATION I TO SECTION 271(1)(C) STATES THAT IF THE ASSESSEE OFFERS AN EXPLANATION PENALTY CAN BE LEVIED ONLY IF THE EXPLANATION IS FOUND TO BE FALSE. ITO VS SMT. DEVIBAI H PARMANI, 84 ITD 342 (MUM.) IN MOHD. KHASIM, THE HON'BLE ITAT, BANGLORE HAS HELD AS UNDER:- '15. ON A COMPARATIVE STUDY OF THE SCHEME OF SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 15 15 ASSESSMENT OF UNDISCLOSED INCOME FOR THE PURPOSE OF BLOCK PERIOD, PENALTY IMPOSSIBLE U/S 271(1 )(I)(C) AND PENALTY IMPOSSIBLE ON THE UNDISCLOSED INCOME IN THE BLOCK PERIOD, WE FIND THAT INCOME FOR THE BLOCK PERIOD HAS TO BE DETERMINED ON THE BASIS OF MATERIAL SEIZED DURING THE COURSE OF SEARCH. THIS MATERIAL WAS TO BE SUPPLIED TO THE ASSESSEE BEFORE HE COULD BE ASKED TO SUBMIT HIS RETURN IN RESPONSE TO THE NOTICE ISSUED U/S 158BC MEANING THEREBY THE MATERIAL GOADS ANY PERSON TO COMPUTE TRUE UNDISCLOSED INCOME. THE MATERIAL IS ALREADY AVAILABLE WITH THE ASSESSING OFFICER. FROM THAT VERY MATERIAL, TRUE AND UNDISCLOSED INCOME HAS TO BE COMPUTED BY THE ASSESSEE AND TO BE DISCLOSED IN THE BLOCK RETURN IN RESPONSE TO THE NOTICE RECEIVED U/S 158BC. THUS THERE IS A PERCEPTIONAL DIFFERENCE IN THE OPERATIVE FORCE OF SECTION 271 (1 )(I)(C) VIS-A-VIS SECTION 158BFA(2). THE CHARGE AGAINST THE ASSESSEE U/S 158BFA(2) SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 16 16 COULD BE, WHY THEY FAILED TO COMPUTE TRUE DISCLOSED INCOME OUT OF THE SEIZED MATERIAL. WHETHER THE ASSESSEES HAVE MADE A DELIBERATE ATTEMPT TO DISCLOSE NIL UNDISCLOSED INCOME OR THEY HAVE SUFFICIENT REASONING FOR FORMING BELIEF THAT NO UNDISCLOSED INCOME IS AVAILABLE IN THEIR HANDS WHICH IS THE DISCLOSED IN RESPONSE TO THE NOTICE RECEIVED U/S 158BC. THE QUESTION BEFORE US IS, WHETHER AT THE TIME OF FILING THE RETURN, A MAN OF ORDINARY PRUDENCE CAN FORM A BELIEF THAT HE HAS NO UNDISCLOSED INCOME ON THE BASIS OF SEIZED MATERIAL SUPPLIED TO HIM. WHETHER SUCH FORMATION OF BELIEF IS A BONA FIDE ONE HAVING REGARD TO THE MATERIAL ON THE RECORD OR IT IS MERELY A PERFORMA EXPLANATION. IT IS TO BE KEPT IN MIND THAT IF A CLAIM WAS NOT MADE IN THE RETURN, THEN THE ASSESSEE WOULD BE FORECLOSING HIS RIGHT TO DISPUTE THE CLAIM AND WOULD ACCEPT THE STAND OF SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 17 17 THE REVENUE. THE HON'BLE SUPREME CO URT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD [2010] 322 ITR 158 (SC) HAS OBSERVED THAT MAKING INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS, BECAUSE THE ASSESSEE WANTS TO TAKE A PARTICULAR STAND ON THE GIVEN FACTS. THUS, THERE IS NO CONCEALMENT OR FURNISHING INACCURATE PARTICULARS. SECTION 158BFA(2) IS ON A SIMILAR FOOTING AS SECTION 271(1)(C), THEREFORE, PENALTY CANNOT BE LEVIED IF THERE IS DELIBERATE ACT ON THE PART OF ASSESSEE. IN THE PRESENT CASE, THERE IS NO DELIBERATE ACT ON THE PART OF ASSESSEE OF CONCEALMENT OR FURNISHING INACCURATE PARTICULARS. IT IS THEREFORE PRAYED THAT PENALTY U/S. 158BFA(2) IS NOT LEVIABLE. SIMILAR PENALTY IS IMPOSED IN THE CASE OF SMT. KALPANA BEN SHAH AND SHRI CHETAN SHAH. SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 18 18 5. DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. AUTHORIZED REPRESENTATIVE MAINLY CONTENDED BEFORE U S THAT THE ADDITION IS MADE ON THE BASIS OF PEAK AS PER TH E WORKING OF PEAK FOR ASSESSMENT YEAR 1994-95, WHEREIN THE PEAK WAS TAKEN AT RS. 7,17,566/-, BUT THE PEAK YEAR WAS 1994 -95 AND THAT WAS PRIOR TO BLOCK PERIOD AND WHEN THE PEAK IS PRIOR TO BLOCK, THIS AMOUNT CAN BE ADDED, BUT PENALTY CANNOT BE LEVIED ON THIS AMOUNT. THE LD. AUTHORIZED REPRESENTATIVE H AS RELIED UPON THE DECISION OF HON'BLE SUPREME COURT IN THE C ASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LIMITED, (2010) 230 CTR ( S.C.) 320, BUT WE ARE OF THE VIEW THAT THIS PROPOSITION O F THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE CASE . IN THE INSTANT CASE, THE ASSESSEE HIMSELF HAS ACCEPTED THE NATURE OF CREDIT IN THE NAME OF FARMERS AS BOGUS AND INTRODUC TION OF HIS OWN FUND THROUGH KISAN UDRAT PARCHI ACCOUNT. THE AO AND I.T.A.T. HAVE ACCEPTED THE DIARY OF PEAK CREDIT APP LICABLE TO THE ASSESSEE AND AMOUNT HAS BEEN CONFIRMED. THE I.T.A.T .S ORDER HAS BECOME FINAL. THEREFORE, WE ARE OF THE VIEW THA T THE LD. CIT(A) IS JUSTIFIED IN HIS ACTION AND OUR INTERFERE NCE IS NOT CALLED FOR. SHRI MAGANLAL, SHRI CHETAN AND SMT. KALPANA BEN SHA H I.T.(SS).A.NOS. 01 ,02 & 03/IND/2014 BLOCK PERIOD : 1.4.2015 TO 3.1.2002 19 19 6. IN THE RESULT, THE ALL APPEALS OF THE ASSESSEE ARE DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 28 TH MARCH, 2016. SD/- (B.C.MEENA) ACCOUNTANT MEMBER SD/- ( D.T.GARASIA) JUDICIAL MEMBER DATED 28 TH MARCH, 2016. CPU* 3.16