Smt. Manguben B.Patel L/h. of Late Bhagwanbhai K.Patel, Ahmedabad V. The ACIT.,(OSD)Circle-9, Ahmedabad

ITSSA 660/AHD/2011

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4471 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 16-12-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Assessee Lawyers: A L THAKKAR
• Keywords: Unexplained investment; Unexplained expenditure; Income from undisclosed sources; Block assessment
• Section: 143(3); 132

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL , C BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD , JUDICIAL MEMBER AND SHRI WASEEM AHMED , ACCOUNTANT MEMBER ./ ITA (SS) NO. 6 60/AHD/2011 / ASSTT. YEAR : BLOCK PERIOD (01/04/1989 TO 21/01/1997) LATE SHRI BHAGWANBHAI K. PATEL THROUGH L/H. MANGUBEN B. PATEL , 61/62 , MAYUR PARK SOCIETY, BAPUNAGAR , AHMEDABAD. PAN: ABAPP0653N VS . A.C.I.T (OSD), CIRCLE - 9, AHMEDABAD. (APPLICANT) ( RESPON D ENT ) ASSESSEE BY : SHRI A.L. THAKKAR , A .R REVENUE BY : SHRI O.P. SHARMA , CIT, D .R / DATE OF HEARING : 05 / 03 / 201 9 / DATE OF PRONOUNCEMENT: 27 /05 /2 01 9 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE COMMISS IONER OF INCOME TAX , (APPEALS) - XV , AHMEDABAD [ LD. CIT (A) IN SHORT] , DATED 17 / 10 / 2017 ARISING IN THE MATTER OF ORDER PASSED UNDER S. 158BFA(3) R.W.S 158BFA(2) OF THE INCOME TAX ACT, 1961 ( HERE - IN - AFTER REFERRED TO AS 'THE ACT') DATED 27 /09 / 201 5 RELEVANT TO ASSESSMENT YEAR (AY) BLOCK PERIOD (01/04/1988 TO 21/01/1997) . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 2 1. THE LEARNED COMMISIONER OF INCOME TAX(APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS.3,23,82,788/ - LEVIED BY THE ASSESSING OFFICER U/S.158BFA(2) OF THE INCOME TAX ACT, 1961 BY GIVING DIRECTION TO THE ASSESSING OFFICER TO COMPUTE THE CORRECT PENALTY U/S .158BFA(2) WHICH SHOULD NOT BE LESS THAN THE TAX LEVIABLE ON THE INCOME WHICH COMES AFTER GIVING EFFECT TO THE CIT(A) S ORDER DTD.19/02/2010 CONSIDERING THE ADDITIONS SUSTAINED AND THE ONES DELETED. 2. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR MODIF Y ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE DATE OF HEAING OF APPEAL. THE ONLY ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO FOR RS. 3,23,82,788/ - U/S 158 BFA(2) OF THE ACT. 2. BRIEFLY STAT ED FACTS ARE THAT THE ASSESSEE, AN INDIVIDUAL WAS SUBJECT TO THE SEARCH AT HIS PREMISES U/S 132 OF THE ACT, DATED 21 - 01 - 1997. AS A RESULT OF THE SEARCH , VARIOUS ADDITIONS WERE MADE BY THE AO DURING THE ASSESSMENT PROCEEDINGS FRAMED U/S 158BC R.W.S. 143(3) OF THE ACT V IDE ORDER DATED 28 - 01 - 1999. AS SUCH THE AO DETERMINED THE UNDISCLOSED INCOME OF THE ASSESSEE FOR THE BLOCK PERIOD AT RS. 15,63,35,561.00 ONLY. THE RELEVANT DETAILS FOR THE ADDITIONS ON ACCOUNT OF DIFFERENT HEAD/ ITEMS MADE IN DIFFERENT YEARS OF THE BLOCK PERIOD HAVE BEEN INCORPORATED ON PAGES 65 TO 69 IN THE ORDER OF THE AO. HOWEVER THE YEAR WISE ADDITIONS FOR THE BLOCK PERIOD STAND AS UNDER: 26.6 IN VIEW OF THE ABOVE - THE UNDISCLOSED INCOME OF THE BLOCK PERIOD IS COMPUTED, ASSESSMENT YEAR - WISE AS UNDER: A.Y TOTYAL INCOME INCLUDING UNDISCLOSED INCOME AS PER PROVISIONS OF CHAPTER IV (PARA 26 - 4) ( A ) TOTAL INCOME DISCLOSED IN OF INCOME. (PARA 26 - 3) (B) UNDISCLOSED INCOME (A - B) 87 - 88 RS.NIL RS.NIL RS.NIL 88 - 89 RS.NIL RS.NIL RS.NIL 89 - 90 RS.NIL RS.NIL RS.NIL 90 - 91 RS.3,51,935/ - RS.( - )48,065/ - RS.4,00,000/ - 91 - 92 RS.2,16,614/ - RS.( - )11,386/ - RS.2,28,000/ - ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 3 92 - 93 RS.1,69,198/ - RS.71,198/ - RS.98,000/ - 93 - 94 RS.95,750/ - RS.35,750/ - RS,60,000/ - 94 - 95 RS.65,77,385/ - RS.85,460/ - RS.64,91,925/ - 95 - 96 RS.85,92,546/ - RS.2,30,100/ - RS.83,62,446/ - 96 - 97 RS.22,93,909/ - RS.2,97,910/ - RS.19,95,999/ - 97 - 98 RS.13,90,64,161/ - RS.3,64,970/ - RS.13,86,99,191/ - (UPTO 21 - 1 - 97) TOTAL: RS.15,73,61,498/ - RS.10,25,937/ - RS.15,63,35,561/ - 2.1 THE LEARNED CIT (A) ON APPEAL TO HIM HAS DELETED THE ADDITION IS IN PART FOR RS. 10,61,49,846/ - OUT OF THE TOTAL ADDITION OF RS. 15,63,35,561/ - MADE BY THE AO IN THE ASSESSMENT PROCEEDINGS AS DISCUSSED ABOVE VIDE ORDER DATED 19 TH FEB 2010. THE NECESSARY DETAILS OF THE ADDITIONS WHICH WERE CONFIRMED AND DELETED BY THE LEARNED CIT (A) ARE AVAILABLE ON PAGES 8 TO 20 OF HIS PENALTY ORDER. 2.2 SUBSEQUENTLY, THE AO ISSUED A SHOW CAUSE NOTICE U/S 158BFA(3) R.W.S. 158BFA(2) OF THE ACT DA TED 8 - 9 - 2010 FOR INITIATING PENALTY. BUT THERE WAS NO REPLY FROM THE SIDE OF THE ASSESSEE. ACCORDINGLY , THE AO LEVIED THE PENALTY VIDE ORDER DATED 27 - 9 - 2010 AMOUNTING TO RS. 3,23,82,788.00 BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED. 3. THE AGG RIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARNED CIT (A). THE ASSESSEE BEFORE THE LD. CIT (A) SUBMI TTED AS UNDER : I. THAT THE AO LEVIED PENALTY ONLY JUST BECAUSE THAT THE LD. CIT (A) CONFIRMED THE ADDITION OF THE AO IN THE QUANTUM PROCE E DINGS WHILE HE DID NOT RECORD ANY FINDING ON HIS OWN , WHICH INDICATE THAT THE AMOUNT REPRESENTED THE UNDISCLOSED INCOME. II. AS SUCH , THE ADDITION CONFIRMED BY THE LD. CIT (A) HAS BEEN DISPUTED BEFORE THE HON BLE ITAT. THEREFORE IT DID NOT COME TO FINALITY. ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 4 III. AS THERE IS A DIFFER ENCE BETWEEN THE AMOUNT ADDED BY THE AO AND CONFIRMED BY THE LD. CIT (A) , SO THE PENALTY CANNOT BE LEVIED. IV. AS SUCH , THE SOURCE OF CALCULATING THE UNDISCLOSED INCOME BY THE AO AND THE ASSESSEE IS THE SAME , I.E. DUPLICATE SET OF BOOKS. THEREFORE ONLY BECAUS E OF DIFFERENCE IN THE CALCULATION BY THE AO AND BY THE ASSESSEE IS NOT SUFFICIENT FOR TREATING THE ASSESSEE GUILTY OF CONCEALING PARTICULAR OF INCOME/ INACCURATE PARTICULAR OF INCOME. V. AS SUCH THE ADDITION S W ERE SUSTAIN ED WHICH WERE ALREADY OFFERED TO TAX BEFORE THE SET TLEMENT COM MISSION . 4. HOWEVER , LD. CIT - A FROM THE SUBMISSION MADE BY THE ASSESSEE MADE CERTAIN OBSERVATION S AS UNDER: I. THAT THE ARGUMENT OF THE ASSESSEE THAT THE ADDITION MADE BY THE AO WAS SUSTAIN ED ONLY BECAUSE OF THE UNDISCLOSED INCOME DECLARED BEFORE THE SET TLEMENT COM MISSION ONLY IS MISLEADING. II. AS SUCH ONCE THE CASE WAS ABATED AND SENT BACK BY THE SET TLEMENT COM MISSION, THE AO AS PER THE LAW USE D THE MATERIAL S WHICH HA VE BEEN DISCLOSE D BY THE ASSESSEE BEFORE THE SET TLEMENT COM MISSION . III. HOWEVER , THE AO MADE AN ADDITION BASED ON SPECIAL AUDIT REPORTS OF THE FIRMS AND ENTRIES IN THE DUPLICATE BOOKS OF ACCOUNT AS WELL AS REGULAR BOOKS OF ACCOUNT. AS SUCH THE ADDITION WAS NOT MADE ONLY JUST BECAUSE OF DISCLOSURES MADE BEFORE THE SET TLEMENT COM MISSION AS CLAIMED BY THE ASSESSEE. ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 5 IV. T HE LD. AR ALSO CONFIRMED ALL THE SALE AND DEEMED SALE IN P&L ACCOUNT OF DUPLICATE BOOKS OF ACCOUNT WHERE ALL UNACCOUNTED TRANSACTIONS WERE RECORDED. 4.1 I N VIEW OF THE ABOVE , THE LD. CIT (A) CONCLUDED THAT THE AO RIGHTLY IMPOSED THE PENALTY AS ASSESSEE DID NOT DISCLOSE THE UNACCOUNTED INVESTMENT/MONEY ON HIS OWN DURING THE SEARCH PROCEEDINGS. AS SUCH , THE ADDITION WAS SUSTAIN ED DUE TO UNACCOUNTED INVESTMENTS IN THE REAL E STATE . THUS THE ASSESSEE CANNOT GET THE IMMUNITY FROM THE LEVY OF PENALTY. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LEARNED AR BEFORE US WHICH IS REPRODUCED AS UNDER: 1. A SEARCH HAD TAKEN PLACE AT THE BUSINESS AS WELL AS THE RESIDENTIAL PREMISES OF THE ASSESSEE ON 21.01.1997. THE BLOCK PERIOD COMPRISING IN THE CASE OF THE ASSESSEE IS FROM 01.04.1986 TO 21.09.1997. THE ASSESSEE HAD FILED THE RETURN FOR THE BLOCK PERIOD ON 30.11.1998 DECLARING UNDISCLOSED INCOME OF RS.NIL FOR THE BLOCK PERIOD. THE ASSESSEE HAD FILED AN APPLICATION BEFORE THE HON. INCOME TAX SETTLEMENT COMMISSION, MUMBAI ON 01.12.1998. IN THE MEAN TIME, THE AO HAD PASSED AN ORDER U/S 158BC ON 28.01.1999. THE HON. ITSC ADMITTED THE ASSESSEE'S SETTLEMENT PETITION ON 14.05.1999. THEREFORE, THE ASSESSEE HAD ALREADY FILED THE SETTLEMENT PETITION BEFORE THE HON. ITSC PRIOR TO THE COMPLETION OF ASSESSMENT FILED BY THE AO. 2. ONCE THE MATTER HAD BEEN ADMITTED BY PASSING AN ORDER U/S 245D(1), THE PERIOD OF ADMISSION WOULD COMMENCE FROM THE DATE OF MAKING THE APPLICATION. AS PER THE PROVISIONS OF SECTION 245F ONCE THE MATTER IS ADMITTED BY THE HON. ITSC THE JURISDICTION OVER THE ASSESSEE WOULD VEST EXCLUSIVELY W ITH THE HON. COMMISSION AND NOT THE AO. ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 6 3. AT THE OUTSET IT IS SUBMITTED THAT THE ASSESSEE HAD ALREADY DISCLOSED UNDISCLOSED INCOME BEFORE THE HON. SETTLEMENT COMMISSION WHICH WAS IN RESPECT OF UNEXPLAINED INVESTMENT MADE IN LAND/SUPPRESSION IN SALES RECEIPTS ON SIE OF LAND ETC. TAXES AS WELL AS STATUTORY INTEREST HAVE ALSO BEEN PAID ON SUCH ADDITIONAL INCOME OFFERED BEFORE THE HON. ITSC. 4. SUBSEQUENTLY, THE HON. ITSC VIDE ITS ORDER DATED 22.10.2007 PASSED U/S 245HA ABATED THE SETTLEMENT APPLICATION FILED BY THE ASSESSEE WITH THE DIRECTION THAT THE AO SHALL DISPOSE OFF THE CASE IN ACCORDANCE WITH THE PROVISION OF SUB SECTION (2), (3) & (4) OF SECTION 245HA OF THE ACT. IT IS ALSO PERTINENT TO NOTE THAT THE ORDER PASSED BY THE HON. ITSC CAME TO BE ABATED ONLY ON ACCOUNT ON NON - PAYMENT OF THE INTEREST AS PER THE PROVISIONS OF SECTION 245D(2D) OF THE ACT WHICH IS ON ACCOUNT OF THE DELAYED PAYMENT OF TAX AND STATUTORY INTEREST U/S 158BFA(1) OF THE ACT. THE PETITION H AD NOT COME TO BE ABATED ON THE GROUND THAT THE ASSESSEE HAD NOT MADE A TRUE AND FAIR DISCLOSURE OF THE UNDISCLOSED INCOME EARNED BY HIM. ONLY ON ACCOUNT OF A TECHNICAL FACTOR I.E. NON PAYMENT OF INTEREST ON DELAYED PAYMENT OF TAXES/INTEREST, THE MATTER HA D COME TO BE ABATED. ON ACCOUNT OF SUCH ABATEMENT OF ORDER, THE AO REVIVED THE ASSESSMENT PROCEEDINGS AND TREATING THE ORIGINAL ASSESSMENT ORDER PASSED ON 28.01.1999 AS A VALID BLOCK ASSESSMENT ORDER AND ADOPTED THE INCOME CONTAINED THEREIN AS THE UNDISCLO SED INCOME OF THE ASSESSEE I.E. RS.15,63,35,5617 - . 5. SUBSEQUENTLY, THE ASSESSEE FILED AN APPEAL BEFORE THE LD.CIT(A) - XV, AHMEDABAD, WHEREIN SUBSTANTIAL RELIEF WAS GRANTED. THEREAFTER, CROSS APPEALS HAD BEEN FILED BEFORE THE HON. IT AT. THE HON. IT AT IN IT(SS)A NO. 465/AHD/2010 DECIDED THE QUANTUM APPEAL. THE COPY OF THE QUANTUM APPEAL HAS ALREADY BEEN FURNISHED EARLIER. WE HAD ALSO FURNISHED A DETAILED CHART INDICATING THE ADDITIONS HAVE COME TO BE CONFIRMED/DELETED DURING THE COURSE OF THE APPELL ATE HEARING. 6. DURING THE COURSE OF THE APPELLATE HEARING FOR THE PENALTY PROCEEDINGS IT WAS CONTENDED THAT INCOME TO THE EXTENT TO WHICH IT HAS BEEN OFFERED BEFORE THE HON. ITSC SHOULD NOT BE CONSIDERED FOR THE PURPOSE OF VISITING THE ASSESSEE WITH P ENALTY ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 7 PROVISIONS U/S 158BFA(2) OF THE ACT ON ACCOUNT OF FACT THAT THE SAME HAD ALREADY BEEN DISCLOSED BEFORE THE HON. ITSC. THE HON. ITSC AS PER THE PROVISION OF SECTION 245F STEPS INTO SHOES OF THE AO ONCE THE MATTER HAD COME TO BE ADMITTED U/S. 245D(1) OF THE ACT AND THEREFORE, THE AFORESAID INCOME SHOULD BE CONSIDERED AS DISCLOSED INCOME AND NOT UNDISCLOSED FOR THE PURPOSE OF LEVYING PENALTY. 7. IDENTICAL ISSUE OF PENALTY ALSO CAME UP FOR CONSIDERATION IN OTHER GROUP CASES AND THE HON. ITAT IN T HE CASE OF M/S. SHYAM CORPORATION. M/S. SHYAM DEVELOPERS AND SHRI ARVINDBHAI P. PATEL IN IT(SS)A.NO.673/AHD/2011, IT(SS)A.NO.259 & 252/AHD/2012 & IT(SS)A.NO.433& 435/AHD/2012 HAVE TAKEN A VIEW THAT THE INCOME ALREADY DISCLOSED BEFORE THE HON. ITSC WOULD NO T BE SUBJECT TO PENALTY PROCEEDINGS. ATTENTION IS INVITED TO PARA 4 AND PAGE 4 OF THE ORDER PASSED BY THE HON. ITAT WHICH IS REPRODUCED FOR EASY REFERENCE: 'THE SECOND ARGUMENT BETWEEN THE PARTIES IS QUA VARIOUS HEADS WHEREIN THESE ASSESSEES HAD PREFERRED THEIR RESPECTIVE SETTLEMENT PETITIONS BEFORE THE INCOME TAX SETTLEMENT COMMISSION. THE REVENUE VEHEMENTLY ARGUES DURING THE COURSE OF HEARING THAT THE INCOME TAX SETTLEMENT COMMISSION HAD ABATED THESE ASSESSEES' SETTLEMENT PETITION ON ACCOUNT OF NON - PAYME NT OF TAXES. WE FIND NO MERIT IN THE INSTANT ARGUMENT SUPPORTING THE CIT(A) 'S ACTION IN ALL THESE CASES. IT RATHER EMERGES THAT THESE ASSESSEES HAD PAID THEIR RESPECTIVE TAX AND INTEREST PAYMENTS U/S. 158BFA(2) (PROVISO) QUA ADDITIONAL INCOME OFFERED TO T AX IN THE CORRESPONDING SETTLEMENT PETITION. THE INCOME TAX SETTLEMENT COMMISSION ADMITTEDLY ABATED ALL THE SAID PETITIONS ON 14.05.1999 FOR THE SOLE REASON THAT INTEREST ON DELAYED PAYMENT OF TAXES AS PER SECTION 245D(2D) HAD NOT BEEN PAID. LEARNED DEPART MENTAL REPRESENTATIVE FAILS TO DISPUTE THAT THESE ASSESSES HAD ALREADY PAID THE TAX AND INTEREST AS PER SECTION 158BFA(2) PROVISO. WE ACCORDINGLY SEE NO REASON TO SUSTAIN THE IMPUGNED PENALTIES. OUR INSTANT DISCUSSION WOULD COVER FIRST ASSESSEE'S M/S. SHYA M CORPORATION'S APPEAL IT(SS)A NO.673/AHD/2011 RAISING CORRESPONDING ISSUES OF UNACCOUNTED WITHDRAWAL OF RS.1,23,200/ - , RS.3,70,000/ - , RS.3,21,775/ - IN ASSESSMENT YEARS 1995 - 96 TO 1996 - 97 AND FROM 1 - 4 - 96 TO 21 - 1 - 97 ALONG WITH UNEXPLAINED INVESTMENT ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 8 ION LAN DS OF RS.11,34,092/ - ; RESPECTIVELY. M/S. SHYAM, DEVELOPERS' APPEAL; IT(SS)A NO. 259/AHD/2012 ALSO CONTAIN THE SIMILAR ISSUES OF UNACCOUNTED WITHDRAWALS OFRS.5000/ - AND RS.99,250/ - IN ASSESSMENT YEARS 1996 - 97 AND FROM 1 - 4 - 96 TO 21 - 7 - 97, UNACCOUNTED DONATION S OF RS.44,875/ - AND UNEXPLAINED LAND INVESTMENT OF RS.10,99,160/ - RESPECTIVELY. REVENUE'S APPEAL IT(SS)A NO. 435/AHD/2012 CONTAINS SECOND ISSUE OF UNEXPLAINED INVESTMENT IN NARODA LAND AMOUNTING TO RS.29,82,497/ - OUT OF WHICH THE ASSESSEE HAD DECLARED RS. 28LACS IN HIS SETTLEMENT PETITION. CORRESPONDING ADDITION OF RS.28LACS ALSO STANDS DELETED IN QUANTUM PROCEEDINGS UNDER THIS HEAD. WE THEREFORE RELY ON OUT PRECEDING DISCUSSION TO CONCLUDE THAT THE IMPUGNED CORRESPONDING PENALTY QUA THIS QUANTUM ISSUE DESE RVES TO BE DELETED SINCE THESE ASSESSEES HAD ALREADY DECLARED THE SAME IN THEIR RESPECTIVE SETTLEMENT PETITION FOLLOWED BY PAYMENT OF TAXES AND INTEREST U/S. 158BFA(2) (PROVISO). ' THE COPY OF THE AFORESAID ORDER IS ALSO ENCLOSED FOR YOUR KIND REFERENCE. IN VIEW OF THE ABOVE FACTS AND THE ISSUE BEING SQUARELY COVERED BY THE DECISION OF THE CO ORDINATE BENCH IT IS REQUESTED THAT PENALTY U/S. 158BFA(2) OF THE ACT TO THE EXTENT TO WHICH INCOME HAS ALREADY BEEN DISCLOSED BEFORE THE HON. ITSC SHOULD NOT BE LEVI ED. 6. ON THE OTHER HAND , THE LEARNED DR BEFORE US VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE RELATES T O THE PENALTY IMPOSED BY THE AO U/S 158BFA(3) R.W.S. 158BFA(2) WHICH WAS SUBSEQUENTLY CONFIRMED BY THE LD. CIT (A). ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 9 7.1 FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE PENALTY WAS LEVIED BY THE AUTHORITIES BELOW FOR DIFFERENT ITEMS. ACCORDINGLY , WE PROCEED TO ADJUDICATE EACH ITEM IN RESPECT OF WHICH PENALTY WAS LEVIED AS DETAILED UNDER: I. UNEXPLAINED INVESTMENT IN LAND AT VASTRAL: - AT THE OUTSET, WE NOTE THAT THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED INVESTMENT W AS REDUCED TO RS. 6.40 LAKHS FROM RS. 1,41,12,826.00 BY THE HON BLE ITAT IN THE QUANTUM PROCEEDINGS IN ITA NO. 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE ISSUE BEFORE US ARISES REGARDING THE PENALTY IMPOSE D BY THE AUTHORITIES BELOW IS LIMITED TO THE AMOUNT OF RS. 6.40 LAKHS ONLY. BEFORE ADJUDICATING THE ISSUE ON HAND, WE FIND IT IMPORTANT TO REFER THE PROVISION OF SECTION 158BFA OF THE ACT WHICH READS AS UNDER: LEVY OF INTEREST AND PENALTY IN CERTAIN CASES. 158BFA. (1) XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX (2) THE ASSESSING OFFICER OR THE COMMISSIONER (APPEALS) IN THE COURSE OF ANY PROCEEDINGS UNDER THIS CHAPTER, MAY DIRECT THAT A PERSON SHALL PAY BY WAY OF PENALTY A SUM WHICH SHALL NOT BE LESS TH AN THE AMOUNT OF TAX LEVIABLE BUT WHICH SHALL NOT EXCEED THREE TIMES THE AMOUNT OF TAX SO LEVIABLE IN RESPECT OF THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER UNDER CLAUSE ( C ) OF SECTION 158BC : PROVIDED THAT NO ORDER IMPOSING PENALTY SHALL BE MADE IN RESPECT OF A PERSON IF ( I ) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUSE ( A ) OF SECTION 158BC ; ( II ) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HAS BEEN PAID OR, IF THE ASSETS SEIZED CONSIST OF MONEY, THE ASSESSEE OFFERS THE MONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; ( III ) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RETURN; AN D ( IV ) AN APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN 1 : PROVIDED FURTHER THAT THE PROVISIONS OF THE PRECEDING PROVISO SHALL NOT APPLY WHERE THE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 10 OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN AND IN SUCH CASES THE 1 PENALTY SHALL BE IMPOS ED ON THAT PORTION OF UNDISCLOSED INCOME DETERMINED WHICH IS IN EXCESS OF THE AMOUNT OF UNDISCLOSED INCOME SHOWN IN THE RETURN. 7.2 A PLAIN READING OF THE ABOVE PROVISIONS REVEALS THAT THE AO SHALL LEVY THE PENALTY IN RESPECT OF THE UNDISCLOSED INCOME DE TERMINED BY HIM UNDER CLAUSE (C) OF SECTION 158BC OF THE ACT. HOWEVER, THERE ARE CERTAIN EXCEPTIONS PROVIDED UNDER THE PROVISIONS OF SECTION 158BFA OF THE ACT WHEN THE AO SHALL NOT IMPOSE THE PENALTY . HOWEVER, WE NOTE THAT THE CASE OF THE ASSESSEE DOES NOT FALL IN ANY OF THE EXCEPTION S AS PROVIDED UNDER THE PROVISIONS OF SECTION 158BFA OF THE ACT. ACCORDINGLY , WE ARE OF THE VIEW THE UNDISCLOSED INCOME DETERMINED BY THE AO IS SUBJECT TO THE PENALTY UNDER SECTION 158BFA OF THE ACT . 7.3 WE ALSO FIND SUPPORT AND GUIDANCE FROM THE ORDER OF THIS HON BLE ITAT AHMEDABAD IN THE CASE OF SMT. MADHUBEN R. BAROT V/S ACIT REPORTED IN 18 TAXMANN.COM 227 INVOLVING THE SAME FACTS WHEREIN IT WAS HELD AS UNDER: THEREFORE, IT IS NOT POSSIBLE TO IGNORE THE SEIZED MATERIAL FO UND DURING THE COURSE OF SEARCH. IN SPITE OF SAID EVIDENCE FOUND DURING THE COURSE OF SEARCH AND OF WHICH THERE WAS KNOWLEDGE, THE ASSESSEE DID NOT FILE ANY RETURN OF INCOME IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 158BD, READ WITH SECTION 158BC. THE PROVISO TO SECTION 158BFA(2) PROVIDES THAT PENALTY COULD BE IMPOSED WHERE UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER IS IN EXCESS OF THE INCOME SHOWN IN THE RETURN OF INCOME. HOWEVER, AS NOTED ABOVE THE ASSESSEE DID NOT FILE ANY RETURN FOR THE BLOCK PERIOD DESPITE SERVICE OF THE NOTICE. THEREFORE, UNDISCLOSED INCOME DETERMINED BY THE ASSESSING OFFICER IN THE BLOCK ASSESSMENT WAS SUFFICIENT TO LEVY PENALTY AGAINST THE ASSESSEE. WHILE THERE COULD BE A DISPUTE BETWEEN THE REVENUE AND THE ASSESSEE AS TO WHETHER PROVISIONS OF SECTION 271(1)( C ) WOULD BE APPLICABLE TO PENALTY PROCEEDINGS UNDER SECTION 158BFA(2), THE LANGUAGE IN THE TWO SECTIONS ARE CLEARLY DIFFERENT AND THE CONTENTION OF THE ASSESSEE IS NOT TENABLE. IT IS CLEAR THAT THE ASSESSEE WAS I N FULL KNOWLEDGE OF UNDISCLOSED INCOME WHICH WAS NOT AT ALL SHOWN IN ANY MANNER IN THE RETURN TO BE FILED FOR THE BLOCK PERIOD. THE ASSESSEE ARGUED THAT ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 11 SINCE SHE FILED EXPLANATION FOR THE PAYMENT OF ON - MONEY, THEREFORE, EXPLANATION TO SECTION 271(1)( C ) CA N BE READ INTO SECTION 158BFA(2). AS MENTIONED ABOVE THAT SUFFICIENT EVIDENCE WERE FOUND DURING THE COURSE OF SEARCH TO SHOW UNDISCLOSED INCOME HELD BY THE ASSESSEE, DESPITE THAT EVIDENCE ON RECORD, THE ASSESSEE DID NOT DISCLOSE ANY UNDISCLOSED INCOME IN T HE RETURN FOR THE BLOCK PERIOD. THEREFORE, THE REVENUE AUTHORITIES WERE JUSTIFIED IN COMPUTING THE UNDISCLOSED INCOME. THE CONDUCT OF THE ASSESSEE IN NOT DISCLOSING UNDISCLOSED INCOME IN THE RETURN FOR THE BLOCK PERIOD WOULD SHOW THAT THE CONDUCT OF THE AS SESSEE WAS NOT BONA FIDE . IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE ABOVE DISCUSSIONS, THE AUTHORITIES BELOW WERE JUSTIFIED IN LEVYING AND CONFIRMING THE PENALTY AGAINST THE ASSESSEE . 7.4 THE ARGUMENT OF THE LD. AR FOR THE ASSESSEE THAT HE DISCLOSED ITS UNACCOUNTED INCOME AT HIS OWN BEFORE THE SETTLEMENT COMMISSION AND BEFORE DETECTING THE SAME BY THE REVENUE DURING THE SEARCH PROCEEDINGS DOES HOLD GOOD. IT IS BECAUSE THE REVENUE UNEARTHED VARIOUS INCRIMINATING DOCUMENTS DURING THE SEARCH , AND ACCORDINGLY , THE ASSESSEE WAS UNDER THREAT FOR GETTING CAUGHT FOR SUCH UNDISCLOSED INCOME. THEREFORE, THE ASSESSEE APPROACHED THE SETTLEMENT COMMISSION. 7.5 FURTHERMORE, WE ALSO NOTE THAT THE UNDISCLOSED INCOME OFFERED TO TAX BEFORE THE SETTLEMENT COMMISSION WAS NOT DISCLOSED IN THE INCOME TAX RETURN WHICH EVIDENCES THAT THE ASSESSEE WAS NOT INCLINED TO OFFER SUCH UNDISCLOSED INCOME AT HIS OWN. 7.6 WE ALSO NOTE THAT THE APPLICATION FILED BY THE ASSESSEE BEFORE THE SETTLEMENT COMMISSION WAS REJECTE D VIDE ORDER DATED 22 - 10 - 2007. THUS WE DO NOT FIND ANY REASON TO MAKE ANY REFERENCE TO SUCH AN APPLICATION FOR DECIDING THE ISSUE ON HAND. ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 12 7.7 IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE IS LIABLE FOR THE PENALTY UNDER SECTION 158BFA OF THE ACT ON THE UNDISCLOSED INCOME AS DISCUSSED IN THE PRECEDING PARAGRAPH. II. U NEXPLAINED INVESTMENT IN LAND AT UMIYA FARM: - AT THE OUTSET, WE NOTE THAT THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED INVESTMENT WAS REDUCED TO RS. 4.61 LAKH S FROM RS. 98,87,174.00 BY THE ITAT IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE ISSUE BEFORE US ARISES REGARDING THE PENALTY IMPOSED BY THE AUTHORITIES BELOW LIMITED TO THE AMOUNT OF RS. 4.61 LAKHS ONLY. AT THE OUTSET, WE NOTE THAT IN THE IDENTICAL FACTS AND CIRCUMSTANCES , WE HAVE CONFIRMED THE PENALTY IN PARAGRAPH NUMBER 7 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE PARA ABOVE . ACCORDINGLY , WE CONFIRM THE PENALTY. III. UNEXPLAINED INVESTMENT IN LAND AT NAVA NARODA: - AT THE OUTSET, WE NOTE THAT THE ITAT DELETED THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED INVESTMENT IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE QUESTION FOR LEVYING THE PENALTY DOES NOT ARISE. ACCORDINGLY , WE DELETE THE PENALTY IMPOSED UNDER SECTION 158BFA OF THE ACT . IV. U NEXPLAINED INVESTMENT IN LAND AT BALAPUR & BAV ADA: - ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 13 AT THE OUTSET, THE LEARNED AR BEFORE US DID NOT AGITATE THE PENALTY IMPOSED BY THE AUTHORITIES BELOW ON ACCOUNT OF THE SMALLNESS OF THE AMOUNT. ACCORDINGLY , WE CONFIRM THE PENALTY IMPOSED BY THE AUTHORITIES BELOW. V. U NEXPLAINED INVESTMENT IN LAND AT NARODA (KATHVADA): - AT THE OUTSET, WE NOTE THAT THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED INVESTMENT WAS REDUCED TO RS. 1,82,497/ - FROM RS. 29,82,497.00 BY THE ITAT IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE ISSUE BEFORE US ARISES REGARDING THE PENALTY IMPOSED BY THE AUTHORITIES BELOW LIMITED TO THE AMOUNT OF RS. 1,82,497.00 ONLY. AT THE OUTSET, WE NOTE THAT IN THE IDENTICAL FACTS AND CIRCUMSTANCES , WE HAVE CONFIRMED THE PENALTY IN PARAGRAPH NUMBER 7 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE PARA ABOVE . ACCORDINGLY , WE CONFIRM THE PENALTY. VI. U NEXPLAINED INVESTMENT IN LAND AT DHANSURA TALUKA(HILL STATION LAND): - AT THE OUTSET, THE LEARNED AR BEFORE US DID NOT AGITATE THE PENALTY IMPOSED BY THE AUTHORITIES BELOW. ACCORDINGLY , WE CONFIRM THE SAME. VII. U NEXPLAINED INVESTMENT IN LAND AT MAHADEVNAGAR: - AT THE OUTSET, THE LEARNED AR BEFORE US DID NOT AGITATE THE PENALTY IMP OSED BY THE AUTHORITIES BELOW. ACCORDINGLY , WE CONFIRM THE SAME. ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 14 VIII. U NDISCLOSED PROFIT ON THE SALE OF LAND AT MAHADEVNAGAR: - AT THE OUTSET, THE LEARNED AR BEFORE US DID NOT AGITATE THE PENALTY IMPOSED BY THE AUTHORITIES BELOW. ACCORDINGLY , WE CONFIRM THE SAME. IX. U NEXPLAINED INVESTMENT IN THE LAND BEING SURVEY NO. 327 & 328/1 AT NIKOL ROAD: - AT THE OUTSET, THE LEARNED AR BEFORE US DID NOT AGITATE THE PENALTY IMPOSED BY THE AUTHORITIES BELOW. ACCORDINGLY , WE CONFIRM THE SAME. X. U NEXPLAINED INVESTMENT IN ASSETS AND GIVING TELESCOPING: - AT THE OUTSET, WE NOTE THAT THE ITAT DELETED THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED INVESTMENT IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. T HE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE QUESTION FOR LEVYING THE PENALTY DOES NOT ARISE. ACCORDINGLY , WE DELETE THE PENALTY IMPOSED UNDER SECTION 158BFA OF THE ACT . XI. U NEXPLAINED HOUSEHOLD EXPENDITURE: - AT THE OUTSET, WE NOTE THAT THE ITAT DELETED THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED HOUSEHOLD EXPENDITURE IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE QUESTION FOR LEV YING THE PENALTY DOES NOT ARISE. ACCORDINGLY , WE DELETE THE PENALTY IMPOSED UNDER SECTION 158BFA OF THE ACT . ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 15 XII. U NEXPLAINED EXPENDITURE/PAYMENTS MADE TO KANTIBHAI: - AT THE OUTSET, WE NOTE THAT THE ITAT DELETED THE ADDITION CONFIRMED BY THE LEARNED CIT ( A) IN RESPECT OF SUCH UNEXPLAINED EXPENDITURE IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE QUESTION FOR LEVYING THE PENALTY DOES NOT ARISE. ACCORDINGLY , WE DELETE THE PENALT Y IMPOSED UNDER SECTION 158BFA OF THE ACT . XIII. U NEXPLAINED CASH: - AT THE OUTSET, WE NOTE THAT THE ITAT DELETED THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED CASH IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE QUESTION FOR LEVYING THE PENALTY DOES NOT ARISE. ACCORDINGLY , WE DELETE THE PENALTY IMPOSED UNDER SECTION 158BFA OF THE ACT . XIV. U NEXPLAINED EXPENDITURE/PAYMENTS OF VARIOUS AMOUNTS AS UNDER AT TH E OUTSET, WE NOTE THAT THE ADDITION CONFIRMED BY THE LEARNED CIT (A) IN RESPECT OF SUCH UNEXPLAINED EXPENDITURES/ PAYMENTS WERE REDUCED TO RS. 2,78,637/ - FROM RS . 13,08,637.00 BY THE ITAT IN THE QUANTUM PROCEEDINGS IN ITA 325/AHD/2010 VIDE ORDER DATED 18 - 04 - 2018. THE COPY OF THE ORDER IS PLACED ON RECORD. THUS THE ISSUE BEFORE US ARISES REGARDING THE ITA(SS) NO.660/AHD/2011 ASSTT. YEAR BLOCK PERIOD 16 PENALTY IMPOSED BY THE AUTHORITIES BELOW LIMITED TO THE AMOUNT O F RS. 2,78,637.00 ONLY. AT THE OUTSET, WE NOTE THAT IN THE IDENTICAL FACTS AND CIRCUMSTANCES , WE HAVE CONFIRMED THE PENALTY IN PARAGRAPH NUMBER 7 OF THIS ORDER. FOR THE DETAILED DISCUSSION, PLEASE REFER THE PARA ABOVE . ACCORDINGLY , WE CONFIRM THE PENALTY. 8. IN THE RESULT , THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED . O RDER PRONOUNCED IN THE COURT ON 27 /05 / 2019 AT AHMEDABAD. - SD - - SD - ( MAHAVIR PRASAD ) ( WASEEM AHMED ) JUDICIAL MEMBER ACCOUNTANT MEMBER (TRUE COPY) A HMEDABAD; DATED 27 / 05 /2019 MANISH