DCIT CIR 23(2), MUMBAI V. C. RAJA, MUMBAI

ITSSA 68/MUM/2008

• Counselvise Citation: [2015] 122 COUNSELVISE.COM (IT) 1187 (ITAT-MUMBAI)
• Duration Of Justice: 7 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 08-09-2014
• Assessment Year: misc
• Appeal Filed On: 02-06-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJITKUMAR SRIVASTAVA
• Assessee Lawyers: B N RAO
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure

Judgement Text

SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI . , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER IT (SS) A NO. : 68 /MUM/20 08 BLOCK PERIOD 1989 - 90 TO 1998 - 99 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 23(2), C - 10 202, PRATAYAKSHA KAR BHAVAN, BKC, BANDRA (EAST), MUMBAI VS SHRI C RAJA , 201, VAITY BUILDING, OPP. RAILWAY STATION, MULUND (EAST), MUMBAI .: PAN: ASXPC 7615 H (APPELLANT (RESPONDENT) APPELLANT BY : SHRI AJIT KUMAR SRIVASTAVA RESPONDENT BY : SHRI B N RAO /DATE OF HEARING : 2 3 - 0 7 - 201 5 / DATE OF PRONOUNCEMENT : 30 - 10 - 201 5 ORDER , . . : PER AMIT SHUKLA, J M : THE A FORESAID APPEAL HA S BEEN FILED BY THE REVENUE AGAINST IMPUGNED ORDER DATED 2 5 . 0 3 .20 08 , PASSED BY CIT(A) - 13 , MUMBAI IN RELATION TO THE PENALTY PROCEEDINGS U/S 158BFA( 2 ) FOR THE BLOCK PERIOD 1989 - 99 TO 1998 - 99. 2. REVENUE HAS RAISED FOLLOWING GROUNDS : - 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE PENALTY U/S 158BFA(2) IS NOT LEVIABLE IN ASSESSABLE IN ASSESSEES CASE IN RESPECT OF THE ASSESSED UNDISCLOSED INCOME U/S 158BC(B) CONFIRMED IN THE QUANTUM B Y THE LD. CIT(A). SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 2 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN NOT APPRECIATING THE POSITION IN I.T. ACT, 1961 WITH REGARD TO IMPOSITION OF PENALTY U/S 158BFA(2) THAT THE ASSESSMENT OF UNDISCLOSED INCOME U/S 158BC(B) BY WAY OF ESTIMATION ITS AN ESTABLISHED METHOD OF COMPUTING THE ASSESSMENT [CIT VS WARASAT HUSSIN 171 ITR 405, 402 (PATNAL)] 3) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) WAS NOT JUSTIFIED IN CARRYING OUT AN EXERCI SE OF COBBLING THE UNEXPLAINED PAYMENTS (VIDE PARA 48 OF HIS ORDER IBID) TO JUSTIFY DELETION OF PENALTY BY SAYING THAT SUCH AGGREGATE OF DISCREPANCIES COMES TO RS. 7,72,934/ - , WELL WITHIN RS. 30 LAKH DISCLOSED BY THE ASSESSEE, WHICH DISCLOSURE IS NOT ENTIT LED TO IMMUNITY FROM PENALTY U/S 158BFA(2) AS THE CONDITIONS STATED IN PROVISO TO SECTION 158BFA(2) WERE NOT SATISFIED. 4) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT AO HAS NOT DISCUSSED AS TO HOW THE ASSESSEE HAD BEEN FOUND CULPABLE FOR THE CIT(A)S CONFIRMED AMOUNT OF RS. 45,10,000/ - IN QUANTUM APPEAL, WHEREAS: I) THE ASSESSEE FAILED TO KEEP ANY DATA OR BOOKS OF ACCOUNTS OF ASST. YRS. 1990 - 91, 1991 - 92 AND 1992 - 93 AND THE ASSESSEE HAD SUBMITTED INC OME ON ESTIMATE BASIS ONLY AND THIS CONDUCT OF THE ASSESSEE HAS BEEN IGNORED BY THE CIT(A) : II) THE ASSESSEE SUBMITTED ONLY DETAILS IN RESPECT OF TOTAL RECEIPTS FOR THE BLOCK PERIOD AT RS. 14.17 CRORES AND THE ENTIRE PAYMENTS TOWARDS LABOUR COST OF RS. 11.44 CRORES WERE SHOWN BY WAY OF PAYMENTS IN CASH AND OUT OF THAT, THE SUM OF RS. 30 LAKHS WAS ADMITTED AS HIS UNDISCLOSED INCOME IN THE FORM OF INFLATED BILLS. 5) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELET ING THE PENALTY U/S 158BFA(2) BY PLACING ONUS ON THE AO THAT THE AO HAD NO POSITIVE DETECTION OF MATERIALS OTHER THAN SUSPICIONS AS SURMISES, WHEREAS THE ASSESSEES CONDUCT OF NON - MAINTENANCE OF BOOKS OF ACCOUNTS AND ADMISSIONS OF INFLATION OF LABOUR BILL, AND FURTHER, THE LABOUR BILLS HAVING BEEN PAID IN CASH, HAVE BEEN IGNORED BY THE CIT(A). 6) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN HOLDING THAT THE PENALTY IS TO BE LEVIED U/S 158BFA(2) ONLY IN RESPECT OF UND ISCLOSED INCOME DECLARED BY THE ASSESSEE IN THE RETURN, AFTER SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 3 VERIFYING THE CONDITIONS OF PAYMENT OF TAX IN RESPECT OF THE SAID UNDISCLOSED INCOME, WHEN THE AO HAS CLEARLY BROUGHT OUT IN THE PENALTY ORDER THAT THE ASSESSEE HAS NOT PAID THE TAXES ON HIS UND ISCLOSED INCOME RETURNED BY THE ASSESSEE. 2. BRIEF FACTS ARE THAT ASSESSEE IS A PROPRIETOR OF VARIOUS CONCERNS LIKE, C. RAJA & CO., GUJARAT SHIPPING SERVICES, SELVI ENGINEERING SERVICES AND TPC & CO. THE LATER ONE WAS THROUGH PROPRIETORSHIP OF HIS FATHER BUT OPERATED AND MANAGE BY ASSESSEE ONLY. THE ASSESSEE WAS ENGAGED IN AND STE E VEDORING ACTIVITY WHICH IS MAINLY PROVIDING LABOUR FOR LOADING AND UNLOADING OPERATIONS AT DEEP SEA, PORT AND ALSO UND ERTAKES THE WORK OF ENROLLING THE CARGO FROM OTHER SHIP TO THE SMALL BARGES ETC . A SEARCH AND SEIZURE ACTION WAS CARRIED OUT IN M/S ABC GROUP U/S 132(1) ON 02.12.1999 WHICH ALSO COVERED THE OFFICE PREMISE OF THE ASSESSEE AT MOGHUL BUILDING, FORT, MUMBAI. I N CONSEQUENT, OF SUCH ACTION, A NOTICE U/S 158BC FOR THE IMPUGNED BLOCK PERIOD WAS ISSUED AND IN RESPONSE, THE ASSESSEE SUBMITTED H IS BLOCK RETURN DECLARING INCOME OF RS. 85,57,100/ - , WHICH INCLUDED SUM OF RS. 30,00,000/ - DISCLOSED BY THE ASSESSEE AS UN DISCLOSED INCOME ON ACCOUNT OF INFLATED LABOUR EXPENSES IN THE PROPRIETARY CONCERN OF M/S TPC & CO. AND M/S C RAJA & CO. 3. IN THE QUANTUM PROCEEDINGS, THE AO GATHERED THAT ASSESSEE WAS INFLATING EXPENSES ON ACCOUNT OF PAYMENT OF SALARIES AND LABOUR CHAR GES. HE ESTIMATED THE INFLATION OF LABOUR CHARGES AND THE SALARY PAYMENT , @ 5% AS AD - HOC ADDITION TO WORK OUT THE UNDISCLOSED INCOME FOR THE BLOCK PERIOD WHICH WAS WORKED AT RS. 57,20,788/ - . SUCH AN ESTIMAT E WAS ON THE BASIS OF EXAMINATION OF VARIOUS EVIDE NCES INCLUDING THE STATEMENT OF THE ASSESSEE THAT HE WAS RESORTING TO INFLATION OF LABOUR PAYMENT. DURING THE COURSE OF THE SEARCH ALSO, THE ASSESSEE HAD DECLARED IN HIS STATEMENT THAT HE WAS GENERATING CASH BY INFLATING THE PAYMENTS AND HAD ALSO DECLARED RS. 30 LAKHS AS UNDISCLOSED INCOME. IN THE FIRST APPEAL T HE LD. CIT(A), PARTLY SUSTAINED THE COMPUTATION OF U NDISCLOSED SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 4 INCOME AT RS. 43,19,050/ - . WHILE SUSTAINING THE SAID AMOUNT, THE LD. CIT(A) HAD WORKED OUT THE EXPENSES ON VARIOUS HEADS AND HELD THAT SUCH INFLATED EXPENSES WORKED OUT TO 3.7%. THE SAID APPELLATE ORDER GOT FINALIZED AS THE APPEAL FILED BEFORE THE TRIBUNAL WA S DISMISSED AS UN - ADMITTED. 4. NOW T HE PENALTY U/S 158BFA(2) HAS BEEN LEVI ED BY THE AO ON SUCH AN ADDITION AFTER DETAILED DISCUSSION AND DELIBERATION AND HELD THAT THE UNDISCLOSED INCOME DETERMINED IN THE QUANTUM WAS NOT MERELY AN ESTIMATE BUT WAS BASED ON VARIOUS DOCUMENTS FOUND AND ASSESSEES OWN ADMISSION THAT HE WAS RESORTIN G TO INFLATI O N OF THE PAYMENTS OF THE LABOURS. ACCORDINGLY, HE LEVIED THE PENALTY OF RS. 54,12,000/ - BEING 200% OF THE TAX ON UNDISCLOSED INCOME. 5 . BEFORE THE LD. CIT(A), ASSESSEE MADE VERY ELABORATE EXPLANATION, REBUTTING THE VERY PREMISE ON WHICH THE UNDISCLOSING INCOME WAS ESTIMATED AND DETERMINED ON ACCOUNT OF INFLATION OF EXPENSES. THE LD. CIT(A) ACCEP TED THE ASSESSEES CONTENTION AND HELD THAT, ULTIMATELY THE ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATE AND AFTER DETAILED DISCUSSION AND REASONIN G HE DELETED THE PENALTY . HE FURTHER HELD THAT THE AO AND CIT(A) IN THE QUANTUM PROCEEDINGS HAD NOT FOUND ANYTHING TO DETERMINE ANY AMOUNT BEYOND THE DISCLOSED AMOUNT OF RS. 30 LAKHS AS UNACCOUNTED INCOME. THEREFORE, HE DELETED PENALTY FOR THE SUMS DECLARE D OVER AND ABOVE THE SUM OF RS. 30 LAKHS AND ALSO HELD THAT THERE IS NO REASON FOR ADOPTING 200% FOR LEVY OF PENALTY WHEN THE ADDITION HAS BEEN MADE ON ESTIMATE BASIS. REGARDING LEVY OF PENALTY ON DECLARED UNDISCLOSED INCOME OF RS. 30 LAKHS HE GAVE DIRECTI ONS TO THE AO TO EXAMINE FULFILLMENT OR OTHERWISE THE CONDITIONS LAID DOWN IN THE FIRST PROVISO TO SECTION 158BFA(2). 6 . LD. CIT DR SUBMITTED THAT, HERE IN THIS CASE, IT IS NOT A CASE WHERE THE UNDISCLOSED INCOME HAS BEEN WORKED PURELY ON ESTIMATE BASIS , ALBIET WAS BASED ON A VERY CATEGORICAL FINDING OF FACT WHICH SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 5 HAS ATTAINED FINALITY THAT , ASSESSEE WAS ENGAGED OF INFLATIN G OF LABOUR CHARGES AND LD. CIT(A) HAD NOT MERELY APPLIED THE AD - HOC PERCENTAGE OF 3.7% BUT HAS SUSTAINED THE ADDITION OF UNDISCLOSED I NCOME IN THE FOLLOWING MANNER : - PAYMENT FOR TENANCY RS. 21,00,000 PAYMENT TO GM & CO RS. 14,45,115 PAYMENT TO PRAVIN EARTH MOVERS RS. 4,15,000 CASH PAYMENT TO INDECOR RS. 1,25,000 UNACCOUNTED RECEIPTS RS. 1,25,947 UNRECONCILED SALES RS. 32,988 UNEXPLAINED INVESTMENT IN LAND RS. 75,000 RS. 43,19,050 SINCE THIS AMOUNT ON ACCOUNT OF INFLATED PAYMENTS WORKED OUT TO 3.7% OF THE TOTAL LABOUR PAYMENT OF RS. 11.44 CRORES , THEREFORE, IT WAS IN THIS BACKGROUND THE LD. CIT(A) HELD THAT INFLATED LABOUR EXPENSES COMES TO 3.7%. THUS, THE UNDISCLOSED INCOME HAS BEEN DETERMINED ON A PROPER BASIS. IT WAS NOT A CASE OF AN MERE ESTIMATE AS HELD BY CIT(A) AND T HIS FACT HAS BEEN NOTED NOT ONLY IN THE PENALTY ORDER BY THE AO BUT ALSO BY THE CIT(A) AT PAGE 23 OF THE IMPUGNED APPELLATE ORDER. THUS, THE LD. CIT(A) HAS WRONGLY RESTRICTED THE PENALTY AS UNDISCLOSED INCOME AT RS. 30 LAKHS. 7. ON THE OTHER HAND, LD. COUNSEL STRONGLY RELIED UPON THE ORDER OF THE CIT(A) AND SUBMI TTED THAT CIT(A) HAS ANALYSED EACH AND EVERY ASPECT DEALT IN THE QUANTUM PROCEEDINGS AND CAME TO THE CONCLUSION THAT PENALTY CANNOT BE LEVIED ONLY ON AMOUNT DETERMINED AT RS. 43,19,050/ - . 8. AFTER CONSIDERING THE RIVAL CONTENTIONS AND ALSO ON PERUSAL OF THE IMPUGNED ORDER S , WE FIND THAT THE CIT(A) IN THE IMPUGNED ORDER HAS NOTED DOWN VARIOUS DISCREPANCIES AND PRESUMPTIONS ADOPTED BY THE AO WHILE ESTIMATING INFLATED EXPENSES OVER AND ABOVE THE AMOUNT OF RS. 30 LAKHS IN THE QUANTUM PROCEEDINGS. ONCE, SUCH P RESUMPTION WAS THAT SALARY PAYMENT MADE TO G. MUTHIAH HAS BEEN INFLATED BECAUSE HE IS THE SAME PERSON WHO IS PROPRIETOR AND OWNER OF G.M. & CO. AND ALSO THE FOREMAN OF THE SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 6 ASSESSEE. THIS PRESUMPTION WAS INCORRECT BECAUSE THESE ARE TWO DIFFERENT PERSONS, GA BRIEL MUTHAIH AND OTHER MR. GYA NMUTHU MUTHI A H . FORMER IS THE OWNER OF G.M. & CO. WHO HAS BEEN SUPPLYING LABOUR AND LATER WAS WORKING AS A FOREMAN IN THE ASSESSEES CONCERN M/S C. RAJA AND WA S ON THE PAY ROLLS OF THE ASSESSEE. HOWEVER, THE AO REJECTED ASSESSEES CONTENTION WITHOUT ANY PROPER MATERIAL TO REBUT THE EXPLANATION AND EVIDENCE GIVEN BY THE ASSESSEE . THUS, A HUGE QUANTUM OF AMOUNT OF DISALLOWANCE O N ACCOUNT OF G.M. & CO. HAS NO BASE TO STAND AND ADDITION CANNOT BE SUSTAINED. FURTHER, SIMILAR D ISCREPANCIES HAVE BEEN HIGHLIGHTED BY THE CIT(A) WITH REGARD TO VARIOUS PAYMENT AS GIVEN IN PARA S 33 TO 38. THUS, HE CAME TO THE CONCLUSION THAT IN THE QUANTUM PROCEEDINGS, THE AMOUNT HAS BEEN CONFIRMED ON THE BASIS OF CERTAIN PRESUMPTIONS / PREMISE MORE S O WHEN THE ASSESSEE HIMSELF HAS DISCLOSED RS. 30 LAKHS AS UNDI SC LO S ED INCOME. HE ALSO GIVEN FINDING OF FACT THAT IN THE ENTIRE SEARCH, NOTHING CONCRETE MATERIAL OR EVIDENCE WAS FOUND THAT ASSESSEE HAD INFLATED EXPENSES MORE THAN WHAT HAS BEEN DISCLOSED B Y THE ASSES S EE AND EVEN THE CONFESSIONAL STATEMENT IS NOT BACKED BY AN Y CONCRETE PROOF OR EVIDENCE. THUS, NO PENALTY OVER AND ABOVE OF RS. 30 LAKHS CAN BE SUSTAINED. FURTHER, FOR THE AMOUNT UNDISCLOSED INCOME OF RS. 30 LAKHS ALSO, HE HAS DIRECTED TO EXAMIN E THE CONDITIONS LAID DOWN BY THE 1 ST PROVISO TO SECTION 158BFA(2). THE RELEVANT OBSERVATION AND FINDING OF THE CIT(A) FROM PARA 44 TO 52 IS REPRODUCED HEREUNDER : - 44. NO ONE DENIES THE SAID MECHANISM. IN FACT, THAT IS ONE OF THE AGE OLD PRACTICES TO INFL ATE EXPENDITURE TO REDUCE THE INCOME. BUT AT THE SAME TIME, IT IS EXPECTED OF AN INTRUSIVE ACTION LIKE SEARCH TO FIND OUT CONCRETE EVIDENCES OF SUCH PRACTICES AND MORE IMPORTANTLY TO BRING THE SAME TO RECORDS. IF THE A.O. HAD ULTIMATELY TO RELY ON THE SO - C ALLED CONFESSIONAL STATEMENT OF THE ASSESSEE PERHAPS THE PURPOSE OF A SEARCH ACTION WOULD ONLY BE REDUNDANT. IS A SEARCH CONDUCTED TO GET A CONFESSIONAL STATEMENT OR TO FIND EVIDENCES? 45. AT THE END OF THE DAY, THE A.O. HAD TO ESTIMATE A PERCENTAGE (5%) OF SUCH EXPENSES AND HE HAD TO MATCH IT UP AGAINST THE ITEMS AS PER HI UNEXPLAINED AND UNSUBSTANTIATED. EVEN THAT PERCENTAGE DID NOT REMAIN FINAL AND UNASSAILABLE. IT WAS REDUCED TO 3.7% BY THE CIT(A) WHO AGAIN TRIED TO MATCH SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 7 HIS PRESUMPTIVE DETERMINATION WITH THE PROBABLE FIGURE OF CONCEALMENT. 46. I AM OF THE VIEW THAT WHEN THE ESTIMATED FIGURE OF RECEIPT AT RS. 14. 17 CRORE HAD BEEN ACCEPTED, THERE WAS NO POSITIVE DETECTION OF MATERIA LS OTHER THAN SUSPICIONS AND SURMISES TO PRESUME THAT 5% OF THE CLAIMED EXPENDITURE HAD BEEN INFLATED. IT WAS ESPECIALLY BECAUSE AT THE SUBSEQUENT STAGE OF APPEAL, SO MUCH OF ALLEGEDLY INFLATED AMOUNT ATTRIBUTED TO THE EXPENDITURE TO A FIRM HAD BEEN ONLY P ARTLY SUSTAINED WHICH MEANS THAT EVEN THE CIT(A) HAD CONSIDERED THE UNCONFIRMED PORTION AS GENUINE. THUS, ONLY A PRESUMPTION HAD BEEN REPLACED BY ANOTHER PRESUMPTION. I DO NOT C SUCH AN AMOUNT PARTIALLY CONFIRMED MERELY BY ANOTHER ESTIMATED PERCENTAGE WOUL D BE HELD AS DESERVING A PENALTY. 47. BESIDES, AS I HAVE ALREADY SAID THE SO - CALLED - PAGDI AMOUNT OF RS. 21 LACS WAS NOT A FINDING EITHER FROM THE SEARCH OR FROM ANY POST - SEARCH INVESTIGATION. THE SAME HAD BEEN HELD AS UNDISCLOSED INCOME BY THE AO WHO HAD RELIED ON MERELY A STATEMENT ALLEGEDLY BY MADE BY THE APPELLANT WHICH HAD BEEN SUBSEQUENTLY DENIED PLEADING THAT THE APPELLANT HAD BEEN ASKED TO SIGN A PREDESIGNED QUESTION - ANSWER FORMAT IN ENGLISH ( A LANGUAGE NOT KNOWN TO THE APPELLANT) WHICH WAS SUBSEQ UENT TO HIS INITIAL DENIAL ABOUT THE PAGDI PAYMENT ON 2/12/1999 IN A STATEMENT MADE IN HINDI LANGUAGE WHICH HE HAD UNDERSTOOD. 48. IF ONE SETS APART THESE FIGURES OF RS. 21 LACS AND THE DELETED AMOUNT OF RS.12,19,885/ - (RS. 26,65,000/ - OF A.O. MINUS CONFI RMED BY THE CIT(A) TO THE TUNE OF RS. 14,45,115/ - ) THEN THERE WOULD BE THE FOLLOWING AMOUNTS WHICH WOULD EASILY 1E COVERED BY THE SO - CALLED RS.30 LACS DISCLOSED BY THE APPELLANT. (I) PAYMENT TO PRAVIN EARTH MOVERS 4,15,000 (II) CASH PAYMENT TO INDECOR 1,25,000 (III) UNACCOUNTED RECEIPTS 1,25,946 (IV) UNRECONCILED SALES 32,988 (V) INVESTMENT IN LAND 75,000 7,72,934 49. EVEN OTHERWISE, EVEN IF A PAGDI PAYMENT IN CASH HAS TO BE FORCED ON THE APPELLANT AS FROM HIS UNDISCLOSED INCOME AND THE INFLATED BILLS AS ADMITTED ARE TO BE TAKEN AS UNRETRACTABLE, THERE BEING NO DIRECT EVIDENCE OR FINDINGS, BOTH THESE CAN BE HELD TO BE ALSO COVERED BY THE BALANCE AMOUNT OF RS.22,26,06 6/ - (RS.30 LACS MINUS THE FIGURE OF RS.7,73,934/ - DETAILED ABOVE). 50 IN OTHER WORDS, I HOLD THAT, THE A.O. OR THE CIT(A) HAD NOT FOUND ANYTHING TO DETERMINE ANY AMOUNT BEYOND THE DISCLOSED AMOUNT OF RS. 30 LACS AS UNACCOUNTED INCOME. I ALSO FIND THAT IN HIS PENALTY ORDER THE A.O. HAS NOT DISCUSSED AS TO HOW THE APPELLANT HAD BEEN FOUND CULPABLE FOR THE CIT(A)'S CONFIRMED AMOUNT OF RS.45,10,000/ - . PENALTY IN ANY CASE DOES 'NOT FLOW FROM ANY PRESUMPTION OF CONCEALMENT. CONCEALMENT SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 8 OF INCOME HAS TO BE ESTABL ISHED WHICH HAS NOT BEEN DONE IN THE PRESENT CASE BY THE A.O. ON THE TOP OF THAT, HE HAS GIVEN ABSOLUTELY NO REASON FOR ADOPTING 200% AS PENALTY. 51. SINCE, THE UNDISCLOSED AMOUNT HAD BEEN COMPUTED MERELY AS AN ESTIMATED RATE WHICH HAD SUBSEQUENTLY BEEN S LASHED DOWN TO AGAIN AN ESTIMATED RATE ONLY TO MATCH THE RECEIPTS OR EXPENDITURE PRESUMED TO HAVE BEEN EXISTING BUT UNEXPLAINED, I HOLD THAT IN THE APPELLANT'S CASE NO PENALTY WAS IMPOSABLE BEYOND THE DISCLOSED AMOUNT LET ALONE AT AN UNREASONED PERCENTAGE OF 200. 52. THERE IS NO CONSIDERATION BY THE A.O. IN HIS PENALTY ORDER, THAT THE SAID DECLARED UNDISCLOSED INCOME OF RS. 30 LAC HAD BEEN COVERED BY THE CONDITIONS LAID DOWN - IN THE FIRST PROVISO TO SECTION 158 BFA(2). THE A.O. HAS TO TAKE THAT INTO ACCOUN T. OTHERWISE, I FIND THAT NO ADDITIONAL UNDISCLOSED INCOME HAD BEEN ACTUALLY DETERMINED AS ANY POSITIVE DETECTION BEYOND WHAT HAD BEEN DISCLOSED IN THE RETURN BY THE APPELLANT. THE AFORESAID FINDING OF THE CIT(A) FOR DELETING THE PENALTY APPEARS TO BE BA SED ON THE PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD , THUS WE FIND NO REASON TO DEVIATE FROM SUCH FINDING OF THE FACTS THEREFORE CIT(A)S DELETING THE PENALTY IS AFFIRMED. 9. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH OCTOBER , 2015. SD/ - SD/ - ( . ) ( ) ( D. KARUNAKARA RAO ) ( AMIT SHUKLA ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATE: 30 TH OCTOBER , 2015 / COPY TO: - 1 ) / THE APPELLANT. 2 ) / THE RESPONDENT. 3) THE CIT (A) - 23 , MUMBAI. 4 ) THE CIT - 23 , MUMBAI. 5 ) , , / THE D.R. C BENCH, MUMBAI. 6 ) \ COPY TO GUARD FILE. SHRI C RAJA IT (SS) NO. 68 /M UM /20 08 9 / BY ORDER / / TRUE COPY / / / , DY. / ASSTT. REGISTRAR I.T.A.T., MUMBAI * . . *CHAVAN, SR.PS