The DCIT, Circle-2(2), Baroda V. Shri Mahendra R.Shah, Baroda

ITSSA 72/AHD/2008

• Counselvise Citation: [2011] 124 COUNSELVISE.COM (IT) 8581 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 18-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 14-03-2011
• Assessment Year: misc
• Appeal Filed On: 14-11-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice
• Section: 132

Judgement Text

- 1 - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE S/SHRI BHAVNESH SAINI, JM AND D.C.AGRAWAL, A M DY. CIT, CIRCLE-2(2), BARODA. VS. SHRI MAHENDRA R. SHAH, 6- 7, MEGHDHANUSH SOCIETY, OLD PADRA ROAD, BARODA. (APPELLANT) .. (RESPONDENT) AND SHRI MAHENDRA R. SHAH, 6- 7, MEGHDHANUSH SOCIETY, OLD PADRA ROAD, BARODA. VS. DY. CIT, CIR-2(2), BARODA. (APPELLANT) .. (RESPONDENT) REVENUE BY :- MR. MUDIT NAGPAL, SR.DR ASSESSEE BY:- SHRI UMAIDSINGH BHATI, AR O R D E R PER D.C. AGRAWAL, ACCOUNTANT MEMBER . THESE ARE TWO CROSS APPEALS ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A) WHEREI N HE HAS PARTIALLY DELETED THE PENALTY LEVIED BY THE AO U/S 158BFA(2). IT(SS)A NO.72/AHD/2008 (REVENUES APPEAL) 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS :- IT(SS)A NO.72/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 IT(SS)A NO.75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 2 (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A) ERRED IN DIRECTING THE AO TO DELETE THE PENALTY LEVIED U/S 158BFA(2) OF THE IT ACT, ON THE ISSUE OF UNDISC LOSED INCOME OF RS.29,20,000/- MADE ON ACCOUNT OF INVESTM ENT IN RESIDENTIAL PROPERTY. (2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A), BARODA OUGHT TO HAVE UPHELD THE ORDER O F THE AO. (3) THE LD. CIT(A)-II, HAS ERRED IN GIVING DOUBLE BENEF IT TO THE ASSESSEE (I) BY DELETING PENALTY IN ADDITION OF RS. 29.20 LACS BEING INVESTMENT IN HOUSE PROPERTY AND (II) BY DIRE CTING TO RECOMPUTED PENALTY ON THE CONFIRMED ADDITION AFTER REDUCING AMOUNT OF RS.16 LACS DISCLOSED IN RETURN OF BLOCK. THE LD. CIT(A) ERRED IN BY GIVING DIRECTION TO RECOMPUTED P ENALTY AFTER REDUCING DISCLOSURE OF RS.16 LACS MADE IN BLOCK RET URN FROM THE ADDITION ON WHICH PENALTY CONFIRMED. SINCE THE DISC LOSURE MADE BY THE ASSESSEE DURING THE COURSE OF SEARCH WAS ON ACCOUNT OF UNDISCLOSED INVESTMENT IN HOUSE PROPERTY AND THE AS SESSEE FILED RETURN OF UNDISCLOSED INCOME OF RS.16 LACS. THUS TH E AMOUNT OF RS.29,20,000/- CONSISTS OF AMOUNT OF RS.16 LACS DIS CLOSED IN THE RETURN. SINCE ON THE AMOUNT OF RS.29,20,000/- PENAL TY IS DELETED NO FURTHER REDUCTION OF RS.16 LACS FOR COMPUTING PE NALTY CAN BE GIVEN. THEREFORE, THE LD. CIT(A) HAS ERRED IN DIREC TING TO RECOMPUTED PENALTY AFTER REDUCING RS.16 LACS. IT(SS) NO.75/AHD/2008 (ASSESSEES APPEAL) 3. THE ASSESSEE HAS RAISED FOLLOWING GROUND IN ITS APPEAL :- (1) THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN CONFIRM ING THE PENALTY ORDER PASSED BY THE AO U/S 158BFA(2) OF THE ACT IN RESPECT OF UNEXPLAINED CASH RECEIPTS AMOUNTING TO RS.26,21,100/- AND UNACCOUNTED F.D.RS AMOUNTING TO RS.82,567/-. REVENUES APPEAL 4. THE FACTS OF THE CASE ARE THAT A SEARCH UNDER SE CTION 132 WAS CARRIED OUT AT THE RESIDENTIAL AND BUSINESS PREMISE S OF BRIGHT GROUP. ASSESSEE IS ONE OF THE ENTITY OF THIS GROUP. THE BL OCK ASSESSMENT IN THE IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 3 CASE OF ASSESSEE WAS COMPLETED ON 30.9.2003 DETERMI NING TOTAL UNDISCLOSED INCOME OF RS.75,13,667/- AS AGAINST RET URNED UNDISCLOSED INCOME OF RS.NIL. FOLLOWING ADDITIONS ARE THE SUBJE CT MATTER OF PENALTY UNDER SECTION 158BFA(2):- (1) RS.44,20,200/- ON ACCOUNT OF UNDISCLOSED INVESTMENT IN RESIDENTIAL PROPERTY. (2) RS.26,21,000/- ON ACCOUNT OF UNDISCLOSED CASH RECEI PTS. (3) RS.3,82,567/- ON ACCOUNT OF UNEXPLAINED FDRS. (1) ADDITION ON ACCOUNT OF UNDISCLOSED INVESTMENT I N RESIDENTIAL PROPERTY 5. DURING THE COURSE OF SEARCH AN APPLICATION FROM THE ASSESSEES WIFE SMT. GEETA M. SHAH, ADDRESSED TO NEW INDIA ASSURANC E CO. LTD. FOR PROCURING FIRE INSURANCE WAS FOUND WHICH INDICATED THAT ASSESSEE IS SEEKING INSURANCE CLAIM FOR A SUM OF RS.1 CRORE OF HIS HOUSE PROPERTY AND FURNITURE & FIXTURES THEREIN BOTH VALUED AT RS.50 L ACS EACH. AFTER EXAMINING THE STATEMENT OF THE ASSESSEE AND AMOUNT DECLARED IN THE RETURN THE AO ALLOWED CREDIT OF RS.55,80,692/- RESULTING I N DEFICIENCY OF RS.44.20 LACS. THIS WAS ADDED BY THE AO IN THE BLOC K ASSESSMENT. THE MATTER TRAVELLED TO THE TRIBUNAL WHICH FINALLY REDU CED THE UNDISCLOSED INVESTMENT TO RS.29.20 LACS. IN THIS REGARD THE TRI BUNAL VIDE ITS ORDER DTD. 8.12.2006 IN IT(SS) A NOS. 217/AHD/2004 AND 227/AHD /2004 BLOCK ASSTT. 1.4.1995 TO 20.9.2001 HAD OBSERVED AS UNDER :- 18. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, FACT S AND CIRCUMSTANCES OF THE CASE AS WELL AS THE EVIDENTIARY VALUE OF APP LICATION FILED BY THE ASSESSEES WIFE TO THE NEW INDIA ASSURANCE CO. LTD. FOR SECURING INSURANCE OF THE HOUSE INCLUDING FURNITURE, FIXTURE AND DECORATION THEREIN AND ALSO THE FACT THAT INVESTMENT OF RS.9 LACS CLAI MED BY THE ASSESSEE AS HAVING BEEN MADE IN PURCHASE OF OLD BUNGALOW HAS AL SO NOT BEEN RECORDED IN THE ASSESSEES BOOKS OF ACCOUNT (BECAUS E ASSESSEE HAS NOT FURNISHED ANY EVIDENCE), ARE OF THE OPINION THAT TH E VALUE OF BUILDING I.E. GROUND/FIRST/SECOND FLOORS AT RS.50 LACS AND FURNIT URE AND FIXTURE AND IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 4 DECORATION AGAIN AT RS.50 LACS MENTIONED IN THE APP LICATION FILED BEFORE THE NEW INDIA ASSURANCE CO. LTD. FOR PROCURING INSU RANCE OF THE BUILDING INCLUDING FURNITURE, FIXTURE AND DECORATION THEREIN CANNOT ITSELF BE A SUFFICIENT EVIDENCE FOR HOLDING AS AN INVESTMENT ON THIS ACCOUNT WAS RS.1 CRORE AND IT IS SO BECAUSE IT IS QUITE OFTEN THAT T HE VALUE OF AN ASSET WHILE PROCURING INSURANCE IS SHOWN AT A LITTLE BIT INFLAT ED FIGURE BUT AT THE SAME TIME, WE ARE UNABLE TO ACCEPT THE ASSESSEES CLAIM THAT TOTAL INVESTMENT ON THIS ACCOUNT WAS AT RS.70 LACS BECAUSE THE ASSES SEE HAS FURNISHED COMPLETE RECORDS OF INVESTMENT, RATHER HAD IN CONSE QUENCE UPON SPECIFIC QUERY PUT BY THE BENCH ADMITTED THAT INVESTMENT AT RS.70 LACS CLAIMED BY THE ASSESSEE WAS ON ESTIMATE BASIS. 19. KEEPING IN VIEW THE AFORESAID COUNTER CLAIMS OF THE PARTIES, I.E. CLAIM OF THE REVENUE THAT INVESTMENT IN HOUSE INCLU DING FURNITURE, FIXTURE AND DECORATION WAS AT RS.1 CRORE (ON THE BASIS OF A PPLICATION REFERRED TO HEREINBEFORE) AND THE ASSESSEE THAT ESTIMATED INVES TMENT WAS AT RS.70 LACS ONLY AND ALSO THE ORDER OF THE CIT(A) SUSTAINI NG THE UNDISCLOSED INCOME AT RS.22.1 LACS WHICH SHOWS THAT HE HAD ACCE PTED THE TOTAL INVESTMENT IN HOUSE AT RS.77.968 LACS (55.868 LACS + 22.100 LACS) AND ALSO THE FACT THAT THE ASSESSEE HAS NOT BEEN ABLE T O ESTABLISH THE DISCLOSURE OF INVESTMENT OF RS.9,00,000/- IN PURCHA SE OF OLD HOUSE THE TOTAL INVESTMENT IN HOUSE INCLUDING FURNITURE, FIXT URE AND DECORATION BE TAKEN AT RS.85 LACS WHICH RESULTS IN DETERMINATION OF UNDISCLOSED INCOME AT RS.55.868 LACS WHICH OTHERWISE ALSO IS ALSO NEAR ER TO INITIAL INCOME OF RS.30 LACS. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCE S OF THE CASE, THE ASSESSEES GROUND IS REJECTED, WHEREAS THE REVENUE S GROUND IS PARTIALLY ALLOWED. WHILE DEALING WITH THE PENALTY THE AO RELIED ON THE FINDINGS GIVEN BY THE TRIBUNAL AND LEVIED PENALTY U/S 158BFA(2) AT RS.29. 20 LACS. THE LD. CIT(A) CANCELLED THE PENALTY ON THIS AMOUNT BY HOLD ING THAT ADDITION WAS MADE ON ACCOUNT OF DIFFERENCE IN VALUATION OF PROPE RTY AS SHOWN BY THE ASSESSEE IN THE BOOKS AND AS ESTIMATED FOR THE PURP OSE OF INSURANCE. HE ALSO REFERRED TO THE OBSERVATIONS OF THE TRIBUNAL T HAT APPLICATION TO INSURANCE CO. CANNOT BY ITSELF BE A SUFFICIENT EVID ENCE FOR HOLDING INVESTMENT OF RS.1 CRORE AS INCOME OF THE ASSESSEE. THE DEPARTMENT IS IN APPEAL AGAINST THIS CANCELLATION OF THE PENALTY. IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 5 6. THE LD. DR SUBMITTED THAT IT IS AN ADMISSION OF THE ASSESSEE THAT INVESTMENT IN THE PROPERTY IS RS.1 CRORE AND THE DI FFERENCE BETWEEN THE DECLARED INVESTMENT AND TOTAL INVESTMENT HAS BEEN W ORKED AT RS.29.20 LACS BY THE TRIBUNAL. SINCE THERE IS NO SATISFACTOR Y EXPLANATION PENALTY SHOULD HAVE BEEN LEVIED. 7. ON THE OTHER HAND, THE LD. AR SUBMITTED THAT APP LICATION TO INSURANCE COMPANY IS NOT A MATERIAL EVIDENCE FOR IN FERRING THAT ASSESSEE HAD IN FACT MADE INVESTMENT TO THE EXTENT OF RS.1 C RORE. IT IS IN FACT ONLY AN ESTIMATE FOR THE PURPOSE OF INSURANCE AND NO OTH ER EVIDENCE HAS BEEN FOUND IN THE SEARCH SHOWING ANY EXTRA INVESTMENT MA DE BY THE ASSESSEE IN PURCHASE OF THE HOUSE OR ACQUISITION OF FURNITURE A ND FIXTURES. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN OUR CONSIDERED VIEW THE ORDER OF LD. CIT(A) DESERVES TO BE CONFIRMED ON THIS ISSUE. THE EVIDENCE FOUND IN THE SEARCH IS ONLY AN APPLICATION MADE BY THE WIFE OF ASSESSEE TO THE NEW INDIA ASSURANCE CO. LTD. FOR PU RCHASING FIRE INSURANCE FOR THE HOUSE. THIS IS ONLY THE VALUE WHI CH IS ESTIMATED IN A ROUND FIGURE AND CANNOT BE SAID TO BE AN EVIDENCE O F ACTUAL EXPENDITURE INCURRED BY THE ASSESSEE. THOUGH THE ADDITION CONFI RMED BY THE TRIBUNAL AS SUCH CANNOT BE QUESTIONED BUT WE HAVE TO EXAMINE THE EXPLANATION SO FURNISHED BY THE ASSESSEE. IF IT IS FOUND SATISFACT ORY THE PENALTY NEED NOT BE LEVIED. IT IS NOT A CASE THAT LEVY OF PENALTY U/ S 158BFA(2) IS AUTOMATIC THE MOMENT THE ADDITION IS CONFIRMED. THE WORD USED IN THE SECTION IS MAY AND NOT SHALL. EVEN OTHERWISE IF THE WORD SHALL WOULD HAVE BEEN THERE, THE PRINCIPLE OF NATURAL JUSTICE WOULD COME INTO OPERATION AND PENALTIES BEING CIVIL PENAL LIABILITIES, THE EXPLAN ATION OF THE ASSESSEE HAS TO BE OBTAINED BY THE AO AND CONSIDERED. OBTAINING EXPLANATION OF THE ASSESSEE IN RESPONSE TO PENALTY NOTICE IS NOT MEREL Y A RITUALISTIC BUT IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 6 PROVIDES AN OPPORTUNITY TO THE AO TO CONSIDER THE E XPLANATION OBJECTIVELY AND SEE WHETHER RETURN FILED BY THE ASSESSEE VISA-A -VIS PARTICULAR ITEM WAS UNTRUE. EVEN THOUGH THE ADDITION IS MADE AND SUSTAI NED ON ACCOUNT OF REJECTION OF EXPLANATION BY THE ASSESSEE BUT THE SA ME PRINCIPLE CANNOT BE APPLIED WHILE DECIDING TO LEVY THE PENALTY. THE EXP LANATION IN RESPONSE TO SHOW CAUSE NOTICE BEFORE LEVY OF PENALTY HAS TO BE NECESSARILY CONSIDERED IN VIEW OF PROVISIONS OF SECTION 158BFA(3)(A). THE EXPLANATION OF THE ASSESSEE THAT THE FIGURE GIVEN IN THE APPLICATION F OR OBTAINING FIRE INSURANCE IS ONLY AN ESTIMATE AND DOES NOT REPRESEN T ACTUAL INVESTMENT IS PRIMA FACIE SATISFACTORY UNLESS AO COULD HAVE FOUND SOME OTHER MATERIAL EITHER DURING THE COURSE OF SEARCH OR DURING POST S EARCH INVESTIGATION SHOWING HIGHER INVESTMENT THAN WHAT IS DECLARED IN THE BOOKS. SINCE NO SUCH MATERIAL IS BROUGHT ON RECORD, WE BELIEVE ON T HE EXPLANATION FURNISHED BY THE ASSESSEE AND HOLD IT SATISFACTORY. ACCORDINGLY, THERE IS NO CASE FOR LEVY OF PENALTY ON THIS AMOUNT. THIS PART OF GROUND OF REVENUES APPEAL IS DISMISSED. (2) ADDITION OF RS.26,21,000/- ON ACCOUNT OF UNDISCLOSE D CASH RECEIPTS. 9. DURING THE COURSE OF SEARCH A DIARY WAS FOUND AN D SEIZED FROM THE POSSESSION OF SHRI PRADIP PATEL, WHO WAS AN EMPLOYE E OF M.S. HOSTEL. IT SHOWED THE DETAILS OF AMOUNT WITHDRAWN IN CASH FROM M.S. HOSTEL AND AMBE VIDYALAYA. THE ENTRIES NOTED IN THE NOTE BOOK ARE REPRODUCED BELOW :- PAGE NO. DATE DESCRIPTION AMOUNT 1 3.4.97 TO SIR 150000 3 17.4.97 TO SIR 100000 8 16.6.98 B.B.SHAH 50000(CASH) 8 17.6.98 A.C. SHAH 200000(CHEQUE) 2000(CASH) 8 22.6.98 M.R.SHAH 300000(CASH) IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 7 10 10.7.98 NATUBHAI 600000 10 13.7.98 C.H.JEWELLERS 40000 11 15.7.98 TO SIR 65000 11 20.7.98 TO SIR 250000 12 22.7.98 NATUBHAI 10000 12 21.7.98 M.R. SHAH 190500 23 15.9.98 MAHENDRABHAI 200000 28 13.10.98 VIVO FASHIO 10000 37 4.12.98 M.J. SHAH 3600 TOTAL 28,21,000 DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBTAINED THE EXPLANATION OF THE ASSESSEE. IT WAS EXPLAINED THAT HOSTEL PREMISES ARE SITUATED IN OUTSKIRT OF BARODA. SOMETIMES THERE ARE LARGE CASH BALANCE ACCUMULATED WHICH IS NOT ADVISABLE TO KEEP IN THE H OSTEL PREMISES THEREFORE, MONEY IS SENT FOR SAFE KEEPING TO THE PA RTNERS WHICH IS BROUGHT BACK NEXT DAY TO THE OFFICE. MONEY IS DELIVERED BY EMPLOYEES AND THEY RECORD THIS MOVEMENT SEPARATELY IN THE DIARY. THE A O DID NOT ACCEPT THIS EXPLANATION AS SATISFACTORY. HE DID NOT FIND SUCH E NTRIES IN THE BOOKS OF THE M.S. HOSTEL AND AMBE VIDYALAYA AND TREATED THE ABOVE SUM OF RS.26.21 LACS AS UNEXPLAINED. THIS ADDITION WAS CON FIRMED BY THE TRIBUNAL AS UNDER :- 24. AFTER CAREFUL CONSIDERATION OF THE RIVAL SUBMI SSIONS AND THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE FACT THAT DET AILS IN QUESTIONS SHOWS THE CASH HAVING BEEN GIVEN TO VARIOUS PERSONS OTHER THAN THE ASSESSEE AND ALSO TO JEWELERS AND THE ASSESSEE HAVING NOT ES TABLISHED THAT CASH PAID TO OTHER THAN THE ASSESSEE HAD COME TO THE ASS ESSEE, IT IS NOT POSSIBLE TO CONSIDER THE SAME AS HAVING BEEN INVESTED IN HOU SE AS CLAIMED BY THE ASSESSEE AND, THERE, THE SAME CANNOT BE TELESCOPED. 25. SO FAR AS ASSESSEES CLAIM THAT THESE WERE NOT RECEIPTS BY THE ASSESSEE, WE ARE, AGAIN, OF THE OPINION THAT THE AS SESSEE HAS NOT FURNISHED ANY EVIDENCE, IN THIS REGARD AND THE CONTENTS OF TH E DIARY HAVING BEEN ADMITTED BY THE ASSESSEE, IT IS NOT POSSIBLE TO ACC EPT THE ASSESSEES PLEA. COMING TO ASSESSEES PLEA THAT THESE WERE NOT CASH RECEIPTS OF THE ASSESSEE, RATHER WERE THE AMOUNTS TAKEN AWAY BY VAR IOUS PERSONS FROM IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 8 THE CASH AVAILABLE IN THE ACCOUNT OF M.S. HOSTEL IN THE EVENING FOR SAFE CUSTODY AND HAD BEEN USED TO BE RETURNED TO M.S. HO STEL ON THE MORNING OF THE NEXT DAY, WE ARE AGAIN, OF THE OPINION THAT THE ONUS WAS ON THE ASSESSEE TO ESTABLISH THE FACT BY WAY OF COGENT MAT ERIAL, SUCH AS BOOKS OF ACCOUNT OF M.S. HOSTEL OR ANY OTHER CONCERN AS THE CASE MAY BE, BUT SINCE THE ASSESSEE HAS NOT FILED ANY EVIDENCE OTHER THAN THE RECEIPTS, WE ARE UNABLE TO BELIEVE THE ASSESSEES STORY. 26. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES, THE A DDITION AT RS.26,21,000/- IS SUSTAINED SUBJECT TO OUR FINDINGS AGAINST ISSUE INVOLVED IN GROUND NO.5. WHILE LEVYING THE PENALTY U/S 158BFA(2), THE AO REL IED ON THE FINDINGS GIVEN BY THE LD. CIT(A) AND THE TRIBUNAL IN QUANTUM ADDITION AND LEVIED THE PENALTY. THE LD. CIT(A) CONFIRMED THE PENALTY B Y HOLDING THAT ASSESSEE WAS NOT ABLE TO EXPLAIN THE ENTRIES FOUND IN THE DIARY BY WAY OF COGENT MATERIAL SUCH AS BOOKS OF ACCOUNT OF M.S. HO STEL OR ANY OTHER CONCERN. THE ONUS WAS ON THE ASSESSEE TO PROVE THAT THIS PAYMENT/WITHDRAWALS WERE REFLECTED IN THE BOOKS. 10. AGAINST THIS, THE LD. AR FOR THE ASSESSEE SUBMI TTED THAT IN FACT IT WAS A CASH CIRCULATION AND NOT CASH WITHDRAWALS. TH ERE WAS HUGE BALANCE IN THE BOOKS OF M.S. HOSTEL AND AMBE VIDYALAYA AND OUT OF SUCH HUGE BALANCE MONEY USED TO BE TRANSPORTED TO THE RESIDEN CE OF THE PARTNERS AND IT IS IN FACT OUT OF AVAILABLE CASH BALANCE AND NOT UNEXPLAINED CASH. 11. ON THE OTHER HAND, THE LD. DR RELIED ON THE ORD ERS OF AO AND THE CIT(A). 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PE RUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO CASE FOR INTERFERENCE IN THE ORDER OF LD. CIT(A). REASONS ARE THAT ONCE A DIARY IS FOUND SHOWING TRANSFER OF MONEY TO THE ASSESSEE THEN IT IS FOR TH E ASSESSEE TO SHOW AS TO FROM WHERE THIS MONEY HAS COME TO HIM. IF IT WAS TA KEN FROM THE CORPUS IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 9 OF M.S. HOSTEL AND AMBE VIDYALAYA THEN IT WAS TO BE SHOWN THAT NECESSARY ENTRIES HAVE BEEN MADE IN THE BOOKS OF TH OSE CONCERNS. FURTHER, NEITHER THERE IS ANY ENTRY WHEN MONEY IS GIVEN TO T HE ASSESSEE AS ALSO THERE IS NO EVIDENCE THAT IT HAS COME BACK TO THE C ORPUS OF M.S. HOSTEL OR AMBE VIDYALAYA. THE ONUS IS ON THE ASSESSEE TO PROD UCE EVIDENCE OF SUCH CASH CIRCULATION WHICH HE HAS FAILED TO DO SO. THE ONUS CANNOT BE SHIFTED TO THE REVENUE FOR INVESTIGATING AND FINDIN G THE EXPLANATION OF ASSESSEE UNTRUE. AN EXPLANATION IS WORTH CONSIDERAT ION ONLY WHEN IT IS SUPPORTED BY MATERIAL EVIDENCE. A BALD EXPLANATION WITHOUT SUPPORT FROM ANY MATERIAL EVIDENCE CANNOT BE ACCEPTED ON THE FAC E OF IT MERELY BECAUSE REVENUE DID NOT FIND ANY FALSITY IN THE EXPLANATION . IN OUR VIEW THIS ARGUMENT OF LD. AR HAS NO FORCE BECAUSE THERE IS A CLEAR FINDING OF THE TRIBUNAL THAT ASSESSEE FAILED TO PRODUCE EVIDENCE I N SUPPORT OF HIS EXPLANATION. IF THERE WERE ENTRIES IN THE BOOKS OF M.S. HOSTEL AND AMBE VIDYALAYA NOTHING PREVENTED THE ASSESSEE TO BRING T HEM TO THE NOTICE OF THE AUTHORITIES OR EVEN BEFORE US. ACCORDINGLY WE H OLD THAT EXPLANATION FURNISHED BY THE ASSESSEE IS NOT SATISFACTORY AND, THEREFORE, THE AUTHORITIES WERE JUSTIFIED IN LEVYING THE PENALTY IN RESPECT OF THIS AMOUNT. THIS GROUND OF ASSESSEE IS ACCORDINGLY REJECTED. 13. THE NEXT ADDITION IS OF RS.3,82,567/- ON ACCOUN T OF UNEXPLAINED FDRS. ON VERIFICATION OF ASSESSEES DOCUMENTS ANNEX URE-A-32 AO FOUND TOTAL AMOUNT OF INVESTMENT IN FDRS OF RS.3,82 ,567/-. FINDING THE EXPLANATION UNSATISFACTORY HE MADE THE ADDITION. IT WAS REDUCED TO RS.82,567/- IN APPEAL WHICH WAS ALSO CONFIRMED BY THE TRIBUNAL. 14. WHILE LEVYING THE PENALTY U/S 158BFA(2) THE AO SOUGHT EXPLANATION OF THE ASSESSEE. IT WAS EXPLAINED THAT ADDITION ON ACCOUNT OF FDR HAS BEEN REDUCED TO RS.82,567/- ONLY. THE AO RE JECTED THIS IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 10 EXPLANATION AND HELD THAT ONLY PARTIAL RELIEF WAS A LLOWED BY THE LD. CIT(A) IN RESPECT OF FDR IN THE NAME OF ALAP SHAH A ND ADDITION OF RS.82,567/- REMAINED UNEXPLAINED. THE AO, HOWEVER, CONSIDERED THE SUM OF RS.82,567/- FOR THE PURPOSE OF LEVY OF PENAL TY BEING THE AMOUNT SURVIVED AFTER THE ORDER OF THE TRIBUNAL AND RESERV ED HIS RIGHT TO MODIFY THE QUANTUM OF PENALTY AFTER HIS M.A. IS PROCESSED BY THE LD. CIT(A). THE LD. CIT(A) IN PENALTY PROCEEDINGS CONFIRMED THE PEN ALTY ON THE SUM OF RS.82,567/- BEING THE AMOUNT FINALLY SURVIVED. 15. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW THERE IS NO EXPLANAT ION FROM THE ASSESSEE AS TO THIS AMOUNT, THEREFORE, THE AO IS JUSTIFIED I N LEVYING THE PENALTY. THIS GROUND OF ASSESSEE IS ALSO REJECTED. 16. IN THE RESULT, BOTH THE APPEALS ARE DISMISSED . ORDER WAS PRONOUNCED IN OPEN COURT ON 18.3.11. SD/- SD/- (BHAVNESH SAINI) (D.C. AGRAWAL) JUDICIAL MEMBER ACCOUNTANT MEMB ER AHMEDABAD, DATED : 18.3.11. MAHATA/- COPY OF THE ORDER FORWARDED TO :- 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)- 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD IT(SS)A NOS.72 & 75/AHD/2008 BLOCK PERIOD 1.4.1995 TO 20.9.2001 11 1.DATE OF DICTATION 14/3/2011 2.DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE TH E DICTATING 16/3/ 2011 MEMBER.OTHER MEMBER. 3.DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P.S./P.S. 4.DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT.. 5.DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR .P.S./P.S 6.DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 7.DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8.THE DATE ON WHICH THE FILE GOES TO THE ASSTT. REG ISTRAR FOR SIGNATURE ON THE ORDER 9.DATE OF DESPATCH OF THE ORDER..