MADHUKAR B. THAKOOR, MUMBAI V. DCIT 20 (INV) CIR 22(1), MUMBAI

ITSSA 77/MUM/2009

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 8876 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 20-03-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 04-12-2012
• Assessment Year: misc
• Appeal Filed On: 29-07-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P MEENA
• Assessee Lawyers: D P BAPAR
• Keywords: Unexplained cash credit; Revision of order; Search and seizure; Document seized; Question of law; Block assessment; Retraction; Documents seized
• Section: 263; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI BEFORE SHRI P.M. JAGTAP (A.M.) AND SHRI SANJAY GARG, J.M. IT(SS)A NO. 60/MUM /2009 BLOCK PERIOD 1-4-1987 TO 15-9-2007 MR. VASANT THAKOOR, DSILVA BUILDING, S.K. BOLE ROAD, OPPOSITE AGAR BAZAR, DADAR, MUMBAI 400 028. PAN AACPT 8966A VS. ASSTT. COMMISSIONER OF INCOME TAX 20(3), 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) IT(SS)A NO. 77 & 79/MUM /2009 BLOCK PERIOD 1-4-1987 TO 15-9-2007 MR. MADHUKAR B. THAKOOR, DSILVA BUILDING, S.K. BOLE ROAD, OPPOSITE AGAR BAZAR, DADAR, MUMBAI 400 028. PAN AACPT 8967B VS. ASSTT. COMMISSIONER OF INCOME TAX 20(3), 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) IT(SS)A NO.65/MUM /2009 BLOCK PERIOD 1-4-1987 TO 15-9-2007 SHRI BALCHANDRA B. THAKOOR, LEGAL HEIR MRS. SUNITA SAMIR SAO, DSILVA BUILDING, S.K. BOLE ROAD, OPPOSITE AGAR BAZAR, DADAR, MUMBAI 400 028. PAN AACPT8968Q VS. ASSTT. COMMISSIONER OF INCOME TAX 20(3), 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 2 IT(SS)A NO.66/MUM /2009 BLOCK PERIOD 1-4-1987 TO 15-9-2007 MR. MOHAN B. THAKOOR DSILVA BUILDING, S.K. BOLE ROAD, OPPOSITE AGAR BAZAR, DADAR, MUMBAI 400 028. PAN AABPT4754D VS. ASSTT. COMMISSIONER OF INCOME TAX 20(3), 5 TH FLOOR, PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI 400 012. (APPELLANT) (RESPONDENT) ASSESSEE BY: SHRI D.P. BAPAR DEPARTMENT BY : SHRI O.P. MEENA DATE OF HEARING 28-01-2013 DATE OF PRONOUNCEMENT 20-03-2013 O R D E R PER P.M. JAGTAP, A.M. THESE FIVE APPEALS FILED IN THE CASE OF FOUR ASSESS EES BELONGING TO ONE GROUP/FAMILY HAVE BEEN HEARD TOGETHER AND ARE B EING DISPOSED OF BY A SINGLE COMPOSITE ORDER FOR THE SAKE OF CONVENIENC E. 2. FIRST WE SHALL TAKE UP THE APPEAL FILED BY THE A SSESSEE NAMELY MR. VASANT THAKOOR BEING IT(SS)A NO. 60/MUM/2009 WH ICH IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) -XXXII, MUMBAI DTD. 15-3-2009. THE SOLITARY ISSUE ARISING OUT OF THIS APPEAL RELATES T O THE QUANTIFICATION OF EXACT AMOUNT OF UNDISCLOSED INCOME CHARGEABLE TO TA X IN THE HANDS OF THE ASSESSEE. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 3 3. THE RELEVANT FACTS OF THE CASE GIVING RISE TO THIS APPEAL ARE THAT A SEARCH AND SEIZURE ACTION WAS CONDUCTED IN THE CASE OF THE ASSESSEE, HIS FAMILY MEMBERS AND THE BUSINESS CONCERNS ON 4-9-199 7. PURSUANT TO THE SAID ACTION, BLOCK ASSESSMENT U/S 158BC OF THE INCOME TAX ACT, 1961 (THE ACT) WAS PASSED BY THE A.O. ON 30-9-1999 DETERMINING THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS. 53,52,237 /-. THE SAID ORDER WAS SET ASIDE BY THE LD. CIT(A) VIDE HIS ORDER DTD. 28-3-2001 PASSED U/S 250 OF THE ACT WITH A DIRECTION TO THE A.O. TO CARR Y OUT CERTAIN ENQUIRIES AND VERIFICATIONS. IN THE SAID ORDER, THE LD. CIT( A) ACCEPTED THE STAND OF THE ASSESSEE THAT CERTAIN UNDISCLOSED INCOME ASSESS ED IN HIS HANDS SHOULD BE CONSIDERED IN THE HANDS OF THE FIRM NAMEL Y M/S THAKOOR METAL INDUSTRIES. THE ORDER OF THE LD. CIT(A) DTD. 28-3-2 001 WAS CHALLENGED BY THE ASSESSEE AS WELL AS BY THE DEPARTMENT BEFORE TH E TRIBUNAL AND THE TRIBUNAL VIDE ITS ORDER DTD. 31-8-2005 ALLOWED THE APPEAL OF THE DEPARTMENT HOLDING THAT THE UNDISCLOSED INCOME WAS RIGHTLY TAXED BY THE A.O. IN THE HANDS OF THE ASSESSEE IN HIS INDIVIDUAL CAPACITY. MEANWHILE, THE ORDER PASSED BY THE A.O. DTD. 28-3-2003 GIVING EFFECT TO THE ORDER OF THE LD. CIT(A) DTD. 28-3-2001 WAS SET ASIDE BY THE CIT U/S 263 VIDE AN ORDER DTD. 30-9-2003 DIRECTING THE A.O. TO MAKE CER TAIN FURTHER ENQUIRIES AND VERIFICATIONS. THE A.O. ACCORDINGLY PASSED A F RESH ORDER U/S 158BC R.W.S. 250 AND 263 ON 30-4-2004 COMPUTING THE UNDIS CLOSED INCOME OF THE ASSESSEE AT RS. 43,83,737/-. INCIDENTALLY, THE ASSESSEE MOVED A MISC. APPLICATION BEFORE THE TRIBUNAL STATING THAT ONE OF THE ISSUES RAISED IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 4 BY HIM REGARDING CORRECT QUANTIFICATION OF UNDISCLO SED INCOME IN HIS INDIVIDUAL HANDS HAD NOT BEEN ADJUDICATED BY THE TR IBUNAL. THE TRIBUNAL VIDE ITS ORDER DTD. 17-7-2006 DISPOSED OF THE SAID MISC. APPLICATION DIRECTING THE LD. CIT(A) TO DETERMINE C ORRECTLY THE QUANTUM OF ADDITION TO BE MADE IN THE HANDS OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CASH/ASSETS/INTERESTS. AS PER THE DIRE CTION OF THE TRIBUNAL, THE LD. CIT(A) CONSIDERED THE ISSUE OF QUANTIFICATI ON OF UNDISCLOSED INCOME OF THE ASSESSEE. IN THIS REGARD, IT WAS SUB MITTED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) THAT THE ISSUE OF QU ANTIFICATION OF UNDISCLOSED INCOME WAS CONFINED TO INTEREST RECEIVE D IN CASH OF RS. 7,50,000/- AND CASH SALE OF SCRAP/MACHINERY ESTIMAT ED AT RS. 30 LACS. IT WAS SUBMITTED THAT THE QUANTIFICATION MADE BY TH E A.O. IN RESPECT OF INTEREST AT RS. 7,50,000/- WAS ACCEPTABLE TO THE AS SESSEE AND THE ONLY DISPUTE WAS RELATING TO THE QUANTIFICATION OF UNDIS CLOSED INCOME FROM CASH SALES OF SCRAP/MACHINERY. IT WAS SUBMITTED IN THIS REGARD THAT THE CASH SALE OF SCRAP/MACHINERY WAS QUANTIFIED BY THE A.O. AT RS. 14,27,680/-, RS. 10,23,906/- AND RS. 40,525/- FOR A SSESSMENT YEARS 1996-97, 1997-98 AND 1998-99 RESPECTIVELY BASED ON THE MATERIAL FOUND DURING THE COURSE OF SEARCH. IT WAS CONTENDED THAT THE CORRECT AMOUNT OF UN-ACCOUNTED SALE OF SCRAP/MACHINERY THUS WAS QUANT IFIED BY THE A.O. AT RS. 24,94,211/- BUT THE SAME WAS ESTIMATED AT RS . 30 LACS TAKING INTO CONSIDERATION THE AMOUNTS SPENT BY THE ASSESSEE FOR PERSONAL AS WELL AS HOUSEHOLD EXPENSES AND OTHER PURPOSES SUCH AS REPAI RS, RENOVATION, IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 5 PURCHASE OF PERSONAL EFFECTS ETC. IT WAS SUBMITTED THAT THE AGGREGATE OF AMOUNTS SO SPENT BY THE ASSESSEE WAS ONLY RS. 10.80 LACS AND IF THE SAME WAS REDUCED FROM CASH SALE OF SCRAP/MACHINERY AMOUNTING TO RS. 24.92 LACS AND INTEREST OF RS. 7.50 LACS RECEIVED I N CASH, CASH AVAILABLE WITH THE ASSESSEE AT THE TIME OF SEARCH WAS RS. 21. 62 LACS WHICH WAS MUCH MORE THAN THE CASH OF RS. 15,58,500/- FOUND DU RING THE COURSE OF SEARCH. IT WAS CONTENDED THAT THERE WAS THUS NO JU STIFICATION IN ESTIMATING THE AMOUNT OF CASH SALE OF SCRAP/MACHINE RY OVER AND ABOVE RS. 24.92 LACS AS QUANTIFIED BY THE A.O. ON THE BAS IS OF SEIZED DOCUMENTS AND THE ESTIMATION OF RS. 30 LACS MADE BY THE A.O. SHOULD BE RESTRICTED TO RS. 24.92 LACS. 4. THE SUBMISSIONS MADE ON BEHALF OF THE ASSESSEE W ERE FOUND ACCEPTABLE BY THE LD. CIT(A). HE NOTED THAT THE UN DISCLOSED INTEREST OF RS. 7.50 LACS RECEIVED IN CASH FROM RAMNIT CHAWDA W AS STATED TO BE DISTRIBUTED BY THE ASSESSEE AMONGST THE PARTNERS OF THE FIRM WHEREAS THE CASH OF RS. 24.92 LACS RECEIVED FROM SALE OF SCRAP/ MACHINERY WAS STATED TO BE UTILISED FOR GIVING RS. 3.82 LACS TO MR. B.B. THAKOOR (DADA) FOR PERSONAL EXPENDITURE AND FOR INCURRING THE PERSONAL EXPENDITURE INCLUDING RENOVATION AND REPAIRS TO THE EXTENT OF R S. 10.80 LACS AS PER THE SEIZED DOCUMENTS. HE FOUND THAT THE CASH ONLY TO THE EXTENT OF RS. 10.30 LACS THUS WAS AVAILABLE WITH THE ASSESSEE AT THE TIME OF SEARCH OUT OF THE UNDISCLOSED CASH RECEIPTS OF RS. 32.42 LACS AS AGAINST THE CASH OF RS. 15,58,500/- FOUND DURING THE COURSE OF SEARCH. THE LD. CIT(A) HELD IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 6 THAT THE CASH FOUND DURING THE COURSE OF SEARCH THU S HAD REMAINED UNEXPLAINED TO THE EXTENT OF RS. 5,28,500/- AND IF THE SAME IS INCLUDED IN THE OTHER UNDISCLOSED INCOME ASSESSED BY THE A.O . INCLUDING INCOME FROM SALE OF SCRAP/MACHINERY AMOUNTING TO RS. 24,92 ,111/-, THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE WOULD COME TO RS . 46,04,348/- AS AGAINST THE TOTAL UNDISCLOSED INCOME OF RS. 45,83,7 37/- COMPUTED BY THE A.O. HE HELD THAT THE ESTIMATE OF RS. 30 LACS MADE BY THE A.O. ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY THUS WAS CO RRECT TAKING INTO ACCOUNT THE UNEXPLAINED CASH OF RS. 5,28,500/- FOUN D DURING THE COURSE OF SEARCH FOR WHICH NO SEPARATE ADDITION WAS MADE. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFOR E THE TRIBUNAL, THE ASSESSEE HAS FILED MODIFIED GROUND AS WELL AS ADDIT IONAL GROUND TO DISPUTE THE ADDITION OF RS. 5,28,500/- SUSTAINED BY THE LD. CIT(A) WHILE QUANTIFYING HIS UNDISCLOSED INCOME. THE SAID GROUN DS READ AS UNDER:- MODIFIED GROUND THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN UPHOLDING THE QUANTIFICATION OF THE ADDITION ON ACC OUNT OF UNDISCLOSED INCOME FROM SALE OF SCRAP/MACHINERY OF RUPEES 30,00,000 AS AGAINST THE CONTENTION THAT THE ADDITION ON THIS ACCOUNT SHOULD NOT EXCEED RUPEES 24,92,111 (EMPHASI S SUPPLIED TO HIGHLIGHT THE MODIFICATION) IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 7 ADDITIONAL GROUND: THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HA S ERRED IN RENDERING THE FINDING THAT THE AMOUNT OF CASH FOUND AT THE TIME OF SEARCH WAS UNEXPLAINED TO THE EXTENT OF RUPEES 5,28 ,500/-. 6. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, RAISED A PRELIMINARY OBJECTION BY SUBMITTING THAT THE LD. CIT(A) HAS SUR PASSED THE DIRECTION GIVEN BY THE TRIBUNAL AND HAS GONE BEYOND THE SCOPE OF THE ORDER OF THE TRIBUNAL SETTING ASIDE THE ISSUE RELATING TO QUANTI FICATION OF UNDISCLOSED INCOME OF THE ASSESSEE. HE SUBMITTED THAT THE LD. CIT(A) OUGHT TO HAVE RESTRICTED HIMSELF THE QUANTIFICATION OF UNDISCLOSE D INCOME OF THE ASSESSEE ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY AS PER THE DIRECTION OF THE TRIBUNAL BUT HE HAS ALSO TAKEN INTO ACCOUNT THE QUANTIFICATION OF UNDISCLOSED CASH FOUND DURING THE COURSE OF SEARCH WHICH IS BEYOND THE SCOPE OF THE ORDER OF THE TRIBUNAL SETTING ASIDE TH E MATTER TO THE LD. CIT(A). HE CONTENDED THAT THE ASSESSEE THEREFORE HA S NOW FILED AN ADDITIONAL GROUND CHALLENGING THE ACTION OF THE LD. CIT(A) ON THIS ISSUE AND REQUESTED THAT THE SAME MAY BE ADMITTED. 7. WITHOUT PREJUDICE TO HIS PRELIMINARY OBJECTION, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE CASH OF RS. 7.50 LA CS RECEIVED AS INTEREST FROM RAMNIT CHAWDA WAS DISTRIBUTED AMONGST THE PART NERS AND THE SAME WAS AVAILABLE TO MEET THE PERSONAL EXPENDITURE INCLUDING THE RENOVATION AND REPAIRS AMOUNTING TO RS. 10.80 LACS. HE SUBMITTED THAT EVEN THE QUANTIFICATION OF SUCH EXPENSES AT RS. 10. 80 LACS WAS WITHOUT ANY BASIS AND THEREFORE THE QUANTIFICATION OF UNDIS CLOSED CASH FOUND IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 8 DURING THE COURSE OF SEARCH AS MADE BY THE LD. CIT( A) AT RS. 5,28,500/- IS NOT CORRECT. HE CONTENDED THAT THE QUANTIFICATIO N OF CASH SALE OF SCRAP/MACHINERY THUS SHOULD HAVE BEEN MADE BY THE L D. CIT(A) ONLY TO THE TUNE OF RS. 24.92 LACS INDEPENDENTLY AS DONE BY THE A.O. ON THE BASIS OF SEIZED DOCUMENTS. 8. THE LD. D.R., ON THE OTHER HAND, INVITED OUR ATT ENTION TO THE RELEVANT PORTION OF THE TRIBUNALS ORDER AT PAGE 12 5 AND 126 OF THE ASSESSEES PAPER BOOK AND SUBMITTED THAT THE MATTER WAS SET ASIDE BY THE TRIBUNAL TO THE FILE OF LD. CIT(A) FOR CORRECT DETERMINATION OF QUANTUM OF ADDITION ON ACCOUNT OF UNDISCLOSED CASH/ASSETS/I NTERESTS. HE CONTENDED THAT THE QUANTIFICATION OF UNDISCLOSED CA SH AS FOUND DURING THE COURSE OF SEARCH THUS HAS BEEN MADE BY THE LD. CIT(A) AS PER THE SPECIFIC DIRECTION GIVEN BY THE TRIBUNAL AND HE HAS NOT GONE BEYOND THE SCOPE OF THE ORDER OF THE TRIBUNAL. HE CONTENDED TH AT THERE IS THUS NO MERIT IN THE OBJECTION RAISED BY THE LD. COUNSEL FO R THE ASSESSEE IN THIS REGARD AND THE ADDITIONAL GROUND FILED BY THE ASSES SEE IS LIABLE TO BE DISMISSED AT THE THRESHOLD. AS REGARDS THE QUANTIF ICATION OF UNDISCLOSED INCOME MADE BY THE LD. CIT(A) AS PER THE DIRECTION OF THE TRIBUNAL, THE LD. D.R. INVITED OUR ATTENTION TO THE WORKING GIVEN BY THE LD. CIT(A) ON PAGE NO. 6 OF HIS IMPUGNED ORDER TO SHOW THAT THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE WAS QUANTIFIED BY HIM AT RS. 46,04,348 /- AS AGAINST TOTAL INCOME OF RS. 45,83,737/- COMPUTED BY THE A.O. HE CONTENDED THAT THE SAID WORKING GIVEN BY THE LD. CIT(A) CLEARLY SHOWS THAT THERE IS NO IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 9 MISTAKE IN THE UNDISCLOSED INCOME OF THE ASSESSEE A S QUANTIFIED BY THE A.O. WARRANTING ANY FURTHER RELIEF TO THE ASSESSEE. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT W HILE DISPOSING OF THE MISC. APPLICATION FILED BY THE ASSESSEE VIDE ITS OR DER DTD. 17-7-2006, THE MATTER WAS SENT BACK BY THE TRIBUNAL TO THE FILE OF THE LD. CIT(A) FOR THE LIMITED PURPOSE OF CORRECT DETERMINATION OF QUANTUM OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH/ASSETS/INTERESTS IN THE HANDS OF THE ASSESSEE AS AN INDIVIDUAL VIDE PARA NO. 5 WHICH REA DS AS UNDER:- 5. FACTUAL BACKGROUND OF THE CASE HAS ALREADY BEEN NARRATED ABOVE WHILE DISPOSING OF THE MISCELLANEOUS APPLICAT ION FILED BY THE ASSESSEE. AS MENTIONED ABOVE ALL THE ASSESSEES HAD CHALLENGED THE ADDITION OF UNEXPLAINED CASH, ASSET AND INTERES T IN THEIR INDIVIDUAL HANDS. THE LD. CIT(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE UNEXPLAINED CASH/ASSET /INTEREST BELONGED TO THE FIRM IN WHICH THEY WERE PARTNERS. THEREFORE, HE DID NOT ADJUDICATE UPON THE CORRECTNESS OF THE QUAN TUM OF ADDITION. IT IS IN THIS BACKGROUND THAT THE LD. AR FOR THE ASSESSEE HAD SPECIFICALLY RAISED A PLEA AT THE TIME OF HEARI NG OF THE APPEALS AND CROSS-OBJECTIONS THAT IF THE ISSUE WAS TO BE DE CIDED IN FAVOUR OF THE DEPARTMENT, THE MATTER WOULD STILL NEED TO G O BACK TO THE FILE OF THE CIT(A) FOR CORRECT DETERMINATION OF QUA NTUM OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH/ASSET/INTEREST IN TH E HANDS OF INDIVIDUAL ASSESSEES. WE FIND THAT THE AFORESAID SU BMISSION MADE BY THE ASSESSEE CARRIED FORCE. THE PLEA OF THE ASS ESSEE FOR ADJUDICATION WITH REGARD TO QUANTUM OF ADDITION HAS NOT BEEN CONSIDERED EITHER BY THE CIT(A) OR BY THIS TRIBUNAL . IT IS, THEREFORE, CONSIDERED APPROPRIATE TO RESTORE THE MATTER BACK TO THE FILE OF THE LD. CIT(A) WITH THE DIRECTION TO ADJUDICATE UPON TH E LIMITED ISSUE OF CORRECTNESS OF THE QUANTUM OF ADDITION MADE ACCOUNT OF UNEXPLAINED CASH/ASSET/INTEREST IN ALL THE AFORESAI D CASES IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. CONSEQ UENTLY, THE ORDERS PASSED BY US IN THE AFORESAID CROSS-OBJECTIO N WILL STAND AMENDED TO THE AFORESAID EXTENT. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 10 A PERUSAL OF THE RELEVANT PORTION OF THE ORDER OF T HE TRIBUNAL AS EXTRACTED ABOVE CLEARLY SHOWS THAT THE MATTER WAS RESTORED BY THE TRIBUNAL TO THE FILE OF THE LD. CIT(A) FOR THE PURPOSE OF CORRECT D ETERMINATION OF QUANTUM OF ADDITION ON ACCOUNT OF UNEXPLAINED CASH/ASSETS/I NTERESTS. KEEPING IN VIEW THIS SPECIFIC DIRECTION GIVEN BY THE TRIBUNAL, WE DO NOT FIND OURSELVES IN AGREEMENT WITH THE CONTENTION OF THE L D. COUNSEL FOR THE ASSESSEE THAT THE LD. CIT(A) HAS GONE BEYOND THE SC OPE OF THE DIRECTION GIVEN BY THE TRIBUNAL IN DETERMINING THE EXACT QUAN TUM OF ADDITION MADE ON ACCOUNT OF UNEXPLAINED CASH. WE THEREFORE OVERRU LE THE OBJECTION RAISED BY HIM IN THIS REGARD AND PROCEED TO DECIDE THE ISSUE RELATING TO QUANTIFICATION OF UNDISCLOSED INCOME ON MERIT. 10. AS REGARDS THE ADDITIONAL GROUND FILED BY THE ASSESSEE, IT IS OBSERVED THAT THE ISSUE RAISED THEREIN RELATING TO QUANTIFICATION OF UNEXPLAINED CASH FOUND AT THE TIME OF SEARCH IS VER Y MUCH ARISING FROM THE ORDER OF THE LD. CIT(A) AND THE SAME IS ALSO LI NKED WITH THE MAIN ISSUE AS ORIGINALLY RAISED IN THE APPEAL OF THE ASS ESSEE. WE THEREFORE ADMIT THE SAID ADDITIONAL GROUND AND PROCEED TO DEC IDE THE SAME ON MERIT ALONG WITH THE ORIGINAL GROUND AS MODIFIED BY THE ASSESSEE. 11. IT IS OBSERVED THAT THE QUANTUM OF UNEXPLAINED CASH FOUND AT THE TIME OF SEARCH AS WELL AS THE TOTAL UNDISCLOSED INC OME OF THE ASSESSEE HAS BEEN DETERMINED BY THE LD. CIT(A) AT RS. 5,28,5 00/- AND RS. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 11 46,04,348/- RESPECTIVELY ON THE BASIS OF FOLLOWING WORKING GIVEN ON PAGE 6 OF HIS IMPUGNED ORDER :- 1) CASH SALE OF SCRAP/MACHINERY- 24.92 2) CASH INTEREST FROM RAMNIT CHAWDA- 7.50 ------- 32.42 32.42 LESS OUTGOINGS A) PERSONAL EXPENDITURE INCLUDING. RENOVATION AND REPAIRS AS PER SEIZED DOCUMENTS- 10.80 B) AMOUNT DISTRIBUTED TO PARTNERS (EXCLUDING APPELLANT)- . 7.50 C) AMOUNT GIVEN TO DADA- 3.82 22.12 ------ ------- 10.30 IT IS THUS EVIDENT THAT THE CASH FOUND DURING THE C OURSE OF SEARCH IN THE PREMISES OF THE APPELLANT TO THE EXTENT OF RS.10.30 LACS GETS ACCOUNTED- FOR FROM CASH SALE OF SCRAP/MACHINERY AND INTEREST FROM THE BUILDER. THEREFORE THE EXCESS CASH FOUND OF RS. 5,28,500/- S TILL REMAINS UNEXPLAINED. THE TOTAL UNDISCLOSED INCOME SHOULD TH EREFORE BE WORKED OUT AS UNDER:- (RUPEES ) A) INCOME DECLARED IN THE RETURN 2,87,871 B) ADDITION ON ACCOUNT OF UNEXPLAINED JEWELLERY 5, 20,866 C) UNEXPLAINED CASH CREDIT 25,000 D) INTEREST FROM BUILDERS 7,50,000 E) INCOME FROM SALE OF SCRAP/MACHINES 24, 92,111 F) EXCESS CASH FOUND BUT NOT EXPLAINED 5,28.500 ========= 46,04,348 ========= AT THE TIME OF HEARING BEFORE US, THE LD. COUNSEL F OR THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT OF RS. 10.80 LACS TAKEN B Y THE LD. CIT(A) AS CASH OUTGOING ON ACCOUNT OF PERSONAL EXPENDITURE IN CLUDING REPAIRS AND RENOVATION IS WITHOUT ANY BASIS. HOWEVER, AS MENTI ONED IN PARA 8 OF HIS IMPUGNED ORDER BY THE LD. CIT(A), CASH OF RS. 10.80 LACS WAS STATED BY THE ASSESSEE HIMSELF TO HAVE BEEN SPENT ON PERSONAL EXPENDITURE AS PER IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 12 THE SEIZED DOCUMENTS. AS REGARDS THE OTHER CONTENT ION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE IN THIS REGARD THAT THE CA SH OF RS. 7.50 LACS RECEIVED AS INTEREST AND DISTRIBUTED AMONGST THE PA RTNERS WAS USED TO MEET THE PERSONAL EXPENDITURE OF RS. 10.80 LACS, IT IS OBSERVED THAT THE LD. CIT(A) HAS SPECIFICALLY NOTED IN THE WORKING GI VEN ABOVE THAT THE AMOUNT OF RS. 7.50 LACS WAS DISTRIBUTED TO THE PART NERS EXCLUDING THE ASSESSEE WHEREAS THE PERSONAL EXPENDITURE OF RS. 10 .80 LACS WAS FOUND TO BE INCURRED BY THE ASSESSEE. WE THEREFORE FIND NO MISTAKE IN THE WORKING MADE BY THE LD. CIT(A) WHILE QUANTIFYING TH E UNEXPLAINED CASH FOUND DURING THE COURSE OF SEARCH AT RS. 5,28,500/- . IT IS ALSO NOTED THAT IF THE SAID AMOUNT OF UNEXPLAINED CASH IS ADDED TO THE OTHER UNDISCLOSED INCOME OF THE ASSESSEE AS COMPUTED BY THE A.O. INCL UDING CASH SALE OF SCRAP/MACHINERY, TOTAL UNDISCLOSED INCOME OF THE AS SESSEE WOULD COME TO RS. 46,04,348/- AS COMPUTED BY THE LD. CIT(A) AN D SINCE THE SAME IS MORE THAN THE UNDISCLOSED INCOME OF THE ASSESSEE AS SESSED BY THE A.O. AT RS. 45,83,737/-, WE ARE OF THE VIEW THAT NO FURT HER RELIEF TO THE ASSESSEE IS WARRANTED AFTER THE QUANTIFICATION OF C ORRECT UNDISCLOSED INCOME AS PER THE DIRECTION OF THE TRIBUNAL AS RIGH TLY HELD BY THE LD. CIT(A). WE THEREFORE FIND NO INFIRMITY IN THE IMPU GNED ORDER OF THE LD. CIT(A) ON THIS ISSUE AND UPHOLDING THE SAME, WE DIS MISS THE APPEAL OF THE ASSESSEE FILED IN THE CASE OF MR. VASANT B. THA KOOR IN IT(SS)A NO. 60/MUM/2009. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 13 12. NOW WE SHALL TAKE UP THE APPEAL FILED BY MR. MA DHUKAR B. THAKUR IN IT(SS)A NO. 77/MUM/2009 WHICH IS DIRECTED AGAINS T THE ORDER OF THE LD. CIT(A)- XXXII, MUMBAI DTD. 23-4-2009. 13. THE SOLITARY ISSUE INVOLVED IN THIS APPEAL RELA TES TO THE QUANTIFICATION OF EXACT AMOUNT OF UNDISCLOSED INCOM E OF THE ASSESSEE ON ACCOUNT OF SALE OF SCRAP/MACHINERY. 14. IN THIS CASE, THE ISSUE INVOLVED AS WELL AS ALL THE MATERIAL FACTS RELEVANT THERETO ARE ALMOST SIMILAR TO THAT OF THE CASE OF MR. VASANT THAKOOR INASMUCH AS AFTER THE INITIAL ROUND OF LITI GATION ARISING FROM THE BLOCK ASSESSMENT ORDER PASSED BY THE A.O. IN PURSUA NCE OF THE SEARCH AND SEIZURE OPERATION, A FRESH ORDER WAS PASSED BY THE A.O. U/S 158 BC R.W.S. 263 & 250 OF THE ACT ON 30-4-2004 COMPUTING THE UNDISCLOSED INCOME OF THE ASSESSEE AT RS. 21,76,560/- AFTER MAK ING ADDITION ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY AT RS. 12.5 0 LACS. THEREAFTER THE APPEAL FILED BY THE DEPARTMENT AGAINST THE ORDER OF THE LD. CIT(A) WAS ALLOWED BY THE TRIBUNAL HOLDING THAT THE UNDISCLOSE D INCOME WAS RIGHTLY ASSESSED BY THE A.O. IN THE INDIVIDUAL HANDS OF THE ASSESSEE. THE ASSESSEE THEN MOVED A MISC. APPLICATION BEFORE THE TRIBUNAL AND WHILE DISPOSING OF THE SAME, THE TRIBUNAL SENT BACK THE I SSUE TO THE FILE OF THE LD. CIT(A) WITH A DIRECTION TO DETERMINE THE EXACT QUANTUM OF UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED CA SH/ASSETS/INTERESTS. AS PER THE DIRECTION OF THE TRIBUNAL, THE LD. CIT(A ) CARRIED OUT THE IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 14 EXERCISE OF EXACT QUANTIFICATION OF UNDISCLOSED INC OME OF THE ASSESSEE AND AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESS EE AS WELL AS THE MATERIAL AVAILABLE ON RECORD, HE DECIDED THE ISSUE REGARDING QUANTIFICATION FINALLY IN PARA 12 OF HIS IMPUGNED O RDER WHICH READS AS UNDER:- 12. NO OTHER MATERIAL OR DOCUMENT INDICATING ANY O THER CASH SALE OF SCRAP/MACHINERY BY THE APPELLANT WAS FOUND DURIN G SEARCH. THE APPELLANT GROUP HAD SOLD ITS FACTORY AND MISCEL LANEOUS ITEMS OF SCRAP/MACHINERY (WHICH WERE NOT SOLD TO THE BUIL DER). ON THE CONSIDERATION OF THE SUBMISSIONS MADE BY THE AR AND THE DETAILED EXAMINATION OF THE FACTS AS DISCUSSED ABOVE, IT STA NDS DEMONSTRATED THAT THE SALE OF SCRAP AS NOTED IN THE LOOSES PAPERS FOUND FROM THE POSSESSION OF THE ASSESSEE TO THE EX TENT OF 2,94,3OO/- IS OVER AND ABOVE THE AMOUNT ASSESSED IN THE HANDS OF SHRI VASANT B. THAKOOR. FURTHERMORE, OUT OF 9 MA CHINES REFLECTED IN APPELLANTS DIARY, IT IS SEEN THAT 7 S UCH MACHINES HAVE ALREADY BEEN CONSIDERED IN THE HANDS OF SHRI VASANT B THAKOOR AND BALANCE 2 MACHINES ARE OVER AND ABOVE THAT. HEN CE AVERAGE VALUE OF SALE PRICE OF THESE MACHINES IS LIABLE TO BE ASSESSED IN THE HANDS OF THE APPELLANT AS HIS UNDISCLOSED INCOME. T HUS UNDISCLOSED INCOME OF THE APPELLANT FROM SALE OF SC RAP/MACHINERY SHOULD BE ESTIMATED AT RS.4,94,300/-. THE ADDITION MADE BY THE A.O. IN THIS REGARD IS THEREFORE UPHELD TO THE EXTE NT OF RS.4,94,3OO/- AND BALANCE OF RS.7,55,700/- IS DELET ED. THE A.O. IS DIRECTED ACCORDINGLY. THE AGGREGATE UNDISCLOSED INCOME OF THE APPELLANT FOR BLOCK PERIOD WOULD THEREFORE BE RS.14 ,20,860/- . THE LD. CIT(A) THUS HELD THAT THE UNDISCLOSED INCOM E OF THE ASSESSEE FROM SALE OF SCRAP/MACHINERY SHOULD BE ESTIMATED AT RS. 4,94,300/- AS AGAINST THE ESTIMATION OF RS. 12,50,000/- MADE BY T HE A.O. AND ALLOWED A RELIEF OF RS. 7,55,700/- TO THE ASSESSEE. STILL AGGRIEVED, THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 15. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. COUNSEL FOR THE IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 15 ASSESSEE HAS NOT MADE ANY SUBMISSION ON THE ISSUE O F QUANTIFICATION OF UNDISCLOSED INCOME MADE BY THE LD. CIT(A) ON MERIT. HE HOWEVER HAS RAISED THE SIMILAR PRELIMINARY OBJECTION AS RAISED IN THE CASE OF MR. VASANT THAKOOR THAT THE LD. CIT(A) HAS GONE BEYOND THE SCOPE OF ORDER OF THE TRIBUNAL IN DETERMINING THE QUANTUM OF ADDITION ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY. SINCE SIMILAR ISSUE INVOL VED IN IDENTICAL FACTS AND CIRCUMSTANCES HAS ALREADY BEEN DECIDED BY US HO LDING THAT A DIRECTION WAS GIVEN BY THE TRIBUNAL TO THE LD. CIT( A) TO DETERMINE THE EXACT QUANTUM OF UNEXPLAINED CASH/ASSETS/INTERESTS AND THE ISSUE RELATING TO ESTIMATION OF SALE OF SCRAP/MACHINERY B EING INCIDENTAL TO AND FORMING PART OF THE QUANTIFICATION OF UNEXPLAINED C ASH/ASSETS/INTERESTS, IT IS NOT A CASE WHERE THE LD. CIT(A) CAN BE SAID T O HAVE GONE BEYOND THE DIRECTION OF THE TRIBUNAL. FOLLOWING THE SAID CONC LUSION DRAWN IN THE CASE OF MR. VASANT THAKOOR (SUPRA), WE UPHOLD THE I MPUGNED ORDER OF THE LD. CIT(A) ESTIMATING THE UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF SALE OF SCRAP/MACHINERY AT RS. 4,94,300/- AND DI SMISS THIS APPEAL OF THE ASSESSEE. 16. NOW WE SHALL TAKE UP THE APPEAL FILED IN THE CA SE OF LATE SHRI BALCHANDRA B. THAKOORE BY LEGAL HEIR MRS. SUNITA SA MIR SAO BEING IT(SS)A NO. 65/MUM/09 WHICH IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) - XXXII MUMBAI DTD. 16-3-2009 WHEREBY HE SUSTAINED THE PENALTY IMPOSED BY THE A.O. U/S 158BFA(2) OF THE ACT TO THE EXTENT IT WAS IN RESPECT OF ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE ON IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 16 ACCOUNT OF UNEXPLAINED FDS AMOUNTING TO RS. 4,20,00 0/- AND INTEREST RECEIVED IN CASH FROM THE BUILDER AMOUNTING TO RS. 7,38,000/-. 17. IN PURSUANCE OF THE SEARCH AND SEIZURE ACTION T AKEN IN ASSESSEES CASE, NOTICE U/S 158BC WAS ISSUED BY THE A.O. IN RE SPONSE TO WHICH RETURN FOR THE BLOCK PERIOD WAS FILED BY THE ASSESS EE DECLARING HIS UNDISCLOSED INCOME AT RS. 1,40,088/- ON ACCOUNT OF EXCESS JEWELLERY FOUND DURING THE COURSE OF SEARCH. THEREAFTER, ASS ESSMENT FOR THE BLOCK PERIOD WAS FRAMED BY THE A.O. U/S 158 ON 30-9-1999 AND AFTER THE INITIAL ROUND OF LITIGATION, A FRESH ORDER U/S 158 BC R.W.S . 263 & 250 OF THE ACT WAS PASSED BY THE A.O. ON 30-4-2004 MAKING THE FOLL OWING THREE ADDITIONS:- (I) I NTEREST RECEIVED IN CASH RS. 7,38,000/- (II) INCOME ON SALE OF SCRAP/MACHINERY RS. 7 LACS (III) UNEXPLAINED FDS RS. 4,20,000/- AFTER THE CONFIRMATION OF THE ABOVE THREE ADDITIONS BY THE TRIBUNAL VIDE ITS ORDER DTD. 31-8-2005 PASSED IN THE QUANTUM PROC EEDINGS IN ITA NO. 161/MUM/2001, NOTICE WAS ISSUED BY THE A.O. REQUIRI NG THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY U/S 158 BFA(2) SHOULD NOT BE IMPOSED IN RESPECT OF ALL THE THREE ADDITIONS MADE TO HIS UNDI SCLOSED INCOME. IN REPLY, THE FOLLOWING SUBMISSIONS WERE MADE BY THE A SSESSEE IN WRITING VIDE HIS LETTER DTD. 21-01-2006 :- IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 17 1. AT THE OUTSET, IT BEARS MENTION THAT IN VIEW OF THE CONTEMPLATED ACTION OF FLING APPEAL WITH THE HIGH C OURT OF MUMBAI AGAINST THE ORDER OF THE TRIBUNAL, IT WILL BE APPRE CIATED THAT THE STATUS OF ASSESSED INCOME HAS NOT REACHED THE STAGE OF FINALITY AS YET WE WILL FILE WITH YOU A COPY OF THE APPEAL PAPE RS AFTER FILING THE APPEAL WITH THE HIGH COURT OF MUMBAI. 2. FROM THE AFORESAID SEQUENCE OF EVENTS, IT WILL B E NOTICED BY YOU THAT THE QUANTUM OF ASSESSED INCOME HAS UNDERGO NE VARIATION AT MANY A STAGE OF THE PROCEEDINGS. IT IS MANIFEST THAT THE AUTHORITIES HAVE TAKEN DIFFERING VIEWS AT VARIOUS S TAGES OF THE PROCEEDINGS. IT IS, THEREFORE, OBVIOUS THAT THE NAT URE AND QUANTUM OF THE UNDISCLOSED INCOME HAS BEEN THE SUBJECT MATT ER OF DIFFERING VIEW POINTS EITHER IN FAVOUR OF OR AGAINST THE ASSE SSEE. IT IS OUR PRIMARY SUBMISSION THAT WHEN THE STATUS OF UNDISCLO SED INCOME HAS BEEN SUBJECTED TO THE RESOLUTION OF DISPUTES IN VOLVING CONTENTIOUS QUESTIONS OF LAW AND FACT, NO PENALTY S HOULD AT ALL BE LEVIED U/S 158BFA OF THE ACT. 3. WITHOUT PREJUDICE TO THE AFORESAID, WE NOW PROCE ED TO MAKE OUR SUBMISSIONS ON THE MERITS OF THE CASE, IN RESPE CT OF EACH OF THE ELEMENTS OF UNDISCLOSED INCOME, WHICH SURVIVE, AT THIS STAGE, AS PER THE ORDER OF THE TRIBUNAL. FOR THIS PURPOSE, SINCE THE ORDER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL HAS NOT BEEN RECEIVED AS YET, WE HAVE TAKEN THE STATUS OF UNDISCLOSED INCOME AS PER THE ENCLOSED WORKING. FURTHER, OUR SUBMISSIONS ARE CONF INED TO THE ADDITIONS OF UNDISCLOSED INCOME OVER AND ABOVE THE UNDISCLOSED INCOME THAT WAS RETURNED BY THE ASSESSEE. A) TWO ELEMENTS OF UNDISCLOSED INCOME ARE BEING TAK EN TOGETHER IN VIEW OF THE COMMONALITY OF THE FACTS BE ING INTEREST OF RS 7.38 LKHS AND INCOME OF SALE OF SCRAP / MACHINES OF RS 7 LAKHS. I) THE ADDITION MADE IN THE ORIGINAL ASSESSMENT ORD ER WAS SET ASIDE BY THE CIT(A) WITH A DIRECTION THAT THE SAID INCOME SHOULD BE ASSESSED IN THE HANDS OF THE PARTNERSHIP FIRM AFTER CONDUCTING CERTAIN ENQUIRIES. II) IT IS NOTEWORTHY THAT IN THE ORDER DATED 28.03. 03 GIVING EFFECT TO THE ORDER OF THE CIT(A), THESE ADDITIONS WERE DELETED. III) HOWEVER, THE CIT SET ASIDE THIS ORDER U/S 263 AS A RESULT OF WHICH THE ASSESSMENT WAS REFRAMED AND THESE ELEMENT S OF UNDISCLOSED INCOME WERE RESTORED AS PER THE ORDER D T 30.04.04. IV) AS A FURTHER DEVELOPMENT THE TRIBUNAL HAS SET A SIDE THE DIRECTIONS OF CIT(A). AS STATED EARLIER, THE ASSESS EE IS IN THE PROCESS OF FILING APPEAL WITH THE HONBLE HIGH COUR T OF MUMBAI AGAINST THE ORDER OF THE TRIBUNAL. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 18 V) THIS IS A CASE WHERE TWO APPELLATE AUTHORITIES TOOK DIVERGENT VIEWS. FURTHER, EVEN THE ADMINISTRATIVE AUTHORITIES HAVE TAKEN DIVERGENT VIEWS REGARDING THE INTERPRETATION OF THE ORDER OF THE CIT(A). WE, THEREFORE, SUBMIT THAT THIS IS A CLEAR CASE WHERE THE ADDITIONS HAVE BEEN SUBJECTED TO CONFLICTING PROCES S OF ADJUDICATION AT THE HANDS OF APPELLATE AND ADMINIST RATIVE AUTHORITIES. IT IS OUR SUBMISSION THAT SUCH CONTENT IOUS ADDITIONS CANNOT BE SUBJECT TO LEVY OF PENALTY U/S 158BFA OF THE ACT. 18. AFTER CONSIDERING THE ABOVE SUBMISSIONS MADE BY THE ASSESSEE, THE A.O. FOUND THAT THERE WAS NOTHING NEW IN THE SAID S UBMISSIONS AND WHAT CONTAINED THEREIN WAS MERELY REITERATION OF THE SUB MISSIONS MADE DURING THE COURSE OF QUANTUM PROCEEDINGS WHICH WAS ALREADY CONSIDERED BY HIM AS WELL AS BY THE APPELLATE AUTHORITY. HE THEREFOR E REJECTED THE SAID SUBMISSION TREATING THE SAME AS UNACCEPTABLE AND IM POSED PENALTY OF RS. 11,14,801/- U/S 158 BFA(2) OF THE ACT BEING 100 % OF TAX SOUGHT TO BE EVADED BY THE ASSESSEE IN RESPECT OF ADDITIONS M ADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE. 19. THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LD. C IT(A). IT WAS SUBMITTED, AT THE OUTSET, ON BEHALF OF THE ASSESSEE THAT THE I SSUE OF CORRECT DETERMINATION OF UNDISCLOSED INCOME OF THE ASSESSEE HAD BEEN RESTORED BY THE TRIBUNAL TO THE FILE OF THE LD. CIT(A) IN TH E QUANTUM PROCEEDINGS AND ACCORDINGLY IN THE SET ASIDE PROCEEDINGS, THE A DDITION OF RS. 7 LACS MADE ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY WAS DELETED BY THE LD. CIT(A). IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 19 20. AS REGARDS THE REMAINING TWO ADDITIONS, IT WAS SUBMITTED THAT THE SAID AMOUNTS HAD BEEN HELD TO BE LIABLE TO TAX IN T HE HANDS OF THE PARTNERSHIP FIRM BY THE LD. CIT(A) VIDE APPELLATE O RDER DTD. 28-3-2001 AFTER HAVING FOUND THAT THE SAME DID NOT BELONG TO THE ASSESSEE. IT WAS CONTENDED THAT ALTHOUGH THIS DECISION OF THE LD. CI T(A) WAS SUBSEQUENTLY REVERSED BY THE TRIBUNAL, THE DIFFERENCE IN VIEWS E XPRESSED BY THE TWO APPELLATE AUTHORITIES WAS SUFFICIENT TO SHOW THAT T HE ISSUES WERE DEBATABLE AND PENALTY U/S 158 BFA(2) OF THE ACT COU LD NOT BE IMPOSED IN RESPECT OF THE ADDITIONS MADE ON ACCOUNT OF SUCH DE BATABLE ISSUE. IT WAS ALSO SUBMITTED THAT THE ADDITION ON ACCOUNT OF UNEX PLAINED FDS WAS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE RELY ING MERELY ON THE STATEMENT RECORDED U/S 132(4) OF THE ACT WITHOUT AN Y DETECTION/RECOVERY OF ANY FDS RECEIPT IN THE NAME OF THE ASSESSEE. IT WAS CONTENDED THAT THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) OF T HE ACT IN RESPECT OF ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASS ESSEE THUS WAS NOT JUSTIFIED AND THE SAME SHOULD BE CANCELLED. 21. THE LD. CIT(A) DID NOT FIND THE SUBMISSIONS MAD E ON BEHALF OF THE ASSESSEE TO BE ACCEPTABLE. ACCORDING TO HIM, THE P ROVISIONS OF SECTION 158 BFA(2) OF THE ACT WERE DIFFERENT FROM THE PROVI SIONS OF SECTION 271(1)(C) OF THE ACT INASMUCH AS PENALTY U/S 158 BF A(2) OF THE ACT WAS LEVIABLE IF THE UNDISCLOSED INCOME DETERMINED BY TH E A.O. WAS IN EXCESS OF THE INCOME SHOWN BY THE ASSESSEE IN THE RETURN. HE HELD THAT SUFFICIENT TIME WAS AVAILABLE TO THE ASSESSEE AFTER THE DATE OF SEARCH TO IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 20 FILE HIS RETURN OF UNDISCLOSED INCOME AND IT WAS TH US INCUMBENT UPON HIM TO CORRECTLY COMPUTE HIS UNDISCLOSED INCOME FOR THE BLOCK PERIOD AND DISCLOSE THE SAME IN HIS RETURN. HE HELD THAT THE ADVERSE FINDINGS OF THE SEARCH AND THE STATEMENT OF THE ASSESSEE RECORD ED U/S 132(4) OF THE ACT WERE SUFFICIENT TO ESTABLISH THE UNDISCLOSED IN COME OF THE ASSESSEE ON ACCOUNT OF INTEREST INCOME RECEIVED IN CASH FROM BU ILDERS AS WELL AS UNEXPLAINED FDS BELONGING TO HIM. HE ALSO NOTED THA T IN HIS STATEMENT RECORDED DURING THE COURSE OF SEARCH, THE ASSESSEE HAD ADMITTED HIS UNDISCLOSED INCOME AT RS. 15 LACS CONSISTING OF CAS H RECEIPT OF INTEREST AND FDS AND THE RETRACTION OF THE SAID STATEMENT MA DE BY THE ASSESSEE AFTER A PERIOD OF ABOUT TWO YEARS WAS A RESULT OF A N AFTER THOUGHT WITH AN INTENTION TO COMPLICATE THIS SIMPLE ISSUE. HE HELD THAT ALTHOUGH THE ASSESSEE HAD MADE AN ATTEMPT TO CONTEND THAT THE UN DISCLOSED INCOME ACCEPTED BY HIM IN THE SEARCH WAS ACTUALLY BELONGIN G TO THE PARTNERSHIP FIRM, THE SAID CONTENTION WAS NOT FINALLY ACCEPTED BY THE TRIBUNAL. THE LD. CIT(A) HELD THAT KEEPING IN VIEW OF THESE FACTS AND CIRCUMSTANCES OF THE CASE, PENALTY U/S 158 BFA (2) WAS LEVIABLE ATLE AST IN RESPECT OF TWO ADDITIONS OF RS. 4,20,000/- MADE ON ACCOUNT OF UNEX PLAINED FDS AND RS. 7,38,000/- MADE ON ACCOUNT OF INTEREST RECEIVED IN CASH AS THE REMAINING ADDITION OF RS. 7 LACS MADE ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY HAD ALREADY BEEN DELETED IN THE QUA NTUM PROCEEDINGS. ACCORDINGLY HE SUSTAINED THE PENALTY IMPOSED BY THE A.O. TO THE EXTENT IT IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 21 WAS IN RESPECT OF THE SAID TWO ADDITIONS. AGGRIEVE D BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFO RE THE TRIBUNAL. 22. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SET, SUBMITTED THAT THE ISSUE INVOLVED IN ADDITION OF RS. 7,38,000/- ON ACCOUNT OF INTEREST RECEIVED IN CASH FROM THE BUILDER HAS BEEN RAISED B Y THE ASSESSEE IN THE APPEAL FILED BEFORE THE HONBLE BOMBAY HIGH COURT A ND A QUESTION RAISED IN THIS REGARD HAS ALREADY BEEN ADMITTED BY THE HONBLE BOMBAY HIGH COURT AS A SUBSTANTIAL QUESTION OF LAW. RELYI NG ON THE DECISIONS OF THE TRIBUNAL IN THE CASE OF NAYAN BUILDERS AND DEVE LOPERS PVT. LTD. VS. ITO (ITA NO. 2379/MAD/2009 DTD. 18-3-2011), HE CONT ENDED THAT THE ADMISSION OF THE SUBSTANTIAL QUESTION OF LAW BY THE HONBLE BOMBAY HIGH COURT CLEARLY SHOWS THAT THE ADDITION OF RS. 7,58,0 00/- INVOLVE DEBATABLE ISSUE AND PENALTY CANNOT BE IMPOSED IN RESPECT OF T HE SAID ADDITION. AS REGARDS THE ADDITION ON ACCOUNT OF UNEXPLAINED FDS, HE SUBMITTED THAT THE SAID ADDITION WAS MADE TO THE UNDISCLOSED INCOM E OF THE ASSESSEE MERELY ON THE BASIS OF STATEMENT RECORDED DURING TH E COURSE OF SEARCH U/S 132(4) OF THE ACT AND THERE WAS NO EVIDENCE FOU ND DURING COURSE OF SEARCH TO SHOW THE EXISTENCE OF ANY SUCH DEPOSIT IN THE NAME OF THE ASSESSEE. HE CONTENDED THAT THE CASE OF THE ASSESS EE THUS IS NOT A FIT CASE TO IMPOSE PENALTY U/S 158 BFA(2) OF THE ACT AN D THE SAME AS IMPOSED BY THE A.O. AND SUSTAINED BY THE LD. CIT(A) MAY BE CANCELLED. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 22 23. THE LD. D.R., ON THE OTHER HAND, SUBMITTED THAT MERELY BECAUSE SUBSTANTIAL QUESTION OF LAW HAS BEEN ADMITTED BY TH E HONBLE BOMBAY HIGH COURT, IT CANNOT BE SAID THAT THE RELEVANT ISS UE INVOLVED IS A DEBATABLE ISSUE AND PENALTY CANNOT BE IMPOSED IN RE SPECT OF THE ADDITION MADE ON SUCH ISSUE. HE CONTENDED THAT THE ISSUE RE LATING TO IMPOSITION OF PENALTY NEEDS TO BE CONSIDERED AND DECIDED ON ME RITS KEEPING IN VIEW ALL THE RELEVANT FACTS OF THE CASE AS WELL AS THE P ROVISIONS OF LAW. HE CONTENDED THAT ALL THE SUBMISSIONS MADE IN THIS REG ARD ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(A) WHICH HAVE NOW BEEN REITERATED BEFORE THE TRIBUNAL, ARE ALREADY CONSIDERED BY THE LD. CIT(A) AND THE SAME HAVE BEEN REJECTED BY HIM BY PASSING A WELL DISCUSSED AN D A WELL REASONED ORDER. HE ALSO CONTENDED THAT THE ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE HAVING BEEN FINALLY CONFIRME D BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS, THE PENALTY PROVISIONS OF SECTION 158 BFA(2) ARE CLEARLY ATTRACTED. IN SUPPORT OF THIS CONTENTIO N, HE RELIED ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF KANDOI BHOGILAL MULCHAND VS. DCIT (2012) 21 TAXMANN.COM 153 (GUJ). HE THEREFORE RELIED STRONGLY ON THE IMPUGNED ORDER OF THE LD. CI T(A) SUSTAINING THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2). 24. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND AL SO PERUSED THE RELEVANT MATERIAL ON RECORD. AS REGARDS THE CONTEN TION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE RELYING ON THE DECISION OF THE TRIBUNAL IN THE CASE OF NAYAN BUILDERS AND DEVELOPERS PVT. LTD. (S UPRA) THAT THE IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 23 SUBSTANTIAL QUESTION OF LAW HAVING BEEN ALREADY ADM ITTED BY THE HONBLE BOMBAY HIGH COURT ON THE ISSUE OF ADDITION MADE ON ACCOUNT OF INTEREST RECEIVED FROM THE BUILDER IN CASH, NO PENALTY U/S 1 58 BFA(2) CAN BE IMPOSED IN RESPECT OF THE SAID ADDITION INVOLVING A DEBATABLE ISSUE, IT IS OBSERVED THAT A SIMILAR CONTENTION RAISED ON BEHALF OF THE ASSESSEE WAS ACCEPTED BY THE TRIBUNAL IN THE CASE OF SPLENDER CO NSTRUCTION, BUT THE HONBLE DELHI HIGH COURT DID NOT AGREE WITH THE SAM E IN ITS JUDGMENT DELIVERED ON 14-1-2011 IN INCOME TAX APPEAL NO. 197 7 OF 2010 HOLDING THAT THE ADMISSION OF SUBSTANTIAL QUESTION OF LAW BY HONBLE HIGH COURT BY ITSELF WOULD NOT BE SUFFICIENT TO HOLD THAT THE ISSUE WAS DEBATABLE ON WHICH LEVY OF PENALTY COULD NOT BE ATTRACTED. IT WA S HELD THAT THE ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASS ESSEE HAD BEEN CONFIRMED BY THE TRIBUNAL IN THE QUANTUM PROCEEDING S SHOWING CLEARLY THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICUL ARS OF ITS INCOME AND AFTER ADMISSION OF THE APPEAL OF THE ASSESSEE FILED AGAINST THE ORDER OF THE TRIBUNAL, THE SAID APPEAL WAS DISMISSED BY THE HON BLE HIGH COURT. KEEPING IN VIEW THE SAID DECISION OF THE HONBLE DE LHI HIGH COURT, WE REJECT THE CONTENTION RAISED BY THE LD. COUNSEL FOR THE ASSESSEE BEING DEVOID OF MERIT. 25. IT IS OBSERVED THAT THE UNDISCLOSED INCOME ON A CCOUNT OF INTEREST RECEIVED IN CASH AS WELL AS UNEXPLAINED FDS IN RESP ECT OF WHICH THE IMPUGNED PENALTY IS LEVIED, WAS ADMITTED BY THE ASS ESSEE IN HIS STATEMENT RECORDED U/S 132(4) OF THE ACT WHEREIN TH E ASSESSEE HAD NOT IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 24 ACTUALLY ACCEPTED THAT THE SAID INCOME WAS BELONGIN G TO HIM BUT ALSO AGREED TO DISCLOSE THE SAME AS HIS UNDISCLOSED INCO ME IN THE BLOCK RETURN. ALTHOUGH THE ASSESSEE MADE AN ATTEMPT TO R ETRACT THE SAID STATEMENT BY TAKING DIFFERENT STAND THAT THE SAID I NCOME WAS BELONGING TO THE PARTNERSHIP FIRM, SUCH RETRACTION CAME AFTER A LONG GAP OF MORE THAN TWO YEARS AND THE SAME WAS NOT ACCEPTED BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS KEEPING IN VIEW ALL THE FACTS O F THE CASE AS WELL AS THE STATEMENT GIVEN BY THE ASSESSEE U/S 132(4) OF T HE ACT. THE ISSUES INVOLVING THE TWO ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF UNEXPLAINED FDS AND RECEIPT OF INTEREST FROM THE BUILDER IN CASH THUS HAVE BEEN DECIDED AGAINST THE ASSESSEE BY THE TRIBUNAL WHEREBY THE DIFFERENT STAND TAKEN BY THE A SSESSEE AS AN AFTER THOUGHT WITH AN INTENTION TO CREATE A DISPUTE HAS N OT BEEN ACCEPTED AND THE EXPLANATION/SUBMISSION MADE IN THIS REGARD BY T HE ASSESSEE HAS BEEN REJECTED AFTER HAVING FOUND THE SAME TO BE UNSATISFACTORY/UNACCEPTABLE. DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE AGAIN HAS MADE AN ATTEMPT TO REITERATE THE SAME SUBMISSIONS WHICH HAVE ALREADY BEEN REJECTED IN THE QUANTUM PROCEEDINGS BY THE TRIBUNAL. MOREOVER, THERE IS NOT HING NEW BROUGHT ON RECORD BY THE ASSESSEE TO SUPPORT AND SUBSTANTIATE HIS EXPLANATION OR TO ESTABLISH SATISFACTORILY THAT THE SAID EXPLANATION IS BONA-FIDE. IN THE CASE OF KANDOI BHOGILAL MULCHAND VS. DCIT (2012) 21 TAX MANN.COM 153 (GUJ.) CITED BY THE LD. D.R., THE HONBLE GUJARAT H IGH COURT HAS HELD THAT IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 25 THE INCOME WHICH IS DETECTED AS A RESULT OF SEARCH OPERATION UNDER SECTION 132 IS UNDISCLOSED INCOME OF THE ASSESSEE W ITHIN THE MEANING OF SECTION 158 BFA(2) OF THE ACT AND PENALTY PROVISION U/S 158 BFA(2) WOULD ARISE WHEN THE A.O. HAS ASSESSED THE INCOME I N THE BLOCK PERIOD IN EXCESS OF THE INCOME DECLARED BY THE ASSESSEE. KEEPING IN VIEW THE SAID DECISION OF HONBLE GUJARAT HIGH COURT AND HAV ING REGARD TO ALL THESE FACTS OF THE CASE, WE ARE OF THE VIEW THAT TH ERE IS NO JUSTIFIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(A) SUSTAINING THE PENALTY IMPOSED BY THE A.O. 158 BFA(2) OF THE A CT TO THE EXTENT IT IS IN RESPECT OF TWO ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE WHICH HAD BECOME FINAL AT THE STAGE OF THE TRIBUNAL. IN THAT VIEW OF THE MATTER, WE UPHOLD THE ORDER OF THE LD. CIT(A) AND WE DISMISS THE APPEAL FILED BY THE ASSESSEE. 26. NOW WE SHALL TAKE UP THE APPEAL FILED BY MR. MO HAN B. THAKOOR BEING IT(SS)A NO. 66/MUM/2009 WHICH IS DIRECTED AGA INST THE ORDER OF THE LD. CIT(A) XXXII, MUMBAI DTD. 31-03-2009 WHER EBY HE SUSTAINED THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) OF T HE ACT TO THE EXTENT IT WAS IN RESPECT OF ADDITIONS MADE TO THE UNDISCLO SED INCOME OF THE ASSESSEE ON ACCOUNT OF INTEREST RECEIVED IN CASH FR OM THE BUILDER AMOUNTING TO RS. 7,71,000/- AND UNEXPLAINED JEWELLE RY FOUND DURING THE COURSE OF SEARCH AMOUNTING TO RS. 41,305/-. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 26 27. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PER USING THE RELEVANT MATERIAL ON RECORD, IT IS OBSERVED THAT THE ISSUE R ELATING TO PENALTY U/S 158 BFA(2) OF THE ACT IMPOSED IN RESPECT OF ADDITIO N MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF INTEREST RECE IVED IN CASH FROM THE BUILDER IS SIMILAR TO THE ONE INVOLVED IN THE CASE OF LATE SHRI BALCHANDRA B. THAKUR, LEGAL HEIR MRS. SUNITA SAMIR SAO WHICH H AS ALREADY BEEN CONSIDERED AND DECIDED BY US IN THE FOREGOING PORTI ON OF THIS ORDER. SINCE ALL THE MATERIAL FACTS RELEVANT TO THE SAID I SSUE AS INVOLVED IN THE PRESENT CASE AS WELL AS THE SUBMISSIONS MADE BY BOT H THE SIDES ARE SIMILAR TO THAT OF THE CASE OF MR. SHRI BALCHANDRA B. THAKUR, LEGAL HEIR MRS. SUNITA SAMIR SAO (SUPRA) WE FOLLOW OUR CONCLUS ION DRAWN IN THE CASE OF SHRI BALCHANDRA B. THAKUR, LEGAL HEIR MRS. SUNITA SAMIR SAO AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) CON FIRMING THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) OF THE ACT IN RE SPECT OF ADDITION OF RS. 7,71,000/- MADE TO THE UNDISCLOSED INCOME OF TH E ASSESSEE ON ACCOUNT OF INTEREST RECEIVED IN CASH FROM THE BUILD ER. 28. AS REGARDS THE PENALTY IMPOSED IN RESPECT OF AD DITION MADE ON ACCOUNT OF UNEXPLAINED JEWELLERY AMOUNTING TO RS. 4 1,305/-, IT IS OBSERVED THAT OUT OF THE TOTAL JEWELLERY WORTH RS. 6,98,721/- FOUND DURING THE COURSE OF SEARCH, JEWELLERY WORTH RS. 24 ,920/- WAS FOUND TO BE ALREADY DECLARED BY THE ASSESSEE IN HIS WEALTH T AX RETURN. THE SAME THEREFORE WAS TREATED BY THE A.O. EXPLAINED. AS RE GARDS THE BALANCE JEWELLERY, THE ASSESSEE OFFERED THE SAME TO THE EXT ENT OF RS. 2,66,176/- IN IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 27 HIS RETURN OF INCOME ACCEPTING THE SAME AS UNEXPLAI NED AND THE BALANCE JEWELLERY WORTH TO RS. 4,37,725/- WAS EXPLAINED BY THE ASSESSEE AS BELONGINGS OF HIS RELATIVES. THIS EXPLANATION OF T HE ASSESSEE WAS NOT ACCEPTED BY THE A.O. AND HE MADE AN ADDITION OF RS. 4,37,725/- TO THE UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF UN EXPLAINED JEWELLERY. AS NOTED BY THE LD. CIT(A) IN THE PENALTY ORDER PAS SED U/S 158 BFA(2) OF THE ACT, THE SAID ADDITION HAS BEEN RESTRICTED BY T HE LD. CIT(A) TO ONLY RS. 41,305/- VIDE HIS APPELLATE ORDER DTD. 25-11-2003 P ASSED IN THE QUANTUM PROCEEDINGS. THE EXPLANATION OF THE ASSESS EE IN RESPECT OF JEWELLERY FOUND DURING THE COURSE OF SEARCH THUS HA S BEEN SUBSTANTIALLY ACCEPTED IN THE QUANTUM PROCEEDINGS AND KEEPING IN VIEW THE ESTIMATIONS AND APPROPRIATIONS INVOLVED IN THE VALU ATION OF JEWELLERY AS MADE AT DIFFERENT STAGES, WE ARE OF THE VIEW THAT T HE MARGINAL DIFFERENCE OF RS. 41,305/- ADDED TO THE TOTAL INCOME OF THE AS SESSEE ON ACCOUNT OF UNEXPLAINED JEWELLERY CANNOT BE TREATED AS CONCEALM ENT IN ORDER TO ATTRACT PENALTY U/S 158 BFA(2) OF THE ACT. WE THER EFORE SUSTAIN THE PENALTY IMPOSED U/S 158 BFA(2) OF THE ACT ONLY TO T HE EXTENT IT IS IN RESPECT OF ADDITION OF RS. 7,71,000/- MADE TO THE U NDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF INTEREST RECEIVED IN CAS H FROM THE BUILDER AND PARTLY ALLOW THIS APPEAL OF THE ASSESSEE. 28. NOW WE SHALL TAKE UP THE APPEAL FILED BY MR. MA DHUKAR B. THAKOOR BEING IT(SS)A NO. 79/MUM/2009 WHICH IS DIRECTED AG AINST THE ORDER OF THE LD. CIT(A) XXXII, MUMBAI DTD. 20-5-2009 WHERE BY HE SUSTAINED THE IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 28 PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) OF THE A CT TO THE EXTENT IT WAS IN RESPECT OF ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUNT OF INTEREST RECEIVED IN CASH F ROM THE BUILDER AMOUNTING TO RS. 7,52,000/- AND CASH SALE OF SCRAP/ MACHINERY AMOUNTING TO RS. 4,94,300/-. 29. IN THIS CASE, THE ISSUE INVOLVED AS WELL AS MAT ERIAL FACTS RELEVANT THERETO ARE SIMILAR TO THE CASE OF LATE SHRI BALCHA NDRA B. THAKUR, LEGAL HEIR MRS. SUNITA SAMIR SAO AND MR. MOHAN B. THAKOOR INASMUCH AS PURSUANT TO THE SEARCH AND SEIZURE OPERATION, BLOCK ASSESSMENT WAS ORIGINALLY COMPLETED BY THE A.O. U/S 158 BC OF THE ACT ON 30-9-1999 AND AFTER THE INITIAL ROUND OF LITIGATION, FRESH ORDER WAS PASSED BY THE A.O. U/S 158 BC R.W.S. 250 & 263 ON 30-4-2004 DETERMININ G TOTAL INCOME OF THE ASSESSEE AT RS. 21,76,560/- AFTER MAKING ADDITI ON OF RS. 12,50,000/- ON ACCOUNT OF CASH SALE OF SCRAP/MACHINERY AND RS. 7,52,000/- ON ACCOUNT OF INTEREST RECEIVED BY THE ASSESSEE IN CAS H FROM THE BUILDER. THEREAFTER, THE MISC. APPLICATION FILED BY THE ASSE SSEE WAS DISPOSED OF BY THE TRIBUNAL DIRECTING THE LD. CIT(A) TO DETERMINE THE EXACT QUANTUM OF ADDITION MADE TO THE UNDISCLOSED INCOME OF THE ASSE SSEE ON ACCOUNT OF CASH/ASSETS/INTERESTS. ACCORDINGLY, THE UNDISCLOSE D INCOME OF THE ASSESSEE ON ACCOUNT OF INTEREST RECEIVED IN CASH FR OM BUILDER WAS QUANTIFIED BY THE LD. CIT(A) AT THE SAME AMOUNT OF RS. 7,50,000/- AS COMPUTED BY THE A.O. HE, HOWEVER, RESTRICTED THE A DDITION OF RS. 12,50,000/- MADE ON ACCOUNT OF CASH SALE OF SCRAP/M ACHINERY TO RS. IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 29 4,94,300/- AND SUSTAINED THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) OF THE ACT TO THE EXTENT IT WAS IN RESPECT O F THE SAID ADDITIONS AS WAS DONE IN THE CASE OF LATE SHRI BALCHANDRA B. THA KUR, LEGAL HEIR MRS. SUNITA SAMIR SAO AND MR. MOHAN B. THAKOOR, THE ASSE SSEES BELONGING TO THE SAME GROUP. 30. AT THE TIME OF HEARING BEFORE US, THE LD. REPRE SENTATIVES OF BOTH THE SIDES HAVE REITERATED THE SAME SUBMISSIONS AS MADE IN THE CASE OF SHRI BALCHANDRA B. THAKUR, LEGAL HEIR MRS. SUNITA SAMIR SAO AND MR. MOHAN B. THAKOOR WHICH HAVE ALREADY BEEN CONSIDERED BY US AND ON SUCH CONSIDERATION, THE ACTION OF THE LD. CIT(A) SUSTAIN ING THE PENALTY IMPOSED BY THE A.O. U/S 158 BFA(2) OF THE ACT HAS BEEN UPHE LD BY US IN THE CASE OF SHRI BALCHANDRA B. THAKUR, LEGAL HEIR MRS. SUNIT A SAMIR SAO AND MR. MOHAN B. THAKOOR. AS HELD BY US IN THE SAID CASES, THERE BEING NOTHING NEW BROUGHT ON RECORD BY THE ASSESSEES AND THE EXPL ANATION OFFERED IN RESPECT OF THE IMPUGNED ADDITIONS MADE TO THE TOTA L INCOME OF THE ASSESSEE, WHICH ARE REITERATED DURING THE PENALTY P ROCEEDINGS, HAVING BEEN ALREADY REJECTED BY THE TRIBUNAL IN THE QUANTU M PROCEEDINGS, WE ARE OF THE VIEW THAT THE ASSESSEE HAS FAILED TO SUP PORT AND SUBSTANTIATE HIS EXPLANATION OFFERED DURING THE COURSE OF PENALT Y PROCEEDING. AS REGARDS THE CONTENTION RAISED BY THE LD. COUNSEL FO R THE ASSESSEE RELYING ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TR IBUNAL IN THE CASE OF NAYAN BUILDERS & DEVELOPERS PVT. LTD. VS. ITO (ITA NO. 2379/MUM/2009 DTD. 18-3-2011) THAT THE ISSUES RAISED BY THE ASSES SEE IN THE APPEAL FILED IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 30 BEFORE THE HONBLE BOMBAY HIGH COURT RELATING TO BO TH THE ADDITIONS MADE ON ACCOUNT OF INTEREST RECEIVED IN CASH AND SA LE OF SCRAP/MACHINERY HAVING BEEN ADMITTED BY THE HONBLE BOMBAY HIGH COURT AS A SUBSTANTIAL QUESTIONS OF LAW, IT BECOMES APPARENT THAT THE SAID ADDITIONS INVOLVE DEBATABLE ISSUES FOR WHICH P ENALTY CANNOT BE IMPOSED, WE HAVE ALREADY NOTED THAT A SIMILAR VIEW WAS TAKEN BY THE TRIBUNAL IN THE CASE OF CIT VS. SPLENDER CONSTRUCTI ON BUT THE HONBLE DELHI HIGH COURT DID NOT AGREE WITH THE SAME IN ITS JUDGMENT DELIVERED ON 14-1-2011 IN INCOME TAX APPEAL NO. 1977 OF 2010 HOLDING THAT THE ADMISSION OF SUBSTANTIAL QUESTION OF LAW BY HONBL E HIGH COURT BY ITSELF WOULD NOT BE SUFFICIENT TO HOLD THAT THE ISSUE WAS DEBATABLE ON WHICH LEVY OF PENALTY COULD NOT BE ATTRACTED. IT WAS HELD THAT THE ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE HAD BEEN CONFIRMED BY THE TRIBUNAL IN THE QUANTUM PROCEEDINGS SHOWING CLE ARLY THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF IT S INCOME AND AFTER ADMISSION OF THE APPEAL OF THE ASSESSEE FILED AGAIN ST THE ORDER OF THE TRIBUNAL, THE SAID APPEAL WAS DISMISSED BY THE HON BLE HIGH COURT. IN THE CASE OF KANDOI BHOGILAL MULCHAND VS. DCIT (201 2) 21 TAXMANN.COM 153 (GUJ.) CITED BY THE LD. D.R., THE HONBLE GUJAR AT HIGH COURT HAS HELD THAT THE INCOME WHICH IS DETECTED AS A RESULT OF S EARCH OPERATION UNDER SECTION 132 IS UNDISCLOSED INCOME OF THE ASSESSEE W ITHIN THE MEANING OF SECTION 158 BFA(2) OF THE ACT AND PENALTY PROVISION U/S 158 BFA(2) IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 31 WOULD ARISE WHEN THE A.O. HAS ASSESSED THE INCOME I N THE BLOCK PERIOD IN EXCESS OF THE INCOME DECLARED BY THE ASSESSEE. 31. KEEPING IN VIEW THE RATIO OF THE JUDICIAL PRONO UNCEMENTS DISCUSSED ABOVE AND HAVING REGARD TO ALL THE FACTS OF THE CAS E, WE FIND NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A ) AND FOLLOWING OUR DECISION RENDERED IN THE CASE OF LATE SHRI BALCHAND RA B. THAKUR, LEGAL HEIR MRS. SUNITA SAMIR SAO AND MR. MOHAN B. THAKOOR , WE UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(A) SUSTAINING THE PEN ALTY IMPOSED BY THE A.O. U/S 158 BFA (2) TO THE EXTENT IT IS IN RESPECT OF THE ADDITIONS MADE TO THE UNDISCLOSED INCOME OF THE ASSESSEE ON ACCOUN T OF INTEREST RECEIVED IN CASH FROM BUILDER AMOUNTING TO RS. 7,52,000/- AN D CASH SALE OF SCRAP/MACHINERY AMOUNTING TO RS. 4,94,300/-. 32. IN THE RESULT, THE APPEALS OF THE ASSESSEES BEI NG IT(SS)A NO. 60/MUM/2009, IT(SS)A NO. 77 & 79/MUM/2009 AND IT(SS )A NO. 65/MUM/2009 ARE DISMISSED WHEREAS IT(SS)A NO. 66/M UM/2009 IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-03-2013. SD/- (SANJAY GARG ) JUDICIAL MEMBER SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER MUMBAI, DATED : 20-03-2013. RK IT(SS)A NOS. 60/M/09, 77 & 79/M/09 65/M/09 & 66/ M/09 32 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- 22, MUMBA I 4. CIT 10, MUMBAI. 5. DEPARTMENTAL REPRESENTATIVE, BENCH E, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI