Sh. Badan Shivaji Moze, Pune v. Dy. CIT,Central Circle-1(1),, Pune

ITA 1029/PUN/2009 | 2004-2005
Pronouncement Date: 31-01-2011 | Result: Dismissed

Appeal Details

RSA Number 102924514 RSA 2009
Assessee PAN AJRPM5209Q
Bench Pune
Appeal Number ITA 1029/PUN/2009
Duration Of Justice 1 year(s) 5 month(s) 4 day(s)
Appellant Sh. Badan Shivaji Moze, Pune
Respondent Dy. CIT,Central Circle-1(1),, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 31-01-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 31-01-2011
Date Of Final Hearing 18-01-2011
Next Hearing Date 18-01-2011
Assessment Year 2004-2005
Appeal Filed On 26-08-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI I.C. SUDHIR (JM) AND SHRI G.S. PANNU (AM) ITA NO. 1025 TO 1029 /PN/200 9 8 ( ASSTT. YEAR S : 1999 - 2000 &2001 - 02 TO 2004 - 05 ) SHRI BABAN SHIAJI MOZE MOZE ALI LOHEGAON TAL. HAVELI DIS T. PUNE - 411032 PAN : AJRPM5209Q .. APPELLANT V. DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE - 1(1) PUNE . RESPONDENT A PPELLANT BY : SHRI S .N. PURANIK RESPONDENT BY : SHRI HEMANT KUMAR LEUVA ORDER PER I.C. SUDHIR JM IN TH E S E APPEAL S THE ASSESSEE HAS QUESTIONED FIRST APPELLATE ORDER WHEREBY LD CIT(A) HAS UPHELD PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT BY THE A.O.. A.Y. 1999 - 2000 (ITA NO. 1025/PN/2009) 2. THE LD. A.R. SUBMITTED THAT THE ASSESSEE IS AN AGRICULTURIS T AND ALSO RUNNING A POULTRY FARM. DURING THE SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASE OF SHRI C.P. MOHANDAS PROPRIETOR KIRTI DEVELOPERS CERTAIN DOCUMENTS PERTAINING TO THE ASSESSEE WERE FOUND. NOTICE U/S. 153 C WAS ISSUED IN RESPONSE TO WH ICH THE ASSESSEE FILED RETURNS OF INCOME FOR THESE ASSESSMENT YEARS DECLARING INCOME FROM POULTRY BUSINESS AND AGRICULTURE. THE A.O. HOWEVER MADE DIFFERENT ADDITIONS IN THE ASSESSMENT FOR THE A.YS. UNDER CONSIDERATION AND ALSO INITIATED PENALTY PROCEE DINGS U/S. 271(1) (C ) AND LEVIED THE PENALTY. HE SUBMITTED THAT THERE WAS NO CONCEALMENT OF PARTICULARS OF INCOME OF ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 2 FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE RELATING TO THOSE ADDITIONS HENCE PROVISIONS OF PENALTY WERE NOT ATTRACTED. WITH THE ASSISTANCE OF A CHART AND THE MATERIAL AVAILABLE ON THE RECORD THE LD. A.R. ADDRESSED EACH OF THE ADDITIONS MADE DURING THE A.YS. THE LD. A.R. SUBMITTED FURTHER THAT THE ASSESSEE ADMITTEDLY WAS NOT MAINTAINING BOOKS OF ACCOUNT THUS ADDITION MADE U/S. 68 OF THE ACT ON PRESUMPTION DOES NOT ATTRACT PENALTY AS IT IS A DEEMING PROVISION. THE ASSESSEE HAD HOWEVER FILED CONFIRMATIONS OF THE CREDITORS. THE LD. A.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1) SMT. PRATIBHAVATI S. ZADBUKE V/S. ITO ITA NO. 986/PN/2004 (A.Y. 1997 - 98) ORDER DT. 18 NOVEMBER 2009 (COPY SUPPLIED). 2) CIT V/S. SANGRUR VANASPATI MILLS LTD. 308 ITR 18 (S.C) (ST.) DT. 19.12.2008 3) JEM GRANITES V/S. DCIT (2009) 120 TTJ 992 (CHENN.) 3. THE LD. D.R ON THE OTHER HAND TRIED TO JUSTIFY THE ORDERS OF THE AUTHORITIES BELOW WITH THE SUBMISSIONS THAT ADDITIONS WERE MADE IN THE ASSESSMENT FRAMED ON THE BASIS OF DOCUMENTS FOUND DURING THE COURSE OF SEARCH HENCE THERE WAS CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING IN ACCURATE PARTICULARS THEREOF TOWARDS THE ADDITIONS ON THE PART OF THE ASSESSEE TO ATTRACT PENAL PROVISIONS. HE PLACED RELIANCE ON THE FOLLOWING DECISIONS : 1) CHUHARMAL V/S. CIT 172 ITR 250 (SC) 2) CIT V/S. DRAPCO ELECTRIC CORPORATION 122 ITR 341 (GUJ .) 4. WE HAVE GONE THROUGH THE ORDERS OF LOWER AUTHORITIES IN VIEW OF THE ARGUMENTS ADVANCED BY THE PARTIES. THERE IS NO DISPUTE ON THE ABOVE NARRATED FACTS BY THE LD. A.R. IN A.Y. 1999 - 2000 PENALTY U/S. 271(1)(C ) AT RS. 15 000/ - HAS BEEN LEVIED FOR T HE ADDITION OF RS. 50 000/ - MADE TO THE RETURNED INCOME. THE SUBMISSION OF THE LD. A.R. IN THIS REGARD REMAINED THAT OUT OF THIS RS. ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 3 50 000/ - THE CONTRIBUTION OF THE ASSESSEE WAS ONLY RS. 25 000/ - AND BALANCE AMOUNT OF RS. 25 000/ - WAS CONTRIBUTED BY MR . SUNIL KHE S E. HE SUBMITTED THAT ADDITION OF RS. 50 000/ - WAS MADE BY THE A.O ON ACCOUNT OF PAYMENT TO SHRI S.G. GAIKWAD. HE SUBMITTED THAT CONFIRMATION OF SHRI SUNIL KHE S E WAS FILED BEFORE THE A.O BUT HE DID NOT TAKE COGNIZANCE OF IT NOR THE LD CIT(A ) CONSIDERED THIS ASPECT OF THE MATTER. THE LD. A.R. SUBMITTED FURTHER THAT WHILE WORKING OUT THE PENALTY THE A.O HAS NOT CONSIDERED THE REDUCTION OF INCOME FROM POULTRY AT RS. 24840/ - AS PER PARA NO. 3 OF THE FIRST APPELLATE ORDER WHEREBY THE LD CIT(A) HAS GIVEN CREDIT OF TELESCOPING OF AD HOC ADDITION ON THE GROUND THAT ADDITION OF RS. 50 000/ - MADE ON ACCOUNT OF PAYMENT OF ADVANCE FOR LAND IS TO BE SET OFF AGAINST THE INCOME ESTIMATED ON POULTRY BUSINESS. LD CIT(A) OBSERVED THAT THE ADDITION OF RS. 5 0 000/ - WOULD BE REDUCED TO RS. 24 860/ - AS INCOME OF RS. 25 140/ - IS HELD TO BE AVAILABLE TO THE ASSESSEE ON ACCOUNT OF ESTIMATION OF POULTRY INCOME AT RS. 60 000/ - AS AGAINST DISCLOSED AT RS. 34 860/ - . WE THUS FIND THAT THE LD CIT(A) SHOULD HAVE CONSID ERED THE MATERIAL ASPECTS THAT THE ASSESSEE HAD FILED CONFIRMATION OF MR.SUNIL KHESE HAVING CONTRIBUTED RS. 25000/ - PAYMENT TO MR. GAIKWAD WHILE ADJUDICATING VALIDITY OF PENALTY LEVIED AGAINST ADDITION OF RS. 50 000/ - . HE SHOULD HAVE ALSO CONSIDERED THAT IN CASE OF ADDITION BASED ON ESTIMATION OF INCOME IT IS NOT POSSIBLE TO COME TO A CONCLUSION BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OF FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS THE SAID ESTIMA TED ADDITION TO ATTRACT THE PENAL PROVISION U/S. 271(1)(C ) OF THE ACT. IN ITS RECENT DECISION THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SMT. PRATIBHAVATI S. ZADBUKE V/S. ITO (SUPRA) RELYING UPON LATEST DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA V/S. M/S. RAJASTHAN SPINNING & WEAVING MILLS (CIVIL APPEAL NO. 3527 OF 2009 ) ARISING OUT OF SLP HAS COME TO THE CONCLUSION THAT IN A SITUATION WHEN THE ENTIRE RELATED FACTS DULY SUPPORTED BY COGENT EVIDENCE WERE BEFORE THE A.O THEN ON REJECTION OF THOSE EVIDENC E S OF ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 4 THE EXPLANATION OFFERED THE PENALTY FOR CONCEALMENT COULD NOT BE IMPOSED IN AN AUTOMATIC MANNER. THE TRIBUNAL HAS ALSO REFERRED THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF UNION OF INDIA V/S. DHARMENDRA TEXTILE P ROCESSORS 295 ITR 244 (SA). IN CASE OF CIT V/S. SANGRUR VANASPATI MILL LTD. (SUPRA) THE HONBLE SUPREME COURT VIDE ITS ORDER DT. 19.12.2008 HAS BEEN PLEASED TO UPHOLD THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT HOLDING THAT PROVISIONS OF SEC. 2 71(1)(C ) OF THE ACT ARE NOT ATTRACTED WHERE THE INCOME OF THE ASSESSEE IS ASSESSED ON ESTIMATE BASIS AND ADDITIONS ARE MADE THEREIN. UNDER THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE LD CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE PENALTY IN QUESTION A GAINST THE ABOVE STATED ADDITIONS. WE THUS WHILE SETTING ASIDE ORDERS OF THE LOWER AUTHORITIES IN THIS REGARD DIRECT THE A.O TO DELETE THE PENALTY. THE GROUND IS ACCORDINGLY ALLOWED. A.Y. 2001 - 02 (ITA NO. 1026/PN/2009) 5. DURING THE YEAR ON THE BASIS OF CERTAIN DOCUMENTS PERTAINING TO ASSESSEE WHICH WERE FOUND DURING THE COURSE OF SEARCH AND SEIZURE OPERATION CARRIED OUT IN THE CASE OF SHRI. C.P. MOHANDAS ( PROPRIETOR KIRTI DEVELOPERS) THE A.O MADE TWO ADDITIONS OF RS. 75000/ - AND RS. 71 500/ - AGAINST THE DECLARED INCOME FROM POULTRY BUSINESS AT RS. 62 203/ - IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S. 153C OF THE ACT. ADDITION OF RS. 75000/ - WAS MADE ON ESTIMATION FROM POULTRY BUSINESS AND OF RS. 71 500/ - MADE ON ACCOUNT OF EXPENDI TURE INCURRED ON PURCHASE OF STAMP PAPER. BEFORE THE FIRST APPELLATE AUTHORITY THE ADDITION OF RS. 71 500/ - WAS MADE ON ACCOUNT OF PURCHASE OF STAMP PAPER WAS OBJECTED WITH THIS SUBMISSION THAT THE SAID STAMP PAPERS DO NOT BEAR THE NAME OF THE PURCHASER. THE STAMP DUTY WAS BORN BY THE SELLERS AND HENCE NO ADDITION WAS CALLED FOR. THE LD CIT(A) DID NOT AGREE AND UPHELD THE ADDITION. IN THE PENALTY PROCEEDINGS THE CONTENTION OF THE ASSESSEE REMAINED THAT THE EXPLANATION OF THE ASSESSEE TOWARDS THE ADD ITION OF RS. ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 5 71 500/ - HAS NOT BEEN FOUND TO BE FALSE AND HENCE PENALTY CANNOT BE LEVIED. THE LOWER AUTHORITIES HAS LEVIED AND UPHELD THE PENALTY OF RS. 25 097/ - ON THE ADDITION OF RS. 71 599/ - . BEFORE THE TRIBUNAL THE SUBMISSION OF THE LD. A.R. REMAINE D THAT THE ASSESSEE ALONG WITH MR. SUNIL KHE S E HAD PURCHASED LAND FOR RE - SALE ON WHICH STAMP DUTY OF RS. 1 43 000/ - WAS PAID. THE A.O MADE ADDITION ALLEGING THAT 50% OF STAMP DUTY WAS PAID BY THE ASSESSEE. THE CONTENTION OF THE ASSESSEE THROUGH OUT RE MAINED THAT WHOLE STAMP DUTY WAS PAID BY SHRI SUNIL KHE SE . DURING THE COURSE OF PENALTY PROCEEDINGS ASSESSEE HAD SUBMITTED CONFIRMATION FROM MR. SUNIL KHE S E TO SUPPORT ITS EXPLANATION WHICH HAS NOT BEEN FOUND FALSE. CONSIDERING ALL THESE FACTS IN TOTALI TY WE ARE OF THE VIEW THAT PENALTY U/S. 271(1)(C) IS ATTRACTED WHEN IT IS ESTABLISHED BEYOND DOUBT BY THE DEPARTMENT THAT THERE IS CONCEALMENT OF PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE TOWARDS THE ADDITION IN QUESTION. IN THE PRESENT CASE WIT HOUT EXAMINING THE CONFIRMATION OF MR. SUNIL KHE S E IT WAS NOT POSSIBLE FOR THE A.O TO ARRIVE AT A CONCLUSION BEYOUND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OF RS. 71 500/ - OR FURNISHING INACCURATE PARTICULARS THEREOF BY THE ASSESSEE TO ATTRACT THE PENAL PROVISION U/S. 271(1)(C ) OF THE ACT. IT IS AN UNDISPUTED PROPOSITION OF LAW THAT PENALTY PROCEEDINGS U/S. 271(1)(C ) ARE INDEPENDENT OF THE ASSESSMENT PROCEEDINGS. THUS IT IS NOT AN AUTOMATIC PROCESS THAT IN ALL CASES OF ABOVE ADDITIO N LEVY OF PENALTY U/S. 271(1)(C ) IS LEVIED IN CONSEQUENCE. UNDER THE ABOVE CIRCUMSTANCES WE WHILE SETTING ASIDE ORDERS OF THE LOWER AUTHORITIES DIRECT THE A.O TO DELETE THE PENALTY IN QUESTION. THE GROUND IS ALLOWED. 6. IN RESULT APPEAL IS ALLOW ED. A.Y. 2002 - 03 (ITA NO. 1027/PN/2009) 7. DURING THE YEAR IN ITS RETURN OF INCOME FILED IN RESPONSE TO THE NOTICE U/S. 153C THE ASSESSEE DECLARED RS. 69 280/ - AS INCOME FROM POULTRY BUSINESS. THE ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 6 A.O. ESTIMATED INCOME FROM THE SAID POULTRY BUSINE SS AT RS. 80 000/ - BESIDES MAKING ADDITION OF RS. 2 00 000/ - U/S. 68 ON ACCOUNT OF UNSECURED LOAN. THE ADDITION OF RS. 2 00 000/ - WAS SUSTAINED BY THE LD CIT(A). THE A.O. LEVIED PENALTY U/S. 271(1)(C ) AT RS. 61 200/ - ON THE ADDITION OF RS. 2 00 000/ - M ADE U/S. 68 OF THE ACT. THE LD CIT(A) HAS UPHELD THE SAME. THE VIEW OF THE AUTHORITIES BELOW REMAINED THAT ONUS WAS ON THE ASSESSEE TO PROVE THE CLAIM OF UNSECURED LOAN BY PRODUCING RELEVANT RELIABLE AND COGENT MATERIAL TO WHICH THE ASSESSEE FAILED TO. BEFORE THE TRIBUNAL SUBMISSION OF THE ASSESSEE REMAINED THAT ASSESSEE HAD TAKEN CASH LOAN OF RS. 2 00 000/ - FROM SHRI JAYWANT JADHAV AND SHRI VILAS SHANKAR DAGDE. HE SUBMITTED THAT IN THE PRELIMINARY STATEMENTS ITSELF RECORDED IN ANSWER TO QUESTION N O. 12 THE ASSESSEE HAS STATED NAMES AND ADDRESSES OF PERSONS FROM WHOM HE HAD RAISED THE CASH LOANS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE ALSO SUBMITTED THE CONFIRMATION OF LOAN. THE A.O HIMSELF BROUGHT TO THE NOTICE OF THE ASSESSEE THE PROVISIONS OF SECTION 271D STATING THAT EVEN IF THE CASH CREDITS ARE PROVED GENUINE BY PRODUCING THE CREDITORS SINCE THE LOAN TAKEN IS CASH LOAN IT ATTRACTS 100% PENALTY. IN FACT THE A.O ADVISED HIM TO OFFER THE CASH CREDIT AND PAY TAX ON THE SAME INSTEAD OF 100% PENALTY. THEREFORE VIDE LETTER DT. 21.3.2006 THE ASSESSEE SUBMITTED BEFORE THE A.O THAT THESE LOANS MAY BE TREATED AS INCOME. IT DOES NOT HOWEVER MEAN THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTIC ULARS THEREOF ON THE PART OF THE ASSESSEE TOWARDS THE SAID ADDITION. 8. CONSIDERING ABOVE SUBMISSIONS WE FIND SUBSTANCE THEREIN THAT WITHOUT EXAMINING THE CONTENTS OF CONFIRMATION OF THE CREDITORS IT WAS NOT POSSIBLE FOR THE AUTHORITIES BELOW TO COM E TO CONCLUSION BEYOND DOUBT THAT THE AMOUNT OF RS. 2 00 000/ - ADDED U/S. 68 OF THE ACT WAS A CONCEALED INCOME OF THE ASSESSEE OR THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS REGARDING THE SAID INCOME TO ATTRACT PENALTY PROCEEDINGS U/S. 271(1)(C ) OF THE ACT. WE THUS W H ILE SETTING ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 7 ASIDE ORDERS OF THE AUTHORITIES BELOW DIRECT THE A.O TO DELETE THE PENALTY IN QUESTION. THE GROUND IS ACCORDINGLY ALLOWED. 9. IN THE RESULT APPEAL IS ALLOWED. A.Y. 2003 - 04 (ITA NO. 1028/PN/2009) 10. AG AINST THE RET URNED INCOME FROM THE BUSINESS AT RS.81747/ - AND AGRICULTURE AT RS. 1 00 000/ - THE A.O HAS ESTIMATED INCOME FROM POULTRY BUSINESS AT RS. 91 000/ - BESIDES MAKING ADDITION OF RS. 6 51 000/ - ON ACCOUNT OF SHORT TERM CAPITAL GAIN AND RS. 2 00 000/ - U/S. 68 ON ACCOUNT OF UNSECURED LOAN. THE LD CIT(A) DELETED THE ADDITION OF RS. 8 80 000/ - AND REMAINING WAS SUSTAINED. CONSEQUENTLY THE A.O. INITIATED PENALTY PROCEEDINGS IN RESPECT OF ADDITION SUSTAINED BY THE LD CIT(A) AT RS. 2 00 000/ - U/S. 68 OF THE ACT A ND AT RS. 6 51 000/ - MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN. THE LD CIT(A) HAS UPHELD THE SAID PENALTY LEVIED AT RS. 2 68 066/ - . 11. BEFORE US THE LD. A.R. SUBMITTED THAT LIKE IN THE A.Y. 2002 - 03 THE ASSESSEE TO AVOID PENALTY U/S. 271D AS SUGGESTE D BY THE A.O HAS ACCEPTED THE ADDITION OF RS. 2 00 000/ - . THE ASSESSEE HAD HOWEVER PRODUCED 3 OUT OF 4 CREDITORS BUT THE A.O DOUBTED THEIR CREDIT WORTHINESS AND MADE ADDITION. THE ASSESSEE HAD MADE ALL THE NECESSARY DISCLOSURE ABOUT THE CREDIT. THUS ONLY BECAUSE THE A.O DID NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE PENALTY CANNOT BE LEVIED U/S. 271(1)(C ) OF THE ACT ON THE SAID ADDITION. THE LD. A.R. SUBMITTED THAT IN ITS PRELIMINARY STATEMENT IN ANSWER TO QUESTION NO. 12 THE ASSESSEE HIMSELF HAD STATED THE NAMES AND ADDRESSES OF PERSONS FROM WHOM HE HAD RAISED THE CASH LOANS. FURTHER DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE CONFIRMATION OF LOAN WAS FURNISHED BY THE ASSESSEE. 12. CONSIDERING THE ABOVE EXPLANATION OF THE ASSES SEE REGARDING ADDITION OF RS. 2 00 000/ - MADE U/S. 68 OF THE ACT WE ARE OF THE VIEW THAT WHEN PARTICULARS ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 8 OF THE CASH CREDITORS WERE FURNISHED BY THE ASSESSEE BEFORE THE A.O ALONG WITH THEIR CONFIRMATIONS AND OUT OF 4 CREDITORS 3 WERE ALSO PRODUCED BEF ORE THE A.O. I T IS NOT POSSIBLE TO ARRIVE AT A CONCLUSION BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME RELATING TO THE SAID ADDITION OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE TO ATTRACT PENAL PROVISION U/ S. 271(1)(C ) OF THE ACT WE THUS WHILE SETTING ASIDE ORDERS OF THE AUTHORITIES BELOW ON THE ISSUE DIRECT THE A.O TO DELETE THE PENALTY IN QUESTION LEVIED AGAINST THE ADDITION OF RS.2 00 000/ - MADE U/S. 68 OF THE ACT. 13. IN RESPECT OF ADDITION OF RS. 6 51 000/ - MADE ON ACCOUNT OF SHORT TERM CAPITAL GAIN ARISING OUT OF SALE OF LAND THE SUBMISSION OF LD. A.R. REMAINED THAT THE LAND SOLD WAS JOINTLY HELD WITH SHRI SUNIL KHESE. LAND WAS PURCHASED JOINTLY WITH INTENTION TO SELL THE SAME IMMEDIATELY. IT WA S A TRANSACTION OF ASSOCIATION OF PERSONS FROM THE RECORD IT WAS CLEAR THAT MR. MOZE AND MR. KHESE WERE JOINTLY CARRYING ON THE BUSINESS OF REAL ESTATE AGENTS AND EVEN PRIOR TO THIS TRANSACTION THEY HAD EARNED INCOME FROM COMMISSION/BROKERAGE. IT IS CLE AR FROM THE STATEMENTS OF MR. C.P. MOHANDAS OF KIRTI DEVELOPERS RECORDED DURING THE COURSE OF SEARCH THAT THERE WAS PRIOR UNDERSTANDING BETWEEN MR. MOZE AND MR. KHESE THAT LAND WILL BE PURCHASED BY MR. MOZE FROM MR. KHESE AT THE AGREED RATE OF RS. 4 00 0 00/ - PER ACRE AND THE SAME LAND WILL BE SOLD BY MR. MOZE & MR. KHESE AT RS. 6 00 000/ - PER ACRE TO MR. C.P. MOHANDAS. IN THIS REGARD THE LD. A.R. REFERRED PAGE NO. 1B AND 125 OF THE PAPER BOOK. UNDER THESE CIRCUMSTANCES THE OBSERVATION MADE IN FIRST APPELLATE ORDER IS INCORRECT THAT ASSESSEE HAD FAILED TO PRODUCE COGENT EVIDENCE IN SUPPORT OF HIS CLAIM. LD. A.R. SUBMITTED FURTHER THAT A.O.P HAS SUBMITTED ITS SEPARATE RETURNS OF INCOME FOR A.YS. 2003 - 04 AND 2004 - 05 COPIES OF WHICH HAVE BEEN MADE AVA ILABLE AT PAGE NOS. 23 TO 32 OF THE PAPER BOOK. SINCE IT IS A TRANSACTION OF A.O.P THERE WAS NO QUESTION OF OFFERING IT AS CAPITAL GAIN BY THE ASSESSEE IN ITS RETURN OF INCOME SUBMITTED THE LD. A.R. HE SUBMITTED THAT MERELY BECAUSE THE ASSESSEE HAS NOT FILED THE SECOND APPEAL ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 9 AGAINST THE ADDITION TO AVOID PROTRACTED LITIGATION AN INFERENCE CANNOT BE DRAWN THAT THERE WAS CONCEALMENT OF PARTICULARS OF INCOME ON THE PART OF THE ASSESSEE TOWARDS THE ADDITION. 14. CONSIDERING THE ABOVE SUBMISSIONS WE A RE OF THE VIEW THAT EXPLANATION OF THE ASSESSEE THAT A.O.P IN ITS RETURNS OF INCOME FOR THE A.YS. 2003 - 04 AND 2004 - 05 HAD SHOWN THE ABOVE TRANSACTION IN LAND NEED VERIFICATION TO ARRIVE AT A CONCLUSION BEYOND DOUBT THAT THERE WAS CONCEALMENT OF PARTICULAR S OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF ON THE PART OF THE ASSESSEE REGARDING THE ALLEGED CAPITAL GAIN OF RS. 6 51 000/ - . IT IS DIRECTED ACCORDINGLY. THE PENALTY LEVIED IN THIS REGARD IS THUS SET ASIDE FOR RECONSIDERATION IN VIEW OF THE DIRECT ED VERIFICATION OF CLAIM. THE GROUND IS THUS PARTLY ALLOWED. 15. IN THE RESULT ASPPEAL IS PARTLY ALLOWED. A.Y. 2004 - 05 (ITA NO. 1029/PN/2009) 1 6 . THE A.O MADE ADDITION OF RS. 95000/ - ON THE BASIS OF VOUCHERS SIGNED BY THE ASSESSEE FOUND DURING THE COURSE OF SEARCH PROCEEDINGS AT THE PREMISES OF MR. C.P. MOHANDAS. A.O. LEVIED PENALTY AT RS. 28 500/ - ON THE SAID ADDITION WHICH HAS BEEN UPHELD BY THE LD CIT(A). THE CONTENTION OF THE LD. A.R. REMAINED THAT THE A.O IN PARA NO. 10 OF THE ASSESSMENT ORDER HIMSELF HAS MENTIONED THAT THE VOUCHERS ARE NOT DATED. THUS THE ADDITION HAS BEEN MADE ONLY ON PRESUMPTION THAT THESE VOUCHERS ARE RELATING TO A.Y. 2004 - 05 BECAUSE THOSE ARE FOUND IN THE FINANCIAL YEAR IN WHICH SEARCH WAS TAKEN PLACE. THE LD. A. R. SUBMITTED FURTHER THAT PENALTY CANNOT BE SUSTAINED ON THE ADDITION ON PRESUMPTION. WHEN VOUCHERS ARE NOT DATED IT HAS NOT EVEN PROVED THAT IT IS RELATED TO A.Y. 2004 - 05. 1 7 . THE ONLY CONTENTION OF THE ASSESSEE REMAINED THAT IN THE ABSENCE OF DATES ON ABOVE STATED VOUCHERS IT CANNOT BE CONCLUSIVELY ESTABLISHED THAT THE ITA NO 1025 TO 1029 /PN/200 9 BABAN S.SHRI VALLABH CHARITABLE TRUST . MOZE ASSTT. YEAR - 1999 - 2000 2001 - 02TO2004 - 05 PAGE OF 10 10 SAME PERTAINED TO A.Y. UNDER APPEAL. THE ASSESSEE HOWEVER HAS FAILED TO POINT OUT THAT THE SAID INCOME HAS EVER BEEN OFFERED BY HIM FOR TAX. UNDER THESE CIRCUMSTANCES IN OUR VIE W THE A.O WAS FULLY JUSTIFIED IN MAKING AN INFERENCE THAT THE SAID INCOME PERTAINED TO THE PERIOD DURING WHICH THE DOCUMENT PERTAINING TO SUCH INCOME WERE SEIZED. WE ARE THUS OF THE VIEW THAT THE LD CIT(A) WAS JUSTIFIED IN UPHOLDING THE PENALTY LEVIED U/S. 271(1)(C ) OF THE ACT ON THE ADDITION OF RS. 95 000/ - . THE PENALTY LEVIED AT RS. 28 500/ - UPHELD BY THE LD CIT(A) IS THUS AFFIRMED. THE GROUND IS ACCORDINGLY REJECTED. 1 8 . IN RESULT APPEAL IS DISMISSED. 1 9 . IN SUMMARY ITA NO. 1025/PN/2009 TO 1027/PN/2009 ARE ALLOWED ITA NO. 1028/PN/2009 IS PARTLY ALLOWED AND ITA NO. 1029/PN/2009 IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 31ST JANUARY 2011 SD/ - SD/ - ( G.S.PANNU ) ACCOUNTANT MEMBER ( I.C. SUD HIR ) JUDICIAL MEMBER PUNE DATED THE 31ST JANUARY 20 1 1 US COPY OF THE ORDER IS FORWARDED TO: 1. THE A PPELLANT 2. THE RESPONDENT 3. THE CIT - CENTRAL PUNE 4. THE CIT(A) - I PUNE 4 . THE D.R. B BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE