DCIT, Chandigarh v. Smt. Aarti Singhal, Chandigarh

ITA 112/CHANDI/2015 | 2010-2011
Pronouncement Date: 28-04-2015 | Result: Dismissed

Appeal Details

RSA Number 11221514 RSA 2015
Assessee PAN ANRPS7985C
Bench Chandigarh
Appeal Number ITA 112/CHANDI/2015
Duration Of Justice 2 month(s) 29 day(s)
Appellant DCIT, Chandigarh
Respondent Smt. Aarti Singhal, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 28-04-2015
Assessment Year 2010-2011
Appeal Filed On 30-01-2015
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES A CHANDIGARH BEFORE SHRI. BHAVNESH SAINI JUDICIAL MEMBER AND SHRI. T.R. SOOD ACCOUNTANT MEMBER ITA NO. 111/CHD/2015 ASSESSMENT YEAR: 2010-11 THE DCIT VS. SHRI SANJAY SINGAL CENTRAL CIRCLE-I CHANDIGARH CHANDIGARH PAN NO. ANRPS7985C & ITA NO. 112/CHD/2015 ASSESSMENT YEAR: 2010-11 THE DCIT VS. SMT. AARTI SINGAL CENTRAL CIRCLE-I CHANDIGARH CHANDIGARH PAN NO. AEFPS6299L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI AMARVEER SINGH DATE OF HEARING : 13.04.2015 DATE OF PRONOUNCEMENT : 28.04.2015 ORDER PER T.R.SOOD A.M. BOTH THE APPEALS BY THE ASSESSEE AND REVENUE ARE DI RECTED AGAINST THE SEPARATE ORDERS DATED 25.11.2014 PASSED BY THE CIT( A)-3 GURGAON. 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUNDS:- I) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN DELETING THE TOTAL PENALTY AMOU NTING TO RS. 7 81 80 101/- LEVIED US/ 271AAA OF THE ACT IMPO SED BY ASSESSING OFFICER WITHOUT APPRECIATING THE FACTS OF THE CASES. II) WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) WAS RIGHT IN GRANTING RELIEF TO THE ASSESSEE WHEN EVEN THE BASIC REQUIREMENT OF THE SECTION 271AAA IS NOT 2 FULFILLED I.E. THE ASSESSEE FAILED TO ELABORATE THE MANNER IN WHICH THE UNDISCLOSED INCOME WAS DERIVED? 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT THE SEARCH OPERATION WAS CARRIED OUT AT THE RESIDENTIAL / BUSINESS PREMISES OF M/S BHUSHAN GROUP OF CASES ON 4.3.2010. SHRI SANJAY SINGAL THE ASSESSEE WAS A LSO COVERED WITH THIS OPERATION. DURING THE SEARCH VARIOUS INCRIMINATING DOCUMENTS WERE FOUND AND STATEMENT OF SHRI SANJAY SINGAL WAS ALSO RECORDED U /S 132(4) ON 3.3.2010. THE ASSESSEE ADMITTED TO CERTAIN DISCREPANCIES AND ULTI MATELY MADE A SURRENDER OF RS. 302 CRORES IN HIS OWN HAND AS WELL AS IN THE HA NDS OF VARIOUS ASSOCIATES. LATER ON VIDE LETTER DATED 13.4.2010 FILED BEFORE T HE ADDITIONAL DIRECTOR OF INCOME TAX (INV) UNIT-VI BREAK UP OF SURRENDERED AMOUNT WAS GIVEN AS UNDER:- S.NO. NAME OF THE PERSON MAKING DISCLOSURES AMOUNT OF DISCLOSURE MADE 1 SHRI SANJAY SINGAL RS 110 C CRORES 2 SMT. AAARTI SINGAL RS. 140 CRORES 3 M/S BHUSHAN POWER & STEEL LTD RS. 8 CRORES 4 M/S DIYAJYOTI STEEL PVT LTD RS. 10CRORES 5 M/S VISION STEEL PVT LTD RS. 9 CRORES 6 M/S MARSH STEEL PVT LTD RS. 12 CRORES 7 M/S JASMINE STEEL PVT LTD. RS. 13 CRORES 4. ON THE BASIS OF SURRENDERED AMOUNT THE ASSESSEE ULTIMATELY FILED A RETURN DECLARING INCOME OF RS. 1 10 81 41 498/-. DURING A SSESSMENT PROCEEDINGS SOME PROTECTIVE ADDITIONS WERE MADE TO THIS INCOME AND P ENALTY PROCEEDINGS U/S 271AAA WERE ALSO INITIATED. 5. IN PENALTY PROCEEDINGS IN REPLY TO THE SHOW CAUS E NOTICE FOR LEVY OF PENALTY IT WAS MAINLY STATED THAT ASSESSEE HAS ALREADY INCLUDED THE SURRENDERED INCOME IN HIS RETURN AND HAS ALSO SUBSTANTIATED THE MANNER IN WHICH THE INCOME WAS EARNED AND THEREFORE ASSESSEE IS ELIGIBLE FOR IMMUNITY FROM PENALTY IN 3 TERMS OF THE PROVISIONS OF THE ACT. THE ASSESSING OFFICER DID NOT FIND FORCE IN TH ESE SUBMISSIONS AND OBSERVED THAT IT WAS ONLY AFTER THREE MONTHS FROM THE DETECT ION OF VARIOUS INCRIMINATING DOCUMENTS THE M.D. OF THE COMPANY AND HIS WIFE HAS STATED THAT INCOME REFLECTED IN THE DOCUMENTS AROSE OUT OF SPECULATIVE TRANSACTIONS WITHOUT GIVING ANY DETAILS OF SPECULATIONS. HE NOTICED THAT AFTER THE ORDER OF THE SETTLEMENT COMMISSION ULTIMATELY SURRENDERED INCOME IN THE HANDS OF THE ASSESSEE WAS REDUCED TO RS. 78 18 01 013/-. ON THIS AMOUNT PENA LTY @ 10% WAS LEVIED. 6. ON APPEAL BEFORE CIT(A) IT WAS MAINLY STATED T HAT ALL THE QUESTIONS RAISED BY THE INVESTIGATION WING DURING THE SEARCH WERE DULY RESPONDED AND PARTICULAR THE REPLIES ARE ALREADY RECORDED IN THE STATEMENT RECORDED U/S 132(4) OF THE ACT. THE DETAILS OF THE SURRENDERED AMOUNT W ERE FILED ON 13.4.2010 AND 25.5.2010 BEFORE THE ADDITIONAL DIRECTOR OF INCOME TAX (INV) UNIT VI NEW DELHI. THE ASSESSEE WAS NEVER ASKED DURING THE REC ORDING OF STATEMENT U/S 132(4) TO SUBSTANTIATE THE AMOUNT THROUGH WHICH TH E UNDISCLOSED INCOME WAS EARNED. BUT STILL THE SAME WAS SUBSTANTIATED BEFOR E THE ADDITIONAL DIRECTOR OF INCOME TAX. A REFERENCE WAS ALSO MADE TO THE ORDER PASSED BY SETTLEMENT COMMISSION PRINCIPAL BENCH NEW DELHI VIDE ORDER DATED 30.06.2013 IN SA NO. HA/GR51/2011-12/70-IT PASSED U/S 245D(4). IN TH IS ORDER IT WAS HELD AS FOLLOWS:- AFTER HEARING BOTH THE PARTIES WE ARE OF THE VIEW THAT THE INCOME OF THE APPLICANT COMPANY CAN BE QUANTIFIED A T THE AMOUNT OF RS. 239 11 90 780/- MINUS RS. 1 68 26 80 993/- (AMOUNT OF OPENING BALANCE PERTAINING TO SMT. AAART I SINGAL AND SHRI SANJAY SINGAL IN THE SEIZED ANNEXURES) AND BALANCE AMOUNT OF RS. 70 85 09 987/- IS TREATED AS UNDISCLO SED INCOME OF THE APPLICANT COMPANY. AS THE SAID INCOME OF RS . 70 85 09 887/- HAS BEEN DECLARED IN THE HANDS OF SH RI SANJAY SINGAL AND HIS WIFE SMT. AARATI SINGAL WHICH IS TO BE SHIFTED IN THE HANDS OF APPLICANT COMPANY ON THE BASIS OF S TAND TAKEN BY THE DEPARTMENT WE DIRECT THAT THIS INCOME WILL BE EXCLUDED FROM SHRI SANJAY SINGAL AND SMT. AARTI SINGAL IN TH E RATIO OF 107:132 RESPECTIVELY. (REFER PAGES 124-125 PARA 19.5 OF THE ORDER) 4 7. IN THIS BACKGROUND IT WAS SUBMITTED THAT SINCE T HE ASSESSEE HAS ALREADY SUBSTANTIATED THE MANNER IN WHICH INCOME HAS BEEN EARNED THEREFORE THE ASSESSEE IS ELIGIBLE FOR IMMUNITY FROM LEVY OF PENA LTY U/S 271AAA. RELIANCE WAS ALSO PLACED ON THE DECISION CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF ACIT VS. MUNISH KUMAR GOYAL REPORTED IN 45 TAXMANN .COM 563; ACIT C.C. PATIALA VS. GIAN CHAND GUPTA / MOHINDER GUPTA / SAN JAY KUMAR GUPTA IN ITA NOS. 1005/1006/1007/CHD/2013. DCIT CENTRAL CIRCLE-2 CHANDIGARH V AMARJIT GOYAL ADITYA GOYAL KRISHAN KUMAR GOYAL (ITA NO. 1 080 1081 1082/2013). THE LD. CIT(A) AFTER EXAMINING THE SUBMISSIONS FOUN D THAT FACTS ARE IDENTICAL TO THE DECISIONS RELIED ON BY THE ASSESSEE AND THEREF ORE FOLLOWING THE SAME THE PENALTY WAS DELETED. 8. BEFORE US LD. COUNSEL FOR THE ASSESSEE NARRATED THE FACTS AND SUBMITTED THAT ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASS ESSEE BY VARIOUS DECISIONS OF CHANDIGARH BENCH OF THE TRIBUNAL CITED BEFORE LD. C IT(A). 9. ON THE OTHER HAND LD. DR STRONGLY SUPPORTED THE ORDER OF ASSESSING OFFICER. 10. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFU LLY AND FIND THAT IDENTICAL ISSUE CAME UP FOR CONSIDERATION IN THE CASE OF ACIT VS. ACIT CC PATIALA VS. GIAN CHAND GUPTA IN ITA NO. 1005/CHD/2013 AND OTHER S. IN THIS CASE THE ISSUE WAS ADJUDICATED VIDE PARA 4 WHICH IS AS UNDER:- 4 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD WE FIND THAT IDENTICAL ISSUES CAME UP FOR CONSIDERATION OF THE TRIBUNAL IN ITAS NO. 1003 & 1004/2013 IN CASE O F MUNISH KUMAR GOYAL AND HARISH KUMAR SINGLA WHICH WERE ADJUDICATE D VIDE PARAS 8 TO 13 WHICH IS AS UNDER: 8 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY. THE LD. CIT(A) HAS DECIDED THIS ISSUE VIDE PARA 5 W HICH IS AS UNDER: I HAVE CONSIDERED THE BASIS OF PENALTY IMPOSED BY T HE AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. THE PERUSAL OF THE PROVISIONS OF SECTION 271 AAA MAKE IT CLEAR THAT THE PENALTY CAN BE LEVIED ON UNDISCLOSED INCOME OF THE SPECIFIED YEAR IF THE CONDITIONS SPECIFIED IN SUB SECTION (2) OF 5 SECTION 271AAA ARE NOT SATISFIED. IT THEREFORE FO LLOWS THAT FIRST THING TO DETERMINE IS WHAT IS THE AMOUNT OF UNDISCLOSED INCOME UNDER THE GIVEN CIRCUM STANCES. THE CONCEPT OF UNDISCLOSED INCOME HAS BEEN CLEARLY DEFINED BY EXPLANATION TO S ECTION 271AAA AND THE SAME READS AS UNDER:- UNDISCLOSED INCOME MEANS- I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRES ENTED EITHER WHOLLY OR PARTLY BY ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF SEARCH UNDER SECTION 132 WHICH HAS-A A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARC H IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMIS SIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED EITHER WHOLLY OR PARTLY BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOK S OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREV IOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEE N CONDUCTED;. THE PERUSAL OF ABOVE DETAILED DEFINITION SHOWS THAT IT IS EXHAUSTIVE DEFINITION AND THERE IS CLEAR IDENTIFICATION OF THE INCOME REPRESENTED EITHER WH OLLY OR PARTLY BY ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OF TRANSACTIONS FOUND IN THE COURSE OF SEARCH UNDER SE CTION 132. IT IS SEEN THAT THERE IS CLEAR AND DIRECT ASSOCIATION BETWEEN THE INCOME ON ONE HAND A ND ASSETS / DOCUMENTS ON THE OTHER HAND FOUND DURING THE COURSE OF SEARCH. IT FOLLOWS THAT IF CERTAIN INCOME IS NOT REPRESENTED BY ANY ASSETS/DOCUMENTS/ENTRY FOUND DURING THE SEARCH THE SAME WOULD NOT BE COVERED UNDER THE DEFINITION OF UNDISCLOSED INCOME BUT WOULD INVITE P ENALTY PROCEEDINGS U/S 271(1)(C) ON THE FULFILLMENT OF OTHER REQUISITE CONDITIONS. THIS MEA NS THAT ENTIRE DISCLOSURE OF INCOME AT THE TIME OF SEARCH OPERATION MAY NOT FALL UNDER THE DEFINITION OF UNDISCLOSED INCOME IF IT COULD NTO BE RELATABLE TO SOME ASSETS/DOCUMENTS/ENTRY FOUND DURING THE COU RSE OF SEARCH OPERATION. IT ALSO MEANS THAT IF THE AO DURING THE COURSE OF SEARCH OPERATION. IT ALSO MEANS THAT IF THE AO DURING THE COURSE OF SEARCH ASSESSMENT PROCEEDINGS MAKES CERTAIN ADDITIO NS INDEPENDENT OF THE INCRIMINATING MATERIAL/DOCUMENTS FOUND DURING THE COURSE OF SEARC H OPERATION THEN SUCH AN ASSESSED INCOME WOULD NOT INVITE PENALTY PROCEEDINGS U/S 271AAA BUT UNDER SECTION 271(1)(C). IT ALSO MEANS THAT INITIATION OF PENALTY PROCEEDINGS WOULD DEPEND UPON THE NATURE OF THE INCOME ASSESSED AND THERE COULD BE PENALTY PROCEEDINGS U/S 271AAA AS WELL AS 271(1)(C) FOR THE SAME ASSESSMENT YEAR HOWEVER IN RESPECT OF DIFFERENT INCOME. THE AO IN T HE PENALTY ORDER HAS CLEARLY ACCEPTED THAT DISCLOSURE OF INCOME BY THE ASSESSEE TO THE TUNE OF RS. 3 80 12 500/- IS NOT REPRESENTED BY ANY ASSETS/DOCUMENTS FOUND DURING THE COURSE OF SEARCH OPERATION AND HAS ALSO OBSERVED THAT THE SAME WAS PART OF THE UNDISCLOSED INCOME JUST BECAUS E THIS DISCLOSURE HAD COME DURING THE COURSE OF SEARCH AND WAS THEREFORE AS A RESULT OF T HE SEARCH. THERE IS A CLEAR ACCEPTANCE OF THE FACT THAT THE SAID DISCLOSURE IS NOT WITH REFERENCE TO ANY ASSETS/DOCUMENTS FOUND DURING THE COURSE OF SEARCH. IT IS ONLY BECAUSE THE SAID DISCL OSURE HAPPENED DURING THE SEARCH THAT THE SAME HAS BEEN CLUBBED IN THE DEFINITION OF UNDISCLO SED INCOME REQUIRING THE ASSESSEE TO FULFILL THE CONDITION AS SPECIFIED IN SUB SECTION (2) OF 271AAA . I AM OF THE CLEAR VIEW THAT INCOME TO THE EXTENT OF RS. 3 80 12 500/- DOES NOT COME UNDER THE DEFINITION OF UNDISCLOSED INCOME AS DEFINED UNDER SECTION 271AAA AND THEREFORE NO PENALTY U/S 2 71AAA COULD BE LEVIED. THE SECOND ASPECT OF THE PENALTY ORDER PASSED BY THE ASSESSING OFFICE R IS THAT WHETHER THE ASSESSEE HAD FULFILLED THE REQUISITE CONDITIONS AS SPECIFIED UNDER SUB SECTION (2) OF SECTION 271AAA. THE ASSESSING OFFICER HAS ACCEPTED THAT THE ASSESSEE HAD MADE THE DISCLOS URE UNDER SECTION 132(4) DURING THE COURSE OF SEARCH OPERATION AND SPECIFIED THE MANNER OF EAR NING SUCH INCOME AND IT ALSO SUBSTANTIATED THE SAME ON THE BASIS OF SEIZED DOCUMENTS TO THE TU NE OF RS. 19 87 500/-. THE AOS VIEW THAT THE ASSESSEE IS REQUIRED TO SUBSTANTIATE THE QUANTUM OF UNDISCLOSED INCOME DOES NOT SEEM LOGICAL FROM THE BARE READING OF THE PROVISIONS OF SECTION 271A SUB SECTION (2). THE REQUIREMENT OF THE LAW IS THAT THE ASSESSEE SHOULD STATE THE MANNER OF EARNING UNDISCLOSED INCOME AND ALSO SUBSTANTIATE THE SAME. IT WOULD NOT BE CORRECT INTE RPRETATION OF THE PROVISIONS TO STRETCH THE REQUIREMENT TO SUBSTANTIATE THE QUANTUM AS WELL. TH ERE IS NO DOUBT WITH REGARD TO THE FACT THAT THE ASSESSEES MANNER OF EARNING UNDISCLOSED INCOME BEI NG FINANCING ACTIVITIES HAS BEEN SUBSTANTIATED BY THE SEIZED DOCUMENTS. THE REQUIREM ENT OF THE LAW HAS THEREFORE BEEN FULFILLED AS THE ASSESSEE HAD STATED THE MANNER OF EARNING UNACC OUNTED INCOME SUBSTANTIATING THE SAME AND ALSO PAID THE DUE TAXES ALONG WITH THE INTEREST WITHIN THE SPECIFIED TIME LIMIT. EVEN IF THE ENTIRE INCOME BY ANY LOGIC IS INCLUDED IN THE DEFIN ITION OF UNDISCLOSED INCOME THE PENALTY UNDER SECTION 271AAA WOULD NOT BE LEVIABLE BECAUSE OF FUL FILLMENT OF REQUIREMENT OF SUB SECTION (2) OF SECTION 271AAA. 9 WE FURTHER FIND THAT SECTION 271AAA READS AS UNDE R: 271AAA. (1) THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT IN A CASE WHER E SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON 6 OR AFTER THE 1ST DAY OF JUNE 2007 43 [BUT BEFORE THE 1ST DAY OF JULY 2012] THE ASSESSE E SHALL PAY BY WAY OF PENALTY IN ADDITION TO TAX IF ANY PAYA BLE BY HIM A SUM COMPUTED AT THE RATE OF TEN PER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PRE VIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE ( I ) IN THE COURSE OF THE SEARCH IN A STATEMENT UNDE R SUB-SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MANNER IN WHIC H SUCH INCOME HAS BEEN DERIVED; ( II ) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSE D INCOME WAS DERIVED; AND ( III ) PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE ( C ) OF SUB-SECTION (1) OF SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCL OSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL SO FAR AS MAY BE APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION. FOR THE PURPOSES OF THIS SECTION ( A ) 'UNDISCLOSED INCOME' MEANS ( I ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRES ENTED EITHER WHOLLY OR PARTLY BY ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THI NG OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 WHICH HAS ( A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PR EVIOUS YEAR; OR ( B ) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMMISS IONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR ( II ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESE NTED EITHER WHOLLY OR PARTLY BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOKS OF ACCO UNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YE AR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CO NDUCTED; (B) NOT RELEVANT----------------- 10 PLAIN READING OF SUB-SECTION WOULD SHOW THAT IF THE ASSESSEE DURING THE COURSE OF SEARCH IN A STATEMENT ADMITS T O SOME UNDISCLOSED INCOME AND PAY TAXES ON THE SAME THEN P ENALTY CANNOT BE LEVIED IN TERMS OF SUB-SEC (1) OF THIS SECTION. IN THE CASE BEFORE US THE AMOUNT OF RS. 4 CRORES WHICH WAS SURRENDERE D DURING SEARCH HAS BEEN DECLARED BY THE ASSESSEE IN THE RE TURN AND TAXES HAVE BEEN PAID ACCORDINGLY. THEREFORE THE ASSESSEE IS NORMALLY ENTITLED FOR THE IMMUNITY PROVIDED IN SEC 271AAA IT SELF. HOWEVER THE REVENUE HAS RAISED FURTHER DISPUTE THAT WHETHER THE ASSESSEE HAS DISCLOSED THE MANNER IN WHICH INCOME HAS BEEN E ARNED. IN THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER FOLLO WING QUESTIONS AND ANSWERS HAVE BEEN EXTRACTED: Q. DO YOU WANT TO SAY ANYTHING MORE ? ANS. I VOLUNTARILY SURRENDER A SUM OF RS. 4.00 CRO RE (RS. FOUR CRORES) FOR CURRENT FINANCIAL YEAR I.E. 2009-10 RELEVANT TO A.Y. 2010-11 IN ANY (SHOUL D BE MY) INDIVIDUAL CAPACITY. THEY COVER ALL THE DISCREPANCIES IN THE SEIZED PAPERS DURING THE C OURSE OF SEARCH PROCEEDINGS. 11 THEREFORE CLEARLY THE REVENUE HAS NOT ASKED THE ASSESSEE TO DISCLOSE THE MANNER IN WHICH SUCH INCOME WAS EARNED . IN ANY CASE ONCE THE INCOME IS SURRENDERED DURING THE COURSE OF SEARCH U/S 132(4) IT CAN BE SAFELY ASSUMED THAT DURING DISCUSS ION THE ASSESSEE MUST HAVE DISCLOSED THE MANNER. IN ANY CAS E WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE EXPLANATION OF THE ASSESSEE HAS BEEN ACCEPTED F OR A SUM OF RS. 1987500 OUT OF TOTAL SURRENDER OF RS. 4 CRORES THEN SAME MANNER SHOULD HAVE BEEN ACCEPTED FOR THE WHOLE OF THE AMOU NT. IT IS NOT 7 CLEAR FROM THE PENALTY ORDER HOW EXPLANATION FOR RS . 1987500 WAS ACCEPTED. IN ANY CASE THE LD. CIT(A) HAS CONSIDERED ALL THESE ISSUES IN DETAIL AND THE D.R. FOR THE REVENUE HAS N OT REFERRED TO ANY MATERIAL OR DECISION WHICH CAN CONTROVERT THE F INDINGS OF THE CIT(A). IN THE FOLLOWING CASES WHICH HAVE BEEN RELI ED ON BY THE LD. COUNSEL FOR THE ASSESSEE WHICH WAS CLEARLY HELD THA T PENALTY IS NOT LEVIABLE. 12 FURTHER THE ASSESSEE HAS RELIED ON THE FOLLOWING DECISIONS: KANAKIA SPACES P. LTD MUMBAI VS. DEPARTMENT OF INC OME TAX ITA NO. 6763/MUM/2011 (COPY FILED) A.N. ANNAAMALAIWSAMI (HUF) VS. DEPARTMENT OF INCOME TAX ITA NO. 1634/MDS/2012 (COPY FILED) PRAMOD KUMAR JAIN BARGARH VS. ASSESSEE ITA NO. 131 132 & 133/CTK/2012 (COPY FILED) RAJ RANI GUPTA NEW DELHI VS. ASSESSEE ITA NO. 3371/DEL/2011(COPY FILED) 13 THE LD. D.R. FOR THE REVENUE WAS NOT ABLE TO PLA CE BEFORE US ANY DECISION WHICH SUPPORTS HIS CASE THEREFORE WE FIND NOTHING WRONG WITH THE ORDER OF THE LD. CIT(A) AND CONFIRM THE SAME. FOLLOWING THE ABOVE DECISION WE CONFIRM THE ORDER O F THE LD. CIT(A). 11. WE HAVE ALSO PERUSED THE STATEMENT RECORDED U/S 132(4) COPY OF WHICH IS AVAILABLE AT PAGES 33 TO 44 OF THE PAPER BOOK AND F IND THAT NOWHERE ANY QUESTION HAS BEEN ASKED FROM THE ASSESSEE AS TO THE MANNER O F EARNING OF SURRENDERED INCOME. IN THIS CASE THE ASSESSEE HAS STATED BEFOR E THE ADDITIONAL DIRECTOR OF INCOME TAX (INV) THAT INCOME WAS EARNED FROM SPECU LATIVE BUSINESS BUT NO MATERIAL HAS BEEN BROUGHT FORWARD TO SHOW THAT INCO ME WAS NOT EARNED FROM SUCH SOURCES THEREFORE ASSESSEE IS DEFINITELY EN TITLED TO IMMUNITY IN TERMS OF SECTION271AAA WHICH HAS BEEN EXTRACTED IN THE ABOVE NOTED ORDER IN THE CASE OF ACIT CC PATIALA VS GIAN CHAND GUPTA (SUPRA). FO LLOWING THAT ORDER WE DECIDE THIS ISSUE AGAINST THE REVENUE. 12. IN THE RESULT APPEAL IS DISMISSED. 13. ITA NO. 112/CHD/2013. THE FACTS AND ISSUES RAISED IN THIS APPEAL BY THE REVENUE ARE IDENTICAL TO THE FACTS AND ISSUES R AISED IN THE CASE OF DCIT VS SHRI SANJAY SINGAL IN ITA NO. 111/CHD/2015 WHICH WE HAVE ADJUDICATED ABOVE. 8 FOLLOWING THE SAME ORDER WE DECIDE THE ISSUES RAISE D IN THIS APPEAL AGAINST THE REVENUE. HENCE THE APPEAL IS DISMISSED. 14. IN THE RESULT BOTH THE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 28.04.2015 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 28 TH APRIL 2015 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR