M/S. AKHTAR HUSSAIN KHAN, MUMBAI v. THE ACIT CEN CIR-12, MUMBAI

ITA 1793/MUM/2008 | 2002-2003
Pronouncement Date: 30-03-2011 | Result: Allowed

Appeal Details

RSA Number 179319914 RSA 2008
Assessee PAN AEMPK0686B
Bench Mumbai
Appeal Number ITA 1793/MUM/2008
Duration Of Justice 3 year(s) 18 day(s)
Appellant M/S. AKHTAR HUSSAIN KHAN, MUMBAI
Respondent THE ACIT CEN CIR-12, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-03-2011
Date Of Final Hearing 31-03-2010
Next Hearing Date 31-03-2010
Assessment Year 2002-2003
Appeal Filed On 12-03-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A BEFORE SHRI J. SUDHAKAR REDDY ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NOS.1793 & 1794/MUM/08 (ASSESSMENT YEARS : 2002-03 & 2003-04) SHRI AKHTAR HUSSAIN KHAN FLAT NO.101/102 1 ST FLOOR A WING SAVINA APARTMENT NEAR HOME GUARD CENTRE ASALFA GHATKOPAR (W) MUMBAI-400 084 PAN AEMPK0686B VS. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 12 MUMBAI. APPELLANT. RESPONDENT. ITA NOS.1795/MUM/08 (ASSESSMENT YEAR : 2003-04) SHRI ABUL HASSAN KHAN SHOP NO.31 KOHINOOR CO-OP. SOCIETY OPP. BMC SCHOOL LINK ROAD SAKINAKA MUMBAI-400 072 PAN AAQPK7323L VS. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 12 MUMBAI. APPELLANT. RESPONDENT. ITA NOS.2224 3040 & 3142/MUM/08 (ASSESSMENT YEARS : 2002-03 2003-04 & 2004-05) ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 12 MUMBAI. VS. SHRI AKHTAR HUSSAIN KHAN GHATKOPAR (W) MUMBAI-400 084 PAN AEMPK0686B APPELLANT. RESPONDENT. ASSESSEES BY : SHRI JAYANT R. BHATT. REVENUE BY : SHRI SHRAVAN KUMAR. ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 2 - O R D E R PER SHRI J. SUDHAKAR REDDY : THESE ARE GROUP OF SIX APPEALS THRE E APPEALS ARE FILED BY THE ASSESSEES AND THREE APPEALS ARE FILED BY REVENUE AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) CENTRAL-III MUMBAI. AS THE ISSUE ARISING IN ALL THESE APPEALS IS COMMON FOR THE SAKE OF CONVENIENCE THEY ARE HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS COMMON ORDER. 2. THE FACTS OF THE CASE ARE STATED IN THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS) AT PARA NOS.3.1 TO 3.5 PAGES 2 TO 8 THE SAME ARE EXTRACTED HEREUNDER : 3.1 THE RELATED FACTS IN BRIEF ARE THA T THE APPELLANT WAS COVERED BY SEARCH ACTION. ONE SHRI AFROZ WHO WAS THE SUPERVIS OR WAS ALSO COVERED BY SEARCH ACTION WITH WHOM A REGISTER NOTING THE PARK ING RECEIPTS AND OTHER RECEIPTS RELATING TO THE AKHTAR GROUP INCLUDING THE APPELLANT WERE FOUND. DURING THE COURSE OF ASSESSMENT HEARING THE AO MADE A COMPARISON OF THE ENTRIES IN THE BOOKS OF ACCOUNT OF THE APPELLANT AS WELL AS THE ENTRIES IN THE REGISTER OF SHRI AFROZ AND FOUND THAT THE PARKING R ECEIPTS WERE SUPPRESSED BY AN AMOUNT OF RS.9 13 380 WHICH RELATED TO THE PARKING RECEIPTS OF VARIOUS SITES FOR VARIOUS MONTHS. HE THEREFORE MADE THE ADDITION A S ABOVE AND IN VIEW OF NON- COMPLIANCE DURING PENALTY PROCEEDINGS IMPOSED PENA LTY U/S.271(1)( C ). 3.2 DURING THE APPEAL PROCEEDINGS IT WAS POINTED OUT THE SUPPRESSION IN PARKING / TOLL RECEIPTS HAD BEEN WORKED OUT BY T HE AO WITH REFERENCE TO THE RECEIPTS AS ENTERED IN THE BOOKS OF ACCOUNT OF THE APPELLANT VIS--VIS THE RECEIPTS FOUND ENTERED IN THE REGISTER OF THE SAID SHRI AFRO Z. HOWEVER IN COMPUTING THE SUPPRESSION THE AO TOOK INTO ACCOUNT ONLY THOSE INS TANCES WHERE THE RECEIPTS WERE HIGHER IN SHRI AFROZS REGISTER AND INSTANCES WHERE THE APPELLANTS BOOK WAS REFLECTING HIGHER PARKING RECEIPTS WERE IGNORED . IT WAS THEREFORE THE APPELLANTS CONTENTION THAT THE SUPPRESSION OF RECE IPTS SHOULD HAVE BEEN WORKED OUT WITH REFERENCE TO THE RECEIPTS IN TOTALITY I.E. THE AO SHOULD HAVE GIVEN CREDIT ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 3 - OF ENTRIES IN WHICH THE APPELLANT WAS SHOWING HIGHE R RECEIPTS BUT WHICH HAD BEEN COMPLETELY IGNORED BY HIM. AS THE MANNER OF WO RKING OUT OF SUPPRESSION OF RECEIPTS WAS NOT CLEAR FROM THE ASSESSMENT ORDER THE MATTER WAS REMANDED TO THE AO AND THE REMAND REPORT HAS BEEN RECEIVED. IN THE REMAND REPORT THE FACT THAT ONLY DEFICIT OF PARKING CHARGES OF SOME M ONTHS AND SITES FOUND IN THE REGULAR BOOKS OF ACCOUNT WAS TAKEN INTO ACCOUNT IN WORKING OUT THE SUPPRESSION IS NOT DISPUTED AS IS CLEAR FROM A READING OF PARA 11. THE AO HAS HOWEVER ALSO OBSERVED THAT - THE ASSESSEE HAS GIVEN NO B ASIS FOR UNDER REPORTING THE RECEIPTS. IT HAS BEEN CLEARLY ESTABLISHED THAT ASS ESSEE WAS EARNING HIGHER INCOME AND RECORDING LOWER RECEIPTS IN HIS REGULAR BOOKS OF ACCOUNTS. IN THE CASE WHERE IN THE REGULAR BOOKS INCOME WAS HIGHER THAN THOSE RECORDED IN ROUGH BOOK THE ASSESSEE HAS NOT BEEN ABLE TO DISCH ARGE HIS BURDEN OF PROOF THAT THERE WERE NO OTHER INCOME RECEIPTS OR THERE W AS NO OTHER BOOKS WHEREIN INCOME WAS RECORDED. IN FACT THERE IS STRONG POSSIB ILITY THAT THE ASSESSEE WAS HAVING OTHER ROUGH NOTE BOOKS WHEREIN ENTRIES WERE MADE. THE ASSESSEE ITSELF CANNOT TAKE A PLEA THAT IN REGULAR BOOKS OF ACCOUNT S IT HAD RECORDED HIGHER INCOME THAN WAS ACTUALLY EARNED. 3.3 IN THE AOS OPINION THEREFORE THE APPE LLANT COULD HAVE SHOWN HIGHER RECEIPTS ON ACCOUNT OF EITHER HAVING SOME OTHER SOU RCE OF UNDISCLOSED INCOME OR MAINTAINING SOME OTHER UNDISCLOSED SET OF BOOKS OF ACCOUNT WHEREIN THE SUPPRESSED INCOME WAS RECORDED AND HENCE THERE WA S NO JUSTIFICATION IN CONSIDERING THE HIGHER RECEIPTS APPEARING IN THE AP PELLANTS BOOKS FOR THE PURPOSES OF WORKING OUT THE SUPPRESSION OF PARKING / TOLL RECEIPTS. IT WAS THEREFORE THE AOS CASE THAT AS BECAUSE THE PARKIN G RECEIPTS HAD NOT BEEN PROPERLY RECORDED IN THE BOOKS OF ACCOUNT THERE WA S NO MERIT IN THE CONTENTIONS OF THE APPELLANT AS ABOVE. 3.4 WHEN CONFRONTED WITH THE ABOVE FINDINGS IN THE REMAND REPORT IT WAS SUBMITTED THAT THE AO HAD NOT REBUTTED THE FOLLOWIN G FACTS : 1) THE SAID SHRI AFROZ WAS NOT ONLY HANDLING THE SITE COLLECTIONS OF THE APPELLANT AND THE GROUP BUT WAS ALSO HANDING SITES OF OTHER OPERATORS AS EVIDENCED BY NOTING IN HIS REGISTER. 2) THE SAID SHRI AFROS WAS INTERMINGLING SITE C OLLECTIONS AS ADMITTED BY HIM IN HIS STATEMENT RECORDED DURING THE COURSE OF ASSE SSMENT PROCEEDINGS A FACT WHICH WAS NOT KNOWN TO THE APPELLANT. 3) THE REGISTER WAS FOUND NOT AT THE OFFICE OF THE APPELLANT BUT WAS FOUND AT ONE OF THE SITES WHICH WAS UNDER THE TOTAL CONTROL OF THE SAID SHRI AFROZ AND THAT THE APPELLANT WAS NOT AWARE OF SUCH REGISTER HAVING BEEN MAINTAINED BY HIM. ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 4 - 3.5 ATTENTION WAS ALSO DRAWN TO THE FACT THAT THE AO HAD PRESUMED AND ASSUMED THAT THE APPELLANT WAS IN RECEIPT OF SOME O THER INCOME OR THAT THERE WAS NO OTHER BOOK WHEREIN INCOME WAS RECORDED. THI S WAS DESPITE THE FACT THAT THE APPELLANT HAD BEEN COVERED BY SEARCH OPERATION WHICH DID NOT YIELD ANY EVIDENCE EITHER OR ANY OTHER SOURCE OF INCOME OR EX ISTENCE OF ANY OTHER SET OF BOOKS OF ACCOUNT. IT WAS FURTHER EMPHASIZED THAT A GREEING TO AN ADDITION DID NOT TANTAMOUNT TO ADMISSION OF GULT AND THEREFORE N O PENALTY WAS CALLED FOR. 3. THE FIRST APPELLATE AUTHORITY AT PARA 3.6 IS HEL D AS FOLLOWS : I HAVE GONE THROUGH THE FACTS BROUGHT ON RECORD BY THE AO AS WELL AS THE CONTENTIONS OF THE APPELLANT. PENALTY HAS BE EN LEVIED ON ACCOUNT OF SUPPRESSION OF PARKING RECEIPTS WHICH HAS BEEN WORKED OUT BY THE AO ONLY ON THE BASIS OF ENTRIES IN SHRI AFROZS BOO K WITHOUT CONSIDERING THE INSTANCES WHERE THE APPELLANTS BOO KS RECORD A HIGHER PARKING RECEIPT THAN SHRI AFROZS. THE AOS REASONS FOR NOT CONSIDERING THE RECEIPTS WHICH ARE HIGHER IN THE AP PELLANTS BOOKS ARE THAT THE HIGHER RECEIPTS COULD EITHER BE FROM SOME OTHER UNDISCLOSED SOURCES OF INCOME OR ENTERED IN SOME OTHER UNDISCLO SED BOOKS OF ACCOUNT. HOWEVER EVEN AFTER SEARCH NO EVIDENCE O F EITHER WAS DETECTED AND HENCE THE AOS LOGIC FOR NOT CONSIDERI NG THE RECEIPTS WHICH ARE HIGHER IN THE APPELLANTS BOOKS IN WORKIN G OUT SUPPRESSION OF PARKING RECEIPTS DOES NOT STAND GOOD STEAD. COM MONSENSE APPRECIATION OF FACTS SUGGESTS THAT SUPPRESSION OF PARKING RECEIPTS SHOULD BE WORKED OUT WITH REFERENCE TO ENTRIES IN T HE BOOKS OF ACCOUNT OF THE APPELLANT AS WELL AS THAT IN SHRI AFROZS RE GISTER. IN THE APPELLANTS CASE THE TOTAL PARKING RECEIPTS AS PER APPELLANTS BOOKS IS HIGHER AT RS.49 71 772 AS AGAINST RS.29 97 382 REC ORDED IN THE REGISTER OF SHRI AFROZ. HOWEVER IT IS SEEN THAT W HEREAS IN ORIGINAL RETURN PARKING RECEIPT WERE SHOWN IS RS.49 71 772 T HE SAME IN THE RETURN FILED U/S. 153A WAS RS.58 22 772 AND HENCE T HE DIFFERENCE IS A RS.8 51 000 REMAINS UNRECORDED AND UNEXPLAINED WITH REFERENCE TO THE ORIGINAL RETURN. HENCE IT IS THE AMOUNT OF RS.63 3 80 WHICH REPRESENTS THE SUPPRESSION IN PARKING RECEIPTS. THE AO HAS TH EREFORE DIRECTED TO RECOMPUTED THE PENALTY U/S. 271(1)( C ) ON SUPPRESS ED RECEIPTS OF RS.63 380. AT PARAS 4.1 AND 4.2 THE CIT(A) HELD AS FOLLOWS : ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 5 - CERTAIN SEIZED DOCUMENTS SEIZED FROM THE APPELLAN TS OFFICE PREMISES AND CONTAINED IN ANNEXURE A-1 TO ANNEXURE A-31 ESTA BLISHED THAT THE FOLLOWING RECEIPTS WERE UNRECORDED IN THE APPELLANT S BOOKS OF ACCOUNT :- MAY 2002 JAMNALAL BAJAJ SITE RS. 1 790 OCT. 2002 MJP MARKET 123 RS. 17 920 FEB. AND MARCH 2003 VARIOUS SITES RS.4 32 770 RS.4 52 480 4.2 THE AO MADE THE ADDITION OF THE ABOVE AMOUN TS ON THE BASIS OF THE FACT THAT IT WAS ACCEPTED BY THE APPELLANT THAT THESE WERE NOT ENTERED IN THE BOOKS OF ACCOUNT. DURING THE COURSE OF APPEAL HEARING NO EXPLANATION WAS OFFERED AS TO WHY THE ABOVE TWO AMOUNTS WERE NOT REFLECTED IN THE APPELLANTS BOOKS OF ACCOUNT. I H AVE THEREFORE IN THE ABSENCE OF ANY EXPLANATION NO HESITATION IN CONFIR MING THE LEVY OF PENALTY ON THESE TWO AMOUNTS. CONFIRMED : LEVY OF PENALTY U/S.271(1)( C ) ON RS.1 9 710 AND RS.4 32 770. 4. THE ASSESSEE DECLARED A SUM OF RS.6 45 000 AS HI S INCOME IN THE ASST. YEAR 2004-05 ON THE GROUND THAT IN THE REGISTER MA INTAINED BY THE SUPERVISOR OF THE ASSESSEE SRI AFROZ CERTAIN AMOUNTS WERE RE CORDED WHICH ARE NOT REFLECTED IN THE BOOKS OF ACCOUNTS OF THE ASSESSEE. THE ASSESSEE HAS SUBMITTED IN HIS STATEMENTS THAT THE AMOUNT RECORDED BY THE SUP ERVISOR WERE NOT LOANS BUT WERE CASH RECEIPTS OF BUSINESS WHICH WERE KEPT WIT H TRUSTED EMPLOYEES. THOUGH THE ASSESSEE DISPUTED THE FACT THAT THESE WE RE LOANS HE VOLUNTARILY OFFERED THE SAME TO TAX DURING THE ASST. YEAR 2003- 04 AND HENCE BROUGHT TO TAX. THE ASSESSEE S CASE IS THAT NO PENALTY WAS ATTRACT ED AS THE AMOUNT HAS BEEN VOLUNTARILY DISCLOSED AS THIS INCOME IN A SUBSEQUEN T YEAR. 5. THE FIRST APPELLATE AUTHORITY AT PARAS 5.4 AND 5 .5 HELD AS FOLLOWS : ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 6 - 5.4 IN THE PRESENT CASE IT IS NOT DISPU TED EVEN BY THE APPELLANT THAT IT WAS ONLY SUBSEQUENT TO THE SEARCH OPERATION THAT THE REVISED RETURN INCORPORATING THE UNACCOUNTED SUM OF RS.6 45 000 WAS FILED WHICH WAS NOT REFLECTED IN THE ORIGINAL RETURN. NO EXPLANATION WAS GIVEN AS TO WHY THERE WAS OMISSION OR UNDER STATEME NT OF INCOME IN THE EARLIER RETURN OTHER THAN THE EMPHASIS LAID ON THE ACT OF FILING A REVISED RETURN. MERE ADMISSION OF SUCH INCOME IN THE REVIS ED RETURN DOES NOT EXPLAIN WHY IT WAS OMITTED IN THE ORIGINAL RETURN. THEREFORE MERELY BECAUSE THE APPELLANT FILED REVISED RETURN DOES NO T MAKE IT IMMUNE FROM THE LIABILITY FOR PENALTY IN THE BACKGROUND THAT T HE RETURN WAS NOT REVISED VOLUNTARILY BUT ONLY SUBSEQUENT TO SEARCH O PERATIONS. 5.5 THEREFORE TAKING INTO ACCOUNT THE ENTI RETY OF THE FACT ELABORATED ABOVE THE LEVY OF PENALTY U/S. 271 (1) ( C ) ON RS.6 45 000 IS CONFIRMED. 6. THE ASSESSEE HAD BY MISTAKE CLAIMED DEPRECIATI ON ON THE REVALUED VALUE OF THE ASSET AND NOT ON THE WDV. HE CLAIMED THAT T HIS WAS A BONA FIDE MISTAKE. THE FIRST APPELLATE AUTHORITY DELETED THE PENALTY. AGGRIEVED BOTH THE PARTIES ARE IN APPEAL. 7. MR. JAYANT R. BHATT THE LEARNED COUNSEL FOR THE ASSESSEE FILED REVISED GROUNDS OF APPEAL FOR ALL THE ASSESSMENT YEARS. 8. THE REVISED GROUNDS ARE AS FOLLOWS : ITA 1793/MUM/2008 (A.Y. 2002-03) GROUND NO.1 MAY BE READ TO INCLUDE SPECIFIC GROUNDS OF APPEAL. GROUND NO.1 CIT(A) HAS ERRED IN CONFIRMING THE PE NALTY U/S. 271(1)( C ) OF THE ACT. 1(A) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED ON SUM OF RS.5 51 372 DISCLOSED BY THE APPELLANT IN HIS RETURN OF INCOME AS PARKING RECEIPTS. ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 7 - 1(B) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY O N SUM OF RS.80 470 AND RS.45 334 BEING ADDITIONS MADE BY THE AO AS SUPPRES SION OF PARKING RECEIPTS. 1( C ) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY ON SUM OF RS.17 60 500 BEING ADDITIONS MADE BY THE AO ON ACCOUNT OF UNDISC LOSED INVESTMENT. ITA 1794/MUM/2008 (A.Y. 2003-04) GROUND NO.1 MAY BE READ TO INCLUDE SPECIFIC GROUNDS OF APPEAL. GROUND NO.1 CIT(A) HAS ERRED IN CONFIRMING THE PE NALTY U/S. 271(1)( C ) OF THE ACT. 1(A) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED ON SUM OF RS.63 380 DISCLOSED BY THE APPELLANT IN HIS RETURN OF INCOME AS PARKING RECEIPTS. 1(B) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY O N SUM OF RS.19 710 AND RS.4 52 480 BEING ADDITIONS MADE BY THE AO AS SUPPR ESSION OF PARKING RECEIPTS. 1( C ) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY ON SUM OF RS.6 45 000 BEING ADDITIONS MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT. ITA 1795/MUM/2008 (A.Y. 2003-04) GROUND NO.1 MAY BE READ TO INCLUDE SPECIFIC GROUNDS OF APPEAL. GROUND NO.1 CIT(A) HAS ERRED IN CONFIRMING THE PE NALTY U/S. 271(1)( C ) OF THE ACT. 1(A) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED ON SUM OF RS.91 000 DISCLOSED BY THE APPELLANT IN HIS RETURN OF INCOME AS PARKING RECEIPTS. ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 8 - 1(B) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY O N SUM OF RS.9093 AND RS.96 112 BEING ADDITIONS MADE BY THE AO AS SUPPRE SSION OF PARKING RECEIPTS. 1( C ) CIT(A) HAS ERRED IN CONFIRMING THE PENALTY ON SUM OF RS.3 45 000 BEING ADDITIONS MADE BY THE AO ON ACCOUNT OF UNDISCLOSED INVESTMENT. 9. THE LEARNED COUNSEL FOR THE ASSESSEE MR. JAYAN T R BHATT HAS SUBMITTED THAT THE ENTIRE ADDITIONS WERE MADE BASED ON A REG ISTER FROM ONE MR. AFROZ SUPERVISOR OF THE ASSESSEE-FIRM WHEREIN MR. AFROZ M AINTAINED DETAILS OF COLLECTION OF MONEY PAY AND PARK SITES AND HE HAD ALSO MIXED UP ALL THE COLLECTION AND PAYMENT. THE RECORDINGS OF MR. AFRO Z IN THE REGISTER WAS EITHER IN EXCESS OF WHAT IS RECORDED IN THE BOOKS OR LESSE R THAN THE AMOUNT RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. HE SUBMITTED THAT T HE DEPARTMENT HAD TAKEN INTO ACCOUNT ONLY ENTRIES OF COLLECTION BY MR. AFROZ WER E IN EXCESS OF THAT IT IS RECORDED IN THE ASSESSEES BOOKS OF ACCOUNTS AND TH AT THE DEPARTMENT HAS IGNORED THOSE ENTRIES WHEREIN THE AMOUNT RECORDED BY THE ASSESSEE IN ITS BOOKS OF ACCOUNTS WAS FAR IN EXCESS THAN THE AMOUNT RECOR DED BY THE SUPERVISOR MR. AFROZ IN HIS REGISTER. THE LEARNED COUNSEL POINTED OUT THAT OVER ALL COLLECTION RECORDED FOR THE YEAR IN THE REGULAR BOOKS OF ACCO UNTS ARE IN EXCESS OF THE COLLECTION RECORDED BY SRI AFROZ IN THE REGISTER. THIS FACT AS PER THE LEARNED COUNSEL IS CLEAR FROM FINDINGS BY CIT(A) AND HIS R ECORDINGS IN HIS ORDER. MR. AFROZ HAS ADMITTED THAT HE HAD INTER MINGLED THE DA ILY COLLECTION OF VARIOUS SITES ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 9 - AND THAT WHICH WAS RECORDED WAS DIFFERENT FROM ACTU AL COLLECTION. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT WITH A VIEW TO AVOID A PROTRACTED LITIGATION THE ASSESSEE HAD COME FORWARD AND FILED A RETURN U/S. 153A DISCLOSING THE ENTIRE AMOUNT THOUGH IT IS NOT THE INCOME OF THE ASSESSEE. SIMILARLY HE SUBMITTED THAT MR. AFROZ HAD RECORDED CERTAIN AMOUN TS AS CASH TRANSACTIONS AND ON BEING QUESTIONED HAS STATED THAT THESE ENTRIES R EFERS TO AMOUNTS KEPT WITH VARIOUS TRUSTED EMPLOYEES. ON THE INSTRUCTIONS OF R EVENUE THOUGH THIS IS NOT INCOME AT ALL THE ASSESSEE HAS OFFERED THE SAME TO TAX. HE RELIED UPON THE DECISION OF MUMBAI A BENCH OF THE TRIBUNAL IN THE CASE OF M/S. A.A. TRADING CORPORATION VS. ACIT IN ITA NO.1796/MUM/08 DT.7.9.2 009 AND THE DECISION OF MUMBAI A BENCH IN ITA NO.1881/MUM/08 ORDER DT. 20.7.09 IN THE CASE OF THE GROUP CONCERN OF A. A. TRADING CORPORATION AND SUBMITTED THAT ON SIMILAR FACTS THE TRIBUNAL HAS HELD THAT THERE IS NO MATER IAL WAS BROUGHT ON RECORD ON BEHALF OF THE REVENUE TO COLLABORATE ENTRIES IN ANN EXURE A8 SEIZED FROM SHOP NO.4 BYCULLA MUMBAI TO SHOW HOW THE ENTRIES FOUN D RELATE TO THIS ASSESSEE AND SUBMITTED THAT THIS ISSUE IS COVERED IN ASSESSE ES FAVOUR. HE RELIED ON THE FOLLOWING CASE LAWS : I) T. KODEESWARAN L/H OF LATE A. THANGAM VS. ITO (123 TTJ 230) (CHENNAI) II) SOUTH INDIAN FINANCE VS. ITO (39 ITD 370) (COCHIN) ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 10 - 10. THE LEARNED D.R. MR. SHRAVAN KUMAR OPPOS ED THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT EVIDENCE HAS BEEN FOUND DURING THE COURSE OF SEARCH IN THE FORM OF A REGISTER WITH MR. AFROZ WHICH SHOWS THAT THE ASSESSEE HAS NOT PROPERLY ACCOUNTED FOR ALL HIS INC OME. HE SUBMITTED THAT BUT FOR THE SEARCH THE INCOME WOULD NOT HAVE BEEN DISC LOSED. HE RELIED ON THE ORDER OF THE A.O. AND ARGUED THAT THE CIT(A) HAS ER RONEOUSLY DELETED PART OF THE ADDITION MADE ON ACCOUNT OF SUPPRESSION OF INCOME. THE LEARNED D.R. FURTHER POINTED OUT THAT THE CIT(A) HAS DELETED THE PART OF THE PENALTY FOR THE REASON THAT THE ENTIRE DISCLOSURE MADE BY THE ASSESSEE WAS ONLY AFTER THE DETECTION BY THE DEPARTMENT. 11. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCES AND PERUSAL OF DETAILS ON REGISTER AND ORDERS OF THE AUTHORITIES B ELOW WE HOLD AS FOLLOWS : 11.1 THE UNDISPUTED FACT IS THAT THE ENTIRE DIS CLOSURE AS WELL AS ADDITION IS BASED ON SEARCH SHOWING DAILY COLLECTION WRITTEN BY MR. AFROZ. MR. AFROZ WAS LOOKING AFTER THE ENTIRE PAY AND PARK BUSINESS AT V ARIOUS LOCATIONS OF THE GROUP. IT IS ALSO ADMITTED FACT THAT MR. AFROZ HAD INTER-M INGLED AND MIXED UP THE RECEIPTS OF VARIOUS SITES. THE ASSESSEE IN THESE CASES HAD ACCOUNTED FOR IN THEIR BOOKS OF ACCOUNTS AMOUNTS RECEIVED BY THEM FROM MR . AFROZ ON A DAY TO DAY BASIS. DUE TO INTER MINGLING OF RECEIPTS ON CERTAI N DAYS THE ENTRIES IN THE BOOKS OF ACCOUNTS SHOWED A HIGHER RECEIPT OF AMOUNT FROM MR. AFROZ THEN WHAT HE ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 11 - HAD RECORDED IN HIS REGISTER AND VICE VERSA. OVER ALL THERE IS NOT MUCH VARIATION IN THE AMOUNTS RECORDED BY MR. AFROZ AND TOTAL RECEIPTS DISCLOSED BY THE GROUP AS A WHOLE. ONLY WHERE ENTRIES IN BOOKS FELL SHORT OF ENTRIES IN MR. AFROZS REGISTER THAT ADDITIONAL INCOME WAS ASSESSE D. SHORT RECORDING WAS IGNORED. CERTAIN CASH ENTRIES WERE ALSO ACCEPTED A S INCOME THOUGH THE ASSESSEE HAS SPECIFICALLY STATED THAT THESE ARE NOT LOANS BUT CASH KEPT WITH CERTAIN TRUSTED EMPLOYEES. THIS IS CLEAR FROM THE STATEMENT RECORDED DURING THE COURSE OF SEARCH AND THEREAFTER. NO CONTRARY EVIDENCE IS FOUND. THE STATEMENTS WERE NOT EVEN DISPUTED. FROM THE ABOVE FACTS IT IS CLE AR THAT THE ASSESSEE HAS ACCEPTED CERTAIN INCOME SOLELY BASED ON A ROUGH R EGISTER MAINTAINED BY A THIRD PARTY WHICH WAS NOT ENTIRELY RELIABLE JUST TO AV OID PROTRACTED LITIGATION. THE MERE FACT THAT THE ASSESSEE HAD RECONCILED TO HIS F ATE AND ACCEPTED TO PAY TAX THOUGH THE REGISTER OF MR. AFROZ DOES NOT PROVE UND ISCLOSED INCOME IT CANNOT BE SAID THAT THE ASSESSEE HAD CONCEALED INCOME SO A S TO JUSTIFY LEVY PENALTY U/S.271(1)(C) OF THE ACT. 11.2 ON SIMILAR FACTS COCHIN BENCH OF THE TR IBUNAL IN THE CASE OF SOUTH INDIAN FINANCE VS. ITO (39 ITD 370) IS HELD AS FOLL OWS : IN THE INSTANT CASE THE ASSESSEE HAD NOT EVEN PR EFERRED AN APPEAL AGAINST THE ASSESSED INCOME BY THE ITO. IN THE ASSESSMENT ORDER THE ITO HAD HELD THAT THE MANAGIN G PARTNER WHILE MAKING A DEPOSITION AT THE TIME OF SEARCH HAD COME OUT WITH THE REAL EXTENT OF INVESTMENT ACCORDING TO HIM AND THE ASSESSEE HAD FILED A RETURN OF INCOME IN PURSUANCE THEREOF AND ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 12 - THAT IT WAS NOT IN POSSESSION OF ANY EVIDENCE WHATS OEVER TO PROVE THAT THE INVESTMENTS WERE OVERSTATED. IT WAS FURTH ER STATED IN THE ASSESSMENT ORDER ITSELF THAT THE ASSESSEE ALSO EXPR ESSED ITS DESIRE TO COME OUT WITH A TRUE DISCLOSURE OF THE INCOME. IN THE INSTANT CASE THERE WAS AMPLE PROOF TO SHOW THAT THE ASSESS MENT WAS ON THE BASIS OF RETURNED INCOME BY THE ASSESSEE. THOU GH THE ACQUISITION OF SOME OF THE ASSETS WAS NOT RELEVANT FOR THE IMPUGNED ASSESSMENT YEARS. THE ASSESSEE HAD OFFERED AND HAD BEEN ASSESSED ON THE SAME IN THE YEARS UNDER APPEAL ON SPREAD OVER BASIS. HENCE IT COULD BE SAID THAT THE ADDIT ION WAS MADE ON AGREED BASIS. IF THAT BEING SO NO PENALTY WOUL D LIE AGAINST THE AGREED ADDITION IN VIEW OF THE DECISION OF THE SUPREME COURT IN THE CASE OF SRI SHADILAL SUGAR & GENERAL MILLS L TD. VS. CIT (1987) 168 ITR 705. AS REGARDS THE APPLICABILITY OF EXPLANATION 5 TO SE CTION 271(1)( C ) IT IS ONLY IN RESPECT OF SUCH ASSETS ENUMERATE D IN EXPLANATION 5 TO SECTION 271(1)( C ) (WHICH ARE IN PARI MATERIA L WITH THOSE IN SECTION 132(1)( C ) AS ARE FOUND IN THE OWNERSHIP O F THE ASSESSEE BUT NOT RECORDED IN THE BOOKS OF ACCOUNT THAT THE A SSESSEE IS DEEMED TO HAVE CANCELED HIS INCOME. THUS THE DOCU MENTS OF TITLE WHICH REPRESENT THE RIGHT TO IMMOVABLE PROPERTY WH ICH RIGHT ITSELF IS AN IMMOVABLE PROPERTY IS OUTSIDE THE PUR VIEW OF EXPLANATION 5 GO SECTION 271(1)( C ). THE COMMISSI ONER (APPEALS) WAS THEREFORE NOT JUSTIFIED IN AFFIRMIN G PENALTIES ON THE ASSESSEE. 11.3 ON SIMILAR FACTS IN ASSESSEES GROUP CONC ERN THE MUMBAI A BENCH OF THE TRIBUNAL IN ITA NO.1881/MUM/08 IN THE CASE O F A.A. TRADING CORPORATION (SUPRA) HELD AS FOLLOWS : WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULL Y. WE FIND THAT THE ASSESSEE IS IN THE BUSINESS OF PAY AND PARK COLLECT ION AND A SEARCH AND SEIZURE ACTION WAS CARRIED OUT. DURING THE SEARCH A REGISTER WAS SEIZED WHICH WAS HAVING SOME NOTINGS OF PARKING AN D TOLL RECEIPTS. THE REVENUE ON THE BASIS OF THIS REGISTER MADE AN A DDITION OF RS.2.86 LAKHS FOR SUPPRESSION OF PARKING RECEIPTS. APART F ROM THIS THE ASSESSING OFFICER HAS MADE ADDITION OF RS.20 500 ON THE BASIS OF SOME ENTRIES IN ANNEXURE A8 SEIZED FROM SHOP NO.4 BYCUL LA MUMBAI. WE ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 13 - FIND THAT THE PENALTY IMPOSED U/S. 271(1)( C ) OF T HE ACT ON THE ADDITION OF RS.2.86 LAKHS WAS DELETED BY THE CIT(A). WITH R EGARD TO THE PENALTY IMPOSED ON THE ADDITION OF RS.20 500 WE FIND THAT THE ASSESSEE HAS CLAIMED THAT THEY DID NOT PREFER AN APPEAL IN THE Q UANTUM CASE DUE TO SMALLNESS OF ADDITION. THE ASSESSMENT AND THE PENA LTY PROCEEDINGS ARE DISTINCT AND SEPARATE PROCEEDINGS. THE MATERIAL RE CORD MAY BE SUFFICIENT FOR CONFIRMING THE ADDITION OF RS.20 500 MADE IN THE QUANTUM CASE OF THE ASSESSEE BUT IS NOT SUFFICIENT TO UPHOLD THE PENALTY IMPOSED U/S. 271(1)( C ) OF THE ACT. THERE IS NO M ATERIAL BROUGHT ON RECORD ON BEHALF OF THE REVENUE TO CORROBORATE THE ENTRIES IN THE ANNEXURE A8 SEIZED FROM SHOP NO.4 BYCULLA MUMBAI AND TO SHOW HOW THE ENTRIES FOUND FROM ANNEXURE A8 FROM SHOP NO .4 BYCULLA RELATES TO THE ASSESSEE. IN THESE FACTS OF THE CAS E WE HOLD THAT IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)( C ) OF THE ACT ON THE ADDITION OF RS.20 500 WHICH IS ACCORDINGLY CANCELL ED AND GROUNDS OF APPEAL OF THE ASSESSEE ARE ALLOWED. 11.4 THIS DECISION WAS FOLLOWED BY ANOTHER BEN CH OF THE TRIBUNAL IN ITA NO.1796/MUM/08 ORDER DT.7.9.2009 IN THE CASE OF A.A . TRADING CORPORATION VS. ACIT AND THE PENALTY WAS CANCELLED. 11.5 AS THE DOCUMENTS BASED ON WHICH INCOME IS DETERMINED ARE THE SAME IN ALL THESE CASES AND AS THE ADDITIONS WERE MADE O R DECLARATION WAS GIVEN BASED ON THESE VERY DOCUMENTS CONSISTENT WITH THE VIEW TAKEN IN THE CASE OF A. A. TRADING CORPORATION (SUPRA) FOR THE A.Y. 2002-03 AND 2003-04 WE DELETE ALL THE PENALTY CONFIRMED BY THE CIT(A). 12. COMING TO THE REVENUES APPEALS AS WE HEL D THAT THERE IS NO MATERIAL BROUGHT ON RECORD TO WARRANT LEVY OF PENALTY WE HA VE TO NECESSARILY DISMISS ALL THE REVENUES APPEALS FOR THE SAME REASONS GIVEN WH ILE ALLOWING THE APPEALS OF THE ASSESSEE. ITA NOS.1793 TO 1795 2224 3040 3142/MUM/08 - 14 - 13. IN THE RESULT ALL THE APPEALS OF ASSESSEE ARE ALLOWED AND THAT OF REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/03/2011. SD/- SD/- (R.S. PADVEKAR) (J. SUDHAKAR REDDY) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI DT.30/03/2011. *GPR TRUE COPY COPY TO : 1. THE ASSESSEE. 2. THE ASSESSING OFFICER. 3. CIT(APPEALS) 4. CIT 5. DEPARTMENTAL REPRESENTATIVE ITAT MUMBAI. 6. GUARD FILE. BY ORDER DY./ASST.REGISTRAR ITAT MUMBAI