C.P.Unnikrishnan, Pune v. DCIT Cent. Cir.-1(1),, Pune

ITA 232/PUN/2010 | 2000-2001
Pronouncement Date: 29-11-2011 | Result: Partly Allowed

Appeal Details

RSA Number 23224514 RSA 2010
Assessee PAN AEUPC8003K
Bench Pune
Appeal Number ITA 232/PUN/2010
Duration Of Justice 1 year(s) 9 month(s) 18 day(s)
Appellant C.P.Unnikrishnan, Pune
Respondent DCIT Cent. Cir.-1(1),, Pune
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2011
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted A
Tribunal Order Date 29-11-2011
Date Of Final Hearing 17-10-2011
Next Hearing Date 17-10-2011
Assessment Year 2000-2001
Appeal Filed On 10-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A PUNE BEFORE SHRI I.C. SUDHIR JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER S.NO. ITA NO. ASSTT. YEAR 1. 232/PN/10 2000-01 2. 233/PN/10 2001-02 3. 234/PN/10 2004-05 SHRI C. P. UNNIKRISHNAN .. APPELLANT VIJAY HOUSE SACHAPIR STREET PUNE PAN AEUPC8003K VS. DY. COMMISSIONER OF INCOME-TAX .. RESPONDENT CEN. CIR.1(1) PUNE APPELLANT BY : SHRI P D KUDVA RESPONDENT BY : SHRI S K AMBASTHA DATE OF HEARING : 17.10.2011 DATE OF PRONOUNCEMENT : 29.11.2011 ORDER PER G. S. PANNU A.M : THE CAPTIONED THREE APPEALS RELATE TO SAME ASSESSEE AN D THEREFORE THEY WERE HEARD TOGETHER AND ARE BEING D ISPOSED OF BY A COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE THREE CAPTIONED APPEALS BY THE ASSESSEE ARE DIR ECTED AGAINST THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I P UNE WHICH IN TURN HAVE ARISEN FROM THE ORDERS PASSED BY THE ASSESSING OFFICER UND ER SECTION 271(1)(C) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT). 2 3. WE SHALL FIRST TAKE UP ITA N0 232/PN/10 PERTAINING TO THE ASSESSMENT YEAR 2000-01. THE SOLITARY ISSUE RAISED IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME-TAX (APPEALS) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT LEVIED BY THE ASSESSING OFFICER ON A CCOUNT OF VARIOUS CREDIT BALANCES AMOUNTING TO RS 17 35 564/- DECLARED AS INCOME IN THE RETURN FILED UNDER SECTION 153A OF THE ACT. 4. THE BRIEF FACTS ARE THAT THE ASSESSEE FILED HIS RETUR N OF INCOME ON 30.3.2001 FOR THE ASSESSMENT YEAR 2000-01 DECLARING TOTA L INCOME OF RS 86 780/- AND AGRICULTURAL INCOME OF RS 92 835/- THERE WAS A SEARCH OPERATION UNDER SECTION 132(1) OF THE ACT IN THE ASSESSEES CASE ON 24.6.200 3. IN RESPONSE TO NOTICE UNDER SECTION 153A(A) THE ASSESSEE FILED RETURN OF INCOME ON 30.9.2005 ADMITTING TOTAL INCOME OF RS 18 21 350/- AND AGRICULTU RAL INCOME OF RS 92 385/-. SUBSEQUENTLY ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) READ WITH SECTION 153A OF THE ACT ON A TOTAL INCOME OF RS 22 69 1 81/- INCLUSIVE OF ADDITIONS ON ACCOUNT OF HOUSEHOLD EXPENSES AGRICULTURAL INCOME OF R S 92 385/- AND CREDIT BALANCES WRITTEN OFF AT RS 20 59 565/- CLAIMED TO BE I N RESPECT OF PLOT BOOKING AMOUNT LOAN ETC. ON THE GROUND THAT GENUINENESS OF TH E SAME COULD NOT BE PROVED BY THE ASSESSEE. IN THE APPEAL FILED AGAINST THE QUANTUM ADDITIONS MADE THE COMMISSIONER OF INCOME-TAX (APPEALS) RESTRICTED THE A DDITION ON ACCOUNT OF CREDIT BALANCES AT RS 17 34 565/-. SUBSEQUENTLY THE ASS ESSING OFFICER INITIATED PENALTY PROCEEDINGS IN RESPECT OF THE ADDITIONS CONFIRME D BY THE COMMISSIONER OF INCOME-TAX (APPEALS) AND ULTIMATELY IMPOSED PENALTY UNDER SECTION 271(1)(C) AMOUNTING TO RS 5 82 301/-. 5. IN THE PENALTY PROCEEDINGS BEFORE THE ASSESSING OFFICE R IT WAS SUBMITTED THAT CREDIT BALANCES OF RS 17 34 565/- WERE APPEARING IN REGULAR BOOKS OF ACCOUNT OF THE ASSESSEE HOWEVER CONSIDERING THE DIFFICUL TIES IN OBTAINING CONFIRMATIONS AND WITH A VIEW TO BUY PEACE OF MIND THE ASSESSEE HAD OFFERED TO DECLARE THE SUBJECT CREDIT BALANCES AS ADDITIONAL INCOM E AT THE TIME OF SEARCH 3 AND THAT THE ASSESSEE SATISFIED THE EXCEPTIONS CONTAINED I N EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND THUS PENALTY UNDER SECTI ON 271(1)(C) WAS NOT JUSTIFIED. AS REGARDS THE ADDITION ON ACCOUNT OF HOUSEHOL D EXPENSES OF RS 30 000/- IT WAS CONTENDED THAT THE SAME HAS BEEN MADE ON AN ADHOC BASIS AND NOT BASED ON ANY POSITIVE EVIDENCE AND THEREFORE ADD ITION WHICH IS MADE ON ESTIMATE BASIS CANNOT BE TERMED AS CONCEALMENT OF INCOME. THE SUBMISSIONS OF THE ASSESSEE DID NOT FIND FAVOUR AND THE ASSESSING OFFICER IMPOSED PENALTY OF RS 5 82 301/- UNDER SECTION 271(1)(C) OF THE ACT IN RESPE CT OF THE ABOVE TWO AMOUNTS. AGAINST THE SAME ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME-TAX (APPEALS). 6. THE COMMISSIONER OF INCOME-TAX (APPEALS) AFTER CONSI DERING THE DETAILED SUBMISSIONS OF THE ASSESSEE CAME TO THE CONCLUSION THAT THE ASSE SSEE HAS CONCEALED THE PARTICULARS OF INCOME AND THE ASSESSING OFFICER WAS PERFECTLY JUSTIFIED IN LEVYING PENALTY IN RESPECT OF UNEXPLAINED CREDIT BALANCES AND ACCORDINGLY CONFIRMED THE PENALTY LEVIED UNDER SECTION 2 71(1)(C) IN RESPECT OF THE ADDITION ON ACCOUNT OF UNEXPLAINED CREDIT BALANCES OF R S 17 34 565/-. AS REGARDS THE PENALTY IN RELATION TO THE ADDITION MADE ON ACCOU NT OF HOUSEHOLD EXPENSES OF RS 30 000/- THE COMMISSIONER OF INCOME-TAX (APPEALS) DE LETED THE SAME. BEING AGGRIEVED BY THE ORDER OF THE COMMISSIONER OF INCOME-T AX (APPEALS) THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 7. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE HAS A SSAILED THE LEVY OF PENALTY BY POINTING OUT THAT IN THE COURSE OF SEARCH NO INCRIMINATING MATERIAL WAS FOUND TO SHOW THAT THE IMPUGNED CREDIT BALANCES APPEARI NG IN THE REGULAR BOOKS OF ACCOUNT WERE FALSE. FURTHER IT IS SUBMITTED THAT THE IMPUGNED CREDIT BALANCES WERE OFFERED AS ADDITIONAL INCOME AT THE TIME OF SEARCH ON 24.6.2003 IN A STATEMENT RECORDED UNDER SECTION 132(4A) OF THE ACT ME RELY TO BUY PEACE OF MIND CONSIDERING THE DIFFICULTIES IN OBTAINING CONFIRMA TIONS FROM THE RESPECTIVE PARTIES. IT IS ALSO POINTED OUT WITH REFERENCE TO THE DETAIL OF SUCH CREDIT BALANCES 4 REPRODUCED IN PARA 6.1 OF THE ORDER OF THE COMMISSION ER OF INCOME-TAX (APPEALS) THAT THE SAME INCLUDED SUMS OF RS 1 04 400/- AND RS 1 56 600/- WHICH REPRESENT PROVISION FOR INTEREST ON LOANS AND THE OTHER BALANCES ARE PLOT BOOKING ADVANCES RECEIVED FROM CUSTOMERS. IT WAS POINTED OUT THAT THERE WAS NO APPARENT REASON FOR THE ASSESSEE TO HAVE OFFERED THE B ALANCE REPRESENTED BY THE PROVISION FOR INTEREST BUT THE SAME WAS OFFERED PRI MARILY TO BUY PEACE OF MIND AS THE ASSESSEE ENVISAGED DIFFICULTY IN OBTAINING CONFIRMA TIONS FROM THE VARIOUS CUSTOMERS WHO HAD BOOKED THE PLOTS. MOREOVER AFTER THE DECLARATION IN THE COURSE OF SEARCH SUCH AMOUNT WAS OFFERED AS INCOME IN THE RETURN OF INCOME FILED ON 30.9.2005 IN RESPONSE TO A NOTICE ISSUED UNDE R SECTION 153A OF THE ACT. IT IS FURTHER POINTED OUT THAT THE ASSESSEE IS COVERED WIT HIN THE IMMUNITY PROVIDED BY THE FIRST EXCEPTION CONTAINED IN EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. IN THIS MANNER THE PENALTY SUSTAINED BY THE COMMISSIONER O F INCOME-TAX (APPEALS) IS SOUGHT TO BE ASSAILED. 8. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS DEFENDED THE IMPOSITION OF PENA LTY BY POINTING OUT THAT THERE WAS NO MATERIAL OR EVIDENCE TO PROVE THE NATURE OF THE IMPUGNED CREDIT BALANCES AS CUSTOMER ADVANCES. IT IS FURTHER SUBMITTED THA T THE TRANSACTIONS WERE IN CASH AND ACCORDINGLY WERE NOT VERIFIABLE AND THERE FORE MERE DISCLOSURE OF THE PARTICULARS OF CREDIT BALANCES IN THE ACCOUNT BOOKS WOU LD NOT DISCHARGE THE ONUS CAST ON THE ASSESSEE TO PROVE THE AUTHENTICITY OF SU CH BALANCES. FURTHER THE LEARNED DEPARTMENTAL REPRESENTATIVE POINTED OUT THAT THE CREDITS IN QUESTION WOULD HAVE GONE UNNOTICED AND THE INCOME WOULD HAVE E SCAPED ASSESSMENT BUT FOR THE SEARCH AND SEIZURE OPERATIONS AND ISSUE OF NO TICE UNDER SECTION 153A OF THE ACT AS THE ASSESSEE DID NOT DISCLOSE SUCH INCOME IN T HE ORIGINAL RETURN OF INCOME FILED PRIOR TO THE SEARCH OPERATIONS FOR THE ASSESS MENT YEAR UNDER CONSIDERATION. 5 9. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. THE FACTS RELEVANT TO DETERMINE THE CONTROVERSY IN THIS APPEAL CAN BE BRIEFL Y RECAPITULATED AS FOLLOWS. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF L AND DEVELOPMENT AND SALE OF LANDS WHO FILED HIS RETURN OF INCOME FOR THE A SSESSMENT YEAR UNDER CONSIDERATION ON 30.3.2001 DISCLOSING A TOTAL INCOME OF R S 1 79 615/- WHICH INCLUDED AGRICULTURAL INCOME OF RS 92 835/-. THE SAID RE TURN WAS PROCESSED AND ACCEPTED AS SUCH UNDER SECTION 143(1) OF THE ACT ON 4.3.20 02. A SEARCH AND SEIZURE ACTION UNDER SECTION 132(1) OF THE ACT WAS CONDUCTE D IN THE CASE OF THE ASSESSEE ON 24.6.2003. CONSEQUENTLY A NOTICE UNDER SECTION 153A OF THE ACT REQUIRING THE ASSESSEE TO FILE A RETURN OF INCOME FOR ASS ESSMENT YEAR 2000-01 WAS ISSUED IN RESPONSE TO WHICH ASSESSEE FILED A RETURN OF INCOME ON 30.9.2005 DISCLOSING TOTAL INCOME OF RS 19 14 185/- WHICH INTER AL IA INCLUDED AGRICULTURAL INCOME OF RS 92 835/- AS WELL AS A SUM OF RS 17 34 565/ - REPRESENTING CERTAIN CREDIT BALANCES APPEARING IN THE ACCOUNT BOOKS. THE LATTE R AMOUNT OF RS 17 34 565/- IS THE SUBJECT MATTER OF CONTROVERSY BEFORE US AS THE PENALTY IN DISPUTE HAS BEEN LEVIED WITH REFERENCE TO THE SAID AMOU NT. IN THE CONSEQUENTIAL ASSESSMENT THE TOTAL INCOME HAS BEEN DETERMINED AT RS 1 9 44 181/-. AS PER THE ASSESSING OFFICER VIDE HIS ORDER DATED 28.3.2008 THE ASS ESSEE HAS CONCEALED HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF INCOME W ITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT QUA THE AMOUNT OF RS 17 34 565/-. AS PER THE ASSESSING OFFICER THOUGH THE SAID AMOUNT WAS INCLUDED IN THE TOTAL INCOME DECLARED BY THE ASSESSEE IN HIS RETURN FILED ON 30.9.200 5 IN RESPONSE TO THE NOTICE ISSUED UNDER SECTION 153A OF THE ACT YET PENALT Y UNDER SECTION 271(1)(C) OF THE ACT WAS ATTRACTED BECAUSE BUT FOR THE SEARCH THE A SSESSEE WOULD NOT HAVE OFFERED THIS INCOME TO TAX AND THAT THERE WAS NO VOLU NTARINESS IN OFFERING SUCH INCOME IN THE RETURN FILED ON 30.9.2005 AS THE SAID IN COME WAS NOT DECLARED IN THE ORIGINAL RETURN OF INCOME FILED ON 30.3.2001 BEF ORE THE SEARCH OPERATION WAS CARRIED OUT ON 24.6.2003. THE COMMISSIONER OF INCOME-T AX (APPEALS) HAS ALSO CONCURRED WITH THE STAND OF THE ASSESSING OFFICER AND HENCE THE PRESENT APPEAL 6 BEFORE US. AT THIS POINT WE MAY ALSO NOTICE THAT THE A SSESSING OFFICER HAD ALSO LEVIED PENALTY ON AN AD HOC ADDITION OF RS 30 000/- MADE TOWARDS HOUSEHOLD EXPENSES WHICH IS CHALLENGED BY THE ASSESSEE IN GROUND NO. 2 IN THE MEMO OF APPEAL BUT AT THE TIME OF HEARING THE SAME HAS NOT B EEN PRESSED AS THE NECESSARY RELIEF HAS BEEN ALLOWED BY THE COMMISSIONER OF INCOME-TAX (APPEALS). THUS THE GRIEVANCE BEFORE US AS ARTICULATED BY THE AP PELLANT IS CONFINED TO THE PENALTY IMPOSED ON THE TAX SOUGHT TO BE EVADED WITH R ESPECT TO INCOME OF RS 17 34 565/- ON ACCOUNT OF CREDIT BALANCES SURRENDERED DU RING THE SEARCH. 10. BEFORE PROCEEDING FURTHER IT WOULD ALSO BE APPRO PRIATE TO BRIEFLY TOUCH UPON THE NATURE OF THE ADDITION IN QUESTION AMOUNTI NG TO RS 17 34 565/-. FOR THIS PURPOSE THE APPELLANT HAS REFERRED TO A STATEMENT O F SHRI C P MOHANDAS ASSESSEES BROTHER RECORDED AT THE TIME OF SEARCH COPY OF W HICH HAS BEEN PLACED ON RECORD. IN RESPONSE TO QUESTION NO. 23 WITH REGARD TO CERTAIN CREDIT BALANCES FOUND RECORDED IN THE ACCOUNT BOOKS IT HAS BEE N ANSWERED THAT THE SAME ARE AMOUNTS RECEIVED AGAINST PLOT BOOKING FROM CUSTOM ERS OR INTEREST PROVISION AND IT IS FURTHER STATED BY THE DEPONENT TH AT HE MAY NOT BE ABLE TO SUSTAIN SUCH CREDIT ENTRIES IN THE BOOKS AND WOULD LIKE TO PAY TAXES IN THE DUE COURSE OF TIME. A PERUSAL OF THE STATEMENT AND THE ANSW ER THEREON REVEALS THAT THE AFORESAID ENTRIES WERE FOUND RECORDED IN THE ACCOU NT BOOKS AND ITS NATURE AS PLOT BOOKING ADVANCES RECEIVED FROM CUSTOMERS AND INTEREST PROVISION WAS ALSO EXPLAINED BY THE ASSESSEE. IT IS ALSO APPARENT THAT ASSESSE E ADMITTED THAT IN THE ABSENCE OF HIS ABILITY TO SUSTAIN SUCH CREDIT ENTRIES HE O FFERED TO PAY TAXES THEREON. QUITE EVIDENTLY THE STATEMENT ADMITTING A DDITIONAL INCOME HAS BEEN FOLLOWED UP BY DECLARATION OF SUCH INCOME IN THE RETU RN OF INCOME FILED AFTER THE SEARCH IN RESPONSE TO A NOTICE ISSUED UNDER SECTION 153A O F THE ACT ON 30.9.2005. THE INCOME SO DECLARED IN THE RETURN FILED UNDER SECTION 153A ON 30.9.3005 HAS ALSO BEEN ACCEPTED WITHOUT DISPUTE IN TH E SUBSEQUENT ASSESSMENT PROCEEDINGS. IN THIS FACTUAL BACKGROUND THE MOOT QUESTION IS AS TO 7 WHETHER THE ASSESSEE CAN BE SAID TO HAVE CONCEALED OR FURN ISHED INACCURATE PARTICULARS OF SUCH INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. 11. THE FIRST AND THE FOREMOST DEFENCE PUT UP BY THE A SSESSEE IS THAT THAT THE IMMUNITY PROVIDED IN EXPLANATION 5 TO SECTION 271(1) (C) OF THE ACT IS AVAILABLE TO THE ASSESSEE. EXPLANATION 5 TO SECTION 271(1)(C) OF THE A CT AS APPLICABLE FOR THE INSTANT CASE READS AS UNDER: EXPLANATION 5: WHERE IN THE COURSE OF A SEARCH INI TIATED UNDER SECTION 132 BEFORE THE 1 ST DAY OF JUNE 2007 THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING (HEREAFTER IN TH IS EXPLANATION REFERRED TO AS ASSETS) AND THE ASSESSEE CLAIMS THAT SUCH ASSETS HAVE BEEN ACQU IRED BY HIM BY UTILIZING (WHOLLY OR IN PART) HIS INCOME - (A) FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE TH E DATE OF THE SEARCH BUT THE RETURN OF INCOME FOR SUCH YEAR HAS NOT BEEN FURNISHED BEFO RE THE SAID DATE OR WHERE SUCH RETURN HAS BEEN FURNISHED BEFORE THE SAID DATE SUC H INCOME HAS NOT BEEN DECLARED THEREIN; OR (B) FOR ANY PREVIOUS YEAR WHICH IS TO END ON OR AFT ER THE DATE OF THE SEARCH THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN ANY RETURN OF INCOME FURNISHED ON OR AFTER THE DATE OF THE SEARCH HE HA LL OR THE PURPOSES OF IMPOSITION OF A PENALTY UNDER CLAUSE (C) OF SUB-SECTION (1) OF THIS SECTION BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURA TE PARTICULARS OF SUCH INCOME (UNLESS - (1) SUCH INCOME IS OR THE TRANSACTIONS RESULTING I N SUCH INCOME ARE RECORDED - (I) IN A CASE FALLING UNDER CLAUSE (A) BEFORE THE DATE OF THE SEARCH; AND (II) IN A CASE FALLING UNDER CLAUSE (B) ON OR BEFO RE SUCH DATE IN THE BOOKS OF ACCOUNT IF ANY MAINTAINED BY HIM FOR ANY SOURCE OF INCOME OR SUCH INCOME IS OTHERWISE DISCLOSED TO THE CHIEF COMMISSIONER OR COMMISSIONER BEFORE THE SAID DATE; OR (2) HE IN THE COURSE OF THE SEARCH MAKES A STATEMENT UNDER SUB-SECTION (4) OF SECTION 132 THAT ANY MONEY BULLION JEWELLERY OR OTHER VAL UABLE ARTICLE OR THING FOUND IN HIS POSSESSION OR UNDER THIS CONTROL HAS BEEN ACQUIRED OR THING FOUND IN HIS POSSESSION OR UNDER HIS CONTROL HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME TO BE FURN ISHED BEFORE THE EXPIRY OF TIME SPECIFIED IN SUB-SECTION (1) OF SECTION 139 AND A LSO SPECIFIES IN THE STATEMENT THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PA YS THE TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF SUCH INCOME. 12. AS PER THE ASSESSEE IN THIS CASE THE UNEXPLAINABLE CR EDIT BALANCES PERTAINING TO ASSESSMENT YEAR 2000-01 WERE RECORDED IN THE BOOKS OF ACCOUNT AND THE REGULAR RETURN OF INCOME FOR SUCH YEAR WAS FURN ISHED BEFORE THE SEARCH ON 24.6.2003. AS PER THE ASSESSEE HE OFFERED SUCH INCOME FOR TAX IN THE RETURN FILED AFTER THE DATE OF SEARCH BUT BECAUSE SUCH TRANSA CTIONS WERE RECORDED IN THE BOOKS OF ACCOUNT BEFORE THE DATE OF SEARCH THEREFORE THE ASSESSEE WOULD NOT BE DEEMED TO HAVE CONCEALED HIS INCOME OR FURNISHED INACCURA TE PARTICULARS OF SUCH 8 INCOME ON THE BASIS OF SUB-CLAUSE (1)(I) READ WITH CLAUSE (A) OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. WE HAVE CAREFULLY CONSIDERED THE PLEA SET UP BY THE ASSESSEE QUA THE CONTENTS OF SUB-CLAUSE (1)(I) READ WITH CLAUSE (A) OF EXPLANATION 5 OF SECTION 271(1)(C) OF THE ACT. THE IMP ORT OF CLAUSE (A) READ WITH SUB-CLAUSE (1)(I) THEREOF IS THAT WHERE IN THE COURSE OF SEARCH ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY BULLION JEWELLERY O R OTHER AVAILABLE ARTICLE OR THING AND THE ASSESSEE CLAMS THAT IT IS ACQUIRED BY UTILIZING HI S INCOME FOR ANY PREVIOUS YEAR WHICH HAS ENDED BEFORE THE DATE OF SEARCH BUT THE RETURN OF INCOME HAS NOT BEEN FURNISHED OR WHERE SUCH RETURN HAS BEEN FURNISHED SUCH INCOME HAS NOT BEEN DECLARED THEREIN THEN NOTWITHSTANDING THAT SUCH INCOME IS DECLARED BY HIM IN THE RETURN OF INCOME FURNISHED AFTER THE DATE OF SE ARCH HE SHALL BE DEEMED TO HAVE CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME UNLESS SUCH INCOME OR TRANSACTIONS RESULTIN G IN SUCH INCOME HAS BEEN RECORDED IN THE BOOKS OF ACCOUNT OR SUCH INCOME HAS B EEN OTHERWISE DISCLOSED TO THE COMMISSIONER BEFORE THE DATE OF SEARCH. I N THE PRESENT CASE IT IS UNDISPUTABLE THAT THE IMPUGNED INCOME WAS DISCLOSED BY THE ASSESSEE IN THE COURSE OF SEARCH AND THAT THE SAME PERTAINED TO A PREVIO US YEAR WHICH ENDED BEFORE THE DATE OF SEARCH AND FOR WHICH A RETURN HAD ALSO BEEN FURNISHED BEFORE THE DATE OF SEARCH. QUITE CLEARLY THE TRANSACTIONS RESULT ING IN SUCH INCOME NAMELY THE CREDIT ENTRIES WERE FOUND RECORDED IN THE BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE AT THE TIME OF SEARCH. IN OUR VIEW THE EXCEPTION CLAUSE (1)(I) CONTAINED IN EXPLANATION 5 TO SECTION 271( 1)(C) OF THE ACT CLEARLY COVERS THE CASE OF THE ASSESSEE AND THAT THE DECLARATION O F RS L7 34 565/- AS INCOME IN THE RETURN FILED ON 30.9.2005 CANNOT BE DEE MED TO BE CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME WITHI N THE MEANING OF SECTION 271(1)(C) OF THE ACT. 12. ON THIS POINT THE COMMISSIONER OF INCOME-TAX (APPE ALS) IN OUR VIEW ERRED IN PUTTING THE ASSESSEE TO THE EXCEPTION CONTAINED IN CLAUSE (2) TO EXPLANATION 5 WHICH EVIDENTLY IS FACTUALLY NOT ATTRACT ED IN THE PRESENT CASE. IN 9 PARA 6.4 OF HIS ORDER THE COMMISSIONER OF INCOME-TAX ( APPEALS) QUITE INEXPLICABLY RECORDS THAT IT IS NOT THE CLAIM OF THE APPELLANT AT ANY TIME THAT HE IS COVERED BY THE FIRST EXCEPTION IN OUR VIEW THE COMMISSIONER OF INCOME-TAX (APPEALS) CLEARLY ERRED IN APPLYING A WRONG PROVISION TO DETERMINE THE EFFICACY OF PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271( 1)(C) OF THE ACT IN THE PRESENT CASE. IN THE CIRCUMSTANCES OF THE CASE AND IN THE LIGHT OF OUR AFORESAID DISCUSSION IN OUR VIEW THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT QUA THE INCOME OF RS 17 34 565/- ON ACCOUNT OF CERTAIN CREDIT BALANCES APPEARING IN THE ACCOUNT BOO KS IS NOT TENABLE AND THE SAME IS LIABLE TO BE DELETED. WE ORDER ACCORDINGLY. 13. IN THE RESULT ITA NO 232/PN/10 FOR THE ASSESSMENT YEAR 2000-01 IS PARTLY ALLOWED. 14. IN ITA NO 233/PN/10 FOR THE ASSESSMENT YEAR 2001-0 2 THE FIRST ISSUE RELATES TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) ON ACCOUNT OF AGRICULTURAL INCOME OF RS 58 000/-. THE FACTS IN BRIEF ARE THAT A N ADDITION OF RS 58 000/- WAS MADE BY THE ASSESSING OFFICER ON THE GROUND THAT THE A SSESSEE HAD SHOWN AGRICULTURAL INCOME OF RS 1 57 900/- IN HIS RETURN FILE D WHEREAS DURING VERIFICATION THE ASSESSING OFFICER FOUND THAT CAPITAL ACCOUNT OF THE ASSESSEE WAS CREDITED WITH AN AMOUNT OF RS 99 900/- ONLY FROM SAL E OF RUBBER I.E. INCOME FROM AGRICULTURAL ACTIVITY AND THEREFORE THE BALANCE OF T HE AMOUNT CREDITED IN THE CAPITAL ACCOUNT WAS TREATED AS UNDISCLOSED INCOME OF THE ASSE SSEE WHICH WAS UPHELD BY THE COMMISSIONER OF INCOME-TAX (APPEALS) IN QUANTUM PROCEEDINGS. SUBSEQUENTLY IN THE PENALTY PROCEEDINGS IT WAS CONTEND ED BY THE ASSESSEE THAT THE AGRICULTURAL INCOME WAS CORRECTLY WORKED OUT AT RS 99 900/- AND INCLUDED IN THE CAPITAL ACCOUNT. HOWEVER THE SHORTFALL OF CASH TO M EET EXPENSES OF RS 56 426/- IN RESPECT OF WHICH ADDITION AT RS 58 000/- WAS MADE WAS INADVERTENTLY INCLUDED IN THE AGRICULTURAL INCOME AS AGAINST INCOME FR OM OTHER SOURCES DUE TO AN ERROR COMMITTED BY THE ACCOUNTANT OF THE ASSESSEE. IT W AS THUS SUBMITTED THAT 10 IT WAS A CASE OF AN ERROR IN CREDITING THE INCOME UNDER THE RIGHT HEAD AND NOT A CASE OF CONCEALMENT OF THE PARTICULARS OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME. HOWEVER THE ASSESSING OFFICER DID NOT FIND MERIT IN THE ASSESSEES SUBMISSIONS AND LEVIED PENALTY UNDER SECTION 271(1) (C) ACCORDINGLY. IN APPEAL THE COMMISSIONER OF INCOME-TAX (APPEALS) U PHELD THE LEVY OF PENALTY BY THE ASSESSING OFFICER. BEING AGGRIEVED THE ASSESSEE IS I N APPEAL BEFORE US. 15. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. W E HAVE PERUSED THE PAPER BOOK FILED BY THE ASSESSEE. WE FIND THAT ON PAGE 2 OF THE PAPER BOOK AGRICULTURAL INCOME HAS BEEN SHOWN AT RS 1 57 900 (RS 99 900/- + RS 58 000/-. WE FURTHER FIND THAT PAGE 6 OF THE PAPER BOOK IS CAP ITAL ACCOUNT OF THE ASSESSEE WHEREIN SALE OF RUBBER HAS BEEN SOWN AT RS 99 900/-. FR OM THIS IT CAN BE SAFELY INFERRED THAT THERE WAS NO CONCEALMENT OF INCOME OR FUR NISHING OF INACCURATE PARTICULARS OF INCOME BY THE ASSESSEE AND IT WAS ONLY AN I NADVERTENT MISTAKE ON THE PART OF THE ASSESSEE WHILE FILING THE RETURN OF IN COME WHICH DOES NOT CALL FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE A CCORDINGLY SET ASIDE THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) ON T HIS ASPECT AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY SO LEVIED. 16. THE NEXT ISSUE RAISED IS PENALTY LEVIED WITH REFERE NCE TO THE ADDITION OF RS 1 41 000/- REPRESENTING CREDIT BALANCES. ON SIMILAR ISSUE FOR THE ASSESSMENT YEAR 2000-01 WE HAVE HELD ABOVE THAT NO PENALTY UNDER SECT ION 271(1)(C) IS ATTRACTED. ON THE SAME PARITY OF REASONING THEREFORE WE DELETE THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT IN RESP ECT OF THE ADDITION OF RS 1 41 000/- REPRESENTING CREDIT BALANCES IN THIS YEAR ALSO. 17. IN THE RESULT ITA NO 233/PN/10 RELATING TO ASSESSME NT YEAR 2001-02 IS ALLOWED. 18. IN ITA NO 234/PN/10 FOR THE ASSESSMENT YEAR 2004-0 5 THE ISSUES RAISED RELATE TO LEVY OF PENALTY UNDER SECTION 271(1)(C) OF T HE ACT ON AN ADDITION OF RS 11 50 000/- ON ACCOUNT OF A SHORTFALL IN VALUE OF STOCK AND THE ADDITION ON ACCOUNT OF INADEQUATE WITHDRAWALS FOR HOUSEHOLD EXPENSES TO THE EX TENT OF RS 90 000/-. 19. THE ASSESSING OFFICER MADE AN ADDITION OF RS 50 000/- BY OBSERVING THAT IN THE CLOSING STOCK OF LAND TABULATED BY THE ASSESSEE A PA RT OF LAND AT S. NO 9/2/1 LOHEGAON WAS SHOWN LESS BY 20R IN THE LIST OF CLOSI NG STOCK DISCLOSED BY THE ASSESSEE. THE ASSESSING OFFICER ESTIMATED ITS VALUE AT RS 50 000/- AND MADE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE AS SHOR TFALL IN VALUE OF STOCK WHICH ADDITION WAS CONFIRMED BY THE COMMISSIONER OF INCOM E-TAX (APPEALS) IN QUANTUM PROCEEDINGS. IN THE PENALTY PROCEEDINGS IT WA S CONTENDED BY THE ASSESSEE THAT THE CLOSING STOCK OF LAND ADMEASURING 20R AT LO HEGAON REMAINED TO BE TAKEN INTO THE CLOSING STOCK INADVERTENTLY DUE TO A CLERICAL ERROR AND THAT THE BASIC RECORDS OF THE ASSESSEE CLEARLY REFLECTED THE CORRECT PAR TICULARS OF LAND. IT WAS FURTHER CONTENDED THAT THE ERROR OCCURRED IN FINALI SING THE ACCOUNTS AND IT WAS NOT A CASE OF CONCEALMENT. 20. AFTER CONSIDERING THE SUBMISSIONS OF BOTH SIDES WE AR E OF THE CONSIDERED OPINION THAT NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS ATTRACTED IN RESPECT OF THIS ADDITION OF RS 50 000/-. THE DIFFERENCE IN CL OSING STOCK HAD OCCURRED DUE TO A CLERICAL ERROR AND IT DOES NOT CALL FOR LEVY OF PEN ALTY FOR CONCEALMENT. WE ACCORDINGLY DELETE THE SAID LEVY OF PENALTY. 21. AS REGARDS THE PENALTY LEVIED IN RELATION TO THE AD HOC ADDITION OF RS 90 000P/- ON ACCOUNT OF HOUSEHOLD EXPENSES WE FIND NO REASONS TO UPHOLD THE PENALTY SINCE THE ADDITION IS ONLY ON ESTIMATION AND NO T ON THE BASIS OF ANY CLINCHING EVIDENCE. THEREFORE WE DIRECT THE ASSESSING OFFI CER TO DELETE THE PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT IN REL ATION TO THE AD HOC ADDITION OF RS 90 000/- ON ACCOUNT OF HOUSEHOLD EXPENSES. 12 22. IN THE RESULT WHEREAS ITA NO 232/PN/2010 FOR ASSESS MENT YEAR 2000-01 IS PARTLY ALLOWED THE ITA NOS 233 & 234/PN/10 PERTAI NING TO ASSESSMENT YEAR 2001-02 AND 2004-05 RESPECTIVELY ARE ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 29 TH DAY OF NOVEMBER 2011. SD/- SD/- (I.C. SUDHIR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 29 TH NOVEMBER 2011 B COPY TO:- 1) THE APPELLANT 2) RESPONDENT 3) THE CIT-(A)-I PUNE 4) THE CIT-II PUNE 5) THE D R A BENCH ITAT PUNE 6) GUARD FILE BY ORDER TRUE COPY SR. PS I.T.A.T. PUNE