DCIT, C.C. XVI, Kolkata v. Shri Binod Chand Kankaria, Kolkata

ITA 329/KOL/2009 | 2006-2007
Pronouncement Date: 30-07-2010

Appeal Details

RSA Number 32923514 RSA 2009
Assessee PAN AGAPK5174B
Bench Kolkata
Appeal Number ITA 329/KOL/2009
Duration Of Justice 1 year(s) 4 month(s) 25 day(s)
Appellant DCIT, C.C. XVI, Kolkata
Respondent Shri Binod Chand Kankaria, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 30-07-2010
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 30-07-2010
Date Of Final Hearing 23-03-2010
Next Hearing Date 23-03-2010
Assessment Year 2006-2007
Appeal Filed On 05-03-2009
Judgment Text
1 A IN THE INCOME TAX APPELLATE TRIBUNAL BENCH- A KO LKATA [ . . . . . . . . . .. . . .. . !' ] [BEFORE SHRI B.R.MITTAL JUDICIAL MEMBER & SRI C.D. RAO ACCOUNT ANT MEMBER] # # # # / ITA NO. 329 (KOL) OF 2009 $%& '( / ASSESSMENT YEAR 2006-07 DY. COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-XVI KOLKATA . BINOD CHAND KANKARIA KOLKATA. (PAN-AGAPK5174B) (+ / APPELLANT ) - % - - VERSUS - (/0+ / RESPONDENT ) + 1 2 !/ FOR THE APPELLANT: / SRI D.R. MAJHI /0+ 1 2 ! / FOR THE RESPONDENT: / SRI S. JHAJHARIA !3 / ORDER ( . . ) (B.R.MITTAL) JUDICIAL MEMBER : THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSME NT YEAR 2006-07 AGAINST THE ORDER OF LD. C.I.T.(A) DATED 18/12/2008 ON THE FOLL OWING GROUNDS :- 1. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) HAS ERRED IN CANCELING THE PENALTY OF RS.2 57 381/- IMP OSED U/S. 271(1)(C) OF THE ACT PARTICULARLY WHEN THE QUANTUM ADDITION WAS NOT DISPUTED BY THE ASSESSEE. 2. THAT THE LD. CIT(A)) HAS ERRED IN HOLD ING THAT THE DISCLOSURE OF RS.65 LAKH MADE U/S. 132(4) OF THE ACT WAS INCLUSIVE OF VALUE OF UNEXPLAINED ASSETS AND THAT THE ASSESSEE WAS ELIGIBLE FOR IMMUNITY FROM PE NALTY UNDER EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. 2. THE RELEVANT FACTS GIVING RISE TO THIS APPEAL A RE THAT THERE WAS A SEARCH CONDUCTED AT THE RESIDENTIAL AND BUSINESS PREMISES OF THE ASSESSEE ON 27/9/2005 AND ON SUBSEQUENT DATES U/S. 132 OF THE I.T. ACT. 3. THE ASSESSEE IS A DIRECTOR IN VARIOUS GROUP COM PANIES AND IS HAVING BUSINESS OF REAL ESTATE AND TRADING OF PAINTS ETC. IT IS RELEV ANT TO STATE THAT DURING THE COURSE OF SEARCH CERTAIN DOCUMENTS DIARIES BOOKS OF ACCOUN TS COMPUTERS CASH JEWELLERY ETC. WERE FOUND AND PART OF THEM WERE SEIZED. IT IS RELE VANT TO STATE THAT THE ASSESSEE IN HIS 2 STATEMENT STATED THAT WHATEVER DOCUMENTS AND ASSETS WERE FOUND OUTSIDE THE REGULAR BOOKS DURING THE SAID SEARCH & SEIZURE OPERATION BE LONG TO HIM AND ARE RELATED TO HIS PERSONAL BUSINESS AND NONE OF HIS FAMILY MEMBERS OR GROUP CONCERNS HAS TO DO ANYTHING WITH IT. THE ASSESSEE ALSO DECLARED AN AMOUNT OF R S. 65 LAKHS FOR THE ASSESSMENT YEARS 2001-02 TO 2006-07 WITH REFERENCE TO VARIOUS SEIZED DOCUMENTS AND CERTAIN DOCUMENTS OF JEWELLERY AND ORNAMENTS. 4. WITH THE ABOVE FACTS IT IS RELEVANT TO STATE T HAT THE A.O. AT THE TIME OF MAKING THE ASSESSMENT FOUND DIFFERENCE IN DIAMOND CONTENT OF TWO ITEMS OF JEWELLERIES MARKED VK-44 AND VK-151. THE A.O. ALSO STATED THAT THE GR OSS WEIGHT OF THOSE ITEMS WAS ALSO NOT IN AGREEMENT WITH THAT OF THE DISCLOSED ITEMS C LAIMED TO HAVE BEEN TALLIED WITH THOSE SEIZED ITEMS. CONSIDERING THE SAID DIFFERENCE THE A.O. STATED THAT THE SAID TWO ITEMS MARKED VK-44 VALUED AT RS.5 14 885/- AND ITEM MARKE D VK-151 VALUED AT RS.2 49 767/- BY THE DEPARTMENTAL VALUER WERE UNDISCLOSED INVESTM ENTS OF THE ASSESSEE IN THE FORM OF JEWELLERY AND ADDED AGGREGATE AMOUNT OF RS.7 64 652 /- TO THE RETURNED INCOME OF THE ASSESSEE U/S. 69B OF THE ACT. 5. IT IS RELEVANT TO STATE THAT THE ASSESSEE DID N OT FILE FURTHER APPEAL AGAINST THE SAID ADDITION STATING THAT HE DID NOT WANT TO DISPU TE THE ABOVE ADDITION TO AVOID LITIGATION AND TO BUY PEACE. 6. IN VIEW OF THE ABOVE THE A.O. INITIATED PENALT Y PROCEEDINGS U/S. 271(1)(C) OF THE ACT. AT THE TIME OF THE HEARING BEFORE THE A.O. I T WAS CONTENDED THAT THE GROSS WEIGHT IN RESPECT OF THE ABOVE TWO ITEMS TALLIED WITH THE REPORT OF THE REGISTERED VALUER AND THE DIFFERENCE WAS OF 2 GMS. IN RESPECT OF ITEM MAR KED VK-44 AND OF 0.5 GM. IN RESPECT ITEM MARKED VK-151. IT WAS ALSO CONTENDED THAT THE DIFFERENCE IN DIAMOND CONTENT OF THOSE TWO ITEMS AS PER THE DEPARTMENT VALUERS REPO RT AND THE VALUATION REPORT SUBMITTED BY THE ASSESSEE IS QUITE HIGH. THE A.O. HAS GIVEN THE COMPARATIVE TABLE OF BOTH THE VALUERS REPORT IN RESPECT OF THE ABOVE TW O ITEMS AT PAGE-3 OF THE ASSESSMENT ORDER WHICH IS AS UNDER :- 3 SL.NO. AS PER DEPARTMENTS VALUATION AS PER ASSESSEES VALUATION REPORT OWNERSHIP OF THE ITEM AS CLAIMED BY THE ASSESSEE. DESCRIPTION GROSS WT. (GM) DIA. CT. DESCRIPTION GROSS WT.(GM) DIS. CT. NAME SL.NO. OF VALUATION REPORT. BCK/44 ONE PC. NECKLACE TWO PCS. TOP WITH TANA TWO PCS. PATLA ALL SET WITH DIA. 133.3 45 ONE NECKLACE ONE PAIR EAR- RING ONE PAIR PATLA MADE OF GOLD SET WITH DIAMOND. 135.3 26 PRIYANKA 1 BCK/15 ONE PC.KALAR TWO PCS. EAR- TOPS WITH TANA ALL SET WITH DIAMOND STRUNG WITH PEARL AND EMERALD. 151.8 30 ONE CHICK WITH VELVET AND DORI TWO EARTOPS MADE OF GOLD SET WITH FLAT DIAMOND R/ PEARL AND EMERALD BEADS. 152.3 15 KANCHAN 24 THE A.O. DID NOT AGREE WITH THE ASSESSEE AND LEVIED THE PENALTY OF RS.2 57 381/- ON THE GROUND THAT THE ASSESSEE HAD DELIBERATELY AND INTEN TIONALLY CONCEALED THE INVESTMENT MADE BY HIM IN JEWELLERY OUT OF HIS UNDISCLOSED INC OME AND THEREBY CONCEALED THE PARTICULARS OF HIS INCOME BY FILING RETURN OF INCOM E U/S. 139 OF THE ACT. 7. BEING AGGRIEVED THE ASSESSEE FILED APPEAL BEFO RE THE LD. C.I.T.(A). ON BEHALF OF THE ASSESSEE IT WAS CONTENDED THAT THE WEIGHT OF T WO ITEMS OF JEWELLERY ALMOST TALLIED BETWEEN THE TWO VALUATION REPORTS. IT WAS ALSO CON TENDED THAT THE DEPARTMENTAL VALUER MADE THE VALUATION DURING THE COURSE OF SEARCH WHIC H LASTED FOR A FEW HOURS. THERE WERE 285 ITEMS OF JEWELLERY FOR VALUATION. WHEN THE REG ISTERED VALUER OF THE ASSESSEE VALUED THOSE ITEMS HE TOOK 12 DAYS TIME. THEREFORE THE VALUATION REPORT OF THE DEPARTMENTAL VALUER CONTAINED CERTAIN INCONSISTENCIES. IT WAS A LSO CONTENDED THAT THE DEPARTMENTAL VALUER ESTIMATED THE WEIGHT OF DIAMOND STUDDED IN J EWELLERY BY MERE LOOKING AT IT WITHOUT ANY SCIENTIFIC METHODS WHEREAS THE VALUER OF THE ASSESSEE WEIGHED THE DIAMONDS WITH THE HELP OF TRANSPARENT SPECIALIZED S CALES. IT WAS FURTHER CONTENDED THAT WHEN THE ITEMS OF JEWELLERY WERE INVENTORISED AT TH E TIME OF SEARCH IT WAS SPECIFICALLY STATED THAT ITEMS MARKED BCK-44 AND BCK-151 WERE OW NED BY FAMILY MEMBERS SMT. 4 PRIYANKA AND SMT. KANCHAN RESPECTIVELY AND THE SAME IS ALSO INDICATED IN THE SAID REPORT AS WELL AS IN THE TABULATION MADE BY THE A.O. IT W AS CONTENDED THAT IF THE DIFFERENCE WAS GENUINE AND THE VALUATION REPORT WAS MERELY AN OPINION OF TWO EXPERTS NO PENALTY COULD BE IMPOSED MERELY BECAUSE THERE WAS A DIFFERE NCE IN THE OPINION OF THE TWO VALUERS. THE LD. C.I.T.(A) CONSIDERED THE ABOVE SU BMISSIONS OF THE ASSESSEE AND DELETED THE SAID PENALTY VIDE PARAS-4 & 4.1 OF THE IMPUGNED ORDER WHICH IS AS UNDER :- 4. THE SUBMISSIONS ARE CAREFULLY CONSIDERED. IN MY OPINION THE DISPUTE STANDS FULLY COVERED BY THE SUPREME COURT JUDGMENT IN THE CASE OF DILIP N. SHROFF VS. JCIT (SUPRA) AND AFTER THIS IF THE HIGH COURT JUDGM ENT ON THE ISSUE CAN BE CONSIDERED NECESSARY RELIANCE MAY BE PLACED ON MAD RAS HIGH COURT JUDGMENT IN THE CASE OF CIT VS. BALASHMMUGHAM (268 ITR 626). I N THAT CASE THE ADMITTED INCOME WAS ENHANCED BY ADOPTING THE HIGHER VALUATIO N IN RESPECT OF GOLD. THE DIFFERENCE BEING ONE OF VALUATION AND NOT CONCEALME NT OF ASSETS ITSELF PENALTY WAS NOT JUSTIFIED IN THE LIGHT OF THE IMMUNITY OFFE RED IN EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT. 4.1. IN THE LIGHT OF THE ABOVE THERE IS NO REA SON WHY THE APPELLANT SHOULD NOT GET THE IMMUNITY FROM PENALTY U/S 271(1)(C) GRANTED BY EXPLANATION 5 TO SECTION 271(1)(C). REFERENCE MAY ALSO BE MADE TO DELHI HIG H COURT JUDGMENT IN THE CASE OF CIT VS. CHHABRA EMPORIUM (264 ITR 249). AN ORDE R OF PENALTY ITSELF HAS REPRODUCED THE DETAILS ABOUT THE OWNERSHIP OF ITEMS OF JEWELLERY. IF THEY BELONG RESPECTIVELY TO OTHER INDIVIDUALS NAMELY PRIYANKA AND KANCHAN THE APPELLANT CANNOT BE TREATED AS THE OWNER OF THE JEWELLERY AT THE SAME TIME. THE INVENTORY NO. IS ALSO STATED TO BE BCK/44 AND BCK/151. THE A PPELLANT DID NOT CONTEST THE ADDITION FOR THE PURPOSE OF AVOIDING THE LITIGATION AND DISPUTE WITH THE DEPARTMENT. THIS CANNOT BE TREATED AS ADMISSION OF CONCEALMENT. THE DISCLOSURE OF RS. 65 LAKH U/S 132(4) IS INCLUSIVE OF VALUE OF UNEXPLAINED ASSETS. IN THE LIGHT OF THE ABOVE THE ORDER OF PENALTY IS CANCELLED AND THE APPEAL IS ALLOWED. HENCE THE DEPARTMENT IS IN FURTHER APPEAL BEFORE TH E TRIBUNAL. 8. DURING THE COURSE OF HEARING THE LD. DEPARTMEN TAL REPRESENTATIVE SUPPORTED THE ORDER OF THE A.O. HE SUBMITTED THAT THE A.O. RIGHT LY CONCLUDED THAT THE SAID TWO ITEMS WERE UNDISCLOSED ITEMS OF JEWELLERY AS THERE WAS A DIFFERENCE IN GROSS WEIGHT AS WELL AS IN THE DIAMOND CONTENT. THE LD. DEPARTMENTAL REPRE SENTATIVE SUBMITTED THAT THE AMOUNT OF RS.65 LAKHS DISCLOSED BY THE ASSESSEE DID NOT RELATE TO THE SAID TWO ITEMS WHICH WERE CONSIDERED BY THE A.O. AS UNDISCLOSED IN VESTMENT. 9. ON THE OTHER HAND THE LD. A/R OF THE ASSESSEE MADE HIS SUBMISSIONS ON THE LINE OF SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE FURTHER REFERRED PAGES 14 & 15 OF 5 THE PAPER BOOK WHICH ARE THE COPIES OF VALUATION RE PORT OF THE REGISTERED VALUER AND SUBMITTED THAT THE SAID ITEM VK-44 IS APPEARING ON PAGE-15 OF THE PAPER BOOK AND THE SAID LIST WAS PREPARED IN THE NAME OF PRIYANKA KANK ARIA. HE FURTHER REFERRED PAGES 23 & 28 OF THE PAPER BOOK WHICH ARE ALSO IN CONTINUATIO N OF THE VALUATION REPORT OF THE DEPARTMENTAL VALUER AND SUBMITTED THAT ITEM VK-151 IS APPEARING ON PAGE-28 OF THE PAPER BOOK IN THE NAME OF KANCHAN KUMARI KANKARIA. THE L D. A/R FURTHER SUBMITTED THAT THE ASSESSEE ALSO FILED THE VALUATION REPORT AND REFERR ED PAGES 56 & 57 OF THE PAPER BOOK WHICH IS A COPY OF THE LETTER DATED 26/2/2007 FROM KANCHAN KUMARI KANKARIA TO THE A.O. AND SUBMITTED THAT THE SAID ITEM OF JEWELLERY WAS G OT VALUED MUCH PRIOR TO THE DATE OF SEARCH AND IS APPEARING AS ITEM NO. 24 OF THE SAID VALUATION REPORT AT PAGES 63 TO 67 OF THE PAPER BOOK. THE LD. A/R ALSO REFERRED PAGES 68 & 69 OF THE PAPER BOOK WHICH IS A COPY OF THE LETTER DATED 26/2/2007 FROM PRIYANKA KA NKARIA TO THE A.O. AND STATED THAT THE OTHER ITEM OF JEWELLERY IS APPEARING AS ITEM-1 OF THE VALUATION REPORT GOT PREPARED MUCH BEFORE THE DATE OF SEARCH PLACED ON PAGES 75 & 76 OF THE PAPER BOOK. THE LD. A/R SUBMITTED THAT THE SAID TWO ITEMS OF JEWELLERY WERE IN EXISTENCE AND BELONGING TO KANCHAN AND PRIYANKA KANKARIA. HE SUBMITTED THAT T HE A.O. THOUGH MADE THE ADDITION AT THE TIME OF ASSESSMENT AND THE ASSESSEE DID NOT DIS PUTE THE ADDITION TO BUY PEACE AND TO AVOID LITIGATION BUT THE LEVY OF PENALTY ON ACCOUN T OF DIFFERENCE IN WEIGHT BY THE TWO VALUERS IS NOT JUSTIFIED. THE LD. A/R PLACED RELI ANCE ON THE FOLLOWING TWO DECISIONS :- (A) DILIP N. SHROFF VS. ACIT [291 ITR 519 (SC)] (B) CIT VS. E.V.BALASHANMUGHAM [286 ITR 626 (MA D)] HE THEREFORE SUBMITTED THAT THE ORDER OF THE LD. C.I.T.(A) MAY BE CONFIRMED. 10. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTHORITIES BELOW AND THE SUBMISSIONS OF THE LEARNED REPRESENTATIVES OF THE P ARTIES. WE HAVE ALSO CAREFULLY PERUSED THE RELEVANT PAGES OF THE PAPER BOOK TO WHI CH OUR ATTENTION WAS DRAWN AND ALSO THE CASES CITED BEFORE US. 11. WE FIND SUBSTANCE IN THE SUBMISSIONS OF THE LD . A/R THAT THE SAID TWO ITEMS OF JEWELLERY HAVE BEEN CONSIDERED AS UNEXPLAINED MEREL Y BECAUSE THERE WAS A DIFFERENCE IN GROSS WEIGHT AND ALSO THE DIFFERENCE IN DIAMOND AS OBSERVED BY THE DEPARTMENTAL VALUER AND THE REGISTERED VALUER OF THE ASSESSEE. ON PERU SAL OF REGISTERED VALUERS REPORT 6 PLACED ON PAGES 14 & 15 OF THE PAPER BOOK WE FIND THAT THE SAID ITEM VK-44 IS APPEARING IN THE NAME OF PRIYANKA KANKARIA. WE FURTHER FIND ON PERUSAL OF THE DEPARTMENTAL VALUERS REPORT PLACED ON PAGES 23 & 28 OF THE PAPE R BOOK THAT ITEM VK-151 IS APPEARING IN THE SAID REPORT IN THE NAME OF KANCHAN KUMARI KA NKARIA. IT IS ALSO STATED BY THE LD. A/R THAT THE ASSESSEE WAS LIVING IN A JOINT FAMILY. WE FURTHER FIND ON PERUSAL OF PAGES 56 & 57 OF THE PAPER BOOK THAT KANCHAN KUMARI KANKA RIA VIDE HER LETTER DATED 26/2/2007 ADDRESSED TO THE A.O. INTIMATED THAT ITEM OF JEWELLERY MARKED VK-151 FOUND DURING SEARCH OPERATION WAS GOT VALUED BY THE REGIS TERED VALUER MUCH BEFORE THE DATE OF SEARCH AND THE SAID REPORT IS APPEARING ON PAGES 63 TO 67 OF THE PAPER BOOK. SIMILARLY VIDE HER LETTER DATED 26/2/2007 (PAGES 68 & 69 OF T HE PAPER BOOK) PRIYANKA KANKARIA WROTE TO THE A.O. THAT ITEM OF JEWELLERY MARKED VK- 44 GOT VALUED BY THE REGISTERED VALUER AND THE VALUATION REPORT WAS PREPARED BY HIM MUCH BEFORE THE DATE OF SEARCH WHICH IS PLACED ON PAGES 75 & 76 OF THE PAPER BOOK. FROM THE ABOVE IT IS EVIDENT THAT THE AFORESAID TWO ITEMS OF JEWELLWERY WERE IN EXIST ENCE AS BELONGING TO PRIYANKA KAHNARIA AND KANCHAN KUMARI KANKARA AND ACCORDINGL Y WERE APPEARING IN THE REPORTS OF THE REGISTERED VALUER IN RESPECT OF THEM WHICH WER E PREPARED MUCH BEFORE THE SEARCH ACTION TOOK PLACE. THEREFORE IN OUR CONSIDERED OP INION THE ALLEGATION OF THE A.O. FOR LEVYING PENALTY U/S. 271(1)(C) OF THE ACT THAT THE ASSESSEE HAD DELIBERATELY AND INTENTIONALLY CONCEALED THE INVESTMENT MADE BY HIM IN JEWELLERY OUT OF HIS UNDISCLOSED INCOME AND THEREBY CONCEALED THE PARTICULARS OF HIS INCOME BY FILING RETURN OF INCOME U/S. 139 OF THE ACT IS UNFOUNDED. 12. IN THIS CONNECTION IT IS PERTINENT TO STATE TH AT IN THE ASSESSMENT FOR THE YEAR UNDER CONSIDERATION THE A.O. ADDED AGGREGATE AMOUN T OF RS.7 64 652/- TO THE RETURNED INCOME OF THE ASSESSEE U/S. 69B OF THE ACT ON ACCOU NT OF DIFFERENCE IN GROSS WEIGHT OF JEWELLERIES MARKED VK-44 AND VK-151 BETWEEN THE DEP ARTMENTAL VALUERS REPORT AND THE REGISTERED VALUERS REPORT AS UNDISCLOSED INVESTMEN T OF THE ASSESSEE IN THE FORM OF JEWELLERY AND THE ASSESSEE DID NOT PREFER ANY APPEA L AGAINST SUCH ADDITION WHICH ACCORDING TO THE ASSESSEE WAS TO BUY PEACE AND AVO ID LITIGATION. IT IS AN ADMITTED POSITION THAT MERELY BECAUSE AN ADDITION HAS BEEN M ADE IN THE ASSESSMENT THAT DOES NOT LEAD TO LEVY OF PENALTY U/S. 271(1)(C) BECAUSE THE ORDER IMPOSING PENALTY IS QUASI-CRIMINAL 7 IN NATURE AND THE BURDEN LIES ON THE DEPARTMENT TO ESTABLISH THAT THE ASSESSEE HAS CONCEALED HIS INCOME. SINCE THE BURDEN OF PROOF IN PENALTY PROCEEDINGS VARIES FROM THAT IN THE ASSESSMENT PROCEEDING A FINDING IN AN ASSES SMENT PROCEEDING THAT A PARTICULAR RECEIPT IS INCOME CANNOT AUTOMATICALLY BE ATTRACTED IN IMPOSING PENALTY U/S. 271(1)(C). 13. IN THIS CONNECTION IT IS PERTINENT TO MENTION HERE THAT THE ASSESSEE VIDE HIS LETTER DATED 10/6/2008 PLACED ON PAGES 105 TO 107 OF THE PAPER BOOK IN RESPONSE TO SHOW CAUSE NOTICE U/S. 271(1)(C) ISSUED BY THE A.O. REQ UESTED FOR DROPPING THE PENALTY PROCEEDING INTER ALIA BY STATING AS UNDER :- IT IS ADMITTED IN THE ORDER OF ASSESSMENT THAT IN THE COURSE OF SEARCH THE ASSESSEE HAS VOLUNTARILY DISCLOSED AN AMOUNT OF RS. 65 00 000 FOR THE ASSESSMENT YEARS 2001-02 TO 2006-07 AND DISCLOSED THE SAID INC OME IN THE RETURN FILED AND ACCEPTED IN ASSESSMENT FOR DIFFERENT ASSESSMENT YEA RS. AND THESE RETURNS WERE FILED ON HONEST AND BONAFIDE BELIEF THAT THE INCOME AS HAS BEEN DISCLOSED IN THE RETURN THERE WAS NO INCORRECT DISCLOSURE OF INCOME WHICH CALLS FOR IMPOSITION OF ANY PENALTY U/S 271(1)(C). THAT ALTHOUGH ITEM NO.44 AND NO. VK-151 DOES NOT B ELONG TO THE PETITIONER BUT A.O. BY MAKING A SCRIPTY ORDER HAS ADDED RS.7 64 65 2/- AS INVESTMENT IN JEWELLERY U/S 69B WITHOUT ANY EVIDENCE BUT OBTAININ G ADVISE OF THE AUTHORIZED REPRESENTATIVE THE SAID ADDITION U/S 69B HAS NOT BE EN CONTESTED IN APPEAL THEREBY IT DOES NOT PROVE THAT THE PETITIONER HAS A CCEPTED THE SAID ADDITION AND IT CONSTITUTE INCOME WHICH CALLS FOR ANY IMPOSITION OF PENALTY U/S 271(1)(C) OF THE I.T. ACT 1961. CONSIDERING THE FOREGOING PARAGRAPHS YOUR GOODSELF WOULD BE KIND ENOUGH TO ACCEPT THE SAID EXPLANATION AND TO DROP THE PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) OF THE I.T. ACT 1961. 14. IN THE CASE OF CIT VS. AMALENDU PAUL [145 ITR 439 (CAL)] THE HONBLE JURISDICTIONAL HIGH COURT AFFIRMED THE DECISION OF THE TRIBUNAL IN NOT HOLDING THE PENALTY AS VALID. THE FACTS AND FINDINGS AS RECORDED IN THA T CASE ARE AS UNDER :- FOR THE ASSESSMENT YEAR THE ASSESSEE FILED A RETURN DECLARING A CERTAIN INCOME. THE ITO NOTICED CERTAIN CASH CREDITS WHICH WERE CLA IMED BY THE ASSESSEE TO BE LOANS FROM ONE CREDITOR. THE ITO REQUIRED THE ASSES SEE TO PROVE THE SOURCE OF THE CREDIT AND SUMMONS UNDER S. 131 OF THE I.T.ACT 1961 WAS ALSO ISSUED IN THIS CONNECTION. LATER THE ASSESSEE REQUESTED THE ITO TO ISSUE SUMMONS TO ANOTHER NEW ADDRESS OF THE CREDITOR BUT THE CREDITOR COULD NOT BE FOUND TO SUBSTANTIATE THE ASSESSEES CONTENTION REGARDING THE SOURCE OF T HE CREDIT. THE ASSESSEE THEREAFTER FILED A REVISED RETURN INCLUDING THEREI N THE CASH CREDIT AMOUNT AS HIS INCOME. THE ITO COMPLETED THE ASSESSMENT BY INCLUD ING THE CASH CREDIT AMOUNT 8 OFFERED BY THE ASSESSEE. THE IAC LEVIED PENALTY ON THE ASSESSEE UNDER S. 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSE E HAD CONCEALED HIS INCOME AS THE REVISED RETURN WAS FILED ONLY AFTER THE ITO STA RTED INVESTIGATION AND WHEN THE ASSESSEE HAD NO OTHER COURSE OPEN TO HIM AS HE WAS CAUGHT. ON APPEAL THE TRIBUNAL FOUND THAT THE ASSESSEE OFFERED VOLUNTARIL Y THE CASH CREDIT FOR ASSESSMENT IN THE REVISED RETURN ONLY BECAUSE HE WA S UNABLE TO PROVE BY SATISFACTORY EVIDENCE HIS CLAIM THAT THE AMOUNT WA S A LOAN TAKEN FROM THE CREDITOR AND NOT BECAUSE HE ADMITTED THE AMOUNT TO BE HIS UNDISCLOSED INCOME AND THAT TOO WITH A PRAYER THAT NO PENALTY WAS TO BE LE VIED AND THEREFORE CANCELLED THE LEVY OF PENALTY . ON A REFERENCE : HELD AFFIRMING THE DECISION OF THE TRIBUNAL THAT THE ADMISSION MADE BY THE ASSESSEE WAS A CONDITIONAL ADMISSION AND COULD NOT BE RELIED UPON FOR IMPOSING PENALTY AS AN UNCONDITIONAL ADMISSION. THEREFORE THE LEVY OF PENALTY WAS NOT VALID. [EMPHASIS SUPPLIED] 15. WE ALSO OBSERVE THAT THE ASSESSEE ALL ALONG H AS CLAIMED THAT ITEMS MARKED VK-44 AND VK-151 DO NOT BELONG TO HIM BUT THESE ITEMS BEL ONG TO OTHER FAMILY MEMBERS. THEREFORE THE INFORMATION/PARTICULARS OF THE SAID INVESTMENT WERE FURNISHED AND MADE AVAILABLE TO THE A.O. DURING ASSESSMENT PROCEEDING. 16. IN VIEW OF ABOVE AND CONSIDERING THE TOTALITY OF THE FACTS WE ARE OF THE CONSIDERED VIEW THAT IT IS NOT A FIT CASE WHERE PEN ALTY U/S. 271(1)(C) IS ATTRACTED. HENCE WE UPHOLD THE ORDER OF THE LD. C.I.T.(A) IN CANCELL ING THE PENALTY OF RS.2 57 381/- LEVIED BY THE A.O. U/S. 271(1)(C) OF THE ACT. 17. IN THE RESULT THE APPEAL OF THE DEPARTMENT IS DISMISSED. 4 !3 '5! 6 5% 7 48 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 30.07.2010. SD/- SD/- ( . .. . . .. . ) !' ( . . . . . . . . ) (C.D.RAO) ACCOUNTANT MEMBER (B.R.MITTAL) JUDICIAL MEMBER ( (( ( ' ' ' ') )) ) DATE: 30 -07-2010 9 # # # # / ITA NO. 329 (KOL) OF 2009 !3 1 /$$9 :!9';- COPY OF THE ORDER FORWARDED TO : 1. + / THE APPELLANT : D.C.I.T. CENTRAL CIRCLE-XVI KOLKATA. 2 /0+ / THE RESPONDENT : BINOD CHAND KANKARIA 9A ESPLANADE EAST KOL-69 3. $3% () : THE CIT(A) CENTRAL-II KOLKATA. 4. $3%/ THE CIT KOL- 4. @$7 /$% / DR ITAT KOLKATA BENCHES KOLKATA 5. GUARD FILE . 09 /$/ TRUE COPY !3%5/ BY ORDER (DKP) B C / DEPUTY REGISTRAR .