M/s. Zina Bhimji Mehta,, JAMNAGAR v. The Assistant Commissioner of Income Tax, Central Circle-1,, RAJKOT-GUJARAT

ITA 336/RJT/2012 | 2007-2008
Pronouncement Date: 26-10-2016 | Result: Allowed

Appeal Details

RSA Number 33624914 RSA 2012
Assessee PAN AAAFZ0875E
Bench Rajkot
Appeal Number ITA 336/RJT/2012
Duration Of Justice 4 year(s) 5 month(s) 5 day(s)
Appellant M/s. Zina Bhimji Mehta,, JAMNAGAR
Respondent The Assistant Commissioner of Income Tax, Central Circle-1,, RAJKOT-GUJARAT
Appeal Type Income Tax Appeal
Pronouncement Date 26-10-2016
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 26-10-2016
Date Of Final Hearing 05-10-2016
Next Hearing Date 05-10-2016
Assessment Year 2007-2008
Appeal Filed On 21-05-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH RAJKOT BEFORE: SHRI S.S. GODARA JUDICIAL MEMBER AND S H RI AMARJIT SINGH ACCOUNTANT MEMBER [CONDUCTED THROUGH E - COURT AT AHMEDABAD] M/S. ZINA BHIMJI MEHTA 22B GRAIN MARKET JAMNAGAR PAN: AAAFZ0875E (APPELLANT) VS THE ACIT CENTRAL CIRCLE - 1 RAJKOT (RESPONDENT) REVENUE BY : S H RI YOGESH PANDEY CIT - D . R. ASSESSEE BY: S H RI M.J. RANPURA A.R. DATE OF HEARING : 05 - 10 - 2 016 DATE OF PRONOUNCEMENT : 26 - 10 - 2 016 / ORDER P ER : AMARJIT SINGH ACCOUNTANT MEMBER : - THI S ASSESSEE S APPEAL FOR A.Y. 2007 - 08 AR ISES FROM ORDER OF THE CIT(A) - IV AHMEDABAD DATED 30 TH MARCH 2012 IN APPEAL NO. CIT(A) - IV / 62 - R/CC - 1/10 - 11 IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE IN COME TAX ACT 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND S OF APPEAL: - I T A NO . 3 3 6 / RJT /20 12 A SSESSMENT YEAR 200 7 - 08 I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 2 1 THE GROUNDS OF APPEAL MENTIONED HEREUNDER ARE WITHOUT PREJUDICE TO ONE ANOTHER. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - IV AHMEDABAD ERRED O N FACTS AS ALSO IN CONFIRMING THE LEVY OF PENALTY U/S. 271(1)(C) OF THE ACT OF RS. 2 47 500/ - ON INCOME ADMITTED DURING THE COURSE OF SEARCH OF RS. 7 50 000/ - . THE PENALTY U/S. 271(1)(C) OF THE ACT MAY KINDLY BE DELETED. 3. IN THIS CASE A SEARCH ACTION U/S. 132 OF THE ACT WAS CARRIED OUT AT THE PREMISES OF SHRI NILESH MEHTA AND DR. AMIT MEHTA WHO ARE PERSONS CONNECTED WITH THE ASSESSEE FIRM ON 21ND FEB 2008. DURING THE COURSE OF SEARCH CERTAIN DOCUMENTS AND MATERIAL PERTAINING TO THE ASSESSEE WAS FO UND AND SEIZED. THEREFORE PROCEEDINGS U/S. 153C OF THE ACT WAS INITIATED AGAINST THE ASSESSEE. THE ASSESSEE IS ENGAGED IN THE MANUFACTURING AND SALES OF ELECTRONIC GAS LIGHTER. THE ASSESSEE GROUP DURING THE COURSE OF SEARCH HAD MADE A DISCLOSURE OF RS. 70 LACS. OUT OF THIS A SUM OF RS. 7.5 LACS HAVE BEEN OFFERED DURING THE YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT ON THE REASONING THAT THE DISCLOSURE WAS MADE ONLY DUE TO SEARCH AND AS SE SSEE HAD CONCEALED THE PARTICULARS OF INCOME. THE ASSESSING OFFICER HAS STATED THAT ASSESSEE WAS HAVING TAXABLE INCOME BUT HAD NOT DISCLOSED THE SAME IN THE REGULAR RETURN. THEREFORE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT WAS INITIATED FOR RS. 7. 5 LACS. IN REPLY TO SHOW CAUSE THE ASSESSEE HAS STATED THAT AS REGARDS THE ADDITIONAL INCOME OFFERED/CONSIDERED IN THE RETURN FILED FOR THE YEAR UNDER CONSIDERATION IS CONCERNED THE SAME WAS PART OF THE INCOME ADMITTED DURING THE COURSE OF SEARCH AS PER HIS STATEMENT I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 3 RECORDED U/S. 132(4) OF THE ACT ON WHICH DUE TAX ALONG WITH INTEREST HAS ALREADY BEEN PAID. THEREFORE IN VIEW OF THE EXPLANATION 5 TO PROVISION OF SECTION 27 1(1)(C) OF THE ACT IMMUNITY FROM PENAL ACTION IS REQUIRED TO BE GRANTED. THE ASSE SSING OFFICER HAS NOT ACCEPTED ASSESSEE S CONTENTION AND STATED THAT ASSESSEE IS NOT ELIGIBLE FOR SUCH IMMUNITY BECAUSE AS PER EXPLAN A TION 5 TO SECTION 271(1)(C) SHELTER FOR DISCLOSURE IS SUBJECT TO THREE CONDITIONS (A) THAT THE DISCLOSURE SHOULD BE MADE I N THE STATEMENT RECORDED U/S. 132 SUB - SECTION 4 AND (B) THAT THE ASSES SEE SHOULD EXPLAIN FROM WHERE HE HAS EARNED THE INCOME SO DISCLOSED AND (C) THE TRANSACTION SHOULD BE DULY RECORDED IN THE BOOKS. THE ASSESSING OFFICER FURTHER STATED THAT THE ASSESSEE HAD NEVER MAINT AINED ANY BOOKS OF ACCOUNTS NOR HAD HE FILED HIS RETURN OF INCOME U/S. 139( 1 ) OF THE ACT . E VEN THE INCOME SO OFFERED AS DISCLOSED WAS WORKED ON THE BASIS OF THE SEIZED JOTTING AND DIARIES. THE ASSESSING OFFICER HAS MADE RELEVANCE ON VARIOU S JUDICIAL PRONOUNCEMENTS MENTIONED IN THE ASSESSMENT ORDER AND HELD THAT THE ASSESSEE HAD COME FORWARD TO OFFER UNDISCLOSED INCOME OF RS. 7.5 LACS ONLY DUE TO SEARCH AND THEREFORE THE INCOME OF RS. 7.5 LACS DEEMED TO REPRESENT THE INCOME IN RESPECT OF WHI CH PARTICULARS OF INCOME HAD BEEN CONCEALED IN VIEW OF EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT AND IMPOSED PENALTY OF RS. 2 57 500/ - . AGGRIEVED AGAINST THE ORDER OF ASSESSING OFFICER THE ASSESSEE FILED APPEAL BEFORE THE LD. COMMISSIONER OF INCOME T AX(A). THE LD. COMMISSIONER OF INCOME TAX (A) DISCUSSED VARIOUS CASE LAWS IN DETAIL FROM PARA 6 TO 6.22 OF HIS ORDER COMING TO THE DECISION AT PARA S 6.23 & 6.24 AS UNDER: - I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 4 6.23 IN VIEW OF THE ABOVE DISCUSSION IT IS SUMMED UP AS UNDER: (I) THE APPELL ANT HAS DISCLOSED ADDITIONAL UNACCOUNTED INCOME IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153C OF THE ACT ON THE BASIS OF THE INCRIMINATING SEIZED MATERIAL. THIS ADDITIONAL INCOME WAS NOT DISCLOSED IN THE RETURN ORIGINALLY FILED U/S 139 OF THE ACT AND THE APPELLANT HAS FAILED TO ESTABLISH THAT SUCH OMISSION WAS A BONAFIDE MISTAKE AND NOT DELIBERATE. (II) SUCH DISCLOSURE OF ADDITIONAL INCOME IS NOT VOLUNTARY. IT IS ON ACCOUNT OF THE SEARCH AND ON THE BASIS OF SCRUTINY OF SEIZED MATERIAL UNACCOUNTED INC OME HAS BEEN DISCLOSED IN DIFFERENT ASSESSMENT YEARS. (III) THERE IS NO CONCEPT OF ANY IMMUNITY FROM PENAL PROVISIONS OF SECTION 271(1)(C) R/W EXPLANATION 5A IN RESPECT OF SEARCH INITIATED ON OR AFTER 01 - 06 - 2007. (IV) CONCEALMENT IS ALWAYS WITH REFERENC E TO THE ORIGINAL RETURN OF INCOME FILED BY THE ASSESSEE U/S 139 OF THE ACT. RETURN FILED IN RESPONSE TO NOTICE U/S 153A / 153C OF THE ACT DISCLOSING ADDITIONAL INCOME SUBSEQUENT TO THE DATE OF SEARCH WITH A VIEW TO PRE - EMPT ANY ACTION BY THE DEPARTMENT ON THE BASIS OF SEIZED MATERIAL CANNOT ABSOLVE THE APPELLANT FROM THE RIGOUR OF PENALTY U/S 271 (1 )(C) OF THE ACT READ WITH EXPLANATION 5A. (V) ONCE THERE IS A DIFFERENCE IN RETURNED / ASSESSED INCOME AS PER SECTION 153A / 153C OF THE ACT AND RETURNED IN COME AS PER RETURN FILED ORIGINALLY U/S 139 OF THE ACT THE ONUS IS ON THE ASSESSEE TO PROVE THAT FAILURE TO RETURN HIS CORRECT INCOME .WAS NOT DUE TO FRAUD OR NEGLECT [K. P. MADHUSUDHANAN VS. CIT [2001] 251 ITR 99(SC)]. (VI) THE HUGE DIFFERENCE BETWEEN THE RETURNED INCOME FILED IN RESPONSE TO NOTICE U/S 153C OF THE ACT DISCLOSING UNACCOUNTED ADDITIONAL INCOME SUBSEQUENT TO THE DATE OF SEARCH AND THE RETURNED INCOME AS PER ORIGINALLY FILED RETURNED INCOME U/S 139 OF THE ACT (AMOUNT OF DISCLOSURE BEING MU CH MORE THAN THE RETURNED INCOME U/S 139 OF THE ACT) CLEARLY PROVES THE FACT THAT THE OMISSION AT THE TIME OF FILING ORIGINAL RETURNS WAS DELIBERATE AND CONSCIOUS SINCE THE ASSESSEE HAS FAILED TO ESTABLISH THAT THE OMISSION IN THE ORIGINAL RETURN WAS ON A CCOUNT OF ANY BONAFIDE INADVERTENCE OR MISTAKE. [G. C. AGARWAL VS. CIT (1990) 186 ITR (SC)] I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 5 (VII) ONCE RETURN OF INCOME IS FILED IN RESPONSE TO NOTICE U/S 153A / 153C OF THE ACT ONLY PENDING ASSESSMENT OR REASSESSMENT PROCEEDINGS DO ABATE AND NOT ALL THE PAST ACTIONS. THE RETURNS FILED ORIGINALLY DO NOT ABATE AT ALL. TO HOLD OTHERWISE WILL LEAD TO ABSURDITY WHICH CANNOT BE ACCEPTED. [K. GOVINDAN & SONS VS. CIT (2001) 247 ITR 192 (SC)] 6.24 IN VIEW OF THE ABOVE I AM OF THE CONSIDERED OPINION THAT THE APP ELLANT HAS CONCEALED THE PARTICULARS OF INCOME IN RESPECT OF ADDITIONAL INCOME DISCLOSED IN THE RETURN FILED IN RESPONSE TO NOTICE U/S 153C OF THE ACT AND IS THEREFORE LIABLE T O PENALTY U/S 271(1)(C) OF THE ACT. ACCORDINGLY PENALTY LEVIED BY THE AO U/S 271(1)(C) AT THE MINIMUM RATE OF 100% OF TAX SOUGHT TO BE EVADED IS HEREBY CONFIRMED. 4. BEFORE US THE LD. AUTHORIZED REPRESENTATIVE SUBMITTED PAPER BOOK CONTAINING NOTES ANNEXED TO THE RETURN OF INCOME FILED U/S. 153C OF THE ACT AND PLACED RELIANCE ON JUD ICIAL PRONOUNCEMENTS AS MENTIONED BELOW : - A ITAT RAJKOT BENCH RAJKOT IN THE CASE OF THE DY. CIT VS. M/S. BALAJI MULTIFLEX P. LTD. IT(SS) 64 & 65/RJT/09 B HIGH COURT OF GUJARAT IN THE CASE OF CIT VS. M/S. BALAJI MULTIFLEX P. LTD. TAX APPEAL NOS. 83 84 OF 2011 C ITAT KOLKATA B BENCH IN THE CASE OF THE DY. CIT VS. AVNISH CH. GUPTA 6 ITR (TRIB) 173 (KOL) 5. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER OF COMMI SSIONER OF INCOME TAX(A). 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD CAREFULLY. WE OBSERVED THAT IN THE ASSESSMENT ORDER U/S. I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 6 153C THE ASSESSING OFFICER HAS MADE ADDITION OF RS. 7.5 LAC AMOUNT OFFERED BY THE ASSESSEE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS STATING THAT SUCH DISCLOSURE WAS EFFECTE D DUE TO SEARCH AND ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. THE ASSESSING OFFICER REITERATED THAT ASSESSEE HAS COME FORWARD TO OFFER UNDISCLOS ED INCOME OF RS. 7 50 000/ - BECAUSE OF SEARCH ACTION. HE HAS LEVIED PENALTY U/S. 271(1)(C) STATING TH AT ASSESSEE HAS CONCEALED HIS INCO ME AND FAILED TO OFFER ANY BONAFIDE EXPLANATION AS TO WHY THE PENALTY SHOULD NOT BE LEVIED . AS DISCUSSED ABOV E IN THIS ORDER THE LD. COMMISSIONER OF INCOME TAX(A) HAS SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER MA I N LY ON THE REASONING THAT ADDITIONAL INCOME NOT DISCLOSED IN THE ORIGINAL RETURN F ILED U/S. 139 OF THE ACT DISCLOSURE IS NOT VOLUNTARY NO CONCEPT OF IMMUNITY U/S. 271(1)(C) R.W. EXPLANATION 5A ETC. 7. IN THIS CONNECTION WE FIND THAT THE LOWER AUTHORI TIES HAS ACCEPTED THE INCOM E DECLARED BY THE ASSESSEE. T HE ASSESSING OFFICER HAS NOT SPECIFIED IN THE ASSESSMENT ORDER ANY FINDING WHICH INDICATE THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF INCOME. THE ASSESSMENT ORDER WAS PASSED IN A BRIEF MANNER CO NTAINING 2 PAGES THE FINDING OF THE ASSESSING OFFICER IS REPRODUCED AS UNDER: - 10.1 THUS THE ISSUE OF DISCLOSURE STANDS COVERED UNDER EXPLANATION 5 WHICH ENACTS A DEEMING PROVISION FOR CONCEALMENT IN A CASE WHERE IN THE COURSE OF SEARCH INITIATED BEFO RE 01.06.2007 THE ASSESSEE IS FOUND TO BE THE OWNER OF ANY MONEY BILLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING WHICH HAS NOT BEEN ACCOUNTED FOR; AND THEREAFTER LIFTS THE AFORESAID PRESUMPTION IF THE ASSESSEE MAKES A STATEMENT IN THE COURSE OF SE ARCH THAT SUCH MONEY BULLION I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 7 JEWELLERY OR OTHER VALUABLE ARTICLE OR THING HAS BEEN ACQUIRED OUT OF HIS INCOME WHICH HAS NOT BEEN DISCLOSED SO FAR IN HIS RETURN OF INCOME AND ALSO SPECIFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED AND PAYS TAX TOG ETHER WITH INTEREST IN RESPECT OF SUCH INCOME. EVEN IF IT IS ACCEPTED THAT THE ASSESSEE WAS FOUND IN POSSESSION OF UNEXPLAINED RECORDS IN THE COURSE OF SEARCH AND IN THE COURSE OF THE RECORDING OF THE STATEMENT IT WAS INTER ALIA DEPOSED THAT SUCH INCOME WA S UNRECORDED THE DEEMING FICTION SHOULD BE THAT THE ASSESSEE CONCEALED THE INCOME REPRESENTING THE QUANTUM OF SUCH INCOME / INVESTMENT AND THIS FICTION COMES TO AN END WHEN THE CORRESPONDING AMOUNT WAS OFFERED FOR TAXATION AND THE SOURCE OF INVESTMENT WAS ALSO EXPLAINED. THE ASSESSEE OFFERED THIS AMOUNT FOR TAX IN THE RESPECTIVE YEARS WHICH HAS NOT BEEN CHALLENGED BY THE AO. THEREFORE WE ARE OF THE VIEW THAT THE BENEFIT OF EXPLANATION 5 IS AVAILABLE TO THE ASSESSEE ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE. 8. WE HAVE ALSO CONSIDERED THE SUBMISSION OF THE LD. A.R. THAT THE ASSESSEE HAS DISCLOSED THE INCOME MERELY ON ADHOC BASIS AND NOT WITH REFERENCE TO ANY PARTICULAR ITEM OR ASSETS. WE HAVE ALSO NOTICED THAT THE ASSESSING OFFICER HAS ACCEPTED THE INCOME RETUNED WITHOUT POINTING OUT ANY DISCREPANCY. WE HAVE ALSO SEEN THAT THE ASSESSING OFFICER HAS NOT SPECIFICALLY CO - RELATED THE SEIZED MATERIAL TO TH E DISCLOSURE MADE IN THE ASSESSMENT ORDER. IN THIS CONNECTION WE REPRODUCE THE LETTER DATED 1 0/04/2008 VIDE WHICH THE ASSESSEE HAD MADE DISCLOSURE U/S. 132(4) OF THE ACT. TO THE ADDL. DIRECTOR OF INCOME - TAX RAJKOT. RESPECTED SIR RE: SEARCH AND SEIZURE ACTIONS U/S 132 OF THE INCOME - TAX ACT 1961 SUB: STATEMENTS RECORDED U/S 132(4) ADMISSION OF INCOME I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 8 IN CONNECTION WITH THE ABOVE YOUR HONOUR'S APPLICANT MOST RESPECTFULLY BEGS TO SUBMIT AS UNDER: 1.0 SEARCH AND SEIZURE ACTION WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE APPLICANT AND GROUP CONCERNS AS ALSO RESIDENTIAL PREMISES OF RELAT ED PARTNERS/FAMILY MEMBERS ON 21.03.2008. 2.0 DURING THE COURSE OF SEARCH VARIOUS BOOKS OF ACCOUNT LOOSE PAPERS AND COMPUTERIZED RECORDS ARE FOUND AND SEIZED. 3.0 WE ARE YET TO RECEIVE COPIES OF SEIZED MATERIALS AND STATEMENTS OF VARIOUS FAMI LY MEMBERS RECORDED DURING SEARCH. HOWEVER WE ON THE BASIS OF ANALYSIS OF VARIOUS RECORDS SUBSEQUENT TO THE DATE OF SEARCH DECLARE AN AMOUNT OF RS. 70 00 000/ - (RUPEES SEVENTY LACS ONLY) AS INCOME EARNED BY OUR GROUP CONCERNS' BUSINESSES UNDER EXPLANATI ON 5A OF SECTION 271(1)(C) AND/OR SEC. 271AAA R.W.S. 132(4) OF THE INCOME - TAX ACT 1961 WITH A VIEW TO AVAIL THE IMMUNITY FROM THE PENAL PROVISIONS AND WE ASSURE TO PAY TAX THEREON. WE MAY CLARIFY THAT THIS LETTER IS TO BE TREATED AS A PART OF OUR STATEMEN TS UNDER SECTION 132(4) OF THE ACT. WE FURTHER CLARIFY THAT THE DETAILED BREAKUP AS TO YEAR WISE INCOME INVESTMENT/EXPENSES ETC. SHALL BE FURNISHED ALONG WITH THE RETURNS TO BE FILED IN DUE COURSE. THANKING YOU SD/ - YOURS FAITHFULLY (NILESH JAYANTILA L MEHTA) 9. AFTER PERUSAL OF THE ABOVE STATED DISCLOSURE LETTER AND THE ORDER PASSED BY THE LOWER AUTHORITIES WE NOTICED THAT THE ASSESSING OFFICER HAS ACCEPTED SUCH DISCLOSURE WITHOUT ANY DISCUSSION AS TO DISCLOSURE VIS - - VIS SEIZED MATERIAL. IT CAN T HEREFORE BE REASONABLY PRESUMED THAT THE ASSESSING OFFICER HAS NO DISSATISFACTION TO SUCH DISCLOSURE BECAUSE HAD THERE BEEN ANY DISSATISFACTION THE SAME WOULD HAVE BEEN REF LECTED IN THE ASSESSMENT ORDER TO THE E XTENT OF SUCH INFERENCE OF DISCLOS URE VIS - - VIS THE SEIZED DOCUMENT. WE HAVE I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 9 NOTICED THAT THE MATERIAL INFORMATION ON THE BASIS OF WHICH ASSESSMENT WAS MADE IS THE VOLUNTARILY DISCLOSURE STATEMENT OF THE ASSESSEE IN THE FORM OF ABOVE REFERRED LETTER IN THIS ORDER AND THE ASSESSING OFFICER HAS NOT GIV EN ANY FINDING TO ESTABLISH THE CONCEALMENT . IN TH IS CONNECTION RELIANCE IS PLACED ON THE DECISION OF HON BLE ITAT RAJKOT BENCH IN ITS DECISION IN THE CASE OF M/S. BALAJI MULTIFLEX PVT. LTD. VS. DCIT CIRCLE - 1 RAJKOT IT(SS)A 64 & 35/RJT/2009 BY THE ASSESSEE IN WHICH IT WAS HELD AS UNDER: - 6. THERE IS SUBSTANTIAL FORCE IN THE ARGUMENTS PUT FORTH BY THE ID . AR. A PERUSAL OF SECTION 271(1 )(C) CLEARLY SHOWS THAT IT IS IN THE COURSE OF ANY PROCEEDINGS UNDER THE ACT ASSESSMENT PROCEEDINGS IN THIS CASE THAT THE AO IS TO BE SATISFIED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS TO BE JUDGED AT THIS STAGE AND IF AT THIS STAGE THE ASSESSEE HAS DECLARED THE CORRECT INCOME THEN THERE IS NO SCOPE TO ARRIV E AT THE SATISFACTION BY THE AO BECAUSE AT THIS STAGE THERE IS NO SUCH CONCEALMENT. THE ONLY MATERIAL INFORMATION AVAILABLE WITH AO WAS THE CONFESSIONAL STATEMENT OF THE ASSESSEE OFFERING UNDISCLOSED INCOME EVEN THOUGH NO MATERIAL INDICATING AND INDICTIN G THE ASSESSEE OF SUCH INDULGENCE WAS FOUND. THERE WAS NEITHER ANY DETECTION NOR ANY INFORMATION IN THE POSSESSION OF THE AO WHICH MIGHT LEAD TO A DETECTION OF CONCEALMENT. THERE WAS NO SPECIFIC PROVOCATION OR AN APPREHENSION OF DETECTION PREVAILING AT T HE TIME WHEN THE OFFER WAS MADE AND IN THE ABSENCE OF ANY SUCH IMMINENT FEAR FROM THE SIDE OF THE REVENUE IF THE ASSESSEE CAME FORWARD AND PAID THE TAX THEREON BY ADDING THE SAME IN THE RETURN INCOME IT HAS TO BE TAKEN AS A VOLUNTARY OFFER TO TAX. THE A SSESSEE HAD OFFERED INCOME FROM SUPPRESSED SALE. IT COULD HAVE VERY WELL CREDITED THE SAME TO ITS TRADING ACCOUNT AND ENHANCED ITS SALES ACCORDINGLY AND AFTER SHOWING CORRESPONDING UNRECORDED EXPENSES REDUCED THE EXTENT OF SUCH DISCLOSURE. BUT THE ASSESSE E DID NOT RECORD IT AS PART OF SALES (EVEN THOUGH IT WAS ADMITTED AS SALES) BUT PROCEEDED TO SHOW IT SEPARATELY AS 'OTHER INCOME'. THEREFORE THE MOOT QUESTION IS WHETHER THERE EXISTED ANY INCOME LEST 'CONCEALED INCOME' IN THE ABSENCE OF ANY INCRIMIN ATING MATERIAL. THE ASSESSMENT WAS COM PLETED U/S. 153C OF THE ACT. WE WONDER IF I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 10 THERE WERE AN Y SEIZED MATERIAL WHICH WOULD HAVE EVEN JU STIFIED THE INITIATION OF PROCEEDINGS U/S. 153C OF THE ACT. THE ACCEPTED POSITION OF LAW IS THAT MERELY BECAUSE AN ASSESSEE HAD AGREED TO THE ASSESSMENT TH AT CANNOT BRING IN AUTOMATIC LEVY OF PENALTY. THE ADMISSION MADE WITH AN INTENTION TO AVOID HARASSMENT PARTICULARLY IN THE ABSENCE OF ANY INCRIMINATING MATERIAL IS A VOLUNTARY DISCLOSURE AND IT CANNOT CONVERT AN OFFER TO TA X AS CONCEALMENT OF INCOME. 10. ON FURTHER APPEAL TO THE ABOVE STATED CASE THE HON BLE GUJARAT HIGH COURT IN TAX APPEAL NO. 83 OF 2011 HELD AS UNDER: - FROM THE RECORD WE FIND THAT THE ASSESSMENT PROCEEDINGS WERE ARISING OUT OF SECTION 153C OF THE INCO ME TAX ACT. ASSESSEE HAD CLAIMED THE BENEFIT OF EXPLANATION(5) TO SECTION 271(1) (C) OF THE ACT CONTENDING THAT ALL REQUIREMENTS WERE FULFILLED. HE HAD FILED RETURN ALSO PAID TAX ON THE DISCLOSED INCOME. CIT(APPEALS) AS WELL AS TRIBUNAL FOUND THAT THERE W AS NO FURTHER ADDITION MADE BY THE ASSESSING OFFICER. ESSENTIALLY BOTH THE AUTHORITIES FOUND THAT THE ASSESSEE HAD FULFILLED ALL THE REQUIREMENTS OF THE EXPLANATION 5 TO SECTION 271(1)(C). THIS BEING PURE QUESTION OF FACT AND NOTHING CONTRARY - BEING POINTED OUT TO US WE DO NOT FIND ANY QUESTION OF LAW ARISING . 11. WE FIND THAT THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE U/S. 153C AFTER THE SEARCH HAVE BEEN ACCEPTED ENTIRELY BY THE ASSESSING OFFICER WITHOUT ANY DETAILED DISCUSSION OF THE SEIZED DOCUMENT S THEREFORE WE ARE OF THE VIEW THAT THE BENEFIT OF EXPLANATION 5 IS AVAILABLE TO THE ASSESSEE ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 12 . IN VIEW OF THE ABOVE STATED FACTS AND FINDINGS WE FIND THAT THE LD. COMMISSIONER OF INCOME TAX(A) IS N OT JUSTIFIED IN UPHOLDING THE I.T.A NO. 336 /RJT /20 12 A.Y. 2007 - 08 PAGE NO M/S. ZINA BHIMJI MEHTA VS. ACIT 11 ORDER OF ASSESSING OFFICER THEREFORE WE ALLOW THE APPEAL OF THE ASSESSEE. ORDER PR ONOUNCED IN THE OPEN C OUR T ON 26 - 10 - 201 6 SD/ - SD/ - (S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 26 /10 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR ITAT AHMEDABAD 6. GUARD FILE. BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL RAJKOT