SHAILESH G. JHUNJHUNWALA, MUMBAI v. ACIT CEN CIR-47, MUMBAI

ITA 467/MUM/2009 | 2003-2004
Pronouncement Date: 08-12-2010 | Result: Allowed

Appeal Details

RSA Number 46719914 RSA 2009
Assessee PAN AABPJ1670J
Bench Mumbai
Appeal Number ITA 467/MUM/2009
Duration Of Justice 1 year(s) 10 month(s) 18 day(s)
Appellant SHAILESH G. JHUNJHUNWALA, MUMBAI
Respondent ACIT CEN CIR-47, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 08-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 08-12-2010
Date Of Final Hearing 18-10-2010
Next Hearing Date 18-10-2010
Assessment Year 2003-2004
Appeal Filed On 21-01-2009
Judgment Text
1 ITA NO467/MUM/2009 I II IN THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH E EE E MUMBAI MUMBAI MUMBAI MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI D K AGARWAL JM & SHRI D K AGARWAL JM & SHRI D K AGARWAL JM & SHRI D K AGARWAL JM & SHRI SHRI SHRI SHRI R R R R K PANDA AM K PANDA AM K PANDA AM K PANDA AM IT ITIT ITA NO A NO A NO A NO. . . . 467/MUM/2009 467/MUM/2009 467/MUM/2009 467/MUM/2009 (ASSESSMENT YEAR 2003-04) SHAILESH G JHUNJHUNWALA 51/52 VILLA KAPRI SANTACRUZ (W) MUMBAI 54 VS THE ASST COMMR OF INCOME TAX CEN.CIR 47 MUMBAI (APPELLANT) (RESPONDENT) PAN PAN PAN PAN AABPJ1670J AABPJ1670J AABPJ1670J AABPJ1670J ASSESSEE BY: SHRI VIJAY MEHTA REVENUE BY: SHRI D SONGATE O OO O R RR R D DD D E EE E R RR R PER PER PER PER R RR R K PANDA K PANDA K PANDA K PANDA: :: : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER DATED 14.11.2008 OF THE CIT(A)-III MUMBAI RELATING TO AS SESSMENT YEAR 2003-04. 2 THE ASSESSEE IN ITS GROUNDS OF APPEAL HAS CHALLEN GED THE ORDER OF THE CIT(A) IN SUSTAINING THE PENALTY OF ` 8 92 841/- OUT OF THE PENALTY OF ` 17 85 682/- LEVIED BY THE ASSESSING OFFICER U/S 2 71(1)( C) OF THE I T ACT. 2.1 FACTS OF THE CASE IN BRIEF ARE THAT A SEARCH AND SEIZURE ACTION U/S 132 OF THE I T ACT WAS CARRIED OUT IN THE ASSESSEES CASE ON 17.3.2006. DURING THE COURSE OF SEARCH ACTION LOOSE PAPERS FILES DOCUM ENTS NOTE BOOKS COMPUTER DATA WERE FOUND AND SEIZED FROM THE RESIDENTIAL PRE MISES OF THE ASSESSEE. THE ASSESSING OFFICER ISSUED NOTICE U/S 153A OF THE ACT FOR THE ASSESSMENT YEAR 2003-04. IN RESPONSE TO THE ABOVE NOTICE THE ASSE SSEE FILED RETURN OF INCOME DECLARING THE TOTAL INCOME OF ` 45 57 540/-. IN TH E RETURN OF INCOME THE 2 ITA NO467/MUM/2009 ASSESSEE HAD SHOWN INCOME FROM BUSINESS AT ` 2 92 2 78/- AND INCOME FROM OTHER SOURCES AT ` 42 76 686/-. THE ASSESSING OFF ICER NOTED THAT DURING THE SEARCH ACTION IT WAS ESTABLISHED THAT THE ASSESSEE HAD INDULGED IN OBTAINING ARTIFICIAL LONG TERM CAPITAL GAIN IN RESPECT OF SHA RES/SCRIPS OF DATABASE FINANCE LTD. THE ASSESSEE WAS CONFRONTED ABOUT THIS FACT D URING THE SEARCH AND HE HAS ADMITTED THESE FACTS VIDE HIS REPLY TO QUESTION NO. 5 OF THE STATEMENT DATED 17.3.2006 RECORDED U/S 132(4) OF THE ACT. IT WAS S TATED THAT HE HAD OBTAINED THE ARTIFICIAL/BOGUS LONG TERM CAPITAL GAIN IN RESPEC T OF THE ABOVE SHARES AND HAS VOLUNTARILY OFFERED AN AMOUNT OF ` 42 61 333/- AS UNDISCLOSED INCOME IN THE INCOME FROM OTHER SOURCES DECLARED DURING THE YEAR. 2.2 THE ASSESSING OFFICER NOTED THAT THE ASSESSEE H AS NOT DISCLOSED THE ADDITIONAL INCOME OF ` 42 61 333/- IN HIS RETURN O F INCOME FILED U/S 139(1) AND IT WAS ADMITTED THAT IT WAS DISCLOSED ONLY IN THE RET URN OF INCOME FILED IN RESPONSE TO NOTICE U/S 153A. THE ASSESSING OFFICER THEREFO RE WAS OF THE OPINION THAT IF THE SEARCH ACTION WOULD HAVE NOT BEEN CONDUCTED THE AS SESSEE WOULD HAVE CONCEALED THIS INCOME AND WOULD NOT HAVE OFFERED FOR TAXATION. SUBSEQUENTLY THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C ). REJECTING THE EXPLANATIONS GIVEN BY THE ASSESSEE AND RELYING ON A COUPLE OF DECISIONS THE ASSESSING OFFICER LEVIED PENALTY OF ` 17 85 682/- B EING 200% OF THE TAX PAYABLE ON THE CONCEALED INCOME. 3 BEFORE THE CIT(A) IT WAS SUBMITTED THAT IN THE R ETURN FILED U/S 139(1) THE ASSESSEE HAD DECLARED INCOME OF `. 45 14 017/- O N 13.4.2004 WHICH INCLUDED LONG TERM CAPITAL GAIN OF ` 42 61 333/-. THEREFORE THE ASSESSING OFFICER WAS 3 ITA NO467/MUM/2009 NOT CORRECT IN HOLDING THAT THE INCOME OF `. 42 61 333/- WAS UNDISCLOSED BY THE ASSESSEE IN THE RETURN FILED U/S 139(1). IT WAS S UBMITTED THAT THE ONLY DIFFERENCE WAS THAT IN THE RETURN FILED U/S 153A THE INCOME O F ` 42 61 333/- WAS DECLARED AS INCOME FROM OTHER SOURCES AS AGAINST UNDER TH E HEAD LONG TERM CAPITAL GAIN IN THE RETURN FILED. 3.1 IT WAS SUBMITTED THAT SECTION 153A 153B AND 15 3C WERE BROUGHT ON THE STATUTE BOOK FOR EXCLUSIVELY DEALING WITH FILING OF RETURNS AND COMPLETION OF ASSESSMENT IN SUCH CASES AND SEC. 153A STARTS WITH A NON-OBSTANTE CLAUSE RELATING TO NORMAL ASSESSMENT PROCEDURE. THEREFORE THE EARLIER RETURNS FILED ARE TO BE TREATED AS NON-EST IN LAW AND NO ASSESSMENT CAN BE MADE ON THE BASIS OF RETURNS FILED PRIOR TO THE DATE OF SEARCH. IF NO A SSESSMENT CAN BE MADE ON THE EARLIER RETURN CERTAINLY THE PENALTY PROCEEDINGS ALSO CANNOT BE INITIATED WITH REFERENCE TO THAT RETURN. IT WAS FURTHER SUBMITTED THAT THE ASSESSEES CLAM FOR LONG TERM CAPITAL GAIN STOOD DULY SUPPORTED BY PURC HASE AND SALE BILLS AND THE PAYMENT STOOD RECEIVED THROUGH BANKING CHANNEL AND IT WAS A GENUINE TRANSACTION. HOWEVER TO BUY PEACE THE AMOUNT WA S DECLARED AS INCOME FROM UNDISCLOSED SOURCES. RELYING ON A COUPLE OF DECISI ONS IT WAS SUBMITTED THAT PENALTY WAS NOT LEVIABLE WHERE THE ASSESSEE SUO-MOTO REVISES THE INCOME AND FILES A REVISED OR SUBSEQUENT RETURN AFTER SEARCH O R SURVEY ACTION. IT WAS ACCORDINGLY SUBMITTED THAT THE PENALTY LEVIED U/S 2 71(1) (C) SHOULD BE DELETED. 3.2 ALTERNATIVELY IT WAS PLEADED THAT IN ANY CASE THE PENALTY LEVIED @ 200% WAS HIGHLY EXCESSIVE AND DESERVED TO BE REDUCED. 4 ITA NO467/MUM/2009 4 HOWEVER THE CIT(A) WAS NOT CONVINCED WITH THE AR GUMENTS ADVANCED BY THE ASSESSEE. HE NOTED THAT ALTHOUGH THE ASSESSEE D ECLARED THE INCOME OF `. 42 61 333/- IN THE ORIGINAL RETURN BUT THE SAM E WAS DECLARED UNDER AN INCORRECT HEAD OF INCOME I.E. LONG TERM CAPITAL G AIN AND SUCH A CONDUCT WAS MOTIVATED WITH THE INTENT OF SUFFERING LOWER TAX RA TE OF 10% ONLY. THE ASSESSEE IN THE STATEMENT RECORDED U/S 132(4) HAS ADMITTED T HAT HE HAD NOT EARNED A GENUINE LONG TERM CAPITAL GAIN AND THE SAME WAS A RTIFICIAL/BOGUS TO CLAIM THE BENEFIT OF LOWER TAX RATES. SUBSEQUENTLY THE ASSE SSEE IN ITS RETURN U/S 153A HAD SHOWN THE INCOME OF `. 42 61 333/- AS INCOME FROM OTHER SOURCES AND PAID THE TAX THEREON. THE ABOVE FACTS CONFIRM BEYOND DOUBT T HAT THE ASSESSEE HAD SHOWN ARTIFICIAL LONG TERM CAPITAL GAIN IN RESPECT OF P URCHASE AND SALE OF SHARES OF DATABASE FINANCE LTD WITH A VIEW TO EVADE TAXES AND SHOULD HAVE SUCCEEDED IN HIS ACTION HAD THE SEARCH OPERATION BEEN NOT CONDU CTED IN HIS CASE AND OTHERS WHO HAD SIMILARLY SHOWN ARTIFICIAL LONG TERM CAPI TAL GAIN IN RESPECT OF SHARES OF DATABASE FINANCE LTD. AND OTHER SIMILAR SCRIPS. RE LYING ON A COUPLE OF DECISIONS THE CIT(A) UPHELD THE ACTION OF THE ASSESSING OFFIC ER IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT. HOWEVER CONSIDERING THE FAC TS AND CIRCUMSTANCES OF THE CASE THE CIT(A) DIRECTED THE ASSESSING OFFICER TO RESTRICT THE PENALTY @ 100% OF THE TAX SOUGHT TO BE EVADED AS AGAINST 200% OF THE TAX SOUGHT TO BE EVADED DETERMINED BY THE ASSESSING OFFICER. HE ACCORDINGL Y SUSTAINED AN AMOUNT OF ` 8 92 841/- AS AGAINST ` 17 85 682/- LEVIED BY TH E ASSESSING OFFICER. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN A PPEAL HERE BEFORE US. 5 THE LD COUNSEL FOR THE ASSESSEE DREW THE ATTENTIO N OF THE BENCH TO THE STATEMENT RECORDED U/S 132(4) FROM THE ASSESSEE ON THE DATE OF SEARCH A COPY OF WHICH IS PLACED AT PAGES 23 TO 33 OF THE PAPER B OOK. REFERRING TO THE VARIOUS 5 ITA NO467/MUM/2009 QUERIES RAISED BY THE SEARCH PARTY HE SUBMITTED TH AT NOTHING ADVERSE HAVE BEEN FOUND AND JUST TO BUY PEACE WITH THE DEPARTMEN T THE ASSESSEE HAD OFFERED THE INCOME AS INCOME FROM OTHER SOURCES AS AGAINS T LONG TERM CAPITAL GAIN DECLARED IN THE ORIGINAL RETURN OF INCOME. R EFERRING TO THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER HE SUBMITTED THAT THE ASSESSING OFFICER HAS MENTIONED WRONG FACTS. REFERRING TO THE QUESTION N O.5 WHICH HAS BEEN MENTIONED BY THE ASSESSING OFFICER IN THE PENALTY O RDER HE SUBMITTED THAT VIDE REPLY TO QUESTION NO.5 THE ASSESSEE HAD STATED THA T DETAILS ARE AVAILABLE IN HIS OFFICE WHICH WILL BE SUBMITTED. REFERRING TO THE Q UESTION NO.13 OF THE STATEMENT HE SUBMITTED THAT THE ASSESSEE IN HIS REPLY HAD STA TED THAT THE SHARES WERE PURCHASED IN MARKET AND CONTRACT NOTES ARE AVAILABL E. THE DETAILS OF BROKERS AND PAYMENTS CAN ALSO BE VERIFIED FROM THE BOOKS. HE ACCORDINGLY SUBMITTED THAT THE REPLY DOES NOT SHOW THAT THE ASSESSEE AT ANY PO INT OF TIME HAVE ADMITTED TO HAVE OBTAINED ARTIFICIAL/BOGUS LONG TERM CAPITAL GAIN IN RESPECT OF THE ABOVE SHARES. 5.1 REFERRING TO THE DECISION OF THE TRIBUNAL IN TH E CASE OF RAMAKANT R JADHAV VS CIT IN ITA NO.6241/MUM/2009 VIDE ORDER DATED 8. 10.2010 FOR ASSESSMENT YEAR 2003-04 THE LD COUNSEL FOR THE ASSESSEE SUBMI TTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL HAD DELETED T HE PENALTY CONFIRMED BY THE CIT(A). 5.2 THE LD DR ON THE OTHER HAND WHILE SUPPORTING TH E ORDER OF THE CIT(A) RELIED ON THE DECISION IN THE CASE OF JYOTI LAXMAN KONKAR VS CIT REPORTED IN 292 ITR 163 (BOM) AND THE DECISION OF THE THIRD MEMBER OF ITAT B BENCH OF AHMADABAD IN 6 ITA NO467/MUM/2009 THE CASE OF ACIT VS KIRIT DAHYABHYAI PATEL REPORTED IN 121 ITD 159 (AHD). HE ALSO RELIED ON THE DECISIONS REPORTED IN 64 ITD 149 (MAD) AND 300 ITR 432 (MAD). 5.3 THE LD COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT THE DECISIONS RELIED UPON BY THE LD DR ARE DISTINGUISHA BLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. HOWEVER THE DECISION O F THE TRIBUNAL UNDER IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE IS DIRECTLY APP LICABLE TO THE FACTS OF THE PRESENT CASE. 6 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE I N HIS ORIGINAL RETURN OF INCOME FILED ON 3.3.2004 HAS DECLARED AN INCOME OF `45 1 4 020/- WHICH INCLUDED AN AMOUNT OF ` 42 61 333/- AS INCOME FROM LONG TERM CAPITAL GAIN. WE FIND IN RESPONSE TO NOTICE U/S 153A THE ASSESSEE FILED RET URN OF INCOME AND OFFERED THE AMOUNT OF ` 42 61 333/- AS INCOME FROM OTHER SOUR CES AS AGAINST LONG TERM CAPITAL GAIN DECLARED IN THE ORIGINAL RETURN OF IN COME. IT IS THE CASE OF THE REVENUE THAT BUT FOR THE SEARCH THE ASSESSEE WOUL D NOT HAVE COME FORWARD VOLUNTARILY BY DECLARING THE INCOME FROM OTHER SOUR CES WHICH HE HAD DECLARED EARLIER AS LONG TERM CAPITAL GAIN AND WOULD NOT HAVE OFFERED THE BALANCE TAX. IT IS THE SUBMISSION OF THE LD COUNSEL FOR TH E ASSESSEE THAT IT IS ONLY TO BUY PEACE WITH THE DEPARTMENT THAT THE ASSESSEE VOLUNTA RILY CAME FORWARD AND OFFERED THE INCOME EARNED ON ACCOUNT OF LONG TERM CAPITAL GAIN AS INCOME FROM OTHER SOURCES. 7 ITA NO467/MUM/2009 6.1 WE FIND THAT DURING THE COURSE OF SEARCH PROCEE DINGS STATEMENT OF THE ASSESSEE WAS RECORDED U/S 132(4) AND THE ASSESSEE V IDE QUESTIONS NO. 5 AND 13 HAS REPLIED AS UNDER: Q; NO.5 PL. FURNISH DETAILS OF INVESTMENTS IN SHARE S MADE BY YOU AND YOUR FAMILY MEMBERS? ANS : DETAILS ARE AVAILABLE IN MY OFFICE WHICH WI LL BE SUBMITTED TO YOU. Q.NO.13: PL FURNISH THE DETAILS OF PURCHASE OF SHAR ES OF DATA BASE FINANCE LTD I.E. CONTRA CT NOTES BROKERS NOTE AND ALSO EXPLAIN THE MOD E OF PAYMENT OF PURCHASE CONSIDERATION? ANS: THE SHARES WERE PURCHASED IN MARKET AND CONTRACT NOTES ARE AVAILABLE IN MY OFFICE. THE DETAILS OF BROKER AND PAYMENTS CAN ALSO BE VERIFIED FROM MY BOOKS. 6.2 FROM THE ABOVE IT IS CLEAR THAT THE ASSESSEE AT NO POINT OF TIME HAS ADMITTED THAT HE HAS OBTAINED ARTIFICIAL/BOGUS L ONG TERM CAPITAL GAIN IN RESPECT OF THE ABOVE SHARES. WE THEREFORE FIND FORCE IN THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSEE THAT THE FINDING GIVEN BY THE ASSESSING OFFICER IN THE PENALTY ORDER THAT THE ASSESSEE VIDE QUERY NO.5 HAD ADMITTED TO HAVE OBTAINED ARTIFICIAL/BOGUS LONG TERM CAPITAL GAIN IN RESPECT OF THE SHARES OF DATA BASE FINANCE LTD IS BASED ON WRONG APPLICATION OF FACTS. . 7 WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE T RIBUNAL IN THE CASE OF RAMAKANT R JADHAV (SUPRA) AND THE TRIBUNAL WHILE D ELETING THE PENALTY AT PARA 5 OF THE ORDER HAS DISCUSSED THE ISSUE AND HAS HELD AS UNDER: 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDE S AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS SUBMIT TED ON BEHALF OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AS WELL AS 8 ITA NO467/MUM/2009 BEFORE US THERE WAS NOTHING FOUND DURING THE COURS E OF SEARCH TO INDICATE THAT THE TRANSACTIONS OF PURCHASE AND S ALE OF SHARES OF M/S DATABASE FINANCE LTD. ENTERED INTO BY THE AS SESSEE WERE BOGUS. IN THE ABSENCE OF SUCH MATERIAL WE FI ND CREDENCE IN THE STAND TAKEN BY THE ASSESSEE THAT THE ADDITIO NAL INCOME WAS OFFERED/SURRENDERED BY HIM IN THE STATEMENT REC ORDED DURING THE COURSE OF SEARCH TO BUY PEACE OF MIND AN D TO AVOID ANY FURTHER LITIGATION. IT IS PERTINENT TO NOTE HE RE THAT THE TRANSACTIONS OF PURCHASE OF SHARES OF M/S DATABASE FINANCE LTD. HAD BEEN ENTERED INTO BY THE ASSESSEE IN THE E ARLIER YEARS AND THE SAME WERE ACCEPTED AS GENUINE EVEN BY THE A .O. A PERUSAL OF THE ASSESSMENT ORDER AND PENALTY ORDER P ASSED BY THE A.O. ALSO SHOWS THAT THERE WAS NOTHING BROUGHT ON RECORD BY HIM TO ESTABLISH THAT THE TRANSACTIONS OF SALE A ND PURCHASE OF SHARES OF M/S DATABASE FINANCE LTD. BY THE ASSES SEE WERE BOGUS OR THAT THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE DURING THE COURSE OF SEARCH REPRESENTED HIS UNDISCL OSED INCOME. AS A MATTER OF FACT THE TRANSACTIONS OF P URCHASE AND SALE OF M/S DATABASE FINANCE LTD. WERE DULY DISCLOS ED BY THE ASSESSEE IN HIS RETURN OF INCOME FILED ORIGINALLY F OR THE YEAR UNDER CONSIDERATION. AS POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US ADDI TIONAL INCOME WAS SIMILARLY OFFERED BY OTHER ASSESSEES IN RESPECT OF IDENTICAL TRANSACTIONS OF SALE OF SHARES OF DATABAS E FINANCE LTD. IN THE STATEMENTS RECORDED DURING THE COURSE O F SEARCH. THE SAID ASSESSEES HOWEVER RETRACTED THE SAID STA TEMENTS MADE DURING THE COURSE OF SEARCH AND DID NOT OFFER THE ADDITIONAL INCOME SURRENDERED DURING THE COURSE OF SEARCH IN THE RETURNS OF INCOME FILED IN RESPONSE TO NOTICE U /S 153A. THE A.O. THEREFORE MADE ADDITION ON ACCOUNT OF ADDITI ONAL INCOME SURRENDERED DURING THE COURSE OF SEARCH AND WHEN TH E MATTER REACHED TO THE TRIBUNAL THE TRIBUNAL DELETED THE S AID ADDITIONS OBSERVING THAT THERE WAS NOTHING TO SHOW THAT THE T RANSACTIONS INVOLVING PURCHASE AND SALE OF SHARES OF M/S DATABA SE FINANCE LTD. WERE BOGUS. IT WAS ALSO OBSERVED BY THE TRIBU NAL THAT MERELY BECAUSE SOME OTHER ASSESSEES HAVE DECLARED B OGUS CAPITAL GAIN ON ACCOUNT OF TRANSACTIONS OF SHARES O F M/S DATABASE FINANCE LTD. COULD NOT BE A GROUND TO HOLD THAT THE TRANSACTIONS WERE BOGUS IN THE CASE OF THE ASSESSEE ALSO. THIS DECISION OF THE TRIBUNAL IS SUFFICIENT TO SHOW THAT BUT FOR THE ACTION OF THE ASSESSEE IN OFFERING THE ADDITIONAL I NCOME SURRENDERED DURING THE COURSE OF SEARCH IN THE RETU RN FILED IN RESPONSE TO NOTICE U/S 153A THE SUSTENANCE OF ADDI TION OF SUCH INCOME IN THE HANDS OF THE ASSESSEE IN THE QUA NTUM PROCEEDINGS WOULD HAVE BEEN DOUBTFUL. IN THE CASE OF SHRI OMKARESHWAR R. KALANTRI & OTHERS (ITA NO. 1004/PN/2 009 9 ITA NO467/MUM/2009 DATED 5.2.1010) CITED BY THE LD. D.R. PENALTY IMPO SED BY THE A.O. U/S 271(1)(C) IN RESPECT OF ADDITION MADE ON T HE BASIS OF INCOME SURRENDERED DURING THE COURSE OF SEARCH WAS CANCELLED BY THE LD. CIT(A) RELYING ON EXPLANATION 5 TO SECTI ON 271(1)(C) AND SINCE THE ASSESSEES WERE FOUND TO HAVE NOT FULF ILLED THE REQUIREMENTS FOR AVAILING THE IMMUNITY AVAILABLE U NDER THE SAID EXPLANATION THE PUNE BENCH OF ITAT SET ASIDE THE ORDERS OF THE LD. CIT(A) CANCELLING THE PENALTY. THE SAID DECISION OF THE TRIBUNAL RENDERED SPECIFICALLY IN THE CONTEXT O F EXPLANATION 5 TO SECTION 271(1)(C) KEEPING IN VIEW THE FACTS AN D CIRCUMSTANCES INVOLVED IN THAT CASE THUS HAS NO APP LICATION IN THE PRESENT CASE INVOLVING ALTOGETHER DIFFERENT FAC TS. AS SUCH CONSIDERING ALL THE FACTS AND CIRCUMSTANCES OF THE CASE AS DISCUSSED ABOVE WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE TO IMPOSE PENALTY U/S 271(1)(C) AND THE LD. CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY IMPOSED BY THE A.O. UNDER THE SAID PROVISION. IN THAT VIEW OF THE MATTER WE CANCEL T HE PENALTY IMPOSED BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) AND ALLOW THIS APPEAL OF THE ASSESSEE. 8 SINCE THE FACTS OF THE INSTANT CASE ARE IDENTICAL TO THE FACTS IN THE CASE OF RAMAKANT R JADHAV (SUPRA); THEREFORE FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL WE ARE OF THE CONSIDERED OPI NION THAT IT IS NOT A FIT CASE TO LEVY PENALTY US/ 271(1)( C) OF THE I T ACT. WE TH EREFORE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELE TE THE PENALTY SO SUSTAINED. 9 IN THE RESULT THE APPEAL FILED BY THE ASSESSEE I S ALLOWED. ORDER PRONOUNCED ON THE 8 TH DAY OF DEC 2010. SD/- SD/- ( (( ( D K AGARWAL D K AGARWAL D K AGARWAL D K AGARWAL ) )) ) JUDICIAL MEMBER ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 8 TH DEC 2010 RAJ* 10 ITA NO467/MUM/2009 COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR ITAT MUMBAI