DCIT 22(3), NAVI MUMBAI v. VIJAY RAVJI GAJRA, NAVI MUMBAI

ITA 6261/MUM/2014 | 2009-2010
Pronouncement Date: 05-10-2016 | Result: Dismissed

Appeal Details

RSA Number 626119914 RSA 2014
Assessee PAN AEDPG2541P
Bench Mumbai
Appeal Number ITA 6261/MUM/2014
Duration Of Justice 1 year(s) 11 month(s) 27 day(s)
Appellant DCIT 22(3), NAVI MUMBAI
Respondent VIJAY RAVJI GAJRA, NAVI MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 05-10-2016
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 05-10-2016
Date Of Final Hearing 30-06-2016
Next Hearing Date 30-06-2016
Assessment Year 2009-2010
Appeal Filed On 09-10-2014
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI JASON P. BOAZ (AM) AND SHRI SANDEEP GOS AIN (JM) ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 THE DCIT 22(3) MUMBAI 3 RD FLOOR TOWER NO. 6 VASHI RAILWAY STATION COMPLEX. VASHI NAVI MUMBAI. VS. SHRI. VIJAY RAVJI GAJRA F.NO. 801 TOWER NO. 6 SEA BREEZE SOCIETY PALM BEACH RAOD NERUL NAVI MUMBAI- 400 706. PAN : AEDPG2541P (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI. RAJNESH K. ARVIND RESPONDENT BY : SHRI. SUNIL KUMAR TIWARI DATE OF HEARING: 22/09 /2016 DATE OF PRONOUNCEMENT: 05/10/201 6 O R D E R PER JASON P. BOAZ AM THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF THE CIT (APPEALS)-33 MUMBAI DT. 15/07/2014 DELETING THE PENALTY OF RS. 35 58 183/-LEVIED U/S 271AAA OF THE INCOME TAX ACT 1961 (IN SHORT THE ACT) FOR ASST. YEAR 2009-10. 2. THE FACTS OF THE CASE BRIEFLY ARE AS UNDER:- 2.1 THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN BUSINE SS OF REAL ESTATE AS BUILDER AND DEVELOPER. A SEARCH AND SEIZURE ACTION U/S 132 OF T HE ACT WAS CONDUCTED BY THE I.T. DEPARTMENT IN THE GAJRA GROUP ON 19/02/2009 W HEREIN THE ASSESSEE ALONG WITH HIS PARTNER SHRI.RAMESH GAJRA DISCLOSED COLLEC TIVELY ADDITIONAL INCOME OF RS. 2 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 15 CRORES IN THEIR INDIVIDUAL HANDS AND FIRM IN WHI CH HE WAS PARTNER. IN THE ASSESSEES CASE THE DISCLOSURE WAS AS RS. 4 24 31 0 99/-. FOR ASST. YEAR 2009-10 THE ASSESSEE FILED HIS RETURN OF INCOME ON 03/05/20 10 DECLARING TOTAL INCOME OF RS. 3 57 72 163/-. THE BREAKUP OF THE DISCLOSURE OF INCOME DECLARED IN THE COURSE OF SEARCH AND WAS AS UNDER:- SR. NO. DESCRIPTION AY 2009 - 10 (AS PER 132(4) AS PER ROI DIFFERENCE 1 JEWELLERY 3 00 000 3 00 000 NIL 2 CASH SEIZURE 10 00 000 10 00 000 NIL 3 BROKERAG E 7 50 000 7 50 000 NI L 4 CASH CREDIT BY WAY OF LOAN 3 78 81 099 3 35 31 393 43 49 166 5 MISCELLANEOUS 25 00 000 NIL 25 00 000 6 TOTAL 4 24 31 099 3 55 81 933 68 49 166 2.2 IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSEE EXPLAINED THE DIFFERENCE OF RS. 43 49 166/- ON ACCOUNT OF REDUCED DISCLOSURE OF CASH CREDIT WHICH WAS ACCEPTED BY THE ASSESSING OFFICER (AO). IN RESPEC T OF THE DIFFERENCE OF RS. 25 00 000/- ON ACCOUNT OF MISCELLANEOUS INCOME T HE ASSESSEE SUBMITTED THAT THIS AMOUNT WAS DECLARED BY THE ASSESSEE DURING SEA RCH TO COVER ANY SHORTFALL IN THE DECLARATION MADE U/S 132(4) OF THE ACT AND SINC E LATER ON AT THE TIME OF FILING OF THE RETURN OF INCOME IT WAS FOUND THAT THERE WA S NO SHORTFALL IN THE UNDISCLOSED INCOME BEYOND RS. 3 55 81 933/- THE SAME WAS NOT O FFERED IN THE RETURN OF INCOME FILED FOR ASST. YEAR 2009-10. THE ASSESSEES EXPLANATION HOWEVER DID NOT FIND FAVOUR WITH THE A.O AND THE SAID AMOUNT OF RS. 25 00 000/- WAS BROUGHT TO TAX IN THE ASSESSEES HANDS WHEN THE A.O CONCLUDED THE ASSESSMENT U/S 153A R. W. S 143(3) OF THE ACT VIDE ORDER DT. 03/11/2010 WHEREIN THE ASSESSEES INCOME WAS DETERMINED AT RS. 3 82 75 163/-. PENALTY PROCEE DINGS U/S 271AAA OF THE ACT WERE INITIATED SIMULTANEOUSLY IN THIS REGARD. THE A UTHORITIES BELOW HAVE OBSERVED 3 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 THAT NO APPEAL HAS BEEN PREFERRED BY THE ASSESSEE A GAINST THE ORDER OF ASSESSMENT FOR ASST. YEAR 2009-10 DT. 03/11/2010 AND THEREFORE THE MATTER ATTAINED FINALITY. 3.1 THE A.O INITIATED PENALTY PROCEEDINGS U/S 271AA A OF THE ACT SIMULTANEOUSLY IN THE ORDER OF ASSESSMENT FOR ASST. YEAR 2009-10 D T. 03/11/2010 REQUIRING THE ASSESSEE TO SHOW CAUSE AS TO WHY PENALTY BE NOT LEV IED THERE UNDER IN THE CASE ON HAND. IN REPLY DT. 23/05/2011 THE ASSESSEE OBJECTE D TO THE SAID PROPOSAL OF THE A.O SUBMITTING INTER ALIA THAT THE A.O HAD ACCEPTED THE DISCLOSURE OF RS. 3 55 81 933/- MADE BY THE ASSESSEE AND THAT THE ONL Y ADDITION MADE TO THE RETURNED INCOME WAS RS. 25 00 000/-PURELY ON ESTIMA TE BASIS. THE EXPLANATION PUT FORWARD BY THE ASSESSEE WERE NOT ACCEPTED BY TH E A.O AND PROCEEDED TO LEVY PENALTY OF RS.35 58 193/-; BEING 10% OF THE RETURNE D INCOME OF RS. 3 55 81 933/- VIDE ORDER DT. 30/05/2011 DUE TO NON COMPLIANCE WIT H THE CONDITIONS SPECIFIED U/S 271AAA OF THE ACT. 3.2 AGGRIEVED BY THE ORDER LEVYING PENALTY OF RS. 3 5 58 193/- U/S 271AAA OF THE ACT FOR ASST. YEAR 2009-10 VIDE ORDER DT. 30/05/201 1 THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(APPEALS)-33 MUMBAI. AFTE R CONSIDERING THE SUBMISSIONS PUT FORTH BY THE ASSESSEE THE AOS VIEWS IN THE MA TTER AND THE MATERIAL ON RECORD THE LD. CIT(A) IN THE IMPUGNED ORDER DT. 15/07/201 4 DELETED THE PENALTY LEVIED U/S 271AAA OF THE ACT AS HE WAS OF THE VIEW THAT T HE ASSESSEE IN THE COURSE OF SEARCH PROCEEDINGS HAD DECLARED THE DETAILS OF INCO ME AND THE MANNER THEREOF AS EVIDENT FROM A PERUSAL OF THE WORKING ON PAGE 3 OF THE ORDER OF ASSESSMENT AND ALSO FOR THE REASON THAT THE A.O HAD NOT IDENTIFIED WHICH CONDITIONS HAS NOT BEEN COMPLIED WITH BY THE ASSESSEE AS PROVIDED U/S 271AA A OF THE ACT. IN COMING TO THIS FINDING THE LD. CIT(A) FOLLOWED THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S KANAKIA SPACES PVT. LT D. IN ITA NO. 6763/MUM/2011 DT. 10/07/2013. 4 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 4.1 REVENUE BEING AGGRIEVED BY THE IMPUGNED ORDER OF THE CIT(APPEALS)-33 MUMBAI DT. 15/07/2014 DELETING THE PENALTY OF RS. 3 5 58 193/- LEVIED U/S 271AAA OF THE ACT FOR ASST. YEAR 2009-10 HAS PREFE RRED THIS APPEAL RAISING THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD. CIT(A) ERRED IN DELETING THE PENALTY OF RS. 35 58 193/- LEVIED BY THE ASSESSING OFFICER U/S 271AAA OF THE INCOME TAX ACT 1961 WITHOUT CONSIDERING THE FACT THAT THE ASSESSEE HAD FAILED TO SPECIFY AND SUBSTANTIATE THE MANNER IN WHICH THE UNDISCLO SED INCOME HAS BEEN DERIVED DESPITE THE FACT THAT U/S 271AAA(2) ON US LIES ON THE ASSESSEE TO SPECIFY AND SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. 2. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUNDS BE REVERSED AND THAT OF THE ASSESSING OFFIC ER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4.2 THE LD. DR FOR REVENUE WAS HEARD IN SUPPORT OF THE GROUNDS RAISED (SUPRA) SUBMITTING THAT THE ONLY ISSUE CHALLENGED WAS THE O RDER OF THE LD. CIT(A) DELETING THE PENALTY OF RS. 35 58 193/- LEVIED BY THE A.O U/ S 271AAA OF THE ACT FOR ASST. YEAR 2009-10. ACCORDING TO THE LD. DR WHO PLACED S TRONG RELIANCE ON THE ORDER OF THE A.O THE LD. CIT(A) OUGHT NOT TO HAVE DELETED T HE SAID PENALTY AS THE ASSESSEE HAD FAILED TO DISCHARGE ITS ONUS TO SPECIFY AND SUB STANTIATE THE MANNER IN WHICH THE UNDISCLOSED INCOME HAD BEEN DERIVED. IN VIEW OF THE ABOVE IT WAS PRAYED THAT THE ORDER OF THE LD. CIT(A) BE REVERSED AND THAT OF THE A.O BE RESTORED. 5 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 4.3 PER CONTRA THE LD. AR FOR THE ASSESSEE SUPPOR TED THE IMPUGNED ORDER OF THE LD. CIT(A) DELETING THE PENALTY OF RS. 35 58 193/-L EVIED U/S 271AAA OF THE ACT AS BEING IN ORDER. SUBMISSIONS PUT FORWARD BEFORE AUTH ORITIES BELOW WERE REITERATED. ACCORDING TO THE LD. AR THE ASSESSEE HAD FULFILLED THE CONDITIONS AS REQUIRED BY THE PROVISIONS OF SEC. 271AAA OF THE ACT AND BOTH SPECIFIED AND SUBSTANTIATE D U/S 132(4) OF THE ACT THE MANNER AND SOURCE FROM W HICH THE UNDISCLOSED INCOME OF RS. 4 24 31 099/- HAD BEEN EARNED BEFORE THE ADD L. DIT (INV.) KALYAN VIDE LETTER DT. 12/04/2009 WHICH ITEM WISE BREAK UP FINDS MENT ION AT PAGES 1 AND 2 OF THE ORDER OF ASSESSMENT OF FOR ASST. YEAR 2009-10. IT W AS CONTENDED THAT IN VIEW OF THE ABOVE PENALTY U/S 271AAA OF THE ACT WAS NOT LEVIAB LE OR SUSTAINABLE IN THE CASE ON HAND AND WAS CORRECTLY DELETED BY THE LD. CIT(A) . IN THIS REGARD RELIANCE WAS INTER ALIA PLACED ON THE DECISION OF THE CO-ORDINATE BENCH O F THIS TRIBUNAL IN THE CASE OF KANAKIA SPACES PVT. LTD. ( ITA NO. 6763/MUM /2011 DT. 10/07/2013.) WHICH THE LD. AR CONTENDS COVERS THE ISSUE IN THIS APPEAL IN FAVOUR OF THE ASSESSEE. 4.4.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE JUDICIAL PRON OUNCEMENT CITED. THE FACTS OF THE MATTER AS EMANATE FROM THE RECORD ARE THAT IN T HE COURSE OF SEARCH ACTION IN THE GAJRA GROUP ON 09/02/2009 AND THEREAFTER IT W AS INTER ALIA ADMITTED BEFORE THE ADDL. DIT (INV) THANE VIDE LETTER DT. 12/04/20 09 AND IN THE ASSESSEES STATEMENT U/S 132(4) OF THE ACT THAT THE DECLARATIO N/ADMISSION OF UNDISCLOSED INCOME OF THE ASSESSEE IN THE CASE ON HAND FOR ASST . YEAR 2009-10 WAS AS UNDER:- SR. NO. DESCRIPTION & DETAILS AMOUNT 1 JEWELLERY RS. 3 00 000 2 CASH SEIZURE RS. 10 00 000 3 BROKERAGE RS. 7 50 000 4 REPRESENTS CASH CREDIT BY WAY OF LOANS IN REGULAR B OOKS RS. 3 78 81 099 6 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 OF ACCOUNT INCLUDING INTEREST(LOAN AMOUNT RS. 3 38 22 409/- INTEREST RS. 40 58 690/-) 5 MISCELLANEOUS RS. 25 00 000 TOTAL RS. 4 24 31 099 4.4.2 IT IS SEEN THAT IN THE RETURN OF INCOME FILED THEREAFTER FOR ASST. YEAR 2009-10 ON 03/05/2010 THE ASSESSEE DECLARED UNDISCLOSED IN COME AS UNDER:- SR. NO. DESCRIPTION AMOUNT (RS.) 1 JEWELLERY 3 00 000 2 CASH S EIZURE 10 00 000 3 BROKERAGE 7 50 000 4 CASH CREDIT BY WAY OF LOAN 3 35 31 933 TOTAL 3 55 81 933 THE DIFFERENCE BETWEEN THE DECLARATION U/S 132(4) OF THE ACT AND THAT ADMITTED IN THE RETURN OF INCOME FILED WAS; (I) RS. 43 49 100/- ON ACCOUNTS OF CASH CREDIT BY WAY OF LOAN THE ASSESSEES EXPLANATION FOR WHICH WAS ACCEPTED BY THE A.O; AND (II) AN AMOUNT OF RS. 25 00 000/- ON ACCOUNT OF MI SCELLANEOUS WHICH WAS ADDED TO THE ASSESSEES INCOME WHEN THE ORDER OF ASSESSME NT WAS FINALIZED U/S 153A RWS 143(3) VIDE ORDER DT. 03/11/2010. 4.4.3 PENALTY PROCEEDINGS WERE INITIATED U/S 271A AA OF THE ACT SIMULTANEOUSLY IN THE ORDER OF ASSESSMENT FOR ASST. YEAR 2009-10. IT IS SEEN THAT THE A.O PROCEEDED TO LEVY PENALTY OF RS. 35 58 193/- @ 10% OF THE RETURNED UNDISCLOSED INCOME OF RS. 3 55 81 933/- ADMITTED BY THE ASSESSE E U/S 132(4) OF THE ACT AND DECLARED IN THE RETURN OF INCOME FOR A.Y. 2009-10 ON THE GROUND THAT THE ASSESSEE HAD NOT COMPLIED WITH THE PROVISIONS SPECIFIED UND ER SECTION 271AAA OF THE ACT FOR NON-LEVY OF PENALTY THERE UNDER. ON APPEAL BY T HE ASSESSEE WE FIND THAT THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF TH E ASSESSEE THE A.OS VIEWS AND 7 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 THE MATERIAL ON RECORD HAS DELETED THE PENALTY LEV IED U/S 271AAA HOLDINGS UNDER AT PARAS 2.6 TO 2.8 OF THE IMPUGNED ORDER :- 2.6 I HAVE CONSIDERED THE DETAILS ON RECORD FILED BY THE A.O AS WELL AS BY THE APPELLANT ON VARIOUS DATES. I HAVE ALSO PERU SED THE ASSESSMENT ORDER AND THE IMPUGNED PENALTY ORDER. THE FIRST CON TENTION OF THE APPELLANT THAT THE INCOME OFFERED UNDER 132(4) DOES NOT FALL WITHIN THE DEFINITION OF THE TERM 'UNDISCLOSED INCOME' IS INCO RRECT. THE APPELLANT WAS FOUND IN POSSESSION OF CASH AND JEWELLERY WHICH HE COULD NOT EXPLAIN. SIMILARLY THE BROKERAGE EXPENSE OF RS.7.50 LAKH HAS BEEN FOUND TO BE FALSE. HOWEVER THE AMOUNT OF RS.3.55 C RORE REPRESENTING UNEXPLAINED CASH CREDIT IS SQUARELY COVERED BY EXPL ANATION (A)(II) OF SECTION 271AAA. THE DETAILS OF THESE CASH CREDITS A RE ALSO PROVIDED TO AO DURING ASSESSMENT AND FIND MENTION IN THE ASSESS MENT ORDER DATE WISE. THEREOF THIS CONTENTION OF THE APPELLANT IS NOT FRIVOLOUS AND DESERVES TO BE HELD AS SUCH. 2.7 COMING TO THE NEXT CONTENTION OF THE APPELLANT IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAS DURING THE COURSE OF SE ARCH PROCEEDINGS DECLARED THE INCOME AND THE MANNER THEREOF. THIS IS EVIDENT FROM THE PERUSAL OF THE ASSESSMENT ORDER WHEREIN THESE FACTS ARE RECORDED. THE AO HAS ON PAGE 3 OF THE ASSESSMENT ORDER RECORDED T HE DETAILS OF CASH CREDITS OF RS.3.55 CRORE AND THE DATES ON WHICH THE SE ARE CREDITED IN THE BOOKS OF THE APPELLANT. THE CASH AND JEWELLERY FOUND DO NOT REQUIRE ANY FURTHER SUBSTANTIATION AS THEY ARE TANGIBLE ITE MS. EVEN IN THE PENALTY ORDER THE AO HAS CLEARLY MENTIONED THE COM PARISON BETWEEN THE INCOME OFFERED U/S 132(4) AND THE INCOME AS PER RETURN OF INCOME. ON A PERUSAL OF THE PENALTY ORDER NO REASON HAS BE EN PROVIDED BY THE AO FOR LEVY OF PENALTY. HE HAS NOT IDENTIFIED WHICH CONDITION HAS BEEN VIOLATED BY THE APPELLANT AS PROVIDED U/S 271AAA AN D WHY. HE HAS 8 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 MERELY REPRODUCED THE CONDITIONS U/S 271AAA AND MAD E A BALD STATEMENT THAT THE APPELLANT HAS NOT SATISFIED THE CONDITIONS. THE PENALTY ORDER SEEMS TO HAVE BEEN PASSED MECHANICALL Y WITHOUT DEALING WITH EACH CONDITION SEPARATELY. THE APPELLANT'S CAS E IS SQUARELY COVERED BY THE DECISION OF THE JURISDICTIONAL ITAT IN THE CASE OF M/S KANAKIA SPACES PRIVATE LIMITED (SUPRA) WHEREIN THE HONBLE ITAT HAS HELD AS UNDER :- 'THE FACT OF THE MATTER IS THAT THE REQUIREMENT ON THE PART OF AN ASSESSEE TO SUBSTANTIATE THE SOURCE OF INCOME CANNO T BE TAKEN TO MEAN THAT ALL EVIDENCES IN THE RESPECT HAS TO BE PRODUCE D. THE VERY FACT THAT THE DISCLOSURE IS MADE IN RESPECT OF UNDISCLOSED IN COME ALL THAT CAN BE REQUIRED OF AN ASSESSEE IS THAT THE PROXIMATE NATUR E OF ACQUISITION CAN BE MENTIONED BY HIM. IT CANNOT BE THE CASE THAT VER Y MINUTE DETAIL THEREOF WOULD BE PRESERVE WITH EVIDENCE WHICH IS PO SSIBLE ONLY FOR THE REGULAR INCOME BEING DISCLOSED BY HIM THE REQUIREME NT AS PER' SECTION (2) OF SECTION 271AAA IS ONLY THAT THE MANNER OF EA RNING INCOME SHOULD BE SPECIFIED SO THAT UNDUE ADVANTAGE OF TELESCOPING OR SOME OTHER INCOME BEING BROUGHT WITHIN THE TOTAL AMBIT OF UNDI SCLOSED INCOME SURRENDERED DOES NOT HAPPEN. FROM THE ORDER OF THE LD. A.0 ALSO IT IS APPARENT THAT THE PENALTY IS NOT LEVIED BY HIM ON A CCOUNT OF SOME CONVICTION BUT HAS BEEN JUST LEVIED TO COMPLETE THE PROCEEDINGS. IN FACT THERE ARE NO MATERIAL FACTS WARRANTING THE LEVY OF PENALTY AND ACCORDINGLY THE PENALTY OF RS.55 00 000/- - LEVIED UNDER SECTION 271AAA IS DIRECTED TO BE DELETED.' 2.8 IT IS ALSO IMPORTANT TO MENTION HERE THAT THE D ISCLOSURE MADE BY THE APPELLANT HAS BEEN DULY ACCEPTED BY THE AO AND DETA ILED IN THE ASSESSMENT ORDER BY THE AO. THEREFORE THERE IS NO OCCASION TO LEVY 9 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 PENALTY U/S 271AAA. I DIRECT THE AO TO DELETE THE I MPUGNED PENALTY. THE APPELLANT SUCCEEDS IN APPEAL AND THE PENALTY ST ANDS DELETED. 4.4.4 THE PROVISIONS OF SECTION 271AAA OF THE ACT R EAD AS UNDER:- 271AAA (PENALTY WHERE SEARCH HAS BEEN INITIATED. (1). THE ASSESSING OFFICER MAY NOTWITHSTANDING ANY THING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT IN A CASE WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1 ST DAY OF JUNE 2007 THE ASSESSEE SHALL PAY BY WAY OF PENALTY IN ADDITI ON TO TAX IF ANY PAYABLE BY HIM A SUM COMPUTED AT THE RATE OF TEN P ER CENT OF THE UNDISCLOSED INCOME OF THE SPECIFIED PREVIOUS YEAR. (2) NOTHING CONTAINED IN SUB-SECTION (1) SHALL APPL Y IF THE ASSESSEE - (I) IN THE COURSE OF THE SEARCH IN A STATEMEN T UNDER SUB-SECTION(4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SPEC IFIES THE MANNER IN WHICH SUCH INCOME HAS BEEN DERIVED; (II) SUBSTANTIATES THE MANNER IN WHICH THE UNDI SCLOSED INCOME WAS DERIVED; AND (III) PAYS THE TAX TOGETHER WITH INTEREST I F ANY IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE(C) OF SUB-SECTION 271 SHALL BE IMPOSED UPON THE ASSESSEE IN RESPECT OF THE UNDISCL OSED INCOME REFERRED TO IN SUB-SECTION (1). (4) THE PROVISIONS OF SECTIONS 274 AND 275 SHALL S O FAR AS MAY BE APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION . 10 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 EXPLANATION.- FOR THE PURPOSES OF THIS SECTION - (A) UNDISCLOSED INCOME MEANS- (I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESENTED EITHER WHOLLY OR PARTLY BY ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOU NT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UN DER SECTION 132 WHICH HAS- (A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEA RCH IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO SUCH PREVIOUS YEAR; OR (B) OTHERWISE NOT BEEN DISCLOSED TO THE CHIEF COMM ISSIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR (II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPR ESENTED EITHER WHOLLY OR PARTLY BY ANY ENTRY IN RESPECT OF AN EXPENSE RECOR DED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FA LSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CO NDUCTED; (B) SPECIFIED PREVIOUS YEAR MEANS THE PREVIOUS YE AR- (I) WHICH HAS ENDED BEFORE THE DATE OF SEARCH BUT THE DATE OF FILING THE RETURN OF INCOME UNDER SUB-SECTION(1) OF SECTION 13 9 FOR SUCH YEAR HAS NOT EXPIRED BEFORE THE DATE OF SEARCH AND THE ASSES SEE HAS NOT FURNISHED THE RETURN OF INCOME FOR THE PREVIOUS YEA R BEFORE THE SAID DATE;OR (II) IN WHICH SEARCH WAS CONDUCTED.) 11 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 4.4.5 FROM A PERUSAL OF THE PROVISIONS OF SECTION 2 71AAA OF THE ACT(SUPRA) THE FINDING OF THE LD. CIT(A)(SUPRA) AND THE MATERIAL O N RECORD WE CONCUR WITH THE LD. CIT(A)S OBSERVATION THAT THE UNDISCLOSED INCOME OF RS. 3.55 CRORES REPRESENTING VARIOUS ITEMS AS CITED THEREIN ARE LIABLE TO BE CO NSIDERED IN TERMS OF THE PROVISIONS OF EXPLANATION (A)(II) TO SECTION 271AAA OF THE ACT. AS PER THE MATERIAL ON RECORD AND AS OBSERVED BY THE LD. CIT(A) WE FIN D THAT IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS DURING THE COURSE OF SEARCH PROCEEDINGS APART FROM DECLARING THE UNDISCLOSED INCOME; HAS ALSO GIVEN TH E DETAILED BREAK UP OF THE SAME ITEM WISE AND GIVING THE PROXIMATE MANNER IN WHICH AND SOURCE THE SAME HAVE BEEN EARNED/DERIVED FROM. THIS IS THEREFORE IN OUR VIEW SUBSTANTIATED. THE ABOVE FACTS FIND MENTION BY THE A.O IN THE ORDER OF ASSESSMENT AT 2 TO 4 THEREOF INTER ALIA GIVING THE DATES ON WHICH THESE CASH CREDIT ARE CR EDITED IN THE BOOKS OF ACCOUNTS. IT IS NOT A REQUIREMENTS ON THE PART OF T HE ASSESSEE THAT ALL EVIDENCES IN RESPECT OF THE UNDISCLOSED INCOME HAVE TO BE PRODUC ED TO SUBSTANTIATE THE SOURCE OF INCOME; A PROXIMATE NATURE OF ACQUISITION WOULD BE SUFFICIENT. WE TOO AGREE WITH THE FINDING OF THE LD. CIT(A) THAT THE A.O HAS NOT IDENTIFIED WHICH OF THE CONDITIONS HAVE BEEN VIOLATED BY THE ASSESSEE THA T INVITE THE LEVY OF PENALTY U/S 271AAA OF THE ACT IN THE CASE ON HAND; NOR HAS ANY REASON HAS BEEN RENDERED FOR THE LEVY THEREOF. ON A CAREFUL APPRECIATION OF THE FACTUAL AND LEGAL MATRIX OF THE CASE ON HAND WE ARE OF THE CONSIDERED VIEW THAT TH E ASSESSEES CASE IS SQUARELY COVERED BY THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF KANAKIA SPACES PVT. LTD.(SUPRA) WHEREIN THE HONBLE TRIBUNAL AT PARAS 3.1 TO 4.1 HAS OBSERVED AND HELD AS UNDER:- 3.1 IT IS SEEN THAT THE LD.AO HA S WRITTEN TWO SENTENCES AT PARA- 8 TO CONCLUDE THAT THE APPELLANT HAS NOT BEEN ABLE TO SUBSTANTIATE THE SOURCE OF ACQUISITION OF THE MOVABLE ASSETS. TH E FACT OF THE MATTER IS THAT THE REQUIREMENT ON THE PART OF AN ASSESSEE TO SUBSTANTIATE THE SOURCE OF INCOME CANNOT BE TAKEN TO MEAN THAT ALL E VIDENCES IN THE 12 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 RESPECT HAS TO BE PRODUCED. THE VERY FACT THAT THE DISCLOSURE IS MADE IN RESPECT OF UNDISCLOSED INCOME ALL THAT CAN BE REQU IRED OF AN ASSESSEE IS THAT THE PROXIMATE NATURE OF ACQUISITION CAN BE MENTIONED BY HIM. IT CANNOT BE THE CASE THAT VERY MINUTE DETAIL THEREOF WOULD BE PRESERVE WITH EVIDENCE WHICH IS POSSIBLE ONLY FOR THE REGULA R INCOME BEING DISCLOSED BY HIM. THE REQUIREMENT AS PER SECTION ( 2) OF SECTION 271AAA IS ONLY THAT THE MANNER OF EARNING INCOME SHOULD BE SPECIFIED SO THAT UNDUE ADVANTAGE OF TELESCOPING OR SOME OTHER INCOME BEING BROUGHT WITHIN THE TOTAL AMBIT OF UNDISCLOSED INCOME SURREN DERED DOES NOT HAPPEN. FROM THE ORDER OF THE LD. A.O ALSO IT IS A PPARENT THAT THE PENALTY IS NOT LEVIED BY HIM ON ACCOUNT OF SOME CON VICTION BUT HAS BEEN JUST LEVIED TO COMPLETE THE PROCEEDINGS. IN FACT TH ERE ARE NO MATERIAL FACTS WARRANTING THE LEVY OF PENALTY AND ACCORDING LY THE PENALTY OF RS.55 00 000/- LEVIED UNDER SECTION 271AAA IS DIREC TED TO BE DELETED. 4. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF CIT(A). THE ORDER IS IN TUNE WITH THE PRINCIPLES LAID DOWN BY VARIOUS CO-ORDINATE BENCHES AND HIGH C OURTS PARTICULARLY WITH REFERENCE TO DISCLOSURE MADE UNDER SECTION 132 (4). IN THE CASE OF CIT VS. MAHENDRA C. SHAH (299 ITR 305) THE HONBLE GUJARAT HIGH COURT CONSIDERED SIMILAR STATEMENT UNDER SECTION 13 2(4) TO GRANT IMMUNITY UNDER SECTION 271(1)(C). THE HON'BLE HIGH COURT HELD AS UNDER:- WHEN THE STATEMENT IS BEING RECORDED BY THE AUTHOR IZED OFFICER IT IS INCUMBENT UPON THE AUTHORIZED OFFICER TO EXPLAIN TH E PROVISIONS OF EXPLANATION 5 IN ENTIRETY TO THE ASSESSEE CONCERNED AND THE AUTHORIZED OFFICER CANNOT STOP SHORT AT A PARTICULAR STAGE SO AS TO PERMIT THE REVENUE TO TAKE ADVANTAGE OF SUCH A LAPSE IN THE ST ATEMENT. THE REASON IS NOT FAR TO SEEK. IN THE FIRST INSTANCE T HE STATEMENT IS BEING RECORDED IN THE QUESTION AND ANSWER FORM AND THERE WOULD BE NO OCCASION FOR AN ASSESSEE TO STATE AND MAKE AVERMENT S IN THE EXACT 13 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 FORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED. SECONDLY CONSIDE RING THE SOCIAL ENVIRONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN AS SESSEE WHETHER LITERATE OR ILLITERATE TO BE SPECIFIC AND TO THE P OINT REGARDING THE CONDITIONS STIPULATED IN THE SECOND EXCEPTION WHILE MAKING STATEMENT UNDER SECTION 132(4). EVEN IF THE STATEMENT DOES NO T SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED IF THE INCOME IS DE CLARED AND TAX THEREON PAID THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTING ANY FURTHER DENIAL OF THE BENEFIT. 4.1 IN THIS CASE THE ASSESSEE WAS ASKED TO EXPLAIN THE ENTRIES IN THE WORK-IN-PROGRESS SHEET AND ASSESSEE IN THE COURSE OF STATEMENT OFFERED THE INCOME WITH A PLEA NOT TO INITIATE PENA LTY PROCEEDINGS. THE ASSESSEE WAS NOT ASKED ABOUT THE MANNER IN WHICH SU CH INCOME WAS EARNED AND ALSO TO SUBSTANTIATE THE MANNER IN WHICH UNDISCLOSED INCOME WAS DERIVED. THE PROVISION OF CLAUSE-2 OF EX PLANATION-V APPENDED TO SECTION 271(1)(C) ARE SIMILAR TO SECTIO N 271AAA(2). THE SCOPE AND MEANING HAS BEEN LUCIDLY EXPLAINED BY THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. RADHA K ISHAN GOEL (2005) 278 ITR 454 (ALL.) WHICH WAS FOLLOWED BY THE HON'B LE GUJARAT HIGH COURT IN THE ABOVE REFERRED CASE. IN VIEW OF THE AB OVE PRINCIPLES LAID DOWN WE ARE OF THE OPINION THAT IMMUNITY PROVIDED UNDER S/S.(2) OF SECTION 271AAA IS APPLICABLE AND ACCORDINGLY THE O RDER OF CIT(A) DOES NOT REQUIRE ANY MODIFICATION. REVENUES GROUNDS ARE REJECTED. 4.4.6 IN THE FACTUAL AND LEGAL MATRIX OF THE CASE AS DISCUSSED ABOVE FROM PARA 4.1 TO 4.4.5 OF THIS ORDER(SUPRA) AND FOLLOWING THE DE CISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF KANAKIA SPACES PVT. LT D. (ITA NO. 6763/MUM/2011 DT. 10/07/2013) WE ARE OF THE OPINION THAT THE IMP UGNED ORDER OF THE LD. CIT(A) DELETING THE PENALTY OF RS. 35 58 193/- U/S 271AAA OF THE ACT IN THE CASE ON HAND 14 ITA NO. 6261/MUM/2014 ASSESSMENT YEAR: 2009-10 FOR ASST. YEAR 2009-10 DOES NOT CALL FOR ANY INTERF ERENCE BY US AND THEREFORE UPHOLD THE SAME. CONSEQUENTLY GROUND NO. 1 TO 3 O F REVENUES APPEAL IS DISMISSED. 5. IN THE RESULT REVENUES APPEAL FOR A SST YEAR. 2009-10 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN CO URT ON 5 TH OCTOBER 2016 SD/- SD/- ( SANDEEP GOSAIN ) (JASON P.BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; DATED: 05/10/2016 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A)- 4. / CIT 5. !' $ !'% / DR ITAT MUMBAI 6. &' ( / GUARD FILE. / BY ORDER ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) / ITAT MUMBAI PRAMILA