Sunil Kumar Bansal, Chandigarh v. DCIT, Chandigarh

ITA 874/CHANDI/2013 | 2009-2010
Pronouncement Date: 18-11-2014 | Result: Allowed

Appeal Details

RSA Number 87421514 RSA 2013
Assessee PAN ABJPB2716J
Bench Chandigarh
Appeal Number ITA 874/CHANDI/2013
Duration Of Justice 1 year(s) 2 month(s) 15 day(s)
Appellant Sunil Kumar Bansal, Chandigarh
Respondent DCIT, Chandigarh
Appeal Type Income Tax Appeal
Pronouncement Date 18-11-2014
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 18-11-2014
Date Of Final Hearing 10-11-2014
Next Hearing Date 10-11-2014
Assessment Year 2009-2010
Appeal Filed On 03-09-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI BHAVNESH SAINI JUDICIAL MEMBER AND SHRI T.R. SOOD ACCOUNTANT MEMBER ITA NO. 874 & 875/CHD/2013 ASSESSMENT YEARS : 2009-10 & 2010-11 SUNIL KUMAR BANSAL V D.C.I.T. CENTRAL CIRCLE-I 2048 SECTOR 15-C CHANDIGARH ABJPB 2716 J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SUDHIR SEHGAL RESPONDENT BY: SHRI RAJEEV KUMAR DATE OF HEARING 10.11 .2014 DATE OF PRONOUNCEMENT 18.11.2014 O R D E R PER T.R. SOOD A.M THESE APPEALS ARE DIRECTED AGAINST THE ORDER OF LD CIT(A) GURGAON DATED 12.6.2013. 2. IN BOTH THESE APPEALS THE ASSESSEE HAS RAISED TH E FOLLOWING GROUNDS: 1 THE LD. CIT(A) HAS ERRED IN LAW AND FACTS IN CON FIRMING PENALTY OF RS. 8 50 000/- IN ASSESSMENT YEAR 2009- 10 & RS. 50 000/- IN ASSESSMENT YEAR 2010-11 U/S 271AAA OF IT ACT. 2 THAT THE PENALTY U/S 271AAA AS CONFIRMED BY THE L D. CIT(A) IS AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE AND BY NOT CONSIDERED OUR SUBMISSIONS PROPERLY. 3 AFTER HEARING BOTH THE PARTIES WE FIND THAT A SEA RCH WAS CONDUCTED IN THIS GROUP OF CASES AND TOTAL SURRENDE R OF RS. 6.5 CRORES WAS MADE AND IN THE HANDS OF THE VARIOUS IND IVIDUALS AND FIRMS ETC. OUT OF THIS TOTAL SURRENDER RS. 90 LAKHS WAS SURRENDERED IN THE HANDS OF THE ASSESSEE CONSISTING OF RS. 85 LAKHS IN ASSESSMENT YEAR 2009-10 AND RS. 5 LAKHS I N ASSESSMENT YEAR 2010-11. THE INCOME WAS ASSESSED O N 2 RETURNED INCOME AFTER CONSIDERING SURRENDERED INCOM E AND PENALTY PROCEEDINGS U/S 271AAA WERE INITIATED. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY IT WAS MA INLY SUBMITTED THAT THE ASSESSEE WAS DIRECTOR OF M/S HIL L VIEW INFRASTRUCTURE PVT LTD AND PARTNER IN HILL VIEW PRO MOTERS. BY VIRTUE OF WORKING WITH THESE COMPANIES THE ASSESSEE HAD ACQUIRED GOOD KNOWLEDGE IN REAL ESTATE BUSINESS AND HAS ALSO ESTABLISHED GOOD LINKS IN THE TRADE. BECAUSE OF TH ESE TWO FACTORS THE ASSESSEE HAD EARNED CERTAIN COMMISSION WHICH WAS NOT DECLARED EARLIER AND WHICH WAS DECLARED NOW . IT WAS FURTHER PLEADED THAT NO EVIDENCE WAS AVAILABLE BECA USE COMMISSION FROM REAL ESTATE BUSINESS WAS NOT INTEND ED TO BE ACCOUNTED FOR AND THEREFORE NO RECORDS WERE KEPT. INCOME WAS SURRENDERED BECAUSE OF INVESTMENT MADE IN SARAS WATI EDUCATIONAL WELFARE SOCIETY AND HILL VIEW INFRASTRU CTURE PVT LTD WAS DETECTED DURING SURVEY. THE ASSESSING OFFI CER DID NOT FIND FORCE IN THESE SUBMISSIONS AND REFERRED TO THE PROVISIONS OF SECTION 271AAA. HE OBSERVED THAT THE ASSESSEE HAS NOT SUBSTANTIATED THE MANNER IN WHICH THE INCOME HAS BE EN EARNED AND DETAILS COMMISSION OR DETAILS OF TRANSACTION O R PROPERTY IN RESPECT OF WHICH INCOME WAS EARNED IS NOT FURNISHE D. IN THIS BACKGROUND PENALTY @ 10% AMOUNTING TO RS. 8 50 000 WAS LEVIED. 4 ON APPEAL THE SUBMISSIONS MADE BEFORE THE ASSESSI NG OFFICER WERE REITERATED AND RELIANCE WAS PLACED ON CERTAIN CASE LAWS. 5 THE LD. CIT(A) DID NOT FIND ANY FORCE IN THE SUBM ISSIONS AND CONFIRMED LEVY OF PENALTY. 3 6 BEFORE US THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AND T HE LD. CIT(A). HE FURTHER SUBMITTED THAT NO QUESTIONS WERE ASKED REGARDING THE MANNER OF EARNING THE INCOME AND THAT IS WHY NO REPLY WAS GIVEN. IN THE ABSENCE OF SUCH QUESTIONS IT CANNOT BE SAND THAT THE ASSESSEE HAS NOT SUBSTANTIATED THE MANNER OF EARNING THE PROFIT. IN THIS REGARD HE RELIED ON TH E DECISION OF HON'BLE GUJARAT HIGH COURT IN CASE OF CIT V. MAHEND RA C. SHAH 299 ITR 305 (GUJ). HE ALSO RELIED ON THE DEC ISION OF CUTTACK BENCH OF THE TRIBUNAL IN CASE OF PRAMOD KUM AR JAIN V DCIT ITAS NO. 131 132 & 133/CTK/2012 AND HE FURTH ER SUBMITTED THAT THE ISSUE IS COVERED BY THE DECISION OF CHANDIGARH BENCH OF THE TRIBUNAL IN CASE OF DCIT V. AMARJIT GOYAL AND OTHERS ITAS NO. 1080 1081 & 1082/CHD/20 13. 7 ON THE OTHER HAND THE LD. DR FOR THE REVENUE STR ONGLY SUPPORTED THE ORDER OF THE LD. CIT(A). 8 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULL Y AND FIND THAT HON'BLE GUJARAT HIGH COURT IN CASE OF CIT V. M AHENDRA C. SHAH (SUPRA) HAS MADE FOLLOWING OBSERVATIONS IN THIS REG ARD. 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 THE 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 FORMAT STIPULATED BY THE PROVISIONS CONSIDERING THE SETTING IN WHICH SUCH STATEMENT IS BEING RECORDED. SECONDLY CONSIDERING THE SOCIAL ENVIRONMENT IT IS NOT POSSIBLE TO EXPECT FROM AN AS SESSEE WHETHER LITERATE OR ILLITERATE TO BE SPECIFIC AND TO THE PO INT REGARDING THE CONDITIONS STIPULATED BY THE SECOND EXCEPTION WHILE MAKING STATEMENT U/S 132(4). EVEN IF THE STATEMENT DOES NOT SPECIFY THE MANNER IN WHICH THE INCOME IS DERIVED IF THE INCOME IS DECLARED AND TAX THEREON PAID THERE WOULD BE SUBSTANTIAL COMPLIANCE NOT WARRANTI NG ANY FURTHER DENIAL OF THE BENEFIT. FURTHER THIS ISSUE CAME UP FOR CONSIDERATION OF THE CHANDIGARH BENCH OF THE TRIBUNAL IN CASE OF DCIT V. AMARJIT GO YAL AND 4 OTHERS ITAS NO. 1080 1081 & 1082/CHD/2013. FOLLOW ING ISSUE WAS DECIDED VIDE PARA 5 WHICH IS AS UNDER: 5 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD WE FIND THAT IDENTICAL ISSUES CAME UP FOR CONSIDERATION OF THE TRIBUNAL IN ITAS NO. 1005/CHD/2013 IN CASE OF A CIT V. GIAN CHAND GUPTA 1006/CHD/2013 IN CASE OF ACITV V. MOHI NDER GUPTA AND 1007/CHD/2013 IN CASE OF ACIT V. SANJAY KUMAR GOYAL AND THE ISSUES WERE DECIDED AGAINST THE REVENUE FOLLOWI NG THE ORDER OF THE TRIBUNAL IN ITAS NO. 1003 & 1004/2013 IN CASE O F MUNISH KUMAR GOYAL AND HARISH KUMAR SINGLA VIDE PARAS 4 TO 11 WHICH READ AS UNDER: 4 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD WE FIND THAT IDENTICAL ISSUES CAME UP FOR CONSIDERATION OF THE TRIBUNAL IN ITAS NO. 1003 & 1004/2013 IN CASE O F MUNISH KUMAR GOYAL AND HARISH KUMAR SINGLA WHICH WERE ADJU DICATED VIDE PARAS 8 TO 13 WHICH IS AS UNDER: 8 WE HAVE GONE THROUGH THE RIVAL SUBMISSIONS CAREFU LLY. THE LD. CIT(A) HAS DECIDED THIS ISSUE VIDE PARA 5 WHICH IS AS UNDER: I HAVE CONSIDERED THE BASIS OF PENALTY IMPOSED BY T HE AO AND THE ARGUMENTS OF THE AR ON THE ISSUE. THE PERUSAL OF TH E PROVISIONS OF SECTION 271AAA MAKE IT CLEAR THAT THE PENALTY CAN B E LEVIED ON UNDISCLOSED INCOME OF THE SPECIFIED YEAR IF THE CO NDITIONS SPECIFIED IN SUB SECTION (2) OF SECTION 271AAA ARE NOT SATISFIED . IT THEREFORE FOLLOWS THAT FIRST THING TO DETERMINE IS WHAT IS THE AMOUNT OF UNDISCLOSED INCOME UNDER THE GIVEN CIRCUMSTANCES. THE CONCEPT OF UNDIS CLOSED INCOME HAS BEEN CLEARLY DEFINED BY EXPLANATION TO SECTION 271A AA AND THE SAME READS AS UNDER:- UNDISCLOSED INCOME MEANS- I) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRES ENTED 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 SEARCH UNDER SECTION 132 WHICH HAS-A A) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARC H 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 COMMIS SIONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR II) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRE SENTED EITHER WHOLLY OR PARTLY BY ANY ENTRY IN RESPECT OF AN EXP ENSE RECORDED IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN T HE NORMAL COURSE RELATING TO THE SPECIFIED PREVIOUS YEAR WHICH IS FO UND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH N OT BEEN CONDUCTED;. THE PERUSAL OF ABOVE DETAILED DEFINITION SHOWS THAT IT IS EXHAUSTIVE DEFINITION AND THERE IS CLEAR IDENTIFICATION OF THE INCOME REPRESENTED EITHER WHOLLY OR PARTLY BY ANY MONEY BULLION JE WELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNTS OR OTHER DOCUMENTS OF TRANSACTIONS FOUND IN THE COURSE OF SE ARCH UNDER SECTION 132. IT IS SEEN THAT THERE IS CLEAR AND DIRECT ASS OCIATION BETWEEN THE INCOME ON ONE HAND AND ASSETS / DOCUMENTS ON THE OT HER HAND FOUND DURING THE COURSE OF SEARCH. IT FOLLOWS THAT IF CER TAIN INCOME IS NOT REPRESENTED BY ANY ASSETS/DOCUMENTS/ENTRY FOUND DUR ING THE SEARCH THE SAME WOULD NOT BE COVERED UNDER THE DEFINITION OF U NDISCLOSED INCOME BUT WOULD INVITE PENALTY PROCEEDINGS U/S 271(1)(C) ON THE FULFILLMENT OF OTHER REQUISITE CONDITIONS. THIS MEANS THAT ENTIRE DISCLOSURE OF INCOME AT THE TIME OF SEARCH OPERATION MAY NOT FALL UNDER THE DEFINITION OF 5 UNDISCLOSED INCOME IF IT COULD NTO BE RELATABLE TO SOME ASSETS/DOCUMENTS/ENTRY FOUND DURING THE COURSE OF S EARCH OPERATION. IT ALSO MEANS THAT IF THE AO DURING THE COURSE OF SEAR CH OPERATION. IT ALSO MEANS THAT IF THE AO DURING THE COURSE OF SEARCH AS SESSMENT PROCEEDINGS MAKES CERTAIN ADDITIONS INDEPENDENT OF THE INCRIMINATING MATERIAL/DOCUMENTS FOUND DURING THE COURSE OF SEARC H OPERATION THEN SUCH AN ASSESSED INCOME WOULD NOT INVITE PENALTY PR OCEEDINGS U/S 271AAA BUT UNDER SECTION 271(1)(C). IT ALSO MEANS T HAT INITIATION OF PENALTY PROCEEDINGS WOULD DEPEND UPON THE NATURE OF THE INCOME ASSESSED AND THERE COULD BE PENALTY PROCEEDINGS U/S 271AAA AS WELL AS 271(1)(C) FOR THE SAME ASSESSMENT YEAR HOWEVER IN RESPECT OF DIFFERENT INCOME. THE AO IN THE PENALTY ORDER HAS CLEARLY ACC EPTED THAT DISCLOSURE OF INCOME BY THE ASSESSEE TO THE TUNE OF RS. 3 80 1 2 500/- IS NOT REPRESENTED BY ANY ASSETS/DOCUMENTS FOUND DURING TH E COURSE OF SEARCH OPERATION AND HAS ALSO OBSERVED THAT THE SAME WAS P ART OF THE UNDISCLOSED INCOME JUST BECAUSE THIS DISCLOSURE HAD COME DURING THE COURSE OF SEARCH AND WAS THEREFORE AS A RESULT OF T HE SEARCH. THERE IS A CLEAR ACCEPTANCE OF THE FACT THAT THE SAID DISCLOSU RE IS NOT WITH REFERENCE TO ANY ASSETS/DOCUMENTS FOUND DURING THE COURSE OF SEARCH. IT IS ONLY BECAUSE THE SAID DISCLOSURE HAPPENED DURING THE SEA RCH THAT THE SAME HAS BEEN CLUBBED IN THE DEFINITION OF UNDISCLOSED I NCOME REQUIRING THE ASSESSEE TO FULFILL THE CONDITION AS SPECIFIED IN S UB SECTION (2) OF 271AAA. I AM OF THE CLEAR VIEW THAT INCOME TO THE E XTENT OF RS. 3 80 12 500/- DOES NOT COME UNDER THE DEFINITION OF UNDISCLOSED INCOME AS DEFINED UNDER SECTION 271AAA AND THEREFORE NO PE NALTY U/S 271AAA COULD BE LEVIED. THE SECOND ASPECT OF THE PENALTY O RDER PASSED BY THE ASSESSING OFFICER IS THAT WHETHER THE ASSESSEE HAD FULFILLED THE REQUISITE CONDITIONS AS SPECIFIED UNDER SUB SECTION (2) OF SE CTION 271AAA. THE ASSESSING OFFICER HAS ACCEPTED THAT THE ASSESSEE HA D MADE THE DISCLOSURE UNDER SECTION 132(4) DURING THE COURSE O F SEARCH OPERATION AND SPECIFIED THE MANNER OF EARNING SUCH INCOME AND IT ALSO SUBSTANTIATED THE SAME ON THE BASIS OF SEIZED DOCUM ENTS TO THE TUNE OF RS. 19 87 500/-. THE AOS VIEW THAT THE ASSESSEE IS REQUIRED TO SUBSTANTIATE THE QUANTUM OF UNDISCLOSED INCOME DOES NOT SEEM LOGICAL FROM THE BARE READING OF THE PROVISIONS OF SECTION 271A SUB SECTION (2). THE REQUIREMENT OF THE LAW IS THAT THE ASSESSEE SHO ULD STATE THE MANNER OF EARNING UNDISCLOSED INCOME AND ALSO SUBSTANTIATE THE SAME. IT WOULD NOT BE CORRECT INTERPRETATION OF THE PROVISIONS TO STRETCH THE REQUIREMENT TO SUBSTANTIATE THE QUANTUM AS WELL. THERE IS NO DO UBT WITH REGARD TO THE FACT THAT THE ASSESSEES MANNER OF EARNING UNDISCLO SED INCOME BEING FINANCING ACTIVITIES HAS BEEN SUBSTANTIATED BY THE SEIZED DOCUMENTS. THE REQUIREMENT OF THE LAW HAS THEREFORE BEEN FULFILLED AS THE ASSESSEE HAD STATED THE MANNER OF EARNING UNACCOUNTED INCOME SU BSTANTIATING THE SAME AND ALSO PAID THE DUE TAXES ALONG WITH THE INT EREST WITHIN THE SPECIFIED TIME LIMIT. EVEN IF THE ENTIRE INCOME BY ANY LOGIC IS INCLUDED IN THE DEFINITION OF UNDISCLOSED INCOME THE PENALTY U NDER SECTION 271AAA WOULD NOT BE LEVIABLE BECAUSE OF FULFILLMENT OF REQ UIREMENT OF SUB SECTION (2) OF SECTION 271AAA. 9 WE FURTHER FIND THAT SECTION 271AAA READS AS UNDE R: 271AAA. (1) THE ASSESSING OFFICER MAY NOTWITHSTANDING ANYT HING CONTAINED IN ANY OTHER PROVISIONS OF THIS ACT DIRECT THAT IN A CAS E WHERE SEARCH HAS BEEN INITIATED UNDER SECTION 132 ON OR AFTER THE 1ST DAY OF JUNE 2007 43 [BUT BEFORE THE 1ST DAY OF JULY 2012] 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 PER CENT OF THE UNDISCL OSED 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 STATEMENT UNDE R SUB-SECTION (4) OF SECTION 132 ADMITS THE UNDISCLOSED INCOME AND SPECIFIES THE MAN NER IN WHICH SUCH INCOME HAS BEEN DERIVED; ( II ) SUBSTANTIATES THE MANNER IN WHICH THE UNDISCLOSE D INCOME WAS DERIVED; AND 6 ( III ) PAYS THE TAX TOGETHER WITH INTEREST IF ANY IN RESPECT OF THE UNDISCLOSED INCOME. (3) NO PENALTY UNDER THE PROVISIONS OF CLAUSE ( C ) OF SUB-SECTION (1) OF 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 SO FAR AS MAY BE APPLY IN RELATION TO THE PENALTY REFERRED TO IN THIS SECTION. EXPLANATION. FOR THE PURPOSES OF THIS SECTION ( A ) 'UNDISCLOSED INCOME' MEANS ( I ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRES ENTED EITHER WHOLLY OR PARTLY BY ANY MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLE OR THING OR ANY ENTRY IN THE BOOKS OF ACCOUNT OR OTHER DOCUMENTS OR TRANSACTIONS FOUND IN THE COURSE OF A SEARCH UNDER SECTION 132 WHICH HAS ( A ) NOT BEEN RECORDED ON OR BEFORE THE DATE OF SEARCH 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 COMMISS IONER OR COMMISSIONER BEFORE THE DATE OF SEARCH; OR ( II ) ANY INCOME OF THE SPECIFIED PREVIOUS YEAR REPRESE NTED EITHER WHOLLY OR PARTLY BY ANY ENTRY IN RESPECT OF AN EXPENSE RECORDED IN THE BOOK S OF ACCOUNT OR OTHER DOCUMENTS MAINTAINED IN THE NORMAL COURSE RELATING TO THE SPE CIFIED PREVIOUS YEAR WHICH IS FOUND TO BE FALSE AND WOULD NOT HAVE BEEN FOUND TO BE SO HAD THE SEARCH NOT BEEN CONDUCTED; (B) NOT RELEVANT----------------- 10 PLAIN READING OF SUB-SECTION WOULD SHOW THAT IF THE ASSESSEE DURING THE COURSE OF SEARCH IN A STATEMENT ADMITS T O SOME UNDISCLOSED INCOME AND PAY TAXES ON THE SAME THEN P ENALTY CANNOT BE LEVIED IN TERMS OF SUB-SEC (1) OF THIS SE CTION. IN THE CASE BEFORE US THE AMOUNT OF RS. 4 CRORES WHICH WA S SURRENDERED DURING SEARCH HAS BEEN DECLARED BY THE ASSESSEE IN THE RETURN AND TAXES HAVE BEEN PAID ACCORDINGLY. THEREFORE TH E ASSESSEE IS NORMALLY ENTITLED FOR THE IMMUNITY PROVIDED IN SEC 271AAA ITSELF. HOWEVER THE REVENUE HAS RAISED FURTHER DISPUTE TH AT WHETHER THE ASSESSEE HAS DISCLOSED THE MANNER IN WHICH INCOME H AS BEEN EARNED. IN THE PENALTY ORDER PASSED BY THE ASSESSI NG OFFICER FOLLOWING QUESTIONS AND ANSWERS HAVE BEEN EXTRACTED : Q. DO YOU WANT TO SAY ANYTHING MORE ? ANS. I VOLUNTARILY SURRENDER A SUM OF RS. 4.00 CRO RE (RS. FOUR CRORES) FOR CURRENT FINANCIAL YEAR I.E. 2009-10 RELEVANT TO A.Y. 2010-11 IN ANY (SHOULD BE MY) INDIVIDUAL CAPACITY. THEY COVER AL L THE DISCREPANCIES IN THE SEIZED PAPERS DURING THE COURSE OF SEARCH PROCE EDINGS. 11 THEREFORE CLEARLY THE REVENUE HAS NOT ASKED THE ASSESSEE TO DISCLOSE THE MANNER IN WHICH SUCH INCOME WAS EAR NED. IN ANY CASE ONCE THE INCOME IS SURRENDERED DURING THE COUR SE OF SEARCH U/S 132(4) IT CAN BE SAFELY ASSUMED THAT DURING DIS CUSSION THE ASSESSEE MUST HAVE DISCLOSED THE MANNER. IN ANY CAS E WE FIND FORCE IN THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE THAT IF THE EXPLANATION OF THE ASSESSEE HAS BEEN ACCEPTE D FOR A SUM OF RS. 1987500 OUT OF TOTAL SURRENDER OF RS. 4 CRORES THEN SAME MANNER SHOULD HAVE BEEN ACCEPTED FOR THE WHOLE OF T HE AMOUNT. IT IS NOT CLEAR FROM THE PENALTY ORDER HOW EXPLANATION FOR RS. 1987500 WAS ACCEPTED. IN ANY CASE THE LD. CIT(A) HA S CONSIDERED ALL THESE ISSUES IN DETAIL AND THE D.R. FOR THE REV ENUE HAS NOT REFERRED TO ANY MATERIAL OR DECISION WHICH CAN CONT ROVERT THE FINDINGS OF THE CIT(A). IN THE FOLLOWING CASES WHIC H HAVE BEEN 7 RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE WHICH WAS CLEARLY HELD THAT PENALTY IS NOT LEVIABLE. FOLLOWING THE ABOVE ORDER WE DECIDE THE ISSUES AGAI NST THE REVENUE. FROM ABOVE IT AS WELL AS THE OBSERVATION OF HON'BLE GUJARAT HIGH COURT IN CASE OF CIT V. MAHENDRA C. SHAH (SUP RA) IT BECOMES CLEAR THAT IF NO QUESTION IS ASKED DURING T HE STATEMENT RECORDED U/S 132(4) THEN THE ASSESSEE CANNOT BE EXP ECTED TO FURTHER SUBSTANTIATE THE MANNER OF EARNING OF INCO ME. SINCE TAXES HAVE ALREADY BEEN PAID THEREFORE IN OUR OPIN ION PENALTY COULD NOT HAVE BEEN LEVIED. ACCORDINGLY WE SET ASI DE THE ORDER OF LD. CIT(A) AND DELETE THE PENALTY. 9 IN THE RESULT BOTH THE APPEALS OF THE ASSESSEE A RE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.11.2014 SD/- SD/- (BHAVNESH SAINI) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 18.11.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR