ACIT, CC 15, v. Raghav Bahl,

ITSSA 48/DEL/2007 | misc
Pronouncement Date: 15-01-2010 | Result: Dismissed

Appeal Details

RSA Number 4820116 RSA 2007
Assessee PAN AALPB0480G
Bench Delhi
Appeal Number ITSSA 48/DEL/2007
Duration Of Justice 2 year(s) 11 month(s) 6 day(s)
Appellant ACIT, CC 15,
Respondent Raghav Bahl,
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 15-01-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 15-01-2010
Date Of Final Hearing 05-01-2010
Next Hearing Date 05-01-2010
Assessment Year misc
Appeal Filed On 09-02-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH F NEW DELHI) BEFORE SHRI A.D. JAIN AND SHRI K.D. RANJAN IT(SS)A NO.48/DEL./2007 (BLOCK PERIOD: 1991-92 TO 2001-02) ACIT CEN. CIRCLE 15 VS. SHRI RAGHAV BAHL NEW DELHI. B-2 KAILASH APARTMENT LALA LAJPAT RAI MARG NEW DELHI. (PAN/GIR NO.AALPB0480G) AND C.O. NO.163/DEL./2007 (IN IT(SS)A NO.48/DEL./2007) (BLOCK PERIOD: 1991-92 TO 2001-02) SHRI RAGHAV BAHL VS. ACIT CEN. CIRCLE 15 NEW DELHI. NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ASHWANI TANEJA ADV. REVENUE BY : SHRI RAJEEV MEHROTRA CIT( DR) ORDER PER K.D. RANJAN AM : THE APPEAL BY THE REVENUE AND THE CROSS OBJECTION BY THE ASSESSEE ARISE OUT OF THE ORDER OF CIT(A)-II NEW DELHI. THE ONLY ISSUE FOR CONSIDERATION RELATES TO DELETING THE PENALTY OF RS.1 06 77 377/- OUT OF TOTAL PENALTY IM POSED AT RS.1 07 30 838/- U/S 158BFA(2) OF THE I.T. ACT. 2. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT N OTICE U/S 158BC READ WITH SECTION 158BD OF THE ACT WAS ISSUED ON THE BASIS OF INFORMA TION CAME INTO POSSESSION OF ASSESSING OFFICER FROM SEARCH AND SEIZURE OPERATION CONDUCTED AT THE PREMISES OF M/S FRIENDS PORTFOLIO PVT. LTD. AND ITS DIRECTOR SHRI M ANOJ AGGARWAL. DURING THE COURSE OF SEARCH IT WAS STATED BY SHRI MANOJ AGGARWAL THAT T RANSACTIONS ENTERED BY M/S FRIENDS PORTFOLIO PVT. LTD. AND HIS OTHER CONCERNS WERE BOG US TRANSACTIONS. IT WAS FURTHER STATED IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 2 THAT HE WAS ENGAGED IN THIS BUSINESS FOR EARNING CO MMISSION. THIS BUSINESS WAS CARRIED OUT WITH THE HELP OF ONE INTERMEDIATARY NAMELY SH RI BHUSHAN. IN VIEW OF THIS INFORMATION NOTICE U/S 158BC READ WITH SECTION 158 BD WAS ISSUED TO THE ASSESSEE ON 7.10.2003. THE ASSESSEE FILED RETURN ON 12.11.2003 ADMITTING UNDISCLOSED INCOME OF RS.27 90 274/- BEING THE AMOUNT OF CHEQUES RECEIVED FROM M/S FRIENDS PORTFOLIO PVT. LTD. ON ACCOUNT OF SALE OF SHARES. IN BLOCK ASSESS MENT ORDERS THE AO PROPOSED TO MAKE FURTHER ADDITION OF RS.1 50 30 137 BEING AGGREGATE AMOUNT OF CHEQUES RECEIVED FROM M/S FRIENDS PORTFOLIO PVT. LTD. ON ACCOUNT OF SALE OF S HARES. DURING THE COURSE OF HEARING BEFORE THE AO IN BLOCK ASSESSMENT PROCEEDINGS THE ASSESSEE EXPLAINED THAT A SUM OF RS.1 50 30 137/- HAD ALREADY BEEN INCLUDED IN REGUL AR RETURN OF INCOME FOR AY 2000-01. THEREFORE IT WAS REQUESTED THAT THE AMOUNT OF RS.1 50 30 137/- SHOULD NOT BE TREATED AS PART OF UNDISCLOSED INCOME. HOWEVER THIS CONTENTI ON OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AND CONSEQUENTLY THE ENTIRE AMOUNT OF RS. 1 78 20 431/- WAS ASSESSED AS UNDISCLOSED INCOME IN BLOCK ASSESSMENT YEAR. THE A O FURTHER MADE ADDITION IN THE BLOCK ASSESSMENT YEAR ON ESTIMATED AMOUNT OF COMMISSION P AID BY THE ASSESSEE @ 1% OF RS.1 78 20 431/- BEING RS.1 78 204/-. THE AO THUS COMPUTED UNDISCLOSED INCOME FOR THE BLOCK PERIOD AT RS.1 79 98 635/-. THE AO ALSO INIT IATED PENALTY PROCEEDINGS U/S 158BFA(2) OF THE ACT. 3. ON APPEAL AGAINST THE QUANTUM ADDITION IT WAS F OUND THAT FOR AY 2000-01 THE RETURN OF INCOME WAS FILED ON 30.11.2000 MUCH BEYON D THE DUE DATE OF FILING THE RETURN ON 31.8.2000. IT WAS ALSO NOTED BY CIT(A) THAT THE TRANSACTION OF ACCOMMODATION ENTRIES WERE UNEARTHED DUE TO SEARCH AND THEREFORE WHOLE AMOUNT OF CHEQUES RECEIVED BY THE ASSESSEE WAS HIS UNDISCLOSED INCOME. ACCORDINGLY THE CIT(A) CONFIRMED THE FINDING OF THE ASSESSING OFFICER. 4. DURING THE COURSE OF PENALTY PROCEEDINGS THE AO IN VIEW OF DECISION OF CIT(A) PROCEEDED TO LEVY PENALTY U/S 158BFA(2). 5. IN PENALTY PROCEEDINGS BEFORE CIT(A) IT WAS SUB MITTED BY THE LD.AR OF THE ASSESSEE THAT THE ASSESSEE HAD DISCLOSED A SUM OF R S.27 90 294/- IN HIS BLOCK RETURN FILED IN RESPONSE TO NOTICE U/S 158BD AND PAID THE TAXES DUE THEREON ALONG WITH THE RETURN. THEREFORE THERE CAN BE NO PENALTY U/S 158BFA(2) OF THE ACT IN RELATION TO THE AMOUNT OF RS.27 90 294/- AS PER THE PROVISIONS OF THE LAW. A S REGARDS THE LEVY OF PENALTY IN RESPECT IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 3 OF ADDITION OF RS.1 50 30 137/- AS UNDISCLOSED INCO ME IT WAS SUBMITTED THAT THIS AMOUNT WAS ALREADY DISCLOSED IN THE RETURN OF INCOME. HEN CE NO PENALTY COULD NOT HAVE BEEN IMPOSED. IT WAS ALSO STATED THAT ASSESSEE HAD DECL ARED THE AMOUNT OF RS.1 50 30 137/- AS INCOME FROM OTHER SOURCES. LD.AR OF THE ASSESSEE F URTHER SUBMITTED THAT ASSESSEE HAD PAID ADVANCE TAX ON 15.3.2000 IN RESPECT OF INCOME OF RS.1 50 30 137/- WHEREAS THE SEARCH IN THE CASE OF M/S FRIENDS PORTFOLIO PVT. LT D. WAS CONDUCTED ON 3.8.2000. THE PAYMENT OF ADVANCE TAX PARTLY GOES TO PROVE THAT TH ERE COULD NEVER BE AND IN FACT IT WAS NOT AN ALLEGATION THAT INCOME CORRESPONDING TO THE SAID ENTRY IN THE BOOKS OF ACCOUNT WOULD NOT HAVE BEEN DISCLOSED. THE ASSESSEE PLACED RELIANCE ON SEVERAL DECISIONS THAT THE AMOUNT OF RS.1 50 30 137/- COULD NOT BE TREATED AS UNDISCLOSED INCOME U/S 158BA(3). IT WAS ALSO PLEADED THAT THERE WAS NO INTIMATION TO TH E ASSESSEE OF ANY SEARCH EITHER IN THE CASE OF M/S FRIENDS PORTFOLIO PVT. LTD. OR ITS DIRE CTOR. THE DEPARTMENT HAD BROUGHT THIS INFORMATION IN THE KNOWLEDGE OF THE ASSESSEE MUCH A FTER THE ISSUE OF NOTICE U/S 158BD WHEREAS REGULAR RETURN WAS FILED MUCH EARLIER ON 30 .11.2000. AS REGARDS THE COMMISSION IT WAS SUBMITTED THAT COMMISSION AMOUNT WAS ESTIMATED AT RS.1 78 204/- AND THEREFORE THERE WAS NO EVIDENCE WITH THE AO T O SUPPORT HIS ALLEGATION THAT COMMISSION WAS PAID BY THE ASSESSEE AND THEREFORE ADDITION SHOULD NOT HAVE BEEN MADE AS PER LAW. 6. THE CIT(A) OBTAINED COMMENTS OF AO ON THE SUBMIS SIONS MADE BY THE ASSESSEE. IN THE REMAND REPORT DATED 2.11.2006 IT WAS SUBMITT ED THAT IN THE RETURN FOR AY 2000-01 FILED ON 30.11.2000 THE ASSESSEE DISCLOSED AN INCO ME FROM OTHER SOURCES AMOUNTING TO RS.1 50 30 137/- ON WHICH TAXES WERE PAID. THE ASS ESSEE IN RESPONSE TO NOTICE U/S 158BC READ WITH SECTION 158BD DATED 7.10.2003 FILED RETUR N FOR THE BLOCK PERIOD 1.4.1990 TO 31.8.2000 DECLARING INCOME RS.27 90 274/-. IT WAS ALSO STATED BY THE AO THAT AO FOR THE REASONS STATED IN ASSESSMENT ORDER HAD BROUGHT THE AMOUNT OF RS.1 78 20 431/- AS UNDISCLOSED INTO TO BE ASSESSED @ 60%. IT WAS ALSO SUBMITTED BY LD.AR OF THE ASSESSEE BEFORE CIT(A) THAT AS PER LAW PENALTY WAS NOT TO B E LEVIED AS THE IMPUGNED AMOUNTS WERE DISCLOSED IN THE BLOCK RETURN AND AS WELL IN T HE REGULAR RETURN OF INCOME. THE BANK ACCOUNT IN WHICH CHEQUES WERE RECEIVED FROM M/S FRI ENDS PORTFOLIO PVT. LTD. WERE REGULAR BANK ACCOUNTS AND PART OF BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE FOR PAST MANY YEARS. THIS FACT HAS NOT BEEN CHALLENGED OR R EVERTED BY THE AO NEITHER IN THE BLOCK IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 4 ASSESSMENT ORDER NOR IN THE PENALTY ORDER NOR IN TH E REMAND REPORT SUBMITTED BY HIM TO CIT(A). 7. AS REGARDS THE LEVY OF PENALTY ON AMOUNT OF RS.2 7 90 274/- LD.CIT(A) AFTER GOING THROUGH THE PROVISIONS OF SECTION 158BFA(2) H ELD THAT AMOUNT OF RS.27 90 274/- WAS INCLUDED IN THE RETURN OF BLOCK PERIOD ON WHICH TAX WAS PAID. THEREFORE PENALTY U/S 158BFA(2) WAS NOT LEVIABLE. AS REGARDS THE LEVY OF PENALTY ON AMOUNT OF RS.1 50 30 137/- IT WAS STATED THAT THE BANK ACCOU NT WITH CITI BANK AND CENTRAL BANK OF INDIA ASAF ALI ROAD NEW DELHI WERE PART OF BALANC E SHEET CONSISTENTLY FOR PAST MANY YEARS AND HAS BEEN PART OF REGULAR BOOKS OF THE ASS ESSEE. THE CHEQUES RECEIVED FROM M/S FRIENDS PORTFOLIO PVT. LTD. AGGREGATING TO RS.1 50 30 137/- WERE DEPOSITED IN CITI BANK ACCOUNT NO.084207 AND IN CENTRAL BANK OF INDIA. TH E CIT(A) ON VERIFICATION OF FACTS FOUND THE CONTENTION OF THE ASSESSEE CORRECT. THE CIT(A) WAS OF THE VIEW THAT PENALTY COULD BE LEVIED ONLY WHEN THE AO WAS IN A POSITION TO PROVE BEYOND DOUBTS THAT THERE WAS CONCEALMENT OF INCOME ON THE PART OF THE ASSESS EE. THE PENALTY CANNOT BE LEVIED ON WHIMS AND FANCY OF THE AO NOR IT CAN BE LEVIED WHEN THERE WAS LOTS OF IFS AND BUTS IN THE ALLEGATION MADE AGAINST THE ASSESSEE BY THE AO. TH E CIT(A) RELYING ON VARIOUS DECISIONS CAME TO CONCLUSION THAT PENALTY COULD NOT BE LEVIED NEITHER IN RESPECT OF AMOUNT DISCLOSED IN THE BLOCK RETURN NOR IT COULD BE LEVIED WHERE TH E IMPUGNED AMOUNT HAD BEEN DISCLOSED IN THE RETURN OF INCOME THAT TOO MUCH PRIOR TO COM MENCEMENT OF PROCEEDINGS U/S 158BD. WHEN THE LEGISLATURE WAS CONSCIOUS OF THE FACT THAT WHEN DISCLOSURE HAS BEEN MADE VOLUNTARILY EVEN AS MADE IN THE BLOCK RETURN THEN T HE ASSESSEE SHOULD NOT BE FURTHER PENALIZED WITH THE LEVY OF PENALTY. WHEN THE SPIR IT OF LAW WAS CLEAR NOT TO LEVY OF PENALTY IN SUCH CASES PENALTY U/S 158BFA(2) COULD NOT BE LEVIED IN THE CASES WHERE DISCLOSER WAS MADE IN REGULAR RETURN OF INCOME. AC CORDINGLY THE CIT(A) DELETED THE PENALTY IN RESPECT OF RS.1 50 30 137/- AND RS.27 90 294/-. 8. HOWEVER AS REGARDS THE PENALTY LEVIED ON PAYMEN T COMMISSION ESTIMATED BY THE AO THE COMMISSION AMOUNTS WERE REDUCED BY THE CIT( A) TO 50%. THE CIT(A) ACCORDINGLY REDUCED THE PENALTY IN RESPECT OF ADDIT ION SUSTAINED ON COMMISSION AT RS.89 102/- AT RS.53 461/-. IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 5 9. THE REVENUE IS AGGRIEVED BY THE ORDER OF CIT(A) DELETING THE PENALTY IN RESPECT OF ADDITION OF RS.1 50 30 137 AND RS.27 90 294/- AN D ASSESSEES IN CROSS OBJECTION FOR LEVY OF PENALTY IN RESPECT OF COMMISSION INCOME EST IMATED AT RS.89 102/-. 10. BEFORE US LD.AR OF THE ASSESSEE SUBMITTED THAT THE AMOUNT OF RS.1 50 30 137/- WAS DISCLOSED IN REGULAR RETURN OF INCOME UNDER THE HEAD OTHER SOURCES AND HAD PAID TAX ACCORDINGLY. THEREFORE NO PENALTY U/S 158BFA(2) C OULD BE LEVIED. AS REGARDS AMOUNT OF RS.27 90 294/- IT WAS SUBMITTED THAT THIS AMOUN T WAS DISCLOSED IN RETURN FOR THE BLOCK PERIOD AND THEREFORE AS PER PROVISO TO SECTION 15 8BFA(2) PENALTY WAS NOT TO BE LEVIED. AS REGARDS THE PENALTY CONFIRMED IN RESPECT OF COMM ISSION IT WAS SUBMITTED THAT NO PENALTY COULD BE LEVIED MADE WHEN ADDITION ON ESTIM ATION BASIS WAS MADE. LD.AR OF THE ASSESSEE HAS CHALLENGED THE PROCEEDINGS U/S 158BD O N THE GROUND THAT MANDATORY CONDITION OF RECORDING OF SATISFACTION WAS NOT SATI SFIED AND THEREFORE ASSESSMENT MADE U/S 158BD WAS BAD IN LAW. HE PLACED RELIANCE ON TH E DECISION OF ITAT (SB) IN THE CASE OF MANOJ AGGARWAL VS. DCIT 113 ITD 377 (DEL.). HE ALSO PLACED RELIANCE ON THE DECISION OF ITAT DELHI BENCH A IN THE CASE OF DH EERAJ SURI VS. ADDL.CIT 98 ITD 187. IT WAS ALSO SUBMITTED THAT IT WAS OPEN TO THE ASSES SEE TO RAISE THE QUESTION OF VALIDITY OF ASSESSMENT IN APPEAL AGAINST LEVY OF PENALTY. HE P LACED RELIANCE ON THE DECISION OF HONBLE ALLABAHAD HIGH COURT IN THE CASE OF RAGHURA J PRATAP SINGH & OTHER VS. ACIT 307 ITR 450 (ALL.) AND DECISION IN THE CASE OF TIDE WATER MARINE INTERNATIONAL INC. VS. DCIT 96 ITD 406. 10. ON THE OTHER HAND LD.CIT(DR) SUBMITTED THAT IT AT HAS UPHELD THE ORDER OF ASSESSMENT IN QUANTUM APPEAL. IT IS A CASE OF ACCO MMODATION ENTRIES. THE ASSESSEE HAD NOT FURNISHED ANY DETAILS REGARDING INCOME DISCLOSE D IN THE REGULAR RETURN OF INCOME. IF THERE WAS NO SEARCH THE PAYMENT OF CASH WOULD HAVE REMAINED UNNOTICED. THEREFORE PENALTY U/S 158BFA(2) SHOULD NOT HAVE BEEN CANCELLE D BY THE CIT(A). 11. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. THE CONTENTION OF THE LD.AR OF THE ASSESSEE IS THAT ASSUMPTION OF JURISDICTION U/S 158BD CAN BE CHALLENGED IN THE PENALTY PROCEEDINGS. ASSE SSEE HAD PLACED RELIANCE ON DECISIONS OF ITAT IN THIS REGARD. IN THE CASE BEFORE US THE ASSESSEE HAS NOT CHALLENGED THE ASSUMPTION OF JURISDICTION IN QUANTUM APPEAL AND TH E SAME HAS BEEN UPHELD BY THE TRIBUNAL. ONCE THE ASSUMPTION OF JURISDICTION HAS BEEN UPHELD BY THE TRIBUNAL IN THE IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 6 QUANTUM PROCEEDINGS THE COORDINATE BENCH IN SUBSEQ UENT PROCEEDINGS I.E. IN PENALTY PROCEEDINGS CANNOT PASS AN ORDER HOLDING THAT ORDER PASSED BY THE TRIBUNAL EARLIER WAS A WRONG ORDER AND ASSUMPTION OF JURISDICTION BY AO IN FRAMING ASSESSMENT U/S 158BD WAS BAD IN LAW. THEREFORE WE ARE NOT IN AGREEMENT WITH THE SUBMISSIONS MADE BY THE LD.AR OF THE ASSESSEE. THE FACTS OF THE CASE BEFORE US A RE DISTINGUISHABLE. IN THE CASE OF TIDE WATER MARINE INTERNATIONAL INC. VS. DCIT (SUPRA) T HE ASSUMPTION OF JURISDICTION WAS CHALLENGED IN PENALTY PROCEEDINGS. IN THIS CASE T HERE WAS NO ORDER OF TRIBUNAL CONFIRMING THE ASSUMPTION OF JURISDICTION U/S 147 O F THE ACT. SIMILARLY IN THE CASE OF RAGHURAJ PRATAP SINGH & OTHERS (SUPRA) THE ISSUE R ELATED TO VALIDITY OF ASSESSMENT U/S 158BC WHICH WAS CHALLENGED IN QUANTUM PROCEEDINGS A ND NOT DURING THE COURSE OF PENALTY PROCEEDINGS. THEREFORE THIS CONTENTION OF THE ASSESSEE IS REJECTED. 12. NOW COMING TO LEVY OF PENALTY ON MERITS THERE IS NO DISPUTE THAT ASSESSEE HAD DISCLOSED THE AMOUNT OF RS.1 50 30 137/- PRIOR TO D ATE OF SEARCH IN THE CASE OF MANOJ AGGARWAL AND M/S FRIENDS PORTFOLIO PVT. LTD.. THE AMOUNT WAS RECEIVED IN THE BANK ACCOUNT WHICH WAS DISCLOSED IN THE REGULAR BOOKS OF ACCOUNT. THE ASSESSEE HAD PAID TAXES AT THE TIME OF FILING OF THE REGULAR RETURN O F INCOME. THEREFORE THE AMOUNT OF RS.1 50 30 137/- COULD NOT BE TREATED AS UNDISCLOSE D INCOME. AS REGARDS THE AMOUNT OF RS.27 90 274/- THE ASSESSEE HAD FILED RETURN OF UN DISCLOSED INCOME IN RESPONSE TO NOTICE U/S 158BD. THE ASSESSEE HAD MADE PAYMENT OF TAX. PROVISO TO SECTION 158BD(2) PROVIDES THAT NO ORDER IMPOSING PENALTY SHALL BE MA DE IN RESPECT OF A PERSON IF (I) SUCH PERSON HAS FURNISHED A RETURN UNDER CLAUSE (A) OF SECTION 158BC; (II) THE TAX PAYABLE ON THE BASIS OF SUCH RETURN HA S BEEN PAID OR IF THE ASSETS SEIZED CONSISTS OF MONEY THE ASSESSEE OFFERS THE M ONEY SO SEIZED TO BE ADJUSTED AGAINST THE TAX PAYABLE; (III) EVIDENCE OF TAX PAID IS FURNISHED ALONG WITH THE RETURN; AND (IV) IF APPEAL IS NOT FILED AGAINST THE ASSESSMENT OF THAT PART OF INCOME WHICH IS SHOWN IN THE RETURN. SINCE THE ASSESSEE HAS DISCLOSED THE AMOUNT OF RS. 27 90 274/- AND HAD PAID TAX ON UNDISCLOSED INCOME OFFERED FOR THE BLOCK PERIOD PE NALTY U/S 158BFA(2) CANNOT BE LEVIED. ACCORDINGLY IN OUR CONSIDERED OPINION THE CIT(A) WAS JUSTIFIED IN DELETING THE PENALTY IN RESPECT OF RS.1 50 30 137/- AND ALSO WITH REFERE NCE TO RS.27 90 274/-. AS REGARDS IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 7 CONFIRMING THE PENALTY IN RESPECT OF COMMISSION PAI D AT RS.89 102/- THE AO ESTIMATED THE COMMISSION AT 1% WHICH WAS REDUCED BY THE CIT(A ) TO 50% I.E. 0.5% OF THE UNDISCLOSED INCOME. IN BOTH THE CASES THE QUANTUM OF ADDITION HAS BEEN ESTIMATED BY THE AO. NO DIRECT EVIDENCE FOR PAYMENT OF COMMISSION B Y THE ASSESSEE WAS FOUND IN THE COURSE OF SEARCH IN THE CASE OF M/S FRIENDS PORTFOL IO PVT. LTD. AND SHRI MANOJ AGGARWAL THE DIRECTOR OF THE SAID COMPANY. THEREFORE PENAL TY HAS BEEN IMPOSED ON AN INCOME WHICH HAS BEEN ESTIMATED BY THE AO AS WELL AS CIT(A ). HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. AJAIB SINGH & CO. 253 ITR 630 HAS HELD THAT WHERE ADDITION IS MADE ON ESTIMATE BASIS PENALTY U/S 271 (1)(C) COULD NOT BE IMPOSED. FURTHER HONBLE P&H HIGH COURT IN THE CASE OF HARGOPAL SING H VS. CIT 258 ITR 85 HELD THAT IF THERE WAS DIFFERENCE OF OPINION IN ESTIMATION OF IN COME PENALTY U/S 271(1)(C) COULD NOT BE IMPOSED. IN THE INSTANT CASE AS DISCUSSED ABOVE NO DIRECT EVIDENCE WAS FOUND FOR PAYMENT OF COMMISSION THOUGH IT WAS ADMITTED BY THE DIRECTOR OF M/S FRIENDS PORTFOLIO PVT. LTD. THAT THEY WERE DOING THE BUSINESS ON COMM ISSION BASIS BUT THE FACTS REMAINED THAT COMMISSION INCOME WAS ESTIMATED BY THE AO AS W ELL AS THE CIT(A). THEREFORE IN VIEW OF DECISION OF HONBLE P&H HIGH COURT IN THE C ASE OF HARGOPAL SINGH (SUPRA) PENALTY U/S 158BFA(2) CANNOT BE LEVIED. ACCORDING LY WE SET ASIDE THE ORDER OF CIT(A) IN RESPECT OF PENALTY IN RESPECT OF COMMISSION AMOU NT OF RS.89 102/- LEVYING PENALTY OF RS.53 401/- AND ALLOW THE RELIEF TO THE ASSESSEE. 13. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED AND THE C.O. FILED BY THE ASSESSEE IS ALLOWED. 14. ORDER PRONOUNCED INN OPEN COURT ON 15.01.2010. SD/- SD/- (A.D. JAIN) (K.D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED JAN. 15 2010. SKB COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXX NEW DELHI. 5.CIT(ITAT) NEW DELHI. AR/ITAT IT(SS)A NO.48/DEL./2007 & C.O. NO.163/DEL./2007 (BLOCK PERIOD 1991-92 TO 2001-02) 8