Sangeetaben M.Khanna, Surat v. The Dy.CIT.,Cent.Circle-2,, Surat

ITA 2840/AHD/2009 | 2002-2003
Pronouncement Date: 29-01-2010 | Result: Allowed

Appeal Details

RSA Number 284020514 RSA 2009
Assessee PAN ADTPK8802A
Bench Ahmedabad
Appeal Number ITA 2840/AHD/2009
Duration Of Justice 3 month(s) 14 day(s)
Appellant Sangeetaben M.Khanna, Surat
Respondent The Dy.CIT.,Cent.Circle-2,, Surat
Appeal Type Income Tax Appeal
Pronouncement Date 29-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 29-01-2010
Assessment Year 2002-2003
Appeal Filed On 15-10-2009
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH AHMEDABAD. BEFORE: HON'BLE SHRI T.K. SHARMA JUDICIA L MEMBER AND HON'BLE SHRI D.C. AGRAWAL ACCOUNTANT MEMBER ITA NOS.2836 2838 2840 2842 2844 & 2846/AHD/200 9 ASSESSMENT YEARS : 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 & 2005-2006 SANGEETABEN K. KHANNA SURAT (PAN : ADTPK 8802 A) VERSUS DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 SURAT (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI C.K. MISHRA SR. D.R. FOR THE RESPONDENT : S/SHRI RASESH SHAH AND HARD IK VORA ORDER PER BENCH :- THESE ARE THE SIX APPEALS FILED BY THE ASSESSEE AG AINST THE ORDER OF LD. COMMISSIONER OF INCOME TAX(APPEALS)-II AHMEDABAD D ATED 01.07.2009. THE FIRST FIVE APPEALS FOR THE ASSESSMENT YEARS 2000-01 TO 20 04-05 ARE THROUGH A COMMON ORDER WHEREAS APPEAL BEING ITA NO. 2846/AHD/2009 F OR THE ASSESSMENT YEAR 2005- 06 IS THROUGH A SEPARATE ORDER. ALL THESE APPEALS I NVOLVED COMMON FACTS AND COMMON ISSUES AND HENCE THEY ARE TAKEN UP TOGETHER FOR TH E SAKE OF CONVENIENCE. 2. BRIEF FACTS OF THE CASE ARE THAT A SEARCH AND SE IZURE OPERATION WAS CARRIED OUT AT THE PREMISES OF THE ASSESSEE ON 18.01.2006. NOTICE UNDER SECTION 153A(A) WAS ISSUED TO THE ASSESSEE ON 09.11.2006. THE RETURN OF INCOME WAS FILED ON 27.11.2006 GIVING DETAILS AS UNDER :- A.Y. DECLARED INCOME DATE OF RETURN FILED DATE OF ASSESSM ENT ASSESSED INCOME ADDITION PENALTY LEVIED 2000-01 RS.52 140/- 27.11.06 31.12.07 RS.97 140/- RS.45 000/- RS.9 056/- 2001-02 RS.77 040/- 27.11.06 31.12.07 RS.92 140/- RS.15 100/- RS.2 770/- 2002-03 RS.75 530/- 27.11.06 31.12.07 RS.85 730/- RS.10 200/- RS.1 170/- 2003-04 RS.1 03 550/- 27.11.06 31.12.07 RS.3 79 840/- RS.2 76 290/- RS.82 152/- 2004-05 RS.76 215/- 27.11.06 31.12.07 RS.1 66 215/- RS.90 000/- RS.18 865/- 2005-06 RS.11 00 000/- 27.11.06 31.12.07 RS.29 09 200/- RS.13 04 600/- RS.1 17 810 /- THE REASONS FOR ADDITION IN RESPECT OF YEARS ARE SU MMARIZED AS UNDER :- 2 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 ASSESSMENT YEAR : 2000-2001 : DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE A.O. FOUND THAT ASSESSEE HAS GIVEN A LOAN OF RS.45 000/-. NO EXPLANATION OF THIS LOAN WAS GIVEN BY HER AND ADDITION WAS MADE ON ACCOUNT O F LOAN OUT OF UNACCOUNTED INCOME. THE LEARNED COMMISSIONER OF INCOME TAX(APPE ALS) ALSO NOTED THAT NO EXPLANATION BEFORE HIM HAS BEEN GIVEN. ASSESSMENT YEAR : 2001-2002 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS GIVEN A LOAN OF RS.15 100/-. NO EXPLANATION OF THIS LOAN WAS GIVEN BY HER AND ADDITION WAS MADE ON ACCOUNT OF LOAN OUT OF UNACCOUNTED INCOME. THE ASSESSEE DID NOT FURNISH AN Y EXPLANATION OF THIS LOAN EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). ASSESSMENT YEAR : 2002-2003 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS GIVEN A LOAN OF RS.10 200/- TO KEKUL CHOKSI. NO EXPLANATION OF THIS LOAN WAS GIVEN BY HER AND ADDIT ION WAS MADE ON ACCOUNT OF LOAN OUT OF UNACCOUNTED INCOME. THE ASSESSEE DID NOT FUR NISH ANY EXPLANATION OF THIS LOAN EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMIS SIONER OF INCOME TAX(APPEALS). ASSESSMENT YEAR : 2003-2004 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS MADE AN INVESTM ENT OF RS.2 76 290/- IN PURCHASE OF PLOT OF LAND AT SURAT. THE ASSESSEE DID NOT FURN ISH ANY EXPLANATION OF THIS INVESTMENT EITHER BEFORE THE A.O. OR BEFORE THE LEA RNED COMMISSIONER OF INCOME TAX(APPEALS). ASSESSMENT YEAR : 2004-2005 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT ASSESSEE HAS DEPOSITED A SUM OF RS.90 000/- IN A BANK A/C. THE ASSESSEE DID NOT FURNISH ANY EXPLANATION OF THIS DE POSIT EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEA LS). 3. THE LD. A.R. SUBMITTED THAT THE AMOUNT OF RS.45 000/- IN ASSESSMENT YEAR 2000-01 RS.15 100/- IN ASSESSMENT YEAR 2001-02 RS .10 200/- IN ASSESSMENT YEAR 2002-03 AND AMOUNT OF RS.2 76 290/- IN THE ASSESSME NT YEAR 2003-04 ARE REFLECTED IN THE BALANCE-SHEET OF THE RESPECTIVE YEARS. THEREFOR E THEY CANNOT BE TREATED AS 3 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 UNEXPLAINED. THE A.O. HAS IGNORED THE EXPLANATION F OLLOWING BY THE ASSESSEE AND GAVE A FINDING THAT NO EXPLANATION IS FURNISHED. TH IS INCOME IS INCORRECT. THE ASSESSEE HAS AGREED TO THE ADDITION TO AVOID LITIGATION AND TO BUY PEACE WHEREAS EVEN THERE WAS NO CASE FOR MAKING ADDITION. 3.1. IN RESPECT OF ASSESSMENT YEAR 2004-05 THE A.R . SUBMITTED THAT THE SUM OF RS.90 000/- WAS DEPOSITED IN THE BANK A/C. WHICH I S REFLECTED IN THE BALANCE-SHEET. THE DEPOSIT WAS UTILIZED FOR MAKING INVESTMENTS WH ICH ARE REFLECTED IN THE BALANCE- SHEET AND IS SUPPORTED BY VARIOUS CREDITS IN CAPITA L ACCOUNT AS APPEARING IN THE BALANCE-SHEET AGAINST WHICH THE ASSETS INCLUDING C ASH DEPOSITED AND INVESTMENTS ARE EQUATED IN THE BALANCE-SHEET. THE ASSESSEE AGREED F OR ADDITION BUT IT CANNOT BE A CASE FOR LEVYING PENALTY. 4. SINCE AS PER A.O. NO EXPLANATION WAS FURNISHED IN RESPECT OF ABOVE ADDITIONS THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CON FIRMED THE PENALTY PROCEEDINGS. HE REJECTED THE CONTENTION OF THE ASSE SSEE THAT HER CASE IS COVERED BY THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF NEW SORATHIA ENGINEERING CO. VS.- CIT [(2006) 282 ITR 642] (GUJ.). IN THIS REGARD HE OBSERVED THAT A.O. HAS INITIALLY PENALTY PROCEEDINGS BOTH FOR CONCEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. IN THIS REGARD W E RE-PRODUCE PARA 6 FROM THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) AS U NDER :- 6. THE RATIO OF THE CASE LAW RELIED UPON BY THE AP PELLANT IS NOT APPLICABLE IN THIS CASE. IN THAT CASE (NEW SORA THIA ENGINEERING VS.- CIT) THE A.O. LEVIED THE PENALTY FOR USING THE WORD CONCEALMENT OF INCOME OR FURNISHING INACCURAT E PARTICULARS OF INCOME. IT WAS UPHELD BY THE C.I.T. (A) AND TRIBUNAL AND ON THOSE FACTS THE HON'BLE HIGH COURT HELD THAT LOWER AUTHORITY HAS NOT DISCUSSED WHETHER PENALTY I S FOR CONCEALMENT OF INCOME OR IT IS FOR INACCURATE PARTI CULARS OF INCOME AND THE PENALTY WAS NOT SUSTAINED. HOWEVER IN THE PRESENT CASE THE FACT IS THAT PENA LTY IS LEVIABLE BOTH FOR CONCEALMENT OF INCOME AND FOR FIL ING INACCURATE PARTICULARS OF INCOME. IN THE PRESENT CASE THE A.O . HAS USED THE WORDS CONCEALMENT OF INCOME/FURNISHING INACCURATE PARTICULARS OF INCOME. IN ENGLISH LANGUAGE THE / IS ALSO USE D FOR CONJUNCTION AND FOR EXAMPLE HE IS INTELLIGENT/ HANDSOME PERSON MEANS HE IS INTELLIGENT AND ALSO HANDSOME P ERSON. THE FACTS OF THE PRESENT CASE SUGGESTS THAT THE A.O. HA S USED THE / FOR DENOTING AND. THEREFORE PENALTY IS LEVIED BOTH F OR CONCEALMENT 4 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 OF INCOME AND FURNISHED INACCURATE PARTICULARS OF I NCOME. THE PENALTY IS ALSO LEVIABLE UNDER EXPLANATION 5 TO SEC TION 271(1)(C) OF THE ACT. IN VIEW OF THESE FACTS IT IS HELD THAT LEVY OF PEN ALTY IS JUSTIFIED AND THE SAME IS CONFIRMED. THIS PARA IS COMMON IN BOTH THE APPELLATE ORDERS. 5. THE LD. A.R. SUBMITTED THAT THE FACTS OF THE CAS E ARE SQUARELY COVERED BY THE DECISION OF THE HON'BLE GUJARAT HIGH COURT IN THE C ASE OF NEW SORATHIA ENGINEERING CO. (SUPRA). IT IS INCORRECT ON THE PART OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) TO HOLD OTHERWISE. THE A.O. IS REQUIRE D TO GIVE SPECIFIC FINDING AS TO WHETHER THE CASE IS COVERED BY MAIN PROVISION OR BY EXPLANATION. HE HAS TO SPECIFICALLY MENTION WHETHER THE ASSESSEE IS GUILTY OF CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN THI S REGARD LD. A.R. SUBMITTED THAT SIMILAR DECISION DATED 17.09.2009 HAS BEEN TAKEN BY THE HON'BLE ITAT B BENCH AHMEDABAD IN THE CASE OF SHREEJI GAS AGENCY VS.- A CIT IN ITA NO. 1518/AHD/2009. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USED THE MATERIAL AVAILABLE ON RECORD. IN FACT ASSESSEE HAS FURNISHED AN EXPLA NATION THOUGH DURING ASSESSMENT PROCEEDINGS AS CONTENDED BY THE LD. A.R. IN RESPECT OF VARIOUS ADDITIONS. WE ARE OF THE VIEW THAT THIS EXPLANATION SHOULD HAVE BEEN ALS O CONSIDERED BY THE A.O. BEFORE LEVYING THE PENALTY UNDER SECTION 271(1)(C). IT WOU LD BE INCORRECT TO PRESUME THAT ONLY THE EXPLANATION FURNISHED IN RESPONSE TO NOTICE UND ER SECTION 271(1)(C) SHOULD ALONE BE SUFFICIENT FOR CONSIDERING THE CASE UNDER EXPLAN ATION (1) TO SECTION 271(1)(C). THE LEVY OF PENALTY IS CIVIL LIABILITY AND ALSO IN THE NATURE OF COMPENSATION FOR CIVIL WRONG THEN BEFORE ARRIVING TO THE CONCLUSION THAT A WRONG HAS BEEN COMMITTED BY THE ASSESSEE THEREFORE A CARE HAS TO BE EXERCISED. TH E EXPLANATION FURNISHED BY HIM AT WHATEVER STAGE SHOULD BE CONSIDERED. EVEN IF THE EX PLANATION FURNISHED AT THE STAGE OF ASSESSMENT IS A PLAUSIBLE EXPLANATION AND EXPLAINS SATISFACTORILY WHY PENALTY SHOULD NOT BE LEVIED ON HIM SUCH EXPLANATION SHOULD BE GI VEN DUE WEIGHTAGE AND IF REALLY THERE IS NO CASE FOR LEVYING PENALTY THEN PENALTY SHOULD NOT BE LEVIED MERELY BECAUSE TECHNICALLY THERE IS NO EXPLANATION IN RESPONSE TO NOTICE UNDER SECTION 271(1)(C). AS 5 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 WE HAVE OBSERVED ABOVE THE ASSESSEE HAD IN FACT FU RNISHED AN EXPLANATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND APPARENTLY THE SE ARE THE CASES WHERE AMOUNT ADDED HAS BEEN REFLECTED IN THE BALANCE-SHEET AND P RIMA FACIE THERE IS NO CASE FOR EVEN SUSTAINING ADDITION THEN MERELY BECAUSE THE ASSESSE E HAS ACCEPTED THE ADDITION AND FAILED TO FURNISH ANY EXPLANATION IN RESPONSE TO NO TICE UNDER SECTION 271(1)(C) PENALTY SHOULD NOT BE LEVIED. THERE IS NOTHING IN THE PENAL TY ORDER OR IN THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WHICH COULD SH OW THAT THE ASSESSEE HAS DONE ANY CONTUMACIOUS CONDUCT. THERE IS NOTHING TO SHOW THAT THE ASSESSEE HAS WITHHELD ANY MATERIAL FACT FROM THE ASSESSEE OR THAT EXPLANA TION FURNISHED DURING THE COURSE OF ASSESSMENT PROCEEDINGS IS NOT BONAFIDE. 7. IN VIEW OF THE ABOVE WE ARE OF THE CONSIDERED V IEW THAT EXPLANATION (1B) CANNOT BE INVOKED AS ALL THE THREE INGREDIENTS OF T HAT EXPLANATION (1B) ARE NOT SATISFIED. EXPLANATION (1A) ALSO CANNOT BE INVOKED BECAUSE THE ASSESSEE HAS IN FACT GIVEN SOME EXPLANATION THOUGH DURING THE COURSE OF ASSESSMENT PROCEEDINGS. AS A RESULT WE HOLD THAT NO CASE IS MADE OUT FOR LEVY O F PENALTY ON MERIT. 8. ASSESSMENT YEAR : 2005-2006 :- DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS FOUND BY THE A.O. THAT THE INCO ME IS DECLARED BY THE ASSESSEE AT RS.11 00 000/- WHICH INCLUDED REGULAR INCOME OF RS . NIL AND UNDISCLOSED INCOME OF RS.11 00 000/-. THE ASSESSMENT WAS FRAMED ON 31.12. 2007 DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS.29 09 200/-. ADDITION WAS MAD E BY THE A.O. (I) OF RS.3 50 000/- BEING UNEXPLAINED CASH CREDIT IN THE BOOKS AND (II) OF RS.9 54 600/- BEING UNACCOUNTED INVESTMENT IN PURCHASE OF FLATS AS PER REPORT OF THE D.V.O. IN ADDITION AN ADDITION OF RS.3 50 000/- WAS MADE ON ACCOUNT OF UN EXPLAINED CASH CREDIT IN THE NAME OF FOLLOWING FOUR PERSONS :- SL. NO. NAME OF THE PERSON AMOUNT OF LOAN 1. MURARILAL SABOO RS. 50 000/- 2. ROSHNI SABOO RS.1 00 000/- 3. GIRDHARLAL SABOO RS.1 00 000/- 4. MEENA MUNDRA RS.1 00 000/- TOTAL RS.3 50 000/- 6 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 THE ASSESSEE DID NOT FURNISH ANY EXPLANATION IN RES PECT OF THESE LOANS. IN RESPECT OF THE ADDITION OF RS.9 54 600/- THE A.O. MENTIONED T HAT THE ASSESSEE HAS PURCHASED TWO FLATS NO. 202 & 71 IN TRISHALA APARTMENT PARLE POI NT SURAT. DURING THE ASSESSMENT PROCEEDINGS REFERENCE WAS MADE TO DISTRICT VALUATI ON OFFICER WHO DETERMINED THE VALUE OF EACH FLAT AT RS.9 54 600/- AS AGAINST RS.2 25 000/- DECLARED BY THE ASSESSEE. ON RECEIPT OF D.V.O.S REPORT EXPLANATION OF THE A SSESSEE WAS CALLED BY PROVIDING A COPY THEREOF. THE REPLY WAS FILED BY THE ASSESSEE O N 26.12.2007. THE ASSESSEE FURNISHED THE FOLLOWING OBJECTIONS VIDE HER LETTER DATED 26.12.2007 FOR ADOPTING THE VALUATION DONE BY THE D.V.O. AS UNDER :- THE DVO HAS NOT GIVEN US AN OPPORTUNITY OF BEING H EARD AS HE HAS NOT GIVEN HIS PROPOSED ESTIMATE. THE ACTION OF THE DVO IS AGAINST THE PRINCIPLES OF NATURAL JUSTICE. THE BUILDING IS VERY OLD AND BUILT BEFORE 1980. THE CONSTRUCTION IS OF LOW GRADE AND DAMAGED DUE TO EARTH QUAKE. THE FLATS WERE UNUSED FOR LONG TIME AND REQUIRED HU GE INVESTMENT TO MAKE IT LIVABLE. THE BUILDING IS SURROUNDED BY HEAVY TRAFFIC AND NOT ICE POLLUTION LACK OF BASIC NECESSITIES LIKE SECURITY ELEVATION PARK ING ETC. THE FLATS ARE UNFAVOURABLE FOR RESIDENCE OCCUPANCY. THE ASSESSEE ALSO QUESTIONED METHOD ADOPTED BY DVO BY ARGUING THAT EACH BUILDING IS UNIQUE AND VALUATION DEPENDS ON AG E OF THE BUILDING LOCATION FACILITIES ETC. ALL THIS FACTORS ARE NOT CONSIDERED BY THE DVO AND DVO HAS ESTIMATED THE COST PURELY BY DOING GUES S WORK. THE A.O. REJECTED THESE OBJECTIONS AND TOOK THE COS T OF EACH FLAT AT RS.9 54 600/- REDUCED THEREFROM THE DECLARED COST OF EACH FLAT AT RS.2 25 000/- AND THUS PROPOSED AN ADDITION OF RS.14 59 200/-. IN RESPONSE TO SHOW-CAU SE NOTICE IT SEEMS THAT NO EXPLANATION WAS FURNISHED BY THE ASSESSEE EITHER BE FORE THE A.O. OR BEFORE THE C.I.T.(A). IT WAS SUBMITTED THAT NO PENALTY IS LEVI ABLE IN BLOCK ASSESSMENT IN RESPECT OF ITEMS RECORDED IN REGULAR BOOKS OF ACCOUNTS. THE ASSESSEE HAD AGREED TO THE ADDITION FOR BUYING PEACE. RELIANCE WAS PLACED BY T HE ASSESSEE ON THE FOLLOWING JUDGMENTS :- (I) ADDL. CIT VS.- AGRAWAL MISTHAN BHANDAR [131 ITR 61 9] (RJASTHAN); 7 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 (II) CIT VS.- BHIMJI BHANJEE & CO.[146 ITR 145] (BOMBAY ); (III) CIT VS.- S. SANKARAN [241 ITR 825] (MADRAS); (IV) SHREE NIRMAL COMMERCIAL LTD. VS.- CIT [308 ITR 406 ] (BOMBAY); (V) CIT VS.- C.J. RATHNASWAMY [223 ITR 5] (MADRAS). 9. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) HOWEVER DID NOT AGREE WITH THE SUBMISSION OF THE ASSESSEE. ACCORDING TO H IM THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS. AS PER PANCHNAMA THE DOCUMENTS FOUND AND SEIZED WERE BUNCH OF LOOSE PAPERS WHICH CONTAINED 9 3 PAGES AND NO BOOKS OF ACCOUNTS CASH BOOK LEDGER OR ANY DIARY WAS FOUND. THUS THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS. HENCE THERE IS NO QUESTION OF RECORDING ANY TRANSACTION IN ANY BOOKS AS CLAIMED. THUS THE ASSES SEE CANNOT CLAIM THE BENEFIT OF EXPLANATION 5 TO SECTION 271(1)(C) OF THE INCOME TA X ACT. ACCORDING TO LEARNED COMMISSIONER OF INCOME TAX(APPEALS) PENALTY IS LEV IABLE WITHIN THE MEANING OF EXPLANATION 5 TO SECTION 271(1)(C) ON THE FACTS OF THE PRESENT CASE. 10. BEFORE US THE LD. AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE SUBMITTED THAT ONCE THE ASSESSEE IS FOUND NOT MAINTAINING BOOKS OF ACCOUNTS THE QUESTION OF IN ANY CASH CREDIT DOES NOT ARISE. THE ASSESSEE MIGHT HAVE GIVEN LOANS BUT THEY WILL NOT BE ADDITION UNDER SECTION 68 AS PRE-REQUISITE CONDITIO N FOR ADDITION UNDER SECTION 68 IS MAINTAINING BOOKS OF ACCOUNTS AND FINDING CASH CRED IT ENTRY THEREIN. THERE IS A FINDING OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THAT THE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNTS THEREFORE THE ADDIT ION UNDER SECTION 68 IS NOT WARRANTED AND IN ANY CASE IF THE ASSESSEE HAS SURR ENDERED FOR ADDITION IT WAS ONLY TO BUY PEACE. REGARDING ADDITION OF RS.9 54 600/- THE LD. A.R. FOR THE ASSESSEE SUBMITTED THAT NO DOCUMENT IS FOUND IN THE SEARCH WHICH WOULD SHOW ANY UNACCOUNTED INVESTMENT IN THE FLATS. COST OF FLATS AS DECLARED BY THE ASSESSEE WAS AT RS.2 25 000/- EACH AND THEREFORE IF AT ALL ADDITI ON SHOULD HAVE BEEN MADE IT SHOULD HAVE BEEN IN THE REGULAR ASSESSMENT. IN ANY CASE W ITHOUT THERE BEING ANY EVIDENCE OF UNACCOUNTED INVESTMENT IN FLATS IT CANNOT BE PRESU MED THAT THE ASSESSEE HAS MADE ANY INVESTMENT OVER AND ABOVE WHAT IT IS DECLARED. MERE LY BECAUSE DVO HAS VALUED THE 8 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 PROPERTY AT HIGHER PRICE IT DOES NOT MEAN THAT THE ASSESSEE HAS CONCEALED ANY INCOME OR FILED INACCURATE PARTICULARS OF INCOME. HE ALSO SUBMITTED THAT THE ASSESSEE HAS ACCEPTED THE ADDITION OF CASH CREDIT. CASH CREDIT I S NOT EQUIVALENT TO MONEY BULLION JEWELLERY OR OTHER VALUABLE ARTICLES. 11. AGAINST THIS THE LD. DEPARTMENTAL REPRESENTATI VE SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY EXPLANATION EITHER BEFORE THE A.O. OR BEFORE THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS). THEREFORE HIS CASE IS COVERED WITHIN THE MEANING OF EXPLANATION 1(A) TO SECTION 271(1)(C) OF THE ACT. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN OUR CONSIDERED VIEW NO PENA LTY ON THE SUM OF RS.3 50 000/- CAN BE LEVIED BECAUSE THE A.O. HAD MADE THE ADDITIO N AS CASH CREDIT WHICH COULD NOT BE MADE AS ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNTS. ONCE SEIZED DOCUMENTS ARE FOUND AND THEIR CONTENTS ARE TREATED AS TRUE T HEN THERE IS NO REASON TO HOLD THAT MONEY RECEIVED BY THE ASSESSEE WILL NOT BE TRUE TO HAVE BEEN RECEIVED FROM THE PERSONS SO STATED IN THE SEIZED DOCUMENTS. THERE CA NNOT BE ANY CONCEALMENT UNLESS MATERIAL IS COLLECTED BY THE A.O. TO PROVE SO. HENC E EVEN THOUGH THE ASSESSEE MIGHT HAVE AGREED FOR THAT ADDITION BUT THIS CANNOT BE AN ITEM FOR LEVY OF PENALTY. THERE IS NO FILING OF ANY INACCURATE PARTICULARS IN RESPECT OF THESE ITEMS. IN FACT AS PER SEIZED DOCUMENTS THIS COULD NOT BE ASSESSEES UNDISCLOSED MONEY. THESE CANNOT BE CONCEALMENT WITHIN CONCEALMENT. DOCUMENTS SHOWING C REDITS ARE FOUND IN THE SEARCH. WHOLE OF THE DOCUMENTS SHOULD BE TREATED AS TRUE OR UNTRUE. MERELY BECAUSE ADDITION IS ACCEPTED DOCUMENT SHOWING CREDIT CANNOT BE TREA TED AS UNTRUE. HENCE THERE IS NO CASE OF LEVY OF PENALTY. 13. REGARDING ADDITION OF RS.9 54 600/- MADE ON THE BASIS OF VALUATION OF TWO FLATS WE ARE OF THE CONSIDERED VIEW THAT NO PENALT Y IN RESPECT OF THIS AMOUNT CAN BE LEVIED BECAUSE AGAIN IN THE PROCEEDINGS UNDER SECTI ON 153A IT HAS TO BE SHOWN THAT THE ASSESSEE HAS MADE INVESTMENT OVER AND ABOVE WHA T HAS BEEN DECLARED BY THE ASSESSEE. NO MATERIAL IS INDICATED TO HAVE BEEN FOU ND DURING THE COURSE OF SEARCH SHOWING INVESTMENT OVER AND ABOVE WHAT IS SHOWN BY THE ASSESSEE AT RS.2 25 000/- IN 9 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 EACH OF FLAT. THE INVESTIGATION CARRIED OUT BY THE A.O. DURING THE POST-SEARCH PERIOD WHICH INCLUDED REFERENCE TO VALUATION CELL AND DETE RMINATION OF COST OF CONSTRUCTION BY THE DVO MAY BE IN ORDER FOR THE PURPOSE OF MAKIN G ADDITION AS ASSESSMENT UNDER SECTION 153A IS AT PAR WITH REGULAR ASSESSMENT AND ALL THE PROVISIONS OF ACT INCLUDING THOSE EMPOWERING THE A.O. FOR CARRYING OUT INQUIRIE S CAN BE INVOKED BUT FOR THE PURPOSES OF LEVY OF PENALTY UNDER SECTION 271(1)(C) IT HAS TO BE ADDITIONALLY SHOWN BY THE A.O. THAT WHAT WAS DECLARED BY THE ASSESSEE AS COST OF CONSTRUCTION WAS NOT TRUE. WHEN SEARCH AND SEIZURE OPERATIONS HAVE BEEN CARRIE D OUT AND NO DOCUMENT SHOWING EXPENDITURE/ INVESTMENT OVER AND ABOVE WHAT HAS BEE N DECLARED BY THE ASSESSEE IS FOUND THEN THERE CANNOT BE ANY PRESUMPTION ABOUT U NTRUE INVESTMENT IN THE CONSTRUCTION OF PROPERTY AND THEREFORE DVOS ESTI MATE BECOMES TRUE INVITING LEVY OF PENALTY FOR CONCEALMENT OR FOR FURNISHING INACCURAT E PARTICULARS OF INCOME. IT HAS HELD BY THE HON'BLE MADRAS HIGH COURT IN THE CASE OF TPK RAMLINGAM (1995) 211 ITR 520 THAT THE DIFFERENCE BETWEEN COST OF CONSTRUCTIO N DISCLOSED BY THE ASSESSEE AND COST ESTIMATED BY THE DEPARTMENTAL VALUER IS NOT SU FFICIENT TO HOLD THAT THERE HAD BEEN CONCEALMENT OF INCOME. AGAIN HON'BLE MADRAS HIGH CO URT IN THE CASE OF CIT VS.- S. SANKARAN (SUPRA) HELD THAT MERE ADDITION TO INCOME AT THE INSTANCE OF THE ASSESSEE WOULD NOT WARRANT A FINDING OF CONCEALMENT OF INCOM E. SIMILAR VIEW WAS TAKEN IN CIT VS.- C.J. RATNASWAMI (1997) 223 ITR 5 (MAD.) FURTH ER WE NOTICE THAT THE ASSESSEE GROUP HAS MADE A DISCLOSURE OF RS.5 CRORES WHICH IN CLUDED THE DISCLOSURE OF RS.11 00 000/- IN THE NAME OF ASSESSEE WHICH HAS B EEN ACCEPTED BY THE DEPARTMENT AND TAXES HAVE ALREADY BEEN PAID ON THE DECLARED IN COME THEN QUESTION OF HOLDING THAT CASE OF THE ASSESSEE IS NOT COVERED BY EXPLANA TION 5 WILL NOT BE CORRECT. 14. IT HAS BEEN HELD BY THE HON'BLE GUJARAT HIGH CO URT IN THE CASE OF CIT VS.- JALARAM OIL MILLS (2002) 253 ITR 192 (GUJ.) THAT WH ERE EXPLANATION REGARDING CREDITS IS NOT ACCEPTED BY THE REVENUE THEN IT WOULD BE SUF FICIENT FOR ADDITION UNDER SECTION 68 BUT WILL NOT BE SUFFICIENT FOR LEVY OF PENALTY IF REVENUE DOES NOT DEDUCE ANY EVIDENCE TO PROVE CONCEALMENT OF INCOME. SIMILAR VI EW WAS TAKEN BY THE HON'BLE GUJARAT HIGH COURT IN NATIONAL TEXTILES VS.- CIT ( 2001) 249 ITR 125 (GUJ.). THEREFORE IN VIEW OF OVERWHELMING DECISIONS FOR TH E PROPOSITION THAT UNLESS THERE IS A MATERIAL FOUND EITHER ON INVESTIGATION OR IN THE CO URSE OF SEARCH THAT INCOME DECLARED 10 ITA NOS.2836 2838 2840 2842 2844 & 2846AHD/2009 BY THE ASSESSEE UNDER SECTION 153A IS NOT CORRECT THEN PENALTY UNDER SECTION 271(1)(C) CANNOT BE LEVIED EVEN THOUGH A.O. MAY REJ ECT THE EXPLANATION IN RESPECT OF CERTAIN ITEMS AND MAKE THE ADDITION TO THE TOTAL IN COME WHICH MAY BE ACCEPTED BY THE ASSESSEE BY NOT CONTESTING THEM IN APPEAL. AS A RES ULT PENALTY LEVIED BY THE A.O. AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS CANCELLED. 15. IN THE RESULT ALL THE SIX APPEALS FILED BY THE ASSESSEE ARE ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON 29 TH JANUARY 2010. SD/- SD/- SSS (D.C. AGRAWAL) (T.K. SHARMA) ACCOUNTANT MEMBER JUD ICIAL MEMBER DATED: 29/01/2010 COPY OF THE ORDER IS FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT 5. THE DR AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER // TRUE COPY // ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT AHMEDABAD BENCHES AHMEDABAD. LAHA/SR. P.S.