TaxTMI 
TaxTMI 
2015 (7) TMI 123
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....ifferent members/associate concerns of the Kalika group of Jalna. The assessee's premises was also covered. In response to notice u/s.153A the assessee filed return of income on 19-07-2011 declaring total income at Rs. 33,37,040/- and agricultural income of Rs. 41,000/-. During the course of assessment proceedings the Assessing Officer noted that the assessee in his computation of income has shown income of Rs. 29,96,551/- "as income declared in search u/s.132". He noted that this income is in addition to the income declared originally in return of income filed u/s.139 of the I.T. Act. On being questioned by the Assessing Officer the assessee vide submission filed on 18-10-2011 stated as under : "The assessee has accepted income u/s.132 during the year though there is no such direct evidence of such sales were noticed or such sales were made by the assessee company/Director. The assessee has declared income in order to buy peace, to avoid litigation and paid the tax according & honoured the declaration." 5. The Assessing Officer therefore noted that this income declared by the assessee was resultant of search action. Had it not taken place the assessee would not have shown th....
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....me in the returned income after the date of search such income has to be considered as concealed income. He further observed that although the assessee and the group as such have cooperated during assessment proceedings it does not give immunity from imposition of penalty for concealing of income. Rejecting the explanation given by the assessee and distinguishing the decision of the Hon'ble Supreme Court in the case of Reliance Petro Products Pvt. Ltd., (Supra) cited before him the Assessing Officer levied penalty of Rs. 6,58,884/- u/s.271(1)(c) of the I.T. Act being 100% of tax sought to be evaded. 8. Before CIT(A) the assessee submitted that the income of Rs. 29,96,551/- has been offered to tax in the hands of the assessee only to avoid protracted litigation and to buy peace of mind. The said income represents profit on alleged suppressed sale of Kalika Steel Alloys Pvt. Ltd., in which the assessee is a Director; therefore, as held by the CIT(A), Aurangabad while deciding the appeals in the cases of Kalika Steel Alloys Pvt.Ltd. for A.Ys.2004-05 to 2010-11 and Kalika Steel Jalna Pvt. Ltd. for A.Ys.2006-07 to 2010-11 vide orders dated 14/05/2012, the income from manufacturing ac....
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....@ 35% and 15% respectively of the unaccounted sale so effected. From the record of the company, it can be seen that the cost of the material in the case of the KSAPL & KSJPL is as follows - KSAPL KSAPL KSJPL FY 06-07 61.50% FY 06-07 87.80% FY 07-08 68% FY 07-08 87.70% Thus, even if the GP rates are accepted 35% and 15% respectively, the unaccounted income would be as follows - Sr. No. Name of company F.Y. Amount of goods removed GP% as Undisclosed income 1 Kalika Steel Alloys Pvt.Ltd. 06-07 11185330.00 @35-3914936 11107800.00 @35-3887730 2 Kalika Steel Jalna Pvt. Ltd. 06-07 16167552.00 @15-2425133 39954004.00 @i5-5993101 56810071.00 @15-8521511 3 Giriraj Re-Rolls Pvt. Ltd. 05-06 2225850.00 @35-779048 3794717.00 @35-1328151 4 Bhoomi Re-Rolls Pvt. Ltd. 07-08 3514942 @35-1230230 TOTAL 144760566.00 28079840 I want to state that I am disclosing the said amounts to buy peace of mind, however in principle, I am not accepting such result ....
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....e A.O. is not justified in levying penalty u/s 271(1)(c) on the amount of Rs. 29,96,551/-. The penalty u/s 271(1)(c) of Rs. 10,23,160/- on the amount of 29,96,551/- is, therefore, cancelled. The A.O. is directed accordingly. The appellant has also raised another contention without prejudice to above contention that the A.O. has invoked Explanation-5A for levying penalty u/s 271(1)(c) of the I.T. Act which is applicable only when the ownership of any asset such as money, bullion, jewellery or other valuable article or thing, is found and it is found that the said asset was acquired out of income which was not disclosed; in the case of the appellant no such facts existed and the income has been offered during search action to buy peace of mind and to avoid protracted litigation. This contention of the appellant is not required to be adjudicated as the first contention of the appellant is accepted and penalty has been cancelled. Ground Nos. 2 & 3 are allowed." 10. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : "1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the p....
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.... 18 to 30 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to the reply of the assessee to Question No.4 wherein the gross profit of various companies are worked out on alleged clandestine removal of goods for the F.Yrs. 2005-06, 2006-07 and 2007-08 at Rs. 2,80,79,840/-. Referring to the said statement he drew the attention of the Bench to the income declared in the respective financial years by respective individuals. Referring to Question No.16 of the said statement (page 27 and 28 of the paper book) he submitted that the final tally of declaration of Rs. 14,01,61,595/- is income and in that the first item is unaccounted sale as per details mentioned in Question in 2 & 3 amounting to Rs. 2,80,79,840/- which is the amounts relating to clandestine removal of goods by these companies. He submitted that it is clear from the above that the income declared by these individuals in A.Yrs. 2006-07 to 2008-09 on which penalty u/s.271(1)(c) has been levied is the income on account of alleged clandestine removal of goods by these companies which has been offered in the hands of the individuals. He submitted that it is also clear from the above that the inco....
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....ve proposition he relied on the following decisions : 1. Smt. Pramila D. Ashtekar Vs. ITO - (2014) 61 SOT 113 2. Dilip Kedia Vs.ADIT (2013) 40 taxmann.com 102 3. DCIT Vs. Purti Sekhar Karkhana (2013 59 SOT 29 4. Devidas Sukhani Vs. DCIT (2013) 158 TTJ 42 5. CIT Vs. Mahendra Shah (2008) 299 ITR 305 6. CIT Vs. Kirit Dahyabhai Patel (2009) 121 ITD 159 7. CIT Vs. Shri Inderchand Surajmal Bothra - ITA No.137/PN/2010 order dated 30-11-2011. 14. He submitted that when the income has been declared u/s.132(4) with the condition that no penalty should be levied then the statement should be accepted in totality and not in part. He submitted that during the course of search the statement of Shri Ghanshyam Goyal was recorded u/s.132(4) in the presence of Shri Naresh B. Jindal, Shri Arun S. Agrawal and Shri Anil N. Goyal, Accordingly, the declaration u/s.132(4) was conditional to the fact that no concealment of the penalty should be levied. 15. Referring to the decision of the Mumbai Bench of the Tribunal in the case of DCIT Vs. Goyal Properties and Estates Pvt. Ltd. vide ITA No.7132/Mum/2010 order dated 07-05-2012 he submitted that the Tribunal in the said decision ha....
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....of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find in the instant case a search took place in the residential premises of different persons/associate concerns of the Kalika group of Jalna. The statement of Shri Ghanshyam C. Goyal, who is the main person of the group, was recorded u/s.132(4) of the I.T. Act in which he has declared undisclosed income of Rs. 14 crores in the name of 4 persons @ Rs. 3.5 crores each, the details of which are as under : 1. Shri Ghanshyam Chunilal Goyal Rs.3.50 Crores 2. Shri Arun Shrikishan Agrawal Rs.3.50 Crores 3. Shri Anil Nandkishor Goyal Rs.3.50 Crores 4. Shri Naresh Banarasidas Jindal Rs.3.50 Crores Total Rs. 14 Crores 15.1 We find in response to Question No.4 recorded u/s.131 on 17- 08-2009 Shri Ghanshyam C. Agrawal had replied as under : "Q.No.4 It is to be noted that, as the assessee had claimed all expenses, direct and indirect, during the respective years, hence the total value of the goods so removed shall be unaccounted income of the assessee. Please comment. A....
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....omi Re- Rolls Pvt.Ltd. Anil Goyal -- 615115 Sunil Goyal -- -- 615115 TOTAL 6772150 6340070 1,49,6 7,624 15.2 Similarly we find in reply to Question No.16 of the said statement he has given the bifurcation of the amount of Rs. 14,01,61,595/- the details of which are as under : "Q.No.16 Would you like to say anything further? Ans: Yes, want to state that as a result of the search action I am offering the amount of Rs. 14,01,61,595/-. The details of the same are as follows : Sr.No. Particulars Amount 1. On account of unaccounted sale as per details mentioned in (Question No.2 & 3) 2,80,79,844 2. Investment in Stock (Question No.14) 2,55,52,503 3. Unaccounted sale/petty loans in case of Shri Anil R. Goyal (Question No.6) 10,00,000 4. Investment in Construction (Question No.5) 86,48,831 5. Investment in stock of Sagar Paridhan Pvt. Ltd., (Question No.7) 24,35,417 6. Investment in furniture in Sagar Paridhan Pvt. Ltd., (Quesetion No.7) 5,00,000 7. Unaccounted Income from badla transaction (Question No.10....