TaxTMI 
TaxTMI 
TaxTMI 
2019 (12) TMI 971
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....)-12 Ahmedabad ('CIT(A)' in short) all dated 22/01/2018 for AYs 2011-12, 2012-13 & 2013-14 towards confirmation of penalty u/s.271(1)(c) of the Income Tax Act (hereinafter referred to as "the Act"). Another set of Assessee's four appeals (in the case of Dhanraj G. Manglani in ITA Nos.560 to 563/Ahd/2018) are directed against the separate orders of the CIT(Appeals)-12, Ahmedabad all dated 22/01/2018 for AYs 2010-11 to 2013-14 towards confirmation of penalty u/s.271 AAB of the Act. Another set of assessee's four appeals ( in the case of Kamlesh D.Manglani in ITA Nos.564 to 567/Ahd/2018) are directed against the separate orders of the CIT(A)- 12, Ahmedabad all dated 22/01/2018 for AYs 2010-11 to 2013-14 towards confirmation of penalty u/s.271(1)(c) of the Act. Another set of assessee's two appeals (in the case of Vinodkumar A. Chugh in ITA Nos.568 & 569/Ahd/2018) are directed against the separate orders of the CIT(A)-12, Ahmedabad both dated 23/01/2018 for AYs 2011-12 and 2012-13 towards confirmation of penalty u/s.271(1)(c) of the Act. Another set of assessee's six appeals ( in the case of Smt.Dhanwantiben C.Darshiyani in ITA Nos.587 to 592/Ahd/2018) are directed against the comm....
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....ssessee is also a partner in two partnership firms. She is deriving income from House property, Business/Profession and Other Sources. There was a search and seizure operation under section 132 of the Act in the "Dhanjimama Group" of cases dated 3rd July 2012. The assessee being the part of the group was also covered under such search and seizure operation carried out dated 3rd July 2012. The assessee accordingly filed her return of income in response to the notice under section 153A of the Act declaring total income of Rs. 13,07,960.00 inclusive of the income from agricultural operation of Rs. 16,136/- only. The income declared in the return of income was also inclusive of the additional income of Rs. 4,05,795.00 disclosed during the search. 3.1 The assessment was framed by the AO under section 153A/143(3) of the Act dated 20th March 2015, after making the addition of Rs. 3,77,790.00 on account of income relating to the land transactions deals which were not disclosed in the books of accounts, at the total income Rs. 16,85,750.00 only. Accordingly, the AO initiated the penalty proceedings under section 271(1)(c) read with section 274 of the Act on account of the additional income....
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....e AO by observing that the additional income declared in the return filed in response to the notice issued under section 153A of the Act and other income was detected only because of the search initiated under section 132 of the Act. Accordingly the learned CIT (A) confirmed the order of the AO. Being aggrieved by the order of the learned CIT (A) the assessee is in appeal before us. 6. The ld. AR before us filed a paper book running from pages 1 to 173 and submitted that that the additional income was offered to tax voluntarily by the assessee which is not based on any seized materials found during the search having some incriminating values. Similarly, in case of the addition of Rs. 3,77,790.00 there was also not any reference to the incriminating document found during the course of search. 6.1 The learned AR also submitted that similar kinds of penalty were also levied in the group matters, which were also the subject matter of the same search, by the Revenue. But the ITAT has deleted such penalty. The learned AR also furnished the list of such orders of the tribunal as detailed under: "Pramod J. Daswani - IT(ss) No.264/Ahd/2017, ITAT Order dated 14/10/2019, as per page 73 t....
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.... the entry in the books of accounts/documents. Then, it shall be presumed that the assessee has either concealed the particulars of income or furnished inaccurate particulars of income. However in the case on hand, we note that there is no such allegation made by the authorities below as discussed above. 8.2 Thus, it is transpired that the assessee has disclosed additional income in the return issued under section 153A of the Act voluntarily and without having found any income by the Revenue in the manner provided under explanation 5A to section 271(1)(c) of the Act. As such, there was not found any undisclosed income by the Revenue in the course of such conducted under section 132 of the Act. 8.3 Similarly, there was also no mentioned of any incriminating document in relation to the addition of Rs. 3,77,790.00 on the basis of which the addition was made by the Revenue. Thus, it is inferred that such addition was not based on the document found during the course of search. 8.4 Now the question arises, whether the assessee can be visited with the penalty with respect to the income disclosed by him in such proceedings voluntarily and without finding any incriminating document duri....
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....al of the assessee is allowed. 9. In the result, assessee's appeal in ITA No.587/Ahd/2018 for AY 2008-09 is allowed. Coming to the other appeals filed by the assessee bearing ITA Nos. 588 to 590/AHD/2018 for the A.Ys. 2009-10 to 2011-12 10. At the outset we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed. 11. In the result, these appeals of the assessee are also allowed. Coming to the assessee's appeal bearing ITA No. 591/Ahd/2018 for the AY 2012- 13. The only issue raised by the assessee is that the ld. CIT(A) erred in confirming the penalty imposed by the AO for Rs. 11,28,165.00 under section 271AAB of the Act. 12. The assessee has disclosed additional income of Rs. 1,06,36,545.00 in pursuance to the return filed under section 153A of the Act. However, the AO further made the addition of Rs. 2,15,039.00 on account of the income of land transactions deal. Thus the assessment was framed ....
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.... the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted.]" 15.1 From the above provision, it is clear that the penalty shall be imposed under section 271AAB of the Act where there is undisclosed income within the meaning of the explanation (c) to 271AAB of the Act. However, we note that there was no documentary evidence found by the search team suggesting that there was any undisclosed income of the assessee. As such the voluntary income disclosed by the assessee and the addition made by the AO was without having found any incriminating document in the course of search. We also note that there no reference made by the authorities below to the documents of incriminating nature having bearing on the income of the assessee in their respective orders. The ld. DR has not advanced any arguments against the contentions raised by the ld. AR for the assessee. In holding so we draw support and guidance from the order of the Tribunal in the case of ACIT Vs. Marvel Associates reported in 170 ITD 353 wherein it was held as under: "9. Pen....
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....that the loose sheet found during the course of search indicates any undisclosed income or asset or inflation of expenditure. The Hon'ble ITAT Delhi Bench in the case of Ajay Sharma v. Dy. CIT [2013] 30 taxmann.com 109 held that with respect to the addition on account of alleged receivables as per seized paper, there is no direct material which leads and establishes that any income received by the assessee has not been declared by the assessee. An addition has been made on the basis of loose document, which did not closely prove any concealment or furnishing of inaccurate particulars by the assessee. Hence penalty u/s 158BFA (2) of the Act is not leviable. The facts of the assessee's case shows that there was no undisclosed income found during the course of search and no incriminating material was found, hence we hold that there is no case for imposing penalty u/s 271AAB of the Act, accordingly, we set aside the order of the lower authorities and cancel the penalty u/s 271AAB of the Act." 15.2 We are also conscious to the fact that the impugned penalty was deleted in the case of other assessees who were part of the group and subject to the same search vis-a-vis involving....
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....69/Ahd/2018 for AY 2012-13 is allowed. Coming to the assessee appeals in the case(s) of Mukesh B. Manglani: Coming to ITA Nos. 556/AHD/2018 for the AY 2011-12 22. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271(1)(c) of the Act vide Paragraph No. 8 of this order in the case of Dhanwantiben C. Darshiyani (supra) in ITA No. 587/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal of the assessee is allowed. 23. In the result, the appeal of the assessee in ITA No.556/Ahd/2018 for AY 2011-12 is also allowed. Coming to ITA Nos. 557 & 558/AHD/2018 for the AYs 2012-13 and 2013-14 24. At the outset, we note that in the identical facts and circumstances, we have deleted the penalty imposed under section 271AAB of the Act vide Paragraph No. 15 of this order in the case Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is....
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....e Paragraph No. 15 of this order in the case Dhanwantiben C. Darshiyani (supra) in ITA No. 591/AHD/2018. Respectfully, following the same, we delete the penalty imposed by the AO which was subsequently confirmed by the Ld. CIT (A). Hence, the ground of appeal(s) of the assessee is allowed. 33. In the result, both the appeals of the assessee in ITA Nos.588 & 599/Ahd/2018 for AYs 2012-13 & 2013-14 are allowed. Coming to assessee appeals in the case(s) of Kamlesh D. Mangalani 34. The learned counsel for the assessee, at the time of hearing, sought an adjournment but we decline the same on the reasoning that the impugned appeals were part of the group listed today for hearing. Therefore, we deemed appropriate to hear these appeals too along with the other appeals who are part of the group. However, Shri M.K. Patel, the learned counsel for the assessee has been taken on record as proxy counsel on behalf of Shri M.J. Shah (the counsel for the assessee) as he (Shri M.K. Patel ) claimed to have obtained the consent from Shri M.J. Shah. Accordingly, we proceed to adjudicate the issue on hand after hearing the proxy counsel as discussed above. Coming to ITA Nos. 564 & 565/AHD/2018 for t....