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TMI Blog2015 (10) TMI 2010X X X X Extracts X X X X X X X X Extracts X X X X ..... t the deletion of penalty levied under section 158BFA(2) of the Act. 4. Briefly, in the facts of the present case, search and seizure operations under section 132 of the Act were carried out at the business premises of M/s Rushiraj Builders and Developers and also at the residential premises of Shri Y.P. Trivedi and Shri J.M. Jhala, the partners of the said firm on 25.03.2003. Certain books of account and documents were seized from the said premises. The document marked at Annexure A-2, seized from the residence of Shri Y.P. Trivedi reflected certain payments in cash were made by M/s. Rushiraj Builders and Developers on various dates in respect of lands / plots purchased for development by them from M/s. Amruta Land Developers, proprietor Shri Vilash Ramchandra Bagad i.e. the assessee before us. Certain information was received from the Assessing Officer, Central Circle - 3, Nashik vide letter dated 22.03.2005. As per the said information, the development agreement dated 30.06.1997 in respect of Plot No.2 of S.R.No.704/2A/5+6/2 admeasuring 775 sq. mtrs. between the assessee and M/s. Rushiraj Builders and Developers was for consideration of Rs. 4,96,000/- with Rs. 84,431/- as stamp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f account and other documents were seized and not against any other third person. The Assessing Officer rejected the contentions of the assessee and held that in the particular case wherein on the seized documents it was categorically written "plot payment Bagad", there was no reason as to why the contents of those papers should not be presumed to be true against the assessee. Further, enquiries were made by the Assessing Officer in this regard. During the second round of proceedings, summons under section 131 of the Act were issued to Shri Yogendra P Trivedi, partner of M/s. Rushiraj Builders & Developers and his statement was recorded on 14.12.2011. In reply to question No.2, Shri Y.P. Trivedi stated that he has paid sum of Rs. 18,22,500/- to Shri Vilas Bagad i.e. the assessee before us in cash and Rs. 4,96,000/- by cheque for the purpose of plot No.2. He has further confirmed that they have furnished an affidavit dated 21.03.2005 in respect of the above transaction. The assessee has also furnished an affidavit on 12.03.2007 denying the receipt of Rs. 18,22,500/- in cash from M/s. Rushiraj Builders & Developers against purchase of plot No.2. Therefore, summons were also served up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set-aside to the file of Assessing Officer by the Tribunal, the assessee offered the said additional income. The undisclosed income of Rs. 17,22,500/- was assessed in the hands of assessee on account of cash receipt received from M/s. Rushiraj Builders & Developers, evidence of which was found during the search conducted on M/s. Rushiraj Builders & Developers. The contention of the assessee vis-a-vis presumption under section 132(4) of the Act was also not accepted by the Assessing Officer. Consequently, penalty under section 158BFA(2) of the Act was levied at Rs. 10,85,180/-. 8. The CIT(A) deleted the said penalty accepting the claim of the assessee that where the addition itself was debatable, no penalty under section 158BFA of the Act was leviable. The CIT(A) held that where the addition was not proved to the hilt, no penalty under section 158BFA(2) of the Act was leviable. 9. The Revenue is in appeal against the order of CIT(A). 10. The learned Departmental Representative for the Revenue pointed out that during the course of search on the premises of M/s.Rushiraj Builders & Developers on 25.03.2003, documents were found in which there was noting that the assessee had receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee that levy of penalty was not automatic and facts of the case have to be seen, where the papers were found that M/s. Rushiraj Builders & Developers and where there is contradiction in the Affidavit of M/s. Rushiraj Builders & Developers, merely on the basis of notings in the diary whether any addition could be made in the hands of the assessee. It was further pointed out by the learned Authorized Representative for the assessee that notings in the same diary were basis for making addition in ACIT Vs. M/s. Manoj Marketing Pvt. Ltd. in ITA No.965/PN/2008 and CO No.28/PN/2009, relating to block period 1997-98 to 2003-04 and the Tribunal vide order dated 30.01.2015, deleted the addition in the hands of the said assessee. Another issue raised by the learned Authorized Representative for the assessee was that where the issue was debatable, no penalty under section 158BFA could be levied. Further, where the provisions of section 132(4A) of the Act could not be applied, onus was upon the Department to prove that the assessee had received on-money. Further, reliance was placed upon the decisions of Pune Bench of Tribunal in ACIT Vs. Shri Chandrakant Kashinath Kele in ITA No.804 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined, which is in excess of undisclosed income declared in the return of income. Under clause (3), it is provided that no order imposing penalty under section 158BFA(2) of the Act shall be made unless the assessee had been given a reasonable opportunity of hearing and such other conditions which are not relevant for deciding the present issue arising before us. 14. Under section 132(4) of the Act, it is provided that the authorized officer in-charge of the search and seizure operations, may examine on oath any person who is found to be in possession of or in control of any books of account, documents, money, bullion, jewellery or other valuable article or thing and any statement made by such person during the examination, may be used in evidence in any proceedings under the Income-tax Act. Under sub-section (4)(a) to section 132 of the Act, where any books of account, other documents, money, bullion, jewellery or other valuable article or things are found in the possession or in control of any person, during the course of search, the presumption is that such books of account, documents, moneysearch, money, bullion, jewellery, etc. belong or belongs to such person and that the cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the information available with the Revenue authorities. The case of the assessee in the second round of proceedings was that the presumption under section 132(4)(a)(iii) of the Act could only be drawn in respect of searched persons and could not be drawn against the assessee, who was not searched. Another contention raised by the assessee before the Assessing Officer during the course of assessment proceedings was that it had not received the said cash payment of Rs. 18,22,500/- from M/s. Rushiraj Builders and Developers. Crossexamination of Shri Y.P. Trivedi was d emanded by the assessee and the Assessing Officer summoned the said person for cross-examination, in which he further admitted that he is partner of M/s. Rushiraj Builders and Developers and paid cash consideration of Rs. 18,22,500/- to the assessee. The assessee however, denied to have received any cash consideration of Rs. 18,22,500/-. However, when the assessee was asked to prove its claim of non-receipt of cash of Rs. 18,22,500/-, vide reply dated 16.12.2011, the assessee offered the additional income of Rs. 18,22,500/-. The case of the assessee before the Assessing Officer was that the said admission was made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not included the additional income determined on the basis of seized documents, in its hands. The question arising before us is that in such circumstances, where the assessee has failed to declare additional income in its return of income, where such additional income was determined on the basis of documents found during the course of search on another person, can the assessee be held to be liable for levy of penalty under section 158BFA(2) of the Act. Admittedly, the assessee declared additional income of Rs. 1,00,000/- in the return of income filed pursuant to notice issued under section 158BD of the Act. The assessee has not furnished any details as to the nature of the said undisclosed income of Rs. 1,00,000/- except to its claim that while treating the undisclosed income of Rs. 18,22,500/-, the credit for the sum of Rs. 1,00,000/- declared, should be allowed to it, while computing penalty under section 158BFA(2) of the Act. 18. In the above said facts and circumstances, where the assessee had entered into a transaction with M/s. Rushiraj Builders and Developers for the sale of plot of land owned by it and incriminating documents in connection with such transaction were fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be established is that the assessee had either concealed the particulars of his income or furnished inaccurate particulars of such income. In contrast, no such language is used in section 158BFA of the Act. We may recall that under section 158BFA(2) of the Act, penalty proceedings would arise while the Assessing Officer had assessed income for the block period in excess of the income declared by the assessee. 20. The Hon'ble Bombay High Court in CIT Vs. Dodsal Ltd. (2008) 218 CTR 430 (Bom) has held that in the context of section 158BFA(2) of the Act, that the section provides discretion to the Assessing Officer in levy of penalty. In this background, it is to be seen whether appropriate reasons have been recorded for exercise of discretion in levying the penalty under section 158BFA(2) of the Act having regard to the facts and circumstances of the case. 21. The learned Authorized Representative for the assessee had placed reliance on the ratio laid down by Pune Bench of Tribunal in ACIT Vs. Shri Chandrakant Kashinath Kele (supra) for the proposition that no penalty under section 158BFA(2) of the Act is leviable in respect of additions made in the hands of the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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