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2012 (8) TMI 1055 - ITAT DELHI

2012 (8) TMI 1055 - ITAT DELHI - TMI - ITA Nos. 4728 to 4731/Del/2011 - Dated:- 24-8-2012 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER Appellant by : Sh. Sanjiv Prindal, CA Respondent by : Sh. Satpal Singh, Sr. DR O R D E R These appeals are filed by the assessee and directed against the order of ld. CIT(A) dated 26/08/2011 for A.Ys. 2001-02, 02-03, 04-05 & 06- 07 respectively. 2. The effective ground of appeal in all these appeals is that Ld. Appellate Authority erred in law and on facts in conf .....

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out in this case on 22/11/2006. A notice u/s 153A dated 23/11/07 was issued and served upon the assessee. In response to notice, the assessee filed return of income on 17/03/08 for all the four assessment years under consideration and offered additional income as under: - NUTAN GUPTA Chart of Additional Income offered by the Assessee in the returns of income filed u/s 153A S.No. Nature of Additional Income Offered AY 2001-02 AY 2003-04 AY 2004-05 AY 2006-07 1. Investment made in KVPs 38,000 42,0 .....

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can be levied on the income declared in any of the said six returns filed in response to the notices issued u/s 153A as the income declared therein has be treated as the income duly disclosed to the department and there will be no concealment or furnishing of inaccurate particulars regarding the said income. The incomes declared in the returns filed in response to the notices issued u/s 153A cannot be compared with incomes declared in the returns filed u/s 139 of the Act earlier to determine th .....

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planation (5A) u/s 271AAA in the Act w.e.f. 1/6/07 by the Finance Act, 2007, for including the additional income offered by the assessee in response to notice u/s 153A. Since search was conducted before 1/6/2007 it was the view of the assessee that in absence of these sections, in this year the additional income offered by the assessee in the return filed u/s 153A cannot be held as concealed income. 5. The AO rejected the assessee s contention for the following reasons: i) Additional income brou .....

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t the return for such year has not been furnished. (b) If the assets found during search action u/s 132 are claimed representing the income fro any previous year which has ended before the date of search and the return has been filed without declaring such income. (c) The previous year relatable to the valuables found represent is yet to end after the date of search and assessee declares such income in the return of income. Exceptions to be deemed concealment in above situations have also been p .....

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he three situation {i.e., (a), (b) and (c)}, the assessee cannot be deemed to be guilty of concealment if the income in question has been otherwise disclosed by him to the commissioner before the date of search. The explanation was amended by the Taxation Laws (Amendment and Miscellaneous Provisions) Act, 1986 which inserted the following clause: unless,- (2) he, in the course of the search, makes a statement under sub-section (4) of section 132 that any money, bullion, jewellery or other valuat .....

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ted above. iv) Regarding the assessee s submission that interest u/s 234A(3) is to be determined from the expiry of the period prescribed upto the final of the return income in response to the notice u/s 153A of the I.T. Act. The AO observed that the interest provisions and penalty provisions are entirely different and are not dependent on each other. Moreover, period of charging interest u/s 234A(3) does not render the original return void. Moreover, in part (a) (b) of the Explanation 5, the le .....

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to be evaded. 6. Before ld. CIT(A) it was, inter-alia, submitted that Explanation 5 is applicable only in respect of assets representing undisclosed income found in search and not on undisclosed income declared on the basis of entries recorded in those documents/papers found during the search. 7. Ld. CIT(A) dismissed the assessee s appeal, inter-alia, observing as under: - The fact that the income surrendered by the appellant was on the basis of the documents/ papers found during the search is .....

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ithin the provisions of section 271(1)(c) the appellant not only has to establish that Explanation 5 is not applicable to the facts of this case, but he has also to establish that he does not fall within the entire provisions of section 271(1)(c). In Pradip Chandulal Patel vs. P.G. Karode [(1992) 197 ITR 385, 398 (Guj.)], it has been held that, in passing an order u/s 132(5), the Officer was right in coming to the conclusion that, independently of the said Explanation 5, penalty was imposable un .....

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on of the words search initiated u/s 132 before first day of June, 2007 or is it limited only to the period from 01.04.2007 to 31.05.2007. Ld. Counsel submitted that since in this case search took place on 26.11.2006 therefore, Explanation 5 is not applicable. In support of his contention, ld. Counsel has vehemently relied on the decision of ITAT, Delhi Benches in the case of Prem Arora vs. DCIT (ITA No. 4702/D/10 order dated 09.03.2012), wherein it has been held as under: 29. We also find that .....

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d by the Finance Act, 2007 w.e.f. 1.6.2007. In our considered opinion the amended provisions of Explanation 5 will be applicable only for AY 2008-09 if any money, bullion, jewellery or other valuable article or thing is found from the possession of the searched person in respect whom searches are initiated on or after 1.4.2007 to 31.05.2007. (iii) ld. counsel submitted that the third issue involved in the present appeal is whether the phrase money bullion jewellery or other valuable article or t .....

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ued by bank cannot be treated as deemed concealment income in view of Explanation 5 of section 271(1)(c). 10. Ld. DR relied on the order of ld. CIT(A) and submitted that Explanation 5 is clearly applicable to the assessee s case because the search took place on 22.11.2006. He submitted that KVPs and NSCs, LIPs are all covered within the phrase other valuable article or thing and, therefore, the penalty was leviable. 11. Ld. DR further submitted that return has been filed in consequence to search .....

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07 to 31/05/07 on the basis of reliance placed in the case of Prem Arora (supra), is concerned, I do not find any substance in the same because the said amendments are with reference to amended provisions of Explanation 5 to sec. 271(1)(c) by which the words search initiated u/s 132 before the first day of June, 2007 had been inserted by the Finance Act, 2007 w.e.f. 01/06/07. These amendments have no bearing to the issue in hand. The search took place in assessee s case on 22/11/06 and, therefor .....

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ng as mentioned in Explanation 5. I find that this plea of assessee deserves to be accepted in view of following decisions: - (a) CIT vs. Mohan Lal Sharma [2006] 281 ITR 384, in this case, a search was conducted u/s 132(1) at the business as well as residential premises of the assessee. During the course of search four fixed deposits receipts in the names of four minor children of the assessee were found and seized from the locker of the bank, owned by the assessee. In the revised return filed b .....

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s no difference between the FDRs and the income offered by assessee in respect of various assets found during the course of search. (b) In the case of Bhagwandas Narayandas vs. CIT [1975] 98 ITR 194, it has been, inter-alia, held as under: - (ii) The contention of the petitioner that fixed deposit receipts and title deed for immovable property are valuable things and articles to which the provisions of rule 112A apply and the action of the department in retaining fixed deposit receipts and title .....

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kes it clear that the show cause notice contemplated by it is required to be given only with reference to those specified assets in respect of which inquiry u/s 132(5) is contemplated. It is evident from the scheme of section 132(5) that the assets which are seized during the course of an authorized search under section 132 are expected to be retained only for the purpose of satisfying the tax liability of an assessee as ascertained from his undisclosed income. Therefore, by using the words valu .....

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