TMI Blog2015 (10) TMI 2577X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Member and Shri Manish Borad, Accountant Member Revenue by: Shri Raj Deep Singh, Sr. D.R. Assessee by: Shri Rasesh Shah, A.R. ORDER PER : S. S. GODARA, JUDICIAL MEMBER:- The assessee and the Revenue have filed these cross appeals for A.Y. 2009-10 against separate orders of CIT(A)-II, Ahmedabad dated 18-10-2011 and 01-02-2012, in appeal nos. CIT(A)- II/C.3/174/2010-11, and CIT(A)-II/C.3/126/2011-12, in proceedings under section 143(3) and section 271AAA of the Income Tax Act, 1961; in short the Act , respectively. 2. We come to assessee s appeal ITA 78/Ahd/2012 raising following grounds:- 1. On facts and circumstances of the case The learned CIT(A) has grossly erred in upholding the AO's action of not granting a refund of ₹ 54,85,781/- in respect of the amount of ₹ 1,48,00,000/- which was conditionally offered by the appellant as its income for the current year, so as to cover any discrepancies, errors, omissions, mistakes, etc., in the seized documents and seized assets vis-a-vis the regular books, Even though on completion of the assessment proceedings, the AO has not been able to identify any unexplained asset, unexplained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aration of disclosure amount is done by me with the motive to compensate all any type of mistakes; deficit; errors in entries, notices, loose sheets, books, all types of registers, notebooks, loose papers, and considering transactions done, by me, by my firms, by my companies, by my relatives by my employees, by my sister concerns which includes cash amount jewellery, investment, inventory, stock etc, that I take into account and accordingly shall provide detail break-up assessee-wise, year-wise from today onwards within 10 days which I request you to allow. For the above mentioned declaration I will pay applicable tax as per rules regulations and considering principles of accounting. 4. The case file indicates that Shri Patel got recorded his second statement at the same place on 29-09-2008 (page 105 to 124 of the paper book). The department put a query about the fact that the assessee and its sister concern M/s Manish Multi-Pack Films (supra) had advanced unsecured loans to different share holders from 2003- 04 to 2008-09 amounting to ₹ 2,10,62,605/- and ₹ 6,60,31,650/- respectively attracting deemed dividend u/s. 2(22)(e) of the Act. Shri Patel expressed h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hysically as well as digitized form were seized. Several discrepancies noticed were confronted to you and your staff. Are you willing to explain the same? A.4 No. the explanation for each and every entry in such books of accounts will be submitted later on. However, having gone through some of the seized materials presented to me and on the basis of further discussion with the Investigating Officials, I propose to make further disclosure of unaccounted income of ₹ 1,15,00,000/- (Rupees One Crore Fifteen Lacs Only) in addition to the amounts disclosed by me in my earlier statement dated. 25/09/2008 to cover all possible contingencies and irregularities that may be found as referred to by me while giving my earlier statement and thereby the total amount of disclosure of unaccounted income would be ₹ 2,25,00,000/- (Rupees Two Crore twenty Five Lacs Only) which includes earlier disclosure made by me of ₹ 1,10,00,000/- and the disclosure now made of ₹ 1,15,00,000/-. Further to thus, in reference to question No. 32 of statement 29/09/2008 with regard to financial transactions carried out by my companies with my other group concerns, family members and myself o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,250/-, ₹ 3,39,900/-, ₹ 5,09,850/- and ₹ 8,49,750/-; respectively. He adverted to assessee s return offering additional income of ₹ 1.75 crores above said on conditional basis only. The Assessing Officer came across assessee s retraction explaining that a preliminary review had been carried out for identifying all discrepancies, errors, omissions and commissions which highlighted only a sum of ₹ 27 lacs declared as its unaccounted income. The assessee sought for refund in relation to surplus sum of ₹ 1.48 crores as the differential amounting between ₹ 1.75 crores alleged unaccounted income reduced by the actual sum declared of ₹ 27 lacs. 8. The Assessing Officer framed a regular assessment on 31-12- 2010 inter alia treating the above extracted disclosures as voluntary, unconditional, unequivocal and precise which could not brushed aside in assessee s return as conditional. His view was that at most, the above stated deemed dividend amount therein (supra) could be held as a conditional disclosure. Shri Patel s statements were taken as that of a fully conscious ones since administered under oath. And that the same had gone un-rebutte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al precedents stand perused. We come to admitted facts first. The department commenced the impugned search operation in assessee s business preemies. And concluded the same on 03-10- 2008. This time span of 10 days involves four statements being obtained from Shri Patel (supra) inter alia disclosing unaccounted business income of ₹ 2.25 crores along with deemed dividend of ₹ 4 crores. We have extracted relevant portions thereof in preceding paragraphs. The same do not reveal any specific incriminating material unearthed in the course of search or thereafter highlighting unaccounted business income. The above stated disclosure statements are very much vague ones and conditional as well without verifying necessary books and records. The relevant array of questions forming part of the paper book are found to be not throwing light on any specific material with contents thereof; whatsoever. The same factual position continues in assessment, lower appellate order and in the course of arguments before us. It is not out of place to reiterate that we are dealing with the issue of impugned unaccounted business income of ₹ 1,48,00,000/-. We observe in these peculiar circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the CIT(A) have erred in making the above stated additions in assessee s as its unaccounted income. The same stands deleted. Other arguments narrated in preceding paragraphs have been rendered infructuous. ITA 78/Ahd/2012 succeeds. 17. This leaves us with the Revenue s appeal ITA 973/Ahd/2012 seeking restoration of the entire section 271AAA penalty of ₹ 17,50,000/- @ 10% of the assessee s disclosure sum of ₹ 1.75 crores determined in the course of assessment hereinabove. We have already deleted addition sum of ₹ 1.48 crores out of the same. This leaves behind the admitted income of ₹ 27 lacs only. The Revenue pleads that the CIT(A) has deleted penalty sum of ₹ 14.8 lacs by accepting assessee s plea of retraction hereinabove. 18. We have given our thoughtful consideration to rival contentions. There is no dispute that this penalty sum of ₹ 14.80 lacs relates to addition of ₹ 1.48 crores made in the course of quantum proceedings as deleted in assessee s appeal. That being the case, we hold that the impugned penalty has no legs to stand. The Revenue s sole substantive ground in this appeal fails. ITA 973/Ahd/2012 is dismissed. 19. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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