9911796707
TMI Blog2019 (5) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... the residential premises of the assessee on 18/03/1997, the assessee was allegedly found to be owner of undisclosed income of Rs. 96,35,468/- by the Assessing Officer. The CIT(A) in the first appeal in quantum proceedings, revised the aforesaid undisclosed income of the assessee to the extent of Rs. 95,97,832/-. The aforesaid quantum order of the CIT(A) was challenged by the assessee before ITAT. The ITAT vide its order dated 20/11/2017 in IT(ss)A No.33/Ahd/2009 for the block period from FY 1987-88 to 18/03/1997 set aside the basis for making the addition towards unaccounted income in a fundamental manner. The ITAT however, retained the addition of Rs. 25 lakhs on pure estimation basis to put an end to the litigation cropped up. It will be apt to reproduce the quantum order for ready reference. 1. With this appeal, the Assessee has challenged the correctness of the order of the ACIT, Anand Circle framed u/s. 158BC r.w.s. 143(3) and 254 of the Act. 2. This is the second round of litigation. In the first round of litigation, the assessment was framed u/s. 158BC r.w.s. 143(3)of the Act for the block period from F.Y. 1987-88 to 18.03.1997 vide order dated 23.03.1999. The litigat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t R.S. No. 1863, Bakrol 25000 30 Unaccounted investment in 71.84 guntha of land at R.S. No. 180 & 183 51000 31 Unaccounted investment in 220.36 guntha of land at R.S. No. 311, 320, 368 5000 32 Unaccounted investment in 78 guntha of land at R.S. No. 1131/12B, Anand 2500 33 Unaccounted investment in 43,03 guntha of land at R.S. No. 1280/1,2,3, 42000 34 Unaccounted investment in 25.29 guntha of land at Revenue Survey No. 161 of Jitodia 25000 35 Unaccounted investment in Share & NSC 19000 36 Unaccounted advances through promissory note 600000 37 Unaccounted business profit as per Annexure A/6 (residence) 4620688 38 Unaccounted gold ornaments 263340 39 Unaccounted investment in KVP / FD and others as per Annexure K, L, M. 250712 40 Unaccounted investment in household valuables 167636 41 Unaccounted deposits in Bank account of the assessee 75000 42 Unaccounted investment in shares as discussed investment in shares 98187 43 Unaccounted money lending through promissory note of M/s. Swaminarayan Financier 264781 44 Miscellaneous investment in Maruti Car Typewriter & others 154923 4. The allegation of the revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tified by the fact that one register A-6 was found at the time of search which contain notings in respect of purchase of land from various parties. The entries on the debit side reflected the payment made to the land owner and the entries on the credit side represented the money received from the purchaser. The total of the receipt side was Rs. 1,46,32,959/- whereas the payments aggregated to Rs. 1,00,18,271/-. The A.O. has added the difference of Rs. 46,20,688/- as unaccounted business profits of the assessee in addition to the amounts found paid as per the Banakhats. 8. The entries in the register appears to be pertaining to the Banakhats found at the time of search on the basis of which the Assessing Officer has made the additions as exhibited in the chart elsewhere. The contention of the assessee was dismissed merely because the amounts did tally but the dates did not. 9. In our considered opinion, the claim of the assessee that he was acting only as a broker/conduit cannot be brushed aside lightly. We are of the opinion that additions of such magnitude should be taken to its logical conclusion. What was found from the premises of the assessee can be understood from the f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions to Rs. 25 lakhs which will cover all the related unexplained investments as alleged by the A.O. 15. Appeal of the Assessee is partly allowed." 4. From the appellate order of the Co-ordinate Bench in quantum proceedings, it is crystal clear that additions towards undisclosed income has been sustained in the hands of the assessee purely on estimated basis having regard to the peculiar facts and circumstances of the case. A question thus arises as to whether penalty under s.158BFA(2) is justified where alleged undisclosed income was finalized on the basis of estimation alone. A perusal of provisions of section 158BFA demonstrates that legislature has used different phraseology in subsection( 1) and sub-section(2) thereof whereby while the payment of interest under s.158BFA(1) is mandatory, levy of penalty is discretionary. It shows that the authority concerned is vested with the discretion towards levy of penalty. It is trite position of law that any discretion vested in an authority has to be exercised in a reasonable and rational manner depending upon the facts and circumstances of each case. It is also trite that the process of imposition of penalty is not automatic in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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