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TMI Blog2010 (6) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ell settled that even when two views are possible, the view which is favourable to the assessee be taken. The revenue s appeals are dismissed. - D.K. TYAGI AND B.C. MEENA, JJ. Smt. Jyoti Kumari for the Appellant. N.K. Poddar and A.K. Tibrewal for the Respondent. ORDER D.K. Tyagi, Judicial Member. - Both these appeals preferred by the revenue are directed against the separate orders of the learned Commissioner of Income-tax (Appeals), Kolkata dated 31-12-2008 for the assessment years 2005-06 and 2006-07 on the common ground in deleting the penalty levied under section 271(1)( c ) of the Act. Since grounds are common and the appeals have been heard together, for the sake of convenience, we dispose of both the appeals by this consolidated order. 2. Briefly stated the facts of the case for the assessment year 2005-06 are that a search and seizure operation under section 132 of the Act was conducted in Shricon Group of cases on 16-11-2005 at the residential and also business premises of the assessee. Shri Avinash Gupta is one of the assessees in this group. In the order passed under section 271(1)( c ) of the Act, the Assessing Officer contended that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy of penalty. Explanation 5 is a deeming provision according to which unexplained investment, expenses, money, etc., would be deemed to be concealed unless admitted with proper explanation about the manner of acquisition in a statement under section 132(4). In the present case such admission under section 132(4) is not disputed. In that case the Delhi High Court judgment in the case of CIT v. Chhabra Emporium [2003] 264 ITR 249 , the Madras High Court judgment in the case of CIT v. S.D.V. Chandru [2004] 266 ITR 175, the Rajasthan High Court judgment in the cases of Gebilal Kanhaialal (HUF) v. Asst. CIT [2004] 270 ITR 523 , CIT v. Kanhaiyalal [2008] 299 ITR 19 and the Gujarat High Court judgment in the case of CIT v. Mahendra C. Shah [2008] 299 ITR 305 supports the case of the appellant. Respectfully following these judicial authorities the order of penalty is cancelled and the appeal is allowed." 4. The facts of the case in respect of the assessment year 2006-07 as observed by the Assessing Officer are that a search and seizure operation under section 132 of the Act was conducted in Shricon Group of cases on 16-11-2005 at the residential and business pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, the fact remains that while explaining jewellery, I had objected to the manner of weighment and valuation of jewellery items. There has not been any concealment facts from my side. Hence, penalty cannot and should not be imposed on such figure." 5. After going through the submissions of the assessee the Assessing Officer did not accept the contention of the assessee as the jewellery having ID Mark RG/12 and NHG/28 valuing at Rs. 10,08,057 did not match with the reconciliation chart in respect of weight and description of items. He, therefore, imposed a minimum penalty of equal amount of the amount of tax sought to be evaded On appeal, the learned Commissioner of Income-tax (Appeals) has held as under : "5. The submissions are carefully considered. The reasons recorded in support of the addition of Rs. 10,08,057 in the assessment order as well as in the order of penalty is that the two items `cannot be accepted to be tallying on account of excessive variation in weight and non-matching of description of items . It is relevant to note that the discrepancies in weight or description are not discussed. Nothing is stated about the extent of variation. The items existed but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2004] 266 ITR 175 (Mad.). He further placed reliance on the Hon ble Apex Court s decision in the case of Pradip J. Mehta v. CIT [2008] 300 ITR 231 wherein it was held that when two interpretations are possible, then invariably the court would adopt that interpretation which is in favour of the tax payer and against the revenue. 9. After hearing the rival submissions, perusing the material available on record and the case law cited by both parties, we find that the original return was filed by the assessee declaring a total income of Rs. 9,52,738. Subsequently, a search and seizure operation was conducted at the business premises of the assessee and during this action a disclosure under section 132(4) of the Act was made and in response to a notice under section 153A, the assessee filed a return of income declaring a total income of Rs. 17,98,360. This figure contained an amount of Rs. 8,45,624 which was declared by the assessee under section 132(4) of the Act. The Assessing Officer was, therefore, of the view that as the return for the assessment year 2005-06 was already filed before the date of search as per Explanation 5 to section 271(1)( c ) of the Act the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y different and, therefore, the ratio as laid down in that case is not applicable to the facts of this case. Similarly, we find that the decision of the learned Third Member in Kirit Dahyabhai Patel s case ( supra ), the learned Third Member following the view already taken by the Tribunal in the group case of Asst. CIT v. Rupesh Bholidas Patel [2009] 309 ITR (AT) 217 (Ahd.) upheld the view that immunity from penalty under Explanation 5 to section 271(1)( c ) is not available for the earlier years. The learned Third Member clearly observed in his order that he is not deviating from the earlier view on account of judicial discipline and more particularly because that view had already been taken by the Ahmedabad Bench of the Tribunal in the cases of the same group on identical facts and circumstances. We further find that in the case of Rupesh Bholidas Patel ( supra ), the Ahmedabd Bench of the Tribunal preferred to follow the decision of the Hon ble Bombay High Court in Sheraton Apparels s case ( supra ). We have already observed that the ratio laid down in this case is not applicable to the facts of the present case. We further find that the Hon ble Madras High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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