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TMI Blog2015 (7) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ared and accepted by the assessee in the return filed in response to notice u/s.153A as undisclosed income is actually belongs to the company and he is not the owner of such income. The Ld. Counsel for the assessee also made a statement at the Bar that the assessee has not taken any benefit out of the amount disclosed. The tax paid on such undisclosed income has gone waste as no benefit out of such income has been availed by the assessee. Therefore, we are of the considered opinion that this is not a fit case for levy of penalty u/s.271(1)(c) read with Explanation 5A - Decided in favour of assessee. - ITA Nos.1443 to 1445/PN/2013 - - - Dated:- 26-6-2015 - Shri R.K. Panda and Shri Vikas Awasthy, JJ. For The Appellant : Shri J.P. Bairagra For The Department : Shri Y.K. Bhaskar ORDER PER R.K. PANDA, AM : The above 3 appeals filed by the Revenue are directed against the separate orders dated 01-04-2013 of the CIT(A), Aurangabad relating to Assessment Years 2006-07 to 2008-09 respectively. Since identical issue is involved in all the three appeals, therefore, these were heard together and are being disposed of by this common order for the sake of convenience ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed only when there must be concealment or there must be inaccurate particulars of income. To avoid litigation, the assessee agreed for addition. 6.5 The assessee also relies upon the latest judgment given by the Supreme Court in CIT vs Reliance Petro-products Pvt. Ltd. 7. However, the Assessing Officer was not satisfied with the explanation given by the assessee. He observed that statement of Shri Ghanshyam Goyal main concerned person of Kalika group was recorded u/s.132(4) of the I.T. Act. At the time of search at Kalika Steel Alloys Pvt. Ltd. on 08-07-2009 in the statement Shri Ghanshyam Goyal made declaration of income of ₹ 14 crores. Later on in the statement recorded u/s.131 of the Act by the ADIT (Investigation) Aurangabad on 17-08-2009 Shri Ghanshyam Goyal reiterated the declaration of income and gave detailed bifurcation of the income declared at ₹ 14 crores. In reply to question No.4 of the said statement Shri Ghanshyam Goyal declared an amount of ₹ 29,96,551/- as undisclosed income in the hands of Shri Naresh Jindal, i.e. the assessee for A.Y. 2006-07. He observed that the declaration of income made by Shri Ghanshyam Goyal was on account of profit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income itself is incorrectly offered and taxed, the concealment penalty has no legs to stand. The assessee has filed written submission, raising the above contentions, vide letter dated 21/03/2013 which has been considered. 9. Based on the arguments advanced by the assessee the Ld.CIT(A) deleted the penalty levied u/s.271(1)(c) of the I.T. Act by observing as under : 8. I have carefully considered the facts of the case and rival contentions. It is undisputed fact that during the course of search post search proceedings, the companies of Kalika Group have offered to tax profit on their alleged suppressed sale to buy peace of mind, which has been offered to tax in the hands of the Directors. The relevant portion of statement recorded on 17/08/2009 giving details of the said income offered is extracted below - Q.No.4 It is to be noted that, as the assessee had claimed all expenses, direct and indirect, during the respective years, hence the total value of the goods so removed shall be unaccounted income of the assessee. Please comment. Ans:- I deny contention of DGCI that the members of Kalika group as mentioned in Q.No.2 had clandestinely removed the products. Even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing such result unaccounted sale. The details of the same are as follows Sr.No Name of company Directors FY 05-06 FY 06-07 FY 07-08 1 Kalika Steel Alloys Pvt.Ltd. Ghanshyam G Goyal -- 1957468 1943865 Arun Agrawal -- 1957468 1943865 2 Kalika Steel Anil Goyal 2996551 1212567 4260756 Jalna Pvt.Ltd. Naresh Jindal 2996551 1212567 4260756 3 Giriraj Re- Rolls Pvt.Ltd. Ghanshyam G Goyal 779048 -- 1328152 4 Bhoomi Re- Rolls Pvt.Ltd. Anil Goyal -- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as money, bullion, jewellery or other valuable article or thing, is found and it is found that the said asset was acquired out of income which was not disclosed; in the case of the appellant no such facts existed and the income has been offered during search action to buy peace of mind and to avoid protracted litigation. This contention of the appellant is not required to be adjudicated as the first contention of the appellant is accepted and penalty has been cancelled. Ground Nos. 2 3 are allowed. 10. Aggrieved with such order of the CIT(A) the Revenue is in appeal before us with the following grounds : 1) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the penalty of ₹ 10,23,160/- imposed u/s 271(1)(c) of the Act. 2) On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the amount on which penalty is levied, was not income of the assessee, ignoring the fact that such income was offered by the assessee himself in the return of income, which renders the decision perverse on facts and in law. 3) The appellant craves leave to add, alter, modify, delete, and am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duals. Referring to Question No.16 of the said statement (page 27 and 28 of the paper book) he submitted that the final tally of declaration of ₹ 14,01,61,595/- is income and in that the first item is unaccounted sale as per details mentioned in Question in 2 3 amounting to ₹ 2,80,79,840/- which is the amounts relating to clandestine removal of goods by these companies. He submitted that it is clear from the above that the income declared by these individuals in A.Yrs. 2006-07 to 2008-09 on which penalty u/s.271(1)(c) has been levied is the income on account of alleged clandestine removal of goods by these companies which has been offered in the hands of the individuals. He submitted that it is also clear from the above that the income offered by these individuals in A.Y. 2010-11 is on account of their personal income earned by them which is clearly mentioned in Question No.50 of the statement recorded u/s.132(4) on which heavy reliance has been placed by the Revenue. He submitted that since the search took place on 08-07-2009 relating to A.Y. 2010-11 the return of income was not due to be filed on the date of search and therefore the same has been declared by these i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 30-11-2011. 14. He submitted that when the income has been declared u/s.132(4) with the condition that no penalty should be levied then the statement should be accepted in totality and not in part. He submitted that during the course of search the statement of Shri Ghanshyam Goyal was recorded u/s.132(4) in the presence of Shri Naresh B. Jindal, Shri Arun S. Agrawal and Shri Anil N. Goyal, Accordingly, the declaration u/s.132(4) was conditional to the fact that no concealment of the penalty should be levied. 15. Referring to the decision of the Mumbai Bench of the Tribunal in the case of DCIT Vs. Goyal Properties and Estates Pvt. Ltd. vide ITA No.7132/Mum/2010 order dated 07-05-2012 he submitted that the Tribunal in the said decision has held that when the assessee has given the declaration during the course of the survey to file the revised return of income to withdraw the claim of deduction u/s.80IB(10) with the clear understanding and assurance that no penalty is to be levied the Department cannot accept one part of the declaration, i.e., filing of the revised return of income withdrawing the claim and ignore the other part of income, i.e. assuring not to levy pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lared undisclosed income of ₹ 14 crores in the name of 4 persons @ ₹ 3.5 crores each, the details of which are as under : 1. Shri Ghanshyam Chunilal Goyal Rs.3.50 Crores 2. Shri Arun Shrikishan Agrawal Rs.3.50 Crores 3. Shri Anil Nandkishor Goyal Rs.3.50 Crores 4. Shri Naresh Banarasidas Jindal Rs.3.50 Crores Total ₹ 14 Crores 15.1 We find in response to Question No.4 recorded u/s.131 on 17- 08-2009 Shri Ghanshyam C. Agrawal had replied as under : Q.No.4 It is to be noted that, as the assessee had claimed all expenses, direct and indirect, during the respective years, hence the total value of the goods so removed shall be unaccounted income of the assessee. Please comment. Ans:- I deny contention of DGCI that the members of Kalika group as mentioned in Q.No.2 had clandestinely removed the products. Even if it is assumed that such products are removed then a fact may be conside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sult unaccounted sale. The details of the same are as follows Sr.No Name of company Directors FY 05-06 FY 06-07 FY 07-08 1 Kalika Steel Alloys Pvt.Ltd. Ghanshyam G Goyal -- 1957468 1943865 Arun Agrawal -- 1957468 1943865 2 Kalika Steel Anil Goyal 2996551 1212567 4260756 Jalna Pvt.Ltd. Naresh Jindal 2996551 1212567 4260756 3 Giriraj Re- Rolls Pvt.Ltd. Ghanshyam G Goyal 779048 -- 1328152 4 Bhoomi Re- Rolls Pvt.Ltd. Anil Goyal -- 615115 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... different companies including the assessee in their hands in fact belongs to the said companies which have been earned by the said companies from their manufacturing activity. Therefore, such income has to be taxed in the hands of the respective companies and not in the hands of the directors. According to the Ld.CIT(A) it is the settled proposition of law that in order to levy penalty u/s.271(1)(c) there has to be income of the assessee in respect of which particulars have been concealed. Since in the instant case it is not the income of the assessee and the income belongs to that of the respective companies, therefore, penalty u/s.271(1)(c) of the I.T. Act cannot be levied by invoking either Explanation 1 or Explanation 5A to provisions of section u/s.271(1)(c) of the I.T. Act. He accordingly deleted the addition. We do not find any infirmity in the above finding given by the Ld.CIT(A). Even in the hands of the company, the assessee in principle has not accepted the result of such unaccounted sale which has been categorically stated by Shri Ghanshyam C. Goyal in his reply to Question No.4. As per the provisions of Explanation 5A to section 271(1)(c) penalty cannot be levied if se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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