Brij Bhushan Singal , New Delhi vs Department Of Income Tax

ITA Nos. 2578, 2571, 2570/Del/2013 Assessment Years: 2004-05, 05-06 & 07-08 DCIT, vs. Brij Bhushan Singal, Central Circle-13, W-29, Greater Kailash, New Delhi. Part-II, New Delhi. AEFPS6298M (Appellant) (Respondent)

Cross Objection Nos. 187/Del/2013, 183/Del/2013 &182/Del/2013 (In ITA Nos. 2578, 2571 & 2570/D/2013) Brij Bhushan Singal, vs. DCIT, W-29, Greater Kailash, Cent. Circle 13, Part-II, New Delhi. New Delhi. (Appellant) (Respondent)

ITA No. 2575/Del/2013 Assessment Year: 2007-08 DCIT, vs. Brij Bhushan Singal HUF, Circle 13, New Delhi. Plot No. 3, Industrial Area, Phase-I, Chandigarh-160002 (Appellant) (Respondent)

Cross Objection No. 185/Del/2013 (In ITA No. 2575/D/2013)

Brij Bhushan Singal HUF, vs. DCIT, Plot No. 3, Industrial Area, Circle 13, New Delhi. Phase-1, Chandigarh. (Appellant) (Respondent)

ITA No. 2481/Del/2013 Assessment Year: 2004-05

Uma Singal, vs. DCIT, W-29, Greater Kailash, Cent. Circle 13, Part-II, New Delhi. New Delhi. ANRPS7987A (Appellant) (Respondent) Page 2 of 18

ITA Nos. 2577, 2568 & 5253/D/2013 Assessment Years: 2004-05, 05-06 & 2010-11

DCIT, vs. Uma Singal, Central Circle-13, W-29, Greater Kailash, New Delhi. Part-II, New Delhi. ANRPS7987A (Appellant) (Respondent)

Cross Objection No. 181/D/2013 (In ITA No. 2568/Del/2013) Assessment Year: 2005-06

Uma Singal, vs. DCIT, W-29, Greater Kailash, Cent. Circle 13, Part-II, New Delhi. New Delhi. ANRPS7987A (Appellant) (Respondent)

ITA No. 2572/Del/2013 Assessment Year: 2007-08 DCIT, vs. Ritu Singal, Central Circle-13, New Delhi. W-29, Greater Kailash, New Delhi. ABHPS3711N (Appellant) (Respondent)

Cross Objection No. 184/D/2013 (In ITA No. 2572/D/2013)

Ritu Singal, vs. DCIT, W-29, Greater Kailash, Cent. Circle 13, New Delhi. New Delhi. (Appellant) (Respondent)

ITA No. 2576 & 2602/Del/2013 Assessment Year: 2004-05 & 05-06 DCIT, vs. Neeraj Singhal, Central Circle-13, W-29, Greater Kailash, New Delhi. Part-II, New Delhi. ANRPS7986B (Appellant) (Respondent)

Cross Objection Nos. 186/D/2013 & 188/D/2013 (In ITA Nos. 2576 & 2602/D/2013)

Neeraj Singal, vs. DCIT, W-29, Greater Kailash, Cent. Circle, 13, Page 3 of 18

Part-II, New Delhi. New Delhi. (Appellant) (Respondent)

Appellant by : Smt. Anuradha Misra, CIT(DR) Respondent by : Sh. Ashwani Kumar, CA

ORDER

PER BENCH

These are 18 appeals, 10 of the Revenue and 8 CO of the assessee. At

the outset both the parties agreed that the issues involved in the aforesaid

appeals are common and therefore, were heard together and are disposed

of by this consolidated order.

2. During the course of hearing both the parties agreed that the disposal

of appeal in the case of Sh. Brij Bhushan Singal will take care of the issues

involved in other appeal preferred by the assessee against the order of

CIT(A) dated 11/02/2013 except ground no. 2, raised in the case of Ms. Uma

Singhal, in ITA No.2481/Del/2013 for A.Y. 2004-05. With this preliminary

backdrop we take up the appeal & CO filed by the assessee in the case of

Brij Bhushan Singal for A.Y. 2004-05. The grounds of appeal of the revenue is

for A.Y. 2004-05 is as follows:

1. "The order of the ld. CIT(Appeals) is not correct in law and facts;

2. On the facts and circumstances of the case, the ld. CIT(A) has erred in law in deleting the addition of Rs. 42,18,037/- made by the AO on account of unexplained credits received by the assessee as accommodation entry from Sh. S.K. Gupta.

Page 4 of 18

3. The appellant craves leave to add, amend any/all the grounds of appeal before or during the course of hearing of the appeal."

And in the CO preferred by the assessee, the following grounds have been

preferred:

1. "That the order dated 11.02.2013 passed u/s 250 of the Income Tax Act, 1961 by the ld. Commissioner of Income Tax (Appeals)-1, New Delhi is against law and facts on the file inasmuch as he was not justified in rejecting the stand of the assessee that the order passed by the ld. AO is without jurisdiction and bad in law as the jurisdiction u/s 153A has been vitiated.

2. That the order dated 11.02.2013 passed u/s 250 of the Income Tax Act, 1961 by the ld. Commissioner of Income Tax (Appeals)-1, New Delhi, is against law and facts on the file inasmuch as he was not justified in rejecting the stand of the assessee that the principles of natural justice have not been followed inasmuch the statement on which entire premise of the Department is based was recorded on the back of the assessee and even a copy of the same was not furnished to the assessee."

3. The solitary ground that has been raised by the revenue is that the

CIT(A) has erred in deleting the addition of Rs. 42,18,037/- made by the AO

on account of unexplained credits received by the assessee as

accommodation entries from Sh. S.K. Gupta.

4. Brief facts of the case are that search and seizure action u/s 132 of the

Income Tax Act, 1961 (hereinafter 'the Act') was carried out on Bhushan

Group on 03/03/2010. Since assessee was also covered in the operation u/s

132 of the Act, Section 153A proceedings were initiated against the assessee

and notices were issued on 24/09/2010. In response to the same the assessee

filed his return of income declaring a total income of Rs. 1,72,686/- on

21/10/2010. The AO vide questionnaire dated 12/07/2011 asked the assessee Page 5 of 18

to reply in respect to his name cropping up in certain documents found

during a survey conducted on 20/11/2007 at the premises of Sh. S.K. Gupta,

C.A. From the impounded documents/ lap top/ computer, during the said

survey at shri S.K. Gupta, survey team found the ledger account maintained

by him for the period from 2003-04 to 2007-08 and the name of the assessee

figured in it. The said survey against Sh. S.K. Gupta finally ended in the

Income Tax Settlement Commission, wherein the said Sh. S.K. Gupta has

admitted that he is an entry provider and controls 38 companies which are

incorporated for providing accommodation entry to various persons. The

AO, then brought to the notice of the assessee the following transaction

recorded in the ledger account maintained by Shri S.K.Gupta, which

according to the AO were nothing but accommodation entries since the

name of the assessee figured in it and that of their mediator being Sh. R.K.

Kedia was forwarded to the assessee for his comments and explanations:

S.No. Name of the Name of the Date Amount Details entry providing person company accepting the amount 1. Sino Securities Sh. B.B. Singhal 21.05.04 8,00,000/- Ch. No. 431989 P. Ltd. dt. 21.05.04 2. As above As above 21.05.04 5,00,000/- Ch. No. 431990 dt. 16.05.04 3. As above As above 21.05.04 5,00,000/- Ch. No. 431997 dt. 17.05.04 4. As above As above 31.05.04 8,00,000/- Ch. No. 433714 dt. 25.05.04 5. As above As above 05.08.03 5,00,000/- Ch. No. 436601 dt. 01.08.03 6. As above As above 05.08.03 5,00,000/- Ch. No. 436602 dt. 01.08.03 7. As above As above 29.11.04 2,77,795/- Ch. NO. 238678 dt. 27.11.04 8. As above As above 13.07.06 25,00,000/- Ch. No. 307075 dt. 10.07.06 9. As above As above 13.07.06 25,00,000/- Ch. No. 307074 dt. 10.07.06 10. As above As above 26.07.06 6,24,235/- Ch. No. 009314 dt. 14.09.06 Page 6 of 18

5. To the said query the assessee replied vide letter dated 27/10/2011 that

the payments mentioned except that of serial no. 7 has been received from

M/s Sino Securities Pvt. Ltd. and the entry at serial no. 7 does not pertain to

the assessee. Along with the said reply, the assessee forwarded the

confirmation and bill in respect of the transaction entered between him and

M/s Sino Securities Pvt. Ltd. (sharebroker) and the payments received were

duly enclosed for the perusal of the AO. However, dissatisfied with the reply

of the assessee, the AO proceeded to add the aforesaid amount as

unexplained money of the assessee earned from unexplained sources and

added the said amount of Rs. 42,18,037/- to the total income of the assessee.

6. Aggrieved by the said order of the AO the assessee preferred an

appeal before the CIT(A) who was pleased to delete the said addition by

holding as under:

"I have considered the rival submissions. The fact that Sh. S.K. Gupta is an entry operator is undisputed. The fact that the appellant/other persons of Bhushan group had transactions with companies controlled by Sh. S.K. Gupta is undisputed. In Kishinchand Chellaram vs. CIT, Bombay City II (1980) 125 ITR 713 (SC), Hon'ble Apex Court held that "It is true that the proceedings under the income-tax law, are not governed by the strict rules of evidence and therefore, it might be said that even without calling the manager of the bank in evidence to prove this letter, it could be taken into account as evidence. But before the I.T. authorities could reply upon it, they were bound to produce it before the appellant so that the appellant could controvert the statements contained in it by asking for an opportunity to cross examine the manager of the bank with reference the statements made by him."

Page 7 of 18 Therefore, as it is equally well settled that the principles of natural justice are applicable to tax proceedings, the statement relied upon as well as opportunity to cross examine the person making the statement ought to have been made available to the appellant. Absence of the opportunity to the appellant during the assessment proceedings, and not seizing the opportunity to remove the defect when provided during the appeal proceedings, vitiates the assessment. Further, while the finding of the ITSC that Sh. S.K. Gupta is an entry operator is final qua the persons/entities alleged to have taken entries from that person. That finding needs to be examined and corroborated in the facts of each case. The real facts could have emerged had the cross examination been got conducted by the revenue. That has not happened. In this view of the matter, I hold that the case of unexplained cash credit has not yet been established against the appellant. This ground of appeal succeeds. Appellant gets relief of Rs. 42,18,037/-.

I find that while the amount of Rs. 42,18,037/- was brought to tax as unexplained credit/income, the capital gain arising from the sale of shares does not find any mention in the assessment order. As the two sets of transactions, i.e. unexplained credit/income charged by the revenue and capital gain offered by the appellant, arise from the same transaction, only one of these amounts can be taxed. As the appeal herein against addition of Rs. 42,18,037/- as unexplained credit/income has been allowed, the corresponding capital gain shall be charged if not charged already in the returned income of the appellant. Further, the applicable rate at which the capital gain is to be charged shall be re-verified in view of the dispute relating to capital gain on unlisted securities and the rate applicable (i.e. 10% offered by the appellant and 20% charged by revenue). I may mention here that the securities in question were listed on the Calcutta Stock Exchange Ltd., though these may not be very well known listed companies. The AO is directed to check Page 8 of 18

these aspects at the time of giving effect to this order, and act in terms of the directions given above in accordance with the law."

7. According to the ld. CITDR, the CIT(A) erred in deleting the addition

made by the AO on account of the unexplained credits received by the

assessee being accommodation entry provided by Sh. S.K. Gupta.

According to the ld. DR, once search u/s 132 of the Act take place at the

premises of the assessee, sec. 153A of the Act gets triggered and the

assessment for the previous six assessment years need to be

assessed/reassessed by the AO. According to the ld.DR, the mandate of sec.

153A of the Act is that the AO has to compute the total income of the

assessee for the previous six assessment years. In this case also the AO has

rightly taken into account the accommodation entries provided by Sh. S.K.

Gupta, CA to the assessee which was exposed during the survey conducted

at his premises on 20/11/2007. The said Sh. S.K. Gupta has admitted on oath

before the survey team that he was indulging in providing accommodation

entries to various persons and the ledger account maintained by the said Sh.

S.K. Gupta clearly reflects the money dealing with the assessee. The modus

operandi for providing the accommodation entry has been explained in

detail by Sh. S.K. Gupta and from the back up folders of his laptop the details

like cash received, cheque issued, commission/premium paid in respect of

the party were found emerging from the ledger account maintained in the

name of the conduit of the assessee; and the ld. CIT(DR) pointed out that in

the case of the present assessee who belongs to the Bhushan Group one Sh.

Raj Kumar Kedia was the conduit and his house was also searched along Page 9 of 18

with that of the assessee. And the ld. CIT(DR) pointed out to a chart, which is

found in page 3 of the assessment order wherein the details of

accommodation entries supposed to have been made to members of the

Bhushan Group have been given, which is reproduced below:

Name Financial Year Amount Sh. B.B. Singal 2003-04 Rs. 12,15,937/- Do 2004-05 Rs. 28,77,795/- Do 2006-07 Rs. 56,24,235/- Sh. Neeraj Singal 2003-04 Rs.1,28,75,500/- Do 2004-05 Rs. 49,35,410/- Smt. Uma Singal 2003-04 Rs. 38,49,305/- Do 2004-05 Rs. 45,07,742/- Smt. Ritu Singal 2006-07 Rs. 77,38,947/- B.B. Singal HUF 2006-07 Rs. 13,00,000/-

8. Ld. DR also has pointed out that Sh. S.K. Gupta in his statement

recorded on oath on 05/01/2009 has categorically admitted that

transactions mentioned in the above accounts were in respect of Bhushan

Group of cases and were not genuine and were only accommodation

entries. The ld. DR also pointed out the fact that Sh. S.K. Gupta has admitted

before the Income Tax Settlement Commission the entire modus operandi in

providing accommodation entries to various entities including the assessee.

Therefore, according to the ld. DR the AO rightly made the addition while

computing the total income of the assessee as mandated by section 153A of

the Act.

9. On the other hand, ld. AR Sh. Ashwini Kumar, C.A, submitted that the

ld. CIT(A) has rightly held that there was no evidence other than the

statement of Sh. S.K. Gupta, that too which has been taken behind the back

of the assessee; and further submitted that neither the copy of the said

statement of Gupta which the AO has relied upon to make the impugned Page 10 of 18

addition has been provided to the assessee for rebutting the same nor his

request to cross examine shri. S.K. Gupta was heeded to by the AO . So the

ld. CIT(A) has found merit in the ground raised by the assessee. Further

according to the ld. AR, the ld. CIT(A) has examined the records/documents

filed by the assessee before the AO, which included the contract notes,

copies of the bills in respect to the purchase of shares made through M/s Sino

Securities Pvt. Ltd. and confirmation from M/s Sino Securities; and the ld

CIT(A) was satisfied that all the payments have been received by the

assessee either through account payee cheques or through demand draft,

which stood duly credited in the bank account and recorded in the regular

books of accounts of the assessee; so according to ld. AR, the CIT(A) rightly

deleted the addition made by the AO.

10. We have heard both the parties and have gone through the records

of the cases cited before us. We find that a search u/s 132 of the Act was

carried out at the business premisses of the assessee on 03/03/2010 being

part of the Bhsushan Group. Pursuant to the search notice u/s 153A of the

Act was issued against the assessee and the assessee filed a return of income

declaring an income of Rs. 1,72,686/- was filed on 21/10/2010. Later we find

that the AO issued a questionnaire dated 12/07/2011, wherein the assessee

was asked to reply about his name being found in the ledger account

maintained by Sh. S.K. Gupta whose premises were surveyed by the

department and to his alleged admission wherein he has revealed that he

was in the business of providing accommodation entries for so many Page 11 of 18

peresons/entities including the assessee. Armed with the said disclosure of

Sh. S.K. Gupta and the ledger account maintained by Sh. S.K. Gupta the AO

sought the reply of the assessee, and he was also asked whether he would

like to cross examine the said Sh. S.K. Gupta. We find that the assessee had

infact replied to the AO vide letter dated 27/10/2011wherein the assessee

admitted all the transactions as except the transaction mentioned at serial

no. 7 with the said share broker M/s Sino Securities Pvt. Ltd. The assessee

informed the AO about his inability to produce the share broker since 5-6

years have lapsed and the assessee is not in touch or doing any business with

the said share broker. We also take note of the fact that the assessee in the

said reply also requested the AO to exercise his statutory powers vested with

him to summon Shri. S.K. Gupta before him (AO) and give an opportunity to

the assessee to cross examine the said Shri. S.K. Gupta. We also find that the

assessee made a request to the AO to provide him with the statements of

Shri. Gupta which has been the basis for asking the queries. However, we

find that in the assessment order, the AO has given a finding that assessee

has not even availed the opportunity given to him vide question no. 7 of

questionnaire dated 12/07/2011 to cross examine Sh. S.K. Gupta. We find

that the AO's said finding is contrary to the evidence/request made by the

assessee to provide him an opportunity to cross examine vide his letter dated

27/10/2011 to AO. In the remand report also, the AO could not say anything

about the said request made by the assessee before the AO. Therefore, the

CIT(A)'s finding that the statement of Sh. S.K. Gupta incriminating the

assessee was not provided to him nor an opportunity was granted to cross Page 12 of 18

examine the said Sh. Gupta is against natural justice and, therefore, the ld.

CIT(A) was justified in coming to a conclusion that the said evidence even if

incriminating the assessee, could not have been the basis for making the

impugned additions. We also take note of the fact that the ld. CIT(A) had

made a finding that the shares which were purchased and sold by the

assessee through the said share broker was listed companies of Calcutta

Stock Exchange though not well known companies. We also take note of

the fact that the assessee had duly reflected in its return filed in the

concerned assessment years the long term/short term capital gain it

received from sale of shares through the Sino Securities Pvt. Ltd. We find that

in the assessment order, there is no whisper about any incriminating material

which was found during search on 03/03/2010 conducted at the residence

of the assessee and other business premises of the Bhushan Group. The

edifice on which the AO, has built the entire addition u/s 68 of the Act, is on

the purported statement of Shri S.K. Gupta which the survey team has

obtained in the year 2007 and the ledger account which was maintained by

the said S.K. Gupta. We find that for the first time the assessee was put on

notice by the AO, in respect to the said fact of his knowledge about the

assessee's name figuring in the survey statement of said S.K. Gupta and

ledger documents of S.K. Gupta was on 12/07/2011 and it is not disputed by

the Revenue that neither the copy of the said statement of S.K. Gupta which

purportedly put the assessee on the dock was given to the assessee, to rebut

the allegation if any nor the request of the assessee to cross examine Shri S.K.

Gupta was acceded to by the AO. Rather we find that, the AO has made a Page 13 of 18

finding that assessee did not avail the opportunity to cross examine Shri S.K.

Gupta which is factually incorrect. Evidence which are on record clearly

shows that assessee had infact requested the AO, to exercise his statutory

powers to summon Shri S.K. Gupta and to allow him to be tested on the anvil

of cross examination. The AO was not justified to make a finding that the

assessee did not avail the opportunity to cross examine Shri S.K. Gupta, when

the fact of the matter was otherwise. The ld. CIT(A) has rightly found that the

addition u/s 68 of the Act computed by the AO was only on the purported

statement of the Shri S.K. Gupta, which has not be provided to the assessee,

inspite of his request to provide him with a copy of the said statement; and

despite the assessee requesting the AO to summon Shri S.K. Gupta for cross-

examine the AO did not heeded to it, so the addition cannot be sustained

on the said statement relied on by the AO. It was also pointed out by the ld

counsel that during the year under consideration the credit is only on

account of realization of the assets of the assessee i.e. the shares which were

sold by the assessee and the cash was realized. The purchase of the shares

have not been doubted by the revenue and, therefore, realization of the

said assets cannot be said to be the accommodation entry availed by the

assessee. It is only the replacement of the one asset with another asset i.e.

the shares were liquidated and cash was realized. The capital gain/capital

loss which arose out of such transactions was duly disclosed in the return of

income. We find force in the arguments of the ld counsel. The realization of

the shares into cash cannot be said to be availing of the accommodation

entry especially when the purchase of those shares have not been doubted Page 14 of 18

by the revenue. Further the purchase and sale of the share are duly

supported by the documentary evidence and the purchase consideration

paid by the assessee by cheque as well as sale consideration was received

by the cheque. The AO has not found any of these documents to be fake.

The only reason for treating the transactions of sale of shares as

accommodation entry is the purported statement of Shri S.K. Gupta, which

survey team obtained in the year 2007. Admittedly such statement was

record behind the back of the assessee and the assessee was never allowed

any opportunity to cross-examine him. Moreover from the statement of Shri

S.K. Gupta the ld CIT DR could not point out any mention of the assessee's

name in any of the statement recorded during the said survey or later on. In

view of the above we do not find any justification to interfere with the order

of the ld CIT(A) and we uphold the same. The revenue's appeal in

assessment year 2004-05 is thus dismissed.

11. Further as regards the CO, the same being not pressed is dismissed.

Since the issues involved and as agreed between the parties, 1 are identical

in appeal for A.Y. 2004-05 with the remaining 9 appeal of the revenue & 7

CO's stand dismissed except ground no. 2 in the case of Uma Singal for A.Y.

2004-05 which reads as under:

2. "That the order dated 11.02.2013 passed u/s 250 of the Income Tax Act, 1961 by the Learned Commissioner of Income-Tax (Appeals), New Delhi is against law and facts on the file in as muich as he was not justified to uphold the action of the Learned Assistant Commissioner of Income-tax, Central Circle-13, New Delhi in making an addition of Rs.

6,76,673/- on account of FDR receipt on the ground that Appellant could not produce any document in support of such FDR receipt." Page 15 of 18

12. The ld. AR contended that the AO and the CIT(Appeals) erred in

making an addition of Rs. 6,76,673/-. Since the appellant could not produce

any document in support of such FDR receipt that Smt. Uma Singal is an

individual and is not carrying out any business/profession but only deriving

income from interest, capital gains, dividend, etc. and is neither statutorily

obliged to nor maintaining any regular books of accounts. And it was

submitted by the ld. AR that the appellant had, at various points of time, prior

to 01.04.2003 out of her own savings or surplus funds available in bank

accounts purchased FDRs in various banks which were either

matured/renewed subsequently during the Financial Year 2004-05 onwards.

However, by mistake, the said FDRs were omitted to be included in the

statement of Affairs prepared as on 31.03.2003. Subsequently, when the error

was noted, it was realized that certain FDRs purchased prior to 01.04.2003

had been matured/renewed subsequently, the imputed value thereof taking

into account the rate of interest and making a reverse calculation was

credited to the capital account with a corresponding debt to the FDRs

account as on 01.04.2003 since the original FDRs were purchased in that

period. The ld. AR tried to impress upon us that because of the passage of

time and the consequential non-availability compounded with the chances

of certain records having been misplaced/defaced/destroyed, subsequently

when the bank accounts were analyzed for the purpose of filing details

during the course of post-search assessment proceedings that the error was

discovered and the corresponding rectification entries passed. As such,

therefore, the AR contended that as such it cannot be said that the said Page 16 of 18

FDRs were in the nature of unexplained credit, specially considering the fact

that the same pertain to the period prior to 01.04.2003 and it was only

because of the compilation of the error that the same could not be

incorporated in the statement of affairs as on 31.03.2003.

13. We have heard both the parties and have perused the records and

we find that the assessee during the section 153 proceedings before the AO

could not produce any documents to substantiate the receipts on account

of FDR receipts of Rs. 6,76,673/- in her capital account. The AO's finding that

no such credit is appearing in the bank account statement provided by the

assessee and since assessee could not produce any documents substantiate

the same. The AO added the said amount to the total income of the

assessee as unexplained credit. Before the CIT(Appeals) also the assessee

had made all the contentions which has been raised before the

CIT(Appeals). The CIT(Appeals) has not accepted the contentions raised by

the assessee since the assessee could not offer any evidence to support the

explanation that was given before him. Before us also the ld. AR could not

produce any documents to substantiate his explanation regarding this

aspect, so that we could take a different view on the issue. Therefore, we

are inclined to confirm the order of the CIT(Appeals) in this behalf and,

therefore, the appeal preferred by the appellant on this issue stands

dismissed.

Page 17 of 18

14. ITA No. 5253/D/2013 for A.Y. 2010-11

This is an appeal of the Revenue preferred by Uma Singal against the order of

the CIT(Appeals)-1, New Delhi dated 05/07/2013 deleting the penalty

imposed on the assessee. The grounds of appeal are as follows:

"On the facts and circumstances of the case the ld. CIT(A) has erred in deleting the penalty imposed by AO u/s 271AAA of the I.T. Act amounting to Rs. 50,00,000/- on the surrender of Rs. 5 crores, as the assessee had not substantiated the manner in which the undisclosed income was derived with any corroborative evidence."

In respect of the deletion of the penalty imposed on the assessee, we find

that the ld. CIT(A) has relied on the order of this Tribunal in the case of Sh.

Neeraj Singal for A.Y. 2010-11, wherein the Tribunal has deleted the penalty

imposed u/s 271AAA of the Act. In the impugned order dated 05/07/2013 in

Neeraj Singal's case, whose case also is before us which has been

adjudicated above, wherein the penalty on similar facts was deleted by this

Tribunal by observing as under:

"In view of above facts of the present case wherefrom it is evident that during the course of search proceedings the authorized officer of the department had not raised any specific query regarding the manner in which the undisclosed income has been derived and on the contrary the assessee has tried to explain the earning of the undisclosed income in question in its reply during the course of recording of his statement u/s 132(4) of the Act and thereafter. We thus, respectfully following the ratio of above cited decisions of Hon'ble Allahabad High Court and Hon'ble Gujarat High Court hold that in absence of query raised by the authorized officer during the course of recording of statement u/s 132(4) about the manner in which the undisclosed income has been derived and about its Page 18 of 18

substantiation, the AO was not justified in imposing penalty u/s 271AAA of the Act specially when the offered undisclosed income has been accepted and due tax thereon has been paid by the assessee."

15. The ld. DR could not point out any fact which could persuade us to

take a different view. Since the penalty was imposed on an assessee who

was also searched along with the appellant Smt. Uma Singal and whose

penalty was also levied on the similar grounds has now been deleted by this

Tribunal on the reasons afore-stated. Respectfully concurring with the view of

the coordinate bench of the Tribunal and, therefore, we uphold the order of

the CIT(Appeals). Therefore, the revenue's appeal against deletion of the

penalty is imposed.

16. In the result, all the appeals/cross objections are dismissed.

Order pronounced in the open court on 17.02.2015 -Sd/- -Sd/- (G.D. AGARWAL ) (A. T. VARKEY) VICE PRESIDENT JUDICIAL MEMBER Dated:17.02.2015 *Kavita Copy forwarded to 1. Appellant 2. Respondent 3. CIT 4. CIT (A) 5. DR:ITAT ASSISTANT REGISTRAR ITAT, New Delhi