K.K. Developers, Surat vs Department Of Income Tax

सुनवाई क तार ख/ Date of Hea ring : 2 4/04/2015 घोषणा क तार ख /Date of P ronouncement: 30 /04 /20 15

आदेश /O R D E R

PER SHRI S.S. GODARA, JUDICIAL MEMBER

This Revenue's appeal for A.Y.2007-08, arises from order of the CIT(A)-II, Ahmedabad dated 6.11.2011 passed in case no.CIT(A)-II/CC.I/75/09-10 deleting impugned penalty of Rs.4,46,000/-, in proceedings u/s.271(1)(c) of the Income Tax Act in short 'the Act'.

2. The assessee-firm is in construction business. The department had conducted a search in case of its partner. He declared undisclosed income of Rs.13.25 lac at the assessee-firm's behest. The assessee filed a return on 29.10.2007 admitting income of Rs.15,19,010/- followed by a revised one. The same was processed.

ITA No. 840/Ahd/2011 M/s. K.K. Developers For A.Y. 2007-08 -2-

Thereafter the Assessing Officer framed a regular assessment on 26.10.2008 accepting the income return. However he initiated penalty proceedings qua the undisclosed income admitted hereinabove of Rs.13.25 lac alleging concealment and furnishing of inaccurate particulars of income.

3. In penalty proceedings, the assessee pleaded for dropping the penalty notice since its income declared stood accepted and claimed immunity u/s.271(1)(c) Explanation 5 of the Act. The Assessing Officer did not agree. He observed in penalty order dated 29.6.2009 that the assessee-firm had declared its undisclosed income above said only because of search and not voluntarily, its claim of immunity was not maintainable since no undisclosed income had been declared to the Chief Commissioner/Commissioner of Income Tax and the same was not on the basis of any money, bullion, jewellery or other valuable articles or things found in the course of search but only on the basis on incriminating entries in the books of accounts. The Assessing Officer concluded that the assessee's action in disclosing the impugned undisclosed income amounted to suppression and concealment of its taxable income by filing inaccurate particulars. He levied minimum penalty of Rs.4.46 lac accordingly in the assessee's case.

4. The assessee preferred an appeal. The CIT(A) takes into account the case law of CIT vs. Mishrimal Soni 162 Taxman 53 (Raj.) that there is no distinction between tangible or intangible asset ITA No. 840/Ahd/2011 M/s. K.K. Developers For A.Y. 2007-08 -3-

in relation to section 271(1)(c) Explanation 5 (2) and disclosure on the basis of entries in the documents is also covered thereunder. The second case law taken note of hon'ble jurisdiction High Court in CIT vs. Mahindra C. Shah granting immunity even if no manner of earning the undisclosed income in question specified in section 32(4) statement recorded during search. The lower appellate order accordingly holds the assessee entitled for immunity relief. This makes the Revenue aggrieved.

5. We have heard the parties. There is no dispute on the factual position on merits hereinabove. The assessee's partner had declared its undisclosed income of Rs.13.25 lac. We reiterate that the impugned assessment year is 2007-08 wherein the assessee was yet to file its return and the search is conducted in the relevant accounting period on 27.12.2006. It filed its return on 29.10.2007 including the very sum and the assessing authority did not make any addition. It's a regular assessment and not the one covered by Section 153A or 153C of the Act. The Revenue still alleges concealment on the assessee's part. We find from a recent decision of the hon'ble jurisdictional High Court dated 3.12.2014 in Kirit Dayabhai Patel vs. ACIT that when the returned income in furtherance to search is accepted without any addition being made, the impugned penalty can only be levied qua the income over and above the one return and not otherwise. The Revenue fails to point out any distinction on facts so as to get the impugned penalty restored. Its grounds stand rejected.

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6. The Revenue's appeal is dismissed.

Order pronounced in the Court on this day, the 30th April, 2015 at Ahmedabad.

(PRAMOD KUMAR) (S.S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 30/04/2015 Prabhat Kr. Kesarwani, Sr. P.S. आदेश क त ल प अ े षत/Copy of the Order forwarded to : 1. अपीलाथ / The Appellant 2. यथ / The Respondent. 3. संबं धत आयकर आयु त / Concerned CIT

4. आयकर आयु त(अपील) / The CIT(A)-III, Ahmedabad

5. वभागीय त न ध, आयकर अपील य अ धकरण, अहमदाबाद / DR, ITAT, Ahmedabad

6. गाड फाईल / Guard file.

आदेशानुस ार / BY ORDER,

उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील य अ धकरण, अहमदाबाद / ITAT, Ahmedabad