SHRI MADANLAL KATARIA,RATLAM vs. THE DCIT CENTRAL CIRCLE, INDORE

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria आयकर अपील�य अ�धकरण, इ�दौर �यायपीठ, इ�दौर IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE �ी डी.ट�.गरा�सया, �या�यक सद�य तथा �ी ओ.पी.मीना, लेखा सद�य के सम� BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER आ.अ.सं./I.T.A. No.898/Ind/2016 �नधा�रण वष� /Assessment Year: 2012-13 Ravi Kataria Ratlam PAN – ACMPK 3917P` :: अपीलाथ� /Appellant Vs DCIT Central Circle Indore :: ��यथ� /Respondent आ.अ.सं./I.T.A. No.897/Ind/2016 �नधा�रण वष� /Assessment Year: 2012-13 Madanlal Kataria Ratlam PAN – ACFPK 5779D :: अपीलाथ� /Appellant Vs DCIT Central Circle Indore :: ��यथ� /Respondent Shri P.D. Nagar �नधा�रती क� ओर से/Assessee by राज�व क� ओर से/Revenue by Shri Mohd. Javed

22.12.2016 सुनवाई क� तार�ख Date of hearing 6.1.2017 उ�घोषणा क� तार�ख Date of pronouncement

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria आदेश /O R D E R PER SHRI D.T. GARASIA, JM These appeals have been filed by the assessees against

the orders of the learned CIT(A)-III, Indore, both dated

14.6.2016. Since common issue is involved, these appeals

were heard together and are being disposed of by this

consolidated order for the sake of convenience.

confirmation of penalty levied by the Assessing Officer u/s

271AAA of the Act.

similar with each other, we would like to decide ITA No. 898/Ind/2016 first.

individual belonging to Kataria group of Ratlam which was

searched on 7.9.2011. The major sources of income are

income from salary, interest and dividend. The return of

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria income was filed for the assessment year 2012-13 on

29.3.2013 declaring total income at Rs. 2,00,49,700/-. The

assessee had offered the additional income of

Rs.32,64,876/- on account of diamond jewellery of

Rs.6,44,876/-, Silver bullion & silver coins of

Rs.11,20,000/- and gross profit estimated on stock fund of

Rs.15,00,000/-. The Assessing Officer held that the

additional income has been offered only as a result of

search and seizure operation and does not qualify for

immunity u/s 271AAA(2) of the Act. Accordingly, the

Assessing Officer levied penalty u/s 271AAA @ 10% of the

undisclosed income amounting to Rs.3,36,488/-. On

appeal, the learned CIT(A) confirmed the penalty levied by the Assessing Officer. Now the assessee is in appeal before the Tribunal. 4.

submitted that during the course of search, the assessee

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria has explained the source of the acquisition of jewellery and

gold bullion from estimated profit surrendered on

unrecorded sales of gold ornaments, diamond and jewellery

which was found short on physical verification of stock.

The learned counsel also claimed that once the income

surrendered during search was admitted and tax was

deposited while filing the return by disclosing such

additional income, the assessee cannot be fastened with

the penalty. For this proposition, the learned counsel for

the assessee relied on the following decisions :-

(i) CIT v. Mahendra C. Shah (2008) 299 ITR 305 (Guj) (ii) CIT v. Radha KishanGoel [2005] 278 ITR 454(All.) (iii) Neerat Singal vs. ACIT (2014) 146 ITD 152 (Del) (iv) Promad Kumar Jain vs. DCIT (2012) 77 DTR 244 (Cuttack) (v) Sita Ram Gupta vs. ACIT (2014) 151 ITD 449 (Del). 6. On the other hand, the DR relied upon the order of

the Commissioner of Income tax (Appeals) with the

submission that it is mandatory to specify the manner in 4

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria which additional income surrendered by the assessee was

earned. In the absence of such explanation regarding the

manner in which such income was derived, the assessee is

not eligible for immunity granted under section 271AAA of

the Act.

sides. We find that in this case the assessee has declared

the additional income and paid tax thereon. During the

course of recording of his statement u/s 132(4) of the Act,

the assessee has explained the earning of the undisclosed

additional income in question in his reply. We, respectfully

following the ratio of above cited decisions, hold that when

the offered undisclosed income has been accepted and due

tax thereon has already been paid by the assessee, no

penalty could be imposed. We, therefore, set aside the

orders of authorities below and direct the Assessing Officer

to delete the penalty.

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria 8. So far as ITA No. 897/Ind/2016 is concerned, since

the facts and circumstances of the case involved in this

appeal are more or less the same except the figures

involved, following our above order, we direct the Assessing

Officer to delete penalty.

allowed.

The order has been pronounced in open Court on 6th

January, 2016.

Sd/- sd/-

(ओ.पी.मीना) (डी.ट�.गरा�सया) लेखा सद�य �या�यक सद�य (O.P.Meena) (D.T.Garasia) Accountant Member Judicial Member

�दनांक /Dated : 6th January, 2016.

Dn/

ITA Nos. 898 & 897/Ind/2016 Ravi Kataria & Madanlal Kataria