JUDGMENT judgment of court was delivered by S. Ravindra Bhat J.-In this appeal, assessee claims to be aggrieved by order of Income-tax Appellate Tribunal ("the ITAT") dated July 18, 2008, in IT(SS) A. No. 236/Del/2006. question of law urged is: "Whether, in circumstances of case, penalty under section 158BFA(2) of Income-tax Act, 1961, could be levied in respect of income which was not undisclosed income but was determined on basis of estimation on application of weight formula on gross credits in various bank statements considered as turnover?" brief facts are that search operation was carried on November 24, 2000, in office of appellant-assessee and residence of its directors. books of account, documents and other materials were seized. assessee, when called upon to file return, filed nil return for relevant block period on October 11, 2002. Assessing Officer ("the AO") completed assessment under section 158BC(c) at Rs. 8,90,36,597 which comprised of, inter alia, undisclosed provisional income of Rs. 1,57,15,409 arrived at by adopting flat rate of 1.5 per cent. on aggregate of all credit entries in bank account statements of assessee. Other than this amount, Assessing Officer also added sums of money on basis of unexplained cash deposits and negative balances; Commissioner of Income-tax (Appeals) (hereafter referred to as "the CIT(A)") directed cancellation of sums added on account of negative balances. However, Commissioner of Income- tax (Appeals) rejected assessee's contentions with respect to addition of Rs. 1,57,15,409. assessee had, in original returns, declared amounts to be derived on account of share trading transactions. assessee's contentions were rejected because Assessing Officer and Commissioner of Income-tax (Appeals) found that in statement recorded under section 132(4) of Income-tax Act, 1961 (hereafter referred to as "the Act"), assessee had admitted that said sum of Rs. 1,04,76,94,004 was actually not entirely based on share transactions but was also based on accommodation entries. assessee had stated in returns that commission received on share transactions ranged between 0.25 per cent. and 0.5 per cent. Commissioner of Income-tax (Appeals), however, found that there was material suggestive of receipt of commission of up to 1 per cent. even on share transactions. In these circumstances, estimated income added back by Assessing Officer on basis of his assessment of true income (on business activity of providing accommodation entries which assessee was engaged in) was to extent of 1.5 per cent. of total turnover indicated. Income-tax Appellate Tribunal, in appeal preferred by assessee, upheld substantive decisions of Assessing Officer and Commissioner of Income-tax (Appeals) (in IT(SS)A No. 54/Del/2004 dated November 30, 2004). However, Income-tax Appellate Tribunal directed rejection of 1.5 per cent. turnover of commission attributed by Assessing Officer and upheld by Commissioner of Income-tax (Appeals) in following terms: "10. As far as application of rate of 1.5 per cent. to turnover was concerned, learned Commissioner of Income-tax (Appeals) referred to seized documents-pages 6 to 8 of annexure A-40 and pages 1 to 16 of annexure A-2-which showed that commission of 1 per cent. to 1.25 per cent. was charged whereas same was shown between 0.05 per cent. to 0.1 per cent. in accommodation bills as per books of account. balance commission was settled outside books of account and received in cash. After considering facts and circumstances of case, learned Commissioner of Income-tax (Appeals) observed that Assessing Officer in this case after giving due consideration to assessee's submissions and information available as per seized record and gathered during course of search, was justified in applying rate of 1.5 per cent. to compute commission earned by assessee in block period. Accordingly, addition of Rs. 1,57,15,409 was upheld... 18. We now face question as to what should be reasonable rate of commission in this case having regard to material available on record. assessee did not dispute that quantum of turnover for providing accommodation entries to various clients during year as computed by Assessing Officer at Rs. 1,04,76,94,004 is not correct. commission stated to have been charged and admitted by assessee ranged from 0.25 per cent. to 0.5 per cent. rate as evident from seized material which has been referred to by lower authorities, does reflect that assessee had charged rate as high as 1 per cent. As against this, Revenue authorities have applied at 1.5 per cent. to entire turnover irrespective of nature of entries whether long-term, short-term gain, etc. It is also noteworthy that gross rate of commission charged by assessee can also not be said to be profit exigible to tax. credit for expenses incurred in running business is also required to be considered while estimating income from business of providing accommodation entries. total turnover also includes some genuine transactions carried on by assessee on which rate of commission was admittedly much lower ranging between 0.25 per cent. to 0.50 per cent. Therefore, having regard to entire gamut of facts, circumstances and material which is available on record, there does not appear to be justifiable reasons to estimate commission/brokerage of assessee by applying rate of 1.5 per cent. of total turnover. In our view, it would be in fitness of things that income earned by assessee by way of commission/brokerage on turnover including accommodation entries provided to its clients is computed at 0.6 per cent. on total turnover of Rs. 1,04,76,94,004 on which there is no dispute. We, accordingly, direct Assessing Officer to compute income on count of commission/brokerage." Assessing Officer had, in meanwhile initiated penalty proceedings under section 158BFA(2) of Act which culminated in order dated June 29, 2005. Assessing Officer directed payment of Rs. 15,34,375. assessee's appeal to Commissioner of Income-tax (Appeals) was not successful. In meanwhile, it is worth mentioning that assessee had not appealed against Income-tax Appellate Tribunal's order finally determining income at 0.6 per cent. of Rs. 1,04,76,94,004. Therefore, matter became final. In these circumstances, when Income-tax Appellate Tribunal was approached in present round of issue of penalty, it rejected assessee's contentions. Learned counsel for assessee urges that Income-tax Appellate Tribunal fell into error. It was submitted that trigger for penal action under Tribunal fell into error. It was submitted that trigger for penal action under section 158BFA(2) is if in course of search, some material is found. Placing emphasis on section 158BB, especially, phrase, "undisclosed income found", learned counsel submitted that pre-condition for imposition of penalty under section 158BFA(2) is that "undisclosed income" determined by Assessing Officer is necessarily linked with undisclosed income found-which in turn is based on some material. Arguing that in present instance, assessee had concededly declared sum of Rs. 1,04,76,94,004 in books of account, learned counsel highlighted that in circumstances, penalty could not have been imposed. It was argued in this context that any income determined in course of block assessment proceedings must necessarily relate to that adjudicated upon and must be based on objective material found. In other words, it cannot be based on estimation or voluntary act of assessee such as surrender. To say so, learned counsel relied upon two judgments of Rajasthan High Court, i.e., CIT v. Satyendra Kumar Dosi [2009] 315 ITR 172 (Raj); [2009] 222 CTR 258 (Raj) and CIT v. Dr. Giriraj Agarwal Giri [2012] 346 ITR 52 (Raj); [2013] 33 Taxman 536 (Jaipur). Learned counsel also relied upon judgment of Division Bench of this court in CIT v. Harkaran Das Ved Pal [2011] 336 ITR 8 (Delhi); 177 Taxman 398 (Delhi). In Satyendra Kumar Dosi (supra), Rajasthan High Court held that section 158BFA(2) textually empowers Assessing Officer to levy penalty on undisclosed income determined by him but that power does not extend to imposing penalty in cases excluded in first proviso. Thereafter, court observed as follows (page 177 of 315 ITR): "The contention raised by learned counsel on strength of provisions of sections 273B and 158BFA(3) is also devoid of any merit. Of course, as per provision of section 273B no penalty shall be imposable on persons or assessee as case may be, on their failure referred to in said provisions if he proves that there was reasonable cause for said failure. But then, said provision in no manner leads to presumption that in respect of cases other than covered by section 273B for any failure or violation imposition of penalty is automatic. Each provision of penalty has to be construed independently keeping in view language employed therein... Moreover, in instant case, after due examination of facts and material on record, Commissioner of Income-tax (Appeals) and learned Tribunal have concurrently found that difference of undisclosed income assessed and undisclosed income shown in return does not relate to block period as such. Tribunal has arrived at finding that assessees had claimed to give reduction of amounts calculated on reasonable basis on account of their opening capital as on April 1, 1995, from unaccounted money-lending business prior to block period out of undisclosed income determined in their hands. learned Tribunal has rightly held that addition is result of estimation of opening capital involved prior to block period and in block assessments while computing undisclosed income for block period, capital possessed by assessees prior to block period as revealed from ledger and material seized during search could not be treated as undisclosed income of first assessment year in block period. Thus, in view of concurrent finding of fact arrived at by two appellate authorities, as aforesaid, in our considered opinion, no substantial question of law arises for consideration of this court in these appeals. In result, appeals fail, same are hereby dismissed. No order as to costs." same High Court later in Giriraj (supra) echoed same view as follows (page 156): "A fact or allegation based on estimation, cannot be said to be correct only, it can be incorrect also. Therefore, in facts and circumstances of case, penalty was wrongly imposed by Assessing Officer. In these circumstances, we find that judgment of hon'ble apex court, referred to by learned counsel for appellant, is not applicable, in facts and circumstances of present case." Harkaran (supra) was case that concerned itself with whether on facts assessee had, during course of proceedings after survey under section 132 of Act surrendered amounts which were ultimately brought to tax. court relied upon various rulings to say that proceedings under Chapter XIV-B were special in nature and rather constituted complete code and that in circumstances, surrender of amounts would not ipso facto lead to inference that amounts were determined by Assessing Officer pursuant to material seized in course of search. Section 158BFA(2) reads as follows: "158BFA. Levy of interest and penalty in certain cases.-... (2) Assessing Officer or Commissioner (Appeals) in course of any proceedings under this Chapter, may direct that person shall pay by way of penalty sum which shall not be less than amount of tax leviable but which shall not exceed three times amount of tax so leviable in respect of undisclosed income determined by Assessing Officer under clause (c) of section 158BC: Provided that no order imposing penalty shall be made in respect of person if- (i) such person has furnished return under clause (a) of section 158BC; (ii) tax payable on basis of such return has been paid or, if assets seized consist of money, assessee offers money so seized to be adjusted against tax payable; (iii) evidence of tax paid is furnished along with return; and (iv) appeal is not filed against assessment of that part of income which is shown in return: Provided further that provisions of preceding proviso shall not apply where undisclosed income determined by Assessing Officer is in excess of income shown in return and in such cases penalty shall be imposed on that portion of undisclosed income determined which is in excess of amount of undisclosed income shown in return." plain terms of provision-which Harkaran (supra) emphasised occur in separate part of Income-tax Act. Chapter XIV-B entitled "Special procedure for assessment of search cases" nowhere indicates that estimation of income-tax logically based upon inference drawn in case of block assessment procedure is per se excludible from ambit of penal provision. plain text of enactment says that Assessing Officer has discretion to levy penalty, "which shall not be less than amount of tax leviable but which shall not exceed three times amount of tax so leviable in respect of undisclosed income determined by Assessing Officer under clause (c) of section 158BC". In present instance, there is no doubt at all that Assessing Officer did determine undisclosed income; that it was based upon estimation or inference is matter of detail. plain text of enactment admits no room for doubt that all manners of determination of income, per se might call for action at discretion of Assessing Officer. As to whether Assessing Officer has properly exercised discretion in particular matter or otherwise can certainly be subject to further scrutiny. plain text of enactment, however, does not admit of interpretation which was favoured by two Rajasthan High Court judgments cited by assessee. assessee's argument that there was no fresh material since entire amount was disclosed earlier and that amount has not been varied, in our opinion, is not accurate. sum of Rs. 1,04,76,94,004 was claimed in entirety (originally) to have been derived from share business. However, it did not exclusively stem from share business and in fact assessee admitted, in course of search proceedings under section 132(4) of Act that said amount also included sums forming part of turnover on account of providing accommodation entries. Now, that radically changed complexion of nature of declaration made and certainly formed basis for materials discovered during course of proceedings. Furthermore, having regard to this admission, Assessing Officer, most importantly, was entitled to determine: having regard to nature of commission originally declared, whether that was in line with new activity disclosed. It is matter of record--noted by Commissioner of Income-tax (Appeals) in quantum proceedings that commission ranged up to 1 per cent. Having regard to conspectus of circumstances, therefore, Assessing Officer determined commission to be 1.5 per cent. on said total turnover; Income-tax Appellate Tribunal decreased it. None less, important fact is that determination in course of block assessment order was based upon material discovered, i.e., in form of statement made by assessee under section 132(4) of Act; that radically changed character of income originally declared. Consequently, estimation directed by Income-tax Appellate Tribunal was accepted by assessee. In view of above circumstances, this court is of opinion that question of law urged has to be answered against assessee and in favour of Revenue. appeal is consequently dismissed along with pending application. *** JRD Stock Brokers P. Ltd. v. Commissioner of Income-tax