IN INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER ITA No. 2149/Ahd/2013 Assessment Year : 2010-11 Pankaj Somabhai Prajapati, ACIT, Prop. of Aai Shri Khodiyar Vs Central Circle 2(2), Bricks, Khodal Bhuvan, Ahmedabad Khodiyar Krupa Bungalow, New Vadaj, Ahmedabad PAN : AIOPP 0311 K (Appellant) (Respondent) Assessee by : Shri P.F. Jain, AR Revenue by : Shri Aditya Shukla, Sr DR Date of Hearing : 12/07/2016 Date of Pronouncement: 29/09/2016 ORDER This appeal by assessee is directed against order of Commissioner of Income-Tax (Appeals)-III, Ahmedabad dated 24.06.2013 for AY 2010-11, confirming penalty of Rs.67,000/- imposed by AO u/s. 271AAA of Income-tax Act, 1961 (hereinafter referred to as Act ). 2. Brief facts are in assessee s case, incriminating material in form of loose paper showing undisclosed interest income of Rs.6,70,000/- was found. said undisclosed income was added during course of assessment proceedings. addition was admitted by assessee. Penalty proceedings u/s 271AAA were initiated, where assessee contended that it was dump paper and addition was accepted in order to co-operate with Department and to avoid litigation. ld. AO, however, imposed penalty. Aggrieved, assessee preferred first appeal, wherein ld. CIT(A) observed that assessee had himself accepted that unrecorded sums were advanced by him and interest therefrom was not offered to tax; therefore, assessee s case was covered SMC-ITA No. 2149/Ahd/2013 Pankaj Somabhai Prajapati vs ACIT AY : 2010-11 2 u/s 271AAA of Act and penalty was confirmed. Ld. CIT(A), while confirming penalty, relied on following judgments:- (i) Suresh Chandra Mittal, 251 ITR 9 (SC), (ii) Raj Kumar Chourasiya vs. CIT, 288 ITR 329 (iii) Zoom Communications Pvt Ltd, 327 ITR 510 (Delhi) 3. ld. Counsel for assessee reiterated arguments and relied on judgment of Hon ble Gujarat High Court in case of Taraben Ramanbhai Patel and Another vs. ITO in S.C.A. No.7306 of 1988, reported in (1995) 215 ITR 323 (Guj.). 4. ld. DR, on other hand, contends that it clearly emerges from record that assessee had advanced unrecorded amount on which interest was earned which was not offered in return of income. addition has been accepted by assessee. There is no substance in plea that addition was accepted in order to co-operate with Department and to avoid litigation. It was only because of search that incriminating material came into possession of Department. Further, reliance is placed on judgment of Hon ble Supreme Court in case of MAK Data P. Ltd. vs. CIT, reported (2013) 358 ITR 593, for proposition that penalty is civil liability and assessee s own admission constitutes admission of liability. facts in case of Taraben Ramanbhai Patel (supra) are totally different, as in that case it was in context of section 271(1)(a) and not section 271AAA. 5. I have heard rival contentions, perused material available on record and gone through orders of lower authorities. From record, it clearly emerges that assessee has earned unaccounted interest income which was not offered in income-tax return. Therefore, I see no infirmity in order of ld. CIT(A) in confirming penalty. Respectfully SMC-ITA No. 2149/Ahd/2013 Pankaj Somabhai Prajapati vs ACIT AY : 2010-11 3 following judgment of Hon ble Supreme Court in case of MAK Data P. Ltd. (supra), penalty is confirmed and assessee s appeal is dismissed. 6. In result, assessees appeal is dismissed. Order pronounced in Court on 29th September, 2016 at Ahmedabad. Sd/- R.P. TOLANI (JUDICIAL MEMBER) Ahmedabad; Dated 29/09/2016 Biju T. Copy of Order forwarded to : 1. Appellant 2. Respondent. 3. Concerned CIT 4. CIT(A) 5. DR, ITAT, Ahmedabad 6.Guard file.BY ORDER, TRUE COPY (Dy./Asstt.Registrar) ,ITAT, Ahmedabad Pankaj Somabhai Prajapati v. ACIT, Central Circle-2(2), Ahmedabad