SHERATON APPARELS Vs. ASSTT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE three appeals have been filed against the common order dated 22-2-2000 passed by the Income Tax Appellate Tribunal, C-Bench, Mumbai ("tribunal" for short ). The Tribunal, while confirming the said order, also upheld levy of penalty under section 271 (1) (c) of the Income Tax Act, 1961 ("the Act" for short ). FACTUAL MATRIX

(2.) THE factual matrix lies in narrow compass and it is this; the appellants are the partnership firms engaged in the business of manufacturing garments and operate as semi wholesalers. The appellant is a part of group concern belonging to one Shah family. Returns for the assessment years 1986-87 and 1988-89 were filed by the assessee. In pursuance thereof assessments were finalised.

(3.) THERE was a search and seizure operation under section 132 of the Act, carried out in the shop premises of all the appellants after the returns were filed by them. One of such seizure operations was carried out at the residence of partners of the group concern viz. Shri Madhukar R. Shah, Shri Ramesh R. Shah and Shri Kantilal R. Shah. Simultaneously, there was a survey action under section 133-A of the Act at the factory premises of these group concerns. In the course of search and seizure operations, certain documents, papers and records including certain diaries were seized. Subsequently, the seized material was scrutinised and as a result of the scrutiny, the following unaccounted income has been worked out :- <FRM>JUDGEMENT_19_BCR5_2002Html1.htm</FRM> The assessee group admitted the above unaccounted income and offered to disclose the additional income in the hands of various firms in various years, broadly on the basis of entries recorded in diaries, when their statements were recorded under section 132 (4) of the Act. The total disclosure made at the time of search was to the tune of Rs. 47,62,860/ -. The papers and documents found during search were attached. The same were scrutinised by the Income Tax Department. Based on such scrutiny, the department arrived at Rs. 46,56,135/- as undisclosed income of the said firm.