Madhuri Satish Misal, Pune V. Income-tax Officer,

CO 103/PUN/2013

• Counselvise Citation: [2014] 122 COUNSELVISE.COM (IT) 9903 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 25-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 30-12-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJIB JAIN
• Assessee Lawyers: K SRINIVASAN
• Keywords: Unexplained cash credit; Cost of acquisition; Capital receipt
• Section: 143(3); 133A; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO.2375/PN/2012 (ASSESSMENT YEAR : 2008-09) INCOME TAX OFFICER, WARD 2 (1), PUNE. . APPELLANT VS. SMT. MADHURI SATISH MISAL, D-3 RAMYANAGARI, D WING, BIBWEWADI, PUNE 411 037. PAN : ABBPM0704H . RESPONDENT C.O. NO.103/PN/2013 (ARISING OUT OF ITA NO.2375/PN/2012) (ASSESSMENT YEAR : 2008-09) SMT. MADHURI SATISH MISAL, D-3 RAMYANAGARI, D WING, BIBWEWADI, PUNE 411 037. PAN : ABBPM0704H . CROSS OBJECTOR VS. INCOME TAX OFFICER, WARD 2 (1), PUNE. . APPELLANT IN APPEAL DEPARTMENT BY : SHRI RAJIB JAIN ASSESSEE BY : SHRI K. SRINIVASAN DATE OF HEARING : 30-06-2014 DATE OF PRONOUNCEMENT : 25-08-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE AND THE CROSS- OBJECTION BY THE ASSESSEE IS DIRECTED AGAINST AN ORDER OF THE COMMIS SIONER OF INCOME TAX (APPEALS)-II, PUNE DATED 31.07.2012 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 30.06.2011 PASSED BY THE ASSESSING OFFICER U/ S 274 R.W.S. 271(1)(C) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSM ENT YEAR 2008-09. ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 2. IN BOTH THE CAPTIONED APPEALS, THE COMMON ISSUE RELATES TO A PENALTY IMPOSED BY THE ASSESSING OFFICER OF RS.45,38,213/- U/S 271(1)(C) OF THE ACT PERTAINING TO THE ASSESSMENT YEAR 2008-09. THE ASS ESSING OFFICER LEVIED PENALTY ON THE FOLLOWING THREE ADDITIONS MADE TO TH E RETURNED INCOME : (I) INTEREST ON BANK DEPOSIT RS.4,60,091/-; (II) TDR SALE RECEIPTS RS.1,11,67,378/-; AND, (III) SHORT TERM CAPITAL GAI N RS.35,00,000/-. THE CIT(A) HAS DELETED THE LEVY OF PENALTY WITH RESPECT TO THE ADDITION ON ACCOUNT OF TDR SALE RECEIPTS OF RS.1,11,67,378/- AND SUSTAI NED THE LEVY OF PENALTY WITH RESPECT TO THE OTHER TWO ADDITIONS ON ACCOUNT OF IN TEREST ON BANK DEPOSIT AND SHORT TERM CAPITAL GAIN. IN THIS BACKGROUND, REVEN UE IS IN APPEAL CHALLENGING THE ACTION OF THE CIT(A) IN DELETING THE PENALTY ON THE INCOME BY WAY OF TDR SALE RECEIPTS WHEREAS THE ASSESSEE IS IN APPEAL BY WAY OF A CROSS OBJECTION CHALLENGING THE SUSTENANCE OF PENALTY WITH RESPECT TO THE ADDITIONS ON ACCOUNT INTEREST ON BANK DEPOSITS AND SHORT TERM CAPITAL GA IN. 3. SINCE THE ISSUES ARISE OUT OF AN ASSESSMENT ORDE R PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE ACT DATED 31.12 .2010 WHEREBY THE RETURNED INCOME WAS ENHANCED, IT WOULD BE RELEVANT TO BRIEFLY NOTE THE FOLLOWING BACKGROUND. THE ASSESSEE BEFORE US IS AN INDIVIDUAL WHO FILED HER RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 24. 09.2008 DECLARING TOTAL INCOME OF RS.3,36,690/-. IN THE RETURN OF INCOME F ILED ASSESSEE DECLARED INCOME FROM HOUSE PROPERTY, SALARY FROM M/S POOJA L OTTERY AGENCY PRIVATE LIMITED AS WELL AS INCOME UNDER THE HEAD INCOME FR OM OTHER SOURCES. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS SUBJECT TO A SCRUTINY ASSESSMENT WHEREIN VARIOUS ADDITIONS ON ACCOUNT OF UNEXPLAINED CASH CREDIT U/S 68 OF THE ACT, LOW HOUSEHOLD WITHDRAWALS, INTEREST INCOME, TD R RECEIPTS AND SHORT TERM CAPITAL GAIN, ETC. WERE MADE WHICH RESULTED IN THE DETERMINATION OF THE ASSESSED INCOME AT RS.1,69,64,160/-. OUT OF THE TO TAL ADDITIONS MADE TO THE RETURNED INCOME, THE AFORESTATED THREE ADDITIONS WE RE CONSIDERED BY THE ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 ASSESSING OFFICER TO BE CONCEALED INCOMES WITHIN TH E MEANING OF SECTION 271(1)(C) OF THE ACT. IN AN ORDER PASSED U/S 274 R .W.S. 271(1)(C) OF THE ACT DATED 30.06.2011 THE ASSESSING OFFICER HELD THE ASS ESSEE GUILTY OF CONCEALMENT OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT QUA THE THREE AFORESTATED ADDITIONS. 4. FIRSTLY, ADDITION IN RESPECT OF INTEREST ON FIXE D DEPOSITS WITH BANK AMOUNTING TO RS.4,60,091/-. IN THIS CONTEXT, THE A SSESSING OFFICER HAS DISCUSSED THE ISSUE IN PARA 5(B) OF THE ASSESSMENT ORDER DATED 31.12.2010. IN TERM OF THE SAID DISCUSSION, IT IS NOTICED THAT IN THE REVISED COMPUTATION OF INCOME SUBMITTED BY THE ASSESSEE DURING THE ASSESSM ENT PROCEEDINGS AN INCOME OF RS.4,60,091/- WAS DECLARED AS INTEREST ON FIXED DEPOSITS WITH DENA BANK LTD. WHICH WAS HITHERTO NOT DECLARED IN THE RE TURN OF INCOME FILED ORIGINALLY. THE ASSESSING OFFICER ADDED THE AFORES AID SUM TO THE TOTAL INCOME OF THE ASSESSEE AND SUBSEQUENTLY HELD THE ASSESSEE GUILTY OF CONCEALMENT OF INCOME ON THIS SCORE. 5. THE CIT(A) HAS ALSO SUSTAINED THE PENALTY ON THI S ADDITION, AGAINST WHICH ASSESSEE IS IN APPEAL BEFORE US. ON THIS ASP ECT, THE PLEA OF THE LEARNED COUNSEL WAS THAT IT WAS A GENUINE ERROR AND AN INAD VERTENT MISTAKE IN NOT DECLARING SUCH INCOME IN THE RETURN OF INCOME. APA RT THEREFROM, IT IS CONTENDED THAT THE SAID INTEREST INCOME WAS INDEED CREDITED BY THE BANK MUCH LATER THAN THE CLOSE OF THE PREVIOUS YEAR UNDER CON SIDERATION, AND THUS IT COULD NOT BE DECLARED IN THE RETURN OF INCOME. APART THE REFROM, IT HAS BEEN POINTED OUT THAT THE INTEREST IN QUESTION WAS CREDITED BY B ANK ONLY AFTER OLD FDRS WERE RENEWED WITH THE BANK. IT IS POINTED OUT THAT THE RENEWAL OF THE FDRS TOOK PLACE ON A SUBSEQUENT DATE AND IT IS ONLY THEREAFTE R THAT THE BANK RENEWED THE FDRS FROM THE EARLIER DATE AND CREDITED INTEREST FO R THE ENTIRE PERIOD STARTING FROM THE DATE ON WHICH THE OLD FDRS HAD MATURED. I T WAS POINTED OUT THAT THE ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 FORM NO.26AS REFLECTING THE ANNUAL TAX STATEMENT U/ S 203AA OF THE ACT PERTAINING TO THE ASSESSMENT YEAR UNDER CONSIDERATI ON ALSO SHOWS THAT IT IS ONLY IN 2011 THAT DENA BANK HAS CREDITED THE INTERE ST TO ASSESSEES ACCOUNT THOUGH IT PERTAINED TO THE PERIOD UNDER CONSIDERATI ON. IT WAS THEREFORE CONTENDED THAT OMISSION TO DECLARE SUCH INCOME IN T HE ORIGINAL RETURN OF INCOME IS FOR A BONA-FIDE REASON, AND THE SAME SHOU LD NOT ATTRACT PENALTY U/S 271(1)(C) OF THE ACT. 6. ON THIS ASPECT, THE LEARNED DEPARTMENTAL REPRESE NTATIVE HAS DEFENDED THE ORDERS OF THE AUTHORITIES BELOW BY POINTING OUT THAT THE ASSESSEE CAME FORWARD TO DISCLOSE THE AFORESAID INCOME ONLY DURIN G THE ASSESSMENT PROCEEDINGS AND THUS PENALTY U/S 271(1)(C) OF THE A CT HAS BEEN CORRECTLY LEVIED. 7. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. ON THIS ASPECT, WE FIND THAT THE INCOME BY WAY OF INTEREST ON FDRS WIT H DENA BANK WAS DECLARED BY THE ASSESSEE ONLY IN THE REVISED COMPUTATION OF INCOME SUBMITTED IN THE COURSE OF ASSESSMENT PROCEEDINGS. OSTENSIBLY, THE SAID INCOME WAS NOT DECLARED IN THE RETURN OF INCOME ORIGINALLY FILED. THE ASSESSING OFFICER HAS JUSTIFIED THE LEVY OF PENALTY ON THE GROUND THAT TH E AFORESAID INCOME WAS NOT OFFERED TO TAX BY THE ASSESSEE BUT WAS UNEARTHED IN THE COURSE OF ASSESSMENT PROCEEDINGS. AS PER THE ASSESSING OFFICER, IF NOT FOR THE EFFORTS MADE BY HIM, THE ENTIRE AMOUNT WOULD HAVE REMAINED UNTAXED. IN THIS CONTEXT, WE HAVE PERUSED THE FOLLOWING DISCUSSION MADE BY THE ASSESS ING OFFICER WHILE MAKING THE ADDITION IN THE ASSESSMENT ORDER DATED 31.12.20 10 :- (B) ADDITION IN RESPECT OF INTEREST OF RS.4,60,091 /- ON FD WITH DENA BANK AS PER THE REVISED COMPUTATION OF INCOME SUBMITTED BY THE ASSESSEE, THE ASSESSEE IS HAVING INCOME OF RS.4,60,091/-. HO WEVER, ON PERUSAL OF THE RETURN, IT IS NOTICED THAT THE ASSESSEE HAS NOT ADD ED THE INCOME FOR THE YEAR OF RS.4,60,091/-. THE ASSESSEE WAS ASKED TO EXPLAIN T HE DISCREPANCY. THE ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 ASSESSEE HAS SUBMITTED VIDE REPLY DATED 29/12/2010, RELEVANT PORTION IS REPRODUCED HERE AS UNDER- WITH REFERENCE TO SHOW CAUSE DATED 27 TH DEC. 2010 WE REPLY AS UNDER: THE COMPUTATION OF TOTAL INCOME VIDE OUR LET TER DATED 22 ND DEC. 2010 ALREADY REFLECTED ADDITIONAL INCOME OF RS.4,60 ,091/- TO BE OFFERED TO TAX. THIS WAS PURELY INTEREST ON FIXED DEPOSITS WITH DENA BANK LTD. WHICH WAS NOT CONSIDERED WHILE FILING OF RETURN OF INCOME. IN VIEW OF THE ABOVE INTEREST ON FIXED DEPOSITS WIT H DENA BANK LTD. OF RS.4,60,091/- IS ADDED TO THE INCOME OF THE ASSESSE E. 8. FROM A READING OF THE AFORESAID EXTRACT FROM THE ASSESSMENT ORDER, IT IS CLEAR THAT THE ASSESSING OFFICER CAME TO KNOW OF TH E SAID INCOME ONLY FROM THE REVISED COMPUTATION OF INCOME FILED BY THE ASSESSEE . THE ASSESSING OFFICER COMPARED THE REVISED COMPUTATION OF INCOME WITH THE ORIGINAL RETURN OF INCOME AND FOUND THAT THE SUM OF RS.4,60,091/- ON ACCOUNT OF INTEREST ON FDRS WITH DENA BANK WAS NOT DECLARED IN THE RETURN OF INCOME. AFTER CONSIDERING THE EXPLANATION OF THE ASSESSEE THAT THE AMOUNT RELATED TO THE INTEREST ON FIXED DEPOSITS WITH DENA BANK LTD., THE ASSESSING OFFICER ADDED SAME TO THE TOTAL INCOME OF THE ASSESSEE. FROM THE AFORESAID DISCUSS ION, WE ARE UNABLE TO APPROVE THE STAND OF THE REVENUE THAT THE SAID INCO ME HAS BEEN DETECTED BY THE ASSESSING OFFICER BEFORE ITS DECLARATION BY THE ASSESSEE. NO DOUBT, IT WAS NOT DECLARED IN THE RETURN OF INCOME BUT WAS DECLAR ED BY WAY OF A REVISED COMPUTATION OF INCOME FILED DURING THE ASSESSMENT P ROCEEDINGS. HOWEVER, EVERY MISTAKE OR OMISSION DOES NOT IPSO FACTO LEAD TO LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. IN SO FAR AS THE PRESENT ISS UE IS CONCERNED, THE OVERALL CIRCUMSTANCES EXPLAINED BY THE LEARNED COUNSEL BEFO RE US, IN OUR VIEW, MITIGATE THE RIGORS OF SECTION 271(1)(C) OF THE ACT QUA THE IMPUGNED SUM OF RS.4,60,091/-. THEREFORE, WE SET-ASIDE THE ORDER O F THE CIT(A) ON THIS ASPECT AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENA LTY LEVIED WITH RESPECT TO THE ADDITION AT RS.4,60,091/- ON ACCOUNT OF INTEREST ON FDRS WITH DENA BANK. 9. NOW, WE MAY TAKE-UP THE PENALTY LEVIED WITH REGA RD TO THE ADDITION OF RS.35,00,000/- MADE ON ACCOUNT OF LAND AS SHORT TER M CAPITAL GAIN. IN THE ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS FOUN D TO HAVE RECEIVED RS.25,00,000/- AND RS.60,00,000/- FROM KARANDIKAR G ANESH AND P. P. SHINDE RESPECTIVELY, WHICH WAS EXPLAINED BY THE ASSESSEE T O BE ARISING ON SALE OF A PIRANGUT PROPERTY (GAT NO.1176). IT WAS ALSO EXPLA INED BY THE ASSESSEE THAT THE AFORESAID PROPERTY WAS PURCHASED FOR AN AMOUNT OF RS.50,00,000/- AND ACCORDINGLY, RS.35,00,000/- WAS GAIN ON SALE OF SUC H PROPERTY. THE AFORESAID SHORT TERM CAPITAL GAIN WAS NOT DECLARED BY THE ASS ESSEE IN THE ORIGINAL RETURN OF INCOME FILED. THE ASSESSEE ALSO AGREED TO THE A FORESAID INCOME IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE AFORESAID IN COME HAS BEEN TREATED AS CONCEALED INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT BY THE INCOME-TAX AUTHORITIES. 10. BEFORE US, THE ONLY PLEA RAISED BY THE ASSESSEE IS THAT THE SAID INCOME REMAINED TO BE DECLARED IN THE RETURN OF INCOME ON ACCOUNT OF AN UNINTENDED ERROR. IT HAS ALSO BEEN CONTENDED THAT THE BONA-FI DES OF THE ASSESSEES STAND ARE ESTABLISHED BY THE FACT THAT THE INCOME WAS ACC EPTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF. 11. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE APPEARING FOR THE REVENUE HAS SUBMITTED THAT CONCEALMENT OF INCOM E STOOD ESTABLISHED FROM THE MANNER IN WHICH THE SAID INCOME WAS ACCEPT ED BY THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS WHEN ASSESSEE WAS SHOW-CAUSED ON THIS ASPECT. 12. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN OUR CONSIDERED OPINION, THE INGREDIENTS NECESSARY TO IMPOSE PENALT Y U/S 271(1)(C) OF THE ACT QUA THE IMPUGNED TRANSACTION ARE FULFILLED. IN THE PRESENT CASE, IT IS QUITE EVIDENT THAT THE TRANSACTION RESULTING IN SHORT TER M CAPITAL GAIN ON SALE OF PIRANGUT PROPERTY WAS NOT DECLARED IN THE RETURN OF INCOME FILED. IT IS ALSO CLEAR ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 THAT THE PURCHASE AS WELL AS SALE OF THE PROPERTY I S BY WAY OF DULY EXECUTED CONVEYANCE DEEDS AND THEREFORE IT IS NOT A CASE WHE RE ASSESSEE WAS NOT AWARE OF THE INCOME ACCRUING TO HER ON ACCOUNT OF T HE IMPUGNED TRANSACTIONS. CONSIDERING THE TOTALITY OF FACTS AND IN THE ABSENC E OF ANY PLAUSIBLE AND BONA- FIDE EXPLANATION COMING-FORTH FROM THE ASSESSEE, WE FIND THAT THE SAID INCOME HAS BEEN RIGHTLY SUBJECTED TO LEVY OF PENALTY U/S 2 71(1)(C) OF THE ACT. WE HEREBY AFFIRM THE ORDERS OF THE AUTHORITIES BELOW O N THIS ASPECT. 13. THUS, IN SO FAR AS THE CROSS OBJECTION FILED BY THE ASSESSEE IS CONCERNED, IT IS PARTLY ALLOWED. 14. NOW, THE ONLY ISSUE REMAINING IS IN THE APPEAL OF THE REVENUE PERTAINING TO THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT ON A SUM OF RS.1,11,67,378/- REPRESENTING INCOME BY WAY OF TDR SALE RECEIPTS. 15. IN THIS CONTEXT, BRIEF FACTS ARE THAT THE ASSES SEE WAS FOUND TO HAVE RECEIVED AMOUNTS OF RS.93,34,878/- AND RS.18,32,500 /- TOTALING TO RS.1,11,67,378/- ON ACCOUNT OF TDR SALES. IN THE C OURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE EXPLAINED THAT THE AFORESAID AMOUNTS FOUND DEPOSITED IN THE BANK ACCOUNT REFLECT TDR SALES EXECUTED BY H ER DECEASED HUSBAND LATE SATISH D. MISAL, PRIOR TO 2002. THE ASSESSEE EXPLAINED THAT NEITHER SHE WAS OWNER OF ANY TDR ASSETS AND NOT SHE WAS A PARTY TO THE AFORESAID SALE TRANSACTION, WHICH WAS IN-FACT EXECUTED BY HER DECE ASED HUSBAND. THE ASSESSEE EXPLAINED THAT THE SAID AMOUNTS WERE MEREL Y RECEIVED BY THE ASSESSEE AS A RESULT OF THE DISPUTE BEING SETTLED I N COURT. IT WAS EXPLAINED THAT SUCH RECEIPT WAS TREATED AS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX; AND, THEREFORE IT WAS NOT OFFERED TO TAX IN THE RETURN O F INCOME. HOWEVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE AGREED T O PAY TAX ON THE SAME AND ACCORDINGLY THE AMOUNT OF RS.1,11,67,378/- WAS ADDED TO THE TOTAL ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 INCOME. THE AFORESAID SUM HAS BEEN SUBJECTED TO LE VY OF PENALTY BY THE ASSESSING OFFICER, PRIMARILY ON THE GROUND THAT ASS ESSEE AGREED TO THE ADDITION AND DID NOT CHALLENGE IT IN APPEAL. AS PE R THE ASSESSING OFFICER, IT WAS ONLY DUE TO THE EFFORTS MADE IN THE COURSE OF A SSESSMENT PROCEEDINGS THAT THE IMPUGNED INCOME WAS FOUND AND ASSESSED , O THERWISE IT WOULD HAVE REMAINED UNTAXED. THE CIT(A) HAS SINCE DELETED THE LEVY OF PENALTY ON THE SAID SUM, AND ACCORDINGLY REVENUE IS IN APPEAL BEFO RE US. 16. BEFORE US, THE LEARNED DEPARTMENTAL REPRESENTAT IVE HAS VEHEMENTLY POINTED OUT THAT THE FACT THAT THE QUANTUM ASSESSME NT PROCEEDINGS NOT HAVING BEEN CHALLENGED BY THE ASSESSEE IN APPEAL GOES TO S HOW THAT THE IMPUGNED SUM WAS INDEED ASSESSABLE AS INCOME, WHICH THE ASSE SSEE DID NOT DISCLOSE IN THE RETURN OF INCOME. MERELY BECAUSE THE ASSESS EE HAD AGREED TO THE SAID ADDITION DURING THE COURSE OF ASSESSMENT PROCEEDING S CANNOT A GROUND TO DELETE THE PENALTY AND THEREFORE THE CIT(A) ERRED I N DELETING THE SAME. IN THIS CONNECTION, IT HAS BEEN POINTED OUT THAT THE CASE O F THE ASSESSEE BEFORE THE CIT(A) WAS THAT ADDITION WAS AGREED IN ORDER TO BUY PEACE OF MIND AND AVOID LITIGATION, WHICH ACCORDING TO THE LEARNED DEPARTME NTAL REPRESENTATIVE IS NOT A GOOD GROUND TO AVOID PENALTY U/S 271(1)(C) OF THE A CT. IN SUPPORT, THE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE JUD GEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD. VIDE CIVIL APPEAL NO.9772 OF 2013 DATED 30.10.2013. 17. ON THE OTHER HAND, THE LEARNED COUNSEL FOR THE ASSESSEE HAS VEHEMENTLY DEFENDED THE ORDER OF THE CIT(A) DELETIN G THE LEVY OF PENALTY ON THE AFORESAID INCOME. ACCORDING TO THE LEARNED COU NSEL, THE AFORESAID TRANSACTION RELATING TO THE SALE OF TDR WAS NOT IN THE KNOWLEDGE OF THE ASSESSEE AS IT WAS EXECUTED BY HER LATE HUSBAND IN 2002 PRIOR TO HIS DEATH IN 2003; THAT DURING HER HUSBANDS LIFETIME THE MATTER WAS IN DISPUTE AND IN THIS ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 YEAR, THE AMOUNTS HAVE BEEN ACTUALLY RECEIVED BY HE R. IT HAS BEEN CONTENDED THAT ASSESSEE WAS UNDER A BONA-FIDE PRESUMPTION THA T THE IMPUGNED AMOUNT REFLECTED OUTSTANDING RECOVERIES OF HER HUSBAND; AN D ONLY WHEN SHE WAS ASKED FOR THE DETAILS IN THE COURSE OF ASSESSMENT P ROCEEDINGS, THAT SHE AGREED TO PAY TAX ON THE SAME BECAUSE OF HER INABIL ITY TO OBTAIN AND FURNISH THE REQUISITE DETAILS BEFORE THE ASSESSING OFFICER. IN THIS BACKGROUND, IT WAS CONTENDED THAT THE CIT(A) MADE NO MISTAKE IN DELETI NG THE PENALTY ON THIS ADDITION. 18. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. IN SO FAR AS THE ADDITION ON ACCOUNT OF SALE OF TDR AMOUNTING TO RS. 1,11,67,378/- IS CONCERNED, IT IS NOT IN DISPUTE THAT THE SAME REFLE CTS A TRANSACTION UNDERTAKEN BY ASSESSEES LATE HUSBAND SATISH D. MISAL PRIOR TO HIS DEATH IN THE YEAR 2003. IT IS QUITE EVIDENT THAT ASSESSEE WAS NOT A PARTY T O THE TRANSACTION AND THAT SHE IS IN RECEIPT OF MONEY AS LEGAL HEIR OF HER DECEASE D HUSBAND. THE AFORESAID FACTUAL ASPECTS OF THE CONTROVERSY ARE NOT IN DISPU TE. IT IS IN THIS BACKGROUND THAT ONE HAS TO EXAMINE AS TO WHETHER OR NOT THE NO N-DISCLOSURE OF SUCH INCOME IN THE RETURN OF INCOME BY THE ASSESSEE WAS BONA-FIDE OR NOT. THE CASE SET-UP BY THE REVENUE IS THAT ASSESSEE HERSELF AGREED TO THE SAID ADDITION AND THEREFORE THE TAXABILITY OF THE SAID S UM IS NOT IN DISPUTE THUS LEADING TO AN INFERENCE OF CONCEALMENT OF INCOME WI THIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. 19. IN OUR CONSIDERED OPINION, MERELY BECAUSE AN AS SESSEE HAS AGREED TO AN ADDITION, CANNOT BE CONCLUSIVE FOR THE PURPOSE O F PENALTY U/S 271(1)(C) OF THE ACT. QUITE CLEARLY, IT IS A TRITE LAW THAT ASS ESSMENT PROCEEDINGS AND THE PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND THAT THE FINDINGS IN THE ASSESSMENT PROCEEDINGS ARE NOT CONCLUSIVE FOR THE P URPOSES OF ADJUDICATING THE LEVY OF PENALTY ALTHOUGH SUCH FINDINGS MAY BE R ELEVANT FOR THE PURPOSES OF ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 PENALTY PROCEEDINGS. IN-FACT, AS PER THE HONBLE S UPREME COURT IN THE CASE OF ANANTHARAM VEERASINGAIAH & CO. VS. CIT, 123 ITR 457 , PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSMENT PROCEEDINGS AND P ENALTY CANNOT BE LEVIED MERELY ON THE BASIS OF THE FINDINGS IN THE ASSESSME NT PROCEEDINGS. THUS, MERELY BECAUSE THE ADDITIONS MADE IN THE QUANTUM PR OCEEDINGS HAVE BECOME FINAL, DOES NOT AUTOMATICALLY ESTABLISH THE INGREDI ENTS OF SECTION 271(1)(C) OF THE ACT. THEREFORE, THE STAND OF THE REVENUE TO SU PPORT THE LEVY OF PENALTY BASED ON THE QUANTUM ASSESSMENT HAVING BEEN CONFIRM ED, IS NOT JUSTIFIED. 20. AS PER THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. (SUPRA), IN A CASE WHERE THERE IS A DIFFERENCE BETW EEN THE RETURNED AND THE ASSESSED INCOME, IN TERMS OF EXPLANATION TO SECTION 271(1)(C) OF THE ACT A PRESUMPTION OF CONCEALMENT ARISES, AND THE BURDEN I S ON THE ASSESSEE TO SHOW OTHERWISE ON THE BASIS OF COGENT AND RELIABLE EVIDENCE. AS PER THE HONBLE SUPREME COURT, WHEN SUCH INITIAL ONUS PLACE D BY THE EXPLANATION HAS BEEN DISCHARGED BY THE ASSESSEE, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED THE INCOME AND NOT OTHERWISE, SO AS TO TRIGGER THE IMPOSITION OF PENALTY U/S 271(1)(C) OF THE ACT. IN THIS BACKGROUND, NOW WE MAY EXAMINE THE FACTS OF THE PRESENT CASE AS TO WHETHER ASSESSEE HAS DISCHARGED HER ONUS WITH RESPECT TO THE IMPUGNE D INCOME BY WAY OF SALE OF TDR AMOUNTING TO RS.1,11,67,378/-. 21. THE PECULIARITIES OF THE TRANSACTIONS HAVE ALRE ADY BEEN NOTED BY US IN THE EARLIER PART OF THIS ORDER, WHEREBY IT IS OBVIO US THAT THE IMPUGNED TRANSACTION IS NOT WITHIN THE EXCLUSIVE PERSONAL KN OWLEDGE OF THE ASSESSEE BECAUSE IT WAS EXECUTED BY HER LATE HUSBAND PRIOR T O HIS DEATH IN 2003. THE ASSESSEE IS THE BENEFICIARY OF THE AMOUNTS RECEIVED AS A CONSEQUENCE OF THE TRANSACTION EXECUTED BY HER HUSBAND. IT IS ALSO NO T IN DISPUTE THAT THE AMOUNTS HAVE BEEN RECEIVED BY THE ASSESSEE DURING T HE YEAR UNDER ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 CONSIDERATION. THE LEARNED COUNSEL ALSO POINTED OU T AND QUITE FAIRLY, THAT THE ENTIRE RECEIPT ON THE TDR SALE HAS BEEN ASSESSED AS INCOME WHEREAS THE APPROPRIATE COURSE IS TO TAX ONLY THE DIFFERENCE BE TWEEN THE SALE PRICE AND THE ACQUISITION COSTS. ACCORDING TO HIM, ASSESSEE BEIN G PERSONALLY UNAWARE OF THE TRANSACTION WAS NOT IN KNOWLEDGE OF THE COST OF ACQUISITION, ETC. AND THEREFORE, IT WAS UNDER THESE CIRCUMSTANCES THAT TH E ENTIRE AMOUNT OF SALE WAS ADMITTED AS INCOME. IT HAS ALSO BEEN POINTED OUT T HAT ASSESSEE IS NOT LIABLE TO PAY TAX ON THE ENTIRE INCOME IN QUESTION BECAUSE SH E IS ONLY ONE OF THE LEGAL HEIRS OF HER DECEASED HUSBAND; THE OTHERS BEING HER DAUGHTERS AND SON. BE THAT AS IT MAY, WE ARE ONLY POINTING OUT THE AFORES AID EXPLANATION OF THE ASSESSEE FOR THE PURPOSE OF EVALUATING WHETHER THE ACTION OF THE ASSESSEE IN NOT DECLARING SUCH INCOME IN THE RETURN OF INCOME W AS ON BONA-FIDE GROUNDS OR NOT. ONE OF HER CLAIMS BEFORE THE ASSESSING OFFICE R WAS THAT SUCH AMOUNT WAS PRESUMED BY HER TO BE A CAPITAL RECEIPT AS IT O NLY REFLECTED CERTAIN RECOVERIES MADE BY HER ON BEHALF OF HER LATE HUSBAN D. CONSIDERING THE ENTIRETY OF ABOVE FACTORS, WE ARE SATISFIED THAT TH E EXPLANATION RENDERED BY THE ASSESSEE IS BONA-FIDE AND IN THE ABSENCE OF ANY DIS PUTE ON THE FACTUAL COUNTOURS OF SUCH EXPLANATION, IN OUR VIEW, THE INI TIAL ONUS CAST ON THE ASSESSEE AS PER EXPLANATION TO SECTION 271(1)(C) OF THE ACT STANDS DISCHARGED. THE PRESUMPTION OF CONCEALMENT IN TERM S OF EXPLANATION TO SECTION 271(1)(C) OF THE ACT IN THE PRESENT CASE, I N OUR VIEW, IS REBUTTED BY THE ASSESSEE HAVING REGARD TO THE FACTS AND CIRCUMSTANC ES OF THE CASE. MOREOVER, THERE IS NO MATERIAL LEAD BY THE REVENUE TO SHOW THAT THE EXPLANATION OF THE ASSESSEE IS EITHER FALSE OR DEVO ID OF BONA-FIDES. THEREFORE, IN OUR VIEW, THE CIT(A) MADE NO MISTAKE IN DELETING THE PENALTY LEVIED WITH RESPECT TO THE INCOME BY WAY OF TDR SALE AMOUNTING TO RS.1,11,67,378/-. AS A RESULT, WE AFFIRM THE FINDINGS OF THE CIT(A) ON T HIS ASPECT CONTAINED IN PARAS 3.7 TO 3.10 OF THE IMPUGNED ORDER. THUS, ON THIS A SPECT, REVENUE FAILS. ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 22. BEFORE PARTING, WE MAY REFER TO THE JUDGEMENT O F THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. (SUPRA) WHI CH HAS BEEN RELIED UPON BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IN ORDER TO SUPPORT THE CASE OF THE REVENUE BEFORE US. IN THE CASE BEFORE THE HONBLE SUPREME COURT, THE ISSUE WAS WHETHER A VOLUNTARILY SURRENDER OF INCOME MADE DURING THE COURSE OF ASSESSMENT PROCEEDINGS CAN MITIGATE THE LEVY OF PEN ALTY U/S 271(1)(C) OF THE ACT. THE PROPOSITION WHICH IS EMERGING FROM THE JU DGEMENT OF THE HONBLE SUPREME COURT IS THAT A MERE VOLUNTARY DISCLOSURE D OES NOT MITIGATE THE RIGOURS OF SECTION 271(1)(C) OF THE ACT IN THE ABSE NCE OF ANY EXPLANATION FORTHCOMING FROM THE ASSESSEE TO REBUT THE PRESUMPT ION OF CONCEALMENT ARISING DUE TO EXPLANATION TO SECTION 271(1)(C) OF THE ACT. AS PER THE HONBLE SUPREME COURT WHEREVER THERE IS A DIFFERENCE BETWEE N THE REPORTED AND THE ASSESSED INCOME, THERE IS A PRESUMPTION OF CONCEALM ENT, AND THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT A ND RELIABLE EVIDENCE AND ONLY WHEN THE INITIAL ONUS PLACED ON THE ASSESSEE I S DISCHARGED, THE ONUS SHIFTS TO THE REVENUE TO SHOW THAT THE AMOUNT IN QU ESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. IN THE CASE BEFORE THE H ONBLE SUPREME COURT, FACTUALLY IT WAS EMERGING THAT SUCH ONUS WAS NOT DI SCHARGED BY THE ASSESSEE BY GIVING A COGENT AND RELIABLE EXPLANATION WITH RE SPECT TO THE DIFFERENCE IN THE REPORTED AND ASSESSED INCOME. WE SAY SO, BECAUSE O F THE FOLLOWING DISCUSSION IN THE ORDER OF THE HONBLE SUPREME COUR T :- 9. WE ARE OF THE VIEW THAT THE SURRENDER OF INCOME IN THIS CASE IS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SUR RENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEARCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. IN THAT SITUATION, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. AO DURING THE COURSE OF ASSES SMENT PROCEEDINGS HAS NOTICED THAT CERTAIN DOCUMENTS COMPRISING OF SH ARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF ASSOCIATION OF COMPA NIES, AFFIDAVITS, COPIES OF INCOME TAX RETURNS AND ASSESSMENT ORDERS AND BLANK SHARE TRANSFER DEEDS DULY SIGNED, HAVE BEEN IMPOUNDED IN THE COURSE OF SURVEY PROCEEDINGS UNDER SECTION 133A CONDUCTED ON 16.12.2 003, IN THE CASE OF A SISTER CONCERN OF THE ASSESSEE. THE SURVEY WAS CO NDUCTED MORE THAN 10 MONTHS BEFORE THE ASSESSEE FILED ITS RETURN OF INCO ME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DIS CLOSURE OF ITS INCOME, IT WOULD HAVE FILED THE RETURN DECLARING AN INCOME INC LUSIVE OF THE AMOUNT WHICH WAS SURRENDERED LATER DURING THE COURSE OF TH E ASSESSMENT ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 PROCEEDINGS. CONSEQUENTLY, IT IS CLEAR THAT THE ASS ESSEE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IT IS THE STATUTORY DUTY O F THE ASSESSEE TO RECORD ALL ITS TRANSACTIONS IN THE BOOKS OF ACCOUNT, TO EXPLAI N THE SOURCE OF PAYMENTS MADE BY IT AND TO DECLARE ITS TRUE INCOME IN THE RE TURN OF INCOME FILED BY IT FROM YEAR TO YEAR. THE AO, IN OUR VIEW, HAS RECORDE D A CATEGORICAL FINDING THAT HE WAS SATISFIED THAT THE ASSESSEE HAD CONCEAL ED TRUE PARTICULARS OF INCOME AND IS LIABLE FOR PENALTY PROCEEDINGS UNDER SECTION 271 READ WITH SECTION 274 OF THE INCOME TAX ACT, 1961. 23. HOWEVER, IN THE CASE BEFORE US, FACTUALLY WE HA VE CONCLUDED THAT THE CIT(A) MADE NO MISTAKE IN CONCLUDING THAT THE EXPLA NATION RENDERED BY THE ASSESSEE IS COGENT AND RELIABLE AS WELL AS BONA-FID E. THEREFORE, EVEN AFTER APPLYING THE PROPOSITION LAID DOWN BY THE HONBLE S UPREME COURT IN THE CASE OF MAK DATA PVT. LTD. (SUPRA) IN THE PRESENT CASE, FACTUALLY SPEAKING, PENALTY U/S 271(1)(C) OF THE ACT IS NOT ATTRACTED. THEREFO RE, IN OUR CONSIDERED OPINION, THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE C ASE OF MAK DATA PVT. LTD. (SUPRA) DOES NOT HELP THE REVENUE IN THE PRESENT CA SE. MOREOVER AS POINTED OUT BY THE LEARNED COUNSEL FOR THE RESPONDENT-ASSES SEE, BY RELYING ON THE JUDGEMENT OF THE HONBLE MADRAS HIGH COURT IN THE C ASE OF CIT VS. M/S GEM GRANITES (KARNATAKA) VIDE TAX CASE (APPEAL) NO.504 OF 2009 DATED 12.11.2013, THAT THE PROPOSITION LAID DOWN BY THE H ONBLE SUPREME COURT IN THE CASE OF MAK DATA PVT. LTD. (SUPRA) HAS TO BE EX AMINED IN THE CONTEXT OF FACTS AND CIRCUMSTANCES OF EACH CASE. 24. RESULTANTLY, WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED THAT OF THE CROSS OBJECTION FILED BY THE ASSESSEE IS PARTLY ALL OWED, AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH AUGUST, 2014. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G . S. PANNU) JUDICIAL MEMBER ACCOUNT ANT MEMBER PUNE, DATED : 25 TH AUGUST, 2014. SUJEET ITA NO.2375/PN/2012 C.O. NO.103/PN/2013 COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II, PUNE; 4) THE CIT-II, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE