DCIT, V. M/s Minitechs Aerotools Pvt. Ltd.,

ITA 1228/BANG/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89913 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-05-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-08-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DHIVAHAR JT
• Assessee Lawyers: S VENKATESAN
• Keywords: Capital asset; Business income; Cost of acquisition; Initiation of penalty proceedings; Revised return; Reassessment proceedings
• Section: 143(3); 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER ITA NO.1228/BANG/2013 ASSESSMENT YEAR : 2007-08 THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 12(1), BANGALORE. VS. M/S. MINITECHS AEROTOOLS PVT. LTD., RATHNA COMPLEX, IV FLOOR, NO.143, RATHNA AVENUE, RICHMOND ROAD, BANGALORE 560 025. PAN : AABCM 1317J APPELLANT RESPONDENT APPELLANT BY : SHRI P. DHIVAHAR, JT. CIT (DR) RESPONDENT BY : SHRI S. VENKATESAN, CA DATE OF HEARING : 12.05.2015 DATE OF PRONOUNCEMENT : 26.05.2015 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER DA TED 31.5.2013 OF THE CIT(APPEALS)-III, BANGALORE RELATING TO ASSESSM ENT YEAR 2007-08. ITA NO.1225/BANG/2013 PAGE 2 OF 12 2. IN THIS APPEAL, THE REVENUE HAS CHALLENGED THE O RDER OF THE CIT(APPEALS) WHEREBY THE CIT(A) CANCELLED THE ORDER OF THE AO IMPOSING PENALTY ON THE ASSESSEE U/S. 271(1)(C) OF THE INCOM E TAX ACT, 1961 (ACT). 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS. THE ASSESS EE IS A COMPANY ENGAGED IN MANUFACTURE OF MACHINE COMPONENTS. IT O WNED A PROPERTY VIZ., LAND BEARING PLOT NO.1 & 2, KHATA NO.2 OF CMC KRISH NARAJAPURAM SITUATED AT HAL INDUSTRIAL ESTATE, BANGALORE 37, MEASURING 21,862 SQ.FT. [HEREINAFTER REFERRED TO AS THE PROPERTY]. THE A SSESSEE ENTERED INTO A JOINT DEVELOPMENT AGREEMENT IN RESPECT OF THE PROPERTY WI TH MS/. VALUE BUILD DESIGNS PVT. LTD. [VBDPL] DATED 23.2.2004. AS PE R THE JOINT DEVELOPMENT AGREEMENT, THE DEVELOPER AGREED TO PUT UP CONSTRUCT ION OVER THE PROPERTY AND HAND OVER TO THE ASSESSEE 10,931 SQ.FT. OF BUIL T UP AREA, IN EXCHANGE FOR THE ASSESSEE CONVEYING TO THE BUILDER 50% UNDIV IDED SHARE OF THE LAND OF THE PROPERTY. THE JOINT DEVELOPMENT AGREEMENT W AS GIVEN EFFECT TO BY PARTIES. THE ASSESSEE ACCORDINGLY RECEIVED BUILT UP AREA OF 10,931 SQ.FT. THE SHARE OF PROPERTY WHICH THE ASSESSEE RECEIVED F ROM THE BUILDER WAS LET OUT BY THE ASSESSEE AND INCOME FROM SUCH LETTING WA S OFFERED TO TAX BY THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE RETURN OF INCOME WAS FILED BY THE ASSESSEE FOR A.Y. 2007-08 O N 24.10.07 DECLARING TOTAL INCOME OF RS.36,04,060 COMPRISING OF RS.36,04 ,060 COMPRISING OF INCOME FROM PROPERTY OF RS.33,88,276 AND INCOME FRO M BUSINESS OF RS.2,15,779. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON ITA NO.1225/BANG/2013 PAGE 3 OF 12 31.10.2008. THE ASSESSEE RECEIVED BUILT UP AREA OF THE FLATS DURING THE PREVIOUS YEAR RELEVANT TO A.Y. 2007-08 I.E., ON 1.1 1.2006. 4. THERE WAS A SURVEY U/S. 133A OF THE ACT CONDUCTE D IN THE CASE OF M/S. VBDPL. IN THE COURSE OF SUCH SURVEY, THE REV ENUE CAME TO KNOW ABOUT THE JOINT DEVELOPMENT AGREEMENT BETWEEN THE A SSESSEE AND VBDPL AND THE FACT THAT CAPITAL GAIN ON TRANSFER OF THE P ROPERTY BY THE ASSESSEE HAD NOT BEEN OFFERED TO TAX IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR A.Y. 2007-08. IT APPEARS THAT ON COMING TO KNOW AB OUT THE SURVEY, THE ASSESSEE FILED A WORKING OF LONG TERM CAPITAL GAIN ARISING FROM TRANSFER OF THE PROPERTY. THE ASSESSEE FILED ONLY A COMPUTATIO N OF LONG TERM CAPITAL GAIN COMPUTING THE SAME AT RS.2,14,42,340, BUT DID NOT FILE A REVISED RETURN OF INCOME BECAUSE THE TIME LIMIT FOR FILING REVISED RETURN OF INCOME HAD ALSO EXPIRED BY THAT TIME. 5. THE ASSESSING OFFICER INITIATED PROCEEDINGS U/S. 148 TO TAX THE CAPITAL GAIN OF RS,2,14,42,340 DECLARED BY THE ASSE SSEE IN THE REVISED COMPUTATION OF CAPITAL GAIN. ULTIMATELY BY AN ORDE R DATED 30.12.2011 PASSED U/S.147 R.W.S. 143(3) OF THE AT, THE AO BROU GHT TO TAX LONG TERM CAPITAL GAIN OF RS.2,27,31,386 + RS.1,26,696 AS DIS ALLOWANCE IN CALCULATION OF LONG TERM CAPITAL GAIN + RS.17,59,087 OUT OF LAB OUR CHARGES CLAIMED AS EXPENSES IN COMPUTING BUSINESS INCOME. IN ALL, A S UM OF RS.2,46,17,169 WAS BROUGHT TO TAX. ITA NO.1225/BANG/2013 PAGE 4 OF 12 6. IN RESPECT OF LONG TERM CAPITAL GAIN BROUGHT TO TAX IN THE REASSESSMENT PROCEEDINGS AND ADDITION TO BUSINESS I NCOME BY DISALLOWANCE OF LABOUR CHARGES, THE AO INITIATED PE NALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT AGAINST THE ASSESSEE. IN THE PENALTY PROCEEDINGS, THE AO HELD THAT BUT FOR THE SURVEY IN THE CASE OF VBDP L, THE CAPITAL GAIN WOULD NOT HAVE BEEN OFFERED TO TAX BY THE ASSESSEE. HE THEREFORE CONCLUDED THAT ASSESSEE HAD CONCEALED PARTICULARS O F INCOME AND ACCORDINGLY IMPOSED PENALTY U/S. 271(1)(C). 7. BEFORE THE CIT(APPEALS), THE ASSESSEE SUBMITTED THAT ASSESSEE HAD NO INTENTION OF CONCEALING THE PARTICULARS OF INCOM E. THE ASSESSEE POINTED OUT THE CIRCUMSTANCES UNDER WHICH THE BUILT UP AREA WAS RECEIVED BY THE ASSESSEE UNDER THE JOINT DEVELOPMENT AGREEMENT AND INCOME THEREFROM HAD BEEN DULY DISCLOSED BY THE ASSESSEE IN THE ORIG INAL RETURN OF INCOME. THE ASSESSEE POINTED OUT THAT IT WAS OWING TO A WRO NG ADVISE THAT IN A JOINT DEVELOPMENT AGREEMENT, THERE WAS ONLY A BARTER AND HENCE THERE WAS NO INCIDENCE OF CAPITAL GAIN THAT CAPITAL GAIN HAD NOT BEEN DECLARED IN THE ORIGINAL RETURN OF INCOME. THE ASSESSEE ALSO POINT ED OUT THAT AFTER THE SURVEY, WHEN THE ASSESSEE WAS APPRISED OF THE REAL POSITION IN LAW, IT VOLUNTARILY DECLARED REVISED COMPUTATION OF INCOME, COOPERATED WITH THE DEPARTMENT AND PAID TAXES. THE ASSESSEE ALSO POINT ED OUT THAT IT COULD HAVE LEGALLY TAKEN A STAND THAT CAPITAL GAIN IS LIA BLE TO TAX ONLY IN THE YEAR IN WHICH THE JOINT DEVELOPMENT AGREEMENT WAS ENTERED I NTO VIZ., 2004-05 AND SUCH A STAND WOULD HAVE BEEN IN TUNE WITH THE DECIS ION OF THE HONBLE HIGH ITA NO.1225/BANG/2013 PAGE 5 OF 12 COURT OF KARNATAKA RENDERED IN THE CASE OF CIT V. T.K. DAYALU IN ITA NO. (ITA NO.3209 OF 2005) DATED 20.6.2011. IN THAT CASE, THE HONBLE HIGH COURT HELD THAT INCIDENCE OF CHARGE TO TAX OF CAPITAL GAI N IN A JOINT DEVELOPMENT AGREEMENT IS THE PREVIOUS YEAR IN WHICH THE JOINT D EVELOPMENT AGREEMENT IS ENTERED INTO AND POSSESSION IS DELIVERED TO THE DEVELOPER. THE ASSESSEE ALSO POINTED OUT THAT ITS BONAFIDES IN THE CIRCUMSTANCES STATED ABOVE CANNOT BE DOUBTED. 8. THE CIT(APPEALS) ON A CONSIDERATION OF THE ABOVE CIRCUMSTANCES POINTED OUT BY THE ASSESSEE, WAS OF THE VIEW THAT I T WAS NOT A FIT CASE FOR LEVY OF PENALTY. IT IS ALSO RELEVANT TO POINT OUT THAT WHILE COMPUTING LONG TERM CAPITAL GAIN, THE COMPUTATION OF LONG TERM CAP ITAL GAIN AS FILED BY THE ASSESSEE, WAS A SUM OF RS.2,14,42,340. IN ARRIVING AT THIS FIGURE, THE ASSESSEE HAD REDUCED THE COST OF ACQUISITION OF RS. 2,53,392. SINCE THE ASSESSEE WAS RETAINING 50% OF THE UNDIVIDED SHARE O F LAND OF THE PROPERTY. THE AO WAS OF THE VIEW THAT ONLY 50% OF THE AFORESA ID SUM CAN BE CLAIMED AS COST OF ACQUISITION. SIMILARLY, A SUM OF RS.17, 59,087 WAS DISALLOWED OUT OF LABOUR EXPENSES. THE CIT(APPEALS) WAS OF THE VI EW THAT THOSE ADDITIONS CANNOT ALSO BE THE BASIS TO IMPOSE PENALTY FOR THE FOLLOWING REASONS:- 6.3 SIMILARLY, WITH RESPECT TO LABOUR CHARGES, TH E ADDITION MADE BY THE AO IS FULLY ACCEPTED BY THE APPELLANT A ND TAXES PAID ON THE SAME. IN COURSE OF THE APPELLATE PROCEEDING, THE APPELLANT HAS PRODUCED THE DETAILS OF THE LABOUR PAYMENTS TOG ETHER WITH THE RECEIPTS / VOUCHERS AND DEMONSTRATED THE ENTRIES IN THE CASH BOOK AND THE LEDGER ACCOUNT EXTRACTS. THE GENUINENESS OF THESE EXPENSES IS EVIDENT FROM THE SAME. HOWEVER, THE AO FOUND SOME ITA NO.1225/BANG/2013 PAGE 6 OF 12 DISCREPANCIES IN THE FIGURES AND ACCORDINGLY MADE T HE ADDITIONS. FINDING THAT THE APPELLANT ACCEPTED THE ADDITIONS A ND CHOSE NOT TO CONTEST THE SAME, AND HAVING NOTED THAT ALL THE PAY MENTS WERE DULY ROUTED THROUGH THE BANK ACCOUNT, I AM NOT CONV INCED THAT THE APPELLANT INTENDED TO AVOID TAX THROUGH SUCH PAYMEN TS BY MANIPULATING THE SAME. 9. AGGRIEVED BY THE ORDER OF THE CIT(APPEALS), THE REVENUE HAS FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 10. WE HAVE HEARD THE SUBMISSIONS OF THE LD. DR, WH O REITERATED THE STAND OF REVENUE THAT BUT FOR THE SURVEY, THE ASSES SEE WOULD NOT HAVE DECLARED LONG TERM CAPITAL GAIN. THE LD. COUNSEL F OR THE ASSESSEE RELIED ON THE ORDER OF CIT(APPEALS) AND ALSO BROUGHT TO OUR N OTICE CERTAIN JUDICIAL PRONOUNCEMENTS. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE H AVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. THE ASSESSEE RECEIVED BUILT UP AREA OF THE FLATS OF 10,931 SQ.FT. DURING THE PR EVIOUS YEAR RELEVANT TO A.Y. 2007-08 I.E., ON 1.11.2006. THE SHARE OF PROPERTY W HICH THE ASSESSEE RECEIVED FROM THE BUILDER WAS LET OUT BY THE ASSESS EE AND INCOME FROM SUCH LETTING WAS OFFERED TO TAX BY THE ASSESSEE UND ER THE HEAD INCOME FROM HOUSE PROPERTY. THE RETURN OF INCOME WAS FIL ED BY THE ASSESSEE FOR A.Y. 2007-08 ON 24.10.07 DECLARING TOTAL INCOME OF RS.36,04,060 COMPRISING OF INCOME FROM PROPERTY OF RS.33,88,276 AND INCOME FROM BUSINESS OF RS.2,15,779. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON 31.10.2008. THERE WAS A SURVEY U/S. 133A OF THE ACT CONDUCTED IN THE ITA NO.1225/BANG/2013 PAGE 7 OF 12 CASE OF M/S. VBDPL, THE ENTITY WHICH DEVELOPED THE PROPERTY. IN THE COURSE OF SUCH SURVEY, THE REVENUE CAME TO KNOW ABO UT THE JOINT DEVELOPMENT AGREEMENT BETWEEN THE ASSESSEE AND VBDP L AND THE FACT THAT CAPITAL GAIN ON TRANSFER OF THE PROPERTY BY TH E ASSESSEE HAD NOT BEEN OFFERED TO TAX IN THE RETURN OF INCOME FILED BY THE ASSESSEE FOR A.Y. 2007- 08. IMMEDIATELY THE ASSESSEE FILED A WORKING OF LO NG TERM CAPITAL GAIN ARISING FROM TRANSFER OF THE PROPERTY, EVEN WITHOUT ANY PROCEEDINGS HAVING BEEN INITIATED AGAINST THE ASSESSEE. THE ASSESSEE FILED ONLY A COMPUTATION OF LONG TERM CAPITAL GAIN COMPUTING THE SAME AT RS.2,14,42,340, BUT DID NOT FILE A REVISED RETURN O F INCOME BECAUSE THE TIME LIMIT FOR FILING REVISED RETURN OF INCOME HAD ALSO EXPIRED BY THAT TIME. THE ABOVE CIRCUMSTANCES EXPLAINED BY THE ASSESSEE CANNOT BE IGNORED AND WAS RIGHTLY TREATED BY THE CIT(A) TO BE CIRCUMSTANC E WHICH GO TO SHOW THE BONAFIDES OF THE ASSESSEE. 12. THE ASSESSEES EXPLANATION THAT OWING TO WRONG PROFESSIONAL ADVISE TO THE EFFECT THAT IN A JOINT DEVELOPMENT AGREEMENT THERE WAS ONLY A BARTER AND NO CAPITAL GAIN ARISES IS ALSO A PLAUSIBLE EXPL ANATION. THOUGH NO MATERIAL HAS BEEN BROUGHT ON RECORD IN THIS REGARD BY THE ASSESSEE, IT IS WIDELY ACKNOWLEDGED THAT INCIDENCE OF CAPITAL GAIN TAX IN A JOINT DEVELOPMENT AGREEMENT AND THE YEAR OF CHARGEABILITY OF CAPITAL GAIN TAX IN A JOINT DEVELOPMENT AGREEMENT IS NOT FREE FROM DOUB T AND IS ALWAYS CONTROVERSIAL. ITA NO.1225/BANG/2013 PAGE 8 OF 12 13. THE SUBSEQUENT CONDUCT OF THE ASSESSEE IN NOT RAISING ANY LEGAL ISSUE WITH REGARD TO THE YEAR OF TAXABILITY OF CAPI TAL GAIN AND VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS WAS ALSO RIG HTLY TREATED AS A CIRCUMSTANCE SHOWING THE BONAFIDES OF THE ASSESSEE BY THE CIT(A). IT WAS OPEN TO THE ASSESSEE TO HAVE TAKEN A STAND THAT IN VIEW OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT CASE OF DR T K DAYALU (SUPRA) , CAPITAL GAIN IN THE CASE OF TRANSFER OF CAPITAL ASSETS UNDE R JOINT DEVELOPMENT AGREEMENT WILL BE ONLY THE YEAR IN WHICH THE JOINT DEVELOPMENT AGREEMENT IS ENTERED INTO AND POSSESSION GIVEN TO THE DEVELOP ER FOR DEVELOPER. 14. THE ASSESSEE PAID TAXES MUCH BEFORE THE ISSUE OF THE NOTICE U/S 148 AND HAD ALSO DULY FILED THE REVISED COMPUTATION OF INCOME. THE AOS VIEW IS THAT WHEN THE RENTAL INCOME WAS ALREADY OF FERED TO TAX, IT WAS IN THE KNOWLEDGE OF THE ASSESSEE THAT THE CAPITAL GAIN S ARE ALSO ATTRACTED ON TAKING POSSESSION OF THE BUILT UP AREA. AS ALREADY STATED, THE ISSUE WAS DEBATABLE AND THE BELIEF ENTERTAINED BY THE ASSESSE E IN THIS REGARD CANNOT BE SAID TO BE UNREASONABLE. THE LEVY OF PENALTY WI TH REGARD TO COMPUTATION OF LONG TERM CAPITAL GAIN BY DISALLOWING PART OF CO ST OF ACQUISITION, IN OUR VIEW, CANNOT LEAD TO CONCEALMENT AND IT, AT BEST, C OULD BE AN ERROR IN COMPUTATION. THE PRIMARY FACTS WITH REGARD TO THE COMPUTATION OF CAPITAL GAIN FILED BY THE ASSESSEE ARE TRUE AND THERE WAS N O CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS THEREIN. EVEN WITH REGARD TO DISALLOWANCE OF LABOUR CHARGES OF RS.1759087/- AGAI NST THE BUSINESS RECEIPTS, THE DISALLOWANCE WAS MADE OWING TO MISMAT CH BETWEEN TWO ITA NO.1225/BANG/2013 PAGE 9 OF 12 SUBMISSIONS. THE ACCOUNTANT HAD MADE A MISTAKE BY S UBMITTING A PROVISIONAL LEDGER EXTRACT AT ONE POINT OF TIME WHI CH RESULTED INTO CERTAIN MISMATCHES IN THE AMOUNTS. THE MISMATCH IN THE SUBM ISSIONS WOULD NOT RESULT INTO TOTAL EXPENDITURE TO BE BOGUS. THE LABO UR COMPONENT IS MAJOR EXPENDITURE OF THE ASSESSEE. THE CIT(A) HAS EXAMIN ED THE LABOUR PAYMENTS OF RS.17,59,087 MADE TO VARIOUS PARTIES AN D THE MODE OF PAYMENT AND HAS FOUND THAT LABOUR CHARGES FOR RS.17 59087/- HAVE BEEN DISCHARGED THROUGH BANK BARRING A SMALL EXPENDITURE OF RS.3224/- BY CASH. IT APPEARS TO US THAT THE ASSESSEE IN ORDER TO AVOI D ANY LITIGATION WITH THE DEPARTMENT HAS ACCEPTED THE ADDITION AND DID NOT FI LE ANY APPEAL ON THE ADDITION MADE THOUGH THE ENTIRE EXPENDITURE IS BACK ED UP WITH CLEAR DOCUMENTARY PROOF. 15. THE HONBLE SUPREME COURT IN THE CASE OF MAK DATA (P) LTD V. CIT (2013) 358 ITR 593 (SC) HAS DISCUSSED THE APPROACH TO BE ADOPTED IN CASES SUCH AS THAT OF THE ASSESSEE. THE ASSESSEE-C OMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2004-05 ON 27TH O CTOBER, 2004 DECLARING INCOME OF RS 16.17 LAKH ALONG WITH TAX AU DIT REPORT. THE CASE WAS SELECTED FOR SCRUTINY. AT THE TIME OF ASSESSMEN T, IT CAME TO LIGHT THAT A SURVEY UNDER SECTION 133A WAS CONDUCTED ON THE ASSE SSEE ON 16.12.2003. DURING THE COURSE OF SURVEY, CERTAIN DOCUMENTS COMP RISING SHARE APPLICATION FORMS, BANK STATEMENTS, MEMORANDUM OF A SSOCIATION OF CERTAIN COMPANIES, AFFIDAVITS, COPIES OF INCOME-TAX RETURN AND BLANK SHARE TRANSFER DEEDS WERE IMPOUNDED. THE ASSESSING OFFICER SOUGHT SPECIFIC INFORMATION ITA NO.1225/BANG/2013 PAGE 10 OF 12 PERTAINING TO BLANK SHARE TRANSFER DEEDS BY MEANS O F SHOW CAUSE NOTICE. THE ASSESSEE-COMPANY SURRENDERED A SUM OF RS 40.74 LAKHS AS ADDITIONAL INCOME WITH A REPLY IN THE FOLLOWING MANNER: THE O FFER OF SURRENDER IS BY WAY OF VOLUNTARY DISCLOSURE OF INCOME WITHOUT ADMIT TING ANY CONCEALMENT WHATSOEVER OR WITH ANY INTENTION TO CONCEAL AND SUB JECT TO NON-INITIATION OF PENALTY PROCEEDINGS AND PROSECUTION. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY ADDING RS 40.74 LAKHS AS INCOME F ROM OTHER SOURCES AND THE ASSESSMENT WAS COMPLETED ON 29.12.2006. FUR THER, THE ASSESSING OFFICER INITIATED PROCEEDINGS FOR LEVY OF PENALTY T OWARDS CONCEALMENT OF INCOME. THE HONBLE DELHI HIGH COURT APPLIED CLAUSE (A) OF EXPLANATION 1 AND HELD THAT THE ASSESSEE HAS NOT OFFERED ANY EXPL ANATION AND THEREFORE UPHELD THE LEVY OF PENALTY. ON APPEAL BY THE ASSESS EE, THE HONBLE SUPREME COURT HELD THAT EXPLANATION TO SECTION 271( 1) RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NO TICED BY THE ASSESSING OFFICER BETWEEN THE RETURNED INCOME AND ASSESSED IN COME. THE BURDEN THEN IS ON THE ASSESSEE TO SHOW OTHERWISE, BY GIVIN G COGENT AND RELIABLE EVIDENCE. WHEN THE INITIAL ONUS IS DISCHARGED BY TH E ASSESSEE, THE ONUS SHIFTS ON THE REVENUE TO SHOW THAT THE AMOUNT IN QU ESTION CONSTITUTED THE INCOME AND NOT OTHERWISE. THE APEX COURT HELD THAT SURRENDER OF INCOME WITH A VIEW TO AVOID LITIGATION, BUY PEACE AND TO C HANNELISE THE ENERGY AND RESOURCES TOWARDS PRODUCTIVE WORK AND TO MAKE AMICA BLE SETTLEMENT WITH THE INCOME-TAX DEPARTMENT ARE NOT RECOGNISED TYPE O F DEFENCE UNDER EXPLANATION 1 TO SECTION 271(1)(C) OF THE ACT. IT H ELD THAT THE LAW DOES NOT ITA NO.1225/BANG/2013 PAGE 11 OF 12 ABSOLVE THE ASSESSEE FROM CONCEALMENT PENALTY MEREL Y BECAUSE A VOLUNTARY DISCLOSURE OF CONCEALED INCOME IS MADE. 16. THE HONBLE SUPREME COURT HELD THAT THE SURREN DER OF INCOME IN THIS CASE IS NOT VOLUNTARY AND THE SURRENDER WAS IN VIEW OF THE DETECTION MADE BY ASSESSING OFFICER. IT IS NOT SURRENDER OF I NCOME ON VOLUNTARY BASIS. THE SURVEY WAS CONDUCTED 10 MONTHS BEFORE TH E ASSESSEE FILED ITS RETURN OF INCOME. HAD IT BEEN THE INTENTION OF THE ASSESSEE TO MAKE FULL AND TRUE DISCLOSURE, IT COULD HAVE FILED THE RETURN DEC LARING THE AMOUNT WHICH WAS FACTUALLY SURRENDERED ONLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND NOT IN THE RETURN FILED. IT IS A CL EAR CASE OF THE ASSESSEE NOT HAVING INTENTION TO DECLARE ITS TRUE INCOME. 17. IN THE PRESENT CASE, AS WE HAVE ALREADY SEEN, T HE ORIGINAL RETURN OF INCOME WAS FILED BY THE ASSESSEE IN WHICH THE INCOM E FROM THE PROPERTY WHICH THE ASSESSEE RECEIVED UNDER THE JOINT DEVELOP MENT AGREEMENT WAS OFFERED TO TAX. AFTER SURVEY IN THE CASE OF THE PR OPERTY DEVELOPER, THE ASSESSEE FILED A REVISED COMPUTATION OF TOTAL INCOM E OFFERING CAPITAL GAIN TO TAX AND ALSO PAID TAXES DUE THEREON. WE HAVE ALREA DY FOUND THAT THE EXPLANATION OFFERED BY THE ASSESSEE FOR NOT OFFERIN G THE CAPITAL GAIN IN THE ORIGINAL RETURN OF INCOME AS BONAFIDE EXPLANATION. IN THE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) WAS FULLY JUSTIFIED IN COMING TO THE CONCLUSION THAT THE CASE IS NOT A FIT CASE FOR IMPO SING PENALTY U/S.271(1)(C) ITA NO.1225/BANG/2013 PAGE 12 OF 12 OF THE ACT. WE CONCUR WITH THE VIEW OF THE CIT(A) AND FIND NO MERIT IN THIS APPEAL BY THE REVENUE. 18. ACCORDINGLY, THE APPEAL BY THE REVENUE IS DISMI SSED. 19. IN THE RESULT, THE APPEAL BY THE REVENUE IS DIS MISSED. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF MAY, 2015. SD/- SD/- ( ABRAHAM P. GEORGE ) ( N.V. VASU DEVAN ) ACCOUNTANT MEMBER JUDICIAL M EMBER BANGALORE, DATED, THE 26 TH MAY, 2015. /D S/ COPY TO: 1. APPELLANT 2. RESPONDENTS 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.