JMJ Essential Oil Company, Una V. ITO, Una

ITA 1327/CHANDI/2012

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1585 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 8 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 19-08-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 21-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Unexplained cash credit; Business income; Income from undisclosed sources; Question of law; Wrong claim; Onus to prove
• Section: 68; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO. 1327/CHD/2012 ASSESSMENT YEAR: 2007-08 JMJ ESSENTIAL OIL COMPANY, V THE ITO, PLOT NO. 39, INDUSTRIAL AREA, UNA. TAHLIWAL, UNA. PAN: AAFFJ0540B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI TEJ MOHAN SING H RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 19.08.2015 DATE OF PRONOUNCEMENT : 25.08.2015 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORD ER OF LD. CIT(APPEALS) SHIMLA DATED 22.10.2012 FOR ASSESSMENT YEAR 2007-08, CHALLENGING THE LEVY OF PE NALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND SALE O F ESSENTIAL OIL, COMMERCIALLY KNOWN AS MUSK/ATTARS. THE FIRM FILED ITS RETURN DECLARING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SECTION 80IC OF THE ACT AT RS. 85.3 1 CR. 2 DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER WHILE EXAMINING TH E BOOKS OF ACCOUNT THAT ASSESSEE HAD SHOWN CASH SALES OF RS. 3 CRORES IN THE MONTH OF SEPTEMBER,2006 TO DIFF ERENT PARTIES. THE ASSESSEE WAS REQUIRED TO PROVE GENUIN ENESS OF THE SAID CASH SALES AND TO ESTABLISH THE IDENTIT Y OF THE PURCHASERS BUT THE ASSESSEE FAILED TO DO SO. THIS LED THE ASSESSING OFFICER TO CONCLUDE THAT ASSESSEE FIRM HA D INTRODUCED UNACCOUNTED CASH IN ITS BOOKS OF ACCOUNT IN THE GARB OF THE CASH SALES. HE, THEREFORE, MADE AD DITION UNDER SECTION 68 OF THE ACT ON ACCOUNT OF UNEXPLAIN ED CASH CREDITS TO THE TUNE OF RS. 3.12 CR AND INITIA TED THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSMENT FRAMED BY THE ASSESSING OFFICER WAS UPHELD BY THE LD. CIT(APPEALS) AS WELL AS BY THE IT AT CHANDIGARH BENCH. THE ASSESSING OFFICER, THEREFORE , LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT O N THE GROUND THAT ASSESSEE HAD CONCEALED THE PARTICULARS OF ITS INCOME TO THE EXTENT OF RS. 3.12 CR BY CREDITING TH E INCOME FROM UNDISCLOSED SOURCES TO ITS BOOKS OF ACC OUNT IN THE GARB OF CASH SALES. 3. THE PENALTY ORDER WAS CHALLENGED BEFORE LD. CIT(APPEALS) AND IT WAS SUBMITTED THAT CASH SALES AMOUNTING TO RS.3.12 CR ONLY OUT OF THE TOTAL SALES OF RS. 94.54 CR AND THAT THE SAID CASH SALES WERE DULY DIS CLOSED AND ACCOUNTED FOR IN THE BOOKS OF ACCOUNT. IT WAS ARGUED THAT ALL THE SALES WERE BACKED BY THE SALES BILLS, SALES TAX 3 PAID CHALLANS AND SALES TAX RETURN FILED BY THE ASS ESSEE WITH THE COMMERCIAL TAX DEPARTMENT OF UNA. IT WAS ARGUED THAT BOOKS OF ACCOUNT ALONGWITH INVENTORY RE CORD WERE DULY AUDITED BY THE TAX AUDITOR AND THE CASH S ALES SHOULD NOT HAVE BEEN TREATED AS UNEXPLAINED CASH CR EDITS MERELY BECAUSE THE ADDRESS OF ALL THE CUSTOMERS WER E NOT FOUND TO BE COMPLETE ON THE CASH SALES BILLS. IT W AS FURTHER ARGUED THAT THE ASSESSING OFFICER HAS FAILE D TO DISCHARGE THE ONUS OF PROVING THE SOURCE OF GENERAT ION OF SUCH UNDISCLOSED INCOME AND HAD PROCEEDED ONLY ON SUSPICION AND ASSUMPTIONS WHILE LEVYING THE PENALTY . IT WAS SUBMITTED THAT APPEAL OF THE ASSESSEE HAD BEEN ADMITTED BY THE HON'BLE HIGH COURT OF HIMACHAL PRAD ESH WHICH PROVES THAT ADDITION MADE BY THE ASSESSING OF FICER IS CERTAINLY DEBATABLE. THE ASSESSEE RELIED UPON D ECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANC E PETROPRODUCTS PVT. LTD. 322 ITR 158 AND ARGUED THAT MERELY BECAUSE THE ASSESSEE'S EXPLANATION WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT ATTRACT THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. THE LD. CIT(APPEALS) CONSIDERED SUBMISSION OF TH E ASSESSEE AND MATERIAL ON RECORD AND REPEATED THE SA ME FACTS AS HAVE BEEN NOTED IN THE ORDERS PASSED BY TH E ASSESSING OFFICER WITH REGARD TO CASH SALES BOOKED BY THE ASSESSEE IN THE BOOKS OF ACCOUNT. THE LD. CIT(APPE ALS) ALSO NOTED THAT THE FINDINGS OF THE ASSESSING OFFIC ER HAVE BEEN ACCEPTED BY THE ITAT CHANDIGARH BENCH. IT WAS 4 FOUND THAT CASH SALES GENERATED WAS DISTRIBUTED BET WEEN THE PARTNERS AND THAT FACTORY OF THE ASSESSEE IS LO CATED IN ISOLATED AREA, THEREFORE CASH SALE IS NOT POSSIBLE. THE ASSESSEE ALSO ADMITTED THAT DUE TO ADMINISTRATIVE R EASONS, CASH SALES WERE STOPPED IN THE SUBSEQUENT YEAR, THE REFORE THE TRIBUNAL HELD THAT ASSESSEE FAILED TO DISCHARGE ITS ONUS TO PROVE GENUINENESS OF THE CASH SALES OF RS. 3.12 CR. THE LD. CIT(APPEALS) ALSO DID NOT ACCEPT THE O RDER PASSED BY THE VAT DEPARTMENT ACCEPTING THE SALES OF THE ASSESSEE BECAUSE VAT DEPARTMENT WAS CONCERNED ONLY WITH THE COLLECTION OF ITS REVENUE. THE LD. CIT(AP PEALS) DID NOT ACCEPT CONTENTION OF THE ASSESSEE AND ULTIM ATELY ON THE BASIS OF FINDING OF FACT RECORDED BY THE AUT HORITIES BELOW AS CONFIRMED BY THE TRIBUNAL, CAME TO THE CONCLUSION THAT ASSESSEE HAS FURNISHED THE INACCURA TE PARTICULARS OF INCOME BY WAY OF CLAIMING BOGUS CASH SALES TO THE TUNE OF RS. 3.12 CR AND ACCORDINGLY, CONFIRM ED LEVY OF THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT THE CASH SALES WERE VERY MEAGER AS A GAINST THE TOTAL SALES MADE BY ASSESSEE OF RS. 94.54 CR. HE HAS SUBMITTED THAT SINCE SUBSTANTIAL QUESTION OF LAW HA S BEEN ADMITTED, THE ISSUE BECOMES A DEBATABLE ISSUE AND A S SUCH PENALTY IS NOT LEVIABLE. HE HAS RELIED UPON D ECISION OF THE BOMBAY HIGH COURT IN THE CASE OF CIT VS NAYA N 5 BUILDERS & DEVELOPERS 368 ITR 722 IN WHICH IT WAS H ELD AS UNDER ; HELD, DISMISSING THE APPEAL, THAT THE IMPOSITION OF PENA LTY WAS FOUND NOT TO BE JUSTIFIED AND THE APPEAL WAS AL LOWED. AS A PROOF THAT THE PENALTY WAS DEBATABLE AND ARGUABLE ISSUE, THE TRIBUNAL REFERRED TO THE ORDER ON THE ASSESSEE' S APPEAL IN QUANTUM PROCEEDINGS AND THE SUBSTANTIAL QUESTIONS OF LAW WHICH HAD BEEN FRAMED THEREIN. THUS, THERE WAS NO C ASE MADE OUT FOR IMPOSITION OF PENALTY AND THE PENALTY WAS RIG HTLY SET ASIDE. 6. HE HAS SUBMITTED THAT PENALTY PROCEEDINGS ARE DISTINCT FROM ASSESSMENT PROCEEDINGS. THE ADDITION S CONFIRMED IN THE QUANTUM PROCEEDINGS CANNOT BE THE BASIS FOR IMPOSITION OF PENALTY AS IS HELD IN THE CASE OF DURGA KAMAL RICE MILLS V CIT 265 ITR 25 AND ALSO RELIED U PON DECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF RATAN LAL AGGARWAL 317 ITR 336 WHEREIN THE ISSUE WAS ALSO IN RESPECT OF ADDITIONS OF CASH CREDITS CONFIRMED IN Q UANTUM PROCEEDINGS. THE LD. COUNSEL FOR THE ASSESSEE FURT HER SUBMITTED THAT THE ASSESSEE IS ADMITTEDLY MAINTAINI NG ACCOUNTS WHICH ARE DULY AUDITED. IT HAD DECLARED T HE ENTIRE SALE PROCEEDS INCLUDING CASH SALES IN THE RE TURN OF INCOME WHICH WAS FORMING PART OF THE GROSS RECEIPTS ON WHICH ASSESSEE ALSO DEPOSITED SALES TAX AND SALE TA X ASSESSMENT HAD BEEN COMPLETED BY THE AUTHORITIES. COPY OF THE SALE TAX ORDER DATED 25.03.2010 IS FILED AT PAGE 56 OF THE PAPER BOOK. THE LD. COUNSEL FOR THE ASSESSE E ALSO SUBMITTED THAT ASSESSEE HAD PLACED ON RECORD DETAIL S OF 6 RAW MATERIAL USED IN THE MANUFACTURING OF ITS PRODU CT WHICH IS ALSO MENTIONED IN THE ORDER OF THE TRIBUNA L. IT IS ALSO MATTER OF RECORD THAT ASSESSEE HAD MAINTAINED STOCK REGISTER AND THE RAW MATERIAL PRODUCED AND PURCHASE BILLS WERE PRODUCED ON RECORD. HE HAS SUBMITTED THAT MAY BE THE ADDITION IS CONFIRMED BY THE TRIBUNAL BUT THE M ATTER IS SUBJUDICE BEFORE THE HIGH COURT THEREFORE, ON ME RE DISBELIEVING THE EXPLANATION OF THE ASSESSEE, PENAL TY NEED NOT BE NECESSARILY IMPOSED. HE HAS ALSO SUBMITTED THAT IT IS A MATTER OF RECORD THAT ASSESSEE WAS MAKING COUN TER SALES AND NOT VISITING THE PLACES OF THE PURCHASERS . WHATEVER ADDRESSES WERE PROVIDED BY PURCHASERS, WER E RECORDED IN THE SALES BILLS. HE HAS RELIED UPON FO LLOWING DECISIONS : I) HAJEE K ASSAINER V CIT 81 ITR 423 (KER) II) CIT V SHREE BAJRANG TRADING & SUPPLY CO. 187 ITR 299 (CAL) III) CIT V V RAMASWAMY NAIDU 208 ITR 377 (MAD) IV) NATIONAL TEXTILES V CIT 249 ITR 125 (GUJ) V) CIT VS NIPANI TOBACCO STORES 145 ITR 128 (PATNA) VI) CIT V OASIS HOSPITALITIES P.LTD. 333 ITR 119 (DEL), ON THE PROPOSITION THAT WHERE PENALTY MADE ON ACCOU NT OF ADDITIONS MADE UNDER SECTION 68 OF THE ACT HAS BEEN HELD TO BE NOT LEVIABLE. IT WAS ALSO HELD THAT PROVISIO NS OF SECTION 68 OF THE ACT PERMITTING THE ASSESSING OFFI CER TO TREAT UNEXPLAINED CASH CREDITS AS INCOME ARE ENABLI NG 7 PROVISIONS FOR MAKING CERTAIN ADDITIONS WHERE THERE IS A FAILURE BY THE ASSESSEE TO GIVE EXPLANATION OR WHER E EXPLANATION IS NOT TO THE SATISFACTION OF THE ASSES SING OFFICER. HOWEVER, ADDITION MADE ON THIS COUNT WOUL D NOT AUTOMATICALLY JUSTIFY LEVY OF THE PENALTY. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT SINCE COMPLETE DETAILS WERE FILED AND BOOKS OF ACCOUNT WERE EXAMIN ED, THEREFORE, ON MERE ADDITION, PENALTY WILL NOT BE LE VIED IN THE MATTER. 7. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT CASH SALES HAV E BEEN MADE IN THE MONTH OF SEPTEMBER,2006 ONLY WHICH HAS CREATED A DOUBT IN THE MINDS OF THE AUTHORITIES BEL OW AND ON SCRUTINY, IT WAS FOUND THAT CASH SALES HAVE BEEN BOOKED FOR EXPLAINING THE UNACCOUNTED CASH OF THE ASSESSEE. THE LD. DR REFERRED TO THE ORDER OF THE ITAT DATED 19.10.2011 IN ITA 204/2011 CONFIRMING THE ADD ITION ON THIS ISSUE AND SUBMITTED THAT EXPLANATION-I TO S ECTION 271(1)(C) OF THE ACT IS THEREFORE, CLEARLY ATTRACTE D IN THE CASE OF THE ASSESSEE. THE LD. DR RELIED UPON DECIS ION OF THE HON'BLE SUPREME COURT IN THE CASE OF UNION OF I NDIA & OTHERS V DHARMENDRA TEXTILES PROCESSORS & OTHERS 30 6 ITR 277 IN WHICH IT WAS HELD AS UNDER : EXPLANATIONS APPENDED TO SECTION 271(L)(C) OF THE IN COME- TAX ACT, 1961, INDICATE THE ELEMENT OF STRICT LIABILI TY ON THE ASSESSEE FOR CONCEALMENT OR FOR GIVING INACCURATE PA RTICULARS WHILE FILING THE RETURN. THE OBJECT BEHIND THE ENACT MENT OF SECTION 271(L)(C) READ WITH THE EXPLANATIONS INDICAT ES THAT THE 8 SECTION HAS BEEN ENACTED TO PROVIDE FOR A REMEDY FOR LOSS OF REVENUE. THE PENALTY UNDER THAT PROVISION IS A CIVI L LIABILITY. WILFUL CONCEALMENT IS NOT AN ESSENTIAL INGREDIENT FO R ATTRACTING CIVIL LIABILITY AS IS THE CASE IN THE MATTER OF PROSEC UTION UNDER SECTION 276C. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND MATERIAL AVAILABLE ON RECORD. IN THIS CASE, THE PE NALTY HAS BEEN IMPOSED BECAUSE THE ASSESSING OFFICER FOUND TH AT ASSESSEE HAS BOOKED CASH SALES OF RS. 3 CRORES IN T HE MONTH OF SEPTEMBER,2006 TO DIFFERENT PARTIES. THIS WAS THE SOLE BASIS FOR LEVY OF PENALTY AGAINST ASSESSEE BECAUSE THE ADDITION ON QUANTUM HAD BEEN CONFIRMED EVEN BY THE TRIBUNAL. THE ASSESSING OFFICER, AFTER EXAMINING T HE RECORD AND MATERIAL FOUND THAT NO COMPLETE DETAILS OF PURCHASERS ARE MENTIONED IN THE SALE BILLS AND WHAT EVER THE DETAILS WERE SUBMITTED, WERE NOT SUBJECTED TO VERIFICATION. THIS LED TO THE CONCLUSION OF THE AS SESSING OFFICER THAT THE ASSESSEE FIRM HAD INTRODUCED UNACC OUNTED CASH IN ITS BOOKS OF ACCOUNT IN THE GARB OF CASH SA LES. IT IS WELL SETTLED LAW THAT FINDINGS GIVEN IN THE QUAN TUM PROCEEDINGS HAVE A PROBATIVE VALUE, HOWEVER, ASSESS EE IS STILL AT LIBERTY TO EXPLAIN THE ADDITION IN THE PEN ALTY PROCEEDINGS SO AS TO EXPLAIN THAT LEVY OF THE PENAL TY IS NOT JUSTIFIED IN THE MATTER BECAUSE THE QUANTUM AND PEN ALTY PROCEEDINGS ARE DISTINCT AND INDEPENDENT PROCEEDING S. MERELY BECAUSE ADDITION ON MERIT HAVE BEEN CONFIRME D BY ITSELF IS NO GROUND TO SUSTAIN THE PENALTY AUTOMATI CALLY. IT IS AN ADMITTED FACT THAT CASH SALES OF RS. 3.12 CR WERE 9 OUT OF THE TOTAL SALES OF RS. 94.54 CR. THE ASSESS EE MAINTAINED COMPLETE BOOKS OF ACCOUNT AND THE ACCOUN TS ARE AUDITED. THE ASSESSEE PRODUCED BOOKS OF ACCOUN T, PURCHASE BILLS, SALES BILLS AND STOCK REGISTER BEFO RE THE AUTHORITIES BELOW AND DISCLOSED COMPLETE FACTS WITH REGARD TO THE SALES MADE TO DIFFERENT PARTIES. THEREFORE, NOTHING WAS CONCEALED TO THE REVENUE DEPARTMENT IN FILING O F THE RETURN AS WELL AS AT THE TIME OF ASSESSMENT FRAMED BY THE ASSESSING OFFICER. THE SALE BILLS WERE SUPPORTED B Y SALES TAX PAID CHALLANS AND SALES TAX RETURN FILED BY THE ASSESSEE WITH COMMERCIAL TAX DEPARTMENT OF UNA AND AS WELL AS SHOWN BY THE ASSESSEE IN THE BOOKS OF ACCOU NT HAVE BEEN ACCEPTED BY THE SALES TAX AUTHORITIES (VA T AUTHORITIES). THUS, THE SALES MADE BY THE ASSESSEE INCLUDING THE CASH SALES HAVE BEEN ACCEPTED BY THE SALES TAX AUTHORITIES. THE AUTHORITIES BELOW DIS-BELIEVE D THE EXPLANATION OF THE ASSESSEE WITH REGARD TO CASH SAL ES MADE TO DIFFERENT PARTIES BECAUSE THEIR COMPLETE DE TAILS ARE NOT NOTED IN THE BILLS. IT WAS ALSO NOTED THAT SINCE NO COMPLETE PARTICULARS OF THE PURCHASERS ARE MENTIONE D IN THE SALE BILLS, THEREFORE, CASH SALES ARE NOT SUBJE CTED TO VERIFICATION. THIS WAS THE SOLE REASON FOR MAKING THE ADDITION AS WELL AS LEVYING THE PENALTY UNDER SECTI ON 271(1)(C) OF THE ACT AGAINST THE ASSESSEE. THE HON' BLE BOMBAY HIGH COURT IN THE CASE OF R.B. JESSA RAM FAT EH CHAND V CIT 75 ITR 33, AND SIMILARLY, KERALA HIGH COURT IN THE CASE OF M. DURAI RAJ V CIT 83 ITR 484, HELD THAT THE BOOKS OF ACCOUNT CANNOT BE REJECTED IF IN CASH SALES, 10 NAMES AND ADDRESS OF THE PURCHASERS ARE NOT MENTION ED. THERE IS NO NEED TO MENTION NAME AND ADDRESS IN THE CASH SALES. THESE JUDGEMENTS SUPPORT THE VERSION OF THE ASSESSEE THAT MERE DIS-BELIEVING THE EXPLANATION OF THE ASSESSEE WOULD NOT BE ENOUGH TO LEVY THE PENALTY UN DER SECTION 271(1)(C) OF THE ACT AGAINST THE ASSESSEE F OR MERELY NOT MENTIONING THE COMPLETE DETAILS OF THE PURCHASE R IN THE CASH SALE BILLS. NO EVIDENCE HAS BEEN BROUGHT ON RECORD OF CONCEALMENT OF INCOME OR FILING INACCURAT E PARTICULARS OF INCOME IN RESPECT OF CASH SALES EXCE PT THE EXPLANATION OF ASSESSEE HAD BEEN FOUND TO BE UNACCEPTABLE. THEREFORE, IT WOULD NOT FOLLOW THE A MOUNT OF CASH SALES REPRESENTS INCOME OF THE ASSESSEE SO AS TO LEVY THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT . MERELY DIS-BELIEVING EXPLANATION OF THE ASSESSEE WAS NO GR OUND TO LEVY THE PENALTY. THE EXPLANATION OF ASSESSEE WAS N OT FOUND TO BE FALSE. NO MATERIAL IS BROUGHT ON RECOR D TO HOLD ASSESSEE HAD MADE ANY FALSE CLAIM OF CASH SALE S. IN OUR OPINION, IN THE CASH SALES BILLS, THERE WAS NO NEED TO MENTION THE COMPLETE NAMES AND ADDRESSES OF THE PURCHASERS FURTHER BECAUSE IF SOME CUSTOMER GAVE SO ME OTHER WRONG NAME AND ADDRESS TO THE SELLER, THE SEL LER IN THE INTEREST OF ITS BUSINESS WOULD BE BOUND TO RECO RD WHAT-SO-EVER ADDRESS HAVE BEEN SUPPLIED BY THE PURCHASER. THE FACTS AND CIRCUMSTANCES OF THE CASE , THEREFORE, CLEARLY SHOW THAT IT IS NOT A CASE OF FU RNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING PART ICULARS OF INCOME. THE LD. DR REFERRED TO EXPLANATION-I TO SECTION 11 271(1)(C) OF THE ACT IN SUPPORT OF THE ARGUMENT BUT THE SAME WOULD NOT BE APPLIED IN THE CASE OF THE ASSESS EE BECAUSE ASSESSEE HAS NOT FAILED TO OFFER ANY EXPLAN ATION AND THAT EXPLANATION OF ASSESSEE WAS NOT FOUND TO B E FALSE. FURTHER, THE EXPLANATION OF THE ASSESSEE IS SUBSTANTIATED BY THE SALE BILLS, SALES TAX CHALLANS AND SALES TAX ORDER PASSED BY THE VAT AUTHORITIES. FUR THER, EXPLANATION-I TO SECTION 271(1)(C) OF THE ACT DEALS WITH DEEMED CONCEALMENT OF INCOME. SINCE THE ASSESSEE H AS BEEN ABLE TO EXPLAIN ITS CASE THROUGH THE MATERIAL ON RECORD, THEREFORE, EXPLANATION-I TO SECTION 271(1)( C) OF THE ACT WOULD NOT APPLY AGAINST THE ASSESSEE. IT IS A MATTER OF RECORD ALSO THAT ASSESSEE MAINTAINED STOCK REGIS TER OF THE RAW MATERIAL PURCHASED AND PURCHASE BILLS WERE ALSO PRODUCED. THE ASSESSEE ALSO PLACED THE DETAILS OF RAW MATERIAL USED IN THE MANUFACTURING OF ITS PRODUCT, THEREFORE, THE SAME WOULD CLEARLY SHOW THAT ASSESSE E HAS BEEN ABLE TO EXPLAIN THAT IT IS NOT A FIT CASE OF L EVY OF PENALTY, IN THE GIVEN FACTS AND CIRCUMSTANCES OF TH E CASE. MERE NON MENTION OF COMPLETE DETAILS OF PURCHASER I N SALE BILLS WOULD NOT PER-SE MAKE OUT A CASE OF CONCEALME NT OF PARTICULARS OF INCOME. IT IS WELL SETTLED LAW THAT PENALTY IS NOT AUTOMATICALLY TO BE IMPOSED IN EACH AND EVERY C ASE. THE FACTS AND CIRCUMSTANCES OF THE CASE SHALL HAVE TO BE CONSIDERED BECAUSE LEVY OF THE PENALTY IS DISCRETIO NARY IN NATURE. THE HON'BLE SUPREME COURT IN THE CASE OF M /S RAJASTHAN SPINNING & WEAVING MILLS 2009-TIOL-63-SC HELD THAT ON EVERY DEMAND, PENALTY IS NOT AUTOMATIC . 12 9. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DISCUSSION, WE ARE OF THE VIEW THAT EVEN IF A DDITION ON QUANTUM HAVE BEEN SUSTAINED, HOWEVER ASSESSEE HA S BEEN ABLE TO MAKE OUT AN ARGUABLE AND DEBATABLE CAS E TO PROVE THAT PENALTY NEED NOT BE IMPOSED IN THIS CASE . WE, THEREFORE, DO NOT SUBSCRIBE TO THE VIEWS OF THE AUT HORITIES BELOW IN LEVYING AND SUSTAINING THE PENALTY UNDER S ECTION 271(1)(C) OF THE ACT. WE, ACCORDINGLY, SET ASIDE T HE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE PENALTY. 10. WE MAY CLARIFY THAT THE FINDINGS GIVEN IN THIS ORDER ARE RELEVANT TO THE PENALTY MATTER ONLY AND SHALL H AVE NO BEARING ON THE QUANTUM MATTER IN APPEAL ALREADY PEN DING BEFORE HON'BLE HIGH COURT. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH AUGUST,2015. SD/- SD/- (ANNAPURNA MEHROTRA) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25 TH AUGUST,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH