The ACIT, Central Circle-2, Surat V. V-3 Industries Pvt.Ltd., Surat

ITA 2012/AHD/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 6889 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 06-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 22-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEB JAIN
• Keywords: Unexplained investment; Income from undisclosed sources; Revised return
• Section: 133A; 115JB; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI D K TYAGI,JM & SHRI A N PAHUJA, AM ITA NO.2012/AHD/2009 (ASSESSMENT YEAR:-2007-08) ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 2, ROOM NO. 504,AAYAKAR BHAVAN,MAJURA GATE, SURAT V/S V-3 INDUSTRIES PVT. LTD., 410/B, GIDC, PANDESARA, SURAT PAN: AABCV 9908 J [APPELLANT] [RESPONDENT] ITA NO.2013/AHD/2009 (ASSESSMENT YEAR:-2007-08) ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 2, SURAT V/S SHREEJI PRINTS PVT. LTD., 412/B, GIDC, PANDESARA, SURAT PAN: AADCS 1502 M [APPELLANT] [RESPONDENT] ITA NO.2014/AHD/2009 (ASSESSMENT YEAR:-2007-08) ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 2, SURAT V/S KANISHKA PRINTS PVT. LTD., 178, GIDC, PANDESARA, SURAT PAN: AABCK 0020 G [APPELLANT] [RESPONDENT] REVENUE BY :- SHRI RAJEEB JAIN, DR ASSESSEE BY:- SHRI HARDIK VORA, AR O R D E R A N PAHUJA: THESE THREE APPEALS BY THE REVENUE DIRECTED AGAIN ST THREE SEPARATE ORDERS DATED 12-03-2009 OF THE LD. C IT(APPEALS)-II, AHMEDABAD, FOR THE ASSESSMENT YEAR 2007-08, RAISE THE FOLLOWING SIMILAR GROUNDS:- [1] THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DEL ETING THE PENALTY OF RS.8,41,500/- IN THE CASE OF M/S V-3 INDUSTRIES P. LTD., RS.67,32,000/- IN THE CASE OF M/S SHREEJI PRINTS P. LTD., AND ITA N OS.2012 TO 2014/AHD/2009 2 RS.50,49,000/- IN THE CASE OF M/S KANISHKA PRINTS P . LTD., WITHOUT CONSIDERING THE FACTS THAT THE ASSESSEE HAS FAILED TO EXPLAIN THE INCOME ADMITTED AS UNACCOUNTED INCOME OF RS.25,00,0 00/- IN THE CASE OF M/S V-3 INDUSTRIES P. LTD., RS.2,00,00,000/ - IN THE CASE OF M/S SHREEJI PRINTS P. LTD., AND RS.1,50,50,000/- IN THE CASE OF M/S KANISHKA PRINTS P. LTD., DURING THE COURSE OF SURV EY. [2] THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN DELETING THE PENALTY OF RS.8,41,500/- IN THE CASE OF M/S V-3 INDUSTRIES P. LTD., RS.67,32,000/- IN THE CASE OF M/S SHREEJI PRINTS P. LTD., AND RS.50,49,000/- IN THE CASE OF M/S KANISHKA PRINTS P . LTD., WITHOUT APPRECIATING THE FACTS OF THE CASE. [3] THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CANCELLING THE PENALTY IN COMPLETE DISREGARD TO THE RATIO LAID DOW N BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF NATIONAL TEXTILES VS. CIT (249 ITR 125). [4] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE CIT(A) OUGHT TO HAVE UPHELD THE ORDER OF THE AO. [5] IT IS, THEREFORE, PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED TO THE ABOVE EXTENT. 2 FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT A SEARCH UNDER SECTION 132 OF THE INCOME-TAX ACT, 1961 [HEREINAFTE R REFERRED TO AS THE ACT] WAS CONDUCTED IN RACHNA GROUP OF SURAT O N 8-02-2007. SIMULTANEOUSLY, A SURVEY U/S 133A OF THE ACT WAS UN DERTAKEN IN THE PREMISES OF THESE THREE COMPANIES. THE DIRECTOR OF THE COMPANY SHRI SANJAY AGARWAL, IN HIS STATEMENT DATED 9-02-20 07, ADMITTED A TOTAL INCOME OF RS.5 CRORES FOR THE ENTIRE GROUP FO R THE YEAR UNDER CONSIDERATION. OUT OF THE TOTAL DISCLOSURE OF RS.5 CRORES, AN AMOUNT OF RS.25 LACS WAS DISCLOSED DURING THE COURSE OF SU RVEY IN THE CASE OF V-3 INDUSTRIES PVT. LTD., RS.2 CRORES IN THE CAS E OF SHREEJI PRINTS PVT. LTD., AND RS.1.50 CRORES IN THE CASE OF KANISH KA PRINTS PVT. LTD. THE RELEVANT DETAILS OF DISCLOSURE AND INCOME RETUR NED/ASSESSED ARE DETAILED HEREUNDER:- NAME OF THE COMPANY DISCLOSURE DURING THE SURVEY INCOME RETURNED (RS.) DATE OF FILING OF RETURN INCOME ASSESSED (RS.) V-3 INDUSTRIES P. LTD. RS.25 LACS 32,96,974 11-02- 2008 32,96,974 ITA N OS.2012 TO 2014/AHD/2009 3 SHREEJI PRINTS P. LTD. RS.2 CRORES NIL/1,06,95,399 (BOOK PROFITS) 26-09- 2007 1,06,95,399 (BOOK PROFITS) KANISHKA PRINTS P. LTD. RS.1.50 CRORES NIL/1,52,12,920 (BOOK PROFITS) 11-02- 2008 1,52,12,920 (BOOK PROFITS SUBSEQUENTLY, ASSESSMENT WAS COMPLETED ON 30-06-200 8 ON THE RETURNED INCOME IN THE AFORESAID THREE CASES . IT MAY BE POINTED OUT THAT IN THE CASE OF SHREEJI PRINTS PVT. LTD. AND K ANISHKA PRINTS PVT. LTD., INCOME WAS ASSESSED IN TERMS OF PROVISIONS O F SEC. 115JB OF THE ACT. INTER ALIA, PENALTY PROCEEDINGS U/S 271(1) (C) WERE ALSO INITIATED IN THESE THREE CASES ON THE GROUND THAT T HE ASSESSEES FURNISHED INACCURATE PARTICULARS OF INCOME. 2.1 SUBSEQUENTLY, IN RESPONSE TO A SHOW CAUSE NOTIC E DATED 17- 09-2008 BEFORE LEVY OF PENALTY, THESE ASSESSEES REP LIED THAT RETURNED INCOME HAVING BEEN ACCEPTED, THERE WAS NO QUESTION OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS THEREOF AND CONSEQUENTLY NO PENALTY CAN BE LEVIED. HOWEVER, THE AO DID NOT ACCEPT THE SUBMISSIONS OF THE ASSESSEES ON THE GROU ND THAT THESE ASSESSEES DID NOT FILE ANY RETURN BEFORE COMMENCEME NT OF THE SEARCH ACTION AND THE ENTIRE INCOME DISCLOSED IN TH E RETURN WAS CONCEALED INCOME. ACCORDING TO THE AO, THERE WAS NO TRUE AND FULL DISCLOSURE AND THESE ASSESSEES DID NOT OFFER ANY EX PLANATION FOR THE UNACCOUNTED INCOME AND UNEXPLAINED INVESTMENT IN TH E STOCK AND OTHER ASSETS. ACCORDINGLY, THE AO OBSERVED THAT [1] THE ASSESSEE HAS FAILED TO GIVE ANY JUSTIFICAT ION OR ACCEPTABLE EXPLANATION FOR CHARGE OF CONCEALMENT; [2] THE ASSESSEE HAS NOT WILLFULLY FURNISHED ACTUAL AND TRUE RETURN OF INCOME DURING RELEVANT AY, BUT HAS BEEN F ORCED TO DO SO UPON DISCOVERIES MADE IN SEARCH AND SEIZUR E OPERATIONS; [3] THE RATIO AND TESTS LAID DOWN FOR LEVY OF PENAL TY AS IN THE CASES OF NATIONAL TEXTILES VS. CIT, 249 ITR 125 OF JURISDICTIONAL HIGH COURT ARE CLEARLY APPLICABLE TO THE CASE OF THE ASSESSEE. ITA N OS.2012 TO 2014/AHD/2009 4 [4] IN THE PENALTY PROCEEDINGS, THE ASSESSEE HAS FA ILED TO ADVANCE ANY EVIDENCE IN SUPPORT OF ITS CLAIMS AND CONTENTIONS AND THE ARGUMENTS OF THE ASSESSEE HAVE BEEN FOUND TO BE OF NO CONSEQUENCE AND BASELESS. TH E ELEMENT OF ANIMUS IS BLATANT IN ASSESSEES EVASIVE REPLIES. 2.2 WHILE HOLDING THAT THESE THREE ASSESSEES WER E NOT ENTITLED FOR THE PROTECTION IN TERMS OF THE EXCEPTION PROVIDED I N EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND REFERRING TO THE DECISIONS IN K C BUILDERS VS. ACIT [2004] 265 ITR 562 (SC), NATIONAL TEXTILES VS. CIT [249 ITR 125] AND HINDUSTAN STEEL LTD. VS. STATE OF ORISSA [1972] 83 ITR 26 (SC), THE AO IMPOSED PENALTY @ 100% ON THE TAX SOUGHT TO BE EVADED AS DETAILED HEREUNDER:- - IN THE CASE OF V-3 INDUSTRIES PVT. LTD. RS. 8,41 ,500/- - IN THE CASE OF SHREEJI PRINTS P. LTD. RS.67, 32,000/- - IN THE CASE OF KANISHKA PRINTS P LTD. RS.50,49 ,000/- 3. ON APPEAL, THE LEARNED CIT(A) CANCELLED THE PENA LTY IN THE CASE OF V-3 INDUSTRIES PVT. LTD. IN THE FOLLOWING TERMS:- 3.2 THE APPELLANT FURTHER SUBMITTED THAT THE AO HA S MISINTERPRETED THE FACTS OF THE CASE IN THE PENALTY ORDER FOR JUSTIFYI NG THE LEVYING OF PENALTY, AND HIS FINDINGS IN THIS REGARD ARE REBUTTED HEREIN AFTER FOR THE IMMEDIATE REFERENCE. A) IN PARA 1 PAGE 1 OF THE PENALTY ORDER, THE LEARN ED AO HAS WRONGLY STATED THAT THE ORIGINAL RETURNED INCOME OF THE APP ELLANT COMPANY WAS RS. NIL AND THE ASSESSED INCOME WAS RS.32,96,97 4/-. IN THIS REGARD, IT MAY BE NOTED THAT THE ORIGINAL-RETURNED INCOME IS RS.32,96,974/- AND NOT RS. NIL, AS IS EVEN MENTIONE D IN THE ORIGINAL ASSESSMENT ORDER ITSELF AND IS VERIFIABLE FROM THE COPY OF ORIGINAL RETURN OF INCOME ENCLOSED HEREINBEFORE. B) IN PARA 2 PAGE 1-2 OF THE PENALTY ORDER, THE AO IS MISLEADING THE FACTS BY STATING THAT THERE WAS A SEARCH ACTION U/S . 132 ON THE 'RACHNA GROUP' OF SURAT, OF WHICH THE APPELLANT COM PANY IS A MEMBER. IN THIS REGARD, IT MAY BE NOTED THAT THERE WAS A SURVEY U/S. 133A IN THE CASE OF THE APPELLANT COMPANY AND NO SE ARCH ACTION U/S. 132, HOWEVER, THE AO IS TRYING TO MISLEAD' THE FACTS AND IS ITA N OS.2012 TO 2014/AHD/2009 5 CONVENIENTLY SILENT AS REGARDS THE SURVEY ACTION IN THE CASE OF THE COMPANY. C) IN PARA 3 PAGE 2 OF THE PENALTY ORDER, THE LEARN ED AO IS HOLDING THAT THE SURRENDERED CONCEALED INCOME HAS NOT BEEN DISCL OSED IN THE BOOKS OF ACCOUNTS BY THE APPELLANT COMPANY. THE AFO RESAID ALLEGATION IS PATENTLY FALSE AS IN THE ORIGINAL ASS ESSMENT ORDER ITSELF, IT IS STATED THAT THE UNACCOUNTED INCOME HAS BEEN S HOWN IN THE PROFIT & LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERAT ION. D) IN PARA 4 PAGE 3 OF THE PENALTY ORDER, THE LEARN ED AO IS WRONGLY STATING THAT ADDITION TO THE TUNE OF RS.25 LACS HAS BEEN MADE IN THE ASSESSMENT ORDER AND PENALTY PROCEEDINGS HAVE BEEN INITIATED AGAINST THIS ADDITION. THIS STATEMENT IS ALSO PATEN TLY FALSE AND IS EVIDENT FROM THE ORIGINAL ASSESSMENT ORDER ITSELF, WHEREIN NO ADDITION WHATSOEVER, HAS BEEN MADE AND ONLY THE INC OME AS PER THE COMPUTATION OF INCOME HAS BEEN ACCEPTED. E) IN PARA 4 PAGE 3 OF THE PENALTY ORDER, THE LEARN ED AO IS FURTHER WRONGLY STATING THAT THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR BEFORE THE SEARCH ACTION AND THUS, ALL THE INCOME ARISING TO THE ASSESSEE IN THE RELEV ANT ASSESSMENT YEAR WAS CONCEALED FROM TAXATION. THE AFORESAID FIN DINGS REFLECTS NON-APPLICATION OF MIND OF THE LEARNED AO TO THE FA CTS OF THE CASE SINCE, THE YEAR UNDER CONSIDERATION IS A.Y. 2007-08 I.E. THE YEAR ENDING ON 31-03-2007 AND THE SURVEY ACTION HAS BEEN CONDUCTED ON 08-02-2007 I.E. BEFORE THE YEAR END AND HENCE, T HERE IS NO QUESTION OF THE APPELLANT COMPANY FILING ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BEFORE THE DATE OF SURVEY ACTION. HERE ALSO THE LEARNED AO IS USING THE WORD 'SEARCH' INSTEAD O F THE WORD 'SURVEY', TO MISLEAD THE FACTS OF THE CASE. F) IN PARA 5 PAGE 5-8 OF THE PENALTY ORDER, THE AO IS DISCUSSING ABOUT EXPLANATION 5 TO SECTION 271(1)(C) OF THE ACT AND A GAIN TRYING TO MISLEAD THAT THIS IS A DISCLOSURE MADE DURING SEARC H. IN THIS REGARD, IT IS ONCE AGAIN REITERATED THAT THIS IS NOT A CASE OF SEARCH U/S. 132 BUT IS A CASE OF SURVEY U/S. 133A OF THE ACT AND HE NCE, EXPLANATION 5 TO SECTION 271(1)(C) AS IS APPLICABLE TO SEARCH C ASES IS NOT AT ALL APPLICABLE TO THE APPELLANT COMPANY. G) IN PARA 6 PAGE 8-10 OF THE PENALTY ORDER, THE AO IS RELYING ON THE CASE OF K.C. BUILDERS V ACIT (2004) 265 ITR 562 (SC ), NATIONAL TEXTILES V. CIT (2001) 249 ITR 125 (GUJ) AND HINDUS TAN STEEL LTD. V. STATE OF ORISSA (1972) 83 ITR 26 (SC), TO JUSTIFY H IS ACT OF LEVYING THE PENALTY. IN THIS REGARD, IT MAY BE NOTED THAT A LL THE 3 CASES AS RELIED UPON BY THE AO ARE IN FAVOUR OF THE ASSESSEE , DELETING THE PENALTY. 3.3 THE APPELLANT FURTHER RELIED ON THE FOLLOWING D ECISIONS: ITA N OS.2012 TO 2014/AHD/2009 6 (A) THE HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF CIT V. UNIQUE PRECURED RETRADERS (2008) 13 DTR (RAJ) 215 HAS HELD THAT NO PENALTY IS LEVIABLE IN RESPECT OF DISCLOSURE OF ADD ITIONAL INCOME AFTER SURVEY. (B) THE HON'BLE HIGH COURT OF MADRAS IN THE CASE OF CIT V. M. PACHAMUTHU (2007) 295 ITR 502 (MAD) HAS HELD THAT M ERE ADDITION AGREED TO BY THE ASSESSEE DURING THE COURSE OF SURV EY WOULD NOT EMPOWER THE AO TO LEVY THE PENALTY U/S. 271(1)(C) O F THE ACT. (C) THE HON'BLE HIGH COURT OF PUNJAB & HARYANA IN THE CASE OF CIT V. HUKAMCHAND HARI PRAKASH (2002) 172 CTR (P&H) 27 1 HAS DELETED THE PENALTY U/S. 271(1)(C) OF THE ACT EVEN IN A CASE WHERE THE ASSESSEE FILED REVISED RETURN DECLARING A DDITIONAL INCOME AFTER A SURVEY OPERATION, HOLDING THAT THERE WA S NOTHING ON RECORD TO PROVE CONCEALMENT IN RESPECT OF ADDITIO NAL INCOME DECLARED AFTER SURVEY. 3.4 THE APPELLANT FURTHER SUBMITTED THAT NO UNACCOU NTED INVESTMENTS HAVE BEEN FOUND IN THE CASE OF THE APPELLANT COMPAN Y HOWEVER, ADDITIONAL INCOME HAS BEEN OFFERED DURING SURVEY ONLY TO BUY P EACE OF MIND AND TO AVOID LITIGATION, IN RESPECT OF ANY ERRORS, OMISSIO NS OR NON-COMPLETION, ETC. OF THE BOOKS OF ACCOUNTS, IN THE MIDDLE OF THE YEAR SINCE, AT THAT POINT OF TIME THE BOOKS ARE NEITHER COMPLETE NOR VERIFIED AN D CROSS-CHECKED BY THE MANAGEMENT NOR AUDITED BY THE STATUTORY AUDITORS. H ENCE, THE PENALTY U/S.271(1)(C) NEEDS TO BE DELETED. 4. I HAVE CONSIDERED THE FACTS AND SUBMISSIONS OF T HE APPELLANT. I AGREE WITH THE APPELLANT'S VIEW. THERE WAS SURVEY U /S.133A IN THE PREMISES OF THE APPELLANT COMPANY AND THE DIRECTOR SHRI SANJAY AGARWAL IN HIS STATEMENT HAD SURRENDERED AND OFFERED RS.25,00, 000/- AS ITS INCOME FOR THE CURRENT YEAR. THE SAME WAS OFFERED IN THE R ETURN OF INCOME FILED BEFORE DUE DATE AND PAID THE TAX THEREON. THE ASSES SMENT HAS BEEN COMPLETED AT RETURNED INCOME. AS THE INCOME WAS OFF ERED DURING THE COURSE OF SURVEY U/S.133A, EXPLANATION 5 TO SECTION 271(1)(C) IS NOT APPLICABLE HERE. AS PER DECISION OF THE-HON'BLE HIGH COURT OF RAJAST HAN IN THE CASE OF C/T V. UNIQUE PRECURED RETRADERS (2008) 13 DTR (RAJ) 21 5, NO PENALTY IS LEVIABLE IN RESPECT OF DISCLOSURE OF ADDITIONAL INC OME AFTER SURVEY. AS PER DECISION OF THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF CIT V. M. PACHAMUTHU (2007) 295 ITR 502 (MAD), MERE ADDITI ON AGREED TO BY THE ASSESSEE DURING THE COURSE OF SURVEY WOULD NOT EMPO WER THE AO TO LEVY THE PENALTY U/S. 271(1)(C) OF THE ACT. FURTHER AS PER DECISION OF THE HON'BLE HIGH COURT O F PUNJAB & HARYANA IN THE CASE OF CIT VS. HUKAMCHAND HARI PRAKASH (2002) 172 CTR (P&H) ITA N OS.2012 TO 2014/AHD/2009 7 271, THE PENALTY U/S. 271(1)(C) OF THE ACT IS NOT L EVIABLE EVEN IN A CASE WHERE THE ASSESSEE FILED REVISED RETURN DECLARING A DDITIONAL INCOME AFTER A SURVEY OPERATION, HOLDING THAT THERE WAS NOTHING ON RECORD TO PROVE CONCEALMENT IN RESPECT OF ADDITIONAL INCOME DECLARE D AFTER SURVEY. 5. IN VIEW OF THE FACTS AND THE RATIOS OF THE CASE LAWS DISCUSSED ABOVE, IT IS HELD THAT THE ASSESSING OFFICER WAS NOT JUSTI FIED IN LEVYING THE PENALTY U/S.271(1)(C) OF THE I.T. ACT. ACCORDINGLY, THE PEN ALTY IS DELETED. 3.1 FOR SIMILAR REASONS , PENALTY WAS CANCELLED IN THE CASE OF SHREEJI PRINTS P. LTD. AND KANISHKA PRINTS P LTD.. 4. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST T HE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR WHI LE RELYING UPON THE DECISIONS IN THE CASE OF LMP PRECISION ENGG. CO . LTD. VS. DCIT [1997] 64 ITD 42 (AHD), HASMUKHBHAI M PATEL VS. ITO [2004] 85 ITD 152 (AHD), CRN INVESTMENTS (P) LTD. VS. CIT [2008] 300 ITR 342 (MAD) AND JYOTI LAXMAN KONKAR VS. CIT [2007] 292 I TR 163 (BOM), SUPPORTED THE FINDINGS OF THE AO, LEVYING THE PENAL TY. ON THE OTHER HAND, THE LEARNED AR ON BEHALF OF THE ASSESSEE, WHI LE RELYING UPON THE DECISIONS IN THE CASE OF CIT VS. M PACHAMUTHU [ 2007] 295 ITR 502 (MAD), CIT VS. UNIQUE PRECURED RETRADERS [2008] 13 DTR (RAJ) 215,) DCIT VS. DR. SATISH B GUPTA [ITA NO.1482/AHD/ 2010, ORDER DATED 06-08-2010], GULAMRASUL M PATHAN VS. ACIT [19 96] 57 ITD 129 (AHD) AND ACIT VS. GANDEVIKAR JEWELLERS [ITA NO.301/AHD/2005, ORDER DATED 11-09-2008 ]SUPPORTED THE FINDINGS OF THE LEARNED CIT(A). 5. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. INDISPUTABLY, THE DISCLOSURE OF RS.25 LAC S IN THE CASE OF V-3 INDUSTRIES PVT. LTD., RS.2 CRORES IN THE CASE O F SHREEJI PRINTS PVT. LTD., AND RS.1.50 CRORES IN THE CASE OF KANISH KA PRINTS PVT. LTD., WAS MADE DURING THE COURSE OF SURVEY U/S 133A OF THE ACT AS CONCLUDED BY THE LD. CIT(A) AND NOT DURING THE COUR SE OF SEARCH AS MENTIONED BY THE AO. THUS, RECOURSE TO EXPLANATION 5 TO SECTION ITA N OS.2012 TO 2014/AHD/2009 8 271(1)(C) WAS TOTALLY MISPLACED BY THE AO, AS CONCL UDED BY THE LEARNED CIT(A). SINCE THE ENTIRE AMOUNT DISCLOSED D URING THE COURSE OF SURVEY WAS OFFERED TO TAX IN THE ORIGINAL RETURN FOR THE YEAR UNDER CONSIDERATION , WE ARE OF THE OPINION THAT NO PENAL TY IS LEVIABLE IN SUCH SITUATION SINCE THE CONCEALMENT OF THE PARTICU LARS OF INCOME IS EFFECTED ONLY WHEN AN ASSESSEE FILES THE RETURN OF INCOME AND DOES NOT DISCLOSE THE PARTICULARS OF INCOME OF THAT YEAR [BRIJ MOHAN VS. CIT, 120 ITR 1(SC),CIT VS. ONKAR SARAN & SONS,195 ITR1(SC),B.N.SHARMA VS. CIT, 226 ITR 442(SC)]. THE BASIS FOR LEVY OF PENALTY IS RETURN OF INCOME. IF A NY AMOUNT HAS BEEN SHOWN IN THE RETURN OF INCOME THEN IT CANNOT BE SAID THAT ASSESS EE HAS CONCEALED ANY PARTICULARS OF THAT INCOME OR FURNISHED INACCURATE PARTICULARS THEREOF. THERE CANNOT BE ANY CONCEALMENT PRIOR TO FILING OF RETURN . WHERE THE AO ACCEPTS THE INCOME DECLARED IN THE RETURN, APPARENTLY, THE ASSE SSEE CANNOT BE ATTRIBUTED ANY CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS THEREOF. THIS VIEW OF OURS IS SUPPORTED BY THE DECISION DAT ED 6-08-2010 OF A CO-ORDINATE BENCH IN DCIT VS. DR. SATISH B GUPTA IN ITA NO.1482 /AHD/2010 AS ALSO BY THE DECISION DATED 11.9.2008 IN THE CASE OF GANDEVIKAR JEWELLERS PVT. LTD. IN ITA NO.201/AHD./2005 FOR THE AY 2002-03, FOLLOWING THE DECISIONS DATED 14.1.2004 IN THE CASE OF MAHESH K LADLA IN ITA NO.130/AHD./2002 FOR THE AY 1996-97 AS ALSO THE DECISION DATED 22.1.2003 IN SANT RAM PARMANAND ,1 S OT 312(DELHI).THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS. UNIQUE PRECURED RETRADERS [2008] 13 DTR (RAJ) 215 C ONCLUDED THAT NO PENALTY IS LEVIABLE IN RESPECT OF DISCLOSURE OF ADDITIONAL INCOME AFTER THE SURVEY. 5.1. AS REGARDS DECISIONS IN THE CASE O F LMP PRECISION ENGG. CO. LTD. VS. DCIT [1997] 64 ITD 42 (AHD), HASMUKHBH AI M PATEL VS. ITO [2004] 85 ITD 152 (AHD), CRN INVESTMENTS (P) L TD. VS. CIT [2008] 300 ITR 342 (MAD) AND JYOTI LAXMAN KONKAR V S. CIT [2007] 292 ITR 163 (BOM), WE HAVE GONE THROUGH THES E DECISIONS AND FIND THAT FACTS AND CIRCUMSTANCES IN THESE DE CISIONS ARE ITA N OS.2012 TO 2014/AHD/2009 9 ALTOGETHER DIFFERENT FROM THE FACTS AND CIRCUMSTAN CES IN THE INSTANT CASES. IN NONE OF THESE DECISIONS, INCOME WAS DISCL OSED IN CONSEQUENCE OF SURVEY IN THE ORIGINAL RETURNS, AS IS THE SITUATION IN THE INSTANT CASES.IN ALL THESE DECISIONS , ADDITION AL INCOME WAS DISCLOSED IN THE REVISED RETURNS IN CONSEQUENCE OF DISCREPANCIES NOTICED DURING THE COURSE OF SURVEY. THUS, RELIANCE BY THE LD. DR ON THESE DECISIONS IS TOTALLY MISPLACED. 5.11 EVEN THE FACTS AND CIRCUMSTANCES IN NATION AL TEXTILES(SUPRA) RELIED ON IN THE GROUNDS OF APPEAL WERE ALTOGETHER DIFFERENT. IN THIS DECISION IN THE ASSESSMENT FOR THE AY 1974-75, THE ASSESSEE IN HIS REVISED RETURN SHOWED AN INCOME OF RS. 95,641.THE INCOME-TAX OFFICER, HOWEVE R, MADE ADDITIONS TO THE INCOME ON TWO COUNTS : RS. 80,000 IN RESPECT OF UNE XPLAINED CASH CREDIT IN THE NAME OF ONE MERCHANT BROTHERS AND RS. 90,000 IN RES PECT OF CERTAIN SQUARED UP ACCOUNTS. THE ISSUE BEFORE THE HONBLE HIGH COURT WAS WHETHER THE TRIBUNAL WAS JUSTIFIED IN LAW IN CONFIRMING THE PENALTY LEVI ED UNDER SECTION 271(1)(C) OF THE ACT TO THE EXTENT OF RS. 90,000? HONBLE HIGH COURT HELD IT WAS A CASE WHERE THERE WAS NO CIRCUMSTANCE TO LEAD TO A REASONABLE A ND POSITIVE INFERENCE THAT THE ASSESSEE'S CASE-THAT THE CASH CREDITS WERE ARRANGED AS TEMPORARY LOANS, WAS FALSE. THE FACTS AND CIRCUMSTANCES WERE EQUALLY CON SISTENT WITH THE HYPOTHESIS THAT IT COULD HAVE BEEN SUNDRY LOANS IN SMALL AMOUN TS OBTAINED FROM DIFFERENT PARTIES. THEREFORE EVEN TAKING RECOURSE TO EXPLANAT ION 1, THE SAME CIRCUMSTANCES OR STATE OF EVIDENCE ON WHICH THE CASH CREDITS WERE TREATED AS INCOME, COULD NOT BY THEMSELVES JUSTIFY IMPOSITION OF PENALTY WITHOUT ANYTHING MORE ON RECORD PRODUCED BY THE ASSESSEE OR THE DEPARTMENT. EVIDENT LY, SUCH ARE NOT THE FACTS IN THE INSTANT CASES BEFORE US. THUS, RELIANCE ON THIS DECISION IS ALSO MISPLACED. 5.2. EVEN OTHERWISE, IN THE CASES OF SHREEJI PRINTS P. LTD. AND KANISHKA PRINTS P. LTD., ONLY BOOK PROFITS HAVE BEE N ASSESSED AS INCOME. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V. NALWA SONS INVESTMENTS LTD. [2010] 327 ITR 543 (DELHI) HA VE HELD THAT IF TAX IS PAID ON THE INCOME ASSESSED U/S 115JB OF THE ACT, CONCEALMENT OF INCOME HAD NO ROLE TO PLAY AND WAS T OTALLY IRRELEVANT. ITA N OS.2012 TO 2014/AHD/2009 10 5.3 IN VIEW OF THE FOREGOING, ESPECIALLY WHEN THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL, CONTROVERTING TH E FINDINGS OF THE LD. CIT(A) IN THESE THREE CASES, SO AS TO ENABLE U S TO TAKE A DIFFERENT VIEW IN THE MATTER, WE ARE NOT INCLINED T O INTERFERE. THEREFORE, GROUND NOS. 1 TO 3 IN THESE THREE APPEAL S ARE DISMISSED. 6. GROUND NOS. 4 & 5 BEING GENERAL IN NATURE, DO N OT REQUIRE ANY SEPARATE ADJUDICATION, AND ARE ,THEREFORE, DISMISSE D. 7. IN THE RESULT, THESE THREE APPEALS ARE DISMISSE D. ORDER PRONOUNCED IN THE COURT TODAY ON 8 -04-2011 SD/- SD/- (D K TYAGI) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 8-04-2011 COPY OF THE ORDER FORWARDED TO: 1. 2. 3 V-3 INDUSTRIES PVT. LTD., 410/B, GIDC, PANDESARA, S URAT SHREEJI PRINTS PVT. LTD., 412/B, GIDC, PANDESARA, S URAT KANISHKA PRINTS PVT. LTD., 178, GIDC, PANDESARA, SU RAT 4. E ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-2, SURAT 5. CIT CONCERNED 6. CIT(A)-II, AHMEDABAD 7. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 8. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, AHMEDABAD