Hotel Woodland Private Limited, Nashik V. Deputy Commissioner of Income-tax,

ITA 221/PUN/2014

• Counselvise Citation: 22124514 RSA 2014
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL PATHAK
• Keywords: Business income; Depreciation; Income from undisclosed sources; Peak credit; Bonafide belief; Wrong claim; Reason to believe
• Section: 32

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS. 220 TO 222/PN/2014 (ASSESSMENT YEARS : 2004-05 TO 2006-07) HOTEL WOODLAND PRIVATE LTD., WANI HOUSE, NEW MUMBAI NAKA, NASHIK 422002 PAN NO.AAACH5758F .. APPELLANT VS. DCIT, CIRCLE-1, NASHIK .. RESPONDENT ASSESSEE BY : SHRI SUNIL PATHAK REVENUE BY : SHRI RAVI PRAKASH DATE OF HEARING : 06-05-2015 DATE OF PRONOUNCEMENT : 20-05-2015 ORDER PER R.K.PANDA, AM : THE ABOVE 3 APPEALS FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE ORDER DATED 29-11-2013 OF THE CIT(A)-I, NASHIK RELATING TO ASSESSMENT YEARS 2004-05 TO 2006-07 RES PECTIVELY. SINCE COMMON GROUNDS HAVE BEEN TAKEN BY THE ASSESSE E IN ALL THESE APPEALS, THEREFORE, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2. LEVY OF PENALTY OF RS.6,72,866/- FOR A.Y. 2004-0 5, RS.6,00,961/- FOR A.Y. 2005-06 AND RS.4,99,120/- FO R A.Y. 2006- 07 U/S.271(1)(C) OF THE I.T. ACT BY THE AO AND UPHE LD BY THE CIT(A) IS THE ONLY ISSUE RAISED BY THE ASSESSEE IN THE GROUNDS OF APPEAL FOR THE ABOVE 3 APPEALS. 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND DERIVED INCOME FROM DIVIDEND AN D RENT DURING THE RELEVANT PREVIOUS YEARS. DURING THE FINA NCIAL YEARS 2003-04, 2004-05 & 2005-06, THE ASSESSEE WAS CONSTR UCTING A BUILDING FOR THE PURPOSE OF ITS BUSINESS. THE RENTA L INCOME DURING THE RELEVANT YEARS WAS DERIVED FROM LETTING OUT PAR T OF THE PARTLY CONSTRUCTED BUILDING AND THE OPEN SPACES AROUND IT FOR MARRIAGES AND OTHER CEREMONIES. THE RETURN OF INCOME FOR ALL THE RELEVANT ASSESSMENT YEARS WERE FILED ON MARCH 18, 2009 DECLA RING LOSSES OF RS.11,71,461/- FOR A.Y. 2006-07, RS.16,75,277/- FOR A.Y.2005-06 AND RS. 15,50,009/- FOR A.Y. 2004-05. F OR ALL THE THREE PREVIOUS YEARS RELEVANT TO A.YS. 2004-05, 200 5-06 & 2006- 07 THE ASSESSEE HAD CLAIMED DEPRECIATION IN THE BOO KS ON ALL THE ASSETS. ASSESSEE CLAIMED DEPRECIATION IN RESPECT OF THE FIXED ASSETS FOR INCOME TAX PURPOSE ALSO. THE ASSESSEE US ED THE PARTLY CONSTRUCTED BUILDING FOR LETTING OUT AND BEING A CO MPANY OTHER FIXED ASSETS LIKE FURNITURE AND FIXTURE, COMPUTERS, ETC. WERE USED FOR THE PURPOSE OF GENERAL ADMINISTRATION AND FOR M ANAGING DAY- TO-DAY AFFAIRS OF THE ASSESSEE COMPANY. THE ASSESSE E CLAIMED DEPRECIATION ON THEM UNDER SECTION 32 OF THE ACT. 4. DURING SCRUTINY ASSESSMENT PROCEEDINGS, THE AO ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE DEPRECIATION CLAI M SHOULD NOT BE DISALLOWED SINCE (I) THE ASSESSEE HAD NOT CARRIE D OUT ANY BUSINESS DURING THE CONCERNED PERIOD (II) THE RENT RECEIVED BY THE ASSESSEE WAS OFFERED AS 'INCOME FROM HOUSE PROPERTY AND (III) FOR THE PURPOSE OF CLAIMING DEPRECIATION, THE PRIMA RY AND 3 FOREMOST CONDITION IS THAT THE ASSET MUST BE USED F OR THE BUSINESS DURING THE PERIOD FOR WHICH DEPRECIATION HAS BEEN C LAIMED. 5. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASS ESSEE AGREED FOR DISALLOWANCE OF DEPRECIATION. AMONG OTHE R ADDITIONS, THE AO DISALLOWED THE WHOLE CLAIM OF DEPRECIATION O F RS.14,82,826/- FOR A.Y. 2006-07, RS.16,42,307/- FOR A.Y. 2005- 06 AND RS.18,37,820/- FOR A.Y. 2004-05. THE ASSESSE E FILED AN APPEAL BEFORE THE LD.CIT(A)-I AGAINST THE ORDER OF THE AO. THE CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE AS REGARD S THE OTHER GROUNDS OF APPEAL ARE CONCERNED. HOWEVER, THE DISA LLOWANCE ON ACCOUNT OF DEPRECIATION WAS CONFIRMED BY THE CIT(A) ON THE GROUND THAT THERE WAS NOTHING ON RECORD TO SUGGEST THAT THE ASSESSEE HAD NOT AGREED FOR PART DISALLOWANCE OF DE PRECIATION. THE ORDER OF THE CIT(A) WAS CONFIRMED BY THE MUMBAI BENCH OF THE TRIBUNAL VIDE ORDER DATED 31-01-2012 ON THE GRO UND THAT THERE WAS NO SUFFICIENT MATERIAL BEFORE THE TRIBUNA L TO INTERFERE WITH THE ORDERS OF THE LOWER AUTHORITIES AS REGARDS THE CLAIM OF DEPRECIATION. 6. SUBSEQUENTLY, THE AO INITIATED PENALTY PROCEEDIN GS U/S.271(1)(C) OF THE I.T. ACT. HE OBSERVED THAT TH E ASSETS WERE NOT PUT TO USE FOR THE PURPOSE OF RUNNING BUSINESS ACTIVITY IN THE YEARS UNDER CONSIDERATION. IN RESPONSE TO THE SAME IT WAS SUBMITTED BY THE ASSESSEE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS AGREED FOR DISALLOWANC E OF CLAIM FOR DEPRECIATION UNDER BONAFIDE BELIEF THAT ON HIS AGRE EING FOR ADDITION DEPARTMENT WILL NOT INITIATE PENALTY. IT WAS ARGUED THAT 4 THE ASSESSEE HAS NOT CONCEALED PARTICULARS OF INCOM E OR FILED INACCURATE PARTICULARS OF INCOME. DUE TO CERTAIN L EGAL CONTENTION EXPENDITURE WAS DISALLOWED AND INCOME RETURNED BY T HE ASSESSEE WAS ENHANCED BY THE AO. IT WAS ARGUED THAT THE ASS ESSEE HAS ACTUALLY INCURRED EXPENDITURE UNDER THE HEAD DEPREC IATION. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANAT IONS GIVEN BY THE ASSESSEE. REJECTING THE VARIOUS EXPLANATION S GIVEN BY THE ASSESSEE AND DISTINGUISHING THE VARIOUS DECISIONS C ITED BEFORE HIM THE AO LEVIED PENALTY OF RS.6,72,866/- FOR A.Y. 2004-05, RS.6,00,961/- FOR A.Y. 2005-06 AND RS.4,99,120/- FO R A.Y. 2006- 07 U/S.271(1)(C) OF THE I.T. ACT, 1961. 7. BEFORE CIT(A) THE ASSESSEE SUBMITTED THAT AS PER THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF RALLIWOLF LTD. REPORTED IN 121 ITR 262 AND EXPLANAT ION 5 TO SECTION 32(1) THE ASSESSEE HAD A BONAFIDE REASON TO BELIEVE THAT DEPRECIATION IS ALLOWABLE. IT WAS UNDER THIS BONAF IDE BELIEF THAT THE ASSESSEE CLAIMED DEPRECIATION AS DEDUCTION IN T HE COMPUTATION OF INCOME. IT WAS ARGUED THAT ALTHOUGH THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME U/S.139(1), HOWE VER, THE RETURN WAS DULY FILED U/S.139(4) OF THE I.T. ACT. RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED BEFORE THE LD.CIT(A) THA T THERE WAS A BONAFIDE BELIEF ON THE PART OF THE ASSESSEE TO CLAI M SUCH DEPRECIATION. REFERRING TO THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LT D., REPORTED IN 322 ITR 158 IT WAS SUBMITTED THAT MERE REJECTION OF A LEGAL CLAIM DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICU LARS OF INCOME 5 OR CONCEALMENT OF INCOME. REFERRING TO THE DECISIO N OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. NA LIN SHAH HUF VIDE ITA NO.49/2013 ORDER DATED 15-07-2013 IT W AS SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID D ECISION HAS HELD THAT IF THE CLAIM OF THE ASSESSEE WAS NOT SUST AINABLE IN LAW BUT THERE WAS NO FURNISHING OF INACCURATE PARTICULA RS OR CONCEALMENT OF INCOME ON THE PART OF THE ASSESSEE, NO PENALTY CAN BE LEVIED. THE ASSESSEE FINALLY SUBMITTED THAT SIN CE THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE DIFFERENT AND INDEPENDENT OF EACH OTHER, THE ADDITION TO THE INCOME OF THE ASSESSEE DOES NOT PER SE WARRANT THE LEVY OF PENALT Y. 8. HOWEVER, THE LD.CIT(A) WAS NOT SATISFIED WITH TH E EXPLANATION GIVEN BY THE ASSESSEE. HE REJECTED THE SUBMISSION OF THE ASSESSEE THAT ALL BONAFIDE DISCLOSURES WERE MAD E IN THE AUDIT REPORT AND OTHER FINANCIAL STATEMENTS AND THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF INCOME. RELYING ON THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE MAK DATA PVT. LTD. VS. CIT VIDE CIVIL A PPEAL NO.9772/2013 ORDER DATED 30-10-2013 AND THE DECISIO N OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. HCI L KALINDEE ARSSPL HE UPHELD THE PENALTY LEVIED BY THE AO FOR A LL THE 3 ASSESSMENT YEARS. 9. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSE SSEE IS IN APPEAL BEFORE US. 6 10. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOS ED THE ORDER OF THE CIT(A). REFERRING TO PARA 3 OF THE OR DER OF THE CIT(A) HE SUBMITTED THAT IT IS AN UNDISPUTED FACT T HAT THE ASSESSEE HAS SHOWN THE RENTAL INCOME DURING THE RELEVANT YEA RS FROM LETTING OUT A PART OF THE PARTLY CONSTRUCTED BUILDI NG AND THE OPEN SPACES AROUND IT FOR MARRIAGES AND OTHER CEREMONIES . REFERRING TO PAGES 5 TO 7 OF THE PAPER BOOK THE LD. COUNSEL F OR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE COMPUTATION OF INCOME FOR A.YRS. 2004-05 TO 2006-07 WHERE SUCH INCOME HAS BEE N SHOWN UNDER THE HEAD INCOME FROM HOUSE PROPERTY. REFER RING TO PAGE36 OF THE PAPER BOOK THE LD. COUNSEL FOR THE AS SESSEE DREW THE ATTENTION OF THE BENCH TO THE TRADING PROFIT AN D LOSS ACCOUNT FOR THE YEAR ENDING 31-03-2005 WHERE SUCH INCOME HA S BEEN SHOWN IN THE PROFIT AND LOSS ACCOUNT AND THE ASSESS EE HAS ALSO DEBITED ELECTRICITY CHARGES OF RS.88,466/-, LABOUR CHARGES OF RS.49,305/-AND TELEPHONE EXPENSES OF RS.28,404/- ET C. HE SUBMITTED THAT THE ASSESSEE HAD DISCLOSED ALL MATER IAL FACTS NECESSARY FOR ASSESSMENT AND THE ASSESSMENT WAS BAS ED ON THE PARTICULARS DISCLOSED BY THE ASSESSEE IN THE PROFIT AND LOSS ACCOUNT AND COMPUTATION OF INCOME AND THERE WAS NOT HING UNEARTHED DURING THE COURSE OF ASSESSMENT PROCEEDIN GS. HE SUBMITTED THAT BY SHOWING RENTAL INCOME FROM LETTIN G OUT OF PROPERTY OF THE HOTEL IT IS PROVED THAT THE HOTEL H AS STARTED AND THE BUILDING WAS EXISTING. MERELY BECAUSE THE ASSESSEE UNDER MISTAKEN BELIEF HAS DECLARED SUCH INCOME AS RENTAL INCOME, THE SAME CANNOT BE THE BASIS FOR LEVYING PENALTY U/S.27 1(1)(C) OF THE 7 I.T. ACT. HE SUBMITTED THAT DURING MARRIAGE FUNCTI ONS THE ROOMS OF THE HOTELS WERE GIVEN, THE KITCHEN WAS ALSO GIVE N TO THE MARRIAGE PARTY AND THE INCOME FROM SUCH MARRIAGE FU NCTIONS COULD HAVE BEEN DECLARED UNDER THE HEAD BUSINESS I NCOME OR INCOME FROM OTHER SOURCES. HE SUBMITTED THAT HAD THERE BEEN NO HOTEL, THERE WOULD NOT HAVE BEEN ANY RENTAL INCO ME. 11. REFERRING TO THE COMPUTATION OF INCOME FOR A.YR S. 2004- 05 TO 2006-07 PLACED AT PAGES 5 TO 8 OF THE PAPER B OOK HE SUBMITTED THAT HOUSE TAX AMOUNTING TO RS.1,37,765/- EACH FOR A.YRS. 2004-05 AND 2005-06 AND RS.1,37,758/- FOR A. Y. 2006-07 WAS ALSO CLAIMED IN THE COMPUTATION OF INCOME FROM HOUSE PROPERTY. ALL THESE THINGS PROVE THAT THE HOTEL BU ILDING WAS IN EXISTENCE. IT WAS USED FOR THE BUSINESS OF THE ASS ESSEE BY LETTING OUT FOR MARRIAGE FUNCTIONS ETC. THEREFORE, MERELY BECAUSE THE RENTAL INCOME HAS BEEN SHOWN UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND DEPRECIATION CLAIMED, SUCH DISA LLOWANCE OF DEPRECIATION CANNOT BE THE BASIS FOR LEVYING PENALT Y U/S.271(1)(C) OF THE I.T. ACT. REFERRING TO THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT. LT D., REPORTED IN 322 ITR 158 HE SUBMITTED THAT THE HONBLE SUPREME C OURT IN THE SAID DECISION HAS HELD THAT A MERE MAKING OF THE CL AIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACC URATE PARTICULARS. HE SUBMITTED THAT THE EXPLANATION OF THE ASSESSEE 8 HAS NOT BEEN DISPROVED, THEREFORE, NO PENALTY U/S.2 71(1)(C) OF THE I.T. ACT CAN BE LEVIED. 12. REFERRING TO THE DECISION OF THE HONBLE GUJARA T HIGH COURT IN THE CASE OF NATIONAL TEXTILES VS. CIT REPO RTED IN 249 ITR 125 HE SUBMITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT IN ABSENCE OF ANY POSITIVE E VIDENCE THAT EXPLANATION WAS FALSE, APPLICATION OF EXPLANATION T O SECTION 271(1)(C) IS NOT JUSTIFIED. ACCORDINGLY, THE PENAL TY LEVIED WAS CANCELLED. REFERRING TO THE DECISION OF THE DELHI BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. JMD ADVISORS PVT. LTD. REPORTED IN 310 ITR 280 HE SUBMITTED THAT THE TRIBU NAL HAS HELD THAT A MERE CHANGE OF HEAD OF INCOME BY THE AO IN T HE ASSESSMENT CANNOT BE CONSTRUED AS CONCEALMENT AS EN VISAGED IN SECTION 271(1)(C) OF THE I.T. ACT SO AS TO ATTRACT THE PENAL PROVISIONS THEREIN. HE SUBMITTED THAT IN THE INSTA NT CASE IT WAS NOT A BOGUS CLAIM BUT WAS A BONAFIDE CLAIM, THEREFO RE, THERE IS NO JUSTIFICATION FOR LEVY OF PENALTY U/S. 271(1)(C) OF THE I.T. ACT. 13. REFERRING TO VARIOUS DECISIONS OF THE TRIBUNAL HE SUBMITTED THAT IT HAS BEEN HELD IN ALL THESE DECISIONS THAT E VEN WHEN THE ASSESSEE COULD NOT PROVE THAT THE ASSET WAS USED, S TILL NO PENALTY COULD BE LEVIED. FOR THE ABOVE PROPOSITION, HE REL IED ON THE DECISIONS REPORTED IN 53 ITD 245, 53 ITD 370, 47 I TD 383 AND 68 ITD 117. 14. HE SUBMITTED THAT ASSESSEE HAS NOT CONCEALED AN Y PARTICULARS OF INCOME AND HAS MADE A BONAFIDE DISCL OSURE OF 9 MATERIAL FACTS. HE SUBMITTED THAT THE CLAIM OF DEP RECIATION MAY BE INCORRECT IN LAW BUT THE FACT REMAINS THAT ALL M ATERIAL FACTS ARE DISCLOSED, THEREFORE, THERE IS NEITHER ANY CONCEALM ENT NOR FILING OF ANY INACCURATE PARTICULARS OF INCOME. THEREFORE , THERE IS NO JUSTIFICATION FOR LEVY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT. 14.1 REFERRING TO THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF MAK DATA PVT LTD., VS. CIT REPORTED IN 263 CTR (SC) 1 HE SUBMITTED THAT THE ABOVE DECISION IS NOT APPLICA BLE TO THE FACTS OF THE CASE OF THE ASSESSEE. IN THAT CASE INCRIMIN ATING DOCUMENTS WERE FOUND DURING THE COURSE OF SURVEY AND TO BUY P EACE THE ASSESSEE HAD SURRENDERED THE INCOME FOR WHICH THE P ENALTY WAS CONFIRMED. WHEN THE MATTER TRAVELLED UPTO HONBLE SUPREME COURT IT WAS HELD THAT THE AO SHALL NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE SUCH AS VOLUNTARY DISCLOSURE, BUY PEACE, AVOID LITIGATION, AMICABLE SETTLEMENT ETC. TO EXPLA IN ON ITS CONDUCT. IT WAS HELD THAT THE SURRENDER OF INCOME IN THAT CASE WAS NOT VOLUNTARY IN THE SENSE THAT THE OFFER OF SU RRENDER WAS MADE IN VIEW OF DETECTION MADE BY THE AO IN THE SEA RCH CONDUCTED IN THE SISTER CONCERN OF THE ASSESSEE. U NDER THOSE CIRCUMSTANCES, IT CANNOT BE SAID THAT THE SURRENDER OF INCOME WAS VOLUNTARY. HOWEVER, FACTS IN THE INSTANT CASE ARE COMPLETELY DIFFERENT. ALL MATERIAL FACTS NECESSARY FOR COMPLE TION OF THE ASSESSMENT WERE VERY MUCH THERE IN THE RETURN OF IN COME FILED. THEREFORE, THE SAID DECISION IS NOT APPLICABLE. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE LD.CIT(A) BE REVERS ED AND THE PENALTY LEVIED U/S.271(1)(C) OF THE I.T. BE CANCELL ED. 10 15. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHE R HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBM ITTED THAT THE ASSESSEE IS A CLOSELY HELD COMPANY AND FILED THE RE TURN OF INCOME IN RESPONSE TO NOTICE U/S.148. HE SUBMITTED THAT W HENEVER THERE IS A DIFFERENCE BETWEEN THE INCOME RETURNED AND INC OME ASSESSED THE ONUS SHIFTS ON THE ASSESSEE TO EXPLAIN THE BONA FIDENESS OF SUCH DIFFERENCE IN THE INCOME. THE ASSESSEE HAS NO T SATISFACTORILY EXPLAINED THE REASON AS TO WHY THE PENALTY SHOULD N OT BE LEVIED. THEREFORE, THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MAK DATA (SUPRA) IS SQUARELY APPLICABLE. 16. THE LD. COUNSEL FOR THE ASSESSEE IN HIS REJOIND ER SUBMITTED THAT THE ASSESSEE HAD DISCLOSED EVERYTHING AND THE AO MADE THE ADDITION ON THE BASIS OF THE RETURN AND NOT ON THE BASIS OF ANY INVESTIGATION. REFERRING TO THE DECISION OF THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF BHIMJI BHANJEE AND CO. RE PORTED IN 146 ITR 145 HE SUBMITTED THAT THE HONBLE HIGH COUR T IN THE SAID DECISION HAS HELD THAT LEVY OF PENALTY IS NOT JUSTIFIED IN A CASE WHERE THE CASH CREDIT APPEARING IN THE ACCOUNT S OF THE ASSESSEE WAS ASSESSED AS INCOME FROM UNDISCLOSED SO URCES DUE TO ADMISSION BY THE ASSESSEE FIRM. HE SUBMITTED THAT IN THAT CASE THE CASH CREDITS WERE FOUND IN THE BOOKS OF THE ASS ESSEE. IN ASSESSMENT PROCEEDINGS THE ASSESSEE FIRM ADMITTED T HE EXISTENCES OF THE CREDITS AND STATED THAT IT WAS NOT IN A POSI TION TO CALL THE PARTIES IN WHOSE FAVOUR THE CASH CREDIT APPEAR. TH E REASON GIVEN BY THE ASSESSEE BEING THAT IT WAS ALWAYS HEAVILY IN DEBTED AND UNABLE TO TROUBLE ITS CREDITORS TO GIVE EVIDENCE. THE ASSESSING 11 OFFICER WORKED OUT THE AMOUNT OF SUCH PEAK CREDITS AND ASSESSED RS.10,590/- AS THE ASSESSEES INCOME FROM UNDISCLOS ED SOURCES. PENALTY WAS ALSO LEVIED U/S.271 (1)(C) OF THE I.T. ACT BUT THE TRIBUNAL CANCELLED THE PENALTY. ON A REFERENCE THE HONBLE HIGH COURT HELD THAT IN THE PRESENT CASE THE ASSESSEE HA S NOWHERE ADMITTED THAT IT HAS CONCEALED ITS INCOME EVEN THE ITO HAS NOT ADDED THE SAID AMOUNT OF RS.10,590/- AS CONCEALED I NCOME OR BUSINESS INCOME BUT AS INCOME FROM UNDISCLOSED SOU RCES. IT WAS ACCORDINGLY HELD THAT PENALTY COULD NOT BE IMPO SED FOR CONCEALMENT OF INCOME U/S.271(1)(C) OF THE I.T. ACT . HE SUBMITTED THAT IN THE INSTANT CASE THE INCOME SO DE RIVED WAS FROM THE PARTLY COMPLETED HOTEL BUILDING AND UNDER MIST AKEN BELIEF THE ASSESSEE ADMITTED BEFORE THE ASSESSING OFFICER TO TREAT SUCH INCOME AS INCOME FROM HOUSE PROPERTY. THEREFORE, I N VIEW OF THE DECISION OF HONBLE BOMBAY HIGH COURT CITED (SU PRA) NO PENALTY IS LEVIABLE U/S.271(1)(C). 17. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE INSTANT CASE HAS EARNED RENTAL INCO ME FROM LETTING OUT A PARTLY CONSTRUCTED BUILDING AND OPEN SPACES A ROUND IT FOR MARRIAGE AND OTHER CEREMONIES. THE ASSESSEE HAS CL AIMED SUCH INCOME AS INCOME FROM HOUSE PROPERTY AND SIMULTANEO USLY CLAIMED DEPRECIATION IN THE BOOKS OF ALL ASSETS. T HE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT 12 THE ASSESSEE HAD NOT CARRIED OUT ANY BUSINESS DURIN G THE CONCERNED PERIOD, THAT THE RENT RECEIVED BY THE ASS ESSEE WAS OFFERED AS INCOME FROM HOUSE PROPERTY AND THAT FO R THE PURPOSE OF CLAIMING DEPRECIATION THE PRIMARY AND FOREMOST C ONDITION IS THAT THE ASSET MUST BE USED FOR THE BUSINESS DURING THE PERIOD FOR WHICH DEPRECIATION HAS BEEN CLAIMED. IT IS ALSO A FACT THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE H AD AGREED FOR DISALLOWANCE OF DEPRECIATION. 18. WHEN THE MATTER TRAVELLED UPTO THE TRIBUNAL WE FIND THE TRIBUNAL VIDE ITA NOS. 989, 989 AND 1000/PN/2000 OR DER DATED 31-01-2012 FOR A.YRS. 2004-05 TO 2006-07 DISALLOWED THE CLAIM OF DEPRECIATION ON THE GROUND THAT THE ASSESSEE HAD ADMITTED FOR THE DISALLOWANCE OF DEPRECIATION BEFORE THE ASSESSI NG OFFICER. SUBSEQUENTLY, THE ASSESSING OFFICER LEVIED PENALTY U/S.271(1)(C) OF THE I.T. ACT FOR SUCH CLAIM OF DEPRECIATION WHIC H HAS BEEN UPHELD BY THE CIT(A). IT IS THE ARGUMENT OF THE LD . COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE HAD DISCLOSED ALL MA TERIAL FACTS NECESSARY FOR THE PURPOSE OF COMPLETION OF THE ASSE SSMENT. THE INCOME SO DERIVED FROM THE PARTLY CONSTRUCTED HOTEL BUILDING, THE ROOMS OF THE HOTEL, THE KITCHEN AND THE OPEN SPACES OF THE HOTEL WERE GIVEN FOR MARRIAGE PURPOSE ETC. FROM WHICH THE INCOME WAS DERIVED AND UNDER MISTAKEN BELIEF THE ASSESSEE AGRE ED BEFORE THE ASSESSING OFFICER FOR TREATING SUCH INCOME AS RENTA L INCOME. IT IS ALSO THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSE SSEE THAT HAD THERE BEEN NO BUILDING THE ASSESSEE WOULD NOT HAVE PAID PROPERTY TAX AND COULD NOT HAVE EARNED SUCH RENTAL INCOME. 13 19. WE FIND SOME FORCE IN THE ABOVE SUBMISSION OF T HE LD. COUNSEL FOR THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT THE RENTAL INCOME DURING THE RELEVANT YEARS WAS DERIVED FROM L ETTING OUT PART OF THE PARTLY CONSTRUCTED BUILDING AND OPEN SP ACES AROUND IT TO MARRIAGE AND OTHER CEREMONIES, A FACT BROUGHT ON RECORD BY THE LD.CIT(A) AT PAGE 3 OF THE APPEAL ORDER AND NOT CON TROVERTED BY THE REVENUE. FROM PAGES 5 TO 7 OF THE PAPER BOOK W E FIND THE ASSESSEE HAS PAID PROPERTY TAX OF RS.1,37,765/- EAC H FOR A.YRS. 2004-05 AND 2005-06 AND RS.1,37,758/- FOR A.Y. 2006 -07. ALL THESE THINGS PROVE THAT THE BUILDING WAS IN EXISTEN CE AND THE INCOME WAS DERIVED FROM LETTING OUT OF THE PROPERTY . THE ASSESSEE HAD DISCLOSED ALL MATERIAL FACTS IN THE RE TURN OF INCOME AND THE ADDITION HAS BEEN MADE BY THE ASSESSING OFF ICER ON THE BASIS OF THE PARTICULARS DISCLOSED BY THE ASSESSEE AND NOT ON THE BASIS OF ANY INDEPENDENT INVESTIGATION CARRIED OUT BY HIM AND UNEARTHED SOMETHING WHICH WAS NOT DISCLOSED BY THE ASSESSEE. UNDER THESE CIRCUMSTANCES THE QUESTION THAT ARISE I S AS TO WHETHER PENALTY CAN BE LEVIED U/S.271(1)(C) OF THE I.T. ACT WHEN THE ASSESSEE BEFORE THE ASSESSING OFFICER HAD ADMITTED TO TREAT SUCH INCOME AS INCOME FROM HOUSE PROPERTY AND FORGO DEPR ECIATION WHICH WAS CLAIMED IN THE PROFIT AND LOSS ACCOUNT. 20. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF BHIMJI AND BHANJEE AND CO., (SUPRA) THE HONBLE HIG H COURT UPHELD THE ORDER OF THE TRIBUNAL WHICH HAS CANCELLE D THE PENALTY LEVIED U/S.271(1)(C) OF THE I.T. ACT ON ACCOUNT OF ADDITION OF CASH 14 CREDIT IN ACCOUNTS AS INCOME FROM UNDISCLOSED SOURC ES DUE TO ADMISSION BY THE ASSESSEE. THE RELEVANT OBSERVATIO N OF THE HONBLE HIGH COURT AT PAGES 146 AND 147 READ AS UND ER : THE SUBMISSION OF MR. SAJNANI, THE LEARNED COUNSEL FOR THE REVENUE, IS THAT THE ASSESSEE HAD IN FACT ADMITTED THE CONCEALMENT OF INCOME AND HENCE IT WAS NOT NECESSARY F OR THE REVENUE TO PROVE THE SAME. IT WAS SUBMITTED BY HIM TH AT IN VIEW OF THIS THE BURDEN WAS ON THE ASSESSEE TO SHOW THAT THERE WAS NO CONCEALMENT AND THE CONCLUSION ARRIVED AT BY THE TRI BUNAL WAS ERRONEOUS. HE PLACED STRONG RELIANCE OIL THE DECISION OF DIVISION BENCH OF THIS COURT IN WESTERN AUTOMOBILES (INDIA) V. CIT [1978] 112 ITR 1048. IN OUR VIEW, IT IS NOT POSSIBLE TO ACCE PT THE SUBMISSION OF MR. SAJNANI. THE FACTS, WHICH WE HAVE NAR RATED EARLIER, CLEARLY SHOW THAT THE ASSESSEE NOWHERE ADMITTED THAT IT HAD CONCEALED ANY INCOME. ALL THAT THE ASSESSEE DID WAS TO ADMIT THAT THERE WERE CERTAIN CASH CREDITS IN ITS BOOKS OF AC COUNT IN FAVOUR OF NAMED PARTIES AND THAT THE ASSESSEE WAS UNABL E TO PRODUCE EVIDENCE TO SHOW THAT THESE CASH CREDITS WERE G ENUINE, AS THE ASSESSEE WAS NOT IN A POSITION TO CALL THE PARTIES IN WHOSE FAVOUR THE CASH CREDITS APPEAR, THE REASON GIVEN BY TH E ASSESSEE BEING THAT IT WAS ALWAYS HEAVILY INDEBTED AND UNABLE TO TROUBLE ITS CREDITORS TO GIVE EVIDENCE. THE AFORESAID STAND BY THE ASSESSEE CAN, IN OUR VIEW, NEVER BE CONSIDERED AS AN ADMI SSION BY THE ASSESSEE THAT IT HAS CONCEALED ANY INCOME. AS FAR AS THE DECISION IN WESTERN AUTOMOBILES (INDIA) [1978] 112 ITR 1048 (BOM) IS CONCERNED, THE FACTS OF THAT CASE ARE ALTOGET HER DIFFERENT FROM THE FACTS OF THE CASE BEFORE US. IN THAT CASE, WHE N THE ITO DISCOVERED IN THE ACCOUNT BOOKS OF THE ASSESSEE LOANS TO T HE TUNE OF RS. 90,000, HE CAME TO THE PRIMA FACIE CONCLUSION THAT THESE REPRESENTED CONCEALED INCOME. THE ASSESSEE FIRM AGREED T O THE ADDITION OF THE AFORESAID AMOUNT OF RS. 90,000 AS ITS B USINESS INCOME FOR THAT YEAR AND THE ADDITION WAS MADE BY TH E ITO AS THE ASSESSEE'S CONCEALED INCOME FROM BUSINESS AND NOT AS INCOME FROM UNDISCLOSED SOURCES. IN THE PRESENT CASE, THE ASSESSEE HAS NOWHERE ADMITTED THAT IT HAS CONCEALED ITS I NCOME AND EVEN THE ITO HAS NOT ADDED THE SAID AMOUNT OF RS. 10,590 AS CONCEALED INCOME FROM BUSINESS BUT AS FROM UNDISCLOSED SOURCES. IN VIEW OF THIS, THE SAID DECISION IN THE CASE O F WESTERN AUTOMOBILES (INDIA) [1978] 112 ITR 1048 (BOM) IS CLEA RLY INAPPLICABLE TO THE PRESENT CASE. IN THE RESULT, THE QUESTION REFERRED TO US IS ANSWERED IN THE NEGATIVE AND IN FAVOUR OF THE ASSESSEE. THE COMMISSIONER TO PAY THE COSTS. 21. WE FIND THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT. LTD., (SUPRA) HAS HELD THAT A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LA W, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULAR S REGARDING THE 15 INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETU RN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. THE RELEVAN T OBSERVATION OF THE HONBLE SUPREME COURT AT PAGES 163 TO 166 RE ADS AS UNDER: A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN ORDE R TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICUL ARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF THE INCOME. THAT IS NOT THE CA SE OF THE REVENUE EITHER. HOWEVER, THE LEARNED COUNSEL FOR REV ENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EXPE NDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULA RS OF THE INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITEMS OF AN ACCOUNT. THEREFOR E, THE WORD 'PARTICULARS' USED IN THE SECTION 271(1)(C) WOULD EMB RACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN AD MITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. IT I S NOT AS IF ANY STATEMENT MADE OR ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, PRIMA FACIE, THE ASSESSEE CA NNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACC URATE PARTICULARS OF SUCH INCOME'. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY U NLESS THE CASE IS STRICTLY COVERED BY THE PROVISION, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, MA KING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHI NG INACCURATE PARTICULARS. IN COMMISSIONER OF INCOME TAX, DELHI VS. ATUL MOHAN BINDAL [2009(9) SCC 589], WHERE THIS COUR T WAS CONSIDERING THE SAME PROVISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATISFIED THAT A PERSON HAS CONC EALED THE PARTICULARS OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. THIS COURT REFERRED TO ANOTHER DECISIO N OF THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROC ESSORS [2008(13) SCC 369], AS ALSO, THE DECISION IN UNION OF INDIA VS.RAJASTHAN SPG. & WVG. MILLS [2009(13) SCC 448] AND REITERATED IN PARA 13 THAT:- '13. IT GOES WITHOUT SAY ING THAT FOR APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST.' 8. THEREFORE, IT IS OBVIOUS THAT IT MUST BE SHOWN THAT THE CONDITIONS UNDER SECTION 271(1)(C) MUST EXIST BEFORE T HE PENALTY IS IMPOSED. THERE CAN BE NO DISPUTE THAT EVERYTHING WO ULD DEPEND UPON THE RETURN FILED BECAUSE THAT IS THE ONLY DOCUMENT, WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCO ME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, TH E LIABILITY WOULD ARISE. IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. [2007(6) SCC 329], THIS COURT EXP LAINED THE TERMS 'CONCEALMENT OF INCOME' AND 'FURNISHING INACCUR ATE PARTICULARS'. THE COURT WENT ON TO HOLD THEREIN THAT IN ORDER TO ATTRACT THE PENALTY UNDER SECTION 271(1)(C), MENS RE A WAS 16 NECESSARY, AS ACCORDING TO THE COURT, THE WORD 'INACCU RATE' SIGNIFIED A DELIBERATE ACT OR OMISSION ON BEHALF OF TH E ASSESSEE. IT WENT ON TO HOLD THAT CLAUSE (III) OF SECTION 271(1) PROVIDED FOR A DISCRETIONARY JURISDICTION UPON THE ASSESSING AUTHORITY, INASMUCH AS THE AMOUNT OF PENALTY COULD NOT BE LESS THA N THE AMOUNT OF TAX SOUGHT TO BE EVADED BY REASON OF SUCH CONCEALMENT OF PARTICULARS OF INCOME, BUT IT MAY NOT EXCEED THREE TIMES THEREOF. IT WAS POINTED OUT THAT THE TERM 'INACCURATE PARTICULARS' WAS NOT DEFINED ANYWHERE IN THE ACT AND, THEREFORE, IT WAS HELD THAT FURNISHING OF AN ASSESSMENT OF THE VALUE OF THE PROPERTY MAY NOT BY ITSELF BE FURNISHING INACCURATE PARTICULARS. IT WAS FURTHER HELD THAT THE ASSESSEE MUST BE FOUND TO HAVE FAILED TO PROVE THAT HIS EXPLANATION IS NOT ONLY NOT BONA F IDE BUT ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUT ATION OF HIS INCOME WERE NOT DISCLOSED BY HIM. IT WAS THEN HELD THA T THE EXPLANATION MUST BE PRECEDED BY A FINDING AS TO HOW AND IN WHAT MANNER, THE ASSESSEE HAD FURNISHED THE PARTICULARS OF HIS INCOME. THE COURT ULTIMATELY WENT ON TO HOLD THAT T HE ELEMENT OF MENS REA WAS ESSENTIAL. IT WAS ONLY ON THE POINT OF MENS REA THAT THE JUDGMENT IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. WAS UPSET. IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), AFTER QU OTING FROM SECTION 271 EXTENSIVELY AND ALSO CONSIDERING SECT ION 271(1)(C), THE COURT CAME TO THE CONCLUSION THAT SINC E SECTION 271(1)(C) INDICATED THE ELEMENT OF STRICT LIABILITY ON THE ASSESSEE FOR THE CONCEALMENT OR FOR GIVING INACCURATE PARTIC ULARS WHILE FILING RETURN, THERE WAS NO NECESSITY OF MENS REA. THE COURT WENT ON TO HOLD THAT THE OBJECTIVE BEHIND ENACTMENT OF SECTION 271(1)(C) READ WITH EXPLANATIONS INDICATED WITH THE SAID SECTION WAS FOR PROVIDING REMEDY FOR LOSS OF REVENUE AND SUCH A PENALTY WAS A CIVIL LIABILITY AND, THEREFORE, WILLFUL CONCEA LMENT IS NOT AN ESSENTIAL INGREDIENT FOR ATTRACTING CIVIL LIABILITY A S WAS THE CASE IN THE MATTER OF PROSECUTION UNDER SECTION 276-C OF THE ACT. THE BASIC REASON WHY DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA ) WAS OVERRULED BY THIS COURT IN UNION OF INDIA VS. DHARAME NDRA TEXTILE PROCESSORS (CITED SUPRA), WAS THAT ACCORDING TO THIS COURT THE EFFECT AND DIFFERENCE BETWEEN SECTION 271(1)(C) AND SECTION 276-C OF THE ACT WAS LOST SIGHT OF IN CASE OF DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITE D SUPRA). HOWEVER, IT MUST BE POINTED OUT THAT IN UNION OF IND IA VS. DHARAMENDRA TEXTILE PROCESSORS (CITED SUPRA), NO FAULT WAS FOUND WITH THE REASONING IN THE DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITE D SUPRA), WHERE THE COURT EXPLAINED THE MEANING OF THE TERMS ' CONCEAL' AND INACCURATE'. IT WAS ONLY THE ULTIMATE INFERENCE IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF INCOME TAX, MUMBAI & ANR. (CITED SUPRA) TO THE EFFECT THAT MENS REA WAS AN ESSENTI AL INGREDIENT FOR THE PENALTY UNDER SECTION 271(1)(C) THAT THE DECISION IN DILIP N. SHROFF VS. JOINT COMMISSIONER OF I NCOME TAX, MUMBAI & ANR. (CITED SUPRA) WAS OVERRULED. 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH THE MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE , AS A MATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTIC ULARS. IN WEBSTER'S DICTIONARY, THE WORD 'INACCURATE' HAS BEEN D EFINED AS:- 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORD ING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRANSCRI PT'. 17 WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTIC ULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNCTION, THEY MUST MEAN THE DETAILS SUPPLIED IN TH E RETURN, WHICH ARE NOT ACCURATE, NOT EXACT OR CORRECT, NOT A CCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE A SSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INV ITING THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE IN COME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT T O THE INACCURATE PARTICULARS. 22. SINCE THE ASSESSEE IN THE INSTANT CASE HAS DISC LOSED ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSE SSMENT AND THE ASSESSMENT WAS BASED ON THE PARTICULARS SUPPLIED BY THE ASSESSEE IN THE RETURN OF INCOME ITSELF AND NOT ON THE BASIS OF ANY INDEPENDENT INVESTIGATION MADE BY THE ASSESSING OFF ICER TO UNEARTH SOMETHING NOT DISCLOSED BY THE ASSESSEE, TH EREFORE, RELYING ON THE ABOVE 2 DECISIONS CITED (SUPRA) WE A RE OF THE CONSIDERED OPINION THAT IT IS NOT A FIT CASE FOR LE VY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT. THE DECISIONS RELIED ON BY THE LD.CIT(A) ARE DISTINGUISHABLE AND NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE THEREFORE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL THE PENA LTY AND THE GROUNDS RAISED BY THE ASSESSEE FOR ALL THE 3 YEARS ARE ALLOWED. 23. IN THE RESULT, ALL THE 3 APPEALS FILED BY THE A SSESSEE ARE ALLOWED. PRONOUNCED IN THE OPEN COURT ON 20-05-2015. SD/- SD/- (SUSHMA CHOWLA) (R.K. PA NDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 20 TH MAY, 2015 SATISH 18 COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. DEPARTMENT 3. THE CIT(A)-I, NASHIK 4. THE CIT-I, NASHIK 5. THE D.R, A PUNE BENCH 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY ITAT, PUNE BENCHES, PUNE