Hi Choice Processors Pvt.Ltd., Surat V. The Income tax Officer,Ward-1(2), Surat

ITA 2466/AHD/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 50732 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 15-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 21-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R K VOHRA SRDR
• Keywords: Unexplained cash credit; Rejection of books of accounts

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD .., !'# $ $ $ $ %% % &, ' ( # BEFORE SHRI G.D.AGARWAL, VICE-PRESIDENT (AZ) AND SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER $./ 1 . ITANO.2466/AHD/2009 2.ITA NO.2571/AHD/2009 ( * * * * / / / / ASSESSMENT YEAR :2004-05) 1.HI CHOICE PROCESSORS PVT.LTD. 264, GIDC ROAD NO.2 SACHIN SURAT 2.ITO WARD-1(2), SURAT / VS. 1. ITO WARD-1(2) SURAT 2. HI CHOICE PROCESSOR PVT.LTD., SURAT '+ (, $./- $./ PAN/GIR NO. : AAACH 7062 E ( +. / // / APPELLANTS ) .. ( /0+. / RESPONDENTS ) ASSESSEE BY : SHRI HARDIK VORA, A.R. REVENUE BY : SHRI R.K. VOHRA, SR.D.R. % 1 2 &, / / / / DATE OF HEARING : 15/09/2011 34* 2 &, / DATE OF PRONOUNCEMENT : 30/ 9/2011 (5 / O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THESE ARE CROSS APPEALS ARISING FROM THE ORDER OF CIT(APPEALS)-I, SURAT DATED 14/7/2009 PASSED FOR A.Y 2004-05. BOTH THESE APPEALS ARE IN RESPECT OF LEVY OF PENALTY U/S 271(1)(C) OF I.T.ACT . WHILE DECIDING THE QUANTUM OF ADDITION THE TRIBUNAL HAS PARTLY ALLOWED THAT APPEAL AND IN CONSEQUENCE THEREUPON THE PENALTY PROCEEDINGS ARE G OING TO BE EFFECTED ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 2 - IN THIS ORDER. HOWEVER FOR THE SAKE OF CLARITY ABOU T THE STATUS OF THE ADDITIONS INVOLVED FOR THE PURPOSE OF LEVY OF PENAL TY A CHART IS REPRODUCED AS UNDER :- SR.NO(S). PARTICULARS AMOUNT (RS.) QUANTUM APPEAL BEFORE ITAT POSITION OF PENALTY BEFORE CIT(A) (I) UNDERVALUATION OF CLOSING STOCK 1,88,506 ADDITION DELETED PENALTY DELETED (II) UNEXPLAINED CASH CREDITS 1,48,322 ADDITION CONFIRMED PENALTY CONFIRMED (III) EXCESSIVE JOB CHARGES TO ASSOCIATE CONCERNS 13,14,047 ADDITION CONFIRMED PENALTY DELETED (IV) UNPROVED OLD CREDITORS 3,26,000 ADDITION DELETED PENALTY DELETED TOTAL 19,76,875 (A) ASSESSEES APPEAL, I.E. ITA 2466/AHD/2009 2. GROUND RAISED IS REPRODUCED BELOW :- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE A S WELL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) HAS ERRED IN PARTLY CONFIRMING THE ACTION OF THE ASSESS ING OFFICER IN LEVYING A PENALTY OF RS.53,211/- OUT OF PENALTY OF RS.7,09,204/- U/S.271(1)(C) OF THE ACT. 2.1. FACTS IN BRIEF AS EMERGED FROM THE PENALTY ORDER PASSED U/S.271(1)(C) OF THE ACT DATED 20/03/2009 AND THE CORRESPONDING ASSESSMENT ORDER PASSED U/S.143(3) OF THE ACT DATED 26/12/2006 WERE THAT ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 3 - THE ASSESSEE-COMPANY IS IN THE BUSINESS OF DYEING AND PRINTING OF FABRICS ON JOB-WORK BASIS. IT IS PERTINENT TO MENTION AT THIS STAGE THAT THE ASSESSEE HAS DECLARED TOTAL INCOME AT RS.NIL AND THE ASSESSMENT WAS ALSO FINALIZED ON NET TAXABLE INCOME AT RS.NIL. THE LD.AR MR.HARDIK VORA HAS CLARIFIED AT THE OUTSET THAT THE ASSESSEE- COMPANY IS RUNNING IN LOSS AND AS PER PROFIT & LOSS ACCOUNT, NET PROFIT F OR THE YEAR UNDER CONSIDERATION WAS AT RS.(-)19,64,915/-. LD.AR HAS ALSO INFORMED THAT THE QUANTUM ADDITIONS NOW STOOD SETTLED BY THE DECI SION OF ITAT B BENCH AHMEDABAD, WHEREIN ASSESSEES APPEAL BEARING ITA NO.1646/AHD/2008 (A.Y. 2004-05) DATED 30/09/2010 WAS PARTLY ALLOWED. THE PENALTY WAS LEVIED U/S.271(1)(C) IN RESPECT O F AN UNEXPLAINED CASH CREDIT OF RS.1,48,322/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS FOUND THAT THERE WAS A CREDITOR M/S.EVEREST FAB AND THE IMPUGNED AMOUNT WAS SHOWN A S OUTSTANDING IN THE ACCOUNTS. THE ALLEGATION OF THE A.O. WAS THA T THE SAID PARTY HAD NOT CONFIRMED THE OUTSTANDING CREDIT BALANCE. ON THE P ART OF THE ASSESSEE, BILLS OF THE SAID CREDITORS HAVE BEEN FILED. IT WA S INFORMED TO A.O. THAT THE BOOKS OF ACCOUNTS OF THE SAID CREDITOR WERE DES TROYED IN FLOOD. THE REVENUE WAS OF THE VIEW THAT IF THE CREDITOR WAS GE NUINE, THEN THE ASSESSEE SHOULD HAVE FURNISHED THE CONFIRMATION OF THE SAID CREDITOR AND ALSO SHOULD HAVE FURNISHED THE EVIDENCES CONFIRMING THE PAYMENTS. THE AO DID NOT FIND THE TRANSACTION AS GENUINE AND TAXE D ACCORDINGLY. WHEN THE MATTER WAS CARRIED IN SECOND APPEAL BEFORE THE TRIBUNAL, THEN IT WAS HELD BY THE RESPECTED CO-ORDI NATE BENCH VIDE ORDER DATED 30/09/2010 (SUPRA) THAT THE ONUS WAS ON THE A SSESSEE TO SHOW AS TO HOW THE LIABILITY WAS CREATED AND WHETHER THE CREDI TOR HAD ACCEPTED THE ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 4 - LIABILITY. THE TRIBUNAL HAS HELD THAT IN THE ABSEN CE OF ANY EVIDENCE ABOUT THE IDENTITY, CREDITWORTHINESS AND THE NATURE OF TR ANSACTION THE ADDITION WAS RIGHTLY MADE. 2.2. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BOTH THE SIDES. FROM THE SIDE OF THE REVENUE, LD.DR MR.R.K.VOHRA HAS SU PPORTED THE ACTION OF THE REVENUE AND ARGUED THAT HAD THE CREDITOR WAS GENUINE THE SAME SHOULD HAVE BEEN PRODUCED BEFORE THE AO. THE PRIMA RY ONUS FROM THE SIDE OF THE ASSESSEE WAS NOT DISCHARGED THEREFORE, THE ADDITION WAS RIGHTLY MADE AND PENALTY HAS ALSO BEEN CORRECTLY LEVIED. 2.3. ON THE OTHER HAND, IT WAS EXPLAINED THAT AS FA R AS THE COPIES OF ACCOUNTS OF THE SAID PARTY IN THE BOOKS OF THE ASSE SSEE-COMPANY WERE CONCERNED, THOSE WERE VERY MUCH PLACED BEFORE THE A O. THE ASSESSEE WAS NOT RESPONSIBLE IF THE BOOKS OF ACCOUNT OF THE SAID CREDITOR WERE DESTROYED IN THE FLOOD. IT HAS ALSO BEEN MENTION ED THAT THE SAID CREDITOR WAS GENUINE AS THE TRANSACTION WITH THE SAID CREDITOR WAS MADE THROUGH ACCOUNT PAYEE CHEQUES . OUR ATTENTION WAS DRAWN ON THE COPY OF THE LEDGER ACCOUNT OF THE SAID PARTY AS WELL AS THE COPY OF THE STATEMENT OF BANK OF BARODA, MANDARWAJA BRANCH TO DEMONSTRATE THAT THE PAYMENTS WERE IN FACT MADE THROUGH CHEQUE. BEF ORE US, THE ASSESSEE HAS ALSO PLACED THE BILLS OF THE SAID PARTY AND VEH EMENTLY STATED THAT ALL THOSE BILLS WERE VERY MUCH IN THE KNOWLEDGE OF THE REVENUE DEPARTMENT DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THERE IS LONG LIST OF BILLS PLACED IN THE COMPILATION RUNNING FROM PAGE NO. 5 T O PAGE NO.28. ON PAGE 29 IS A COPY OF THE LEDGER ACCOUNT OF THE SAID PARTY IN THE ASSESSEES ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 5 - BOOKS OF ACCOUNTS. THE SAID ACCOUNT WAS TITLED AS BOLTING CLOTH DESIGN ACCOUNT. THE BILLS OF THE SAID CREDITOR HAVE ALSO INDICATED THE DESCRIPTION OF THE PRODUCT AS BOLTING CLOTH. THERE WERE CERT AIN OTHER BILLS IN THE NAME OF GREY CLOTH DESIGN ACCOUNT AS WELL. CONSI DERING THESE EVIDENCES WHICH WERE SUBMITTED BEFORE THE LOWER AUT HORITIES FROM THE SIDE OF THE ASSESSEE, THIS MUCH IS APPARENT THAT ON THE PART OF THE ASSESSEE THE VERIFICATION OF THE TRANSACTION WAS POSSIBLE. T HOUGH IT WAS AN ADMITTED FACT THAT ON THE PART OF THE SAID CREDITOR THERE WAS A DEFAULT AS HE HAD FAILED TO COMPLY WITH THE NOTICES OF THE AO; B UT WHETHER THAT FAULT OF THE CREDITOR WOULD LEAD TO LEVY OF CONCEALMENT PENALTY ON THIS ASSESSEE? RIGHT NOW, WE ARE NOT DEALING WITH THE QUANTUM ISSUE BUT WE ARE DEALING THE ISSUE OF LEVY OF PENALTY, THEREFORE , WE CAN HOLD THAT THOUGH THE QUANTUM ADDITION HAS BEEN CONFIRMED BY T HE TRIBUNAL BUT THAT ALONE IS NOT ENOUGH TO TAKE AN ADVERSE VIEW AGAINST THE ASSESSEE. IN OUR OPINION, CONSIDERING THE TOTALITY OF THE CORROBORAT IVE EVIDENCES, SUCH AS, COPY OF LEDGER ACCOUNT AND COPIES OF THE BILLS OF THE SAID CREDITOR AS WELL AS THE STATEMENT OF THE BANK TO ESTABLISH THAT THE PAYMENTS WERE MADE THROUGH CHEQUES, WHICH WERE NOT FOUND TO BE FALSE O R UNTRUE, WE ARE OF THE CONSIDERED VIEW THAT MERELY FOR A DEFAULT OF TH E SAID CREDITOR, THIS ASSESSEE SHOULD NOT BE INFESTED WITH THE CONCEALMEN T PENALTY. THEREFORE THE ASSESSEE IS ABSOLVED IN THERESULT HEREBY DIRECT ED TO DELETE THE PENALTY. (B) REVENUES APPEAL, I.E. 2571/AHD/2009 3. REVENUE HAS RAISED THE FOLLOWING GROUND:- ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 6 - (1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A)-I, SURAT HAS ERRED IN DELETING THE PENALTY U/S.271(1)(C) OF THE ACT LEVIED BY A.O. OF RS.6,55,693/ -. 3.1. AS PER THE CHART REPRODUCED HEREINABOVE THE RE VENUE HAS CHALLENGED THE DELETION OF PENALTY IN RESPECT OF TH REE ADDITIONS AND ONE BY ONE WE SHALL DISCUSS HEREUNDER:- 3.2. IN RESPECT OF UNDERVALUATION OF CLOSING STOCK , THE ASSESSEE HAS FURNISHED THE BREAK-UP OF THE CLOSING WORK IN PROGR ESS AS ON 31/03/2004. THE ASSESSEE HAS VALUED THE CLOSING STOCK AT RS.4/- PER METER, HOWEVER, AS PER AO, THE ASSESSEE SHOULD HAVE INCURRED COST A T RS.6.46 PER METER. THE DIFFERENCE OF RS.1,88,506/- WAS COMPUTED AND TA XED IN THE HANDS OF THE ASSESSEE. AGAINST THE SAID QUANTUM ADDITION, T HE MATTER HAD GONE UPTO THE TRIBUNAL AND VIDE ORDER DATED 30/09/2010 (SUPRA), T HE ADDITION WAS DELETED PRIMARILY ON THE GROUND THAT THE AO HAD NEITHER REJECTED THE BOOKS OF ACCOUNTS NOR THERE WAS ANY DE FECT POINTED OUT, THEREFORE, THERE WAS NO BASIS FOR ESTIMATION OF PRO FIT. EVEN THE FIRST APPELLATE AUTHORITY HAS DELETED THE PENALTY WITH TH E OBSERVATION THAT THE ASSESSEE HAS FOLLOWED A REGULAR SYSTEM FOR VALUATIO N OF WORK-IN-PROGRESS. THE SAID METHOD HAD ALWAYS BEEN ACCEPTED BY THE DEP ARTMENT IN THE PAST. THE LD.CIT(A) HAS REFERRED J.H. BARABIA (TRANSPORT) PVT.LTD. 284 ITR 361 AND HELD THAT NO PENALTY COULD BE LEVIED IF THE ASS ESSEE HAS FOLLOWED THE SAME METHOD OF ACCOUNTING THROUGH WHIC H THE WORK-IN- PROGRESS WAS CALCULATED AND THE SAME WAS NOT REJECT ED BUT MERELY A PROFIT WAS ESTIMATED. ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 7 - 3.3. SINCE THE QUANTUM ADDITION HAD ALREADY BEEN DE LETED BY THE TRIBUNAL, THEREFORE, THE REASONING ON WHICH LD.CIT( A) DELETED THE PENALTY, WHICH WERE ALMOST ON THE SAME LINES AS HEL D BY THE TRIBUNAL, THEREFORE, WE ARE NOT INCLINED TO DISTURB THOSE FIN DINGS AND HEREBY AFFIRM THE DELETION OF PENALTY. 4. IN RESPECT OF THE PENALTY LEVIED ON EXCESSIVE JOB CHARGES , IT WAS NOTICED BY THE AO THAT JOB CHARGES OF RS.34,74,821/ - WERE FOUND TO BE PAID TO AN ASSOCIATE CONCERN, M/S.AMAR PROJECTS PVT .LTD. IT WAS NOTICED THAT JOB CHARGES WERE PAID @ 0.50 PER METER UPTO OC TOBER-2003. HOWEVER, AFTER OCTOBER-2003 AND UPTO MARCH-2004 JOB CHARGES WERE PAID @ 0.25 PER METER. DUE TO THIS FLUCTUATION IT WAS ALLEGED THAT EXCESSIVE RATE OF JOB CHARGES WERE PAID TO AN ASSOC IATE CONCERN. THE AO HAS INVOKED THE PROVISIONS OF SECTION 40A(2)(B) OF IT.ACT AND THE DIFFERENCE OF RS.13,14,047/- WAS TAXED IN THE HANDS OF THE ASSESSEE. WHEN THE MATTER HAD GONE BEFORE THE TRIBUNAL, IT W AS HELD THAT NO REASONABLE EXPLANATION WAS FURNISHED AS TO WHY HIGH ER CHARGES HAVE BEEN PAID IN THE FIRST HALF OF THE ACCOUNTING PERIOD. THE TRIBUNAL WAS OF THE VIEW THAT APPARENTLY THERE WAS NO CONVINCING REASON THAT WHY IN THE FIRST HALF OF THE ACCOUNTING PERIOD HIGHER CHARGES WERE P AID AND SINCE THERE WAS NO SATISFACTORY EXPLANATION, THEREFORE THE AUTH ORITIES WERE JUSTIFIED IN DISALLOWING THE EXCESSIVE PAYMENT TO A SISTER-CONCE RN. 4.1. AS FAR AS THE PROCEEDINGS FOR LEVY OF PENALTY WERE CONCERNED, THE FIRST APPELLATE AUTHORITY WAS OF THE VIEW THAT MERE LY ON THE BASIS OF A ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 8 - TECHNICAL DISALLOWANCE U/S.40A(2)(B) NO CONCEALMENT OF INCOME SHOULD BE ALLEGED SPECIALLY WHEN ALL THE PARTICULARS HAVE BEEN FURNISHED AND THOSE PARTICULARS WERE NOT FOUND TO BE AN INACCURAT E PARTICULAR. 4.2. FROM THE SIDE OF THE REVENUE, LD.DR HAS OBJE CTED THE MANNER IN WHICH LD.CIT(A) HAS DELETED THE PENALTY, PRIMARILY ON THE GROUND, THAT AN EXPENDITURE WAS CLAIMED WHICH WAS FOUND TO BE INCOR RECT AS WELL AS EXCESSIVE THEREFORE IT WAS WRONG ON THE PART OF THE LD.CIT(A) TO DELETE THE PENALTY MERELY STATING THAT IT WAS A SIMPLE TEC HNICAL DISALLOWANCE. 4.3. AS FAR AS THE STAND OF THE ASSESSEE IS CONCERN ED, IT WAS STATED THAT THE SAID ASSOCIATE CONCERN, NAMELY, M/S.AMAR PROJEC TS PVT.LTD. HAD ENTERED INTO AN AGREEMENT WITH THE ASSESSEE AND THR OUGH THOSE AGREEMENTS THE LABOUR CHARGES WERE AGREED UPON TIME TO TIME. OUR ATTENTION HAS BEEN DRAWN ON SOME OF THOSE AGREEMENT S TO DEMONSTRATE THAT IN SOME OF THE YEARS THE CHARGES WERE 40 PAISE PER METER, AS PER AGREEMENT DATED 1.4.2002. SUBSEQUENTLY VIDE AN AGRE EMENT DATED 29/03/2004 THE RATES WERE REVISED AND THE JOB CHARG ES FIXED EARLIER OF 50 PAISE PER METER WERE MUTUALLY AGREED FOR 25 PAISE P ER METER FOR A PEERIOD. THEREFORE THE ARGUMENT WAS THAT IN FACT T HE CHARGES WERE REDUCED IN THE SECOND HALF OF THE ACCOUNTING PERIOD RATHER THAN THERE WAS AN INCREASE IN THE CHARGES. THE AO HAS SIMPLY COM PARED THE RATES OF ONE FINANCIAL YEAR BUT HE HAS NOT COMPARED THE RATE S WITH THE PAST YEARS. IT IS VEHEMENTLY ARGUED THAT HAD THE AO EXAMINED TH E RECORDS OF THE PAST YEAR, THEN HE SHOULD NOT HAVE HELD THAT THE CHARGES WERE EXCESSIVE IN THE YEAR UNDER CONSIDERATION. ACCORDING TO US, THE E XPLANATION OFFERED IS ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 9 - ACCEPTABLE AS FAR AS THE QUESTION OF LEVY OF PENALT Y IS CONCERNED. SINCE WE ARE NOT DEALING WITH THE QUANTUM ADDITION, THERE FORE, WE CAN HOLD THAT AN EXPLANATION WERE OFFERED WHICH WAS NOT FOUND TO BE FALSE EXPLANATION. FURTHER, OUR ATTENTION HAS ALSO BEEN DRAWN ON AN OR DER OF ITAT D BENCH AHMEDABAD IN THE CASE OF RUSHABH N.PATEL BEAR ING ITA NO.3006/AHD/2008 FOR A.Y. 1997-98 DATED 16/12/2010, WHEREIN IT WAS HELD THAT SINCE THE DETAILS OF EXPENDITURE AND THE CONNECTED EVIDENCES WERE BEFORE THE CONCENRED REVENUE AUTHORITIES AND T HERE WAS NO ALLEGATION THAT THE ASSESSEE HAD WITHHELD THE NECES SARY INFORMATION OR THAT THOSE INFORMATION WERE UNTRUE AND DETECTED BY THE DEPARTMENT, THEN MERELY ON THE BASIS OF CERTAIN DOUBTS THAT AN EXCES SIVE PAYMENT MIGHT HAVE BEEN PAID TO A SISTER-CONCERN, THEN THERE WAS NO OCCASION TO LEVY OF CONCEALMENT PENALTY U/S.271(1)(C) OF THE ACT. CON SIDERING THE ENTIRETY OF THE CIRCUMSTANCES AND THE REASONS ASSIGNED HEREI NABOVE AND ALSO FOLLOWING THE VIEW TAKEN BY THE RESPECTED CO-ORDINA TE BENCH, WE HEREBY AFFIRM THE DELETION OF PENALTY. 5. IN RESPECT OF THE LEVY OF PENALTY PERTAINING TO UNPROVED OLD CREDITORS OF RS.3,26,000/- THE TRIBUNAL VIDE ORDER DATED 30/09/2010 (SUPRA ) HAS HELD THAT THOUGH THE CREDITORS WERE S TANDING IN THE BALANCE- SHEET FOR A LONG PERIOD BUT THAT DID NOT MEAN THAT THE LIABILITY HAD CEASED TO EXIST. AS PER THE TRIBUNAL, MERELY BECAUSE A LI ABILITY WAS OUTSTANDING FOR SEVERAL YEARS, IT COULD NOT BE PRESUMED THAT TH E SAID LIABILITY COULD BE ASSESSED BY INVOKING THE PROVISIONS OF SECTION 41(1 ) OF THE I.T.ACT. THE ADDITION WAS DELETED. WHILE DEALING WITH THE LEVY OF PENALTY, LD.CIT(A) HAS FOLLOWED AMBICA MILLS LTD. 54 ITR 167(GUJ.) AN D HELD THAT THE ITA NO.2466/AHD/2009 (BY ASSESSEE) AND ITA NO.2571/AHD/2009 (BY REVENUE) M/S.HI-CHOICE PROCESSORS PVT.LTD. VS. ITO ASST.YEAR 2004-05 - 10 - PARTICULARS WERE VERY MUCH ON RECORD AND THERE WAS NO ALLEGATION THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS, THER EFORE THERE WAS NO CONCEALMENT ON THE PART OF THE ASSESSEE. THE PENAL TY WAS DELETED. 6. ON HEARING THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE VIEW THAT THE RESPECTED CO-ORDINATE BENCH HAS ALREADY DE LETED THE QUANTUM ADDITION AND THEREFORE THE TOTALITY OF THE CIRCUMST ANCES DEMANDS TO AFFIRM THE VIEW TAKEN BY THE LD.CIT(A). THIS PART OF THE GROUND OF THE REVENUE IS, THEREFORE, DISMISSED. 7. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED, WHE REAS REVENUES APPEAL IS DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/ 09 /2011. SD/- SD/- ( G.D. AGARWAL ) ( MUKUL KR. SHRAWAT ) VICE PRESIDENT (AZ) JUDICIAL ME MBER AHMEDABAD; DATED 30/ 09 /2011 6.. , . ../ T.C. NAIR, SR. PS (5 2 /&7 (7*& (5 2 /&7 (7*& (5 2 /&7 (7*& (5 2 /&7 (7*&/ COPY OF THE ORDER FORWARDED TO : 1. +. / THE APPELLANT 2. /0+. / THE RESPONDENT. 3. $$ & %8 / CONCERNED CIT 4. %8() / THE CIT(A)-I, SURAT 5. 7;< /& , , / DR, ITAT, AHMEDABAD 6. < =1 / GUARD FILE. 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