ITO, Coimbatore V. Southern Sites India P. Ltd., Coimbatore

ITA 26/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96282 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2015
• Appeal Filed By: Department
• Bench Allotted: C
• Next Hearing Date: 15-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 07-01-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: A GOPAL KANAKARAJ
• Keywords: Wrong claim; Onus to prove; Reassessment proceedings
• Section: 143(3); 142(1); 133A; 37(1); 147; 68; 148

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER I.T.A.NO. 2 6 /MDS/2015 ASSESSMENT YEAR :20 07 - 08 & C.O. NO. 20 /MDS/2015 [IN I.T.A. NO. 2 6 /MDS/2015] THE INCOME TAX OFFICER , C ORPORATE WARD 3, 63 - A, RACE COURSE ROAD, COIMBATORE. VS. M/S. SOUTHERN SITES INDIA P. LTD., NO. 195, 2 ND FLOO R, TULSI CHAMBERS, T.V. SAMY ROAD (WEST), R.S. PURAM, COIMBATORE 641 002. [PAN: AA HCS9229D ] ( APPELLANT ) ( R ESPONDENT /CROSS OBJECTOR ) DEPARTMENT BY : SHRI A. V. SREEKANTH , JCIT ASSESSEE BY : SHRI A. GOPAL KANAKARAJ, C.A. / DATE OF HEARING : 15 . 0 9 .201 5 / DATE OF P RONOUNCEMENT : 29 . 1 0 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : TH I S APPEAL FILED BY THE REVENUE AND THE CROSS OBJECTION FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) I , C OIMBATORE , DATED 29 . 10 .201 4 RELEVANT TO THE ASSESSMENT YEAR 20 07 - 08 . 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND FILED ITS RETURN OF INCOME F OR THE ASSESSMENT YEAR 2007 - 08 I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 2 ADMITTING TAXABLE INCOME OF .57,84,270/ - AND AGRICULTURAL INCOME OF .8,15,000/ - . INITIALLY, THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. CONSEQUENT TO THE SURVEY OPERATION UNDER SECTION 133A OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT], THE ASSESS MENT WAS REOPENED UNDER SECTION 147 BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT. THEREAFTER, THE ASSESSEE S CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE. AFTER FOLLOWING DUE PROCESS, THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) R.W.S. 147 OF THE ACT BY MAKING VARIOUS ADDITIONS BY THE ASSESSING OFFICER. AGAINST THE ADDITIONS MADE BY THE ASSESSING OFFICER, THE ASSESSEE HAS NOT PREFERRED ANY APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. MOREOVER, I N VIEW OF THE QUANTUM ADDITIONS, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. 3. THE FIRST ISSUE RELATES TO DISALLOWANCE OF AGRICULTURAL INCOME. IN THE 147 ASSESSMENT ORDER, THE ASSESSING OFFICER HAS OBSERV ED THAT AGAINST THE NOTICE UNDER SECTION 142(1) OF THE ACT, THE ASSESSEE WAS ASKED TO PRODUCE EVIDENCE FOR THE AGRICULTURAL INCOME. HOWEVER, THE ASSESSEE HAS NOT PRODUCED COMPLETE EVIDENCE FOR THE AGRICULTURAL ACTIVITIES CARRIED OUT BY THE ASSESSEE COMPANY . FURTHER, THE ASSESSEE HAS AGREED TO OFFER THE AGRICULTURAL INCOME FOR TAXATION. AGAINST THE SAID ADDITION, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS BY SERVING NOTICE UNDER SECTION I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 3 271(1)(C) OF THE ACT. AFTER CONSIDERING THE EXPLANATION GIV EN BY THE ASSESSEE, THE ASSESSING OFFICER HAS OBSERVED THAT MERE POSSESSION OF AGRICULTURAL LANDS, A TRACTOR AND OTHER AGRICULTURAL IMPLEMENTS DO NOT GO TO PROVE THAT THE ASSESSEE HAS EARNED AGRICULTURAL INCOME. THE ASSESSEE HAS NOT ADMITTED ANY GROSS AGRI CULTURAL INCOME SHOWING EXPENSES TOWARDS EARNING SUCH INCOME. THE ONUS LIES ON THE ASSESSEE TO PROVE THAT THE ASSESSEE FILLED THE SOIL, FOR SOWING SEEDS, IRRIGATED AND FERTILIZED THE LAND FOR REARING CROPS AND EARNED AN INCOME FROM HARVEST ON WHICH AGRICUL TURAL TAXES WERE PAID, HOWEVER, THE ASSESSEE HAS NOT DISCHARGED ITS ONUS TO PROVE THAT AGRICULTURAL OPERATIONS WERE CARRIED OUT TO EARN THE INCOME WHICH IS CLAIMED AS EXEMPT. SINCE THE ASSESSEE HAS NOT FURNISHED PROPER EVIDENCE FOR THE AGRICULTURAL ACTIVIT IES AMOUNTS TO FURNISHING OF INACCURATE PARTICULARS, THE ASSESSING OFFICER HAS LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. ON APPEAL, THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HAS DELETED THE PENALTY LEVIED BY THE ASSE SSING OFFICER. 5. ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR , WHILE RELYING ON THE DECISIONS IN THE CASE OF MAK DATA PVT. LTD. V. CIT 358 ITR 593 (SC), ADDL. CIT V. BHOOPATHY 113 ITR 188 (MAD) AND L.H. SUGAR FACTORY AND OIL MILLS (P) LTD. V. CIT 125 ITR 293 (SC), HAS SUBMITTED THAT THE ASSESSEE HAS NOT PROVED THE AGRICULTURAL INCOME BY I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 4 COGENT AND RELIABLE EVIDENCE, PENALTY WAS LEVIED AND PRAYED THAT THE SAME SHOULD BE CONFIRMED. 6. ON THE OTHER HAND, THE LD. COUNSEL F OR THE ASSESSEE HAS STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. CIT(A). THE ASSESSEE HAS RELIED ON THE DECISION IN 32 ITR 466 AND 32 ITR 587 IN THE CROSS OBJECTION. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORD ERS OF AUTHORITIES BELOW. THE ASSESSEE COMPANY IS A REAL ESTATE AGENT AND HAS ACQUIRED LANDS FOR CONVERSION INTO PLOTS AND SALE AND DECLARED AN AGRICULTURAL INCOME OF .8,15,000/ - ON THE GROUND THAT THE ASSESSEE WAS REGULARLY PURCHASING RURAL AGRICULTURAL LAND IN MULTIPLE ACRES AT DIFFERENT PLACES FROM VARIOUS AGRICULTURISTS DIRECTLY AND POSSESS AS WHERE IS CONDITION BEFORE PLOTTING IT. IN REAL SPIRIT, THE ASSESSEE COMPANY HA S NOT ENGAGED IN ANY REGULAR AGRICULTURAL ACTIVITIES. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS CLAIMED ANY EXPENDITURE HAVING INCURRED FOR CARRYING OUT THE AGRICULTURAL OPERATION FOR EARNING AGRICULTURAL INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS NOT ABLE TO PRODUCE ANY EVIDENCE OF HAVING ENGAGED IN AGRIC ULTURAL ACTIVITIES AND AGREED TO OFFER THE SAID INCOME FOR TAXATION. ONCE THE ASSESSEE HAS AGREED TO PAY TAX FOR THE SAID INCOME, THE INCOME SO DECLARED BY THE ASSESSEE UNDER THE HEAD AGRICULTURAL INCOME HAS NO LOCUS STANDI AND IT IS NOTHING BUT UNDISCLO SED INCOME UNDER SECTION 68 OF THE ACT CLAIMED UNDER THE HEAD AGRICULTURAL I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 5 INCOME TO EVADE TAX. ANY EVIDENCE FURNISHED FOR HAVING CARRIED OUT AGRICULTURAL OPERATION BY INCURRING ANY EXPENDITURE, THE INCOME SO EARNED SHALL BE TREATED AS AGRICULTURAL INCO ME , WHICH IS EXEMPT UNDER THE ACT. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ADMITTED ANY GROSS AGRICULTURAL INCOME SHOWING EXPENSES TOWARDS EARNING OF SUCH AGRICULTURAL INCOME AND AGREED TO PAY TAX. THE LD. CIT(A) HAS NOT AT ALL CONSIDERED THE VERY FACT THAT TAX SO AGREED TO PAY BY THE ASSESSEE TO THE INCOME FOR WHICH , THE ASSESSEE HAS NOT PRODUCED ANY PARTICULARS OR COGENT EVIDENCE , TANTAMOUNT TO CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS, DULY ATTRACTS PENALTY PROCEEDINGS. THE LD. C IT(A) HAS OBSERVED THAT CONSIDERING THE NATURE OF BUSINESS ACTIVITIES OF THE ASSESSEE COMPANY, THE AGRICULTURAL LANDS WERE ALSO PURCHASED WITH STANDING CROPS. AFTER THE LANDS WERE TAKEN POSSESSION BY THE ASSESSEE COMPANY, IT IS POSSIBLE THAT THE AGRICULTUR AL INCOME CAN BE D E RIVED BY HARVESTING OF THE STANDING CROPS. IF WE HAVE TO AGREE WITH THE OBSERVATIONS OF THE LD. CIT(A) THAT THE ASSESSEE HAS DERIVED AGRICULTURAL INCOME BY HARVESTING OF THE STANDING CROPS, THE LD. CIT(A) HAS NOT MADE ANY MENTION AS TO H OW THE ASSESSEE HAS HARVESTED THE STANDING CROPS WITHOUT INCURRING ANY EXPENDITURE. WHAT IS THE CROP STANDING AT THE TIME OF PURCHASE OF THE LAND WAS NOT MENTIONED SO AS TO AT LEAST PRESUME THAT THE SAID CROPS WERE HARVESTED ON FREE OF COST AND EARNED INCO ME. I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 6 8. BEFORE THE LD. CIT(A) AND ALSO I N THE CROSS OBJECTION, THE ASSESSEE HAS RELIED ON THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF CIT V. RAJA BENOY KUMAR SAHAS ROY 32 ITR 466, WHEREIN THE HON BLE SUPREME COURT HAS ELABORATELY CONSIDERED ABOUT THE AGRICULTURE AND DETERMINED INCOME EARNED AS AGRICULTURE INCOME. THE ASSESSEE HAS SHOWN EXPENDITURE INCURRED FOR EARNING THE INCOME . FURTHER, IN THE CASE OF KAMESHWAR SINGH V. CIT 32 ITR 587, THE ISSUE PERTAINS TO WHETHER THE INCOME EARNED OUT OF FORESTRY IS AGRICULTURAL INCOME OR NOT. THEREFORE, BOTH THE CASE LAW RELIED ON BY THE ASSESSEE HAS NO APPLICATION TO THE FACTS OF THE PRESENT CASE. 9. DURING PENALTY PROCEEDINGS AND EVEN BEFORE US, THE ASSESSEE HAS NOT FILED ANY MATERIAL EVIDENCE FOR THE INCOME OF .8,15,000/ - . UNDER THE ABOVE FACTS AND CIRCUMSTANCES, THE LD. CIT(A) HAS FAILED TO CONSIDER THE FACTS IN PROPER PERSPECTIVE AND ACCORDINGLY, WE CONFIRM THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OF THE ACT. 10 . T HE NEXT ISSUE RELATES TO LEVY OF PENALTY FOR THE DISALLOWANCE OF DEVELOPMENT LIABILITY. DURING THE COURSE OF 147 ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE COMPANY HAS DEBITED A SUM OF .1,05,50,000/ - AS PROVISIONS FOR DEV ELOPMENT EXPENDITURE, OUT OF WHICH THE ACTUAL EXPENDITURE INCURRED WAS ONLY .8,75,000/ - . THE NET PROVISION OF .96,75,000/ - WAS ADDED BACK TO THE RETURNED INCOME AS THIS WAS ONLY A PROVISION FOR THE EXPENDITURE TO BE INCURRED IN FUTURE AND NOTHING I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 7 WAS IN CURRED. THE ASSESSEE HAS CONTENDED THAT THESE ARE FUTURE LIABILITIES FOR THE ASSESSEE COMPANY AND THESE HAVE BEEN DEBITED DUE TO THE MATCHING CONCEPT AND HAVE TO BE INCURRED TO EARN THE INCOME. HOWEVER, THE ASSESSING OFFICER HAS HELD THAT THESE ARE ONLY PR OVISIONS CREATED IN THE ACCOUNTS, WHICH ARE NOT ALLOWABLE UNDER THE INCOME TAX ACT. FURTHER, THE ASSESSEE DID NOT FURNISH ANY PROOF TO SHOW THAT THE EXPENDITURE SO CLAIMED WAS LAID OUT OR EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE ASSESSEE S BU SINESS AS REQUIRED BY SECTION 37(1) OF THE ACT, THE ACTUAL EXPENDITURE INCURRED TO AN EXTENT OF .8,75,000/ - FOR WHICH EVIDENCES WERE PRODUCED WAS ALLOWED AND THE BALANCE OF .96,75,000/ - HAS BEEN ADDED BACK TO THE RETURNED INCOME. AGAINST THE ABOVE DISALL OWANCE, THE ASSESSEE HAS NOT CONTESTED BEFORE THE FIRST APPELLATE AUTHORITY. SUBSEQUENTLY, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. 11 . DURING THE COURSE OF PENALTY PROCEEDINGS, IN REPLY TO THE NOTICE, THE ASSESSEE HAS SUBMITTED THAT IT WAS OBLIGATORY ON THE P ART OF THE ASSESSEE TO MAINTAIN ENTRIES AND ACCOUNTS ON MERCANTILE BASIS UNDER THE PROVISIONS OF COMPANIES ACT, 1956. THE COMPANY HAD COMMITTED TO PROVIDE VARIOUS PERMANENT INFRA FACILITIES TO THE P ROSPECTIVE PURCHASERS OF THE PLOTTED LANDS, SUCH AS CLUB HOUSE, SECURITY, ENTRANCE ARCH, METAL ROAD, DRAINAGE PROTECTION, WATER FACILITY ETC. THE ASSESSING OFFICER HAS OBSERVED THAT THE COMMITMENT I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 8 TO BUILD CLUB HOUSE, ETC. ARE NOT IN THE NATURE OF ASCERTAI NED LIABILITY AND IN NO WAY IT CAN BE SAID THAT THE LIABILITY NEEDS TO BE INCURRED EITHER DURING THE YEAR UNDER CONSIDERATION OR IN THE FUTURE. HE HAS ALSO OBSERVED THAT THE ASSESSEE HAS SIMPLY MADE THE PROVISION DUE TO T HE FACT THAT THE INCOME FOR THE YEA R STANDS REDUCED AND COULD NOT PROVE ANY COMMITMENT MADE TO ITS CLIENTS BY WAY OF ANY WRITTEN AGREEMENT TO SUPPORT THE CLAIM THAT THE ACCOUNTING PROVISION HAS TO BE MADE FOR THE EXPENDITURE DURING THE YEAR UNDER CONSIDERATION. SINCE THE PROVISIONS CREATED IN THE ACCOUNTS, WHICH ARE NOT ALLOWABLE UNDER THE INCOME TAX ACT AND, THE ASSESSEE HAS NOT ACTUALLY INCURRED THE EXPENDITURE, WHICH IS ONLY AN OBLIGATORY FOR FUTURE REQUIREMENT, THE ASSESSING OFFICER LEVIED PENALTY FOR MAKING WRONG CLAIM IN THE RETURN OF INCOME . 1 2 . ON APPEAL, THE LD. CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HAS DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 13 . ON BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS SUBMITTED THAT THE ASSESSEE HAS CREATED THE PROVISION TO REDUCE THE RETURNED INCOME OF THE ASSESSEE. FURTHER, HE HAS SUBMITTED THAT SINCE THE DIRECTORS OF THE ASSESSEE COMPANY ADMITTED BEFORE THE LD. CIT(A) THAT THEY ARE NOT AWARE OF THE ACCOUNTING METHOD AND THEY ACTED ONLY ON THE ADVICE OF THE PROFESSIONAL CHARTERED ACCOUNTANTS CANNOT BE A GROUND TO DELETE THE PENALTY. I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 9 14. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE WAS COMMITTED TO CREATE DEVELOPMENT LIABILITIES AND THEREFORE, THE PROVISION WAS CREATED TO MEET THE EXPENSES AND PRAYED FOR DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER. 1 5 . WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. SINCE THE ASSESSEE HAS NOT FU RNISHED ANY PROOF TO SHOW THAT THE EXPENDITURE SO CLAIMED WAS EXPENDED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE ASSESSEE S BUSINESS AS REQUIRED UNDER SECTION 37(1) OF THE ACT, THE ACTUAL EXPENDITURE INCURRED TO AN EXTENT OF .8,75,000/ - FOR WHICH EVID ENCES WERE PRODUCED WAS ALLOWED AND THE BALANCE OF .96,75,000/ - HAS BEEN ADDED BACK TO THE RETURNED INCOME. ACCORDINGLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AGAINST THE DISALLOWANCE. SINCE THE ASSESSEE MADE A WRONG CLAIM, FOR WHICH THE ASS ESSEE COULD NOT ABLE TO OFFER EXPLANATION, THE ASSESSING OFFICER LEVIED PENALTY. 16 . T HE LD. CIT(A) HAS RELIED ON THE DECISION IN THE CASE OF CIT V. SANKARAN 241 ITR 825 (MAD) , IN THE CASE OF CIT V. PACHAMUTHU 295 ITR 502 (MAD) AND IN THE CASE OF CIT V. SARAN KHANDSARI SUGAR WORKS 246 ITR 216 (ALL). IN THE CASE OF CIT V. SANKARAN (SUPRA), THE HON BLE HIGH COURT HAS OBSERVED THAT MERE ADDITION TO INCOME AT THE INSTANCE OF ASSESSEE WOULD NOT WARRANT A FINDING OF CONCEALMENT OF INCOME. FURTHER IN THE CASE O F CIT V. I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 10 SARAN KHANDSARI SUGAR WORKS (SUPRA), THE ASSESSEE HAS AGREED TO A HIGHER ASSESSMENT ON THE CONDITION THAT NO PENALTY WOULD BE IMPOSED. IN THE CASE OF CIT V. PACHAMUTHU (SUPRA), DURING THE SURVEY, THE ASSESSEE HAS AGREED FOR ADDITION AND NO CONCEAL MENT WAS DISCOVERED , FOR WHICH THE HON BLE HIGH COURT HAS HELD THAT PENALTY IS NOT ATTRACTED. IN THE INSTANT CASE, DURING THE COURSE OF REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS FOUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS TO REDU CE THE TAXABLE INCOME IN THE RETURN FILED BY THE ASSESSEE TO EVADE TAX AND WHEN THE ASSESSEE HAS NO OTHER GO , THE ASSESSEE HAS ADMITTED THAT THEY ACTED ONLY ON THE ADVICE OF THE PROFESSIONAL CHARTERED ACCOUNTANTS. 17 . FURTHER IN THE CASE OF PANKAJ RATHI V. CIT [2011] 245 CTR 218 , THE HON BLE CALCUTTA HIGH COURT HAS HELD THAT IF THE ASSESSEE HAS NOT FURNISHED THE CORRECT PARTICULARS OF HIS INCOME, PENALTY UNDER SECTION 271(1)(C) CAN BE LEVIED ON THE GROUND THAT THERE WAS MENS REA INVOLVED. 18 . MOREOVER , IN THE GROUNDS OF APPEAL, THE DEPARTMENT HAS RELIED ON THE CASE LAW IN THE CASE OF MAK DATA PVT. LTD. V. CIT (CIVIL APPEAL NO. 9772 OF 2013. T HE HON'BLE SUPREME COURT HAS OBSERVED THAT THE EXPLANATION 1 TO SECTION 271(1) (C) OF THE ACT RAISES A PRESUMPTIO N OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSING OFFICER BETWEEN THE REPORTED AND ASSESSED INCOME. THE BURDEN IS THEN ON THE ASSESSEE TO SHOW OTHERWISE, BY COGENT AND RELIABLE EVIDENCE . W HEN THE INITIAL ONUS PLACED BY THE I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 11 EXPLANATION, HAS BEEN DISCHARGED BY HIM , THE ONUS SHIFTS T O THE DEPARTMENT TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED INCOME AND NOT OTHERWISE. VOLUNTARY DISCLOSURE DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NO T PROVIDE THAT WHEN AN ASSESSEE MAKES A VOLUNTARY DISCLOSURE OF HIS CONCEALED INCOME, HE HAS TO BE ABSOLVED FROM PENALTY. THE ASSESSING OFFICER SHOULD NOT BE CARRIED AWAY BY THE PLEA OF THE ASSESSEE SUCH AS VOLUNTARY DISCLOSURE , BUY PEACE , AVOID LITIG ATION , AMICABLE SETTLEMENT , TO EXPLAIN AWAY ITS CONDUCT. THE QUESTION IS WHETHER THE ASSESSEE HAS OFFERED ANY EXPLANATION FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. 1 9 . IN THE PRESENT CASE, THE ASSESSEE HA S MADE AN ERRONEOUS CLAIM OF DEDUCTION, WHICH INDEED POINTED OUT BY THE ASSESSING OFFICER DURING THE COURSE OF 147 ASSESSMENT PROCEEDINGS AND THE ASSESSEE HAS NOT GIVEN PROPER EXPLANATION. T HEREFORE, THE CLAIM WAS ADDED BACK TO THE RETURNED INCOME OF THE A SSESSEE. IT IS NOT THE CASE THAT THE ASSESSEE HAS FURNISHED TRUE PARTICULARS OF INCOME IN THE RETURNED FILED BY THE ASSESSEE . T HE REFORE, THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF MAK DATA P. LTD., VS. C IT (SUPRA) RELIED ON BY THE DEPARTMENT IN THE GROUNDS OF APPEAL SQUARELY APPLIES TO THE FACTS OF THE PRESENT CASE IN HAND. ACCORDINGLY, WE FIND THAT THERE IS NO ILLEGALITY IN INITIATING PENALTY PROCEEDINGS. IN VIEW OF THE I.T.A. NO . 2 6 /M/ 15 & C.O. NO. 20/M/15 12 ABOVE, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND CONFIRM THE PE NALTY LEVIED BY THE ASSESSING OFFICER. C.O. NO. 20/MDS/2015 20 . THE CROSS OBJECTION FILED BY THE ASSESSEE IS ONLY IN SUPPORT OF THE ORDER PASSED BY THE LD. CIT(A) AND SINCE WE HAVE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND ALLOWED THE APPEAL FI LED BY THE REVENUE, THE CROSS OBJECTION FILED BY THE ASSESSEE STANDS DISMISSED. 2 1 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED AND THE CROSS OBJECTION FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON THE 29 TH OCTOBER , 2015 AT CHEN NAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 29 . 1 0 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.