S. Sivarama Reddy, Visakhapatnam V. The ITO, Visakhapatnam

ITA 275/VIZ/2015

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9661 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 year(s) 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2011-2012
• Appeal Filed On: 15-06-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MAKING FAKE CLAIMS WITHOUT ANY VERIFIABLE EVIDENCES; VIZAG; CO NOS.
• Keywords: Unexplained cash credit; Income from undisclosed sources; Reasonable cause; Retraction; Revised return
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 271(1)(c); 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 143(3); 92; 142(1); 133A; 201; 251; 191; 139(1); 13

Judgement Text

ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . , . , $ BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ./I.T.A.NOS.251 & 286/VIZAG/2015 ( / ASSESSMENT YEARS: 2011-12 & 2012-13) THE ITO, WARD - 1(2), VISAKHAPATNAM VS. S. SIVA RAMA REDDY, VISAKHAPATNAM [PAN: AIXPS6613A ] ( % / APPELLANT) ( &'% / RESPONDENT) ./I.T.A.NOS.273, 275 & 277/VIZAG/2015 ( / ASSESSMENT YEARS: 2010-11, 2011-12 & 2012-13) S. SIVA RAMA REDDY, VISAKHAPATNAM VS. THE ITO, WARD - 1( 4 ), VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) C.O. NOS.24 & 27/VIZAG/2015 (ARISING OUT OF I.T.A.NOS.251 & 286/VIZAG/2015) ( / ASSESSMENT YEARS: 2011-12 & 2012-13) S. SIVA RAMA REDDY, VISAKHAPATNAM VS. THE ITO, WARD - 1( 2 ), VISAKHAPATNAM ( % / APPELLANT) ( &'% / RESPONDENT) / APPELLANT BY : SHRI R. GOVINDARAJAN, DR & SHRI M. NARAYANA RAO, DR / RESPONDENT BY : SHRI G.V.N. HARI, AR / DATE OF HEARING : 05.12.2016 / DATE OF PRONOUNCEMENT : 30.12.2016 ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 2 / O R D E R PER BENCH: THESE CROSS APPEALS FILED BY THE ASSESSEE, AS WELL AS THE REVENUE AND CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE COMMISSIONER OF INCOME TAX (A)-1, VISAKHAPATNAM FOR THE ASSESSMENT YEARS 2010-11, 201 1-12 & 2012-13. SINCE, THE FACTS ARE IDENTICAL AND ISSUES ARE COMMO N, THEY ARE CLUBBED, HEARD TOGETHER AND DISPOSED-OFF BY WAY OF THIS COMM ON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS ENGAGED IN THE BUSINESS OF MANUFACTURE AND SALE OF SWEETS, IN THE NAME AND STYLE OF M/S. SIVARAMA SWEETS FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEARS 2010-11 & 2011-12 DECLARING TOTAL INCOME OF ` 11,33,604/-, ` 9,84,314/-, BESIDES AGRICULTURAL INCOME OF ` 2,40,000/- RESPECTIVELY. HOWEVER, HE DID NOT FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2012-13. A SURVEY OPERATION U/S 133A OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED AS 'THE ACT') WAS CONDUCTED IN THE ASSESSEES CASE ON 12.11.2012. THE POST SURVEY INVESTIGATION REVEALED CERTAIN CASH DEPOSITS IN UNDISCLOSED BANK ACCOUNT, UNACCOUNTED P URCHASES AND SUPPRESSION OF SALES, ETC. DURING THE COURSE OF SU RVEY OPERATIONS, A ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 3 STATEMENT WAS RECORDED FROM THE ASSESSEE, WHEREIN T HE ASSESSEE HAS ADMITTED SUPPRESSION OF SALES TURNOVER AND AGREED T O DISCLOSE SAID SUPPRESSED SALES TURNOVER. 3. CONSEQUENT TO SURVEY, THE ASSESSMENT FOR THE ASS ESSMENT YEAR 2010-11 TO 2012-13 HAS BEEN RE-OPENED BY ISSUING NO TICE U/S 148 OF THE ACT FOR THE REASON THAT INCOME CHARGEABLE TO TAX HA D BEEN ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT. IN RESPONSE TO THE NOTICE U/S 148 OF THE ACT, THE ASSESSEE HAS FILED RETURN DECLARING TOTAL INCOME OF ` 22,09,314/- AS AGAINST THE ORIGINAL INCOME RETURN OF ` 9,84,314/-, THUS ADMITTING ADDITIONAL INCOME OF ` 12,25,000/- ON ADDITIONAL TURNOVER DECLARED TO COVER UP THE DEFICI ENCIES FOUND IN THE COURSE OF SURVEY OPERATION. IN SO FAR AS ASSESSMEN T YEAR 2010-11, THE ASSESSEE HAS FILED A LETTER STATING THAT THE RETURN ALREADY FILED U/S 139(1) OF THE ACT, MAY BE TREATED AS RETURN FILED IN RESPO NSE TO NOTICE ISSUED U/S 148 OF THE ACT. HOWEVER, THE ASSESSEE DID NOT FILED RETURN FOR THE ASSESSMENT YEAR 2012-13. THEREFORE, THE A.O. ISSUE D NOTICE U/S 142(1) OF THE ACT, CALLING FOR RETURN OF INCOME ON 16.11.2 012. IN RESPONSE TO NOTICE, THE ASSESSEE FILED HIS RETURN OF INCOME ON 19.2.2013 DECLARING TOTAL INCOME OF ` 3,77,341/- AND AGRICULTURAL INCOME OF ` 2,40,000/-. LATER ON, THE ASSESSEE HAS FILED A REVISED RETURN D ECLARING TOTAL INCOME OF ` 16,02,341/- AS AGAINST THE ORIGINAL INCOME RETURN OF ` 3,77,341/-, ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 4 THUS ADMITTING ADDITIONAL INCOME OF ` 12,25,000/-. THE A.O. AFTER CONSIDERING VARIOUS EXPLANATIONS FILED BY THE ASSES SEE COMPLETED THE ASSESSMENT U/S 143(3) R.W.S. 147 OF THE ACT BY DETE RMINING THE TOTAL INCOME OF 18,22,104/-, ` 1,10,66,802/-AND ` 3,80,27,004/- RESPECTIVELY FOR THE ASSESSMENT YEARS 2010-11, 2011-12 AND 2012- 13. 4. THEREAFTER, THE A.O. INITIATED PENALTY PROCEEDIN GS U/S 271(1)(C) OF THE ACT AND ASKED TO EXPLAIN AS TO WHY PENALTY SHAL L NOT BE LEVIED FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN RESPONSE, THE ASSESSEE SUBMITTED THA T HE PREFERRED APPEAL BEFORE THE CIT(A) AGAINST THE ORDER U/S 143( 3) OF THE ACT AND THE SAME IS BEING PENDING. THE ASSESSEE FURTHER SUBMIT TED THAT LEVY OF PENALTY FOR CONCEALMENT OF INCOME IS UNWARRANTED AS HE HAD EXPLAINED CASH DEPOSIT IN TO THE BANK ACCOUNT OUT OF CASH WIT HDRAWN FROM THE VERY SAME BANK. IN SO FAR AS DIFFERENCE IN AMOUNT OF MIL K PURCHASE AND OTHER PURCHASES, NO EVIDENCE WAS FOUND TO SHOW THAT THE M ILK STATED TO HAVE BEEN SOLD BY THE ABOVE COMPANY WAS IN FACT DELIVERE D TO THE ASSESSEE. THE ALLEGED SUPPRESSION OF SALES AS PER THE BILLING MACHINE IS ON ACCOUNT OF ERRORS IN DATA ENTERED RESULTING IN MULTIPLE ENT RIES. IT WAS FURTHER SUBMITTED THAT HE HAD ADMITTED ADDITIONAL TURNOVER OF ` 70 LAKHS EACH IN THE ASSESSMENT YEARS 2011-12 AND 2012-13 TO COVER U P THE DEFICIENCIES FOUND IN THE FORM OF UNACCOUNTED BANK ACCOUNT AND P URCHASES, ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 5 THEREFORE, VOLUNTARY SURRENDER OF ADDITIONAL INCOME TO BUY PEACE FROM THE DEPARTMENT CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 5. THE A.O. DID NOT ACCEPT THE CONTENTION OF THE AS SESSEE. AFTER CONSIDERING THE DETAILS FILED BY THE ASSESSEE HELD THAT THE ASSESSEE HIMSELF CONFESSED HIS CONCEALMENT OF INCOME AND FUR NISHING INACCURATE PARTICULARS BY ACCEPTING (1) UNDISCLOSED BANK ACCOU NT BELONGS TO HIM (2) BY FILING A REVISED RETURN (3) ADMITTING UNACCOUNTE D TURNOVER OF ` 70 LAKHS AND OFFERING ADDITIONAL INCOME OF ` 12,25,000/- (4) BY CLAIMING BENEFIT OF TELESCOPE OF UNACCOUNTED PURCHASE TO UND ISCLOSED SALES AND CASH CREDITS. THE A.O. FURTHER OBSERVED THAT DURIN G THE COURSE OF SURVEY, THE DEPARTMENT HAD UNEARTHED SUPPRESSION OF SALES TURNOVER AND OTHER DEFICIENCIES. WHEN THESE FACTS WERE CONFR ONTED TO THE ASSESSEE, THE ASSESSEE HAS CAME FORWARD TO OFFER AD DITIONAL INCOME, THEREFORE, IT IS CLEARLY EXHIBITS THAT THE ASSESSEE HAS CONCEALED HIS PARTICULARS OF INCOME WHILE FILING RETURN U/S 139(1 ) OF THE ACT FOR THE RESPECTIVE ASSESSMENT YEARS. THEREFORE, OPINED THA T THE ASSESSEE HAS DELIBERATELY CONCEALED PARTICULARS OF INCOME AND FU RNISHED INACCURATE PARTICULARS OF INCOME TO EVADE PAYMENT OF TAXES AND HENCE, IT IS A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE A.O. FURTHER OBSERVED THAT THE ASSESSEE HAS TRIED TO MISLEAD THE DEPARTMENT BY ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 6 MAKING VAGUE CLAIMS WITHOUT ANY VERIFIABLE EVIDENCE BY STATING THAT THE ASSESSEE HAS NOT DISCLOSED FACTS UNTIL THE SAME WAS DETECTED AND QUESTIONED BY THE DEPARTMENT. THE ASSESSEE RETRACT ED FROM THE EARLIER STATEMENT GIVEN AT THE TIME OF SURVEY AND ALSO DENI ED THE ADMISSION OF ADDITIONAL INCOME WITHOUT PRODUCING ANY VERIFIABLE EVIDENCES. THE ASSESSEE DENIED HIS STATEMENT FROM TIME TO TIME AND ALSO FAILED TO PRODUCE VERIFIABLE EVIDENCES FOR HIS OWN AND SELF-S ERVING CLAIMS. THEREFORE, OPINED THAT IT IS A CLEAR CASE OF DELIBE RATE CONCEALMENT OF PARTICULARS OF INCOME AND FURNISHING INACCURATE PAR TICULARS OF INCOME, WARRANTS LEVY OF MAXIMUM PENALTY OF 300% U/S 271(1) (C) OF THE ACT. ACCORDINGLY, LEVIED PENALTY OF 300% OF TAX SOUGHT T O BE EVADED. 6. AGGRIEVED BY THE PENALTY ORDERS, THE ASSESSEE PR EFERRED AN APPEAL BEFORE THE CIT(A). BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT THERE IS NO CONCEALMENT OF PARTICULARS OF INCOME OR FURNI SHING INACCURATE PARTICULARS OF INCOME, AS THE A.O. HAS MADE ADDITIO NS TOWARDS ESTIMATED NET PROFIT ON SUPPRESSED SALES TURNOVER. THE ASSES SEE FURTHER SUBMITTED THAT HE HAD EXPLAINED THE SOURCES FOR CREDIT FOUND IN THE BANK ACCOUNT, HOWEVER, THE A.O. HAS REJECTED THE EXPLANATIONS OFF ERED BY THE ASSESSEE AND MADE ADDITIONS TOWARDS TOTAL CREDITS FOUND IN T HE BANK ACCOUNT. BUT THE FACT IS THAT THE ASSESSEE IS HAVING A SOURC E OF INCOME IN THE FORM OF WITHDRAWAL FROM HIS CAPITAL ACCOUNT AND ALS O PART OF THE AMOUNT ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 7 HAS BEEN RE-DEPOSITED INTO THE BANK ACCOUNT OUT OF PREVIOUS WITHDRAWAL FROM THE SAME ACCOUNT. INSPITE OF ASKING FOR TELESC OPING OF THE SOURCES AVAILABLE IN THE FORM OF PREVIOUS WITHDRAWAL, THE A .O. HAS MADE ADDITIONS TOWARDS CREDITS FOUND IN THE BANK ACCOUNT WHICH CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OF INCOME. IN SO FAR AS ASSESSMENT YEARS 2011-12 & 2012-13, MOST OF THE ADD ITIONS ARE MADE ON THE BASIS OF ESTIMATION OF SALES TURNOVER AND ES TIMATION OF HIGHER NET PROFIT OF 60% ON THE SUPPRESSED TURNOVER, IGNORING THE EVIDENCES FILED. IT WAS FURTHER SUBMITTED THAT HE HAD ADMITTED ADDIT IONAL TURNOVER OF ` 70 LAKHS EACH FOR BOTH THE ASSESSMENT YEARS TO COVE R UP THE DISCREPANCIES FOUND AT THE TIME OF SURVEY OPERATION S. THE ASSESSEE FURTHER SUBMITTED THAT MERELY BECAUSE SOME TURNOVER WAS EFFECTED OUTSIDE THE BOOKS OF ACCOUNTS, IT CANNOT BE SAID TH AT THE ASSESSEE CERTAINLY MADE INCOME FROM THE SAID TURNOVER. IT W AS CONTENDED THAT AS THE AMOUNT OF PROFIT WAS ASSESSED ON AN ESTIMATE BA SIS, THERE IS NO CONCEALMENT REFERRED TO IN SECTION 271(1)(C) OF THE ACT AND ACCORDINGLY, THE A.O. WAS ERRED IN LEVYING MAXIMUM PENALTY OF 30 0% TAX SOUGHT TO BE EVADED. 7. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, HELD THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCO ME AND FURNISHED INACCURATE PARTICULARS OF INCOME, WHICH IS EVIDENT FROM THE FACT THAT A ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 8 REVISED RETURN WAS FILED MUCH AFTER THE ISSUE OF NO TICE U/S 148 OF THE ACT AND AFTER VARIOUS ENQUIRIES WHICH UNEARTHED SEVERAL MATERIAL DISCREPANCIES. THE A.O. HAS BROUGHT OUT CLEAR FACT S THAT THE ASSESSEE HAS SUPPRESSED SALES TURNOVER AND ALSO NOT DISCLOSE D BANK ACCOUNTS FOR THE REGULAR RETURN OF INCOME FILED FOR THE RESPECTI VE ASSESSMENT YEARS. THOUGH, THE ASSESSEE HAS ADMITTED ADDITIONAL TURNOV ER FOR BOTH THE ASSESSMENT YEARS, THE SAME HAS BEEN FILED AFTER THE DEPARTMENT FOUND OUT THE DISCREPANCIES IN THE FORM OF UNACCOUNTED SA LES, PURCHASES AND BANK ACCOUNT. THEREFORE, IT CANNOT BE SAID THAT TH E REVISED RETURN WAS FILED VOLUNTARILY TO BUY PEACE WITH THE DEPARTMENT. ACCORDINGLY, OPINED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCO ME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THE CIT(A ) FURTHER HELD THAT UNACCOUNTED INCOME WAS DETERMINED BY WAY OF ESTIMAT E WOULD NOT IN ANY MANNER ABSOLVE THE ASSESSEE FROM THE PENAL LIAB ILITY PRESCRIBED UNDER THE LAW WHEN THE CONDITIONS PRESCRIBED FOR SU CH PENAL LIABILITY IS SATISFIED AND WHEN THE ADDITION WAS ESTIMATED WITH REFERENCE TO THE MATERIAL DISCREPANCIES DETECTED. WITH THESE OBSERVA TIONS, OPINED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOM E AND FURNISHED INACCURATE PARTICULARS OF HIS INCOME AND HENCE, THE A.O. WAS RIGHT IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT. HOWEVER, THE CIT(A) FURTHER HELD THAT THOUGH THE ASSESSEE HAS CONCEALED PARTICU LARS OF HIS INCOME, IT ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 9 IS NOT A FIT CASE FOR LEVY OF MAXIMUM PENALTY OF 30 0% AS THE REASON GIVEN BY THE A.O. TO LEVY MAXIMUM PENALTY OF 300% I S INCORRECT. THE CIT(A) FURTHER OBSERVED THAT IT IS THE DUTY OF THE DEPARTMENT TO MAKE NECESSARY ENQUIRIES TO DETERMINE THE CORRECT INCOME AND ESTABLISH CONCEALMENT. THE ASSESSEE CANNOT BE EXPECTED IN AL L CASES TO SURRENDER ADDITIONAL INCOME. THE FACTS BROUGHT OUT BY THE A. O. ONLY JUSTIFY THE BASIS FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THE CONDUCT OF THE ASSESSEE CANNOT BE SAID TO BE TOTALLY RECALCITRANT AS THE ASSESSEE HAD RESPONDED TO THE NOTICES U/S 148 OF THE ACT AND FIL ED REVISED RETURN OFFERING ADDITIONAL INCOME IN THE LIGHT OF VARIOUS ENQUIRIES MADE. WITH THESE OBSERVATIONS, DIRECTED THE A.O. TO REDUCE CON CEALMENT PENALTY AS PER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT AT 100% IN REGARD TO THE ADDITIONS CONFIRMED BY THE CIT(A) IN THE QUANTU M APPEAL. AGGRIEVED BY THE CIT(A) ORDER, THE ASSESSEE AS WELL AS REVENUE ARE IN APPEAL BEFORE US. 8. THE LD. A.R. FOR THE ASSESSEE, SUBMITTED THAT TH E LD. CIT(A) IS NOT JUSTIFIED IN PARTLY SUSTAINING THE PENALTY LEVIED B Y THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. THE LD. COMMISSIONER OF INCOME TAX (A) OUGHT TO HAVE APPRECIATED THE FACT THAT THERE IS NE ITHER CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME WHICH WARRANTS LEVY OF PENALTY. THE A.R. FURTHER SUBMITTED THAT T HE ADDITIONS MADE BY ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 10 THE A.O. ARE PURELY ON ESTIMATION BASIS WITHOUT ANY PROPER EVIDENCES. THE ASSESSEE HAS FILED REVISED RETURN IN RESPONSE T O NOTICE U/S 148 OF THE ACT AND ADMITTED ADDITIONAL INCOME FOR BOTH THE ASSESSMENT YEARS TO COVER UP THE DEFICIENCIES FOUND DURING THE SURVEY, THEREFORE, VOLUNTARY SURRENDER OF INCOME TO BUY PEACE FROM THE DEPARTMEN T AND ALSO TO COOPERATE WITH THE DEPARTMENT FOR SMOOTH COMPLETION OF ASSESSMENT PROCEEDINGS CANNOT BE CONSIDERED AS CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. 9. THE A.R. FURTHER SUBMITTED THAT IN SO FAR AS CRE DITS FOUND IN THE BANK ACCOUNT, THE ASSESSEE HAD EXPLAINED BEFORE THE A.O. THAT THE SOURCES FOR THE CREDIT FOUND IN THE BANK ACCOUNT AR E OUT OF WITHDRAWAL FROM HIS CAPITAL ACCOUNT AND ALSO PART OF THE AMOUN T IS OUT OF PREVIOUS WITHDRAWALS FROM SAME BANK ACCOUNT. UNLESS THE A.O . PROVES OTHERWISE, THE WITHDRAWALS ARE USED FOR ACQUIRING A NY ASSETS OR EXPENDED OUTSIDE BOOKS OF ACCOUNTS, THE SOURCES AVA ILABLE CANNOT BE IGNORED. THOUGH ASSESSEE EXPLAINED THE SOURCES FOR CREDITS FOUND IN THE BANK ACCOUNT, THE A.O. IGNORED THE EVIDENCES FILED BY THE ASSESSEE AND MADE ADDITIONS, THEREFORE, IT CANNOT BE CONSIDERED AS DELIBERATE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. IN SO FAR AS ASSESSMENT YEAR 2011-12 & 2012-13 ARE CONCERNED, THE A.R. SUBMITTED THAT MOST OF THE ADDI TIONS MADE BY THE ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 11 A.O. HAVE BEEN DELETED BY THE CIT(A) IN THE QUANTUM APPEAL PROCEEDINGS. THOUGH THE CIT(A) HAS SUSTAINED ADDIT IONS MADE BY THE A.O. TOWARDS ESTIMATION OF TURNOVER AND ESTIMATION OF NET PROFIT, THE ADDITIONS SUSTAINED BY THE CIT(A) ARE PURELY AN EST IMATION WITHOUT ANY EVIDENCES. THEREFORE, THE CIT(A) WAS ERRED IN CONF IRMING MINIMUM PENALTY U/S 271(1)(C) OF THE ACT. 10. ON THE OTHER HAND, THE LD. D.R. SUBMITTED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME AND FURNISHED I NACCURATE PARTICULARS OF INCOME, WHICH IS EVIDENT FROM THE FACT THAT DURI NG THE COURSE OF SURVEY, THE DEPARTMENT HAS UNEARTHED SEVERAL DISCRE PANCIES IN THE FORM OF UNACCOUNTED BANK ACCOUNT, PURCHASES AND SUPPRESS ION OF SALES TURNOVER. THE D.R. FURTHER SUBMITTED THAT THE ASSE SSEE HAS ADMITTED ADDITIONAL INCOME AND ALSO FILED REVISED RETURN BY ADMITTING ADDITIONAL INCOME DISCLOSED DURING SURVEY, WHICH CLEARLY SHOWS THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF HIS INCOME WHILE FILIN G RETURN U/S 139(1) OF THE ACT. THE D.R. REFERRING TO THE PENALTY ORDER, SUBMITTED THAT THE A.O. HAS BROUGHT OUT CLEAR FACTS WHEREIN HE HAD PROVED T HAT THERE IS A CONCEALMENT OF INCOME WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT. THE D.R. FURTHER SUBMITTED THAT THE ASSESSEE TRIED TO MISLEAD THE DEPARTMENT BY MAKING FAKE CLAIMS WITHOUT ANY VERIFI ABLE EVIDENCES, NON-DISCLOSURE OF FACTS UNTIL THE SAME ARE DETECTED AND QUESTIONED BY ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 12 THE DEPARTMENT AND RETRACTION FROM THE EARLIER STAT EMENT AND DENIAL OF ESTABLISHED EVIDENCES WITHOUT PRODUCING ANY VERIFIA BLE EVIDENCES AMOUNTS TO DELIBERATE CONCEALMENT OF INCOME, WHICH WARRANTS MAXIMUM PENALTY OF 300% TAX SOUGHT TO BE EVADED. THE CIT(A ) WITHOUT APPRECIATING THE FACTS, SIMPLY DIRECTED THE A.O. TO LEVY MINIMUM PENALTY OF 100%, THEREFORE, REQUESTED TO UPHOLD PENALTY LEV IED BY THE A.O. 11. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATE RIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHOR ITIES BELOW. THE A.O. LEVIED PENALTY U/S 271(1)(C) OF THE ACT, BY HO LDING THAT THE ASSESSEE HAS DELIBERATELY CONCEALED PARTICULARS OF HIS INCOME AND FURNISHED INACCURATE PARTICULARS OF HIS INCOME, WHI CH IS EVIDENT FROM THE FACT THAT THE DEPARTMENT HAD UNEARTHED SEVERAL DISC REPANCIES DURING THE COURSE OF SURVEY. THE A.O. FURTHER OBSERVED THAT T HE ASSESSEE HAD NOT DISCLOSED FEW BANK ACCOUNTS IN THE REGULAR RETURN F ILED FOR THE RESPECTIVE ASSESSMENT YEARS. THE ASSESSEE ALSO NOT DISCLOSED PURCHASES AND SUPPRESSED SALES TURNOVER, WHICH WAS FOUND AND IMPO UNDED DURING THE COURSE OF SURVEY. WHEN THESE FACTS WERE CONFRONTED TO THE ASSESSEE, THE ASSESSEE HAS ADMITTED THE LAPSES AND AGREED TO DISCLOSE ADDITIONAL INCOME, THEREFORE, OPINED THAT IT IS A FIT CASE FOR LEVY OF PENALTY OF 300% TAX SOUGHT TO BE EVADED. IT IS THE CONTENTION OF T HE ASSESSEE THAT THERE IS NO CONCEALMENT OF PARTICULARS OF INCOME OR FURNI SHING INACCURATE ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 13 PARTICULARS OF INCOME, AS HE HAD SURRENDERED ADDITI ONAL INCOME TO BUY PEACE AND TO COOPERATE WITH THE DEPARTMENT FOR SMOO TH COMPLETION OF ASSESSMENT. THOUGH, THERE IS A SLIGHT DIFFERENCE I N INCOME FINALLY ASSESSED BY THE A.O. CONSEQUENT TO THE FINDINGS OF THE CIT(A), THE INCOME FINALLY ASSESSED BY THE A.O. IS MAINLY BECAU SE OF ESTIMATION OF SALES TURNOVER FOR THE REMAINING PERIOD OF 8 MONTHS BASED ON THE INFORMATION OF 4 MONTHS FOUND DURING THE COURSE OF SURVEY. IT IS FURTHER CONTENDED THAT HE HIMSELF HAD ADMITTED ADDITIONAL I NCOME TO COVER UP THE DEFICIENCIES FOUND IN THE COURSE OF SURVEY AND SURRENDERED ADDITIONAL INCOME, THEREFORE, IT CANNOT BE CONSIDERED AS CONCE ALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF I NCOME WHICH WARRANTS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. 12. THE ONLY ISSUE FOR DETERMINATION IS WHETHER THE ASSESSEE CAN BE SAID TO HAVE CONCEALED PARTICULARS OF INCOME OR FUR NISHED INACCURATE PARTICULARS OF HIS INCOME WHICH WARRANTS LEVY OF PE NALTY U/S 271(1)(C) OF THE ACT. THE FACTS RELATING TO DISCLOSURE OF ADDIT IONAL INCOME CONSEQUENT TO SURVEY OPERATIONS AND ESTIMATION OF HIGHER INCOM E BY THE A.O. IS NOT DISPUTED. BUT, THE CIT(A), IN THE QUANTUM APPEAL P ROCEEDINGS HAS DIRECTED THE A.O. TO DELETE MOST OF THE ADDITIONS M ADE BY THE A.O. TOWARDS UNEXPLAINED CREDITS FOUND IN THE BANK ACCOU NT AND UNACCOUNTED PURCHASES. THOUGH, THE CIT(A) HAS SUSTAINED PART O F THE ADDITIONS ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 14 MADE BY THE A.O. TOWARDS ESTIMATION OF SALES TURNOV ER AND ESTIMATION OF NET PROFIT ON SUCH TURNOVER, IT IS THE FACT THAT IN COME FINALLY SUSTAINED BY THE CIT(A) IS PURELY ON THE BASIS OF ESTIMATION. W E FURTHER NOTICED THAT THE ITAT IN THE QUANTUM APPELLATE PROCEEDINGS IN IT A NOS.274/VIZAG/2015 & 276/VIZAG/2015 HAS FURTHER RED UCED ADDITIONS SUSTAINED BY THE CIT(A) TOWARDS ESTIMATION OF SUPPR ESSED SALES TURNOVER AND NET PROFIT ON SUCH TURNOVER. ON PERUSAL OF THE QUANTUM APPEAL ORDERS, WE FIND THAT THE ITAT, HAS FINALLY DIRECTED THE A.O. TO ACCEPT ADDITIONAL TURNOVER DECLARED BY THE ASSESSEE FOR TH E ASSESSMENT YEARS 2011-12 & 2012-13 AND DIRECTED THE A.O. TO ESTIMATE NET PROFIT OF 20% ON SUCH TURNOVER. WE FURTHER OBSERVED THAT THE ASS ESSEE HIMSELF HAD ADMITTED ADDITIONAL TURNOVER OF ` 70 LAKHS EACH FOR THE ASSESSMENT YEAR 2011-12 AND 2012-13 AND ESTIMATED 17.5% NET PROFIT ON ADDITIONAL TURNOVER. THOUGH, THE ITAT HAS ENHANCED NET PROFIT FROM 17.5% TO 20%, THE FINAL INCOME DETERMINED BY THE ITAT IS PUR ELY ON ESTIMATION BASIS. THEREFORE, WHEN ADDITIONS ON THE BASIS OF W HICH PENALTY WAS LEVIED U/S 271(1)(C) OF THE ACT, HAD ITSELF BEEN RE DUCED SUBSTANTIALLY IN QUANTUM APPEAL, LEVY OF PENALTY FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME IS NOT CORRECT. WE FURTHER OBSERVED THAT THOUGH THE ITAT HAS SUSTAINED PART OF THE ADDITIONS MADE BY THE A.O. TOWARDS ESTIMATION OF NE T PROFIT, WHICH IS ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 15 ONLY A MERE ESTIMATE WITHOUT ANY REFERENCE TO THE C ONCEALMENT OF PARTICULARS OF INCOME AND ACCORDINGLY, WE ARE OF TH E VIEW THAT THE ASSESSEE NEITHER CONCEALED PARTICULARS OF HIS INCOM E NOR FURNISHED INACCURATE PARTICULARS OF INCOME WHICH WARRANTS LEV Y OF PENALTY U/S 271(1)(C) OF THE ACT. 13. THE QUESTION WHETHER THERE WAS A REASONABLE CAU SE FOR WHICH THE REQUIREMENT OF CONCERNED PROVISIONS OF SECTION COUL D NOT BE COMPLIED WITH IS PRIMARILY AN ESSENTIAL QUESTION OF FACT AND IT HAS TO BE DECIDED IN EACH CASE ON CONSIDERATION OF MATERIAL PLACED BEFOR E THE CONCERNED AUTHORITY. THE LEVY OF PENALTY U/S 271(1)(C) OF TH E ACT IS NOT AUTOMATIC. BEFORE LEVYING PENALTY, THE CONCERNED AUTHORITY IS REQUIRED TO FIND OUT THAT EVEN THERE WAS ANY VIOLATION REFERRED TO IN TH E SAID PROVISIONS AND THE SAME WAS WITHOUT A REASONABLE CAUSE. THE INITI AL BURDEN IS ON THE ASSESSEE TO SHOW THAT THERE EXISTS A REASONABLE CAU SE, WHICH WAS THE REASON FOR THE FAILURE REFERRED TO IN THE CONCERNED PROVISIONS. THEREFORE, THE ASSESSING OFFICER DEALING WITH TH E PENALTY, IS TO CONSIDER WHETHER THE EXPLANATIONS OFFERED BY THE ASSESSEE OR THE PERSON AS THE CASE MAY BE AND AS REGARDS THE REASON WAS ON ACCOUN T OF REASONABLE CAUSE. 14. IN THE PRESENT CASE ON HAND, THE ASSESSEE HAS A DMITTED ADDITIONAL TURNOVER TO COVER UP THE DEFICIENCIES FOUND DURING THE COURSE OF SURVEY. ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 16 THE ASSESSEE ALSO FILED REVISED RETURNS IN RESPONSE TO NOTICE U/S 148 OF THE ACT, ADMITTING ADDITIONAL TURNOVER DISCLOSED DU RING THE COURSE OF SURVEY. THE ASSESSEE HAS ESTIMATED NET PROFIT OF 1 7.5% ON SUCH ADDITIONAL TURNOVER. THOUGH THE A.O. HAS ESTIMATED 60% NET PROFIT ON ADDITIONAL TURNOVER, THE ITAT FINALLY DIRECTED THE A.O. TO ESTIMATE NET PROFIT OF 20% ON ADDITIONAL TURNOVER DECLARED BY TH E ASSESSEE. THOUGH THERE IS A SLIGHTLY HIGHER INCOME FINALLY ASSESSED CONSEQUENT TO THE FINDINGS OF THE ITAT, IT IS MAINLY BECAUSE OF ESTIM ATION OF NET PROFIT WHICH CANNOT BE CONSIDERED AS CONCEALMENT OF INCOME , WHICH WARRANTS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. WE FURTH ER OBSERVED THAT WHEN ASSESSEE SURRENDERED ADDITIONAL INCOME TO COVER UP THE DEFICIENCIES FOUND DURING THE COURSE OF SURVEY AND OFFERED ADDIT IONAL INCOME BY FILING REVISED RETURN IN RESPONSE TO NOTICE U/S 148 OF THE ACT, THE A.O. WAS INCORRECT IN LEVYING PENALTY FOR CONCEALMENT OF PAR TICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. IT IS NOT AUTOMATIC THAT WHATEVER AMOUNT HAS BEEN OFFERED BY THE ASSESSEE, P ENALTY IS TO BE IMPOSED. GENERALLY, CONCEALMENT PROVISION CANNOT B E INVOKED IN CASE OF SURRENDER OF ADDITION, IF SURRENDER IS MADE SPECIFI CALLY ON CONDITION THAT NO PENALTY WILL BE LEVIED OR IF SURRENDER IS MADE W ITH A VIEW TO BUY PEACE OR TO AVOID HARASSMENT OR LITIGATION. ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 17 15. COMING TO THE CASE LAWS RELIED UPON BY THE PART IES. THE ASSESSEE HAS RELIED UPON THE DECISION OF CIT VS. SURESH CHAN DRA MITTAL (2001) 251 ITR 9 (SC) AND SUBMITTED THAT WHEN ADDITIONAL I NCOME IS SURRENDERED TO BUY PEACE AND TO COOPERATE WITH THE DEPARTMENT, PENALTY CANNOT BE LEVIED FOR CONCEALMENT OF PARTICU LARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. WE FIN D THAT HONBLE SUPREME COURT, OBSERVED THAT THOUGH THE ASSESSEE SU RRENDERED ADDITIONAL INCOME BY WAY OF REVISED RETURNS AFTER P ERSISTENT QUERIES BY ASSESSING OFFICER, ONCE THE REVISED RETURNS FOUND R EGULARIZED BY THE REVENUE, THE EXPLANATIONS OF THE ASSESSEE THAT HE H AS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF V EXED LITIGATION COULD BE TREATED AS BONAFIDE AND PENALTY U/S 271(1)(C) OF THE ACT WAS NOT LEVIABLE. 16. THE ASSESSEE RELIED UPON THE DECISION OF HONBL E DELHI HIGH COURT, IN THE CASE OF CIT VS. SAS PHARMACEUTICALS PVT. LTD . REPORTED IN (2011) 335 ITR 239. THE HONBLE DELHI HIGH COURT, HELD TH AT NO PENALTY CAN BE LEVIED FOR INCOME SURRENDERED DURING THE COURSE OF SURVEY. THE RELEVANT PORTION OF THE ORDER IS EXTRACTED BELOW: IT IS TO BE KEPT IN MIND THAT S. 271(1)(C) IS A PE NAL PROVISION AND SUCH A PROVISION HAS TO BE STRICTLY CONSTRUED. UNLESS THE CASE FALLS WITHIN THE FOUR CORNERS OF THE SAID PROVISION, PENALTY CANNOT BE IM POSED. SUB-S. (1) OF S. 271 STIPULATES CERTAIN CONTINGENCIES ON THE HAPPENI NG WHEREOF THE AO OR THE CIT(A) MAY DIRECT PAYMENT OF PENALTY BY THE ASS ESSEE. SEC. 271(1)(C) AUTHORIZES IMPOSITION OF PENALTY WHEN THE AO IS SAT ISFIED THAT THE ASSESSEE HAS EITHER : (A) CONCEALED THE PARTICULARS OF HIS I NCOME; OR (B) FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IT IS NOT TH E CASE OF FURNISHING ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 18 INACCURATE PARTICULARS OF INCOME, AS IN THE IT RETU RN, PARTICULARS OF INCOME HAVE BEEN DULY FURNISHED AND THE SURRENDERED AMOUNT OF INCOME WAS DULY REFLECTED IN THE IT RETURN. THE QUEST/ON IS WHETHER THE PARTICULARS OF INCOME WERE CONCEALED BY THE ASSESSEE OR NOT. IT WOU LD DEPEND UPON THE ISSUE AS TO WHETHER THIS CONCEALMENT HAS REFERENCE TO THE IT RETURN FILED BY THE ASSESSEE, VIZ., WHETHER CONCEALMENT IS TO BE FOUND IN THE IT RETURN. THE WORDS 'IN THE COURSE OF ANY PROCEEDINGS UNDER T HIS ACT' ARE PREFACED BY THE SATISFACTION OF THE AO OR THE CIT('A). WHEN THE SURVEY IS CONDUCTED BY A SURVEY TEAM, THE QUESTION OF SATISFACTION OF A O OR THE CIT(A) OR THE CIT DOES NOT ARISE. ONE HAS TO KEEP IN MIND THAT IT IS THE AO WHO INITIATED THE PENALTY PROCEEDINGS AND DIRECTED THE PAYMENT OF PENALTY. HE HAD NOT RECORDED ANY SATISFACTION DURING THE COURSE OF SURV EY. DECISION TO INITIATE PENALTY PROCEEDINGS WAS TAKEN WHILE MAKING ASSESSME NT ORDER. IT IS, THUS, OBVIOUS THAT THE EXPRESSION 'IN THE COURSE OF ANY PROCEEDINGS UNDER THIS ACT' CANNOT HAVE THE REFERENCE TO SURVEY PROCE EDINGS IN THIS CASE. IT NECESSARILY FOLLOWS THAT CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULAR OF INCOME BY TH E ASSESSEE HAS TO BE IN THE IT RETURN FILED BY IT. THE ASSESSEE CAN FURNISH THE PARTICULARS OF INCOME IN HIS RETURN AND EVERYTHING WOULD DEPEND UP ON THE IT RETURN FILED BY THE ASSESSEE. THIS VIEW GETS SUPPORTED BY EXPLNS. 4 AS WELL AS S AND 5A OF S. 271. OBVIOUSLY, NO PENALTY CAN BE IMPOS ED UNLESS THE CONDITIONS STIPULATED IN THE SAID PROVISIONS ARE DU LY AND UNAMBIGUOUSLY SATISFIED. SINCE THE ASSESSEE WAS EXPOSED DURING SU RVEY, MAY BE, IT WOULD HAVE NOT DISCLOSED THE INCOME BUT FOR THE SAI D SURVEY. HOWEVER, THERE CANNOT BE ANY PENALTY ONLY ON SURMISES, CONJE CTURES AND POSSIBILITIES. SEC. 271 (1) (C) HAS TO BE CONSTRUED STRICTLY. UNLESS IT IS FOUND THAT THERE IS ACTUALLY A CONCEALMENT OR NON-D ISCLOSURE OF THE PARTICULARS OF INCOME, PENALTY CANNOT BE IMPOSED. T HERE IS NO SUCH CONCEALMENT OR NON-DISCLOSURE AS THE ASSESSEE HAD M ADE A COMPLETE DISCLOSURE IN THE IT RETURN AND OFFERED THE SURREND ERED AMOUNT FOR THE PURPOSES OF TAX.CIT VS. MOHAN DAS HASSA NAND (1983 ) 34 CTR (DEL) 361 (1983) 141 ITR 203 (DEL) AND CIT VS. RELIANCE P ETRO PRODUCTS (P) LTD. (2010) 230 CTR (SC) 320: (2010) 36 DIR (SC) 44 9: (2010) 3 SCR 510 RELIED ON. 17. THE ASSESSEE ALSO RELIED UPON THE DECISION OF H ONBLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF CIT VS. RAVAILSI NG & CO. (2002) 254 ITR 191 WHEREIN, THE HONBLE HIGH COURT HELD THAT W HERE ADDITION WAS MADE ON THE BASIS OF ESTIMATE, BUT NOT ON ANY CONCR ETE EVIDENCE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS , LEVY OF PENALTY IS NOT JUSTIFIED. 18. THE A.O. RELIED UPON THE DECISION OF HONBLE HI GH COURT OF PATNA IN THE CASE OF CIT VS. VARSAT HUSAIN 171 ITR 405 AND H ONBLE SUPREME ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 19 COURT IN THE CASE OF B.A. BALA SUBRAHMANYAM & BROTH ERS COMPANY VS. CIT 236 ITR 977 AND OBSERVED THAT WHERE ASSESSEE SH OWS RELEVANT MATERIAL EVIDENCE, THE REVENUE HAS NO OPTION BUT TO MAKE A BEST JUDGEMENT ASSESSMENT BY ESTIMATE. AN ASSESSMENT BY ESTIMATE IS AS MUCH LEGAL AS ANY OTHER ASSESSMENT. ONCE THE ASSES SMENT HAS BEEN DONE, WHETHER IT IS A BEST JUDGEMENT ASSESSMENT OR OTHERWISE, THE FIGURES ASSESSED MUST BE HELD TO BE THE INCOME OF T HE ASSESSEE. SUCH ASSESSMENT WOULD ATTRACT THE LEVY OF PENALTY. WE HA VE GONE THROUGH THE CASE LAWS RELIED UPON BY THE A.O. IN THE LIGHT OF THE FACTS OF THE PRESENT CASE AND FOUND THAT THE CASE LAW RELIED UPO N BY THE LD. A.O. IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. I N THE PRESENT CASE, THOUGH THE A.O. HAS MADE HIGHER ESTIMATION OF TURNO VER AND NET PROFIT, THE ITAT FINALLY DIRECTED THE A.O. TO ACCEPT THE TU RNOVER DECLARED BY THE ASSESSEE IN THE RETURN OF INCOME FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT. ALTHOUGH THERE IS A SLIGHT DIFFERENCE IN INCOME FINALLY ASSESSED BASED ON HIGHER NET PROFIT, WHICH IS MERELY AN ESTI MATE WITHOUT ANY REFERENCE TO PARTICULAR CONCEALMENT OF INCOME OR FU RNISHING INACCURATE PARTICULARS OF INCOME, THEREFORE, THE CASE LAWS REL IED UPON BY THE A.O. ARE NOT CONSIDERED. 19. IN THIS VIEW OF THE MATTER AND ALSO FOLLOWING T HE RATIOS OF CASE LAWS DISCUSSED ABOVE, WE ARE OF THE VIEW THAT THE A SSESSEE NEITHER ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 20 CONCEALED PARTICULARS OF HIS INCOME NOR FURNISHED I NACCURATE PARTICULARS OF INCOME, WHICH WARRANTS LEVY OF PENALTY U/S 271(1 )(C) OF THE ACT. THE INCOME FINALLY ASSESSED IS MERELY AN ESTIMATION OF INCOME WITHOUT REFERENCE TO ANY CONCEALMENT OF PARTICULARS OF INCO ME. THEREFORE, WE ARE OF THE VIEW THAT THE A.O. WAS ERRED IN LEVYING PENALTY U/S 271(1)(C) OF THE ACT. HENCE, WE DELETE THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) OF THE ACT. 20. THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE IN SUPPORT OF THE ORDER OF THE LD. CIT(A). THEREFORE, FOR THE REASON S RECORDED IN THE PRECEDING PARAGRAPHS, WE DISMISS THE CROSS OBJECTIO NS FILED BY THE ASSESSEE AS NOT MAINTAINABLE. 21. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E IN ITA NOS.273, 275 & 277/VIZAG/2015 ARE ALLOWED AND APPEALS FILED BY THE REVENUE IN ITA NOS.251 & 286/VIZAG/2015 ARE DISMISSED. THE CROSS OBJECTIONS FILED BY THE ASSESSEE VIDE CO NOS.24 & 27/VIZAG/201 5 ARE ALSO DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 30 TH DEC16. SD/- SD/- ( . ) ( . ) (V. DURGA RAO) (G. MANJUNATHA) /JUDICIAL MEMBER /ACCOUNTANT MEMBER # /VISAKHAPATNAM: ' /DATED : 30.12.2016 VG/SPS ITA NOS.251,273, 275, 277, 286/VIZAG/2015 & CO NOS. 24 & 27/VIZAG/2015 S. SIVARAMA REDDY, VISAKHAPATNAM 21 )# *# /COPY OF THE ORDER FORWARDED TO:- 1. / THE APPELLANT THE ITO, WARD-1(2), VISAKHAPATNA M 2. / THE RESPONDENT SHRI S. SIVARAMA REDDY, PROP: S RI SIVARAMA SWEETS, D.NO.28-02-23, SURYABAGH, VISAKHAPATNAM 3. / THE RESPONDENT THE ITO, WARD-1(4), VISAKHAPATN AM 4. + / THE CIT-1, VISAKHAPATNAM 5. + ( ) / THE CIT (A)-1, VISAKHAPATNAM 6. # . , . , # / DR, ITAT, VISAKHAPATNAM 7 . / GUARD FILE / BY ORDER // TRUE COPY // 12 . (SR.PRIVATE SECRETARY) . , # / ITAT, VISAKHAPATNAM