The ITO, Ward-4(1), Ahmedabad V. Geera Finance Ltd., Ahmedabad

ITA 2802/AHD/2012

• Counselvise Citation: 280220514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 18-03-2014
• Assessment Year: 1989-1990
• Appeal Filed On: 11-12-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS SRDR
• Assessee Lawyers: VIJAY RANJAN
• Keywords: Bogus purchase; Opportunity of being heard; Revised return
• Section: 143(3); 131; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH AHMADABAD , , , , BEFORE SHRI D.K.TYAGI , JUDICIAL MEMBER AND .., SHRI T.R. MEENA, ACCOUNTANT MEMBER !.. , ' # $ # $ # $ # $ ITA NO. 2802/AHD/2012 ASSESSMENT YEAR :1989-90 THE INCOME-TAX OFFICER, WARD-4(1), AHMADABAD NAVJIVAN TURST BLDG., OFF. ASHRAM ROAD, AHMADABAD. V/S . GEERA FINANCE LTD. ANAND, SAURASHTRA SOCIETY, PALDI, AHMADABAD 380 007 PAN NO. A AACG7562Q (APPELLANT) .. (RESPONDENT) %& ' ( / BY APPELLANT SHRI K. C. MATHEWS, SR.D.R. )%& ' ( /BY RESPONDENT SHRI VIJAY RANJAN, A.R. *+, ' -' /DATE OF HEARING 18.03.2014 ./0 ' -' /DATE OF PRONOUNCEMENT 27.03.2014 O R D E R PER : SHRI T.R.MEENA, ACCOUNTANT MEMBER THIS IS AN APPEAL AT THE BEHEST OF REVENUE WHICH HA S EMANATED FROM THE ORDER OF CIT(A)-VIII, AHMEDABAD, DATED 22. 09.2012 FOR ASSESSMENT YEAR 1989-90. THE SOLE GROUND OF REVENU ES APPEAL IS AGAINST DELETING PENALTY OF RS.4,91,124/- LEVIED BY THE ASSESSING OFFICER WITHOUT APPRECIATING FACTS THAT TRANSACTION WERE FO UND BOGUS AND PARTIES ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 2 HAD ONLY ISSUED BILLS IN FAVOUR OF THE ASSESSEE. E VEN THE REVISED RETURN WAS FILED BY THE ASSESSEE AFTER COMPLETE ENQUIRIES BY THE A.O. THE CIT(A) ERRED IN NOT CONSIDERING THE DECISION OF HON BLE DELHI HIGH COURT IN THE CASE OF CIT VS. USHA INTERNATIONAL (348 ITR 485 ). 2. IN THIS CASE, THE A.O. COMPLETED THE ASSESSMENT U/S. 143(3) OF THE IT ACT ON 30.11.1990 AND ADDITION ON ACCOUNT OF BOG US TRADING LOSS WAS MADE AT RS.7,81,149/- AND FINALLY INCOME WAS DETERM UINED OF RS.8,38,500/- AGAINST THE NET PROFIT OF RS.90,145/- . FOR THIS, THE LD. A.O. INITIATED PENALTY PROCEEDING U/S. 271(1)(C) FOR CON CEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME. BEFOR E IMPOSING PENALTY U/S. 271(1)(C), THE A.O. GAVE REASONABLE OPPORTUNITY OF BEING HEARD, WHICH WAS AVAILED BY THE ASSESSEE. AFTER CONSIDERING THE ASS ESSEES REPLY, THE A.O. OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCE EDING U/S. 143(3) OF THE IT ACT, THE BOOKS OF ACCOUNT FROM 08.09.1988 TO 31.03.1989 WERE PRODUCED BY THE ASSESSEE. THE BOOKS OF ACCOUNT PRI OR TO 01.09.1989 WERE SEIZED BY THE DEPARTMENT DURING THE SEARCH OPE RATION U/S. 132 OF THE IT ACT FROM THE BUSINESS PREMISES AS WELL AS RESIDE NCE PREMISES OF THE ASSESSEE. ON EXAMINATION OF THESE BOOKS, IT WAS NO TICED BY THE A.O. THAT THE ASSESSEE HAD INCURRED HEAVY LOSSES IN EVERY TRA NSACTION OF PURCHASE AND CORRESPONDENCES THE PARTIES WITH WHOM THESE TRA NSACTIONS HAD BEEN MADE WERE SUMMONED AND EXAMINED UNDER OATH BY HIM. THE LD. A.O. FOUND THAT: ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 3 SHRI PRASHANT P VAKIL, PROPRIETOR OF A.P. TRADERS, FROM WHOM MAJORITY OF THESE GOODS HAD BEEN PURCHASED, REVEALE D THAT A.P. TRADERS DEALT IN SELF ADHESIVE STICKERS ONLY AND CA RRIED ON NO OTHER BUSINESS. HE HAD HIMSELF ISSUED SALES BILLS OF RS. 25,99,075/- TO GEERA FINANCE LTD. BUT NO GOODS AS MENTIONED IN THE BILLS , WERE SUPPLIED. HE HAD NO SUCH GOODS IN HIS POSSESSION AND HE DID NOT PURCHASE ANY SUCH GOODS FROM ANY OTHER PARTY. HE STATED THAT HE HAD ISSUED THESE BILLS AT THE BEHEST OF SHRI BHARAT C. SHAH, WHO WAS THE BROTHER OF PRAKASH C. SHAH, M.D. OF THE ASSESSEE COMPANY. HE A LSO ADMITTED THAT THESE BILLS WERE ISSUED IN THE MONTHS OF MAY & JUNE, 1989, BUT WERE DATED JANUARY & FEBRUARY,1989. THESE TRANSACTI ONS WERE NOT ENTERED IN THE BOOKS OF ACCOUNTS AND EVEN A CARBON COPY OF THE SAME WAS NOT KEPT. A SEPARATE BANK ACCOUNT, FOR THESE T RANSACTIONS WAS OPENED WITH AHMEDABAD MERCANTILE CO-OP. BANK LTD., PALDI BRANCH, WHERE THE CHEQUES OF THE ASSESSEE COMPANY WERE DEPO SITED. AFTER CLEARING, THE CASH WAS WITHDRAWN AND HANDED OVER TO SHRI PRAKASH C.SHAH, M.D. OF THE ASSESSEE COMPANY. PROOF WAS ALS O SUBMITTED SHOWING THAT THE BANK ACCOUNT WAS OPENED ON 30.5.89 AND CHEQUES OF GCERA WERE DEPOSITED FROM JUNE TO OCTOBER, 1989. IN THE CASE OF ANOTHER SUCH PARTY, HEMANI CHEMICALS PVT. LTD., SHRI CHANDRAVADAN M.SHAH, DIRECTOR STATED UNDER OAT H U/S.131 THAT IT DEALT IN FIRE EXTINGUISHERS AND HAD THE AGENCY OF R ED COMMET AUTOMATIC FIRE EXTINGUISHERS. HE REVEALED THAT HE HAD ISSUED SALES BILLS TO RAJ RADHE ANOTHER GROUP CONCERN, IN THE MO NTH OF MAY, 1989 AND AGAINST THAT, PAYMENT WAS MADE TO GEERA FINANCE LTD. HE ADMITTED THAT NO PURCHASE HAD BEEN MADE FROM GCCRA FINANCE LTD. AND NO SALE HAD BEEN MADE TO RAJ RADHE FINANCE LTD. THIS TRANSACTION WAS DONE SIMPLY TO ACCOMMODATE THE ASSE SSEE AND AT THE INSTANCE OF SHRI KAUSHIK C. SHAH & SHRI BHARAT C. S HAH, BROTHER OF SHRI PRAKASH C. SHAH. HE DID NOT SEE THE GOODS AT A LL. AGAIN HE REVEALED THAT WHILE THE BILLS WERE RECEIVED IN THE MONTH OF MAY, 1989, THE DATES WERE OF JANUARY AND FEBRUARY 1989. ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 4 SHRI HARMIT B, PATWA, PROPRIETOR OF RIDHI SIDHI COR PORATION AND SHRI DIXIT B. PATWA, PROPRIETOR OF NIMOL DYECHEM, JITENDRA CHEMICALS AND J.K. CHEMICALS WERE ALSO EXAMINED UNDER OATH U/ S..131 OF THE I.T.ACT. ON COLLECTING ADDITIONAL FACTS AND RELEVA NT BILLS, IT EMERGED THAT THESE ENTITIES, TOGETHER WITH THE ASSESSEE'S GROUP OF COMPANIES HAD INDULGED IN A NETWORK OF TRANSACTION, WHICH ENDED U P WITH RAJRADHE FINANCE LTD. AND GEERA FINANCE LTD. CREATING A BO GUS LOSS ON PAPER AND THE COMPANIES OF THE PATWA GROUP SHOWING A PROF IT. NO ACTUAL DELIVERY WAS EFFECTED IN ANY TRANSACTION. THE A.O. CONCLUDED THAT ASSESSEE WAS INDULGED IN BO GUS PURCHASE AND SALE TRANSACTION TO REDUCE ITS PROFIT WITH A VIEW T O AVOID PAYMENT OF TAX ON THE SAME. THE LD. A.O. AT THE TIME OF ASSESSMENT G AVE REASONABLE OPPORTUNITY OF BEING HEARD AFTER RECORDING THE STAT EMENT, HE ALSO FORWARDED THE COPY OF STATEMENT OF SHRI PRASHANT P. VAKIL AND OFFERED CROSS EXAMINATION OF THE WITNESS. THE ASSESSEE WAS ASKED TO PROVE THE GENUINENESS OF THESE PURCHASES MADE FROM ABOVE PART IES. THE ASSESSEE FILED REVISED RETURN ON 07.11.1990 DECLARING THE EN TIRE BOGUS LOSS OF RS.7,81,149/- AS ADDITIONAL INCOME FOR A.Y. 89-90. THE ASSESSEE CLAIMED BEFORE THE A.O. THAT OFFER WAS MADE TO AVOID LITIGA TION AND TO BUY PEACE OF MIND AND ON THE CONDITION THAT NO PENAL ACTION BE I NITIATED AGAINST IT. THE TAX AND INTEREST WAS ALSO PAID ON ADDITIONAL INCOME . THE CIT(A) ALSO CONFIRMED THE FINDING OF CONCEALMENT OF INCOME/BOGU S TRANSACTION AND HELD THAT. AS A RESULT OF INVESTIGATION AND THE AC T OF THE REVISED INCOME WAS PURELY SUBSEQUENT TO THE DETECTION BY THE A.O. AND WAS IN ADMISSION ON THE PART OF THE ASSESSEE TO THE NATURE OF THE BO GUS TRANSACTION. THE ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 5 HONBLE ITAT ALSO UPHELD THE ADDITION IN ITA NO. 99 8/AHD/95, DATED 19.02.2001 AND ADDING THAT THE A.O. WAS FULLY JUSTI FIED IN MAKING THE ADDITION. AFTER CONSIDERING THE ASSESSEES REPLY, HE WAS SATISFIED THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS AS AL SO CONCEALED THE PARTICULARS INCOME FROM THE BEGINNING WITH A DELIBE RATE INTENTION TO EVADE DUE TAXES PAYABLE ON ITS INCOME. THUS, HE IMPOSED 100% OF PENALTY ON CONCEALED INCOME AT RS.4,92,124/- OF THE TAX SOUGHT TO BE EVADED. 3. BEING AGGRIEVED BY THE ORDER OF THE A.O., THE A SSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS DELETED THE PENALT Y BY OBSERVING AS UNDER: 4. I HAVE GONE THROUGH THE PENALTY ORDER AND THE S UBMISSION OF THE APPELLANT CAREFULLY. AFTER DULY CONSIDERING THE ENT IRE FACTS AND CIRCUMSTANCES AND THE LEGAL POSITION, I AM OF THE V IEW THAT LEVY OF PENALTY U/S.271(1)(C) OF THE I.T. ACT IS NOT JUSTIF IED IN THE PRESENT CASE. FIRST OF ALL, IT IS NOTABLE THAT THE APPELLANT-COMP ANY HAD MADE PURCHASES FROM A.P. TRADERS AND HEMANI CHEMICALS P. LTD. THESE PURCHASES ARE SUPPORTED BY BILLS ISSUED BY THE AFOR ESAID PARTIES AND THE PAYMENTS WERE MADE BY THE APPELLANT-COMPANY BY CHEQUES THROUGH REGULAR BANKING CHANNELS, WHICH ARE DULY CR EDITED TO THE BANK ACCOUNTS OF THE AFORESAID PARTIES. IT IS NOTABLE TH AT BESIDES THE AFOREMENTIONED TWO PARTIES THE APPELLANT-COMPANY HA D MADE PURCHASES FROM SEVERAL OTHER CONNECTED PARTIES WHIC H ARE ALSO SUPPORTED BY VOUCHERS AND PAYMENTS WERE MADE THROUG H CHEQUES. OUT OF THESE SEVERAL PARTIES THE ASSESSING OFFICER RECORDED THE STATEMENTS OF SHRI PRASHANT P. VAKIL, PROPRIETOR OF A.P. TRADERS AND SHRI CHANDRAVADAN M. SHAH, DIRECTOR OF HEMANI CHEMI CALS P. LTD. THE PURCHASES MADE FROM OTHER CONNECTED PARTIES WERE NO T EXAMINED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER ALSO A LLOWED OPPORTUNITY ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 6 TO THE APPELLANT-COMPANY TO CROSS-EXAMINE THE ABOVE MENTIONED TWO PERSONS BUT IT DID NOT AVAIL THIS OPPORTUNITY AND F ILED A REVISED RETURN OF INCOME. IT MAY BE MENTIONED THAT THE LOSS ARISING F ROM PURCHASES MADE FROM THE ABOVE TWO PARTIES AMOUNTED TO RS.7,26 ,125 WHEREAS THE TOTAL LOSS WITH REGARD TO PURCHASES AND SAL ES RELATING TO VARIOUS CONNECTED PARTIES AMOUNTED TO RS.7,81,149. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER ONLY P ROPOSED DISALLOWANCE OF LOSS OF RS.7,26,125. HOWEVER, THE A PPELLANT-COMPANY SURRENDERED THE ENTIRE LOSS OF RS.7,81,149 IN THE R EVISED RETURN OF INCOME. AS MENTIONED ABOVE, IT DECLINED TO CROSS-EX AMINE THE TWO PERSONS FOR THE REASON THAT THEY WERE CLOSE FRIENDS OF THE DIRECTORS OF THE APPELLANT-COMPANY AND PROBABLY THEY DISOWNED TH E PURCHASES FOR THE REASON THAT THE SAME MAY NOT HAVE BEEN ACCOUNTE D BY THEM IN THEIR BOOKS OF ACCOUNT. THE APPELLANT-COMPANY FELT THAT CROSS- EXAMINATION MAY RESULT INTO EMBARRASSMENT OF THE AF ORESAID TWO FRIENDS OF THE DIRECTORS. THEREFORE, A REVISED RETU RN WAS FILED SURRENDERING THE TOTAL LOSS. IT IS NOTABLE THAT AIL THE PURCHASES ARE SUPPORTED BY VOUCHERS AND THE SAME ARE DULY RECORDE D IN THE AUDITED BOOKS OF ACCOUNT AND ALL THE PAYMENTS HAVE BEEN MAD E BY THE APPELLANT-COMPANY THROUGH REGULAR BANKING CHANNEL. 5. ANOTHER IMPORTANT FACT TO BE NOTED WHILE CONSIDE RING LEVY OF PENALTY U/S.271(1)(C) IS THAT FOR THE IMMEDIATELY P RECEDING ASSESSMENT YEAR 1988-89, THE APPELLANT-COMPANY HAD INCURRED LO SS OF RS.5,38,771 IN RESPECT OF PURCHASES AND SALES AROUND THE SAME T IME AS IN THE PRESENT ASSESSMENT YEAR. THE ASSESSING OFFICER DISA LLOWED THE LOSS TREATING THE SAME AS BOGUS LOSS AND FURTHER PENALTY U/S.271(1)(C) OF RS.3,40,222 WAS LEVIED. DURING THAT YEAR THE APPELL ANT-COMPANY DID NOT FILE ANY REVISED RETURN OF INCOME SURRENDERING THE AFORESAID LOSS AND THE ISSUE WAS CONTESTED BY IT IN FURTHER APPEAL S. IT OBTAINED PART RELIEF BEFORE THE LEARNED CIT(A) WHO HELD THAT WHER EVER THE LOSS AROSE FROM PURCHASES FROM CONNECTED CONCERNS, THE SAME SH OULD BE DISALLOWED. WHILE GIVING EFFECT TO THIS ORDER THE A SSESSING OFFICER ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 7 ALLOWED LOSS TO THE EXTENT OF RS.2,14,751 AND LEVIE D PENALTY U/S.271(1)(C) OF RS.3,40,222 AS MENTIONED ABOVE. TH E APPELLANT FILED APPEAL AGAINST LEVY OF PENALTY AND THE PENALTY WAS DELETED BY THE LEARNED CIT(A) VIDE HIS ORDER DATED 31.3.1994. IT I S NOTABLE THAT EVEN THE ADDITION SUSTAINED BY THE LEARNED CIT(A) WAS FU RTHER CONTESTED BY THE APPELLANT-COMPANY BEFORE THE ITAT AND THE ITAT RESTORED THE MATTER TO THE ASSESSING OFFICER VIDE ORDER DATED 3V 3.1999 IN ITA NO. 5249/1991. THE CONCLUDING PART OF THE HON'BLE TRIBU NAL'S ORDER HAS BEEN REPRODUCED IN THE WRITTEN SUBMISSIONS OF THE A PPELLANT-COMPANY AS MENTIONED ABOVE. THE ASSESSING OFFICER EXAMINED THE ISSUE IN CONSONANCE WITH THE DIRECTIONS OF THE HON'BLE ITAT AND VIDE ITS ORDER DATED 8-3.2002, DID NOT MAKE ANY DISALLOWANCE OF LO SS. THUS, ALMOST IN SIMILAR CIRCUMSTANCES THE LOSS STANDS ALLEGED FOR T HE IMMEDIATELY PRECEDING ASSESSMENT YEAR. IN THE PRESENT YEAR THE LOSS STANDS DISALLOWED WHICH IS ENTIRELY FOR THE REASON THAT TH E APPELLANT ITSELF FILED REVISED RETURN OF INCOME SURRENDERING THE ENTIRE LO SS. 6. CONSIDERING THE ENTIRE FACTS AND CIRCUMSTANCES M ENTIONED ABOVE, IN MY CONSIDERED OPINION, THERE IS HARDLY AN Y CASE FOR LEVY OF PENALTY ;OR CONCEALMENT OF INCOME OR FOR FURNISHING INACCURATE PARTICULARS OF INCOME, IN T!I3 LIGHT OF VARIOUS JUD ICIAL PRONOUNCEMENTS REFERRED TO ABOVE. ACCORDINGLY, THE PENALTY OF RS.4 ,92,124 IS DELETED. 4. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. VEHE MENTLY RELIED UPON THE ORDER OF THE A.O. AND ARGUED THAT THE ASSESSEE HAS CONCEALED THE INCOME, WHICH HAS BEEN ADMITTED BY IT BY REVISING T HE RETURN WHEN CORNERED BY THE A.O. THROUGH INVESTIGATION ON THE B OGUS PURCHASE. THE A.O. RECORDED THE STATEMENT OF SHRI PRASHANT P. VAK IL AND SHRI CHANDRAVADAN N. SHAH ON OATH U/S. 131 AND ADMITTED THAT THEY HAVE SIMPLY GIVEN THE ACCOMMODATION BILL TO THE ASSESSEE . THUS, CONCEALMENT OF INCOME HAS BEEN ESTABLISHED BY THE A.O. HE FURT HER RELIED UPON IN CASE ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 8 OF CIT VS. USHA INTERNATIONAL LTD. [2012] 27 TAXMANN.C OM 227 (DELHI), WHEREIN IDENTICAL ISSUE WAS THAT REVISED RETURN WAS FILED BY IT ONLY WHEN IT WAS DETECTED AND INCOME TAX AUTHORITY HAD COLLECTED MATERIAL ON THE BASIS OF WHICH IT COULD BE SAID THAT THE CLAIM OF D EDUCTION WAS FALSE OR BOGUS. THEREFORE, HONBLE DELHI HIGH COURT CONFIRM ED THE PENALTY U/S. 271(1)(C). HE FURTHER RELIED IN CASE OF CIT VS. LALLUBHAI JOGIBHAI PATEL [2004] 134 TAXMAN 381 (GUJ.), WHEREIN INVESTMENT IN CAR WAS SUPPRESSED BY THE ASSESSEE AT RS.31,000/-. THE HON BLE GUJARAT HIGH COURT HELD THAT EXPLANATION TO SECTION 271(1)(C) AT TRACTED. THE ASSESSEE COULD NOT REVERT THE PRESUMPTION. THUS, THE TRIBUN AL WAS JUSTIFIED IN CONFIRMING THE PENALTY U/S. 271(1)(C). HE FURTHER RELIED IN CASE OF A.M. SHAH & CO. VS. CIT [2000] 108 TAXMAN 137 (GUJ.), WHEREIN SERIOUS DISCREPANCIES WERE FOUND BY THE A.O. IN BOOKS OF AC COUNT AND EXCESS SALES WERE SHOWN WHILE PURCHASES WERE NOT SHOWN, BO GUS PURCHASES WERE CLAIMED AND PURCHASES WERE NOT SHOWN IN THE SA LES OR STOCK. ADDITIONS WERE MADE TO GROSS PROFITS ON ACCOUNT OF DISCREPANCIES. PENALTY U/S. 271(1)(C) HELD JUSTIFIABLE. LD. SR. D.R. ALSO RELIED UPON IN RECENT DECISION OF HONBLE SUPREME COURT IN CASE OF MAK DATA (P.) LTD. VS. CIT [2013] 38 TAXMANN.COM448 (SC), WHEREIN IT HAS BEEN HELD THAT WHERE OFFER OF SURRENDER OF CERTAIN AMOUNT RECEIVED AS SH ARE APPLICATION MONEY WAS MADE BY ASSESSEE IN VIEW OF DETECTION MADE BY A SSESSING OFFICER IN SEARCH CONDUCTED IN CASE OF ASSESSEES SISTER CONCE RN, SAID SURRENDER OF ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 9 INCOME NOT BEING VOLUNTARY IN NATURE, AUTHORITIES B ELOW WERE JUSTIFIED IN LEVYING PENALTY UNDER SECTION 271(1)(C). AT THE OU TSET, LD. A.R. ARGUED THAT ASSESSEE SUO MOTU HAS REVISED RETURN AND DID NOT AV AIL CROSS EXAMINATION OF THE WITNESS AS WITNESSES WERE FAMILY FRIENDS. T HE ASSESSEE HAD SHOWN THESE PURCHASES IN THE BOOKS OF ACCOUNT AND ALL PAY MENTS WERE MADE THROUGH ACCOUNT PAYEE CHEQUES. HE ALSO HAS DRAWN O UR ATTENTION ON STATEMENT RECORDED BY THE LD. A.O. OF ABOVE TWO PER SONS AND ARGUED THAT THERE IS NO BASIS FOR IMPOSING PENALTY U/S. 271(1)( C). HE ALSO HAS DRAWN OUR ATTENTION ON PAGE NOS. 1 & 2, WHERE THESE PURCH ASES HAVE BEEN SHOWN AND CASE LAWS RELIED BY THE ASSESSEE BEFORE T HE LD. CIT(A), WHICH ARE SQUARELY APPLICABLE AT THIS STAGE ALSO. HE ALS O ARGUED THAT IN PRECEDING YEAR, THE LD. A.O. HAD ACCEPTED THE BUSIN ESS LOSS OF THE SAME PARTY. LD. A.R. REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE A.O. HAS ESTABLISHED THAT ASSESSEE HAS TAKEN BOGUS PURCHASE BILL TO REDUCE THE TAX LIABILITY. THE A.O . MADE DETAILED INVESTIGATION ON IT AND WHEN THE ASSESSEE CORNERED BY THE A.O. THROUGH INVESTIGATION, IT REVISED THE RETURN AND ACCEPTED T HE LOSS AT RS.7,81,149/-, AS HONBLE SUPREME COURT IN CASE OF MAK DATA (P.) L TD. VS. CIT (SUPRA) HAS HELD THAT THE SURRENDER OF INCOME NOT HAVE BEEN VOLUNTARY IN NATURE AS DETECTED BY THE ASSESSING OFFICER IN SEARCH CONDUCT ED. THEREFORE, PENALTY HELD JUSTIFIABLE BY THE HONBLE SUPREME COU RT. THE ISSUE IS ITA NO. 2802/AHD/12 A.Y. 1989-90 THE ITO VS. GEERA FINANCE LTD. PAGE 10 IDENTICAL IN THIS CASE AS ASSESSEE HAS REVISED HIS RETURN WHEN WITNESSES HAD ADMITTED HAVING BEEN GIVEN ACCOMMODATION ENTRY TO THE ASSESSEE. THEREFORE, WE HAVE CONSIDERED VIEW THAT LD. CIT(A) WAS NOT RIGHT IN DELETING THE PENALTY. ACCORDINGLY, WE REVERSE THE ORDER OF THE CIT(A). 6. IN THE RESULT, REVENUES APPEAL IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 27.03.2014 SD/- SD/- ( D.K.TYAGI ) (T.R. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER TRUE COPY S.K.SINHA 1 1 1 1 ' '' ' )-2 )-2 )-2 )-2 320- 320- 320- 320- / COPY OF ORDER FORWARDED TO:- 1. %& / APPELLANT 2. )%& / RESPONDENT 3. - *7 / CONCERNED CIT 4. *7- / CIT (A) 5. 2; )-+ , , / DR, ITAT, AHMEDABAD 6. = >? / GUARD FILE. BY ORDER/ 1 , @/ B , $