HEMAL MAGANLAL SHAH, MUMBAI V. CIT (A) NFAC, DELHI

ITA 285/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 8591 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Assessment Year: 2010-2011
• Appeal Filed On: 13-02-2022
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: H.M. SHAH
• Keywords: Bogus purchase; Unexplained cash credit; Unexplained expenditure; Business expenditure; Question of law; Wrong claim; Agreed addition; Onus to prove; Revised return; Capital expenditure
• Section: 148; 271(1)(c); 69C; 143(3); 37(1); 250; 274; 139(1); 64; 142(2A); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “H”, MUMBAI BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER ITA No. 285/Mum/2022 (A.Y. 2010-11) Hemal Maganlal Shah 84, 4 th Floor, Pankaj-B, LBS Road, Ghatkopar (W), Mumbai-400086. PAN: AMFPS8271G ...... Appellant Vs. The Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Mumbai. ..... Respondent Appellant by : Sh. H.M. Shah Respondent by : Sh. Prasoon Kabra Date of hearing : 17/05/2022 Date of pronouncement : 10/08/2022 ORDER PER GAGAN GOYAL, A.M: This appeal by the assessee is directed against the order of National Faceless Appeal Centre, Delhi [hereinafter referred to as (‘NFAC)’) dated 15.12.2021 passed under section 250 for the Assessment Year (AY) 2010-11. The assessee has raised the following grounds of appeal: 2 ITA No. 285/Mum/2022-Hemal Maganlal Shah “In the facts and circumstances of case of your appellant, the AO completed the assessment by passing an assessment order u/s. 143(3)/147 of the Act dated 25-01-2016 determining the assessee's total income at Rs. 9,86,520/- by making sole addition of Rs. 7,65,962/- u/s. 69C of the Act on account of addition of 12.5% of bogus purchases amounting to Rs. 61,27,698/-.The Hon’ble Income Tax Appellate Tribunal has vide order dated 20.02.2020 of ITAT Appeal – ITA No. 7137/Mum/2018(A.Y. 2009-10) confirmed the addition of 8% of the impugned purchases. On the facts and circumstances of the case & in the law, the assessee states that there has been no furnishing of inaccurate particulars of income & he has not concealed the income and has voluntarily offered the Income during assessments proceeding and appellate proceedings and that additions has be unmade on some G P. estimation. Therefore Penalty U/s. 271(1) (c) should not be levied. It is further submitted that the Ld. CIT (A) and Hon Income Tax Appellate Tribunal has ordered to make the addition at the estimated basis@12.5% of the impugned purchases. Copy of CIT (A) order & copy of ITAT Order has been attached herewith as Annexure I. There are various Judicial Pronouncements that when addition is based on estimation, the Penalty U/s. 271(1) (c) cannot be levied & wherein it is held that on G P estimation, Penalty U/s. 271(1) (c) cannot be levied and assessee pleads that there is neither "Concealment' nor 'furnishing of inaccurate particulars' by him. The assessee also relies on following decisions of various High Courts to put weight that he has not concealed the Income. Judicial Pronouncements: 1. Surat Fashions Ltd. vs. ACIT [2011-ITRV-ITAT-AHD-124] 2. Narayansingh J. Deora vs. ACIT [2011-ITRV-ITAT-MUM-283] 3. CIT Vs. Gordhandas Moolchand 116 ITR 893 (Mad.) 4. C.LT. Vs. Sureshkumar Bansal and another 254 ITR 130 (P & H) 5. Harigopal Singh Vs. C.I. T. 258 ITR 85 (P & H) 6. C.1.T. Vs. Raj Bans Singh 276 ITR 351 (All) 7. CIT v/s. Mahendra Sigh Khedia (2012) 252 CTR 453 -Raj HC 8. CIT vis. Vijay Kumar Jain (2010) 325 ITR 288-Chhatishgadh HC 9. CIT vs. Aero Traders P Ltd (2010)322 ITR 316- Delhi HC" 2. Brief facts of the case are that the assessee had filed his return of income on 12.10.2010 declaring total income of Rs. 2,20,566/-. Subsequently on the basis of 3 ITA No. 285/Mum/2022-Hemal Maganlal Shah information received from the Investigation Wing, Mumbai with regard to the bogus purchases made by the assessee. The case was re-opened by issuing notices under section 148 of the Income Tax Act on 19.03.2015 order under section 143(3) r.w.s 147 of the Act was passed on 25.01.2016 determining the total income at Rs. 9,86,520/-. In the assessment order sole addition of Rs. 7, 56,962/- was made under section 69C of the Act. 3. Consequent to addition made under section 69C of the Act on account of bogus purchase penalty proceedings under section 274 r.w.s 271(1)(c) of the Act was also initiated on the issue of addition on account of bogus purchases. A penalty order under section 271(1) (c) of the Act dated 12.03.2020 was passed against the assessee and a penalty of Rs. 1, 99,717/- was imposed. 4. Against this order of penalty passed by AO assessee preferred an appeal before the Ld. CIT (A)-25, Mumbai, but there also no relief was given to the assessee. Hence, assessee is in appeal before us. 5. We have gone through the assessment order, penalty order, and order of Ld. CIT (A) with reference to assessment order, penalty order and submissions of the assessee along with Paper Book. We observed the following facts emanated from the orders mentioned as under: (i) Assessee filed return of income at Rs. 2, 20,566/-, which ultimately assessed at Rs. 9, 86,520/-. This difference of figure arisen because of addition under section 69C of the Act. (ii) Assessee’s case was re-opened under section 148 of the Act based on information received from Investigation Wing, Mumbai that assessee was involved in bogus purchase. Same transactions were found in the case of assessee for A.Y. 2009-10 also (as per copy of C.O. vide ITA No. 7137/Mum/2018) vide page no.47 of the Paper Book. As per this ITA percentage of addition was reduced from 12.5% to 4 ITA No. 285/Mum/2022-Hemal Maganlal Shah 8%, but what happened in A.Y. 2009-10 in terms of penalty proceedings before the AO, Ld. CIT (A) and ITAT, Mumbai, assessee neither produced any order nor submitted any written submission in this regard. (iii) For sake of clarity and better understanding of the matter, we are reproducing herein-below section 69C and section 271((1) (c) of the Act. So that the version of the Revenue and submissions of assessee can be evaluated. “[Unexplained Expenditure, etc. 69C. Where in any financial year an assessee has incurred any expenditure and he offers no explanation about the source of such expenditure or part thereof, or the explanation, if any, offered by him is not, in the opinion of the [Assessing] Officer, satisfactory, the amount covered by such expenditure or part thereof, as the case may be, may be deemed to be the income of the assessee for such financial year :] Provided that, notwithstanding anything contained in any other provision of this Act, such unexplained expenditure which is deemed to be the income of the assessee shall not be allowed as a deduction under any head of income.]” [Failure to furnish returns, comply with notices, concealment of income, etc. 271. (1) If the [Assessing] Officer or the [Commissioner (Appeals)] [or the [Principal Commissioner or] Commissioner] in the course of any proceedings under this Act, is satisfied that any person— (c) has concealed the particulars of his income or [***]furnished inaccurate particulars of [such income, or] [Explanation 1.—Where in respect of any facts material to the computation of the total income of any person under this Act,— (A) such person fails to offer an explanation or offers an explanation which is found by the [Assessing] Officer or the [***][Commissioner (Appeals)][or the [Principal Commissioner or] Commissioner] to be false, or (B) such person offers an explanation which he is not able to substantiate [and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him], Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 5 ITA No. 285/Mum/2022-Hemal Maganlal Shah (iv) We have gone through the provisions of section 69C of the Act which deals with the situation where assessee incurs any expenditure but not able to explain the source of the expenditure or the explanation offered by assessee is not acceptable to the AO. In the impugned matter there is no question arose about the source of the purchases made by the assessee, hence, provisions of section 69C applied by the AO is not sustainable. This fact will not affect the other action of AO i.e. disallowing a certain percentage out of purchase claimed by the assessee. (v) As far as applicability of section 271(1)(c) read with explanation-1, is concerned, there is no doubt that assessee has not offered any income through return filed under section 139(1) and return filed in response to section 148 of the Act. This additional income unearthed only when AO proceeded on the basis of information received from Investigation Wing and verify transactions of purchases amounting to Rs. 61, 27,698/- under section 133(6). Assessee never came forward to offer this income. (vi) There is no doubt that there cannot be any sales without the purchases being made. There is no challenge to the transactions of purchase and sales made by the assessee, the only issue involved is that assessee purchased the goods in grey market, of course to save indirect taxes and then arrange the bills to introduce these purchases made in the books of accounts. To the extent assessee saved indirect taxes in the guise of this arrangement of bogus purchase bills, he suppressed his real income. (vii) It is also emanated from the records and orders mentioned (supra), that assessee never succeeded in countering percentage disallowance out of purchases made. 6. In view of the above facts, the contention of the assessee that no penalty can be levied in the case of G.P. Addition or disallowances made on estimation basis is not sustainable. As the same argument can be taken where ad-hoc disallowances were being made by the AO on those expenses where the genuineness of the expenses are not under doubt, disallowances on account of personal use, disallowances on account of revenue verses capital, disallowances on account of some question of law involved, etc. Whereas in this case revenue 6 ITA No. 285/Mum/2022-Hemal Maganlal Shah received an information from the Maharashtra VAT Department about involvement of certain entities in providing bogus bills to the traders to accommodate their unaccounted purchases from grey market. Assessee nowhere challenged the action of the Revenue about disallowance of 12.5% in principle, he only challenged in terms of percentage to be disallowed. 7. The nature of disallowance in the instant case clearly establishes the concealment of income and furnishing inaccurate particulars of income. Section 271(1) (c) read with Explanation-1 is clearly applied to this case. Simply because disallowance has been done on percentage basis, no relief in terms of penalty for concealment and furnishing inaccurate particulars of income can be given to the assessee. 8. The assessee had relied on the following decisions in his favour of various High Courts and Co-ordinate Benches of ITAT as under: 1. Surat Fashions Ltd. vs. ACIT [2011-ITRV-ITAT-AHD-124] 2. Narayansingh J. Deora vs. ACIT [2011-ITRV-ITAT-MUM-283] 3. CIT Vs. Gordhandas Moolchand 116 ITR 893 (Mad.) 4. C.LT. Vs. Sureshkumar Bansal and another 254 ITR 130 (P & H) 5. Harigopal Singh Vs. C.I. T. 258 ITR 85 (P & H) 6. C.1.T. Vs. Raj Bans Singh 276 ITR 351 (All) 7. CIT v/s. Mahendra Sigh Khedia (2012) 252 CTR 453 -Raj HC 8. CIT vis. Vijay Kumar Jain (2010) 325 ITR 288-Chhatishgadh HC 9. CIT vs. Aero Traders P Ltd (2010)322 ITR 316- Delhi HC" 9. We have gone through the case laws cited by the assessee, but the ratio decided in theses case laws are not applicable to the facts of the case. A conspectus of the Explanation added by the Finance Act, 1964, and the subsequent 7 ITA No. 285/Mum/2022-Hemal Maganlal Shah substituted Explanations make it clear that the statute visualised assessment proceedings and penalty proceedings to be wholly distinct and independent of each other. In essence, the Explanation (both after 1964 and 1976) is a rule of evidence. Presumptions which are rebuttable in nature are available to be drawn. The initial burden of discharging the onus of rebuttal is on the assessee. The rationale behind this view is that basic facts are within the special knowledge of the assessee. Section 106 of Indian Evidence Act, 1872, gives statutory recognition to this universally accepted rule of evidence. There is no discretion conferred on the Assessing Officer as to whether he can invoke the Explanation or not. Explanation 1, which primarily concerns the case at hand, automatically comes into operation when, in respect of any facts material to computation of total income of any person, there is failure to offer an explanation or an explanation is offered which is found to be false by the Assessing Officer or first appellate authority, or an explanation is offered which is not substantiated. In such a case, amount added or disallowed in computing total income is deemed to represent the income in respect of which particulars have been concealed. As per the provision of Explanation 1, the onus to establish that explanation offered was bona fide and all facts relating to the same and material to the computation of his income have been disclosed by him will be on person charged with concealment. Mere failure to substantiate explanation is not enough to warrant penalty. The revenue has to establish that explanation offered was not substantiated. The provision of Explanation is concerned only with cases coming under clause (b) of the Explanation, where the assessee offered an explanation which he was not able to substantiate. The explanation of the assessee for purpose of avoidance of penalty must be an acceptable explanation; it should not be a fantastic or fanciful one. 8 ITA No. 285/Mum/2022-Hemal Maganlal Shah Consequence follows as a matter of law. Burden is the on assessee. If he fails to discharge that burden, presumption that he had concealed income or furnished inaccurate particulars thereof is available to be drawn. The principal logical import of the Explanation is to shift burden of proof from the revenue on to the assessee. Rebuttal must be on materials relevant and cogent. It is for the fact-finding body to judge relevancy and sufficiency of materials. If such a fact-finding body, bearing the aforesaid principles in mind, comes to the conclusion that the assessee has discharged the onus, it becomes a conclusion of fact and no question of law arises. As observed earlier, initial burden is on the assessee. Once initial burden is discharged, the assessee would be out of mischief unless further evidence is adduced. It is plain on principle that it is not law that the moment any fantastic or unacceptable explanation is offered, burden placed would be discharged and the presumption rebutted. Position on and after 1-4-1976 is clear that where, in respect of any item of credit, the assessee has offered an explanation which the Taxing Officer has considered to be false or the assessee has offered an explanation but no material or evidence to substantiate it, he shall be deemed to have concealed such income within the meaning of section 271(1)(c). By operation of the Explanation, the onus lay on the assessee and findings given at the time of assessment are relevant and have probative value where the assessee has offered nothing beyond the explanation offered at the assessment stage. In such cases, it cannot be said that the assessee has discharged the onus even by a preponderance of probabilities. To substantiate we are relying on following judicial pronouncements as under: 9 ITA No. 285/Mum/2022-Hemal Maganlal Shah “[2000] 111 TAXMAN 46 (KER.) Beena Metals v. Commissioner of Income-tax Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Addition to income was made on account of bogus purchases - Assessee failed to produce relevant records and whereabouts of party through whom purchases were allegedly made - Not even addresses of brokers through whom alleged purchases were made were furnished - Assessee, impliedly, conceded fact of concealment - Assessing Officer levied penalty - Assessee’s appeal was dismissed by Commissioner (Appeals) and Tribunal - Whether there was material for finding that there was concealment of income and penalty levied by Assessing Officer was justified - Held, yes [2004] 2 SOT 116 (RAJKOT) Vijay Proteins Ltd. v. Assistant Commissioner of Income-tax Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1991-92 - During assessment proceedings, additions were made on account of suppressed oil production and bogus purchases - Tribunal confirmed additions on account of low yield and bogus purchases - Assessee was not maintaining proper books of account which had been rejected on account of their non-reliability - Whether duty is enjoined upon a person to make a complete disclosure of his income as well as correct disclosure and if disclosure made of particulars of income is incorrect, then also he commits breach of his duty - Held, yes – Whether onus lies on assessee to prove genuineness of any expenditure which is claimed as deduction in computing its taxable income - Held, yes - Whether benefit of principle that mere non-satisfactory nature of explanation furnished cannot amount to proof of falsity of explanation furnished applies in case fact-finding authority reaches a stage where it can only conclude that fact alleged is not proved, which would result that except rejection of explanation furnished by assessee, there is no material to sustain plea of concealment - Held, yes - Whether in instant case, there was ample evidence on record to prove that assessee had claimed deduction of expenses pertaining to purchases of raw material from bogus parties or suppliers and that fact had been duly proved on record an brought assessee within ambit of phrase ‘furnishing wrong particulars of income’ - Held, yes - Whether assessee had concealed particulars of its income and was liable to be visited with penalty under section 271(1)(c) - Held, yes 10 ITA No. 285/Mum/2022-Hemal Maganlal Shah [2005] 97 ITD 595 (ASR.) Hoshiarpur Roller Flour Mills v. Income-tax Officer, Ward I, Gurdaspur Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1997-98 - During assessment proceedings, Assessing Officer made enquiries and found that purchases shown by assessee were bogus - Assessee, admitting fact of bogus purchases, agreed to quantum addition and did not challenge assessment order before Commissioner (Appeals) - Even at penalty stage, assessee did not ask for cross examination of any party and even did not rebut material/evidence collected by Assessing Officer - Whether on facts, Assessing Officer was justified in drawing adverse inference against assessee and levying penalty under section 271(1)(c) - Held, yes [2010] 1 taxmann.com 215 (Kerala) Kalpaka Bazar v. Commissioner of Income tax,* Cochin Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1984-85 – For relevant assessment year assessee filed return disclosing certain income - Subsequently, a search was carried out in premises of assessee and books of account and other documents were seized - Statutory audit was done under section 142(2A) wherein auditor brought out bogus purchases accounted by assessee - Assessing Officer levied penalty based on inflation of purchase value - On appeal, Tribunal sustained penalty - Whether accounting of bogus purchase expenditure was nothing but concealment and, therefore, penalty was rightly levied - Held, yes [2012] 25 taxmann.com 83 (Mumbai) Clariant Chemicals India Ltd. v. Assistant Commissioner of Income-tax, 1(1) Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 2003-04 - Whether entries in books of account or auditors' reports or board of directors' meeting can take place of a piece of genuine evidence to claim any deduction - Held, no – To support its claim for purchase of assets claimed to have been used for R&D purposes, assessee produced only three bills - Assessing Officer found that those bills were not evidencing claim made by appellant and he gave more than one chance to assessee to prove his claim - Assessee did not avail same - Whether since particulars filed by assessee were inaccurate, assessee was liable to penalty under section 271(1)(c) - Held, yes [In favour of revenue] [2013] 36 taxmann.com 321 (Madras) Commissioner of Income-tax, Business Range -XV, Chennai v. M. Thiruvengadam 11 ITA No. 285/Mum/2022-Hemal Maganlal Shah Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income [Wrong claim, effect of] - Assessment year 2004-05 - Whether penalty under section 271(1)(c) is a civil liability for which wilful concealment is not an essential ingredient - Held, yes - Assessee derived income by acting as a mediator between granite quarry owners and purchasers of granite - During assessment proceedings, the Assessing Officer noticed that assessee had debited certain amount towards services charges – It was found that vouchers created for said expenses represented a lower amount whereas amount debited in profit and loss account was higher and, therefore, entire claim made towards service charges was proved to be false or bogus - Assessing Officer, thus, passed a penalty order under section 271(1)(c) - It was apparent from records that amount claimed towards services charges was utilised in making investment in various properties and same was consciously claimed as expenditure - Thus, an attempt to fabricate evidence to make illegal gain by suppression of profits was clearly made out - Whether on facts, Assessing Officer was justified in passing penalty order under section 271(1)(c) - Held, yes [Para 15] [In favour or revenue] [2015] 54 taxmann.com 257 (Bombay) Clariant Chemicals (India) Ltd. v. Assistant Commissioner of Income-tax, 1(1)* Section 35 read with section 271(1)(c) of the Income-t Act, 1961 - Scientific research expenditure (Sub-section (2AB)) - Assessment year 2003-04 - Whether where out of 9 items in respect of capital expenditure of research and development, bills or supporting documents in relation to 6 items had not been produced by assessee, imposition of penalty under section 271(1)(c) after disallowance of said expenditure was justified - Held, yes [Para 10] [In favour of revenue] [2015] 54 taxmann.com 354 (Calcutta) Gourav Goenka v. Assistant Commissioner of Income-tax* Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 2007-08 - Where assessee claimed deduction on account of interest knowingly on a wrong basis, penalty under section 271(1) (c) was rightly levied [In favour of revenue] The assessee claimed deduction on account of interest paid. During scrutiny, he confessed to have made a mistake in claiming the aforesaid deduction and submitted a revised return and paid the applicable tax. The revenue considered it as a case of intentional and deliberate attempt on the part of the assessee to evade tax and imposed penalty under section 271(1)(c). 12 ITA No. 285/Mum/2022-Hemal Maganlal Shah Held that the assessee did not establish by any cogent evidence that inaccurate particulars were furnished accidentally or by mistake. Deduction was claimed knowingly on a wrong basis. Therefore, penalty was rightly imposed. [2015] 64 taxmann.com 91 (Calcutta) Commissioner of Income-tax-II, Kolkata v. Balarampur Chini Mills Ltd. Section 271(1)(c), read with section 37(1), of the Income tax Act, 1961 - Penalty - For concealment of income (Business expenditure) - Assessment years 2003-04 and 2004-05 - Assessment was completed in case of assessee under section 143(3) - Search proceedings initiated by Director (Inv.) at office premises of another assessee unearthed some records which showed that assessee made certain payments to 'another' assessee were disallowable - Assessee filed revised return and offered said amount as disallowable item under section 37(1) - Assessing Officer held that there was deliberate concealment of income on part of assessee, since assessee disclosed additional income only after he was confronted by Director (Inv.), with evidence - He, thus, passed a penalty order under section 271(1)(c) - Whether since assessee himself admitted that return originally filed by him included expenditure disallowable under section 37(1), it would follow that original return contained inaccurate particulars - Held, yes - Whether therefore, assessee was liable for penalty under section 271(1)(c) - Held, yes [Para 38] [In favour of revenue] [2016] 69 taxmann.com 60 (Jaipur - Trib.) Income-tax Officer, Ward 2(1) v. Bhansali Trading Corporation Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income (Disallowance of claim, effect of) - Assessment year 2005-06 - Where assessee claimed to have made purchases from some parties but it was not able to produce said parties and summons served to them were returned back un-served, penalty under section 271(1)(c) was leviable [In favour of revenue] The assessee-company claimed exemption under section 10B. The Assessing Officer having noticed that the assessee had made several purchases from certain parties asked the assessee to produce said parties. However, the assessee could not produce said parties and summons issued to them were also returned un- served. Accordingly, the Assessing Officer treated said purchases bogus and penalty under section 271(1)(c) was also imposed. Held that the addition made by the Assessing Officer was specific on account of unverifiable purchases on which gross profit at 25 per cent was applied and added in the income. The assessee has not been able to produce these parties for verification and also summons was returned back to the officer un-served. The Department has been able to prove that in gems and jewellery business, some of the parties were giving accommodation entry and some of them were accepting 13 ITA No. 285/Mum/2022-Hemal Maganlal Shah the accommodation bills to reduce the profit. Thus, penalty under section 271(1)(c) was rightly levied on the assessee. [2017] 88 taxmann.com 623 (Chennai - Trib.) Assistant Commissioner of Income-tax, Corporate Circle-20(1), Chennai v. Madhusudhana Reddy* Section 2(1A) of the Income-tax Act, 1961 – Agricultural income (Burden of proof) - Assessment year 2010-11 - Where assessee could not produce any evidence with reference to nature of crop grown, labourers employed or any details of expenses incurred or product sold, it was not possible to give benefit of agricultural income to assessee [In favour of revenue] The assessee claimed certain amount as agricultural income. Since the assessee did not have any evidence to prove the gross receipts from agricultural income, the agricultural income was added by the Assessing Officer to income of the assessee. Held that there was no iota of evidence regarding cultivation carried on by the assessee with reference to nature of crop grown, labourers employed, or any details of expenditure incurred or products sold. In the absence of these particulars, it was not possible for department to give benefit of agricultural income to the assessee. [2018] 95 taxmann.com 15 (Madras) Khandelwal Steel & Tube Traders v. Income Tax Officer, Ward-IX(3) Section 271(1)(c), read with section 69B, of the Income-tax Act, 1961 - Penalty - For concealment of income (Agreed additions) - Assessment years 2001-02 to 2002-03 - Whether explanation as to why there was an omission or wrong statement in original return must be due to bonafide inadvertence or bona fide mistake on part of assessee and even if assessee agreed to addition with a condition that penalty could not be imposed, department is not precluded from initiating penalty proceedings - Held, yes – During course of survey, incriminating evidences regarding purchase were found and stock statement showed a negative figure and there was a difference in closing balances in case of four sundry creditors and assessee, accordingly, filed revised return admitting additional income - Assessee explained that since it wanted to purchase peace with department, additional income was offered vide two revised returns of income – Assessing Officer held that assessee did not prove credit balance in account of two concerns and only as a result of this, assessee offered an income and but for survey conducted by department, assessee might not have agreed to addition and, hence, it could not be said addition was made voluntarily and he levied concealment penalty – Assessee was given an opportunity to explain and he nowhere rebutted evidences, which were recovered during course of survey and materials, which were recovered during search 14 ITA No. 285/Mum/2022-Hemal Maganlal Shah proceedings, revealed concealment of income and assessee agreed for additions - Whether there were no extraneous circumstances warranting interference on factual findings recorded by Commissioner appeal affirming findings recorded by Assessing Officer - Held, yes [Paras 10 - 30] [In favour of revenue] [2018] 99 taxmann.com 443 (Kerala) Commissioner of Income-tax v. N. Jayaprakash Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income (General) - Assessment year 1992-93 - If concealment or furnishing of inaccurate particulars of income is an act committed by assessee at time of filing return, liability of assessee or culpability of assessee is his conduct at time when he filed return and mere fact that concealment of income was invented by Assessing Officer from details that are furnished by assessee does not absolve assessee from levy of penalty under section 271(1)(c) [In favour of revenue] If the concealment or furnishing of inaccurate particulars of income is an act committed by the assessee at the time of filing the return, the liability of the assessee or the culpability of the assessee is his conduct at the time when he filed the return. In such a case, even if it is assumed that concealment of the income was invented by the Assessing Officer from the details that are furnished by the assessee, that does not amount to a disclosure made by the assessee nor does it absolve the assessee from the concealment of income or furnishing of inaccurate particulars of income resulting in levy of penalty under section 271(1)(c). Thus, where Assessing Officer levied penalty under section 271(1)(c) upon assessee on basis of additions made on account of unaccounted sale and unexplained credits, the Tribunal was not justified in deleting penalty on the ground that the details, on the basis of which the additions had been ordered, were available on the materials filed by the assessee before the Assessing Officer.” 10. In the result, appeal filed by the assessee is dismissed. Order pronounced in the open court on 10 th day of August, 2022. Sd/- Sd/- (ABY T VARKEY) (GAGAN GOYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai, िदनांक/Dated: 10/08/2022 SK, Sr.PS 15 ITA No. 285/Mum/2022-Hemal Maganlal Shah Copy of the Order forwarded to: 1. अपीलाथŎ/The Appellant , 2. Ůितवादी/ The Respondent. 3. आयकर आयुƅ(अ)/ The CIT(A)- 4. आयकर आयुƅ CIT 5. िवभागीय Ůितिनिध, आय.अपी.अिध., मुबंई/DR, ITAT, Mumbai 6. गाडŊ फाइल/Guard file. BY ORDER, //True Copy// (Dy. /Asstt. Registrar) ITAT, Mumbai