ACIT, CHENNAI V. R.Palanivelu, CHENNAI

ITA 322/CHNY/2015

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9593 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 17-03-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 05-02-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI
• Assessee Lawyers: P A PRABHAKARAN
• Keywords: Unexplained cash credit; Income from undisclosed sources; Opportunity of being heard; Peak credit; Agreed addition
• Section: 142(1); 68

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO. 322 /MDS/2015 / ASSESSMENT YEAR :201 0 - 1 1 THE ASSISTANT COMMISSIONER OF INCOME TAX, NON - CORPORATE CIRCLE - 8, CHENNAI 600 034. VS. SHRI R. PALANIVELU, 11, DHANALAKSHMI STREET, JANAKI NAGAR, VALASARAVAKKA M CHENNAI 600 087. [PAN: AAKPP6980E] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI A. B. KOLI, JCIT / RESPONDENT BY : SHRI P.A. PRABHAKARAN, C.A. / DATE OF HEARING : 17 .0 3 .2016 / DATE OF P RONOUNCEMENT : 26 . 0 4 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) V , CHENNA I DATED 11 . 11 .201 4 RELEVANT TO THE ASSESSMENT YEAR 201 0 - 1 1 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE REVENUE IS WITH REGARD TO DELETION OF PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT]. 2. BRIEF FACTS O F THE CASE ARE THAT THE ASSESSEE IS A N INDIVIDUAL AND ENGAGED IN THE BUSINESS OF TRADING INDIAN MADE FOREIGN LIQUOR (IMFL) I.T.A. NO . 322 /M/ 15 2 BOTTLES. THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 30.03.2012 DECLARING TOTAL INCOME OF .22,58,473/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED AND INTIMATION UNDER SECTION 143(1) OF THE ACT WAS SENT TO THE ASSESSEE. THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE ON 13.09.2012. S UBSEQUENTLY, NOTICE UNDER SECTION 142(1) DATED 15.10.2012 WAS ISSUED CALLING UPON TO FURNISH ADDITIONAL DETAILS FOR THE ADMITTED INCOME. AFTER EXAMINING THE DETAILS FILED BY THE ASSESSEE, THE ASSESSING OFFICER HAS OBSERVED THAT THE A SSESSEE HAS BROUGHT IN A SUM OF . 50 , 00 , 000 / - BY CASH ON 26.09.2009. THE MONEY WAS DRAWN BY THE ASSESSEE FORM A PARTNERSHIP FIRM M/ S MOTHERS FOODS (PAN: AAKFM1927E) IN WHICH T HE ASSESSEE IS A PARTNER. THE FIRM HAS SOLD ITS FACTORY PREMISES VIDE SALE DEED N O. 1988/2009 DATED 14.12.2009. THE COPY OF THE DOCUMENT ALONG WITH THE BANK STATEMENT HA S BEEN VERIFIED AND FOUND TO BE CORRECT. FURTHER, THE AR OF THE ASSESSEE WA S REQUIRED TO FURNISH THE DETAILS OF SUNDAY CREDITORS. THOUGH THE AR HAS SUBMITTED THE ADDRESS DETAIL OF SUNDRY CREDITORS BU T HE IS NOT ABLE TO PROVIDE ADDRESS FOR CERTAIN CREDITORS WHICH AMOUNT TO . 26,37, 019/ - STA T ING THAT THE CREDITORS SHIFT THEIR PLACE OF BUSINESS OFTEN, HENCE THEIR ADDRESS COULD NOT BE FURNISHED. FURTHER AR WAS REQUIRED TO GIVE CONFIRMATION FOR CERTAIN CREDITORS WHICH ARE SELECTED RANDOMLY. AR HAS FURNISHED THE CONFIRMATION FRO M SUNDRY CREDITORS SOUGHT FOR , W HEREAS , HE WA S NOT ABLE TO GET CONFIRMATION FOR TWO CREDITORS WHICH AMOUNTS TO THE TUNE OF .8,96,011 / - . AR HAS BEEN ASKED WHY THE I.T.A. NO . 322 /M/ 15 3 UNCONFIRMED CREDITORS AMOUNT CANNOT BE ADDED TO THE TOTAL INCOME SINCE THE IDENTITY OF THE CR EDITORS COULD NOT HAVE BEEN FURNISHED. SUBSEQUENTLY AR HAD STATED THAT HE WAS UNABLE TO OBTAIN THE CONFIRMATION FROM CERTAIN SUNDRY CREDITORS SINCE THEY SHIFT THEIR PLACE OF BUSINESS OFTEN. HENCE THE UNCONFIRMED CREDITORS AMOUNT HAS BEEN ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 68 OF THE ACT. WITH REGARD TO VEHICLE MAINTENANCE, THE ASSESSEE COULD NOT FURNISH BILLS AND VOUCHERS FOR VEHICLE MAINTENANCE TO THE EXTENT OF . 7,54,375/ - . HENCE THE SAME WA S ADDED BACK TO TOTAL INCOME OF THE ASSESSEE. 3. AGAINST THE ABOVE ADDITIONS, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. NOTICE UNDER SECTION 274 R . W S. 271(1)(C) OF THE AC T WAS ISSUED TO THE ASSESSEE GIVING HIM AN OPPORTUNITY OF BEING HEARD AND TO SHOW CAUSE D AS TO WHY PENALTY UNDER SECTION 271(1)(C) SHOULD NOT BE LEVIED. EVEN AFTER AVAILING OF MORE THAN FIVE MONTHS TIME ASSESSEE HAS NEITHER RESPONDED NOR GIVEN ANY VALID RE ASONS FOR NOT TO LEVY PENALTY UNDER SECTION 271(1)( C) ACT . DURING THE COURSE OF SCRUTINY, AR WA S REQUIRED TO FURNISH THE DETAILS OF CERTAIN S UND R Y CREDITORS TO PROVE THE IDENTITY, CREDIT WORTHINESS AND GENUINENESS OF TRANSACTIONS. THE AR OF THE ASSESSEE W A S NOT ABLE TO PROVIDE ADDRESS FOR CERTAIN CREDITORS . FURTHER AR WAS REQUIRED TO GIVE CONFIRMATION FOR CERTAIN CREDITORS WHICH ARE SELECTED RANDOMLY , W HEREAS , HE IS NOT ABLE TO GET CONFIRMATION FOR TWO I.T.A. NO . 322 /M/ 15 4 CREDITORS . SINCE THE ASSESSEE HAS AGREED TO THE ADDI TION OF THE ABOVE MENTIONED AMOUNT ONLY WHEN HE COULD NOT FURNISH THE CONFIRMATION, CREDIT WORTHINESS AND GENUINE NE SS OF TRANSACTIONS FOR THE SUNDRY CREDITORS AND NOT FURNISHING OF BILLS AND VOUCHERS , BY FOLLOWING THE JUDGMENT OF ALLAHABAD HIGH COURT IN TH E CASE OF CIT V. RAKESH SURI [331 ITR 458 ALL] WHEREIN THE HIGH COURT HAS HELD THAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT CAN BE LEVIED WHERE THE SURRENDER OF INCOME IS NOT VOLUNTARY BUT ON INQUIRY INTO THE PARTICULARS OF THE INCOME BY THE A SSES SI NG O FFICER , PENALTY UNDER SECTION 271(1)(C) OF THE ACT WAS LEVIED. IN VIEW OF THE ABOVE DECISION OF THE HON BLE ALLAHABAD HIGH COURT, THE ASSESSING OFFICER HAS LEVIED THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 4. THE ASSESSEE CARRIED THE MATTER IN APPE AL BEFORE THE LD. CIT(A) AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY REFERRING TO VARIOUS CASE LAW, THE PENALTY LEVIED BY THE ASSESSING OFFICER WAS CONFIRMED BY THE LD. CIT(A) BY OBSE RV ING AS UNDER: 5. I HAVE GONE THROUGH THE SUBMISSIONS MADE BY THE AR OF THE APPELLANT AS WELL AS PENALTY ORDER PASSED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE AN ADDITION OF RS.35,33,030/ - ON ACCOU NT OF UNCONFIRMED CREDITORS U/S 68 OF THE IT ACT. APART FROM AN ADDITION OF RS.7,54,375/ - ON ACCOUNT OF NON - FURNISHING OF BILLS AND VOUCHERS FOR VEHICLE MAINTENANCE. THE APPELLANT IS AN INDIVIDUAL CARRYING OF BUSINESS OF TRADING IN OLD INDIAN MADE FOREIGN LIQUOR BOTTLES. THE APPELLANT PURCHASES USED IFML BOTTLES FROM SCRAP DEALER AND WASTE PAPER MERCHANTS, WHO OPERATE OUT OF SMALL ROADSIDE SHOPS. MOST OF THEM ARE THE INFORMAL SECTORS AND ARE MOVING FROM PALACE TO PLACE OFTEN AND SOME OF THEM QUIT THE BUSINE SS AS AND WHEN THEY GET BETTER OPPORTUNITIES. THE AR OF I.T.A. NO . 322 /M/ 15 5 THE APPELLANT ARGUED THAT THERE IS A TIME GAP OF ABOUT TWO YEARS BETWEEN PURCHASE DATE AND ASSESSMENT PROCEEDINGS. SINCE THE APPELLANT COULD NOT LOCATE A FEW OF THE SUPPLIERS AND COULD NOT PRODUCE THE ADDRESS DETAILS OF THOSE SUPPLIERS DUE TO THE NATURE OF BUSINESS AS EXPLAINED ABOVE. SOME OF THE SUPPLIERS WERE PAID THROUGH CHEQUES AND DDS IN THE SUBSEQUENT YEAR WHO WERE SHOWN AS OUTSTANDING TRADE CREDITORS. THE APPELLANT HAS ALSO FILED A COPY OF THE B ANK STATEMENT IN THIS REGARD AND FURTHER ARGUED THAT THE ASSESSEE HAS NEITHER CONCEALED ANY INCOME NOR FURNISHED ANY INACCURATE PARTICULARS OF INCOME, WARRANTING LEVY OF PENALTY ON THE BUSINESS TRANSACTIONS WHICH ARE SHOWN IN THE BOOKS OF ACCOUNTS. SIMILAR LY, DEFENDED THE VEHICLE MAINTENANCE, AS NO PUCCA VOUCHERS CAN BE MAINTAINED AS THESE ARE PAYMENTS MADE DAY TODAY BASIS AND PAID TO LORRY/BUS DRIVERS AND DISCUSSED WITH THE ASSESSEE'S EMPLOYEES . 5. 1 THE AR OF THE APPELLANT HAS ALSO DISTINGUISHED IN HI S SUBMISSIONS THE CASE LAWS RELIED UPON BY THE ASSESSING OFFICER IN HIS PENALTY ORDER BY STATING THAT IN THE CASE OF RAKESH SURI, THE ADDITIONS WERE MADE U/S 69A AS INCOME FROM UNDISCLOSED SOURCES ON ACCOUNT OF LONG TERM CAPITAL GAINS ON SALE OF SHARES WHE REAS THE ASSESSEE'S BUSINESS IS PURCHASE AND SALE OF OLD LIQUOR BOTTLES FROM SCRAP DEALERS AND WASTE PAPER MERCHANTS. SIMILARLY, IN THE CASE OF KRISHNA & CO., WHEREIN THE BOOKS OF ACCOUNTS WERE SHOWING BORROWINGS, WHICH WAS FOUND TO BE BOGUS AND THE ASSESS EE HAS AGREED FOR ADDITIONS ON THE PEAK CREDIT. THE FACTS OF THE APPELLANT'S CASE ARE TOTALLY DIFFERENT AND HENCE DISTINGUISHED. EVEN IN THE CASE OF POLO SINGH & CO THE FIRMS WERE REJECTED AND THE CASH CREDITS INTRODUCED BY THE PARTNERS OF THE FIRM WERE FO UND TO BE NOT GENUINE. EVEN THIS CASE CANNOT BE APPLICABLE TO THE FACTS OF THE CASE. APART FROM THE ABOVE THE APPELLANT PLACED HIS RELIANCE IN THE CASE OF M. PACHAMUTHU THE JURISDICTIONAL HC IN 295 ITR 502 HAS HELD THAT MERE ADDITIONS TO INCOME AGREED TO B Y THE ASSESSEE IS NOT PROOF OF CONCEALMENT AND PENALTY CANNOT BE IMPOSED. SIMILARLY IN THE CASE MEHSONS EXPORT VS. ITO (2012) 347 ITR 639 (ALL) WHEREIN THE HON'BLE HC HELD THAT FOR PURCHASES MADE FROM NOMADS, NON - PRODUCTION OF DETAILS OF THE SUPPLIERS FOR VERIFICATION DOES NOT AMOUNT TO CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND HENCE PENALTY - CANNOT BE IMPOSED. FURTHER THE AR OF THE APPELLANT RELIED ON THE RATIO HELD IN THE CASE OF MATHURA COMMERCIAL (2014) 361 ITR 0380 (ALL) AND IN THE - CASE OF S.L.N. TRADERS (2012) 341 ITR 0235 (KAR), THE HON'BLE HIGH COURT HAVE HELD THAT, AGREED ADDITIONS FOR NON - FURNISHING OF DETAILS OF CREDITORS DO NOT JUSTIFY PENALTY U/S 271(1)(C) OF THE IT ACT. 5.2 AFTER HAVING GONE THROUGH THE VARIOUS SUBMIS SIONS OF THE AR OF THE APPELLANT, THE APPELLANT HAS FURNISHED ALL THE DETAILS AVAILABLE WITH HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS ALONG WITH LEDGER ACCOUNT PARTIES OF THE TRADE CREDITORS TO PROVE THE GENUINENESS OF THE BUSINESS TRANSACTIONS AND BECAUSE OF DAY TO DAY PURCHASES FROM VARIOUS MOBILE PARTIES, THE APPELLANT COULD NOT FURNISH SOME OF THE SUNDRY CREDITORS I.T.A. NO . 322 /M/ 15 6 ADDRESSES HOWEVER AGREED TO SURRENDER AN AMOUNT OF RS.42,87,405/ - WHICH INCLUDES THE MAINTENANCE EXPENDITURE AND ACCORDINGLY PAID THE TAX ALONG WITH INTEREST. AFTER VERIFYING THE CASE LAWS AS WELL AS LEDGER ACCOUNT COPIES FILED BY THE APPELLANT FOR THE TRADE TRANSACTIONS APPARENTLY THE SAME WERE FURNISHED BEFORE THE ASSESSING OFFICER HENCE, THE SAME CANNOT BE TREATED AS CONCEALMENT OF IN COME OR FURNISHING OF INACCURATE PARTICULARS WARRANTING LEVY OF PENALTY. KEEPING IN VIEW OF THE RATIOS HELD IN THE CASES OF PACHAMUTHU M AND MEHSONS EXPORT AND OTHER CASE LAWS WHICH ARE APPLICABLE TO THE FACTS OF THE APPELLANT'S CASE, THE PENALTY LEVIED BY THE ASSESSING OFFICER IS NOT WARRANTED AND ACCORDINGLY DIRECTED TO DELETE THE PENALTY LEVIED. THE APPELLANT SUCCEEDS ON THIS GROUND OF APPEAL. 5. AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. BY RELYING ON THE DECISION IN THE CASE OF MAK DAT A (P) LTD VS. CIT(2013) 358 ITR 593 (SC) AND ALSO THE DECISION IN THE CASE OF CIT V. ZOOM COMMUNICATION (P) L TD. (327 ITR 510)(2010) (DEL) , THE LD. DR STRONGLY CONTENDED THAT PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS LEVIABLE IN THE PRESENT CASE . 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSESSEE STRONGLY SUPPORTED THE ORDER PASSED BY THE LD. C I T (A) AND RELIED ON THE DECISION IN THE CASE OF CIT V. MATHURA COMMERCIAL CO. [2014] 361 ITR 380 (ALL) AND CIT V. S.L.N. TRADERS [2012] 341 ITR 235 (KAR.), WHEREIN THE HON BLE HIGH COURTS HAVE HELD THAT AGREED ADDITIONS FOR NOT FURNISHING DETAILS OF CREDITORS DOES NOT JUSTIFY PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. DURING THE COURSE OF SCRUTINY OF THE RETURN AS WELL AS DETAILS FURNISHED BY THE ASSESSEE , THE ASSESSEE WA S REQUIRED TO FURNISH THE DETAILS OF CERTAIN S UND R Y CREDITORS TO PROVE THE IDENTITY, I.T.A. NO . 322 /M/ 15 7 CREDIT WORTHINESS AND GENUINENESS OF TRANSA CTIONS. BEFORE THE ASSESSING OFFICER, THE AR OF T HE ASSESSEE WA S NOT ABLE TO PROVIDE ADDRESS FOR CERTAIN SUNDRY CREDITORS , WHICH AMOUNTS TO .26,37,019/ - STATING THAT THE CREDITORS SHIFT THEIR PLACE OF BUSINESS OFTEN AND HENCE COULD NOT FURNISH THEIR ADDR ESSES . FURTHER , THE ASSESSEE WAS REQUIRED TO GIVE CONFIRMATION FOR CERTAIN CREDITORS WHICH ARE SELECTED RANDOMLY , W HEREAS , HE IS NOT ABLE TO GET CONFIRMATION FOR TWO CREDITORS , WHICH AMOUNTS TO THE TUNE OF .8,96,011/ - SINCE THEY SHIFT THEIR PLACE OF BUSI NESS OFTEN . SINCE THE ASSESSEE HAS AGREED TO THE ADDITION OF THE ABOVE MENTIONED AMOUNT ONLY , WHEN HE COULD NOT FURNISH THE CONFIRMATION, CREDIT WORTHINESS AND GENUINE NE SS OF TRANSACTIONS FOR THE SUNDRY CREDITORS AND ALSO FOR NOT FURNISHING OF BILLS AND VO UCHERS , FOR VEHICLE MAINTENANCE, ADDITIONS WERE MADE. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271(1)(C) OF THE ACT . 8. WITH REGARD TO PENALTY IN RESPECT OF UNEXPLAINED CREDITORS, IF THE TRANSACTION IS GENUINE, THE ASSESSEE WOULD HAVE FURNISHED ADDRESSES OF THE SUNDRY CREDITORS [ .26,37,019/ - ] AND FILED CONFIRMATION OF TWO CREDITORS [ .8,96,011/ - ] TOTALLING TO .35,33,030/ - , WHICH CLEARLY SHOWS THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS. THEREFORE, THE ASSESSING OFFICE R HAS LEVIED THE PENALTY. 9 . WHILE DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER, T HE LD. CIT(A) HAS MAINLY RELIED ON THE DECISION IN THE CASE OF CIT V. PACHAMUTHU I.T.A. NO . 322 /M/ 15 8 295 ITR 502 (MAD) AND IN THE CASE OF MEHSONS EXPORT V. ITO (2012) 347 ITR 639 (ALL ). HOWEVER, BOTH CASE LAW HAVE NO RELIANCE TO THE FACTS OF THE PRESENT CASE SINCE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS FOUND THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS TO REDUCE THE TAXABLE INCOME IN THE RETURN FILED BY THE ASSESSEE TO EVADE TAX AND WHEN THE ASSESSEE COULD NOT FURNISH THE ADDRESS OF THE SUNDRY CREDITORS AND ALSO NOT FILED CONFIRMATION FROM TWO CREDITORS, THE ASSESSEE HAS NO OTHER GO BUT TO ACCEPT THE ADDITIONS. 1 0 . FURTHER IN THE CASE OF PANK AJ 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. 11 . 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 PRESUMPTION 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 EXPLANAT ION, HAS BEEN DISCHARGED BY HIM , THE ONUS SHIFTS T O THE DEPARTMENT TO SHOW THAT THE AMOUNT IN QUESTION CONSTITUTED INCOME AND NOT OTHERWISE. I.T.A. NO . 322 /M/ 15 9 MERE ACCEPTANCE OF ADDITION DOES NOT RELEASE THE ASSESSEE FROM THE MISCHIEF OF PENAL PROCEEDINGS. THE LAW DOES NOT PROVIDE OR PERMIT THE ASSESSEE TO ABSOLVE FOR FURNISHING INACCURATE PARTICULARS BY WAY OF NOT PROVIDING DETAILS/CONFIRMATION S WITH REGARD TO CREDITORS, FOR WHICH HE HAS ACCEPTED THE ADDITIONS MADE BY THE ASSESSING OFFICER. 1 2 . IN THE PRESENT CASE, THE AS SESSEE HAS MADE AN ERRONEOUS CLAIM OF DEDUCTION, WHICH INDEED POINTED OUT BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE ASSESSEE HAS NOT FURNISHED THE ADDRESSES OF THE SUNDRY CREDITORS AND MOREOVER, HE HAS NOT FILED CONFIRMAT ION FROM TWO CREDITORS . T HEREFORE, THE CLAIM WAS ADDED BACK TO THE RETURNED INCOME OF THE ASSESSEE. , T HE 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 AP PLIES TO THE FACTS OF THE PRESENT CASE IN HAND , WHEREIN, THE HON BLE SUPREME COURT HAS OBSERVED THAT THE EXPLANATION 1 TO SECTION 271(1) (C) OF THE ACT RAISES A PRESUMPTION OF CONCEALMENT, WHEN A DIFFERENCE IS NOTICED BY THE ASSESSING OFFICER BETWEEN THE RE PORTED 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 EXPLANATION, HAS BEEN DISCHARGED BY HIM , THE ONUS SHIFTS T O THE DEPARTMENT TO SHOW THAT THE AMOUNT IN QUE STION CONSTITUTED INCOME AND NOT OTHERWISE. ADMISSION OF ADDITION DOES NOT RELEASE THE ASSESSEE FROM THE I.T.A. NO . 322 /M/ 15 10 MISCHIEF OF PENAL PROCEEDINGS. ACCORDINGLY, WE FIND THAT THERE IS NO ILLEGALITY IN INITIATING PENALTY PROCEEDINGS. IN VIEW OF THE ABOVE, WE CONFIRM THE ORDER PASSED BY THE LD. CIT(A) WITH REGARD TO UNCONFIRMED CREDITS . 13. WITH REGARD TO VEHICLE MAINTENANCE, WITHOUT VEHICLE, NO MATERIAL CAN BE TRANSPORTED FROM ONE PLACE TO ANOTHER. THE ASSESSEE HAS EXPLAINED THAT NO PUCCA VOUCHERS CAN BE MAINTAINED AND PRODUCED BEFORE THE ASSESSING OFFICER AS THESE ARE PAYMENTS MADE ON DAY TODAY BASIS AND PAID TO LORRY/BUSS/DRIVERS. BUT INCURRING OF EXPENDITURE TOWARDS VEHICLE MAINTENANCE CANNOT BE RULED OUT. THEREFORE, PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT CANNOT BE SUSTAINED FOR THE ADDITION MADE TOWARDS NON - FURNISHING OF BILLS AND VOUCHERS FOR VEHICLE MAINTENANCE . THUS, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED TO THE EXTENT OF .7,54,375/ - . 14 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS PARTLY ALLOWED . ORDER PRONOUNCED ON THE 26 TH APRIL, 201 6 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 26 . 0 4 .2 01 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.