SURYODAYA MOTORS P. LTD, MUMBAI V. ACIT CEN CIR 2, MUMBAI

ITA 4281/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8653 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-01-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 05-01-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUBODH L RATNAPARKHI
• Keywords: Business income; Depreciation; Revised return; Revenue expenditure; Capital expenditure
• Section: 133A; 10

Judgement Text

1 ITA NOS 4280 & 4281/MUM/2009 I II IN THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL N THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH MUMBAI BENCH E EE E MUMBAI MUMBAI MUMBAI MUMBAI BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI R R R R K PANDA, AM K PANDA, AM K PANDA, AM K PANDA, AM & SMT ASHA VIJAYARAGHAVAN, JM & SMT ASHA VIJAYARAGHAVAN, JM & SMT ASHA VIJAYARAGHAVAN, JM & SMT ASHA VIJAYARAGHAVAN, JM ITA N ITA N ITA N ITA NO OO OS 4280 & 4281/MUM/2009 S 4280 & 4281/MUM/2009 S 4280 & 4281/MUM/2009 S 4280 & 4281/MUM/2009 (ASST YEARS 2004-05 & 05-06) SURYODAYA MOTORS P LTD VARTAK ARCADE AMBADI ROAD VASAI (W), DIST THANE 401 202 VS THE ASST COMMR OF INCOME TAX CEN.CIR 2THANE (W) (APPELLANT) (RESPONDENT) PAN PAN PAN PAN AAFCS2401P AAFCS2401P AAFCS2401P AAFCS2401P ASSESSEE BY: SHRI SUBODH L RATNAPARKHI REVENUE BY: SHRI SURENDRA KUMAR O OO O R RR R D DD D E EE E R RR R PER PER PER PER R RR R K PANDA K PANDA K PANDA K PANDA: :: : THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DI RECTED AGAINST THE SEPARATE ORDERS DATED 13.3.2009 OF THE CIT(A)-I, TH ANE, RELATING TO ASSESSMENT YEARS 2004-05 & 2005-06 RESPECTIVELY. FOR THE SAKE OF CONVENIENCE BOTH THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. 2 THE ASSESSEE, IN BOTH THESE APPEALS HAS CHALLENGE D THE ORDERS OF THE CIT(A) IN CONFIRMING THE PENALTY OF ` 10,76,250/- AND ` 8,53,711/- LEVIED BY THE ASSESSING OFFICER U/S 271(1) ( C) OF THE I T ACT FO R THE ASSESSMENT YEARS 2004-05 AND 2005-06 RESPECTIVELY. ITA NO.4280 /MUM/2009 ITA NO.4280 /MUM/2009 ITA NO.4280 /MUM/2009 ITA NO.4280 /MUM/2009 ( (( ( A.Y 2004 A.Y 2004 A.Y 2004 A.Y 2004- -- -05) 05) 05) 05) 3 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSE E HAD FILED ITS ORIGINAL RETURN OF INCOME DISCLOSING TOTAL INCOME OF ` . 13,25,140/-. A SURVEY U/S 133A WAS CARRIED OUT IN THIS CASE ON 20.7.2005. DURING T HE COURSE OF SURVEY, CERTAIN INCRIMINATING DOCUMENTS RELATING TO REPAIRS AND REN OVATION OF THE ASSESSEES 2 ITA NOS 4280 & 4281/MUM/2009 SHOW ROOM WERE FOUND. ON SCRUTINY OF THOSE EXPENSES , IT WAS FOUND THAT THE EXPENSES WERE CAPITAL EXPENSES BUT THE ASSESSEE HAD DEBITED THE SAME IN ITS P&L ACCOUNT AS REVENUE EXPENSES. THE ASSESSEE AGREE D THAT THE EXPENSE WERE CAPITAL EXPANSES AND FILED REVISED RETURN OF INCOME DISCLOSING ADDITIONAL INCOME OF ` . 30 LACS. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONSIDERED THE NATURE OF THE EXPENSES AND WAS OF TH E VIEW THAT THE ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OF ITS INCOME IN THE ORIGINAL RETURN OF INCOME FILED FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THE ASSESSING OFFICER HELD THAT THE ASSESSEE WAS FORCED AFTER THE SURVEY TO DE CLARE ITS CONCEALED INCOME OF ` . 30 LACS. THE ASSESSING OFFICER, THEREFORE, INITIA TED PENALTY PROCEEDINGS U/S 271(1)( C) OF THE I T ACT, 1961. 3.1 DURING THE PENALTY PROCEEDINGS, IT WAS EXPLAINE D BY THE ASSESSEE THAT THE ADDITION OF ` 30 LACS WAS ON ACCOUNT OF EXPENSES INCURRED FOR SH OW ROOM REPAIRS WHICH WAS CLAIMED BY THE ASSESSEE AS REVENUE EXPENS E AS THE SHOW ROOM WAS RENTED AND THERE WAS NO ADDITION TO ASSETS. DURING THE COURSE OF SURVEY, THE SURVEY PARTY DISALLOWED THE SAME TREATING IT AS CAP ITAL EXPENDITURE AND THE ASSESSEE VOLUNTARILY AGREED FOR THE SAME. HE ACC ORDINGLY, CAPITALIZED THE SAME AND FILED THE REVISED RETURN DISCLOSING THE ADDITIO NAL INCOME OF ` 30 LACS. IT WAS SUBMITTED THAT ALTHOUGH THE ADDITION MAY BE TERMED AS DUE TO ERRONEOUS UNDERSTANDING OF LAW, BUT IT CANNOT BE TERMED AS F URNISHING OF INCORRECT PARTICULARS OF INCOME. IT WAS SUBMITTED THAT THE D ISALLOWANCE OF AN EXPENSE PER- SE DOES NOT MEAN THAT THE ASSESSEE HAS FURNISHED INAC CURATE PARTICULARS OF INCOME. SINCE THERE IS NO CONCEALMENT OF ANY INCOME ON THE PART OF THE ASSESSEE AS IT HAS DISCLOSED ALL THE FACTS AND THE ISSUE WAS DEBATABLE I.E CAPITAL OR REVENUE; THEREFORE, NO PENALTY SHOULD BE LEVIED U/S 271(1)( C) OF THE ACT. 3 ITA NOS 4280 & 4281/MUM/2009 4 HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EXPLANATION OF THE ASSESSEE. ACCORDING TO HIM, HAD THERE BEEN NO SURVEY, THE ASSESSEE WOULD NOT HAVE OFFERED THE ADDITIONAL INCOME OF ` S. 30 LACS. THUS, THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME AND ALSO FURNISHED INACCURATE PARTICULARS OF INCOME. RELYING ON THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF K P MADHUSUDHAN VS CIT REPORTED IN 251 ITR 66, HE HELD THAT THE ASSESSEE CONCEALED PARTICULARS AND ALSO FURNISHED INACCURATE PARTICULA RS OF INCOME. HE, THEREFORE, LEVIED PENALTY OF ` . 10,76,250/- U/S 271(1)( C) BEING THE MINIMUM PEN ALTY LEVIABLE. 5 BEFORE THE CIT(A), THE ASSESSEE REITERATED THE S AME SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER AND ALSO RELIED ON A C OUPLE OF DECISIONS AND SUBMITTED THAT MERE REVISION OF THE INCOME TO A HI GHER FIGURE BY THE SURVEY PARTY DOES NOT WARRANT AN INFERENCE OF CONCEALMEN T. CONCEALMENT IMPLIES SOME DELIBERATE ACT ON THE PART OF THE ASSESSEE IN WITHHOLDING THE TRUE FACTS FROM THE AUTHORITIES. SINCE THERE IS NO DEFINITE FINDING THAT THERE IS CONCEALMENT AND SINCE THE ASSESSEE HAS DISCLOSED ALL THE FACTS AND THE ONLY DIFFERENCE WAS OF REVENUE OR CAPITAL; THEREFORE, NO PENALTY SHOULD HA VE BEEN LEVIED. 5.1 HOWEVER, THE CIT(A) WAS ALSO NOT SATISFIED WIT H THE EXPLANATION GIVEN BY THE ASSESSEE AND UPHELD THE LEVY OF PENALTY MADE BY THE ASSESSING OFFICER. WHILE DOING SO, HE OBSERVED THAT THE ASSESSEE HAD D ELIBERATELY CLAIMED THE EXPENSES INCURRED FOR THE RENOVATION OF THE SHOW RO OM AS REVENUE EXPENSES. BECAUSE OF THE SURVEY THE ASSESSEE ACCEPTED THE SAM E AS CAPITAL IN NATURE. 4 ITA NOS 4280 & 4281/MUM/2009 THEREFORE, IT IS SUFFICIENT TO SUGGEST THAT KNOWING FULLY WELL THAT THE EXPENSES WERE CAPITAL EXPENSES; THE ASSESSEE TREATED THE SAM E AS REVENUE EXPENSES. DISTINGUISHING THE VARIOUS DECISIONS CITED BEFORE H IM, HE CONFIRMED THE LEVY OF PENALTY MADE BY THE ASSESSING OFFICER. AGGRIEVED W ITH SUCH ORDER OF THE CIT(A), THE ASSESSEE IS IN APPEAL HERE BEFORE US. 6 THE LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT TH E ASSESSEE INCURRED EXPENSES TOWARDS RENOVATION OF SHOW ROOM AND CLAIME D THE SAME AS REVENUE EXPENDITURE. REFERRING TO QUESTION NO.5, AS REPRO DUCED IN THE PENALTY ORDER, HE SUBMITTED THAT THE ASSESSEE IN HIS REPLY HAD SUBMIT TED THAT AN AMOUNT OF ` .22.70 LACS HAS BEEN SPENT ON REPAIRS IN RESPEC T OF FALSE CEILING, TILE, WOODEN PARTION, WIRING ETC., 6.1 REFERRING TO QUESTION NO.6, HE SUBMITTED THAT WHEN THE SURVEY PARTY ASKED THE ASSESSEE THAT THE EXPENSES MENTIONED APPE AR TO BE OF CAPITAL NATURE AND SHOULD HAVE BEEN CAPITALIZED, THE ASSESSEE AGRE ED TO THE PROPOSITION AND HAS SUBMITTED THAT HE WILL FILE A REVISED RETURN AF TER CAPITALIZING THESE EXPENSES AND CALMING DUE DEPRECIATION. 6.2 REFERRING TO QUESTION NO.7 HE SUBMITTED THAT SI NCE THE ASSESSEE WAS UNABLE TO PRODUCE ALL THE BILLS AND VOUCHERS IN RES PECT OF VARIOUS EXPENSES, IT HAD AGREED FOR ADDITIONAL INCOME OF ` 30 LACS FOR THE ASSESSMENT YEAR 2004-05. HE SUBMITTED THAT IN ORDER TO BUY PEACE, IT HAD AGR EED FOR THE ADDITIONAL INCOME OF ` 30 LACS. HE SUBMITTED THAT WHETHER THE EXPENSES I NCURRED IN THE LEASE HOLD PREMISES IS REVENUE OR CAPITAL IN NATURE, IS A HIGH LY DEBATABLE ISSUE. 5 ITA NOS 4280 & 4281/MUM/2009 6.3 REFERRING TO THE DECISION OF THE HONBLE SUPREM E COURT IN THE CASE OF RELIANCE PETROPRODUCTS PVT LTD REPORTED IN 322 ITR 158(SC), HE SUBMITTED THAT A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN L AW, BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHIN G INACCURATE PARTICULARS. MERELY BECAUSE THE ADDITION HAS BEEN SUSTAINED, IT DOES NOT ATTRACT THE LEVY OF PENALTY U/S 271(1)( C) OF THE ACT. 6.4 THE LD DR ON THE OTHER HAND WHILE RELYING ON TH E ORDERS OF THE ASSESSING OFFICER AND CIT(A) SUBMITTED THAT BECAUSE OF THE SU RVEY, THE ASSESSEE FILED REVISED RETURN AND DISCLOSED ITS ADDITIONAL INCOME. HAD THERE BEEN NO SURVEY, THE ASSESSEE WOULD NOT HAVE DISCLOSED HIGHER INCOME BY TREATING THE REVENUE EXPENDITURE AS CAPITAL EXPENDITURE. HE ALSO RELIED ON THE FOLLOWING DECISIONS REPORTED IN 253 ITR 203:120 ITR 144; 8 ITD 580 & 25 9 ITR 132. 6.5 THE LD COUNSEL FOR THE ASSESSEE IN HIS REJOINDE R SUBMITTED THAT VARIOUS DECISIONS RELIED UPON BY THE LD DR ARE DISTINGUISHA BLE AND ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. HE SUBMITTED THAT I N ALL THE ABOVE CASES THERE WAS INCOME OUTSIDE BOOKS OF ACCOUNT. HOWEVER, IN THE CA SE OF THE ASSESSEE, THERE IS NO EXPENDITURE OUTSIDE BOOKS OF ACCOUNT. 7 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS MADE BY BOTH THE PARTIES, PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. 6 ITA NOS 4280 & 4281/MUM/2009 THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE H AS DEBITED WORKSHOP EXPENSES OF ` 22,88,732.22 IN THE P&L ACCOUNT AS REVENUE EXPENDI TURE. THERE IS ALSO NO DISPUTE TO THE FACT THAT DURING THE COURSE OF SURVE Y, THE ASSESSEE HAD STATED THAT SOME AMOUNT HAS BEEN SPENT ON ACCOUNT OF REPAIRS IN RESPECT OF TILING, FALSE CEILING, AND FURNITURE FITTINGS ETC. THERE IS ALSO NO DISPUTE TO THE FACT THAT DURING THE SURVEY PROCEEDINGS, THE ASSESSEE HAD AGREED THA T HE WILL FILE A REVISED RETURN AFTER CAPITALISING THESE EXPENSES AND CLAIMI NG DUE DEPRECATION. THERE IS ALSO NO DISPUTE TO THE FACT THAT ON ACCOUNT OF VARI OUS EXPENSES CLAIMED IN THE P&L ACCOUNT SUCH AS PRINTING & STATIONARY ` 6,27,492.52; REPAIRS & MAINTENANCE ` 7,25,008.08; SUNDRY EXPENSES ` 6,13,322.75; PETROL DIESEL & OIL ` 8,90,396.45 AND CONVEYANCE ` 7,86,334.35, THE ASSESSEE HAS SUBMITTED THAT IT WAS UNABLE TO PRODUCE ALL THE BILLS AND VO UCHERS AND HAS ACCORDINGLY OFFERED ADDITIONAL INCOME OF ` . 30 LACS AND FILED THE REVISED RETURN. 7.1 IT IS THE CASE OF THE REVENUE THAT BECAUSE OF T HE SURVEY THE ASSESSEE FILED REVISED RETURN DISCLOSING ADDITIONAL INCOME. HAD THERE BEEN NO SURVEY, THE ASSESSEE WOULD NOT HAVE DISCLOSED THE ADDITIONAL IN COME. THUS THERE IS CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME FOR WHICH THE PENALTY U/S 271(1)( C) IS ATTRACTED. 7.2 FROM THE VARIOUS DOCUMENTS FILED, WE FIND THER E IS NO ITEM WISE DISALLOWANCE OF EXPENSES AND ON THE BASIS OF THE DE CLARATION MADE BY THE ASSESSEE IN THE RETURN FILED DECLARING TOTAL INCOM E OF ` . 43,25,140/- THE ASSESSING OFFICER HAS ACCEPTED THE SAME WITHOUT MAK ING FURTHER ADDITION. WE FIND MERIT IN THE SUBMISSIONS MADE BY THE ASSESSEE THAT REPAIRS AND RENOVATION 7 ITA NOS 4280 & 4281/MUM/2009 EXPENDITURE SUCH AS TILING, FALSE CEILING, AND FURN ITURE FITTINGS ETC., IN THE LEASE HOLD PREMISES IS A DEBATABLE ISSUE. SINCE SOME OF THE VOUCHERS ON ACCOUNT OF VARIOUS EXPENSES WERE NOT AVAILABLE WITH THE ASSESS EE AND TO BUY PEACE WITH THE DEPARTMENT, THE ASSESSEE AGREED THAT SUCH RENOVATIO N EXPENDITURE SHALL BE TREATED AS CAPITAL IN NATURE AND DEPRECIATION BE CL AIMED INSTEAD OF TREATING SUCH RENOVATION EXPENSES AS REVENUE IN NATURE. FURTHER, ON ACCOUNT OF NON AVAILABILITY OF VOUCHERS, IT HAS ALSO AGREED FOR ADHOC ADDITION . THUS, THERE WAS AN INCREASE IN THE INCOME IN THE REVISED RETURN FILED AMOUNTING TO ` 30 LACS. THE ASSESSEE OFFERED ADDITIONAL INCOME OF ` 30 LACS AND PAID TAX THEREON AND THEREFORE, THERE IS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. IN OUR OPINION, THE FACTS IN THE PRESENT C ASE DO NOT WARRANT LEVY OF PENALTY U/S 271(1)( C) OF THE I T ACT. 7.3 WE FIND THE HONBLE SUPREME COURT IN THE CASE O F RELIANCE PETROPRODUCTS PVT LTD (SUPRA) HAS HELD THAT A MERE MAKING A CLAIM, WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF WILL NOT AMOUNT T O FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTI CULARS. IN THE INSTANT CASE, THE ASSESSEE HAS CLAIMED EXPENSES AS REVENUE EXPEND ITURE AND OFFERED TO FILE REVISED RETURN AFTER THE SURVEY TO BUY PEACE WITH T HE DEPARTMENT. WE FIND MERIT IN THE SUBMISSION OF THE LD COUNSEL FOR THE ASSESSE E THAT THE ISSUE OF EXPENDITURE INCURRED IN A RENTED PREMISES WHETHER CAPITAL OR RE VENUE IS A HIGHLY DEBATABLE ISSUE. MERELY BECAUSE THE ASSESSEE AGREED FOR TREAT ING THE REVENUE EXPENDITURE AS CAPITAL EXPENDITURE AND FOR NON AVAILABILITY OF CERTAIN VOUCHERS FOR VARIOUS EXPENSES FILED THE REVISED RETURN DECLARING AD-HOC INCOME OF ` . 30 LACS AS PER HIS STATEMENT RECORDED DURING THE SURVEY, THE SAME IN OUR OPINION IS NOT SUFFICIENT FOR LEVY OF PENALTY U/S 271(1)( C) OF TH E ACT. THE VARIOUS DECISIONS 8 ITA NOS 4280 & 4281/MUM/2009 RELIED BY THE CIT(A) IN OUR OPINION ARE DISTINGUISH ABLE AND ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN THIS VIEW OF THE MATTER, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANC EL THE PENALTY LEVIED U/S 271(1)( C) OF THE ACT. ITA NO.428 ITA NO.428 ITA NO.428 ITA NO.4281 11 1 /MUM/2009 /MUM/2009 /MUM/2009 /MUM/2009 ( (( ( A.Y 2005 A.Y 2005 A.Y 2005 A.Y 2005- -- -06 0606 06) )) ) 8 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSE E FILED RETURN OF INCOME ON 15.3.2007 DECLARING TOTAL INCOME OF ` 47,33,970/- WHICH HAS BEEN ACCEPTED BY THE ASSESSING OFFICER WITH MINOR DISALLOWANCE OF RE NT FOR NON DEDUCTION OF TDS ON RENT. THE ASSESSING OFFICER LEVIED PENALTY U/S 2 71(1)(C) ON THE GROUND THAT BECAUSE OF THE SURVEY CONDUCTED U/S 133A ON 19.8.20 05 HE ASSESSEE HAD AGREED TO FILE RETURN OF INCOME FOR ASSESSMENT YEAR 2005-0 6 DECLARING MINIMUM INCOME OF ` 50 LACS AND PAID TAX THEREON. ACCORDING TO THE AS SESSING OFFICER, HAD THERE BEEN NO SURVEY, THE ASSESSEE WOULD NOT HAVE OFFERED THE ADDITIONAL INCOME. THEREFORE, THE DECLARED INCOME OF ` . 47 LACS, WHICH CONSISTS OF BUSINESS INCOME OF ` . 26.67 LACS AND ADDITION ACCEPTED DURING THE SURVE Y OF ` 23.33 LACS LESS DEPRECATION OF ` . 3 LACS IS DUE TO THE SURVEY ACTION. THEREFORE, RELYING ON HIS DECISION, AS ALREADY MENTIONED IN THE ORDER FOR ASS ESSMENT YEAR 2004-05, THE ASSESSING OFFICER LEVIED PENALTY OF ` 8,53,711/- U/S 271(1)( C) OF THE ACT, WHICH HAS BEEN CONFIRMED BY THE CIT(A). 9 AFTER HEARING BOTH THE SIDES, WE FIND THE CASE DO ES NOT WARRANT LEVY OF PENALTY U/S 271(1)( C). ADMITTEDLY, THE SURVEY WAS CONDUCTED ON 20 TH JULY 2005 AND THE ASSESSMENT BEING ASSESSMENT YEAR 2005-06, T HE RETURN WAS DUE ONLY ON OR BEFORE 31.10.2005 THEREFORE, ALTHOUGH THE ASSESS EE HAS ACCEPTED DURING THE 9 ITA NOS 4280 & 4281/MUM/2009 COURSE OF SURVEY THAT HE IS FILING REVISED RETURN D ECLARING ADDITIONAL INCOME, THIS, IN OUR OPINION DOES NOT WARRANT LEVY OF PENALTY U/S 271(1)( C) AS THE RETURN WAS NOT DUE ON THE DATE OF SURVEY. COMING TO THE CONCLU SION THAT THE ASSESSEE WOULD NOT HAVE DECLARED ADDITIONAL INCOME OR HIGHER INCOM E UNDER THE FACTS OF THE PRESENT CASE, IN OUR OPINION IS PRE-MATURED. WE, TH EREFORE, FIND FORCE IN THE ARGUMENTS OF THE LD COUNSEL FOR THE ASSESSEE THAT T HIS CASE DOES NOT CALL FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT FOR THE ADHOC D ECLARATION MADE BY THE ASSESSEE DURING THE COURSE OF SURVEY. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CANCEL T HE PENALTY MADE U/S 271(1)( C) 10 IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED ON THE 28 TH ,DAY OF JAN 2011. SD/- SD/- ( (( ( SMT ASHA VIJAYARAGHAVAN SMT ASHA VIJAYARAGHAVAN SMT ASHA VIJAYARAGHAVAN SMT ASHA VIJAYARAGHAVAN ) )) ) JUDICIAL MEMBER ( (( ( R K PANDA R K PANDA R K PANDA R K PANDA ) )) ) ACCOUNTANT MEMBER PLACE: MUMBAI : DATED: 28 TH , JAN 2011 RAJ* COPY FORWARDED TO: 1 APPELLANT 2 RESPONDENT 3 CIT 4 CIT(A) 5 DR /TRUE COPY/ BY ORDER DY /AR, ITAT, MUMBAI