M/s. Shiv Shakti Rice Mills, Taraori, Haryana V. ACIT, Karnal

ITA 4484/DEL/2012

• Counselvise Citation: 448420114 RSA 2012
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-09-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 26-08-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 21-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Wrong claim

Judgement Text

ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND SHRI H.S. SIDHU : JUDICIAL MEMBER ITA NO. 4484/DEL/2012 ASSTT. YR: 2007-08 SHIV SHAKTI RICE MILLS, VS. ACIT, KARNAL. TARAORI, DISTT. KARNAL. PAN: AAFFS 1879 J ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SHRI GURJEET SINGH CA RESPONDENT BY : SHRI RAKESH KUMAR SR. DR DATE OF HEARING : 26-08-2014 DATE OF ORDER : 03-09-2014. O R D E R PER S.V. MEHROTRA, A.M:- THIS APPEAL, BY THE ASSESSEE, IS DIRECTED AGAINST T HE ORDER DATED 16-5- 2012 PASSED BY THE LD. CIT(A), KARNAL, IN APPEAL NO . IT/31/KNL/CIT(A)/KNL/2011-12, CONFIRMING THE PENALT Y IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE I.T. ACT, R ELATING TO A.Y. 2007-08. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE DE RIVED INCOME FROM MILLING OF PADDY AND TRADING/ EXPORT OF RICE. THE A SSESSING OFFICER NOTICED THAT THE ASSESSEE HAD DECLARED GROSS PROFIT OF RS. 4,43,57,855/- ON SALES OF RS. 18,22,69,316/- AT A G.P. RATE OF 24.34% AS AGAI NST THE G.P. RATE OF ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 2 21.03% IN THE LAST. YEAR. THE ASSESSING OFFICER OBS ERVED THAT THOUGH THE G.P. RATE WAS BETTER AS COMPARED TO LAST YEAR, BUT THE B ASMATI RICE YIELD WAS @ 66.14% AS COMPARED TO LAST YEAR RICE YIELD OF 66.22 %. 2.1. THE ASSESSEE HAD SUBMITTED AUDIT REPORT ALONG WITH MANUFACTURING AND TRADING ACCOUNT. THE ASSESSING OFFICER OBSERVED TH AT ACCOUNTS IN RESPECT OF PADDY WERE PADDY BASMATI ACCOUNT AND PADDY S/FIN E ACCOUNT AND IN RESPECT OF RICE WAS RICE ACCOUNT, REFLECTING THE EXPORT AND LOCAL SALES TO BASMATI AND S/FINE. HE NOTED THAT THE CLOSING STOCK SHOWN IN THE MANUFACTURING & TRADING ACCOUNT WAS UNDER THE HEAD RICE BASMATI, RICE DUBAR, RICE NAKOO AND RICE S/FINE. THE ASSESSI NG OFFICER EXAMINED THE VALUE OF CLOSING STOCK AND NOTED THAT THE ASSES SEE HAD VALUED THE CLOSING STOCK OF 13598.88 QTL. OF PADDY BASMATI @ RS. 184 1/- PER QTL. THE ASSESSEE SUBMITTED THAT THE VALUATION WAS DONE AT T HE MARKET PRICE AND FILED COPIES OF FORM I IN RESPECT OF PURCHASES MADE FROM VARIOUS PARTIES MENTIONED IN THE ASSESSMENT ORDER TO SUBSTANTIATE T HAT THE RATE ADOPTED BY IT WAS PROPER. THE ASSESSING OFFICER, HOWEVER, NOTICED FROM THE PURCHASE ACCOUNT AND PURCHASE VOUCHERS THAT THE ASSESSEE PUR CHASED PADDY BASMATI FROM PANNA LAL RAKESH KUMAR ON 30-3-2007 VIDE BILL NO. 14 @ 2138/- PER QTL. AND, THEREFORE, REQUIRED THE ASSESSEE TO EXPL AIN AS TO WHY THIS RATE BE NOT ADOPTED FOR VALUATION OF CLOSING STOCK. THE ASSESS EE POINTED OUT THAT IT USED ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 3 TO PURCHASE ALL VARIETIES OF PADDY BASMATI I.E. PUS A BASMATI AND PURE BASMATI, WHICH WAS VERIFIABLE FROM VALUE OF PADDY A S APPEARING IN FORM I OF ANY SINGLE DAY ON THE SAME SHOP AS PER THE QUAL ITY OF THAT PARTICULAR PADDY WHICH COULD ALSO BE VERIFIED FROM I FORM PR ODUCED. THE ASSESSEE FURTHER SUBMITTED THAT VALUATION OF PADDY HAD BEEN MADE ON THE MARKET PRICE AND THE MARKET PRICE OF PUSA BASMATI CAME TO ABOUT RS. 1500/- ON THE BASIS OF THE SALE BILLS OF M/S PANNA LAL RAKESH KUM AR AT THE END OF THE YEAR AND THAT OF PURE BASMATI CAME TO RS. 2040/- PER QTL . ON THE OTHER HAND, THE ASSESSEE HAD VALUED THE CLOSING STOCK OF PUSA BASMA TI AT RS. 2133/- PER QTL., WHICH WAS EVEN MORE THAN THE VALUE AS WAS ALLEGEDLY ADOPTED BY ASSESSING OFFICER. THE ORIGINAL FORM I WAS ALSO PRODUCED FO R VERIFICATION. 2.2. HOWEVER, ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES CONTENTION AND POINTED OUT THAT THOUGH ASSESSEE CLAIMED TO HAV E MADE PURCHASES OF ALL VARIETIES OF PADDY BASMATI, BUT THERE WAS ONLY ONE TRADING A/C OF PADDY BASMATI AND NOT SEPARATE ACCOUNTS OF DIFFERENT TYPE S OF BASMATI. FURTHER, THE ASSESSEE WAS MAINTAINING THE STOCK RECORDS, WHICH HAD THE ACCOUNT OF PADDY BASMATI ONLY AND THERE WERE NO SEPARATE ACC OUNTS TO SUPPORT THE CLAIM OF THE ASSESSEE. 2.3. AFTER CONSIDERING THE ASSESSEES SUBMISSIONS, THE ASSESSING OFFICER INVOKED THE PROVISIONS OF SECTION 145(3) REJECTING THE BOOKS OF ACCOUNT AND ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 4 VALUED THE CLOSING STOCK OF PADDY BASMATI @ 2138/- PER QTL., AS AGAINST RS. 1841/- PER QTL. SHOWN BY THE ASSESSEE AND, ACCORDI NGLY, MADE AN ADDITION OF RS. 40,38,867/-. 2.4. THE ASSESSING OFFICER FURTHER NOTED THAT DURIN G THE YEAR, ASSESSEE REPLACED OLD TRANSFORMER WITH NEW ONE PURCHASED FRO M M/S NAND KISHORE & CO., DELHI VIDE BILL NO. 964 DATED 23-9-2006 AND RE CEIVED ON THE EVEN DATE IN HIS RICE MILL AT TARAORI. FROM THE DOCUMENTS, TH E ASSESSING OFFICER NOTICED THAT BILL WAS DATED 23-9-2006 BUT THE GR NO. 2278 O F SHANTY ROAD CARRIERS, GEETA COLONY, GANDHI NAGAR, DELHI WAS DATED 22-9-20 06. THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEES CLAIM OF TRAN SFORMER BEING INSTALLED PRIOR TO 30-9-2006, FOR THE FOLLOWING REASONS: (I) THE ASSESSEE DID NOT DISCHARGE HIS DUTY TO PROVE T HAT THE TRUCK WAS BOOKED ON 22-9-2006, THOUGH THE BILL OF PURCHASE OF TRANSFORMER WAS DATED 23-9-2006. (II) DESCRIPTION IN THE GR WAS OF 750 KVA TRANSFORMER, W HEREAS THE PARTICULARS OF TRANSFORMER PURCHASED FROM M/S NAND KISHORE & CO. WAS FOR TRANSFORMER OF 1000 KVA. (III) THE ASSESSEE FILED COPY OF ST FORM 38 CLAIMING THAT THE S. NO. 3748962 OF FORM 38, WAS MENTIONED ON THE PURCHASE BILL NO. 964 DATED 23-9-2006 AND ALSO VICE VERSA, THE DATE OF RE CEIPT OF GOODS ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 5 WRITTEN ON FORM NO. 38 WAS INITIALLY 23-10-2006 AND IT WAS CLEARLY EVIDENT THAT THE DATE HAD SUBSEQUENTLY CHANGED TO 2 3-9-2006. (IV) THE DETAILS WERE SUBMITTED TO THE SALES-TAX DEPARTM ENT VIDE ENTRY DATED 26-10-2006. (V) THE ASSESSEE DID NOT FILE ANY PROOF TO PROVE THAT T HE TRANSFORMER WAS ACTUALLY INSTALLED OR PUT TO USE ON OR BEFORE 3 0-9-2006. 2.5. ACCORDINGLY, ASSESSING OFFICER DISALLOWED 50% OF THE DEPRECIATION CLAIMED BY THE ASSESSEE AND MADE A DISALLOWANCE OF RS. 60,000/-. 2.6. WHILE PARTLY ALLOWING THE ASSESSEES APPEAL, T HE LD. CIT(A) CONFIRMED BOTH THE DISALLOWANCES. 2.7. THE ASSESSEE DID NOT FILE ANY FURTHER APPEAL B EFORE THE TRIBUNAL. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS AND LEVIED PENALTY U/S 271(1)(C), APROPOS BOTH THE ADDITIONS DISCUSSED ABO VE. LD. CIT(A) CONFIRMED THE PENALTY. BEING AGGRIEVED WITH THE ORD ER OF LD. CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US AND HAS TAKEN FOLLO WING EFFECTIVE GROUND OF APPEAL. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE WORTHY CIT(A), KARNAL HAS ERRED IN LAW IN CONFIRMING THE P ENALTY OF RS. 13,79,680/- U/S 271(1)(C) OF THE INCOME TAX ACT , 1961 IMPOSED BY THE LD. AO ON ACCOUNT OF ALLEGED UNDER VALUATION OF CLOSING STOCK OF PADDY BASMATI AND ALLEGED EXCES S CLAIM OF DEPRECIATION. HENCE, THE PENALTY CONFIRMED BY THE W ORTHY CIT(A) BE KINDLY REMITTED. ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 6 3. APROPOS THE PENALTY LEVIED ON ACCOUNT OF ADDITIO N MADE TO CLOSING STOCK, LD. COUNSEL REFERRED TO PAGE 25 OF THE PB WH EREIN FORM I IN RESPECT OF PURCHASE FROM M/S PANNA LAL RAKESH KUMAR ARE CON TAINED AND POINTED OUT THAT ASSESSEE HAD PURCHASED 117.05 KG. OF BASMA TI @ RS. 2000/- ON 30-3- 2007. LD. COUNSEL REFERRED TO FORM NO. I TO DEMON STRATE THE MARKET RATE PREVAILING IN MARCH 2007 IN RESPECT OF DIFFERENT TY PES OF BASMATI. 3.1. LD. COUNSEL REFERRED TO PAGE 26 OF THE PB WHER EIN THE COMPUTATION MADE BY ASSESSEE IN REGARD TO CLOSING STOCK IS CONT AINED. 3.2. LD. COUNSEL SUBMITTED THAT ASSESSEE HAD ADOPTE D THE MARKET RATE ON THE BASIS OF DETAIL AVAILABLE WITH IT AND ACCORDING LY MADE COMPUTATION OF CLOSING STOCK. HE SUBMITTED THAT IT IS ONLY A CASE OF ESTIMATION OF RATE, WHICH HAS BEEN BONA FIDE MADE BY ASSESSEE AND, THEREFORE, NO PENALTY IS EXIGIBLE IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN TH E CASE OF RELIANCE PETRO PRODUCTS 322 ITR 150 , WHEREIN IT HAS BEEN HELD A S UNDER: 7. A GLANCE AT THIS PROVISION WOULD SUGGEST THAT IN ORDER TO BE COVERED, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF T HE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURA TE PARTICULARS OF HIS INCOME. PRESENT IS NOT THE CASE OF CONCEALMENT OF T HE INCOME. THAT IS NOT THE CASE OF THE REVENUE EITHER. HOWEVER, THE LEARNED CO UNSEL FOR REVENUE SUGGESTED THAT BY MAKING INCORRECT CLAIM FOR THE EX PENDITURE ON INTEREST, THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF TH E INCOME. AS PER LAW LEXICON, THE MEANING OF THE WORD 'PARTICULAR' IS A DETAIL OR DETAILS (IN PLURAL SENSE); THE DETAILS OF A CLAIM, OR THE SEPARATE ITE MS OF AN ACCOUNT. THEREFORE, THE WORD 'PARTICULARS' USED IN THE SECTION 271(1)(C ) WOULD EMBRACE THE MEANING OF THE DETAILS OF THE CLAIM MADE. IT IS AN ADMITTED POSITION IN THE PRESENT CASE THAT NO INFORMATION GIVEN IN THE RETUR N WAS FOUND TO BE INCORRECT OR INACCURATE. IT IS NOT AS IF ANY STATEMENT MADE O R ANY DETAIL SUPPLIED WAS FOUND TO BE FACTUALLY INCORRECT. HENCE, AT LEAST, P RIMA FACIE, THE ASSESSEE ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 7 CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PART ICULARS. THE LEARNED COUNSEL ARGUED THAT 'SUBMITTING AN INCORRECT CLAIM IN LAW FOR THE EXPENDITURE ON INTEREST WOULD AMOUNT TO GIVING INACCURATE PARTI CULARS OF SUCH INCOME'. WE DO NOT THINK THAT SUCH CAN BE THE INTERPRETATION OF THE CONCERNED WORDS. THE WORDS ARE PLAIN AND SIMPLE. IN ORDER TO EXPOSE THE ASSESSEE TO THE PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIO N, THE PENALTY PROVISION CANNOT BE INVOKED. BY ANY STRETCH OF IMAGINATION, M AKING AN INCORRECT CLAIM IN LAW CANNOT TANTAMOUNT TO FURNISHING INACCURATE P ARTICULARS. IN COMMISSIONER OF INCOME TAX, DELHI VS. ATUL MOHAN BI NDAL [2009(9) SCC 589], WHERE THIS COURT WAS CONSIDERING THE SAME PRO VISION, THE COURT OBSERVED THAT THE ASSESSING OFFICER HAS TO BE SATIS FIED THAT A PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME. THIS COURT REFERRED TO ANOTHER DECISIO N OF THIS COURT IN UNION OF INDIA VS. DHARAMENDRA TEXTILE PROCESSORS [2008(13) SCC 369], AS ALSO, THE DECISION IN UNION OF INDIA VS.RAJASTHAN SPG. & WVG. MILLS [2009(13) SCC 448] AND REITERATED IN PARA 13 THAT:- '13. IT GOES WITHOUT SAYING THAT FOR APPLICABILITY OF SECTION 271(1)(C), CONDITIONS STATED THEREIN MUST EXIST.' .. . 9. WE ARE NOT CONCERNED IN THE PRESENT CASE WITH TH E MENS REA. HOWEVER, WE HAVE TO ONLY SEE AS TO WHETHER IN THIS CASE, AS A M ATTER OF FACT, THE ASSESSEE HAS GIVEN INACCURATE PARTICULARS. IN WEBSTER'S DICTIONA RY, THE WORD 'INACCURATE' HAS BEEN DEFINED AS:- 'NOT ACCURATE, NOT EXACT OR CORRECT; NOT ACCORDING TO TRUTH; ERRONEOUS; AS AN INACCURATE STATEMENT, COPY OR TRAN SCRIPT'. WE HAVE ALREADY SEEN THE MEANING OF THE WORD 'PARTI CULARS' IN THE EARLIER PART OF THIS JUDGMENT. READING THE WORDS IN CONJUNC TION, THEY MUST MEAN THE DETAILS SUPPLIED IN THE RETURN, WHICH ARE NOT A CCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO TRUTH OR ERRONEOUS. WE MUST HASTEN TO ADD HERE THAT IN THIS CASE, THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR F ALSE. SUCH NOT BEING THE CASE, THERE WOULD BE NO QUESTION OF INVITING THE PE NALTY UNDER SECTION 271(1)(C) OF THE ACT. A MERE MAKING OF THE CLAIM, W HICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACC URATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH CLAIM MADE IN THE RETURN CANNOT AMOUNT TO THE INACCURATE PARTICULARS. 4. LD. DR RELIED ON THE ORDER OF CIT(A). HE SUBMITT ED THAT ASSESSEE HAD NOT MAINTAINED THE STOCK REGISTER, THEREFORE, THE B OOKS OF ACCOUNT WERE REJECTED AND THE MARKET RATE AS PER THE LAST PADDY RICE BILL WAS RIGHTLY ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 8 ADOPTED BY ASSESSING OFFICER. THEREFORE, THERE WAS CONCEALMENT OF INCOME AND FURNISHING OF INACCURATE PARTICULARS OF INCOME. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E PERUSED THE RECORD OF THE CASE. THE ASSESSEE HAD GIVEN DETAILED REASON ING BEFORE ASSESSING OFFICER FOR ADOPTING THE MARKET RATE AT RS. 1841/- PER QTL. IN RESPECT OF VALUATION OF PADDY BASMATI STOCK. ASSESSEE HAD DUL Y EXPLAINED THAT IT USED TO PURCHASE POOSA BASMATI AND PURE BASMATI BUT THE ENTIRE STOCK WAS ENTERED INTO STOCK REGISTER WITHOUT MAKING ANY SUCH DISTINC TION. THE ASSESSEE HAD ALSO POINTED OUT THAT THE MARKET RATE OF PUSA BASMA TI WAS RS. 1500/- WHEREAS PURE BASMATI WAS RS. 2040/- PER QTL. BUT AS SESSEE HAD ADOPTED RATE OF RS. 2133/- PER QTL. IN RESPECT OF PURE BASMATI W HICH IS EVIDENT FROM PAGE 26 OF THE PB. HOWEVER, THE EXPLANATION OF ASSESSEE DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER WHO MADE THE ADDITION ON ACCO UNT OF NON-MAINTENANCE OF COMPLETE STOCK IN REGARD TO PUSA BASMATI AND PUR E BASMATI SEPARATELY. ADDITION WAS ALSO CONFIRMED BY CIT(A). HOWEVER, WHE N WE HAVE TO DECIDE THE ISSUE OF LEVY OF PENALTY, WE HAVE TO FIND WHETH ER THE ASSESSEES EXPLANATION WAS BONA FIDE OR MALA FIDE. THE ASSESSI NG OFFICER HAS ADOPTED THE RATE FROM THE LAST BILL, CONTAINED AT PAGE 25 O F THE PB. THE ASSESSEES CONTENTION IS THAT IT IS IN RESPECT OF ONLY ONE VAR IETY OF PURE BASMATI AND, THEREFORE, COULD NOT BE TAKEN AS THE BASIS FOR VALU ING THE ENTIRE STOCK, WHICH ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 9 ADMITTEDLY INCLUDED THE PUSA BASMATI. UNDER SUCH CI RCUMSTANCES, KEEPING IN VIEW THE FACT THAT PURCHASE BILLS CLEARLY SHOWED TH AT THE ASSESSEE WAS MAKING PURCHASES OF PUSA BASMATI AS WELL AS PURE BASMATI, THE ESTIMATION MADE BY ASSESSEE OF MARKET RATE FOR VALUATION OF STOCK, COU LD NOT BE FAULTED AND, THEREFORE, INVOCATION OF PENAL PROVISIONS WAS NOT J USTIFIED AS THE ASSESSEES EXPLANATION COULD NOT BE BRANDED WITH ANY MALA FIDE . RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF RE LIANCE PETRO PRODUCTS (SUPRA), WE, THEREFORE, SET ASIDE THE ORDER OF LD. CIT(A) ON THIS COUNT. 5.1. APROPOS THE PENALTY LEVIED ON ACCOUNT OF DISAL LOWANCE OF DEPRECIATION, WE FIND THAT THE MAIN REASON FOR DISA LLOWANCE WAS THAT IN FORM NO. ST 38-INWARD, SUBMITTED TO THE SALES-TAX DEPART MENT, CONTAINED AT PAGE 43 OF THE PB, THERE WAS ALLEGEDLY OVER-WRITING IN R EGARD TO THE RECEIPT OF GOODS, WHICH, AS PER ASSESSING OFFICER WAS 23-10-20 06 BUT WAS ALTERED TO 23- 9-2006. ACCORDINGLY, IT WAS CONCLUDED THAT THE ASSE SSEE WAS NOT ABLE TO DEMONSTRATE THAT THE TRANSFORMER WAS ACTUALLY INSTA LLED AND PUT TO USE. IN THIS REGARD WE FIND THAT THERE IS NO DISPUTE THAT GR NO. 2278 (CONTAINED AT PAGE 38 OF THE PB), WAS ISSUED BY SHANKI ROAD CARRIERS ON 22-9-2006. THE CONSIGNERS NAME WAS NAND KISHORE & CO., BUT IN THE DESCRIPTION 750 KVA TRANSFORMER WAS MENTIONED WHEREAS THE PURCHASE WAS FOR 1000 KV AS PER BILL. WE DO NOT THINK THAT THIS CAN BE A BASIS FOR ARRIVING AT ANY ADVERSE ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 10 CONCLUSION, BECAUSE ALL OTHER DETAILS ARE NOT DISPU TED. FURTHER, THE BILL IS DATED 23-9-2006 AND THAT IS ALSO ONE OF THE REASONS GIVEN BY THE ASSESSING OFFICER FOR MAKING DISALLOWANCE, OBSERVING THAT GR IS PRE-DATED. THIS ALSO, IN OUR OPINION, CANNOT BE A BASIS FOR ARRIVING AT A NY ADVERSE CONCLUSION. AS PER THE ENDORSEMENT ON THE GR (PAPER BOOK PAGE 38), CASH OF RS. 4020 WAS PAID ON 23-9-2006. THE ST-38 IN-WARD (PAPER BOOK PA GE 43), WAS OBTAINED FROM SALES-TAX DEPARTMENT ON 20-9-2006 BY ASSESSEE, IN WHICH THE CONSIGNORS NAME WAS NAND KISHORE & CO. THIS ST-38, INTER ALIA, CONTAINS THE REGISTRATION NUMBER OF GOODS CARRIAGE AS HR-47- 7031, WHICH ALSO FINDS PLACE IN THE GR NO. 2278 CONTAINED AT PAGE 38 OF TH E PB. 5.2. LD. COUNSEL HAS REFERRED TO PAGE 42 OF PB, WHE REIN THE STATEMENT OF ST 38 INWARD USED FOR THE PERIOD 1-7-2006 TO 30-9-2 006 IS CONTAINED, WHICH WAS SUBMITTED TO THE SALES-TAX DEPARTMENT, IN WHICH IT IS MENTIONED THAT ST- 38 NO. 3748962 WAS UTILIZED ON 22-9-2006 FOR PURCHA SE OF GOODS FROM NAND KISHORE & CO., DELHI. THUS, THERE IS OVERWHELMING E VIDENCE TO COME TO THE CONCLUSION THAT THE SUPPLY TO THE ASSESSEE WAS MADE ON 23-9-2006. FURTHER, IT CANNOT BE LOST SIGHT OF THAT THE GOODS WERE SUPP LIED FROM DELHI TO KARNAL, WHICH IS NOT VERY FAR SO AS TO TAKE A PERIOD OF ONE MONTH FOR DELIVERY OF GOODS. IT IS TRUE THAT ON ACCOUNT OF NON-FURNISHING OF EVIDENCE OF INSTALLATION OF TRANSFORMER, A VIE COULD BE TAKEN AGAINST THE AS SESSEE IN ASSESSMENT ITA 4484/DEL/12 SHIV SHAKTI RICE MILLS 11 PROCEEDINGS BUT WHEN IT COMES TO LEVY OF PENALTY, T HERE HAS TO BE A CONCRETE EVIDENCE ON RECORD, ESTABLISHING THAT ASSESSEE MAD E A FALSE CLAIM, TO SADDLE THE ASSESSEE WITH PENALTY, DEMONSTRATING THAT THE E XPLANATION FURNISHED BY THE ASSESSEE WAS FALSE. 5.3. IN THE PRESENT SET OF FACTS, WE DO NOT FIND AN Y SUCH CIRCUMSTANCE, COMING INTO PICTURE AND, THEREFORE, WE SET ASIDE TH E ORDER OF LD. CIT(A), CONFIRMING THE PENALTY QUA THIS ADDITION ALSO. 5.4. IN VIEW OF ABOVE, PENALTY LEVIED U/S 271(1)(C) IS CANCELLED. 6. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 03-09-2014. SD/- SD/- ( H.S. SIDHU ) ( S.V. MEHROTRA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03-09-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR