PARAMOUNT MINERALS & CHEMICALS LTD, MUMBAI V. DCIT CEN CIR 46, MUMBAI

ITA 4715/MUM/2009

• Counselvise Citation: 471519914 RSA 2009
• Duration Of Justice: 1 year(s) 10 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 12-08-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V SAMUEL
• Assessee Lawyers: P J PARDIWALLA
• Keywords: Bogus purchase; Depreciation; Search and seizure; Deemed to accrue or arise in india; Revised return; TDS
• Section: 271(1)(c); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH C, MUMBAI BEFORE SHRI R.V. EASWAR (PRESIDENT) AND SHRI B. R AMAKOTAIAH (AM) I.T.A. NO . ASSESSMENT YEAR 4714/MUM/2009 2002-03 4715/MUM/2009 2004-05 4716/MUM/2009 2006-07 M/S. PARAMOUNT MINERALS AND CHEMICALS LIMITED, 33,OLD HAUMAN 1 ST CROSS LANE, KALBADEVI ROAD, MUMBAI 400 002. PAN: AAACP 2721 Q VS. THE DY.COMMISSIONER OF INCOME-TAX, CENTRAL CIR. 46, AAYAKAR BHAVAN, 6 TH FLOOR, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI P. J. PARDIWALLA & NITESH JO SHI RESPONDENT BY : SHRI V. SAMUEL, SR. DR. O R D E R PER B. RAMAKOTAIAH, AM: THESE THREE APPEALS ARE BY THE ASS ESSEE AGAINST THE PENALTIES LEVIED FOR THE ASSESSMENT YEARS 2002-03, 2004-05 AND 2006- 07 OF ` 98,818/-, ` 58,476/- AND ` 9,92,498/- RESPECTIVELY UNDER SECTION 271(1)(C) OF THE ACT. THESE APPEALS WERE ORIGINALLY DISMISSED BY NON-PROSECUTIO N VIDE ORDER DATED 30.04. 2010 AND IN M.A. NOS. 386 TO 388/MUM/2010 THE APPEALS WE RE RECALLED VIDE ORDER DATED 9 TH SEPTEMBER, 2010. SINCE THE ISSUES ARE COMMON FOR ALL THE YEARS, THE APPEALS WERE HEARD AND DISPOSED OF BY THIS COMMON ORDER. 2. SEARCH AND SEIZURE OPERATIONS WERE CONDUCTED IN R.R. GROUP OF CASES ON 12.4.2006. THE ASSESSEE COMPANY WAS COVERED UNDER S URVEY ACTION U/S.133A OF THE ACT ON THE SAME DAY I.E. 12.04.2006. THE ASSESS ING OFFICER SPECIFICALLY VERIFIED THE PURCHASE OF RAW-MATERIALS AND AFTER EXAMINING T HE STATEMENT GIVEN BY M/S. R.R.ENTERPRISES, THE ASSESSEES DIRECTOR WAS ASKED TO EXPLAIN THE PURCHASES MADE FROM SUCH FIRM. WHILE ACCEPTING THAT THE ASSESSEE C OMPANY HAS PURCHASED GOODS FROM THE ABOVE SAID R.R. ENTERPRISES FROM ASSESSMEN T YEAR 2000-01 TILL DATE AND ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 2 AFTER FURNISHING THE DETAILS, THE ASSESSEE ADMITTED THE FOLLOWING INCOMES CONSIDERED TO BE BOGUS PURCHASES BY THE SURVEY PART Y. THE ADMISSION OF INCOME OF THE AMOUNT OF PURCHASES FROM M/S. R.R. ENTERPRIS ES IN RESPECT OF FINANCIAL YEARS ARE AS UNDER: SR. NO . F. Y . A. Y AMOUNT OF PURCHASES MADE 1. 2000-01 2001-02 ` 1,53,600 2. 2001-02 2002-03 ` 2,76,800 3. 2002-03 2003-04 ` 1,31,854 4. 2003-04 2004-05 ` 1,63,000 5. 2004-05 2005-06 ` 14,49,500 6. 2005-06 2006-07 ` 29,48,600 3. THE ASSESSEE ACCORDINGLY FILED REVISED RETURNS W ITH REFERENCE TO THE ASSESSMENT YEARS UPTO 2005-06 AND A REGULAR RETURN FOR THE ASSESSMENT YEAR 2006-07 SINCE THE TIME LIMIT FOR FILING THE RETURN HAS NOT EXPIRED. THE ASSESSING OFFICER ACCEPTED THE REVISED RETURNS DISALLOWING T HE PURCHASES AS ADMITTED BY THE ASSESSEE AND INITIATED PENALTY PROCEEDINGS IN THE R ESPECTIVE ASSESSMENT YEARS. HOWEVER, PENALTIES FOR THESE THREE ASSESSMENT YEARS ONLY WERE LEVIED WHEREAS IN RESPECT OF THE OTHER ASSESSMENT YEARS WERE DROPPED BY THE AO. 4. IT WAS THE CONTENTION OF THE ASSESSEE THAT THE A MOUNT OF ` 2,76,800/- OFFERED WRONGLY IN THE AY 2002-03 AS THE ACTUAL PUR CHASES WERE ONLY ` 1,22,500/- AND THE BALANCE AMOUNT OF ` 1,53,600/- WERE OFFERED IN THE AY 2001-02 AND THAT AMOUNT WAS TAXED TWICE. NOT ONLY T HAT IT WAS ALSO FURTHER SUBMITTED THAT THE AMOUNT OF ` 1,62,000/- ADMITTED IN THE ASSESSMENT YEAR 2004-05 WAS ALSO NOT CORRECT AS THERE WERE NO PURCH ASES MADE IN THAT YEAR BUT ONLY PAYMENTS OF THE OUTSTANDING AMOUNTS OF THE EAR LIER YEAR. WITH REFERENCE TO ASSESSMENT YEAR 2006-07, IT WAS SUBMITTED THAT ASSE SSEE HAD OFFERED THE ABOVE PURCHASE AMOUNTS BY DECLARING IN THE RETURN OF INCO ME ITSELF AND THAT PENALTY PROCEEDINGS U/S.271(1)(C) ARE NOT WARRANTED. IT WA S FURTHER SUBMITTED THAT DURING THE COURSE OF SURVEY, THE ASSESSING OFFICER VERIFIED THE STOCK REGISTERS, PURCHASES AND FOUND NO DISCREPANCY IN THOSE TRANSAC TIONS. IT WAS FURTHER ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 3 SUBMITTED THAT THE STATEMENT RECORDED FROM THE PART NER OF R.R. ENTERPRISES WAS NOT FURNISHED. IN ORDER BUY PIECE AND SETTLE THE IS SUES, THE ASSESSEE OFFERED AN AMOUNT OF ` 51,23,354/- IN ALL THESE YEARS AND REDUCED THE LOS SES ACCORDINGLY. IT WAS FURTHER SUBMITTED THAT THE ASSESSEES INCOME WA S ASSESSED UNDER SECTION 115JB AND SO PENALTY U/S.271(1)(C) WAS NOT WARRANTE D. HOWEVER, THE AO BASED ON THE ADDITIONS MADE IN RESPECTIVE ASSESSMENT YEAR S, LEVIED PENALTIES IN ALL THE THREE IMPUGNED ASSESSMENT YEARS. 5. THE LEARNED CIT(A) BASED ON THE ARGUMENTS FOR TH E ASSESSMENT YEAR 2006-07, WHERE THE SURVEY HAS YIELDED DISCLOSURE OF AN AMOUNT OF ` 2 9,48,600/- RELIED ON VARIOUS JUDICIAL PRINCIPLES AND CONFIRMED THE PENALTIES IN ALL THE YEARS. THE ASSESSEE IS AGGRIEVED. 6. DRAWING OUR ATTENTION TO THE RESPECTIVE ASSESSME NT ORDERS, IT WAS SUBMITTED BY THE LEARNED COUNSEL FOR THE ASSESSEE T HAT IN ALL THE YEARS UNDER CONSIDERATION, THE INCOMES WERE ULTIMATELY ASSESS ED U/S.115JB AND SO, THERE IS NO SCOPE FOR LEVY OF PENALTY AS THE INCOME RETURNED AND THE INCOME ASSESSED WERE SAME. HE RELIED ON THE PRINCIPLES ESTABLISHED BY TH E HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS NALWA SONS INVESTMENTS LTD 327 ITR 543(DEL.) FOR THE PROPOSITION THAT EVEN WHERE THERE ARE ADDITIONS AND LOSSES WERE REDUCED, PENALTY U/S.271(1)(C) WAS NOT ATTRACTED WHERE THE INCOMES W ERE ASSESSED U/S.115JB IF NO ADDITIONS WERE MADE IN THAT COMPUTATION. HE FURTH ER PLACED ON RECORD THE CO- ORDINATE BENCH DECISIONS OF THE TRIBUNAL IN THE CAS E OF DCIT V. USHDEV INTERNATIONAL LTD. (129 ITD 167) AND IN THE CASE OF RUCHI STRIPS & ALLOYS LTD. VS. DCIT IN ITA NO. 6940 & 6941/MUM/2008 DATED 21.1.20 11. IT WAS HIS SUBMISSION THAT SINCE THE INCOMES IN RESPECT OF THE ASSESSMENT YEARS WERE ASSESSED U/S.115JB WITHOUT ANY MODIFICATION, PROVISIONS OF S ECTION 271(1)(C) ARE NOT ATTRACTED. HE FURTHER REFERRED TO THE SUBMISSIONS O N MERITS MADE BEFORE THE AO TO SUBMIT THAT IN THE ASSESSMENT YEAR 2002-03 THE PURC HASES FROM RR ENTERPRISES ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 4 WAS ONLY ` 1,23,200/- WHEREAS THE ADDITION MADE WAS ` 2,76,800/-. IT WAS FURTHER SUBMITTED THAT IN THE ASSESSMENT YEAR 2004- 05 THERE WERE NO PURCHASES AT ALL BUT STILL THE AO MADE ADDITION OF ` 1,63,000/- AND LEVIED PENALTY ON THAT. WITH REFERENCE TO A.Y. 2006-07 IT WAS SUBMITTED TH AT THE ASSESSEE HAS FILED THE RETURN OF INCOME OFFERING AN AMOUNT OF ` 29,48,600/- AND STILL THE COMPUTATION THEREON WAS NIL INCOME, WHEREAS THE ASSESSEE HAS OFFERED AN AMOUNT OF ` 97,99,780/- AS BOOK PROFIT UNDER THE PROVISIONS OF SECTION 115JB. IT WAS HIS SUBMISSION EVEN ON MERITS THERE IS NO SCOPE FOR LEV Y OF PENALTY. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HOWEVE R, SUBMITTED THAT THE PROVISIONS EXPLANATION 4(A) OF SECTION 271(1)(C) AR E APPLICABLE WHICH WERE AMENDED FROM 1.4.2003 AND THEREFORE SINCE THE LOSS ES IN THE RESPECTIVE YEARS WERE REDUCED BY THE AMOUNTS, THE AO WAS CORRECT IN LEVYING THE PENALTY IN ALL THE ABOVE YEARS. HE RELIED ON THE LEGAL PRINCIPLES DIS CUSSED BY THE CIT(A) IN THE APPELLATE ORDER. 8. THE LEARNED COUNSEL FOR THE ASSESSEE IN REPLY SU BMITTED THAT THE EXPLANATION 4(A) TO SECTION 271(1)(C) WILL NOT APPL Y IN A CASE WHERE THE INCOME RETURNED AND INCOME ASSESSEE WERE POSITIVE. HE REFE RRED TO THE DECISION OF THE I.T.A.T D BENCH AHEMEDABAD IN THE CASE OF NIKO RE SOURCES LTD. VS. ACIT (ITA NO.2477/AHD.2008) TO SUBMIT THAT EXPLANATION 4(C) I S APPLICABLE TO THE FACTS OF THE CASE AND NOT EXPLANATION 4(A) AS CONTENDED BY T HE LEARNED DEPARTMENTAL REPRESENTATIVE. IT WAS HIS SUBMISSION THAT INCOMES WERE ULTIMATELY OFFERED AS POSITIVE INCOME AND ASSESSED AS SUCH U/S.115JB. THE REFORE, THE PENALTIES ARE NOT WARRANTED. 9. WE HAVE CONSIDERED THE ISSUE. AS FAR AS THE FACT S ARE CONCERNED, THE ASSESSEE HAS OFFERED INCOMES IN RESPECT OF THE ASSE SSMENT YEAR 2002-03 UNDER SECTION 115JB AND AS PER ASSESSMENT ORDER THE ASS ESSEE FILED RETURN OF INCOME DECLARING A LOSS OF ` 7,04,178/- AND SUBSEQUENTLY FILED A REVISED RETURN REDUCING ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 5 THE LOSS TO ` 4,27,378/-. HOWEVER, THE BOOK PROFIT OFFERED ORIG INALLY WAS ` 15,04,908/- WAS ACCEPTED AS SUCH AND TAX WAS PAYAB LE UNDER SECTION 115JB WAS DETERMINED AT ` 1,15,125/-. WITH REFERENCE TO ASSESSMENT YEAR 2004 -05 THE ASSESSEE FILED ORIGINAL RETURN OF INCOME AT ` (-) 2,06,41,733/- WHICH WAS REDUCED BY AN AMOUNT OF ` 1,63,000/- THEREBY DETERMINING LOSS AT ` 2,04,78,733/-. HOWEVER, THE BOOK PROFIT AT ` 36,01,827/- WAS ORIGINALLY OFFERED AND THE SAME WAS ALSO ACCEPTED U/S.143(3) IN THE ASSESSMENT. AS FAR AS ASSESSMENT YEAR 2006- 07 WAS CONCERNED, THE ASSESSEE FILED THE RETURN OF INCOME OF ` 86,74,612/- ON 22.11.2006 I.E. SUBSEQUENT TO THE SURVEY OPERATION S ON 12.4.2006. THIS WAS REVISED AFTER CLAIMING HIGHER DEPRECIATION AND SET OFF OF THE LOSS AND THE REGULAR INCOME WAS OFFERED AT ` 4,29,490/- BEING THE CAPITAL GAINS. THE ASSESSEE OFFERED AN INCOME OF ` 97,99,780/- U/S.115JB WHICH WAS ALSO ACCEPTED AS SUCH DETERMINING THE TAX PAYABLE AT ` 8,24,652/-. AS SEEN FROM THE ABOVE ASSESSMENT ORDERS, THE FACT IS THAT IN ALL THE THREE ASSESSMEN T YEARS, THE INCOMES WERE RETURNED AND ACCEPTED U/S.115JB. THEREFORE, THE PRI NCIPLES ESTABLISHED BY THE HONBLE DELHI HIGH COURT (SUPRA) IT IS CLEARLY APPL ICABLE. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS NALWA SONS INVESTMENTS LTD 3 27 ITR 543(DEL.) HAS CONSIDERED THE ISSUE AND HELD AS UNDER: THE JUDGMENT OF THE SUPREME COURT IN GOLD COIN HE ALTH FOOD (P) LTDS CASE(SUPRA) CLARIFIES THAT EVEN IF T HERE ARE LOSSES IN A PARTICULAR YEAR, PENALTY CAN BE IMPOSED , AS EVEN IN THAT SITUATION THERE CAN BE A TAX EVASION. AS PER SECTION 271(1)(C), THE PENALTY CAN BE IMPOSED WHEN ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR HAS FURNISHED INCORRECT PARTICULARS OF THE INCOME. ONC E THIS CONDITION IS SATISFIED, QUANTUM OF PENALTY IS TO BE LEVIED AS PER CLAUSE (III) OF SECTION 271(1) WHICH STIPULAT ES THAT THE PENALTY SHALL NOT EXCEED THREE TIMES OF THE AM OUNT OF TAX SOUGHT TO BE EVADED. THE EXPRESSION THE AMOU NT OF TAX SOUGHT TO BE EVADED HAS BEEN CLARIFIED AND EXP LAINED IN THE EXPLANATION 4 THERETO, AS PER WHICH IT HAS T O HAVE ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 6 THE EFFECT OF REDUCING THE LOSS DECLARED IN THE RET URN OR CONVERTING THAT LOSS INTO INCOME. UNDER THE SCHEME OF THE ACT, THE TOTAL INCOME OF TH E ASSESSEE IS FIRST COMPUTED UNDER THE NORMAL PROVISI ONS OF THE ACT AND TAX PAYABLE ON SUCH INCOME IS COMPARED WITH THE PRESCRIBED PERCENTAGE OF THE BOOK PROFITS COM PUTED UNDER SECTION 115JB. THE HIGHER OF THE TWO AMOUNTS IS REGARDED AS TOTAL INCOME AND TAX IS PAYABLE WITH RE FERENCE TO SUCH INCOME. IF THE TAX PAYABLE UNDER THE NOR MAL PROVISIONS IS HIGHER, SUCH AMOUNT IS THE TOTAL INCO ME OF THE ASSESSEE, OTHERWISE BOOK PROFITS ARE DEEMED AS TH E TOTAL INCOME OF THE ASSESSEE IN TERMS OF SECTION 115JB. IN THE INSTANT CASE, THE INCOME COMPUTED AS PER THE NORMAL PROCEDURE WAS LESS THAN THE INCOME DETERMINED BY LE GAL FICTION, NAMELY, BOOK PROFITS UNDER SECTION 115 J B[PARA 22] THE INCOME OF THE ASSESSEE WAS, THUS ASSESSED UNDER SECTION 115 JB AND NOT UNDER THE NORMAL PROVISIONS. IT WAS IN THAT CONTEXT THAT THE APPLICATION OF EXPLANA TION 4 TO SECTION 271(1)(C) HAD TO BE EXAMINED. THE JUDGMENT IN THE CASE OF GOLD COIN HEALTH FOOD ( P) LTD.(SUPRA) OBVIOUSLY, DOES NOT DEAL WITH SUCH A SI TUATION. WHAT WAS HELD BY THE SUPREME COURT IN THAT CASE IS THAT EVEN IF IN THE INCOME TAX RETURN FILED BY THE ASSES SEE LOSSES ARE SHOWN, PENALTY CAN STILL BE IMPOSED IN A CASE W HERE ON SETTING OFF THE CONCEALED INCOME AGAINST ANY LOSS I NCURRED BY THE ASSESSEE UNDER OTHER HEAD OF INCOME OR BROUG HT FORWARD FROM EARLIER YEARS, THE TOTAL INCOME IS RED UCED TO A FIGURE LOWER THAN THE CONCEALED INCOME OR EVEN IS A MINUS FIGURE. THE COURT WAS OF THE OPINION THAT THE TAX SOUGHT TO BE EVADED WILL MEAN THE TAX CHARGEABLE N OT AS IF IT WAS THE TOTAL INCOME. ONCE THIS RATIONALE GIVE N BY THE SUPREME COURT TO THE EXPLANATION 4 WAS APPLIED TO T HE INSTANT CASE, IT WOULD BE DIFFICULT TO SUSTAIN THE PENALTY PROCEEDINGS. REASON WAS SIMPLE. NO DOUBT, THERE W AS CONCEALMENT BUT THAT HAD ITS REPERCUSSIONS ONLY WHE N THE ASSESSMENT WAS DONE UNDER THE NORMAL PROCEDURE. TH E ASSESSMENT AS PER THE NORMAL PROCEDURE WAS, HOWEVER , NOT ACTED UPON IN THE INSTANT CASE. ON THE CONTRARY, I T WAS THE DEEMED INCOME ASSESSED UNDER SECTION 115JB WHICH HA D BECOME THE BASIS OF ASSESSMENT, AS IT WAS HIGHER O F THE ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 7 TWO TAX WAS, THUS, PAID ON THE INCOME ASSESSED UNDE R SECTION 115JB. HENCE, WHEN THE COMPUTATION WAS MAD E UNDER SECTION 115JB, THE AFORESAID CONCEALMENT HAD NO ROLE TO PLAY AND WAS TOTALLY IRRELEVANT. THEREFORE , THE CONCEALMENT DID NOT LEAD TO TAX EVASION AT ALL [PAR A 25] . 10. IN OUR VIEW, THE AFORESAID RULING OF THE HONBL E DELHI HIGH COURT APPLIES TO THE FACTS OF THE PRESENT CASE. THE DECISION OF THE COORDINATE BENCH (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE ALSO H AS FOLLOWED THE SAME PRINCIPLE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT NO PENALTY COULD BE IMPOSED ON THE ASSESSEE BECAUSE THERE WAS NO TAX SOUGHT TO BE EVADED, AS THE ADDITION IN RESPECT OF WHICH PENALTY WAS IMP OSED WAS MADE UNDER THE NORMAL PROVISIONS OF THE ACT BUT ULTIMATELY THE TO TAL INCOME WAS DETERMINED ON THE BASIS OF BOOK PROFITS UNDER 115JB OF THE ACT. S INCE THE ADDITIONS MADE IN THE NORMAL COMPUTATION HAS NOT RESULTED IN ANY VARIATIO N OF THE TOTAL INCOME RETURNED AND ASSESSED, THERE IS NO QUESTION OF INVOKING THE PROVISIONS OF SECTION 271(1)(C) FOR LEVY OF PENALTY. CONCEALMENT OF INCOME WOULD HA VE NO ROLE TO PLAY AND WOULD NOT LEAD TO TAX EVASION. THEREFORE, PENALTY CANNOT BE IMPOSED ON THE BASIS OF DISALLOWANCES OR ADDITIONS MADE UNDER THE REGULAR P ROVISIONS. 11. THE LEARNED DEPARTMENTAL REPRESENTATIVE TRIED TO JUSTIFY THE LEVY OF PENALTY ON THE BASIS OF EXPLANATION 4(A) TO SECTION 271(1)(C). IN OUR OPINION, EXPLANATION 4 DEALS WITH THREE SITUATIONS, SITUATIO N ONE IS WITH REFERENCE TO A LOSS RETURNED DEALT WITH BY EXPLANATION 4(A). 4(B) APPL IES TO SITUATION WHERE THE ASSESSEE HAS FILED ITS RETURN AFTER ISSUANCE OF NOT ICE U/S.148 WHICH IS NOT THE CASE HERE. THE PRESENT CASE OF THE ASSESSEE IS COVERED B Y EXPLANATION 4(C) WHERE THE TAX SOUGHT TO BE EVADED MEANS A DIFFERENCE BETWEEN THE TAX ON THE TOTAL INCOME ASSESSED AND THE TAX THAT WOULD HAVE BEEN CHARGEABL E HAS SUCH TOTAL INCOME BEEN REDUCED BY THE AMOUNT OF INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED OR INACCURATE PARTICULARS HAVE BEE FURNIS HED. SINCE NO ADDITION HAS ITA NOS.4714-4716/M/2003 PARAMOUNT MINERALS AND CHEMICALS LTD.. 8 BEEN MADE IN COMPUTATION U/S.115JB AND SINCE THE IN COME RETURNED AND ASSESSED BEING THE SAME, WE ARE OF THE OPINION THAT THE AMOU NT OF TAX SOUGHT TO BE EVADED IS NIL IN THE ASSESSEES CASE. THEREFORE, THERE IS NO SCOPE FOR LEVY OF PENALTY U/S.271(1)(C). IN VIEW OF THIS, WE HAVE NO HESITAT ION IN CANCELING THE PENALTIES LEVIED FOR THE ABOVE ASSESSMENT YEARS. IT IS ALSO F OUND THAT THOUGH THE ASSESSEE HAS OFFERED SIMILAR INCOMES IN THE INTERVENING ASSE SSMENT YEARS, THE ASSESSING OFFICER HIMSELF HAS DROPPED THE PENALTY PROCEEDINGS . KEEPING IN VIEW THE FACTS AND THE PROVISIONS OF LAW, WE ALLOW THE APPEALS FILED B Y THE ASSESSEE BY CANCELING THE PENALTIES LEVIED IN THE RESPECTIVE ASSESSMENT YEARS . 12. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF JUNE, 2011. SD/- SD/- (R.V. EASWAR) (B. RAMAKOTAIAH) PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATED THE 30 TH JUNE, 2011. KN COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT, CENTRAL IV, MUMBAI 4. THE CIT(A), CENTRAL-II, MUMBAI 5. THE DR C BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI