LEO BUILDERS, MUMBAI V. ACIT CIR 25(3), MUMBAI

ITA 586/MUM/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0957 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 25-01-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: HARESH JAIN
• Keywords: Unexplained expenditure; Question of law; Onus to prove; Revised return
• Section: 271(1)(c); 143(3); 133A; 139(5); 251

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI D.K. AGARWAL, JM AND SHRI J. SUDHAKAR REDDY, AM I.T.A. NO.586/MUM/2010 ASSESSMENT YEAR : 2006-07 M/S. LEO BUILDERS C/101, CHANAKYA APARTMENT, MAHAVIR NAGAR, KANDIVALI (WEST), MUMBAI 400 067. PAN: AAAFL 1363 K VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE 25(3), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI HARESH JAIN RESPONDENT BY : SHRI HARI GOVIND SINGH O R D E R PER J. SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED A GAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-35, MUMBAI, 18 .11.2009 FOR THE ASSESSMENT YEAR 2006-2007, WHEREIN THE FIRST APPELLATE AUTHORI TY HAS CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1 )(C) OF THE INCOME-TAX ACT, 1961. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A PARTNE RSHIP FIRM AND IS CARRYING ON THE BUSINESS OF CONTRACTOR FOR VARIOUS GOVERNMENTS, MUNICIPAL CORPORATION AND ALSO DEVELOPMENT OF VARIOUS PROPERTIES. IT FILED ITS ORI GINAL RETURN OF INCOME DECLARING TOTAL INCOME AT RS.28,07,060/-. THEREAFTER, SURVEY WAS C ARRIED OUT UNDER SECTION 133A OF THE ACT ON 13.12.2006. DURING THE COURSE OF SURVEY PROCEEDINGS A STATEMENT WAS RECORDED FROM ONE SHRI NITIN PATEL, A PARTNER OF TH E FIRM. THE OTHER FAMILY MEMBERS WERE ALSO CARRYING ON SIMILAR BUSINESS OF VARIOUS P ROJECTS IN THE VICINITY OF KANDIVALI AREA UNDER THE NAME AND SALE OF M/S. MAHAVIR ENTERP RISES . BOTH THESE PARTNERSHIP FIRMS M/S. LEO BUILDER AND M/S. MAHAVIR ENTERPRISES WERE DEVELOPING PROJECTS AND 2 SUBSEQUENTLY SELLING THEM THROUGH SELLING AGENTS M/ S. CHAMUNDA ESTATE AGENT PVT. LTD., AND THE ASSESSEE USED TO COLLECT 25% TO 30% O F THE TOTAL CONSIDERATION IN CASH AND NOT ACCOUNTED THE SAME IN THE BOOKS OF ACCOUNTS . DURING THE COURSE OF SURVEY ACTION, CERTAIN DOCUMENTS I.E. NOTE PADS, LOOSE PAP ERS OF UNACCOUNTED EXPENDITURE HAVE BEEN IMPOUNDED. THESE DOCUMENTS DISCLOSED THE RECEIPT OF PART SALE CONSIDERATION IN CASH. 3. SHRI DINESH BAROT, DIRECTOR OF M/S. CHAMUNDA EST ATE PVT. LTD., IN A STATEMENT DISCLOSED THAT HE USED TO COLLECT CERTAIN PORTION O F SALES CONSIDERATION IN CASH AT THE INSTANCE OF BUILDER AND PASSED ON THE SAME TO THE B UILDER. 4. IN A STATEMENT RECORDED U/S.133A, SHRI NITIN PAT EL, PARTNER OF THE FIRM M/S. LEO BUILDER ACCEPTED THAT CERTAIN PORTION OF THE SA LES CONSIDERATION WAS RECEIVED BY THEM IN CASH. HE MADE A DISCLOSURE OF RS. 3 CRORES IN THE HANDS OF BOTH THE CONCERNS, I.E. (A) LEO BUILDERS, THE ASSESSEE AND ( B) M/S. MAHAVIR ENTERPRISES FOR THE ASSESSMENT YEARS 2006-07 AND 2007-08. HE ALSO AGRE ED TO FILE A REVISED RETURN FOR THE ASSESSMENT YEAR 2006-07. SHRI NITIN PATEL AGRE ED TO PAY THE TAXES DUE THEREON WITHIN THE FINANCIAL YEAR AND SUBMITTED POST DATE D CHEQUES OF RS. 46 LAKHS IN THE CASE OF M/S. MAHAVIR ENTERPRISES AND RS. 48 LAKHS I N THE CASE OF M/S. LEO BUILDERS AT THE TIME OF SURVEY ACTION. THE ASSESSEE FILED A REV ISED RETURN ON 31.01.2007 DECLARING TOTAL INCOME OF RS.1,10,87,060/-. THE AS SESSING OFFICER PASSED AN ORDER UNDER SECTION 143(3) OF THE ACT ON 31.12.2008, BASE D ON THE REVISED RETURN OF INCOME. HE ASSESSED THE INCOME BY TAKING THE TOTAL INCOME AS PER THE REVISED RETURN AND DISALLOWING A SUM OF RS. 2,46,510/-. IN OTHER WORDS, THE ENTIRE ASSESSMENT WAS BASED ON THE REVISED RETURN FILED BY THE ASSESSEE. THEREAFTER, AFTER GIVING A SHOW CAUSE NOTICE PENALTY WAS LEVIED UNDER SECTION 271(1)(C) OF THE ACT BY HOLDING THAT THE ASSESSEE HAD COMMITTED DEFAULT BY FURNISHING INACCURATE PARTICULARS AND HAS CONCEALED THE PARTICULARS OF INCOME TO THE EXTENT OF RS. 79,80,000/-. THE 3 ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CI T(A). THE FIRST APPELLATE AUTHORITY CONFIRMED THE PENALTY. FURTHER AGGRIEVED, THE ASSES SEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. THE LEARNED COUNSEL FOR THE ASSESSEE SHRI HARESH JAIN SUBMITTED THAT NOTICE U/S.143(2) WAS ISSUED BY THE ASSESSING OFFICER ON 1 1.10.2007 WHICH IS AFTER FILING OF THE REVISED RETURN OF INCOME AND THE ASSESSING OFFI CER HAD ACCEPTED THE REVISED RETURN OF INCOME IN HIS ORDER PASSED UNDER SECTION 143(3). HE SUBMITTED THAT NO PENALTY CAN BE LEVIED WHEN THE RETURNED INCOME IN R ESPECT OF WHICH PENALTY HAS BEEN LEVIED, IS THE SAME AS THE ASSESSED INCOME. H E CONTENDED THAT THE REVISED RETURN WAS VOLUNTARY AND FALLS WITHIN THE AMBIT OF SECTION 139(5) AND THE SAME HAS BEEN ACCEPTED AS VALID BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE REVISED RETURN OBLITERATES ORIGINAL RETURN AND FOR THIS PROPOSITIO N HE RELIED ON THE FOLLOWING CASE LAWS JUDGMENT OF THE HONBLE GUJART HIGH COURT IN CCIT V. MACHINE TOOL CORPORATION OF INDIA LTD. (1993) 201ITR 101 (GUJ.), WHEREIN IT HAS BEEN HELD THAT WHEN A REVISED RETURN IS FILED, THE ORIGINAL RETURN IS TOTALLY SUB STITUTED AND REVISED RETURN ALONE HAS TO BE CONSIDERED IN COMPLETING ASSESSMENT. HE SUBMITT ED THAT THE DISCLOSURE ITSELF WAS MADE WITH A VIEW TO BUY PEACE AND TO AVOID PROTRACT ED LITIGATION AND ONLY ON PROMISE THAT PENAL PROCEEDINGS WOULD NOT BE INITIAT ED. HE SUBMITTED THAT THE ASSESSEE HAD MADE CONDITIONAL OFFER. HE POINTED OU T THAT THE ENTIRE SALE CONSIDERATION WAS OFFERED AS INCOME, THOUGH THE LAW REQUIRE THAT ONLY GROSS PROFIT ON THE RECEIPTS IS TO OFFERED AS INCOME. FOR THIS P ROPOSITION THAT THE ENTIRE RECEIPT CANNOT BE TAXED AS INCOME, BUT ONLY THE GROSS PROFI T ON TOTAL RECEIPTS CAN BE TREATED AS INCOME, HE RELIED ON THE DECISION OF THE AHMEDAB AD BENCH OF THE TRIBUNAL IN THE CASE OF M/S. ABHISHEK CORPORATION VS. DCIT (63 TTJ (AHD.) 651. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE AO HAS RECORDED IN THE ASSESSMENT ORDER, THAT THE ASSESSEE HAD INCURRED CERTAIN EXPENDITURE WHICH WAS NOT ACCOUNTED FOR. THIS 4 FIND BY THE A.O., AS PER THE LEARNED COUNSEL, PROVE S HIS ARGUMENT THAT THE ENTIRE UNACCOUNTED RECEIPT CANNOT BE TREATED AS INCOME IS INCORRECT. HE SUBMITTED THAT THERE IS NO ADMISSION OF CONCEALMENT AND ON THE OTH ER HAND, THE ASSESSEE HAS DECLARED EXCESS INCOME. HE FILED A PAPER BOOK RUNN ING INTO 90 PAGES AND FURTHER FILED A CASE LAW PAPER BOOK RUNNING INTO 171 PAGES . HE RELIED ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. V. NARASHIMA PRASAD (250 ITR 852) FOR THE PROPOSITION THAT WHEN THERE IS NO PROO F OF CONCEALMENT, PENALTY UNDER SECTION 271(1)(C) CANNOT BE LEVIED. HE RELIED ON TH E DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. KIRAN & CO. (217 I TR 326)(BOM) AND CIT V. BHIMJI BHANJEE & CO. (146 ITR 145)(BOM.) 6. HE FURTHER RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. SURESH CHANDRA MITTAL, 251 ITR 9 (SC) WHE REIN THE HONBLE APEX COURT CONFIRMED THE JUDGMENT OF THE HONBLE MADHYA PRADES H HIGH COURT WHICH IS REPORTED IN 241 ITR 124. HE DISTINGUISHED THE CASE LAWS RELIED UPON BY THE A.O. HE SUBMITTED THAT IN THE CASE OF DCIT V. GLAMOUR RESTA URANT (80 TTJ 763) (MUM), THE ASSESSMENT HAVE BEEN FRAMED BY TAKING INTO CONSIDE RATION THE MATERIAL SEIZED DURING THE SEARCH AND WHEREAS IN THE INSTANT CASE, THE ASSESSMENT IS NOT BASED ON ANY MATERIAL SEIZED DURING THE COURSE OF SEARCH. H E FURTHER RELIED ON THE JUDGMENT OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE C ASE OF CIT V. HUKAM CHAND HARI PRAKASH (119 TAXMAN 822) FOR THE PROPOSITION THAT I N THE ABSENCE OF POSITIVE EVIDENCE OF CONCEALMENT, AND WHEN THE FACTUM OF CON CEALMENT WAS NOT PROVED BEYOND A SHADOW OF DOUBT, BY INDEPENDENT ENQUIRY, N O PENALTY WAS LEVIABLE. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, HARGOVI ND SINGH, ON THE OTHER HAND, OPPOSED THE CONTENTIONS OF THE ASSESSEE AND S UBMITTED THAT THERE WAS POSITIVE EVIDENCE WITH THE REVENUE THAT THE ASSESS EE HAS NOT ONLY FURNISHED INACCURATE PARTICULARS OF INCOME BUT, IT WAS ALSO C ONCEALING PARTICULARS OF INCOME. HE 5 POINTED OUT THAT, BUT FOR THE SURVEY THE FACT THAT THE ASSESSEE WAS RECEIVING CERTAIN PORTION, OF THE SALE PROCEEDS, IN CASH WHICH WAS N OT ACCOUNTED FOR IN THE BOOKS OF ACCOUNT, WOULD NOT HAVE SEEN THE LIGHT OF THE DAY. HE ARGUED THAT THE ASSESSEE HAD COME FORWARD WITH THE DECLARATION ONLY AFTER BEING CORNERED BY THE DEPARTMENT, DURING THE COURSE OF SURVEY. HE RELIED ON THE ORDER OF THE AO AS WELL AS THE ORDER OF THE CIT(A) AND SPECIFICALLY REFERRED TO PAGE 4 PARA 5 OF THE CIT(A) ORDER WHEREIN A PORTION OF THE STATEMENT RECORDED FROM THE PARTNER OF THE ASSESSEE FIRM SHRI NITIN PATEL WAS EXTRACTED AND POINTED OUT THAT INITIALLY THE ASSESSEE DENIED HAVING RECEIVED ANY SALE CONSIDERATION BY WAY OF CASH, IT WAS ONLY SUBSEQUENTLY ON BEING CONFRONTED WITH A NOTE PAD AND OTHER EVIDENCE, THE ASSESSEE HAS AGREED THAT CERTAIN CASH COMPONENTS WAS RECEIVED AND THE SAME W AS NOT ACCOUNTED FOR IN ITS BOOKS OF ACCOUNT. THEREAFTER, THE LEARNED DEPARTMEN TAL REPRESENTATIVE SUBMITTED, THAT THE FIRST APPELLATE AUTHORITY HAS RIGHTLY RELI ED ON THE DECISION IN THE CASE OF GLAMOR RESTAURANT (2 SOT 366), FOR THE PROPOSITION THAT THE FILING OF REVISED RETURN WOULD NOT BE SUFFICIENT TO EXONERATE THE ASSESSEE F ROM PENAL CONSEQUENCES. IT IS THE TIME OF SUBMISSION OF THE REVISED RETURN AND TH E REASON FOR DOING SO THAT IS CRUCIAL TO THE QUESTION. HE FURTHER SUBMITTED THAT IT CANNOT SAID THAT THE REVISED RETURN WAS FILED VOLUNTARILY AND IT WAS IN FACT FIL ED AFTER DETECTION OF INCRIMINATING EVIDENCE. HE RELIED ON THE JUDGMENT OF THE HONBL E SUPREME COURT IN THE CASE OF K.P. MADHUSUDHANAN V. CIT (251 ITR 99) AND SUBMITTE D THAT THE HONBLE SUPREME COURT HELD THAT THE VIEW TAKEN IN THE CASE OF SIR S HADILAL SUGAR & GENEAL MILLS LTD., IS NO LONGER APPLICABLE. ON THE SUBMISSION OF THE ASS ESSEE THAT PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE DROPPED IN CASE ASSESS EES SISTER CONCERN M/S. MAHAVIR ENTERPRISES UNDER IDENTICAL CIRCUMSTANCES, THE LEAR NED DR POINTED OUT THAT AT PARA 5.8 OF THE ORDER OF THE CIT(A) AND SUBMITTED THAT, MERELY BECAUSE PENALTY 6 PROCEEDINGS WERE WRONGLY DROPPED IN THE CASE OF SIS TER CONCERN, THE ASSESSEE HAS NO RIGHT TO CLAIM DROPPING OF PENALTY PROCEEDINGS IN T HIS CASE ALSO. 8. RIVAL CONTENTIONS HAVE BEEN HEARD. ON CAREFUL CO NSIDERATION OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND ON THE CASE LAW CITED, WE HOLD AS FOLLOWS: 9. FROM THE FACTS IT CAN BE SEEN THAT, CONSEQUENT T O THE SURVEY ACTION, MATERIAL WAS FOUND WHICH SHOWED THAT THE ASSESSEE HAS BEEN R ECEIVING SOME PORTION OF THE SALE PROCEEDS IN CASH AND THAT THE SAME IS NOT ACCO UNTED FOR IN THE BOOKS OF ACCOUNT. ON FINDING OF SUCH EVIDENCES, THE ASSESSEE HAS COME FORWARD WITH A DISCLOSURE. JUST BECAUSE, UNRECORDED EXPENSES WERE NOT CLAIMED OR BECAUSE THE ASSESSEE COULD HAVE DECLARED LESSER INCOME, IT DOES NOT MEAN THE ASSESSEE HAS, ON HIS OWN, VOLUNTARILY COME FORWARD WITH A DECLARATIO N. HENCE, ALL THESE ARGUMENTS OF VOLUNTARY FILING OF RETURN ETC., CANNOT BE ACCEPTED . THE ARGUMENT THAT CONDITIONAL OFFER OF INCOME WAS MADE, AS ASSURANCE THAT NO PEN ALTY WOULD BE LEVIED, IS ALSO NOT BORNE OUT OF RECORD. HENCE, WE REJECT THESE ARGUME NTS ON FACTS. 10. NEVERTHELESS WE FIND THAT THE ASSESSMENT ORDE R IS BASED ONLY ON THE REVISED RETURN OF INCOME ONLY WHEREIN, THE TOTAL IN COME OF RS. 1,10,87,060/- HAS BEEN DECLARED. THOUGH, THERE IS A MENTION ABOUT TH E SURVEY, THERE IS NO INVESTIGATION OR VERIFICATION OF ANY OF THE MATERIA L FOUND DURING THE COURSE OF SURVEY. THE ENTIRE ASSESSMENT IS BASED ON DECLARATION MADE BY ONE OF THE PARTNERS OF THE ASSESSEE FIRM ONLY CERTAIN DISALLOWANCES AMOUNTING TO RS. 2,46,510/- HAVE BEEN MADE. THERE IS NO EVIDENCE GATHERED AGAINST THE ASS ESSEE, WHICH HAS BEEN INVESTIGATED UPON AND CONCLUSIONS DRAWN BASED ON WH ICH IT CAN BE SAID THAT IT IS PROVED THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME SPECIFICALLY WHEN IN THE PENALTY PROCEEDINGS, THE ASSESSEE IS CHALLENGING TH E SAME. IF A DISCLOSURE MADE BY THE PARTNER, IT IS GOOD ENOUGH FOR AN ASSESSMENT, B UT FOR THE LEVY OF PENALTY, 7 SPECIFICALLY WHEN THE ASSESSEE CHALLENGES THE QUANT IFICATION OF INCOME AND ALSO SAYS THAT HE IS VOLUNTARILY FILED THE REVISED RETURN AN D DECLARED ADDITIONAL INCOME TO BUY PEACE, WE ARE OF THE CONSIDERED OPINION THAT THE AO SHOULD HAVE CONDUCTED CERTAIN INVESTIGATIONS AND BROUGHT OUT CERTAIN EVIDENCES TO PROVE THAT THE ASSESSEE HAS IN FACT CONCEALED INCOME AND THE SAME HAS SURFACED DUE TO THE SURVEY ACTION. WHEN THE ASSESSEE CONTENDS BEFORE THE A.O. IN PENALTY PR OCEEDING THAT THE ENTIRE RECEIPTS CANNOT BE TAXED AS INCOME, SPECIFICALLY WHEN THE AO HIMSELF RECORDED THAT THERE ARE CERTAIN EXPENSES WHICH ARE NOT RECORDED IN THE BOOK S OF ACCOUNT AND WHEN THE ASSESSEE RELIES ON CERTAIN CASE LAWS, IN SUPPORT OF HIS CONTENTION THAT ONLY A PARTICULAR PERCENTAGE OF RECEIPTS COULD BE THE PRO FIT, WHICH COULD BE CONSIDERED AS INCOME FOR THE PURPOSE OF TAXATION AND WHEN THE ASS ESSEE SUBMITS THAT OFFERING GROSS RECEIPTS AS INCOME WAS A VOLUNTARY ACT, THE A .O. IN PENALTY PROCEEDINGS, SHOULD HAVE, WITH EVIDENCE NEGATIVED THESE CONTENT IONS. . 11. NOW WE CONSIDER THE CASE LAWS RELIED; (I) IN THE CASE OF ABHISHEK CORPORATION V. DCIT (6 3 TTJ 651)(AHD.), AHMEDABAD C BENCH OF THE TRIBUNAL HAS HELD THAT T HE ENTIRE RECEIPTS ON ACCOUNT OF ON MONEY/PREMIUM IN RESPECT OF BOOKING OF FLATS C ANNOT BE THE UNDISCLOSED INCOME OF THE ASSESSEE AND ONLY NET PROFIT RATE CAN BE APP LIED ON UNACCOUNTED SALES/RECEIPTS FOR THE PURPOSE OF MAKING THE ADDITI ON. (II) IN THE CASE OF CIT VS. SURESH CHANDRA MITTAL (170 CTR 182)(SC) THE HONBLE SUPREME COURT HELD THAT WHEN ASSESSEE SURRE NDERED THE INCOME AFTER PERSISTENT QUERIES FROM THE A.O. AND WHEN REVISED R ETURNS HAVE BEEN REGULARISED BY THE REVENUE AND WHEN THE ASSESSEES EXPLANATION SAY S THAT HE HAS DECLARED ADDITIONAL INCOME TO BUY PEACE AND TO COME OUT OF V EXED LITIGATION, IT COULD BE TREATED AS BONA FIDE AND PENALTY IS RIGHTLY CANCEL LED. THE SUPREME COURT AFFIRMED 8 THE JUDGMENT OF THE HONBLE MADHYA PRADESH HIGH COU RT REPORTED IN 214 ITR 124(MP). (III) IN THE CASE OF CIT VS. UNIQUE PRECURED RETRA DERS (13 DTR 215)(RAJ.) THE HONBLE RAJASTHAN HIGH COURT UPHELD THE DELETION OF PENALTY BY THE TRIBUNAL UNDER SECTION 271(1)(C) OF THE ACT, WHERE THERE WAS OF AD DITIONAL INCOME CONSEQUENT OF SURVEY. (IV) THE HONBLE KERALA HIGH COURT IN THE CASE OF CIT V. V. NARASHIMA PRASAD (250 ITR 852) WAS DEALT WITH THE SITUATION WHETHER ASSESSEE DECLARED ADDITIONAL INCOME IN THE REVISED RETURN FILED AFTER A SURVEY. THE HONBLE HIGH COURT UPHELD THE DECISION OF THE TRIBUNAL THAT NO PENALTY CAN BE LEV IED WHEN THE AO HAS FRAMED THE ASSESSMENT BASED ON REVISED RETURN. (V) IN THE CASE OF CIT V. HUKAMCHAND HARI PRAKASH (172 CTR 271), THE HONBLE PUNJAB & HARYANA HIGH COURT HELD THAT WHERE ASSESSEE FILED REVISED RETURN DECLARING ADDITIONAL INCOME AFTER THE SURVEY OPERAT ION AND WHEN THE ASSESSMENT IS MADE, THE ONUS TO PROVE THE FACTUM OF CONCEALMENT L IES ON THE REVENUE AND WHEN THE FACTUM OF CONCEALMENT WAS NOT PROVED BEYOND THE SHADOW OF DOUBT, PENALTY CANNOT BE LEVIED. (VI) THE ASSESSEE FURTHER RELIED ON NUMBER OF DECI SIONS FOR THE PROPOSITION THAT WHEN SURRENDER IS MADE BY THE ASSESSEE TO BUY PEACE, NO PENALTY CAN BE LEVIED UNDER SECTION 271(1)(C) OF THE ACT. (VII) COMING TO THE DECISION IN THE CASE OF D CIT V. GLAMOUR RESTAURANT (80 TTJ 763), THE ASSESSMENT WAS NOT BASED ON THE REVIS ED RETURN. THE ASSESSMENT WERE FRAMED TAKING INTO CONSIDERATION THE MATERIALS SEIZED DURING THE COURSE OF SEARCH. THUS, THIS DECISION IS NOT APPLICABLE. 12. UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR HUMBLE OPINION, THE AO WAS BOUND TO HAVE CONDUCTED ENQUIRIES AND BROUG HT OUT EVIDENCES TO PROVE THAT 9 ASSESSEE HAS IN FACT CONCEALED ITS INCOME OR FURNIS HED INACCURATE PARTICULARS OF INCOME. PENALTY IS ALWAYS LEVIED ONLY IN RELATION T O INCOME DECLARED IN A RETURN OF INCOME. HERE THE RETURN OF INCOME CONSIDERED BY THE A.O. FOR THE PURPOSE OF ASSESSMENT WAS ONLY REVISED RETURN OF INCOME IN THE ASSESSMENT ORDER, THE A.O. HAS ACCEPTED THE REVISED RETURN OF INCOME AND THE A SSESSMENT IS BASED ONLY ON THE INCOME DECLARED AND PARTICULARS FURNISHED IN THE RE VISED RETURN OF INCOME. ASSESSMENT IN THIS CASE IS NOT BASED ON THE ORIGINA L RETURN OF INCOME. THE A.O. HAS NOT ACTED ON THE ORIGINAL RETURN OF INCOME. IT IS W ELL SETTLED THAT ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDEN T OF EACH OTHER AND MERE RELIANCE ON THE ASSESSMENT ORDER FOR LEVY OF PENALT Y IN THE FACE OF CHALLENGE OF THE FINDINGS THEREIN, IS NOT SUFFICIENT TO LEVY PENALTY . THE HONBLE P&H IN THE CASE OF CIT V. HUKUM CHAND HARI PRAKSH (SUPRA) HELD AS FOLLOWS: NOTHING HAS BEEN PLACED BEFORE THE COURT TO SHOW T HAT THE FINDINGS OF THE TRIBUNAL ARE CONTRARY TO THE EVIDENCE ON REC ORD. THE TRIBUNAL HAS TAKEN A POSSIBLE VIEW. IN THE ABSENCE OF POSITI VE EVIDENCE OF CONCEALMENT, THERE IS NO GROUND TO INTERFERE WITH T HE FINDING. RESULTANTLY, NO QUESTION OF LAW ARISES, WHICH MAY R EQUIRE AN EXPRESSION OF OPINION BY THE COURT. 13. IN THE LIGHT OF THE ABOVE DISCUSSION, WE UPHOLD THE CONTENTIONS OF THE ASSESSEE AND CANCEL THE PENALTY LEVIED UNDER SECTIO N 271(1)(C) OF THE ACT. 14. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 3 0 TH DAY OF JULY, 2010 SD. SD. (D. K. AGARWAL) (J. SUDHAKAR REDD Y) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED THE 30 TH JULY, 2010. COPY TO: 1. THE ASSESSEE 2. THE REVENUE 3. THE CIT-25, MUMBAI 4. THE CIT(A)-35, MUMBAI 5. THE DR A BENCH, MUMBAI BY ORDER /TRUE COPY/ KN/ ASST . REGISTRAR, ITAT, MUMBAI