Xebec Communications Pvt. Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 637/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1120 (ITAT-PUNE)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Keywords: Business income; Revenue expenditure; Capital expenditure
• Section: 37(1)

Judgement Text

] IQ.KS ] IQ.KS ] IQ.KS ] IQ.KS IQ.KS IQ.KSIQ.KS IQ.KS IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , . . , # BEFORE MS. SUSHMA CHOWLA, JM AND SHRI R.K. PANDA, AM . / ITA NO.637/PN/2016 % % / ASSESSMENT YEAR : 2011-12 XEBEC COMMUNICATIONS PVT. LTD., 20, IST FLOOR, SANTOSH HEIGHTS, 39/4, J.N. ROAD, OPP. APSARA TALKIES, PUNE 411037 PAN : AAACX0223B . / APPELLANT V/S DCIT, CIRCLE - 7, PUNE . / RESPONDENT / APPELLANT BY : SHRI SUHAS P. BORA / RESPONDENT BY : SHRI ANIL CHAWARE / ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 08-01-2016 OF THE CIT(A)-V, PUNE RELATING TO THE A SSESSMENT YEAR 2011-12. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF ADVERTISING, P UBLICITY, PUBLIC RELATIONS, MARKET SURVEY, EXHIBITIONS ETC. IT FILED ITS RETURN OF INCOME ON 30-09-2011 DECLARING TOTAL INCOME OF RS.1,97,35,2 60/-. THE AO COMPLETED THE ASSESSMENT U/S.143(3) ON 29-03-201 4 DETERMINING THE TOTAL INCOME AT RS.2,11,60,010/-. IN THE S AID ORDER, / DATE OF HEARING :13.07.2016 / DATE OF PRONOUNCEMENT:12.08.2016 2 ITA NO.637/PN/2016 THE AO HAD MADE ADDITION OF RS.14,24,749/- ON DIFFERENT HEAD S OUT OF WHICH THE FOLLOWING ADDITIONS ARE RELEVANT ON WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED BY THE AO : I. ADDITION ON ACCOUNT OF NON-DEDUCTION/NON-RECONCI LIATION OF INCOME/PAYMENTS OF RS.7,39,927/-. II. ADDITION ON ACCOUNT OF DEDUCTION CLAIMED U/S.37( 1) OF RS.22,660/- . III. ADDITION ON ACCOUNT OF DEDUCTION OF RS.50,000/- ON ACCOUNT OF DEPOSIT FOR OFFICE. 3. ASSESSEE DID NOT PREFER ANY APPEAL AGAINST THE ADDITION MADE BY THE AO. SUBSEQUENTLY, THE AO INITIATED PENALTY PROCEEDIN GS AND ASKED THE ASSESSEE TO EXPLAIN AS TO WHY AN ORDER IMPOS ING PENALTY SHOULD NOT BE PASSED U/S.271(1)(C) OF THE I.T. ACT. THE ASS ESSEE MADE ELABORATE SUBMISSIONS STATING THAT IT HAS CORRECTLY ACCO UNTED FOR THE INCOME IN THE BOOKS OF ACCOUNT BASED ON SERVICES RENDER ED AND BILLS RAISED ON THEIR CLIENTS. HOWEVER, IN MANY CASES THESE ARE DISPUTED BY THE CLIENTS FOR VARIOUS REASONS SUCH AS IMPROPER DATA PU BLICATION, DISCOUNTS NOT GIVEN AS AGREED, ADVERTISEMENT NOT APPROP RIATELY PLACED, SIZE NOT AS AGREED UPON AND SO ON. IN CASE WHE RE THE ASSESSEE HAS MADE GENUINE ERROR HE AGREES TO THE REQUEST BY TH E PARTY EITHER TO REDUCE THE CHARGE OR TO COMPLETELY WITHDRAW THE BILL DEPENDING ON THE CIRCUMSTANCES. FURTHER, SOMETIMES THE ERROR IS ON ACCOUNT OF COMMUNICATION BY THE CLIENTS IN WHICH CASE THE CLIENT IS MADE TO BEAR THE COST FULLY EVEN IF CLIENT IS HESITANT TO DO SO. IN CERTAIN CASES THE PARTIES RECORD THE BILL AS IT IS ORIGINALL Y RECEIVED BY THEM AND DEDUCT TAX ACCORDINGLY. ALL THE SUBSEQUENT RE NEGOTIATIONS FOR REASONS EXPLAINED ABOVE THAT TAKE PLACE RESULTS IN CO RRECTION IN BOOKS OF ACCOUNT BUT REMAIN UNADJUSTED IN 26AS. UNDER S UCH CIRCUMSTANCES THOUGH THE ASSESSEE CORRECTLY ACCOUNTS FOR THE INCOME 3 ITA NO.637/PN/2016 BASED ON SUBSEQUENT NEGOTIATION, THE DIFFERENCE ARISES IN RECONCILIATION WITH 26AS FIGURES. THEREFORE, IT IS WRONG TO SA Y THAT IN SUCH CASES THE ASSESSEE HAS SHORT RECORDED THE INCOM E. THE ASSESSEE ALSO EXPLAINED THAT THE PENALTY SHOULD NOT BE LEVIED ON AC COUNT OF SUCH ADDITION, OR ON ACCOUNT OF DEDUCTION CLAIMED U/S.37(1) A ND ADDITION OF RS.50,000/- ON ACCOUNT OF DEPOSIT FOR OFFICE. 4. HOWEVER, THE AO WAS NOT SATISFIED WITH THE EXPLANATION G IVEN BY THE ASSESSEE. HE OBSERVED THAT THE ASSESSEE HAS SH OWN LESSER AMOUNTS OF PAYMENTS RECEIVED FROM ITS CLIENTS ON WHICH TDS WAS DEDUCTED. RS.7,39,927/- HAS NOT BEEN OFFERED IN ITS RETUR N OF INCOME. SINCE THE ABOVE AMOUNT HAS NOT BEEN OFFERED IN THE RETU RN OF INCOME FILED, THEREFORE, THIS IS A CASE WHERE THE ASSESSEE HAS KNO WINGLY UNDERSTATED ITS BUSINESS INCOME. AS REGARDS THE CLAIM OF DEDUCTION O F RS.22,660/- ON ACCOUNT OF TDS PAID ON BEHALF OF MS.POOJA PA TIL IS CONCERNED, THE AO NOTED THAT ASSESSEE COMPANY WAS NOT LIABLE TO MAKE THIS EXPENDITURE. THEREFORE, IT IS NOT AN ALLOWABLE EX PENDITURE WITHIN THE MEANING OF SECTION 37(1) FOR WHICH THE SAME HAD BEEN ADDED BY THE AO TO THE TOTAL INCOME OF THE ASSESSEE. SIMILARLY, THE ASSESSEE COMPANY HAD CLAIMED DEDUCTION OF RS.50,000/- ON ACCOUNT OF DEPOSIT FOR OFFICE WHICH IS CAPITAL EXPENDITURE WHEREAS THE ASSESSEE HAS WRONGLY CLAIMED THE SAME AS REVENUE EXPENDITURE WIT HIN THE MEANING OF SECTION 37(1) OF THE I.T. ACT. THE AO, THEREFORE , HELD THAT THE ASSESSEE HAS UNDERSTATED ITS BUSINESS INCOME IN THE RETURN OF INCOME. THE ASSESSEE WITHOUT SUFFICIENT AND REASONABLE CAU SE AND UNDER DELIBERATE INTENTION HAS CONCEALED THE PARTICULARS O F ITS INCOME AND HAS COMMITTED DEFAULT WITHIN THE MEANING OF SECTION 271 (1)(C) OF THE I.T. ACT. REJECTING THE VARIOUS EXPLANATIONS GIVEN B Y THE ASSESSEE 4 ITA NO.637/PN/2016 THE AO LEVIED PENALTY OF RS.2,51,090/- BEING 100% OF THE TAX SOUGHT TO BE EVADED. 5. IN APPEAL THE LD.CIT(A) UPHELD THE PENALTY LEVIED BY THE AO FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. THE LD.CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY DY.CIT U/S.271(1)(C) OF RS.2,51,090/- DISREGARDING THE SUBMISSION GIVEN BY THE APPELLANT. 2. THE LD.CIT(A) WHILE CONFIRMING THE PENALTY LEVIE D BY THE AO HAS ERRED IN NOT APPRECIATING THE FACT THAT DURING THE COURSE OF APPEAL PROCEEDINGS AGAINST THE PENALTY ORDER, APPELLANT HAD FULLY EXPLAINED AND HAD GIVEN RECONCILIATION OF THE DIFFERENCE. 3. THE LD.CIT(A) HAD FAILED TO APPRECIATE THAT AS RE GARDS LEVY OF PENALTY ON OTHER ADDITIONS OF RS.22,660/- AND RS.50,00 0/- MERELY BECAUSE THE AR HAD AGREED FOR THE ADDITION IT DOES NO T AMOUNT TO CONCEALED INCOME OR FURNISHING OF INACCURATE PARTICU LARS TO WHICH PENALTY U/S.271(1)(C) CAN BE LEVIED. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND O R DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 6. THE LD. COUNSEL FOR THE ASSESSEE STRONGLY OPPOSED TH E ORDER OF CIT(A). SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF ADDITION ON ACCOUNT OF DIFFERENCE IN TDS CLAIMED BY THE ASSESSEE AND THE TDS A S PER 26AS STATEMENT IS CONCERNED, HE SUBMITTED THAT THE MATTER M AY BE SET ASIDE TO THE FILE OF AO FOR VERIFICATION SINCE SOME OF THE ENTR IES DO NOT BELONG TO THE ASSESSEE. REFERRING TO PAGES 10 TO 17 OF THE PAPER BOOK THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTENTION OF T HE BENCH TO THE TDS MADE BY VARIOUS PARTIES. HE SUBMITTED THAT THE RE ARE CERTAIN APPARENT ERRORS WHICH THE ASSESSEE HAS ALREADY RECONC ILED. HOWEVER, UNDER MISTAKEN BELIEF IT WAS STATED DURING ASSESSMENT PR OCEEDINGS THAT THE RECEIPTS OF RS.7,39,927/- WERE NOT OFFERED IN THE RETURN OF INCOME FOR WHICH IT WAS OFFERED DURING THE COURSE OF ASSESS MENT PROCEEDINGS. HOWEVER, THE RECEIPTS SHOWN BY THE ASSESS EE IS MORE 5 ITA NO.637/PN/2016 THAN THE AMOUNTS AS PER 26AS STATEMENT. THEREFORE, TH E MATTER MAY BE RESTORED TO THE FILE OF THE AO WITH A DIRECTION TO VERIF Y THE ENTRIES WHICH DO NOT BELONG TO THE ASSESSEE AND REDUCE THE PE NALTY ON THOSE ITEMS. HE SUBMITTED THAT MERELY BECAUSE THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THE ADDITION MADE BY THE AO IT DOES NOT C ALL FOR AUTOMATIC LEVY OF PENALTY. HE SUBMITTED THAT PENALTY PROC EEDINGS AND ASSESSMENT PROCEEDINGS ARE DISTINCT AND SEPARATE AND T HE ASSESSEE CAN MAKE NEW PLEA DURING THE PENALTY PROCEEDINGS. 7. SO FAR AS THE PENALTY LEVIED ON THE ADDITION OF RS.22,660 /- IS CONCERNED HE SUBMITTED THAT THE ASSESSEE COMPANY HA D PAID THE DUES TO ONE OF THE PARTIES WITHOUT DEDUCTING THE TDS THROUGH OVERSIGHT AND LATERON ON REALIZING THE FACT PAID THE TDS ON RS.22,660/-. INSPITE OF ITS BEST EFFORTS TO RECOVER THE DUES FROM THE PARTY THE SAME COULD NOT BE RECOVERED FOR WHICH THE SAME WAS CLAIMED AS EXPENDITU RE. HE SUBMITTED THAT MERE DISALLOWANCE OF THE SAME DOES NOT CA LL FOR AUTOMATIC LEVY OF PENALTY. 8. SO FAR AS THE PENALTY LEVIED ON THE ADDITION OF RS.50,000 /- IS CONCERNED HE SUBMITTED THAT THE ASSESSEE COMPANY CLA IMED BACK THE REFUND OF DEPOSIT OF RS.50,000/- AFTER SURRENDERING THE PRE MISES WHICH WAS TAKEN ON RENT. SINCE THE OWNER OF THE PROPER TY REFUSED TO REFUND THE DEPOSIT STATING THAT THEY HAVE ADJUSTED THE ABOVE DEPOSIT TOWARDS REPAIRS OF PREMISES, THEREFORE, THE ASSESSEE COMP ANY TREATED THE SAME AS REVENUE EXPENDITURE. HE SUBMITTED THAT FULL DETAILS WERE GIVEN DURING THE COURSE OF ASSESSMENT PROCEEDINGS AS WE LL AS PENALTY PROCEEDINGS. THEREFORE, NO PENALTY IS LEVIABLE ON ACCOUNT O F ADDITION MADE BY THE AO. 6 ITA NO.637/PN/2016 9. REFERRING TO THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF NEW HOLLAND TRACTORS (INDIA) PVT. LTD. VS. CIT HE SUB MITTED THAT THE HONBLE HIGH COURT IN THE SAID DECISION HAS HELD THAT EVEN IF THE QUANTUM APPEAL IS DECIDED AGAINST THE ASSESSEE IT D OES NOT FOLLOW THAT PENALTY FOR CONCEALMENT MUST BE IMPOSED. THE FINDING S IN THE ASSESSMENT PROCEEDINGS CANNOT BE CONSIDERED AS CONC LUSIVE AND FINAL FOR THE PURPOSE OF IMPOSITION OF PENALTY. HE SUBMITTED THA T IN THE INSTANT CASE ADDITION HAS BEEN MADE BY THE AO WITHOUT G IVING ANY FINDING THAT ACTUAL RECEIPTS AS PER BOOKS ARE LESS THAN T HE FIGURES AS PER 26AS. HE SUBMITTED THAT THIS DIFFERENCE HAS BEEN REC ONCILED AND THE AR OF THE ASSESSEE COMPANY HAD OFFERED THE SAME UN DER MISTAKEN BELIEF THAT THESE RECEIPTS WERE NOT OFFERED TO TAX. THERE FORE, IT DOES NOT AMOUNT TO CONCEALMENT OF INCOME OR FURNISHING OF INACCU RATE PARTICULARS OF INCOME. RELYING ON VARIOUS DECISIONS HE SUBM ITTED THAT NO PENALTY CAN BE LEVIED WHEN ADDITION HAS BEEN MADE BY THE AO BY INVOKING THE DEEMING PROVISIONS OF THE ACT. REFERRING TO TH E FOLLOWING DECISIONS HE SUBMITTED THAT NO PENALTY U/S.271(1)(C) CAN BE LEVIED WHEN THE ADDITIONS ARE MADE ONLY ON ACCOUNT OF DIFFERENCE IN THE RECEIPTS AS PER BOOKS AND AS PER 26AS : 1. INS LAW ASSOCIATES VS. ACIT ITA NO.5181/MUM/2012 ORDE R DATED 05-12-2014. 2. DCIT VS. SHREE G. SELVA KUMAR ITA NO.868/BANG/2009 ORDER DATED 22-10-2010. 3. AARTI RAMAN VS. DCIT ITA NO.245/BANG/2012 ORDER DA TED 05-10- 2012. 10. HE ALSO RELIED ON THE FOLLOWING DECISIONS : 1. CIT VS. SUDHIRKUMAR CHOTTUBHAI REPORTED IN 250 ITR 5 28 (BOM.) 2. DUTRON PLASTICS PVT. LTD. VS. DCIT REPORTED IN 105 TAX MANN 107 (AHD.) (MAG.) 7 ITA NO.637/PN/2016 3. SABARKANTHA JILLA RU UTPADAKONI CO-OP SUGAR MILLS VS. ITO REPORTED IN 36 TTJ 478 (AHD.) 4. HANDLOOM SYNDICATE VS. ITO REPORTED IN 1 ITD 586 (CO CH.) 11. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT THE CIT(A) HAS PASSED A SPEAKING ORDER DEALING WITH EACH AND EVERY ASP ECT OF THE CASE. SINCE THE ASSESSEE HAD NOT DECLARED THE FULL AMOU NT AS PER 26AS STATEMENT AND THEREBY UNDERSTATED ITS RECEIPTS, T HEREFORE, THE CIT(A) WAS JUSTIFIED IN CONFIRMING THE PENALTY ON ACCOUNT OF A DDITION OF RS.7,39,927/-. SO FAR AS THE LEVY OF PENALTY ON THE TWO OTHER ADDITIONS NAMELY, RS.22,660/- AND RS.50,000/- ARE CONCERNE D HE SUBMITTED THAT THE ASSESSEE HAS WRONGLY CLAIMED THE AB OVE EXPENDITURE FOR WHICH PENALTY PROVISIONS ARE ATTRACTED. H E ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BEING IN CONSONANCE WITH LAW THE SAME SHOULD BE UPHELD AND THE G ROUNDS RAISED BY THE ASSESSEE SHOULD BE DISMISSED. 12. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED TH E VARIOUS DECISIONS CITED BEFORE US. WE FIND AS AGAINST THE RETURNED INCOME OF RS.1,97,35,260/- THE AO COMPLETED THE ASSESSMENT DETERMIN ING THE TOTAL INCOME OF RS.2,11,60,010/- BE MAKING ADDITION OF RS.14,24,749/-. THE ASSESSEE DID NOT PREFER ANY APPEAL. SUBSEQUENTLY, THE AO INITIATED PENALTY PROCEEDINGS AND LEV IED PENALTY ON ACCOUNT OF THE FOLLOWING ADDITIONS NAMELY : I. ADDITION ON ACCOUNT OF NON-DEDUCTION/NON-RECONCI LIATION OF INCOME/PAYMENTS OF RS.7,39,927/-. 8 ITA NO.637/PN/2016 II. ADDITION ON ACCOUNT OF DEDUCTION CLAIMED U/S.37( 1) OF RS.22,660/- . III. ADDITION ON ACCOUNT OF DEDUCTION OF RS.50,000/- ON ACCOUNT OF DEPOSIT FOR OFFICE. 13. WE FIND IN APPEAL THE LD.CIT(A) UPHELD THE PENALTY LEVIED BY THE AO FOR WHICH THE ASSESSEE IS IN APPEAL BEFORE US. SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF ADDITION ON ACCOUNT OF DEDUCTION CLAIMED U/S.37(1) AMOUNTING TO RS.22,660/- IS CONCERNED, WE FIND TH E ASSESSEE HAS PAID CERTAIN AMOUNT TO A PARTY WITHOUT D EDUCTING TAX AND SUBSEQUENTLY ON REALIZING THAT NO TAX HAS BEEN DED UCTED, HAS DEDUCTED TAX OF RS.22,660/-. IT WAS THE SUBMISSION OF TH E ASSESSEE BEFORE THE AO THAT DESPITE ITS BEST EFFORTS THE ASSESSEE COULD NOT RECOVER THE AMOUNT FOR WHICH IT CLAIMED THE SAME AS DEDU CTION U/S.37(1). SIMILARLY AN AMOUNT OF RS.50,000/- PAID AS SECURITY DEPOSIT TO THE LANDLORD WAS CLAIMED AS REVENUE EXPENDITUR E AFTER THE ASSESSEE VACATED THE PREMISES BUT WAS UNABLE TO RECOV ER THE SAME AS THE LANDLORD FAILED TO REFUND THE SAME ON THE GROUND THA T SAME HAS BEEN ADJUSTED TOWARDS REPAIRS OF THE PREMISES. THUS, TH E ASSESSEE IN OUR OPINION HAS GIVEN BONAFIDE REASONS FOR CLAIMING THE SAM E. IT HAS BEEN HELD IN VARIOUS DECISIONS THAT MERE ADDITION IN THE AS SESSMENT PROCEEDINGS IS NOT SUFFICIENT FOR AUTOMATIC LEVY OF PENALTY. THE FINDINGS IN THE ASSESSMENT PROCEEDINGS CANNOT BE CONSIDER ED AS CONCLUSIVE AND FINAL FOR THE PURPOSE OF IMPOSITION OF PENALTY . THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. RELIANCE PE TROPRODUCTS PVT. LTD. REPORTED IN 322 ITR 158 HAS HELD THAT A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT T O FURNISHING OF INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUN T TO FURNISHING INACCURATE PARTICULARS. 9 ITA NO.637/PN/2016 14. SINCE IN THE INSTANT CASE FULL DETAILS WERE GIVEN BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THEREFORE, M ERE DISALLOWANCE OF THE SAME IN OUR OPINION WILL NOT CALL FOR VISITIN G THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T. ACT. WE ACCORDINGL Y SET ASIDE THE ORDER OF THE CIT(A) ON THIS ISSUE AND DIRECT THE AO TO CANCEL THE PENALTY LEVIED ON ACCOUNT OF THE ABOVE 2 ADDITIONS. 15. SO FAR AS THE PENALTY LEVIED ON ACCOUNT OF ADDITION OF RS.7,39,927/- IS CONCERNED, WE FIND THE ASSESSEE BEFORE THE CIT(A) HAD MADE THE FOLLOWING SUBMISSIONS (PARA 3A PAGE 9 OF THE ORDER) : 3(A) AS REGARDS THE LEVY OF PENALTY IN RESPECT OF ADD ITION OF RS.7,39,927/- MADE ON ACCOUNT OF DIFFERENCE IN THE R ECEIPTS AS PER 26AS AND BOOKS OF ACCOUNTS, WE ARE ENCLOSING HEREWITH STATEM ENT SHOWING RECONCILIATION OF THESE RECEIPTS IN RESPECT OF BANK OF MAHARASHTRA, LAVASA CORPORATION, H.T. MEDIA AND TATA PICOSSA (REFER PAGE 1-9) FROM THESE STATEMENTS IT IS EVIDENT THAT IN RESPECT OF BANK OF MA HARASHTRA THERE WERE 3 ACCOUNTS AND THE RECEIPTS AS PER 26AS ARE LESS T HAN THE RECEIPTS OFFERED IN THE BOOKS OF ACCOUNTS (REFER PAGE 6) AS REG ARDS TO DIFFERENCE IN LAVASA CORPORATION IT IS SUBMITTED THAT DIFFERENCE IS MAINLY ON ACCOUNT OF NOMENCLATURE OF THE COMPANY AND THERE IS NO SUCH DIF FERENCE (REFER PAGE 7) AS REGARDS TO DIFFERENCE IN H.T. MEDIA AND TATA PI COSSA (REFER PAGE 8- 9) WE SUBMIT THAT THESE AMOUNTS APPEARING IN 26AS ARE NOT AT ALL RELATED TO THE APPELLANT AND IT IS PERTINENT TO BE NOTED THA T NO TDS CLAIM IS MADE IN THE RETURN OF INCOME WHICH IS REFLECTED AS MADE BY THESE PARTIES. IN THE CIRCUMSTANCES, IT IS SUBMITTED THAT THE ADDITION MA DE BY THE AO AND AGREED BY THE APPELLANT, DOES NOT AMOUNT TO CONCEALE D INCOME OR FURNISHING OF INACCURATE PARTICULARS TO WHICH PENALTY U/S.271(1)(C) CAN BE LEVIED. 16. HOWEVER, WE FIND THE LD.CIT(A) WHILE UPHOLDING THE PENALTY LEVIED BY THE AO HAS HELD THAT ASSESSEE HAD NOT GIVEN A NY EXPLANATION WHATSOEVER IN ANY MANNER EITHER DURING THE C OURSE OF ASSESSMENT PROCEEDINGS OR DURING THE COURSE OF PENALTY PROCEEDINGS TO EXPLAIN SUCH DIFFERENCE. ACCORDING TO HER, HAD THERE BEEN ANY RECONCILIATION AS HAS BEEN ARGUED DURING THE APPEAL PROCE EDINGS, THE ASSESSEE WOULD HAVE FURNISHED THE SAME BEFORE THE AO EIT HER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR THEREAFTER DUR ING THE COURSE 10 ITA NO.637/PN/2016 OF THE PENALTY PROCEEDINGS. THE RELEVANT OBSERVATION OF T HE CIT(A) AT PARA 3.4 READS AS UNDER : 3.4 THE VERY FACT THAT DURING THE COURSE OF ASSESSME NT PROCEEDINGS, SUCH DIFFERENCE OF INCOME! RECEIPTS SHOWN, IN FORM NO. 26AS VIS-A-VIS THE BOOKS OF ACCOUNT IN RESPECT OF A NUMBER OF PARTIES A S MENTIONED IN BOTH THE ASSESSMENT ORDER AND PENALTY ORDER WAS BROUGHT TO TH E NOTICE OF THE APPELLANT AND NO EXPLANATION WHATSOEVER IN ANY MANNE R COULD BE FURNISHED BY THE APPELLANT, EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR DURING THE COURSE OF PENALTY PROCEEDIN GS TO EXPLAIN SUCH A DIFFERENCE. IT WAS FOR THIS REASON THAT AS THE APPELL ANT HAD NO EXPLANATION, THE DIFFERENCE AMOUNT OF RS.7,39,927/- WAS CONSIDERED BY THE AO AS UNDISCLOSED INCOME, CONSCIOUSLY NOT SHOWN BY TH E APPELLANT IN THE ACCOUNTS, DULY AGREED UPON BY THE APPELLANT FOR SUCH AN ADDITION. IT IS OBVIOUS THAT, HAD THERE BEEN ANY RECONCILIATION, AS H AS BEEN ARGUED DURING THE COURSE OF APPELLATE PROCEEDINGS, THE APPEL LANT WOULD HAVE FURNISHED THE SAME BEFORE THE AO, EITHER DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR THEREAFTER DURING THE COURSE OF PENALT Y PROCEEDINGS. IT IS PERTINENT HERE TO MENTION THAT IN THIS CONNECTION, THE APPELLANT DID NOT FILE ANY APPEAL AGAINST THE SAID ADDITION BEFORE THE APPELLATE AUTHORITY. WHEN THE DIFFERENCE OF RECEIPTS IN FORM 26AS VIS--V IS THE BOOKS OF ACCOUNTS AS POINTED OUT BY THE AO COULD BE RECONCILED AS CLAIMED, IT IS RATHER SURPRISING AND WITHOUT REASON THAT SUCH RECONCIL IATION WAS NOT MADE BEFORE THE AO. IT IS ALSO SEEN THAT THE APPELLANT DURING PENALTY PROCEEDINGS DID NOT PREFER AN APPEAL ON THE ADDITION OF THIS DIFFERENCE. AS TO WHY NO APPEAL WAS PREFERRED DESPITE THE FACT THA T THE DIFFERENCE COULD BE RECONCILED WAS NOT EXPLAINED BY THE APPELLA NT. AS REGARDS THE OTHER ADDITIONS MADE DURING ASSESSMENT PROCEEDINGS, THE U NDERSIGNED HAS IDENTICAL OBSERVATIONS TO MAKE. THE APPELLANT HAS C ITED A NUMBER OF DECISIONS IN ITS SUBMISSION, WHICH APPARENTLY ARE DISTINGU ISHABLE WITH THE FACTS OF APPELLANT'S CASE UNDER CONSIDERATION. ON T HE OTHER HAND, THE DECISIONS CITED BY THE AO IN THE ASSESSMENT ORDER CAN SQUA RELY BE APPLICABLE IN THE CASE OF THE APPELLANT. AS THE SAID DECISION REFERRED TO BY THE AO HAVE BEEN DISCUSSED ABOVE, NO FURTHER DISCUSSION I N THIS REGARD IS MADE. I ALSO FIND THAT THE APPELLANT HAD DELIBERATEL Y FAILED TO DISCLOSE THE CORRECT INCOME AND THE PENALTY PROVISION U/S 271(1)(C ) IN THIS CASE IS APPLICABLE. MY VIEW IS FORTIFIED BY THE JUDICIAL PRO NOUNCEMENTS IN CASES REFERRED TO AS UNDER:- 17. FROM THE ABOVE, IT IS SEEN THAT ALTHOUGH THE ASSESSE E HAD GIVEN RECONCILIATION BEFORE THE CIT(A), SHE IGNORED THOSE DETAILS ON THE GROUND THAT ASSESSEE HAD NOT GIVEN RECONCILIATION OF THE DIFFERENCE BETWEEN THE FIGURES IN THE 26AS STATEMENT AND THE AMOU NT DECLARED IN THE RETURN EITHER DURING THE COURSE OF ASSESSMENT P ROCEEDINGS OR PENALTY PROCEEDINGS BEFORE THE AO AND THE ASSESSEE HAS NOT FILED ANY APPEAL AGAINST THE QUANTUM ADDITION AS MENTIONED EARLIER IN THE 11 ITA NO.637/PN/2016 PRECEDING PARAGRAPHS. MERE ADDITION MADE BY THE AO IN T HE BODY OF THE ASSESSMENT ORDER IN OUR OPINION DOES NOT NECESSARIL Y MEAN THAT PENALTY IS AUTOMATIC. THE ASSESSEE CAN ALWAYS ADVANCE FRESH ARGUMENTS AND FURNISH NEW MATERIAL DURING THE COURSE OF P ENALTY PROCEEDINGS. SINCE IT IS THE SUBMISSION OF THE LD. COUNSE L FOR THE ASSESSEE THAT UNDER MISTAKEN BELIEF THE ASSESSEE HAD OF FERED THE INCOME BEFORE THE AO DURING THE ASSESSMENT PROCEEDINGS AND NO APPEAL WAS FILED, HOWEVER, THERE IS NO UNDERSTATEMENT OF INC OME AND THE INCOME DECLARED BY THE ASSESSEE IS MORE THAN THE A MOUNT DISCLOSED IN 26AS STATEMENT IN RESPECT OF CERTAIN PARTIES. IT IS ALSO HIS SUBMISSION THAT CERTAIN AMOUNTS REFLECTED IN THE 26AS STATEMENT DOES NOT BELONG TO THE ASSESSEE AND THE ASSESSEE HAD RECONCILED FULLY SUCH DIFFERENCES. UNDER THESE CIRCUMSTANCES, WE DEEM IT P ROPER TO RESTORE THE ISSUE TO THE FILE OF THE AO WITH A DIRECTION TO GIVE ONE MORE OPPORTUNITY TO THE ASSESSEE TO RECONCILE SUCH DIFFERENCE. IF THE ASSESSEE IS ABLE TO DEMONSTRATE WITH EVIDENCE TO THE SA TISFACTION OF THE AO REGARDING SUCH DISCREPANCY, THE AO SHALL DECIDE TH E ISSUE IN ACCORDANCE WITH LAW. IF THE ASSESSEE FAILS TO RECONCILE T HE DIFFERENCE TO THE SATISFACTION OF THE AO, IN THAT CASE, THE PENALTY SO LEVIED SHALL BE CONFIRMED ON THIS ISSUE. WE HOLD AND DIRECT ACCORDINGLY. GROUNDS RAISED BY THE ASSESSEE ARE ACCORDINGLY ALLOWED FOR STATIS TICAL PURPOSES. 18. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWE D FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 12-08-2016. SD/- SD/- ( SUSHMA CHOWLA ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER IQ.KS PUNE ; DATED : 12 TH AUGUST , 2016. LRH'K 12 ITA NO.637/PN/2016 ' (*+ ,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. % ( ) - THE CIT(A)-5, PUNE 4. % S / THE CIT-5, PUNE 5. ( ++, , , , IQ.KS / DR, ITAT, A PUNE; 6. 0 / GUARD FILE. / BY ORDER , ( + //TRUE COPY// 23 + , / SR. PRIVATE SECRETARY ,, IQ.KS / ITAT, PUNE