Sh. Sharanjit Singh, Ludhiana V. ITO, Ludhiana

ITA 638/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8350 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 26-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA NO. 638/CHD/2016 ASSESSMENT YEAR: 2007-08 SHRI SHARANJIT SINGH, VS THE ITO, S/O SHRI JAGDEV SINGH, WARD 6(3), PROP. M/S ROYAL RESORT, LUDHIANA. VPO THREEKE NR RAJGURU NAGAR, LUDHIANA. PAN: ANCPS4069G (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SUDHIR SEHGAL RESPONDENT BY : SHRI S.K.MITTAL, DR DATE OF HEARING : 01.02.2017 DATE OF PRONOUNCEMENT : 09.02.2017 O R D E R THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-3 LUDHIANA DATED 04.03.2016 FOR ASSESSMENT YEAR 2007-08, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE INCO ME TAX ACT. 2. I HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PAR TIES AND PERUSED THE MATERIAL ON RECORD. BRIEFLY THE FA CTS NOTED IN THE IMPUGNED PENALTY ORDER ARE THAT ASSESS MENT IN THIS CASE WAS COMPLETED ON 29.12.2009 VIDE ORDER DATED 143(3) OF INCOME TAX ACT ASSESSING THE TOTAL INCOME AT RS. 33,50,290/-. THE ASSESSING OFFICER M ADE ADDITIONS OF RS. 14,77,000/- RS. 7,20,000/- AND RS. 2 8,98,528/-. THE ASSESSING OFFICER ALSO INITIATED P ENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. TH E ASSESSEE DECLARED TOTAL INCOME OF RS. 2,54,760/-. THE ASSESSEE PRODUCED BOOKS OF ACCOUNT BEFORE ASSESSING OFFICER. THE ASSESSEE DERIVES INCOME FROM RUNNING A RESORT IN THE NAME OF M/S ROYAL RESORT. THE REQUIS ITE INFORMATION/DETAILS HAVE BEEN FILED AND EXAMINED BY THE ASSESSING OFFICER. THE ASSESSING OFFICER NOTED THA T ASSESSEE HAS ADDED THE FIXED ASSETS OF AGRICULTURAL LAND OF RS. 24 LACS, DETAILS OF THE SAME WERE ASKED FOR ALONGWITH SOURCE OF INVESTMENT IN THESE ASSETS. TH E ASSESSEE DECLARED THAT HE HAS PURCHASED THE LAND FO R RS. 38,77,000, HOWEVER VALUE OF THE AGRICULTURAL LAND APPEARING IN THE BOOKS OF ACCOUNT WAS RS. 24 LACS. THE ASSESSEE EXPLAINED THAT HE HAS PURCHASED AGRICULTUR AL LAND FROM SHRI GURTEJ SINGH S/O SHRI AVTAR SINGH, V ILLAGE DEWATWAL, LUDHIANA VIDE PURCHASE DEED DATED 30.03.2007. THE ASSESSEE INVESTED RS. 38,77,000/- INCLUDING REGISTRATION EXPENSES TOWARDS PURCHASE OF SAID AGRICULTURAL LAND, DETAILS OF THE SAME WERE ALSO IN TIMATED TO THE ASSESSING OFFICER WHICH HAVE BEEN REPRODUCED IN THE IMPUGNED ORDER. THE ASSESSEE EXPLAINED THAT RS . 24 LACS WAS WITHDRAWN FROM THE BOOKS OF M/S ROYAL RESO RT AND COPY OF THE AGRICULTURAL LAND ACCOUNT WAS FILED . IT WAS EXPLAINED THAT RS. 10 LACS WAS WITHDRAWN FROM SAVING BANK ACCOUNT NO. 4032 WITH INDIAN OVERSEAS BANK ON 26.03.2007 MAINTAINED BY FATHER OF THE ASSE SSEE SHRI JAGDEV SINGH AND SHRI SHARANJIT SINGH. COPY O F THE 3 BANK STATEMENT WAS FILED. RS. 4 LAC WAS RECEIVED F ROM M/S GARG SEEDS CORPORATION BY SHRI JAGDEV SINGH AGAINST SALE OF AGRICULTURE PRODUCE. RS. 77,000/- IS THE AMOUNT SPENT BY SHRI JAGDEV SINGH OUT OF HIS INCOME SHOWN IN HIS RETURN OF INCOME. 2(I) THE ASSESSING OFFICER, HOWEVER, DID NOT ACCEPT EXPLANATION OF THE ASSESSEE BECAUSE ASSESSEE HAS NO T DECLARED ANY AGRICULTURE INCOME IN HIS RETURN OF IN COME AND THAT RECEIPT OF RS. 4,70,000/- FROM HIS FATHER WAS NOT APPEARING IN THE BALANCE SHEET OF THE ASSESSEE. FURTHER, THE ENTRY SHOWN IN THE BANK ACCOUNT OF SHR I JAGDEV SINGH APPEARS ON 26.03.2007. AS PER THE SAL E DEED, SELLER HAS RECEIVED THE FULL AMOUNT OF CONSID ERATION BEFORE THE DATE OF TRANSFER/DATE OF REGISTRATION. IN THIS CASE, DATE OF REGISTRATION WAS 26.03.2007. AS REGA RDS RECEIPT OF RS. 4,77,000/-, IT IS NOTED THAT ASSESSE E FAILED TO PRODUCE THE SAID PERSON. ENTRY OF THIS AMOUNT W AS ALSO NOT APPEARING ON THE BALANCE SHEET OF M/S ROYA L RESORT. THE ASSESSING OFFICER, THEREFORE, HELD THA T ASSESSEE FAILED TO EXPLAIN BOTH THESE ADDITIONS AND ACCORDINGLY CONCEALED THE INCOME. 2(II) IT IS ALSO NOTED IN THE IMPUGNED ORDER THAT A SSESSEE HAS NOT SHOWN ANY AGRICULTURE INCOME IN HIS RETURN OF INCOME. DESPITE OF THIS, THE ASSESSEE HAS A CREDIT BALANCE OF RS. 33,97,623/- OF AGRICULTURE INCOME OF SHRI SHARANJIT SINGH IN THE BALANCE SHEET OF M/S ROYAL R ESORT AS ON 31.03.2007. THE ASSESSEE WAS ASKED TO EXPLAI N 4 WHY HE HAS NOT SHOWN HIS AGRICULTURE INCOME IN THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. THE ASSESSEE EXPLAINED THAT SHRI JAGDEV SINGH GREWAL, H UF WHO IS KARTA OF THE FAMILY SOLD AGRICULTURAL PROD UCE TO M/S GARG SEEDS THROUGH ASSESSEE AGAINST BILL NO. 1 DATED 26.12.2006 AND THE PAYMENT OF THE SAME WAS ALSO RECEIVED. M/S GARG SEEDS ISSUED TWO CHEQUES OF RS. 2,50,000/- EACH AND THE SAME WAS ALSO DEPOSITED IN SB ACCOUNT NO. 22213 WITH INDIAN OVERSEAS BANK. THIS BANK ACCOUNT IS DULY REFLECTED IN THE BALANCE SHEET OF THE FIRM. A REGARDS AGRICULTURE INCOME IS CONCERNED, T HE ASSESSEE HAD ALREADY STATED IN EARLIER REPLIES ALON GWITH AFFIDAVIT OF THE ASSESSEE IN RESPECT OF THE STATUS OF AGRICULTURAL LANDS AS WELL AS AGRICULTURE INCOME TH EREON BELONG TO SHRI JAGDEV SINGH GREWAL, HUF AND NOT THE ASSESSEE. THE ASSESSEE FILED DETAILS OF THE FAMILY PEDIGREE CATEGORY. IN RESPECT OF ACQUISITION OF TH E LAND BY WAY OF INHERITANCE/SUCCESSION OR OTHERWISE IN NA TURE, IT WAS MENTIONED THAT AGRICULTURE INCOME OF THE SAI D AGRICULTURAL LAND WERE ALREADY SHOWN IN THE HANDS O F THE HUF DURING THE ASSESSMENT PROCEEDINGS. THE ASSESSI NG OFFICER, HOWEVER, DID NOT ACCEPT CONTENTION OF THE ASSESSEE BECAUSE ASSESSEE TRYING TO DIVERT THE AGRICULTURE INCOME TO HUF AND THE ASSESSEE HIMSELF HAS NOT SHOWN ANY AGRICULTURE INCOME THEREFORE, ADDITIO N OF RS. 7,20,000/- WAS MADE AND PENALTY PROCEEDINGS WER E INITIATED FOR CONCEALMENT OF INCOME AND FILING INAC CURATE PARTICULARS OF INCOME. 5 2(III) IT IS ALSO NOTED THAT ASSESSEE HAS ALSO INT RODUCED A SUM OF RS. 8,98,528/- AS UNSECURED LOAN FROM HIS NO N- RESIDENT FRIENDS/RELATIVES. THE ASSESSEE WAS ASKED TO PRODUCE THE SOURCE OF THESE CREDITS. ALL THE ENTRI ES IN HIS BANK ACCOUNT CAME FROM WESTERN UNION MONEY TRANSFER. THE MONEY TRANSFERRED HAS OBTAINED AN UNDERTAKING FROM THE ASSESSEE WHEREIN IT HAS BEEN UNDERTAKEN BY THE ASSESSEE THAT THESE RECEIPTS ARE NOT IN THE SHAPE OF LOAN AND ADVANCES. THE EXTRACT OF THE CERTIFICATE IS REPRODUCED IN THE IMPUGNED ORDER. T HE ASSESSING OFFICER, THEREFORE, NOTED THAT THE MONEY WAS NOT RECEIVED FOR THE PURPOSE OF PURCHASE OF THE PRO PERTY AND IT HAS BEEN RECEIVED FOR MAINTENANCE OF THE FAM ILY. THE ADDITION OF RS. 8,98,528/- WAS MADE TO THE RETU RNED INCOME. THE ASSESSING OFFICER, THEREFORE, NOTED TH AT TOTAL ADDITIONS WERE MADE OF RS. 30,95,528/- AND IN COME WAS ASSESSED AT RS. 33,50,288/-. 3. THE SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AS TO WHY PENALTY BE NOT LEVIED UNDER SECTION 271(1)(C ) OF THE ACT. THE ASSESSING OFFICER AFTER CONSIDERING EXPLANATION OF THE ASSESSEE NOTED THAT ASSESSEE HAS DELIBERATELY AND CONSCIOUSLY CONCEALED PARTICULARS OF INCOME. THE ONUS UPON ASSESSEE TO EXPLAIN ABOVE ADDITIONS HAS NOT BEEN DISCHARGED. IT BEING A STRI CT CIVIL LIABILITY, THEREFORE, PENALTY WAS IMPOSED ON THE AB OVE ADDITIONS. THE LD. CIT(APPEALS) ALSO CONFIRMED THE LEVY OF PENALTY AND DISMISSED THE APPEAL OF THE ASSESSEE . 6 4. THE LD. COUNSEL FOR THE ASSESSEE REITERATED SUBMISSIONS MADE BEFORE AUTHORITIES BELOW. HE HAS SUBMITTED THAT DETAILED REPLY WAS FILED BEFORE ASSE SSING OFFICER TO EXPLAIN SOURCE OF MAKING INVESTMENT IN T HE PURCHASE OF AGRICULTURAL LAND. COPY OF THE REPLY I S FILED AT PAGE 8 OF THE PAPER BOOK IN WHICH IT WAS EXPLAIN ED THAT RS. 10 LACS HAVE BEEN WITHDRAWN BY FATHER OF T HE ASSESSEE FROM THE JOINT ACCOUNT ON 26.03.2007, COPY OF THE BANK ACCOUNT IS FILED AT PAGE 11 OF THE PAPER B OOK. HE HAS SUBMITTED THAT AUTHORITIES BELOW HAVE DISBEL IEVED THE EXPLANATION OF THE ASSESSEE BECAUSE THE DATE OF PURCHASE DEED REGISTERED ON THE SAME DAY ON 26.03.2 007. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS NOTED IN THE SALE DEED THAT SELLER HAS RECEIVED AMO UNT ON OR BEFORE THE DATE OF REGISTRATION WHICH IS SAME DA Y ON 26.03.2007 THEREFORE, WHEN AMOUNT OF RS. 10 LACS WA S WITHDRAWN BY FATHER OF THE ASSESSEE FROM JOINT ACCO UNT ON THE SAME DAY, NO ADVERSE INFERENCE SHOULD BE DRA WN AGAINST THE ASSESSEE. IT WAS ALSO EXPLAINED BEFORE ASSESSING OFFICER THAT AMOUNT OF RS. 4 LACS WAS REC EIVED FROM M/S GARG SEEDS CORPORATION BY SHRI JAGDEV SING H AGAINST SALE OF AGRICULTURE PRODUCE. COPY OF THE L EDGER ACCOUNT OF SHRI JAGDEV SINGH IN THE BOOKS OF M/S GA RG SEEDS CORPORATION IS FILED AT PAGE 12-13 OF THE PAP ER BOOK. HE HAS ALSO REFERRED TO PB-22 WHICH IS ACKNOWLEDGEMENT OF RETURN OF INCOME FILED BY M/S JA GDEV SINGH GREWAL, HUF FOR ASSESSMENT YEAR UNDER APPEAL SUPPORTED BY COMPUTATION OF INCOME IN WHICH AGRICUL TURE 7 INCOME HAVE BEEN SHOWN IN A SUM OF RS. 12 LCS. PB- 18 IS REPLY FILED BEFORE ADIT (INVESTIGATION) LUDHIANA IN WHICH SAME FACTS HAVE BEEN EXPLAINED AS WERE EXPLAINED BE FORE ASSESSING OFFICER. PB-24 IS THE REPORT OF DDIT (INVESTIGATION) LUDHIANA TO DIT (INVESTIGATION) LUD HIANA DATED 27.08.2009 IN WHICH THE SAME MATTER IN ISSUE WITH REGARD TO PURCHASE OF LAND BY ASSESSEE WAS CONSIDER ED AND SAME EXPLANATION OF THE ASSESSEE HAVE BEEN ACCE PTED BY INVESTIGATION WING AND IT WAS REFERRED TO DIT (INVESTIGATION) THAT INVESTMENT OF RS. 38,77,000/- MADE BY ASSESSEE IN PURCHASE OF PROPERTY HAVE BEEN DULY EXPLAINED AND THEREFORE, IT WAS PROPOSED TO FILE TH E PROCEEDINGS AGAINST THE ASSESSEE. 4(I) THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMI TTED THAT SINCE FATHER OF THE ASSESSEE PAID THE AMOUNT O F RS. 14,77,000/- DIRECTLY TO THE SELLER, THEREFORE, THES E WERE NOT NOTED IN THE BALANCE SHEET OF THE ASSESSEE. HE HAS, THEREFORE, SUBMITTED THAT EVEN IF ADDITION ON QUANT UM HAVE BEEN CONFIRMED BUT THE EXPLANATION OF THE ASSE SSEE WAS NOT FOUND TO BE FALSE. THE ASSESSEE EXPLAINED THIS ISSUE BEFORE THE AUTHORITIES BELOW BASED UPON THE EVIDENCE AND MATERIAL ON RECORD. THEREFORE, NO PEN ALTY SHOULD BE LEVIED ON THIS ADDITION. THE LD. COUNSEL FOR THE ASSESSEE AS REGARDS EARNING OF AGRICULTURE INCOME SUBMITTED THAT THE AGRICULTURAL LAND WAS WITH THE H UF AND THE HUF SOLD AGRICULTURE PRODUCE TO M/S GARG SE EDS THROUGH ASSESSEE AND PAYMENT OF THE SAME WAS ALSO 8 RECEIVED. M/S GARG SEEDS CORPORATION ISSUED TWO CHEQUES FOR RS. 2,50,000/- AND SAME WERE DEPOSITED IN THE SAVING BANK ACCOUNT. COPY OF THE ACCOUNT OF TH E ASSESSEE IN THE BOOKS OF M/S GARG SEEDS CORPORATION IS FILED AT PAGE 15 TO SHOW THAT ASSESSEE RECEIVED RS. 7,20,000/- ON ACCOUNT OF SALE PROCEEDS OF AGRICULTU RE PRODUCE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT ASSESSEE IS MEMBER OF HUF AND IS ALSO ENTITLED FOR AGRICULTURE INCOME. HE HAS ALSO SUBMITTED THAT HUF HAS ALREADY DECLARED AGRICULTURE INCOME IN THEIR RETURN OF INCOME, COPY OF WHICH IS ALREADY FILED AT PAGES 22 TO 23 OF PAPER BOOK DECLARING AGRICULTURE INCOME OF RS. 1 2 LACS IN ASSESSMENT YEAR UNDER APPEAL. HE HAS, THEREFORE , SUBMITTED THAT MERELY BECAUSE ASSESSEE HAS NOT SHOW N AGRICULTURE INCOME IN HIS HAND, IS NOT ENOUGH TO LE VY THE PENALTY AGAINST THE ASSESSEE. HE HAS FURTHER SUBMI TTED THAT ASSESSEE IN HIS BALANCE SHEET OF M/S ROYAL RES ORT HAS SHOWN THE AMOUNT OF RS. 33,97,623/- PAYABLE TO THE HUF. THE LD. COUNSEL FOR THE ASSESSEE HAS REGARDS THE ADDITION OF RS. 8,98,528/- REFERRED TO THE DOCUMENT ARY EVIDENCES FILED BEFORE THE AUTHORITIES BELOW FROM P AGE 30 TO 65 WHICH ARE CONFIRMED LEDGER ACCOUNT OF THE CRE DITORS WITH CERTIFICATE OF WESTERN UNION FOR TRANSFER OF M ONEY WITH THEIR CONFIRMATION TO SHOW THAT AMOUNTS HAVE B EEN RECEIVED BY ASSESSEE AS LOAN. HE HAS, THEREFORE, SUBMITTED THAT EVEN IF THE ADDITION ON MERIT HAVE B EEN CONFIRMED, ASSESSEE EXPLAINED ALL THESE ISSUES AND EXPLANATION OF THE ASSESSEE WAS NOT FOUND TO BE FAL SE. 9 THE ASSESSEE DISCLOSED ALL THE PARTICULARS OF INCOM E AND DISCLOSED ALL THE FACTS BEFORE THE AUTHORITIES BELO W. IT IS WELL SETTLED LAW THAT QUANTUM AND PENALTY PROCEEDIN GS ARE INDEPENDENT AND DISTINCT AND EVEN IF ADDITION O N QUANTUM HAVE BEEN MAINTAINED, PENALTY NEED NOT TO B E IMPOSED AUTOMATICALLY IN EACH AND EVERY CASE. HE H AS RELIED UPON DECISION OF HON'BLE SUPREME COURT IN TH E CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. LTD. 322 ITR 158. 4(II) ON THE OTHER HAND, LD. DR RELIED UPON ORDE RS OF AUTHORITIES BELOW AND SUBMITTED THAT ABOVE ADDITION S CONFIRMED BY ITAT CHANDIGARH BY DISMISSING THE APPE AL OF THE ASSESSEE IN ITA 65/2012 DATED 24.08.2012, CO PY OF THE ORDER IS PLACED ON RECORD. THE LD. DR ALSO SUB MITTED THAT PENALTY IS STRICTLY A CIVIL LIABILITY AND RELI ED UPON DECISIONS OF HON'BLE SUPREME COURT IN THE CASE OF DHARMENDRA TEXTILE & PROCESSORS 306 ITR 277 AND ATU L MOHAN BINDAL 317 ITR 1. THE LD. DR ALSO SUBMITTED THAT THE WITHDRAWAL OF RS. 10 LACS BY FATHER OF THE ASSE SSEE ON 26.03.2007 IS NOT RELEVANT BECAUSE SALE DEED WAS REGISTERED ON THE SAME DAY. PENALTY WAS, THEREFORE , RIGHTLY LEVIED AGAINST THE ASSESSEE. 5. I HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIAL ON RECORD. IT IS WELL SETTLED LAW THAT QUANTUM AND PE NALTY PROCEEDINGS ARE INDEPENDENT AND DISTINCT PROCEEDING S. THE FINDINGS GIVEN IN THE QUANTUM PROCEEDINGS ARE RELEVANT AND HAVE PROBATIVE VALUE BUT THESE ARE NOT 10 CONCLUSIVE TO HOLD THAT ASSESSEE IS LIABLE FOR PENA LTY IN EACH AND EVERY CASE AUTOMATICALLY. THE ASSESSEE AT THE PENALTY STAGE COULD STILL EXPLAIN THAT PENALTY IS N OT LEVIABLE IN THE MATTER. AS REGARDS ADDITION OF RS. 10 LACS, THE ASSESSEE EXPLAINED THAT THE AMOUNT WAS WITHDRAW N BY FATHER OF THE ASSESSEE FROM THE JOINT ACCOUNT ON 26.03.2007 WHICH IS SUPPORTED BY THE COPY OF THE BA NK ACCOUNT. THE AUTHORITIES BELOW DID NOT ACCEPT EXPLANATION OF THE ASSESSEE BECAUSE SALE DEED WAS REGISTERED ON THE SAME DAY ON 26.03.2007 IN WHICH I T WAS NOTED THAT SELLER HAS RECEIVED THE FULL AMOUNT OF CONSIDERATION BEFORE THE DATE OF THE TRANSFER/DATE OF REGISTRATION. SINCE THE DATE OF WITHDRAWAL OF RS. 10 LACS FROM THE BANK ACCOUNT IS SAME, THEREFORE, THERE IS PROBABILITY THAT THE AMOUNT WAS WITHDRAWN FROM THE BANK ACCOUNT ON THE SAME DATE AND GIVEN TO THE SELL ER ON THE SAME DAY. THERE IS NOTHING ON RECORD TO SHOW T HAT THE SELLER HAS NOT RECEIVED ANY AMOUNT ON 26.03.200 7. THUS, THE ASSESSEE IS ABLE TO EXPLAIN THAT RS. 10 L ACS WAS AVAILABLE TO THE ASSESSEE FOR PURCHASE OF THE PROPE RTY AND EXPLANATION OF THE ASSESSEE IS SUPPORTED BY COP Y OF THE JOINT BANK ACCOUNT. AS REGARDS THE AMOUNT OF RS . 04 LACS RECEIVED FROM M/S GARG SEEDS CORPORATION BY FA THER OF THE ASSESSEE AGAINST SALE OF AGRICULTURE PRODUCE , THE ASSESSEE FILED COPY OF ACCOUNT OF HIS FATHER IN THE BOOKS OF M/S GARG SEEDS CORPORATION WHICH SUPPORT EXPLANATION OF THE ASSESSEE. THE ASSESSEE ALSO FIL ED COPY OF THE ACKNOWLEDGEMENT OF RETURN OF INCOME OF THE H UF 11 ALONGWITH COMPUTATION OF INCOME IN WHICH HUF HAS SHOWN AGRICULTURE INCOME OF RS. 12 LACS. THEREFORE , AGRICULTURE INCOME IS AVAILABLE TO FATHER OF THE AS SESSEE BEING KARTA THEREFORE, FATHER OF THE ASSESSEE COU LD MAKE AVAILABLE RS. 77,000/- TO THE ASSESSEE FOR PURCHASE OF THE PROPERTY. 5(I) IT MAY ALSO BE NOTED HERE THAT THIS MATTER WAS INVESTIGATED BY OFFICE OF THE DIRECTOR OF INCOME TA X (INVESTIGATION) LUDHIANA AND DDIT (INVESTIGATION) LUDHIANA VIDE HIS REPORT DATED 27.08.2009 (PB-24) RECOMMENDED FOR DROPPING OF THE PROCEEDINGS BECAUSE ASSESSEE WAS ABLE TO EXPLAIN SOURCE OF THE MONEY INVESTED IN PURCHASE OF THE AGRICULTURAL LAND WHICH IS THE SAME EXPLAINED BY THE ASSESSEE. THEREFORE, ASSESSE E IS ABLE TO EXPLAIN THE ADDITION OF RS. 14,77,000/- WHI CH IN THE OPINION OF AUTHORITIES BELOW, MAY NOT BE ACCEPT ABLE BUT IT PROVED THAT ASSESSEE EXPLAINED THIS ISSUE AN D EXPLANATION OF THE ASSESSEE APPEARS TO BE BONAFIDE. 5(II) AS REGARDS ADDITION OF RS. 7,20,000/- ON ACCO UNT OF AGRICULTURE INCOME, THE AUTHORITIES BELOW DID NOT A CCEPT CONTENTION OF ASSESSEE REGARDING RS. 7,20,000/- ON ACCOUNT OF AGRICULTURE INCOME BECAUSE AGRICULTURE INCOME WAS NOT SHOWN IN THE RETURN OF INCOME. BUT THE ASSESSEE, TIME AND AGAIN EXPLAINED THAT AGRICULTURA L LAND WAS HELD BY HUF OF WHICH ASSESSEE WAS ALSO ONE OF T HE CO-PARCENER. THE SALE PROCEEDS WERE CREDITED IN TH E ACCOUNT OF THE ASSESSEE AND COPY OF THE RECEIPT AND 12 LEDGER ACCOUNT IS FILED AT PAGE 14-15 OF THE PAPER BOOK. ASSESSEE IN THE BALANCE SHEET OF M/S ROYAL RESORT H AS SHOWN THE AMOUNT OF AGRICULTURE INCOME PAYABLE TO T HE HUF. THEREFORE, MERELY BECAUSE ASSESSEE HAS NOT SH OWN AGRICULTURE INCOME FOR HIMSELF MAY NOT BE RELEVANT FOR THE PURPOSE OF LEVYING THE PENALTY AGAINST THE ASSE SSEE. AS REGARDS ADDITION OF RS. 8,89,528/-, ASSESSEE EXP LAINED THAT THESE WERE UNSECURED LOANS RECEIVED FROM NON- RESIDENT FRIENDS AND RELATIVES. THEY HAVE FILED TH EIR CONFIRMED COPY OF THE LEDGER ACCOUNT WITH THEIR CONFIRMATION AND COPIES OF WESTERN UNION MONEY TRANSFER. THESE WERE, THEREFORE, SUPPORTED BY EXPLANATION OF THE ASSESSEE. MAY BE THE EXPLANATIO N OF THE ASSESSEE WAS NOT ACCEPTABLE TO THE REVENUE DEPARTMENT, BUT IT IS A FACT THAT ASSESSEE EXPLAINE D THIS ISSUE THROUGH EVIDENCE AND MATERIAL ON RECORD. 6. CONSIDERING TOTALITY OF THE FACTS AND CIRCUMSTAN CES AND EXPLANATION OF THE ASSESSEE ABOVE, IT IS CLEAR THAT ASSESSEE OFFERED EXPLANATION ON THESE ADDITIONS WHI CH WERE NOT FOUND TO BE FALSE. THE EXPLANATION OF THE ASSESSEE IS SUBSTANTIATED THROUGH EVIDENCE AND MATE RIAL ON RECORD AND ASSESSEE IS ABLE TO PROVE THAT HIS EXPLANATION WAS BONAFIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL I NCOME HAD BEEN DISCLOSED TO THE REVENUE AUTHORITIES. THU S, THE ASSESSEE DISCLOSED ALL THE FACTS, MATERIAL TO THE R EVENUE AUTHORITIES WHICH, IN THEIR OPINION WERE NOT ACCEPT ABLE. 13 MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING INCOME OF THE ASSESSEE. NO FINDINGS HAVE BEEN GIVEN BY THE AUTHORITIES BELOW T HAT EXPLANATION OF THE ASSESSEE WAS INCORRECT OR ERRONE OUS OR FALSE. THEREFORE, THERE IS NO QUESTION OF LEVY OF PENALTY AGAINST THE ASSESSEE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. I RELY UPON DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS PVT. L TD. 322 ITR 158 IN WHICH IT WAS HELD AS UNDER : A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME-TAX ACT,1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT, THERE HAS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY, THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE, THE ASSESSEE CANNOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PENALTY, UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISIONS, THE PENALTY PROVISION CANNOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHING WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE, BECAUSE THAT IS THE ONLY DOCUMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PARTICULARS ARE FOUND TO BE INACCURATE, THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY, THE DETAILS SUPPLIED IN 14 THE RETURN MUST NOT BE ACCURATE, NOT EXACT OR CORRECT, NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY U/S 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW, BY ITSELF, WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS. 7. CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTAN CES, I AM OF THE VIEW PENALTY NEED NOT BE LEVIED IN THIS CASE. I, ACCORDINGLY, SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL THE LEVY OF PENALTY. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DATED : 9 TH FEBRUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT CHANDIGARH