SH. SURESH KUMAR SOMANI, Jaipur V. ITO, Kishangarh

ITA 670/JPR/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 5342 (ITAT-JAIPUR)
• Duration Of Justice: 4 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAILASH MANGAL JCIT DHK
• Assessee Lawyers: O P AGARWAL
• Keywords: Income from undisclosed sources; Opportunity of being heard; Agreed addition
• Section: 133(6); 68

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA -@ ITA NO. 670/JP/2011 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 SURESH KUMAR SOMANI, PROP.- M/S SHUBH MARBLES, MAKRANA ROAD, MADANGANJ, KISANGARH. CUKE VS. INCOME TAX OFFICER, KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. ACSPS 0373 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL & SHRI O.P. AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI KAILASH MANGAL (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/12/2015. MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 18/03/2016 VKNS'K@ ORDER PER T.R. MEENA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER DATED 26/05/2011 OF THE LEARNED CIT(A), AJMER FOR A.Y. 200 7-08. THE EFFECTIVE GROUNDS OF APPEAL ARE AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD CIT(A) HAS GROSSLY ERRED IN CONFIRMING THE PENALT Y 2 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO OF RS. 13,77,028/- LEVIED U/S 271(1)(C) OF THE INCO ME TAX ACT, 1961. 1.1 THAT THE LD CIT(A) HAS ERRED IN UPHOLDING THE PE NALTY LEVIED U/S 271(1)(C) OF THE INCOME /TAX ACT, 1961 WITHOUT APPRECIATING THE FACT THAT THE INCOME WAS SURRENDERED BY THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND THE INCOME WAS OFFERED SUO MOTO, TO BUY THE PEACE OF MIND AND TO AVOID PROLONGED LIMITATION. THUS UPHOLDING THE PENALTY SO LEVIED DESERVES TO BE DELETED. 1.2 THAT THE PENALTY U/S 271(1)(C) HAS BEEN IMPOSED AND CONFIRMED BY THE LD CIT(A) WITHOUT MAKING ANY INDEPENDENT ENQUIRY IN PENALTY PROCEEDINGS AND SIMPLY RELYING UPON THE CONCLUSION DRAWN IN ASSESSMENT ORDER THUS THE PENALTY DESERVES TO BE DELETED. 1.3 THAT THE ASSESSEE HAS VOLUNTARILY SURRENDERED T HE INCOME AND PAID THE DUE TAX THEREON THUS THERE REMAINED NO INCOME ON WHICH TAX SOUGHT TO BE EVADED COULD BE CALCULATED WHICH FACT WAS NOT APPRECIATED BY THE LD CIT(A). 2. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PURCHA SE OF SALE OF MARBLE AND GRANITE, TILES AND SLABS. THE RETURN OF I NCOME WAS FILED ON 30/07/2007 DECLARING TOTAL INCOME OF RS. 2,50,070/- . DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER MADE ADDITION OF RS. 20,21,897/- U/S 41(1)(A) OF THE INCOME TAX ACT, 196 1 (IN SHORT THE ACT) AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C ) OF THE ACT FOR 3 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO CONCEALING AND FURNISHING INACCURATE PARTICULARS OF INCOME. ADDITION U/S 68 OF THE ACT WERE ALSO MADE FOR RS. 19,13,007/- AND RS. 1,48,500/-. 2.1 BEFORE IMPOSING PENALTY U/S 271(1)(C), THE ASSE SSING OFFICER GAVE REASONABLE OPPORTUNITY OF BEING HEARD, WHICH WAS AVAI LED BY THE ASSESSEE VIDE LETTER DATED 12/1/2010. IT WAS SUBMITT ED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS SURRENDERED AN AMOUNT OF RS. 40,83,404/-, WHICH INCLUDES UNSECURED LOAN OF RS. 1 ,48,500/- AND RS. 19,12,007/- U/S 68 OF THE ACT. THE ASSESSEE WAS UNABL E TO PRODUCE THE CASH CREDITORS BEFORE THE ASSESSING OFFICER AND VOL UNTARILY SURRENDERED THESE AMOUNTS TO AVOID THE LITIGATION. THE OUTSTANDI NG OF RS. 20,21,897/- SHOWN IN THE BOOKS OF ACCOUNT, FOR WHICH CASH PAYMENT HAD BEEN MADE AND NECESSARY EVIDENCES WERE NOT AVAILABLE WITH THE A SSESSEE, WHICH IS ALSO SURRENDERED VOLUNTARILY BEFORE THE ASSESSING O FFICER TO AVOID LITIGATION. THE ASSESSEE ON 18/12/2009 HIMSELF SURRE NDERED THE ABOVE AMOUNT FOR PURCHASE PEACE AND TO AVOID LITIGATION. THE ASSESSEE HAD NOT ONLY PAID TAX AND INTEREST ON IT BUT NO APPEAL HAS BEEN FILED BEFORE THE LD CIT(A). THERE WAS NO INTENTION TO CONCEAL THE INCOME, THEREFORE, HE REQUESTED BEFORE THE ASSESSING OFFICER NOT TO IMPOS E PENALTY U/S 271(1)(C) OF THE ACT. HE RELIED ON THE FOLLOWING DEC ISIONS:- 4 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO (I) SURESH CHAND MITTAL (2001) 251 ITR 9 (SC) FOR BY E PEACE AND COME OUT OF VEXED LITIGATION. (II) CIT VS M PACHAMTHU & ORS (2008) 214 CTR (MAD) 52 4 FOR SURRENDER UNDER THE SURVEY. (III) CIT VS S.I. PARIPUSHPAM (2001) 249 ITR 550 (MAD ) FOR AGREED ADDITION. (IV) CIT VS D&H SECHERON ELECTRONICS LTD. (2006) 203 CTR (MP) 164 FOR SURRENDER MADE. (V) GEBILAL KANHIALAL (HUF) VS ACIT (2004) 270 ITR 52 3 (RAJ.) FOR SURRENDER MADE. (VI) CIT VS. BADRILAL CHATURBHUJ (2004) 265 ITR 329 ( RAJ) FOR BUY PEACE. (VII) CIT VS RAJNISH NATH AGGARWAL (2008) 219 CTR (P&H ) 590 FOR SURRENDER MADE. (VIII) HINDUSTAN STEEL LTD. VS STATE OF ORISSA (197 2) 83 ITR 26 (SC) FOR TECHNICAL OR VENIAL BREACH. AFTER CONSIDERING THE ASSESSEES REPLY, THE LD ASSE SSING OFFICER HELD THAT THE CLAIM OF THE ASSESSEE THAT HE SURRENDERED VOLUN TARILY WAS FOND TOTALLY FALSE AND BASELESS TO HIM. THE LD ASSESSING OFFICER SINCE BEGINNING WAS ASKING TO THE ASSESSEE TO PROVIDE COMPLETE ADDRESSE S OF ALL THE PARTIES. THE ASSESSEE HAS SOUGHT ADJOURNMENT EVERY TIME. THE O UTCOME OF THE ENQUIRY WERE MADE AVAILABLE TO THE ASSESSEE BY SUPPL YING THE COPY OF REPLY RECEIVED FROM THE VARIOUS PARTIES. IT IS THEN THE ASSESSEE CAME FORWARD WITH THE SURRENDER LETTER AND NOT SUO MOTO. I F THE ASSESSEES INTENTION WAS BONAFIDE, WHY HE MADE SURRENDER IN LAST . THE CASE LAWS RELIED UPON BY THE ASSESSEE ARE ALSO NOT SQUARELY A PPLICABLE, WHICH WAS 5 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO APPLICABLE ON SURRENDER VOLUNTARILY WITH BONAFIDE BE LIEF. IN ASSESSEES CASE, THE INVESTIGATION OF DEPARTMENT AS COMPELLED THE ASSESSEE TO SURRENDER AMOUNT FOR TAXATION AS NO OTHER OPTION WAS LEFT. IN ASSESSEES CASE, THERE WAS NO AGREED ADDITION. THE MENS REA NEED NOT BE PROVED BY THE ASSESSING OFFICER AS HELD BY THE HON'BLE SUPREM E COURT IN THE CASE OF DHARMENDRA TEXTILE PROCESSORS VS UOI (2008) 306 I TR 0277. HE FURTHER RELIED ON THE FOLLOWING DECISIONS: (I) CIT VS DASS TRADING & HOLDING (P) LTD. (2009) 226 CTR (DELHI) 533. (II) DDIT VS CHIRAG METAL ROLLING MILLS LTD. (2008) 305 ITR 29 (MP). (III) K.P. MADHUSUDAN (2001) 251 ITR 99(SC). (IV) CIT VS. GURUVIJAY KURI CO. LTD. (2008) 302 ITR 239 (KER). (V) KOMAL BASHA VS DCIT (2009) 316 ITR 0058 (MAD). AFTER CONSIDERING THE ABOVE CASE LAWS, THE ASSESSING OFFICER IMPOSED PENALTY U/S 271(1)(C) OF THE ACT FOR CONCEALING THE PARTICULARS OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME AT RS. 13,70,028/-, WHICH IS 100% OF TAX SOUGHT TO BE EVADED. 3. BEING AGGRIEVED BY THE ORDER OF THE ASSESSING OF FICER, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD CIT(A), WHO HAD DISMISSED THE APPEAL BY OBSERVING THAT WHERE THERE IS DIFFERENCE B ETWEEN THE RETURN AND ASSESSEES INCOME. THERE IS AN INFERENCE OF THE CONCEALMENT AS A 6 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO RULE OF LAW. THE REBUTTAL IS SQUARELY ON THE TAX PAYE R. THE ASSESSEE IS EXPECTED TO OFFER THE EXPLANATION FOR THE DIFFERENC E. ABSENCE OF ANY EXPLANATION, BY ITSELF, WILL MERIT PENALTY. THE EXPLA NATION WERE OFFERED, SHOULD NOT BE FOUND TO BE FALSE. MERELY BECAUSE THE ASSESSEE IS NOT ABLE TO SUBSTANTIATE HIS EXPLANATION, PENALTY MAY NOT BE EXIGIBLE, IF SUCH EXPLANATION IS BONAFIDE AND ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME HAV E BEEN DISCLOSED BY HIM. THE PENALTY PROCEEDINGS ARE INDEPENDENT PROCEED INGS. THE PENALTY ORDER SHOULD CONTEND THE REASONS FOR ITS CONCLUSION BUT THIS DOES NOT MEAN THAT THE ASSESSING OFFICER IS REQUIRED TO BRIN G ON RECORD THE ADDITIONAL OR NEW EVIDENCES, WHICH WAS NOT PART OF THE REGULAR ASSESSMENT. WHERE THE ASSESSMENT ORDER ITSELF CONTE NDS THE FACT WHICH JUSTIFIED AN INFERENCE OF THE CONCEALMENT, PENALTY ORDER IS SUSTAINABLE. THIS VIEW DERIVED SUPPORT FROM THE DECISION OF HONB LE ALLAHABAD HIGH COURT IN THE CASE OF RAJ KUMAR CHOURASIYA VS CIT 288 ITR 329. HE EXAMINED THE ASSESSEES CASE IN VIEW OF THE LEGAL PO SITION AND FOUND THAT THE APPELLANT CLAIMED TAX LIABILITY IN RESPECT OF S UNDRY CREDIT BALANCE OF RS. 19,13,007/-, RS. 20,21,897/- AND UNSECURED LOAN OF RS. 1,48,500/- BUT FAILED TO PROVE THE GENUINENESS OF THE TRANSACT ION. IT IS ONLY WHEN THE ASSESSING OFFICER MADE ENQUIRY FROM THESE PARTI ES AND INTIMATED THE 7 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO APPELLANT ABOUT THE RESULT OF SUCH ENQUIRIES THAT T HE APPELLANT AGREED TO SURRENDER THIS AMOUNT. IN SUCH A SITUATION ASSESSING OFFICER HAS RIGHTLY CONCLUDED THAT APPELLANT FURNISHED INACCURATE PARTI CULARS OF HIS INCOME, IN THE RETURN FILED BY HIM. IT CANNOT BE HELD THAT THE SURRENDER OF INCOME BY APPELLANT WAS VOLUNTARY, BECAUSE THE SURRENDER WAS MADE ONLY AFTER DETECTION OF THE SAME BY AO. IN THIS CASE IT IS NOT ESTABLISHED THAT THE CONDUCT AND EXPLANATION OF APPELLANT WAS BONAFIDE, T HEREFORE THE CASE FALLS IN CATEGORY (B) OF PARA 4.19 OF CIT(A)S ORDER . THE LEVY OF PENALTY U/S 271 (L)(C) IS THEREFORE JUSTIFIED IN THIS CASE PURSUANT TO THE DECISION OF DHARMENDRA TEXTILES. THE LD ASSESSING OFFICER HAS RIG HTLY PLACED RELIANCE ON THE FOLLOWING DECISIONS FOR COMING TO THE CONCLUS ION THAT PENALTY IS LEVIABLE IN THIS CASE. (A) [2009] 226 CTR (DELHI) 533 - CIT V/S DASS TRADING & HOLDING (P)LTD. (B) [2008] 305 ITR 0029 (MP) - DDIT U/S CHIRAG METAL ROLLING MILLS LTD. (C) [2008] 302 ITR 0239 (KEV) - CIT V/S GURUVIJAY KUR I CO. LTD. (D) [2009] 316ITR 0058 (MAD) - KOMAL BASHA V/S DCIT. THE LD CIT(A), THEREFORE HOLD THAT AO IS JUSTIFIED IN IMPOSING PENALTY OF RS. 13,77,028/- IN THIS CASE AND THE SAME IS CONFIR MED. GROUND NO. 2 IS THUS DISMISSED. 8 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT IN BALANCE SHEET, THE ASSESSEE H AD SHOWN UNSECURED LOAN IN THE NAME OF 8 PERSONS RECEIVED FROM THEM IN AMOUNT BELOW RS. 20,000/-, WHICH WERE OPENING BALANCE AS ON 01/4/2006. THE ASSESSEE FURNISHED DETAILS OF CASH CREDITORS BUT COULD NOT F ILE CONFIRMATIONS IN RESPECT OF LOAN IN SPITE OF HIS BEST EFFORTS MADE. FINALLY HE SURRENDERED THIS AMOUNT VOLUNTARILY TO BUY PEACE OF MIND AND TO AVOID ANY LITIGATION. THE OTHER UNSECURED LOAN OF RS. 19,13,007/-, WHICH WAS ALSO PART AMOUNT REPRESENTING OPENING BALANCE. THE ARGUMENTS A RE SIMILAR TO ABOVE TRANSACTION, AS SURRENDERED VOLUNTARILY IN AB SENCE OF CONFIRMATION. THE ASSESSEE HAS DISCLOSED THESE CASH CREDITORS IN T HE BOOKS OF ACCOUNT AND BALANCE SHEET. THE SAID UNSECURED LOAN DID NOT PERTAIN TO YEAR UNDER APPEAL. THERE WERE OPENING BALANCES OF UNSECURED LOAN TAKEN BY THE ASSESSEE IN PRECEDING ASSESSMENT YEAR AND NOT IN TH E YEAR UNDER APPEAL. THE OPENING BALANCE CANNOT BE ADDED U/S 68 OF THE AC T DURING THE YEAR UNDER CONSIDERATION BUT THE ASSESSEE HAD NOT RAISED THIS ISSUE IN APPEAL BEFORE THE LD CIT(A) DUE TO PROLONGED LITIGATION AN D WANTED TO PEACE OF MIND, THE ASSESSEE VOLUNTARILY HAS SURRENDERED THES E AMOUNTS FOR TAXATION. THE LEGAL POSITION IS CLEAR THAT OPENING C ASH CREDITORS CANNOT BE ADDED IN THE YEAR UNDER CONSIDERATION U/S 68 EVEN T HE ASSESSEE DID NOT 9 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO FILE ANY APPEAL. THEREFORE, THE ASSESSEE MADE SURREN DER VOLUNTARILY TO BUY PEACE OF MIND AND TO AVOID PROLONGED LITIGATION . THE PENALTY PROCEEDINGS AND THE ASSESSMENT PROCEEDINGS ARE SEPA RATE AND DISTINCT, FOR WHICH HE RELIED ON THE DECISION OF HON'BLE SUPRE ME COURT IN THE CASE OF EILLY LILLY & COMPANY 312 ITR 225 AND PENALTY SHO ULD NOT BE LEVIED IN ROUTINE MANNER. AT THE TIME OF IMPOSING PENALTY, TH E LD ASSESSING OFFICER REPRODUCED THE FINDING GIVEN IN THE QUANTUM ADDITIO N. THERE IS NO FRESH APPLICATION OF MIND INDEPENDENTLY. HE FURTHER RELIE D ON THE DECISION IN THE CASE OF NARANGS INTERNATIONAL HOTELS (P) LTD. V S. DCIT, CIRCLE-1(2) 137 ITD 53 WHEREIN IT HAS BEEN HELD THAT MERE CONFIR MATIONS OF ADDITION CANNOT IPSO FACTO LEAD TO INFERENCE THAT THERE HAS BEEN CONCEALMENT OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCO ME. THE ASSESSEE HAS DISCLOSED FULL PARTICULARS OF LOAN CREDITORS. IN CA SE OF NATIONAL TEXTILES VS. CIT 249 ITR 125, THE HONBLE GUJARAT HIGH COURT HAS H ELD THAT THE ADDITION MADE ON THIS COUNT AUTOMATICALLY CANNOT JU STIFY THE PENALTY. THERE MUST BE SOME MATERIAL TO HOLD REASONABLE CONCL USION THAT THE AMOUNT DOES REPRESENT THE ASSESSEES INCOME. THEREFO RE, NO PENALTY CAN BE IMPOSED ON VOLUNTARILY SURRENDER OF RS. 1,48,500 /- AND RS. 19,13,007. 10 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO IT IS FURTHER SUBMITTED THAT THE PENALTY IMPOSED O N ACCOUNT OF VOLUNTARILY SURRENDER AT RS. 20,21,895/- THAT THESE CREDIT ENTRIES WERE OUTSTANDING AS ON 01/4/2006, WHICH WAS NOT RECEIVED D URING THE YEAR UNDER CONSIDERATION. DURING THE YEAR UNDER CONSIDER ATION, THE ASSESSEE HAD PAID BACK TO M/S JK MARBLES INDUSTRY RS. 6,08,0 00/-, M/S RAJHANS MARBLE HOUSE RS. 3,43,000/- AND M/S VENKETESH MARBL E RS. 1,00,350/- AND REMAINING AMOUNT OUTSTANDING AS ON 31/3/2007. TH ESE CREDITORS WERE RELATED TO PURCHASE MADE TO THE EARLIER YEAR. TH E BALANCE AMOUNT WAS RECEIVED AS ADVANCE MONEY FOR PURCHASE OF GOODS BY THE PARTIES. MOST OF THESE PARTIES, THE ASSESSEE HAD SOLD MARBLE TO THEM AND SALE BILLS WERE SUBMITTED DURING THE COURSE OF ASSESSMENT PROCEEDINGS BEFORE THE ASSESSING OFFICER. HE HAS DRAWN OUR ATTENTION O N PAGE NOS. 13 TO 30 OF PAPER BOOK. THE OUTSTANDING WAS DUE TO SOME PARTIE S, THE TERMS AND RATES COULD NOT BE AGREED UPON DESPITE OF THE LONG NEGOTIATION. THUS, THE AMOUNTS WERE REFUNDED TO THE PARTIES IN THE YEAR UND ER CONSIDERATION AND IN SUBSEQUENT YEAR. DURING THE COURSE OF ASSESS MENT PROCEEDINGS, NOTICES U/S 133(6) WERE ISSUED TO M/S JK MARBLES IND USTRY AND M/S LOVELY MARBLES. THE ASSESSING OFFICER RECEIVED THE C ONFIRMATIONS FROM THEM DULY CONFIRMING THE COPY OF ACCOUNT OF THE ASS ESSEE. THE LD ASSESSING OFFICER HAS DRAWN ADVERSE INFERENCE ON THE BASIS OF THAT 11 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO PAYMENTS WERE MADE IN SUBSEQUENT YEAR THROUGH BEARER CHEQUE. M/S LAXMI FLOORING HAD SQUARED UP THE ACCOUNT OF THE AS SESSEE BUT AS PER ASSESSEES BOOK, HE HAS LIABILITY TO PAY FOR THE CR EDITORS. THERE IS NO EVIDENCE WITH THE ASSESSING OFFICER THAT THE ASSESSE E HAS ROUGHED UNACCOUNTED INCOME THROUGH THESE PERSONS BUT TO COO PERATIVE THE ASSESSMENT PROCEEDINGS AND TO BUY PEACE OF MIND AND TO AVOID PROLONGED LITIGATION, THE ASSESSEE VOLUNTARILY DECI DED TO PAY THE TAX ON IT. THE FINDING OF THE ASSESSING OFFICER MAY BE SUPPORTI NG FOR QUANTUM ADDITION BUT CANNOT BE THE SOLD BASIS FOR IMPOSITIO N OF PENALTY. HE FURTHER RELIED ON THE FOLLOWING DECISIONS: (I) SMT. DURGA DEVI SOMANI IN ITA NO. 672/JP/2011. (II) SH. ASHISH GUPTA IN ITA NO. 671/JP/2011. (III) SMT. SUMSITRA DEVI AGARWAL ITA NO. 687/JP/201 1. (IV) SHRI JUGAL KISHORE SHARMA ITA NO. 686/JP/2011 . THE HON'BLE SUPREME COURT IN THE CASE OF MAK DATA PV T. LTD. VS. CIT (2014) 1 SCC 674 DOES NOT APPLY AND IS DISTINGUISHA BLE ON THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THAT CASE, TH E ASSESSEE DID NOT OFFER ANY EXPLANATION EXCEPT THE SAID PLEA OF VOLUN TARILY SURRENDER WHICH ALSO ON THE FACT WAS FOUND TO BE NOT VOLUNTARY. HE F URTHER RELIED ON THE DECISION IN THE CASE OF RELIANCE PETRO PRODUCTS 322 ITR 158 AND ARGUED THAT THE ASSESSEE HAD FILED THE RETURN OF INCOME. TH ERE IS VIOLATION IN THE 12 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO CLAIM OF THE ASSESSEE AND WILL NOT ENTAIL PENALTY U/ S 271(1)(C) OF THE ACT. HE HAS FURTHER DRAWN OUR ATTENTION ON LATEST DECISI ON OF HONBLE JAIPUR ITAT WHEREIN SIMILAR ADDITIONS WERE MADE AND HELD THA T PENALTY IS NOT LEVIABLE, WHICH IS SQUARELY APPLICABLE ON IDENTICAL FACTS. HE HAS DRAWN OUR ATTENTION ON PAGE NO. 29 OF THE FINDING OF THE COOR DINATE BENCH IN THE CASE OF DURGA DEVI SOMANI VS. ITO, ASHISH GUPTA VS. ITO, ASHOK KUMAR KAMDAR VS. ITO, SUMITRA DEVI AGARWAL VS. ITO AND JUGA L KISHORE SHARMA VS. ITO AND PRAYED TO DELETE THE ADDITION. 5. AT THE OUTSET, THE LD DR HAS VEHEMENTLY SUPPORTE D THE ORDER OF THE LD CIT(A). 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. IT IS UNDISPUTED FACT THAT THESE CASH CREDITORS ARE OPENING AS ON 01/4/2006 AN D NOT PERTAINED TO YEAR UNDER CONSIDERATION. THE LD ASSESSING OFFICER I SSUED NOTICE IN QUANTUM PROCEEDING U/S 133(6) OF THE ACT. THE PARTIE S CONCERNED FILED CONFIRMATIONS IN SOME OF THE CASES. IT IS ALSO FACT THAT THE ASSESSEE PAID THE OUTSTANDING DURING THE YEAR AND IN SUBSEQUENT Y EAR BUT COULD NOT PROVE BEYOND DOUBT BEFORE THE ASSESSING OFFICER. IT IS WELL SETTLED LAW THAT OPENING BALANCE OF CASH CREDITOR CANNOT BE ADD ED IN THE YEAR UNDER 13 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO CONSIDERATION U/S 68 OF THE ACT. THE COORDINATE BENC H IN THE CASE OF DURGA DEVI SOMANI VS. ITO, ITA NO. 672/JP/2011 FOR A.Y. 2007-08 ORDER DATED 31/10/2014, IN THE CASE OF ASHISH GUPTA VS. ITO ITA NO. 671/JP/2011 A.Y. 2007-08 ORDER DATED 17/10/2014, IN THE CASE OF ASHOK KUMAR KAMDAR VS. ITO IN ITA NO. 684/JP/2011 A.Y. 200 7-08 ORDER DATED 18/11/2011, IN THE CASE OF SUMITRA DEVI AGARWA L VS. ITO ITA NO. 687/JP/2011 A.Y. 2007-08 ORDER DATED 01/10/2015 AND IN THE CASE OF JUGAL KISHORE SHARMA VS. ITO IN ITA NO. 686/JP/2011 A.Y. 2007-08 ORDER DATED 09/10/2015 HAVE CONSIDERED THE IDENTICA L ISSUE AND HELD AS UNDER:- 2.10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERU SED THE MATERIAL AVAILABLE ON RECORD. WE ARE INCLINED TO DE LETE THE PENALTY ON FOLLOWING REASONS:- I. IT CLEARLY EMERGES THAT THE AMOUNTS IN QUESTIO N WERE CARRIED OVER TRADE CREDITS FROM EARLIER YEAR, CORRESPONDING PURCHASES WERE INCLUDED IN TRADING A/C THUS LEGALLY SPEAKING IF TRADE CREDITS ARE ADDE D AS CESSATION OF LIABILITY, THE RELEVANT ENTRIES EXI ST IN BOOKS ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHANGARH 11 AND IF THEY ARE HELD AS BOGUS THEN THEY BELONG TO EARLIER YEARS. II. THESE PLEAS CAN BE TAKEN BY ASSESSEE IN PENALT Y PROCEEDINGS AND IN THAT CASE PENALTY CAN BE 14 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO IMPOSED NOT ON THE SOLE BASIS OF ALLEGED SURRENDER BUT AFTER CONSIDERATION OF MERITS OF THE EXPLANATIO N. III. AO HAS HELD THAT THE SURRENDER IS NOT ACCEPTA BLE AND CHOSE TO ADD IT U/S 41(1) OF THE ACT. THUS TECHNICALLY EVEN THE SURRENDER IS NOT ACCEPTED. IV. THE MAK DATA JUDGMENT RELIED BY LD DR ALSO HOLD S THAT PENALTY CANNOT BE DELETED MERELY HOLDING THAT ASSESSES VOLUNTARILY SURRENDERED THE INCOME. THERE IS NO SUCH IMMUNITY AND IT IS THE EXPLANATION WHICH SHOULD BE CONSIDERED FOR PENALTY. IN THAT CASE ASSESSEE DID NOT OFFER ANY EXPLANATION EXCEPT AN SPECIOUS PLEA OF VOLUNTARY SURRENDER, WHICH ALSO ON FACTS WAS FOUND TO BE NOT VOLUNTARY. V. THE DETAILS ABOUT TRADING LIABILITIES AND TRANSA CTIONS WERE REFLECTED IN THE ACCOUNTING STATEMENTS WHICH WERE PART OF THE RETURN OF INCOME. HONBLE SUPREME COURT IN RELIANCE PETRO PRODUCTS CASE (SUPRA) HAS HELD THAT IF THE RELEVANT INFORMATION IS FILED WITH THE RETURN OF INCOME IN THAT CASE ANY VARIATION IN THE CLAIMS OF THE ASSESSE WILL NOT ENTAIL PENALTY. THIS JUDGMENT ALSO SUPPORTS THE CASE OF THE ASSESSE, IN VIEW THEREOF ALSO THE PENALTY IN THIS CASE CANNOT BE IMPOSED BY MERELY REFERRING TO THE ALLEGED SURRENDER AND WITHOUT CONSIDERING THE EXPLANATION. THUS, IN CONSIDERATION OF ENTIRETY OF FACTS, CIRCUM STANCES AND CASE LAWS AS RELIED ON BY ASSESSEE, WE DELETE THE PEN ALTY. THE FACTS OF THE CASE ARE IDENTICAL WITH THE COORDINA TE BENCH DECISION, WHICH IS SQUARELY APPLICABLE. THEREFORE, BY RESPECTFU LLY FOLLOWING THE 15 ITA NO. 670/JP/2011 SURESH KR SOMANI VS. ITO ORDER OF THE COORDINATE BENCH ON SIMILAR FACTS AND CIRCUMSTANCES, WE REVERSE THE ORDER OF THE LD CIT(A) AND ALLOW THE ASSE SSEES APPEAL. 7. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/03/2016. SD/- SD/- YFYR DQEKJ VH-VKJ-EHUK (LALIET KUMAR) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18 TH MARCH, 2016 RANJAN* VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI SURESH KUMAR SOMANI, KISHANGARH. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, KISHANGARH. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 670/JP/2011) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR