SH. ASHISH GUPTA, Jaipur V. ITO, Kishangarh

ITA 671/JPR/2011

• Counselvise Citation: 67123114 RSA 2011
• Duration Of Justice: 3 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-10-2014
• 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
• Section: 2

Judgement Text

ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 1 IN THE INCOME TAX APPELLATE TRIBUNAL JAIPUR BENCH, JAIPUR (BEFORE SHRI R.P. TOLANI AND SHRI T.R. ME ENA) ITA NO. 671/JP/2011 ASSESSMENT YEARS : 2007-08 PAN : AAPPB 2479 K SHRI ASHISH GUPTA VS. THE ITO PROP. M/S. ASHISH MARBLES WARD- KISHANGARH CHHABRA COLONY, MADANGANJ, KISHANGARH KISHANGARH (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MANISH AGARWAL DEPARTMENT BY: SHRI RAJESH OJHA DATE OF HEARING: 09-09-2014 DATE OF PRONOUNCEMENT: 17-10-2014 ORDER PER R.P. TOLANI, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF THE LD. CIT(A), AJMER DATED 27-05-2011 FOR THE ASSESSMENT YEAR 2007-08 CHALLENGING THE IMPOSITION OF PENALTY OF RS. 5,56,7 90/- U/S 271(1)( C) OF THE I.T. ACT, 1961. 2.1 THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS AN INDIVIDUAL AND RUNNING PROPRIETARY BUSINESS IN THE NAME AND STYLE OF M/S. ASHISH MARBLES AT KISHAGARH AND IS ENGAGED IN THE BUSINESS SLABS AND TILES MADE OF MARBLES AND GRANITES. THE IMPUGNED PENALTY IS LEVIED IN RES PECT OF CESSATION OF ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 2 LIABILITY U/S41(1) IN RESPECT OF TWO TRADE CREDITOR S AND IN RESPECT OF ONE TRADE DEBTOR. THERE WAS MISMATCH IN THE INTER SE ACCOUNTS , ASSESSE COULD NOT COMPLY WITH THE DIRECTIONS AND ULTIMATELY OFFERED T HE AMOUNTS FOR TAXATION. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A O EXAMINED ABOUT THE FOLLOWING TWO TRADE CREDITORS A/CS. S.N NAME OF TRADE CREDITOR OPENING BALANCE AS ON 01-04- 2006 PAYMENT DURING THE YEAR BALANCE OUTSTANDING AS ON 31-03- 2007 1. M/S. PUSHPA MARBLE INDUSTRIES, KISHANGARH 13,14,404/- 1,55,000/- 11,59,404/- 2. M/S. MUKUND MARBLE FACTORY 1,03,589/ - 1,03,589/- TOTAL 14,17,993/- APROPOS AOS INQUIRIES IN THIS BEHALF, ASSESSEE EXPL AINED THAT HE HAD PURCHASED MARBLE FROM PUSHPA MARBLES, THE OUTSTANDI NG OPENING TRADE BALANCE AS ON 01-04-2006 REPRESENTED THE AMOUNT PAY ABLE BY THE ASSESSEE AGAINST EARLIER YEARS PURCHASES. AN AMOUNT OF RS.1 .55 LACS WAS PAID DURING THE YEAR AND BALANCE WAS CLEARED IN SUBSEQUENT YEAR S. THE REPAYMENT DURING THE YEAR WAS THROUGH BANK ACCOUNT. THE AO INSISTED FOR CONFIRMATION FROM THE PARTY I.E. M/S. PUSHPA MARBLE TO ASCERTAIN THE TRADE LIABILITY, WHICH ASSESSEE COULD NOT PRODUCE. 2.2 APROPOS M/S. MUKUND MARBLE FACTORY, AN AMOUNT O F RS. 1,03,589/- WAS SHOWN AS PAYABLE FOR MARBLE PURCHASES WHEREAS A CCORDING TO THE AO IN ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 3 THE BOOKS OF ACCOUNT OF MUKUND MARBLE, THE CORRESPO NDING RECEIVABLE WAS SHOWN AS NIL. THE ASSESSEE REPLIED THAT ABOVE PARTI ES WERE NOT RELATED BESIDE HE HAD NO CONTROL OVER UNRELATED THIRD PARTYS ACCO UNTS. IT WAS NOT UNDERSTANDABLE AS TO HOW THE DIFFERENCES IN INTER S E ACCOUNT CROPPED UP. IT IS CLAIMED BY THE ASSESSEE THAT THE AO DID NOT MAKE AN Y INDEPENDENT EFFORT IN CROSS VERIFYING THE CORROBORATIVE DETAILS FROM THES E PARTIES. THE ASSESSE WAS ADVISED THAT IT WAS DESIRABLE TO BUY PEACE WITH THE DEPARTMENT. ON THE BASIS OF THE ADVICE AND UNDERSTANDING SURRENDERED AN AMOU NT OF RS. 14,17,993/- TO AVOID LITIGATION WITH THE DEPARTMENT. AO HOWEVER D ID NOT ACCEPT THE SURRENDER AND HELD IT TO BE CESSATION OF LIABILITY U/S 41(1). 2.3 APROPOS M/S. YOGI MARBLES, ASSESSE HAD SOLD GOO DS TO THEM ON CREDIT AS THE PAYMENTS WERE MADE ITS ACCOUNT REFLECTED NIL CLOSING BALANCE. THE AO OBTAINED THE COPY OF THE ACCOUNT AND FOUND THAT M/S . YOGI MARBLES HAD SHOWN AN AMOUNT OF RS.5,02,210/- PAYABLE TO THE ASS ESSEE. IN THIS BEHALF, ASSESSEE FILED FOLLOWING REPLY. IN THE CASE OF M/S. YOGI MARBLES, LANDHE KE, MOGA , THE BALANCE SHOWN BY US WAS NIL BUT IN YOUR ACCOUNTING FOLLOWING DDS WERE RECEIVED FROM GOYAL MARBLES, HOSHIYAPUR (PUNJA B) BUT WRONGLY CREDITED IN THE ACCOUNT OF M/S. YOGI MARBLES BY OUR ACCOUNTANT, HENCE AS PER OUR BOOKS THE CORRECT BALANCE WAS RS.2,70,44 7/- WHICH WAS TO BE RECEIVED FROM M/S. YOGI MARBLES AS ON 31-03-2007 . ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 4 D.D. NO. DATE AMOUNT 807626 01.07.2006 94980.00 476244 29.01.2007 87741.00 476251 29.01.2007 87726.00 THE YOGI MARBLES IS SHOWING THE BALANCE OF RS.5,02, 510/- PAYABLE TO US. THE REASON OF DIFFERENCE COULD NOT B E KNOWN TO US. HENCE THE DIFFERENCE AMOUNT OF RS.2,32,063/- IS VOL UNTARILY SURRENDERED FOR TAXATION TO PURCHASE PEACE AND AVOI D LITIGATION. ON THE BASIS OF ADVICE, THE ASSESSEE SURRENDERED TH IS AMOUNT ALSO AS INCOME AND THE ASSESSMENT WAS FRAMED ACCORDINGLY. THE AO I NITIATED PENALTY PROCEEDINGS U/S 271(1)( C) OF THE ACT IN THIS BEHAL F. IN REPLY THERETO THE ASSESSEE FILED DETAILED EXPLANATION CONTENDING THAT THE PURCHASES FROM ABOVE PARTIES WERE DULY ACCOUNTED FOR AND ACCEPTED IN EAR LIER YEARS. LOOKING AT THE DIFFICULTIES TO FETCH CONFIRMATIONS FROM THESE PART IES AFTER A PERIOD OF 2 YEARS ASSESSEE VOLUNTARILY SURRENDERED THEM. NEITHE R INACCURATE PARTICULARS WERE FURNISHED NOR WERE ANY INCOME WAS CONCEALED. W ITHOUT ASKING THE OTHER UNRELATED PARTIES ABOUT THE ACCOUNTING DIFFER ENCES ASSESSE WAS NOT LIABLE FOR PENALTY. THE AO HOWEVER, IMPOSED THE IM PUGNED PENALTY. 2.4 AGGRIEVED, THE ASSESSEE PREFERRED FIRST APPEAL BEFORE THE LD. CIT(A) WHERE DETAILED WRITTEN SUBMISSIONS WERE FILED, THE SUMMARY THEREOF IS AS UNDER :- A. NONE OF THE OPENING BALANCE OF TRADE CREDITORS PERT AINED TO THIS YEAR, THEY WERE OPENING BALANCES OF EARLIER YEARS AND PAI D SUBSEQUENTLY. ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 5 THESE TRANSACTIONS OF PURCHASES AND SALE WERE ACCEP TED BY THE DEPARTMENT IN EARLIER YEARS. B. IN MARBLE TRADE MANY OF THE PARTIES KEEP ON SHIFTIN G PLACES DEPENDING ON THE MINING LEASE. THE PARTIES WERE GENUINE AND 2 ADDITIONS PERTAINED TO TRADE LIABILITIES AGAINST THE GOODS PU RCHASED AND ONE PERTAINED TO GOODS SOLD. C. THE SURRENDER WAS VOLUNTARY WHEREAS THE LD. AO HAS HELD IT TO BE UNACCEPTABLE AS THERE WERE PROLONGED INQUIRIES BEFO RE SURRENDER. IT HAS NOT BEEN APPRECIATED THAT ASSESSE ALSO MADE EFF ORTS BECAUSE HE WAS UNDER BONA FIDE BELIEF THAT BEING TRADE RELATE D BALANCES NECESSARY CONFIRMATIONS WILL BE OBTAINED. RATHER THE INQUIRIE S PROVE THE BONA FIDES OF THE ASSESSE AS HE CANNOT KNOW IN ADVANCE T HAT ITS TRADE DEALING WHICH WERE ACCEPTED BY THE DEPARTMENT, RELEVANT CON FIRMATIONS WOULD NOT BE FETCHED BY HIM. D. THE PARTIES WERE NOT RELATED TO THE ASSESSEE, NOTHI NG WAS CROSS VERIFIED FROM THEIR END AS TO HOW AND WHY THEY HAD DEALT WIT H THESE ENTRIES IN THEIR BOOKS. THESE PARTIES WERE EQUALLY OBLIGED TO EXPLAIN THE ENTRIES, THIS PART HAS NOT BEEN VERIFIED BY THE AO. E. RELIANCE WAS PLACED ON BY THE ASSESSE ON CATENA OF JUDICIAL PRONOUNCEMENTS INCLUDING THE FOLLOWING FOR THE PROP OSITION THAT PENALTY U/S 271(1) C CANNOT BE LEVIED IN THESE FACT S AND CIRCUMSTANCES: I. CIT V SURESHCHANDRA MITTAL 251 ITR 9 (SC) II. GEBILAL KANHAIYALAL (HUF) V. ACIT 270 ITR 523 (RAJ) III. CIT V BADRILAL CHATURBHUJ 265 ITR 329(RAJ) F. PENALTY PROCEEDINGS WERE SEPARATE AND DISTINCT FROM ASSESSMENT PROCEEDINGS AND MERE FACT THAT INCOME HAS BEEN OFFE RED FOR TAXATION ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 6 WILL NOT TANTAMOUNT TO ADMISSION OF FURNISHING INAC CURATE PARTICULARS WITHOUT PROPERLY EXAMINING THE EXPLANATION AND CIRC UMSTANCES IN THIS BEHALF. 2.5 THE LD. CIT(A) HOWEVER CONFIRMED THE PENALTY BY FOLLOWING OBSERVATIONS: 4.22 WHEN THE PRESENT CASE IS EXAMINED IN VIEW OF THIS LEGAL POSITION, IT IS FOUND THAT THE APPELLANT CLAI MED BOGUS LIABILITY IN RESPECT OF SUNDRY CREDIT BALANCES OF RS. 14,17,993/- IN THE RETURN FILED BY HIM. SIMILARLY AMOUNT SHOWN IN THE ACCOUNT OF M/S. YOGI MARBLES BY THE APPELLANT WAS I NCORRECT TO THE EXTENT OF RS. 2,32,063/-. IT WAS ONLY WHEN AO M ADE ENQUIRY FROM APPELLANT REGARDING THESE PARTIES THAT APPELLA NT AGREED TO SURRENDER THIS AMOUNT. IN SUCH A SITUATION, AO HAS RIGHTLY CONCLUDED THAT APPELLANT FURNISHED INACCURATE PARTI CULARS OF HIS INCOME, IN THE RETURNED FILED BY HIM. IT CANNOT BE HELD THAT THE SURRENDER OF INCOME BY APPELLANT WAS VOLUNTARY, BEC AUSE THE SURRENDER WAS MADE ONLY AFTER DETECTION OF THE SAME BY AO. UNDER THE PRESENT SCHEME OF THINGS ONLY A MINISCULE PERCENTAGE OF RETURNS WAS SELECTED FOR SCRUTINY AND IN ALL OTH ER CASE, INCOME DECLARED BY THE ASSESSEE IS ACCEPTED U/S 143 (1) WITHOUT MAKING ANY FURTHER ENQUIRY. APPELLANT WAS WELL AWAR E OF THIS AND TRIED TO TAKE UNDUE ADVANTAGE OF THIS SCHEME OF THE DEPARTMENT. IT IS OBVIOUS THAT IF HIS CASE WAS NOT SELECTED FOR SCRUTINY, HE WOULD HAVE NEVER SURRENDERED THE AMOUN T OF RS. 16,50,056/-. IN THIS CASE, IT IS NOT ESTABLISHED TH AT THE CONDUCT AND EXPLANATION OF APPELLANT WAS BONAFIDE, THEREFOR E, THE CASE FALLS IN CATEGORY OF PARA 4.19 AS MENTIONED ABOVE. THE LEVY OF PENALTY U/S 271(1) IS THEREFORE, JUSTIFIED IN THIS CASE PURSUANT TO THE DECISION OF DHARMENDRA TEXTILES. 2.6 AGGRIEVED, THE ASSESSE IS BEFORE US. 2.7 THE LD COUNSEL FOR THE ASSESSE CONTENDS THAT LD CIT(A) HAS NOT DISPUTED THE PROPOSITION THAT PENALTY PROCEEDINGS A RE DISTINCT AND SEPARATE IN ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 7 NATURE THAN ASSESSMENT PROCEEDINGS. THIS CLEARLY IM PLIES THAT MERELY BECAUSE AN INCOME IS SURRENDERED IT CAN NOT BE A FA CTOR FOR AUTOMATIC LEVY OF CONCEALMENT PENALTY. THE FACTS AND EXPLANATION OF T HE ASSESSEES CASE ARE TO BE CONSIDERED BEFORE LEVYING ANY PENALTY BECAUSE IM POSITION OF PENALTY IS PRIMARILY A QUESTION OF FACT AND DISTINCT FROM ASSE SSMENT PROCEEDINGS. IN THIS BACKDROP IT IS POINTED OUT THAT LD CIT(A) HAS ERRON EOUSLY HELD THESE LIABILITIES TO BE BOGUS, WHICH IS A FUNDAMENTALLY W RONG FINDING OF FACT IN AS MUCH AS LD. AO HAS HELD THEM TO BE CESSATION OF LIA BILITY U/S 41(1). ALL THESE ENTRIES EMANATE FROM THE BOOKS OF ACCOUNTS AS OPENI NG BALANCES, THUS THE RELATED PURCHASE/ SALE TRANSACTIONS HAVE BEEN ACCEP TED BY THE DEPARTMENT IN PRECEDING YEAR. THESE BEING THE UNDISPUTED FACT THE OPENING BALANCES COMING FROM EARLIER CANNOT BE HELD TO BE BOGUS. THU S THE ADVERSE INFERENCES DRAWN BY LOWER AUTHORITIES ARE SELF-CONTRADICTORY A ND FUNDAMENTALLY FLAWED CONSEQUENTLY ANY FINDING OR CONCLUSION ARRIVED ON T HAT BASIS IS INCORRECT. COMING TO THE MERITS, PUSHPA MARBLE LIABILITY EXIST S IN THE BOOKS, BESIDES THE CLAIM OF THE ASSESSEE THAT THE OUTSTANDING BALA NCES HAVE BEEN PAID IN SUBSEQUENT YEARS HAS NOT BEEN DISPUTED. THESE FACTS MAKE IT CLEAR THAT LIABILITIES WERE GENUINE COUPLED WITH UNDISPUTED FA CTS THAT BALANCES DO NOT PERTAIN TO THIS YEAR BUT ARE CARRIED FORWARD FROM E ARLIER YEARS. TO AVOID LITIGATION ASSESSE MAY HAVE AGREED FOR ADDITION BUT THIS SURRENDER DONT ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 8 DISCOUNT THE ACTUAL NATURE OF ENTRIES. IN FACT LD. AO INSTEAD OF ACCEPTING THE SURRENDER OUGHT TO HAVE MADE PROPER INQUIRIES IN EA RLIER RELEVANT YEAR AND PROPOSE THE ADDITION IN THAT YEAR. THUS MERELY BECA USE ASSESSE IN HER POOR KNOWLEDGE ABOUT INTRICACIES OF INCOME TAX LAW SURRE NDERED SOME INCOME, IT DOESNT ABSOLVE THE AO FROM HIS STATUTORY OBLIGATIO N OF TAXING THE INCOME IN RIGHT YEAR. THUS THE PENALTY IN THIS BEHALF IS NOT IMPOSABLE IN THIS YEAR. ONCE AO HIMSELF HELD THAT THE SURRENDER IS NOT ACCEPTABL E AS IT WAS NOT VOLUNTARY, IN THAT CASE HE WAS UNDER OBLIGATION TO MAKE ADDITI ON IN THE YEAR IN ACCORDANCE WITH LAW AND INITIATE THE PENALTY PROCEE DING DEPENDING IN HIS FINDINGS IN RELEVANT YEAR. THUS THE ADDITIONS HAVE BEEN MADE IN WRONG YEAR AND PENALTY ALSO HAS BEEN IMPOSED IN WRONG YEAR. TH E ASSESSE HAS A STATUTORY RIGHT TO RAISE THE PLEA OF CORRECT YEAR O F IMPOSITION IN PENALTY PROCEEDINGS. THE SURRENDER OF INCOME TO AVOID LITIG ATION WHICH IS ALSO NOT ACCEPTED ON FACE VALUE BY AO MAY BE GOOD REASON FOR ADDITION BUT CANNOT BE SOLE BASIS FOR IMPOSITION OF PENALTY. THEREFORE, THE PENALTY HAS BEEN IMPOSED WITHOUT APPRECIATING THE ISSUES PROPERLY. S EC.271(1) OBLIGES THE AO TO CONSIDER ASSESSEES REPLY IN OBJECTIVE MANNER ALONG WITH FACTS, CIRCUMSTANCES AND LAW AND THEREAFTER HAS TO COME TO A SPEAKING CONCLUSION THAT INACCURATE PARTICULARS WERE FILED OR INCOME WA S CONCEALED. IN THIS CASE THE ASSESSES EXPLANATION HAS BEEN SUMMARILY DISCARD ED AND RELYING ON ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 9 MERELY THE SURRENDER WHICH IS ALSO NOT ACCEPTED ON FACE VALUE BY AO, THE PENALTY HAS BEEN IMPOSED. ASSESSE HAS DEMONSTRATED THAT ADDITIONS AND PENALTY WERE NOT POSSIBLE IN AY 2007-08 AS ON FACE OF IT AMOUNTS WERE OPENING BALANCES. IN CARRYING FORWARDED CLOSING BAL ANCES OF EARLIER YEARS BOOKS WHICH ARE ACCEPTED BY THE DEPARTMENT, IT CAN NOT BE HELD THAT ASSESSE FURNISHED ANY INACCURATE PARTICULARS. THUS PENALTY IS NOT IMPOSABLE AS THE YEAR OF ADDITIONS IS FUNDAMENTALLY WRONG, ALL THE R ELEVANT PARTICULARS WERE FILED ALONG WITH THE RETURN AND NO INACCURATE PART ICULARS HAVE BEEN FURNISHED WITH THE RETURN OF INCOME, PENALTY IS NOT LEVIABLE. ALTERNATIVELY IT IS PLEADED THE AO HAS ERRED IN NOT GIVING ANY SETOFF OF AMOUNT S AS PAYABLE AND RECEIVABLE BOTH HAVE BEEN ADDED. IF SET OFF IS GIVE N THE PENALTY WILL BE DRASTICALLY REDUCED. RELIANCE IS PLACED ON THE SUPR EME COURT JUDGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS LTD. 322 ITR 15 8; PRICE WATER HOUSE COOPER 348 ITR 306(SC) AND OTHER JUDGMENTS RELIED O N BEFORE LOWER AUTHORITIES. 2.8 THE LD DR ON THE OTHER HAND VEHEMENTLY ARGUES T HAT ONCE THE INCOME IS SURRENDERED BY ASSESSE, REVENUE HAS NO BURDEN ON IT TO PROVE THE MOTIVE OR MENS REA. RELIANCE IS PLACED ON FOLLOWING RECENT JUDGMENT OF HONBLE SUPREME COURT: MAK DATA V CIT 358 ITR 593 (SC) ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 10 2.9 THE LD COUNSEL FOR THE ASSESSE ON THE OTHER HAN D CONTENDS THAT MAK DATA JUDGMENT ITSELF POSTULATES THAT THE PENALTY CA N BE IMPOSED ON SURRENDER BY THE ASSESSE IF IT IS MADE AFTER DETECTION BY THE DEPARTMENT AND ASSESSE DOESNT GIVE PROPER REPLY. IN THAT CASE THE ADDITIO N WAS MADE AFTER DETECTION BY THE DEPARTMENT, ASSESSE WAS FOUND TO BE DEFLECTI NG THOSE ENQUIRIES AND NO OTHER REPLY WAS FILED. IN THE INSTANT CASE ASSESSE HAS DEMONSTRATED THAT NEITHER THE ADDITION NOR THE PENALTY COULD HAVE BEE N IMPOSED IN THIS YEAR. THE SURRENDER OFFER WAS NOT ACCEPTED ON FACE VALUE BY THE AO. IN THAT CASE ASSEESEES REPLY IN PENALTY PROCEEDINGS OUGHT TO HAV E BEEN CONSIDERED, CONTROVERTED AND NOT SUMMARILY BRUSHED ASIDE. THUS MAK DATA CASE IS NOT APPLICABLE TO ASSESSE. BESIDES ALL THE RELEVANT PAR TICULARS HAVING BEEN FURNISHED WITH THE RETURN, HONBLE SUPREME COURT JU DGMENT IN THE CASE OF RELIANCE PETRO PRODUCTS IS SQUARELY APPLICABLE. 2.10 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE ARE INCLINED TO DELETE THE PENALTY ON FOLLOWING REASONS:- I. IT CLEARLY EMERGES THAT THE AMOUNTS IN QUESTION WER E CARRIED OVER TRADE CREDITS FROM EARLIER YEAR, CORRESPONDING PURCHASES WERE INCLUDED IN TRADING A/ C THUS LEGALLY SPEAKING IF TRADE CREDITS ARE ADDED AS CESSATION OF LIABILITY, THE RELEVANT ENTRIES EXIST IN BOOKS ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 11 AND IF THEY ARE HELD AS BOGUS THEN THEY BELONG TO E ARLIER YEARS. II. THESE PLEAS CAN BE TAKEN BY ASSESSE IN PENALTY PROCEEDINGS AND IN THAT CASE PENALTY CAN BE IMPOSED NOT ON THE SOLE BASIS OF ALLEGED SURRENDER BUT AFTER CONSIDERATION OF MERITS OF THE EXPLANATION. III. AO HAS HELD THAT THE SURRENDER IS NOT ACCEPTABLE AN D CHOSE TO ADD IT U/S 41(1) OF THE ACT. THUS TECHNICA LLY EVEN THE SURRENDER IS NOT ACCEPTED. IV. THE MAK DATA JUDGMENT RELIED BY LD DR ALSO HOLDS TH AT PENALTY CANNOT BE DELETED MERELY HOLDING THAT ASSES SES VOLUNTARILY SURRENDERED THE INCOME. THERE IS NO SUC H IMMUNITY AND IT IS THE EXPLANATION WHICH SHOULD BE CONSIDERED FOR PENALTY. IN THAT CASE ASSSESEE DID N OT OFFER ANY EXPLANATION EXCEPT AN SPECIOUS PLEA OF VOLUNTAR Y SURRENDER, WHICH ALSO ON FACTS WAS FOUND TO BE NOT VOLUNTARY. V. THE DETAILS ABOUT TRADING LIABILITIES AND TRANSACTI ONS WERE REFLECTED IN THE ACCOUNTING STATEMENTS WHICH WERE P ART OF THE RETURN OF INCOME. HONBLE SUPREME COURT IN RELI ANCE PETRO PRODUCTS CASE (SUPRA) HAS HELD THAT IF THE RE LEVANT INFORMATION IS FILED WITH THE RETURN OF INCOME IN T HAT CASE ANY VARIATION IN THE CLAIMS OF THE ASSESSE WILL NOT ENTAIL PENALTY. THIS JUDGMENT ALSO SUPPORTS THE CASE OF TH E ASSESSE, IN VIEW THEREOF ALSO THE PENALTY IN THIS C ASE CAN NOT BE IMPOSED BY MERELY REFERRING TO THE ALLEGED SURRENDER AND WITHOUT CONSIDERING THE EXPLANATION. ITA NO. 671/JP/2011 ASHISH GUPTA VS. ITO, KISHA NGARH 12 THUS, IN CONSIDERATION OF ENTIRETY OF FACTS, CIRCUM STANCES AND CASE LAWS AS RELIED ON BY ASSESSE, WE DELETE THE PENALTY. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 17- 10-2014 SD/- SD/- (T.R. MEENA) (R.P. TOLANI) ACCOUNTANT MEMBER JUDICIAL MEMBER JAIPUR DATED: 17 TH OCT 2014 *MISHRA COPY FORWARDED TO:- 1. SHRI ASHISH GUPTA, KISHANGARH 2. THE ITO, WARD- KISHANGARH 3. THE LD. CIT 4. THE LD. CIT(A), JAIPUR 5..THE LD. DR 6.THE GUARD FILE (IT NO. 671/JP/2011) BY ORDER AR ITAT, JAIPUR