GIRDHAR GOPAL LAHOTI, Jaipur V. ITO, Kishangarh

ITA 682/JPR/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2025 (ITAT-JAIPUR)
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2005-2006
• Appeal Filed On: 30-09-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: O P AGARWAL
• Keywords: Revised return
• Section: 273B; 143(3); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH HKKXPAN] YS[KK L NL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, A M VK;DJ VIHY LA- @ ITA NO. 682/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2005-06 SHRI GIRDHAR GOPAL LAHOTI PROP. M/S SHREE PUSHPA MARBLES, 16B, VIRAT NAGAR, MADANGANJ, KISHANGARH. CUKE VS. THE ITO, WARD- KISHANGARH. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ABHPL 7131 M VIHYKFKHZ@ APP ELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MANISH AGARWAL (C.A.)& SHRI O.P. AGARWAL (C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI R. A. VERMA (ADDL.CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 14/12/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 26/02/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 24.07.2014 OF CIT (A), AJMER ARISING FROM PENALTY O RDER PASSED U/S 271(1)(C) OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2 005-06. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE ORDER OF ASSESSING ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 2 OFFICER OF LEVYING THE PENALTY U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS AND CIRCUM STANCES OF CASE AND IN IGNORANCE OF THE SUBMISSIONS MADE BEFOR E HIM. THEREFORE, THE SAID PENALTY ORDER UNDER SECTION 211 (1)(C) DESERVES TO BE QUASHED AND HELD BAD IN LAW. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE LEVY OF P ENALTY AT RS. 1,17,818/- U/S 271(1)(C) OF THE INCOME TAX ACT, 196 1, WITHOUT CONSIDERING THE FACT THAT THERE WAS NO CONCEALMENT OF INCOME IN ANY MANNER NOR WERE ANY INACCURATE PARTICULARS OF I NCOME FURNISHED BY THE ASSESSEE. THEREFORE, THE CONSEQUEN T PENALTY DESERVES TO BE DELETED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE LEVY OF P ENALTY ON ACCOUNT OF PROFIT ESTIMATED BY HIM BY APPLYING A RANDOM/UNREASONABLE PROFIT RATE, WITHOUT APPRECIATI NG THE WELL ESTABLISHED LAW THAT NO PENALTY CAN BE LEVIED MEREL Y ON THE BASIS OF ESTIMATION OF INCOME. THEREFORE THE PENALTY LEVI ED ON THIS ACCOUNT DESERVES TO BE DELETED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LD. CIT(A) HAS GROSSLY ERRED IN UPHOLDING THE LEVY OF P ENALTY ON ACCOUNT OF ADDITION MADE U/S 41(1)(A) WITHOUT APPRE CIATING THE FACT THAT ASSESSEE HAD MADE EVERY POSSIBLE EFFORT T O ESTABLISH THE GENUINENESS OF OPENING CREDIT BALANCE HOWEVER, ACTI NG ON THE WRONG ADVICE OF THE COUNSEL, THE SAID CREDIT BALANC E WAS SHOWN AS NIL IN RETURN FILED IN RESPONSE TO NOTICE U/S 14 8 OF INCOME TAX ACT, 1961. HENCE, THIS BEING PURELY A CASE OF GENUI NE MISTAKE WHICH WAS MADE UNDER BONA-FIDE BELIEF AND WRONG AD VICE OF THE THEN COUNSEL, NO PENALTY SHOULD BE LEVIED. THEREFOR E, THE PENALTY LEVIED ON THIS ACCOUNT DESERVES TO BE DELETED. 4. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF APPEAL. ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 3 2. THE ASSESSEE IS AN INDIVIDUAL AND FILED ITS RETU RN OF INCOME DECLARED TOTAL INCOME OF RS. 98,644/-, THE RETURN O F INCOME WAS INITIALLY PROCESSED U/S 143(1) OF THE I.T. ACT. THEREAFTER, A SSESSMENT WAS REOPENED BY THE AO BY ISSUING NOTICE U/S 148 OF THE ACT DATED 03.04.2008. IN RESPONSE TO THE NOTICE U/S 148 OF TH E ACT THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME O F RS. 1,80,590/-. IN THE REASSESSMENT COMPLETED U/S 147 R.W.S. 143(3) OF THE I. T. ACT. THE AO COMPUTED THE TOTAL INCOME OF THE ASSESSEE AT RS. 24 ,23,900/- BY MAKING VARIOUS THE ADDITIONS TO THE TUNE OF RS. 22, 45,222/- WHICH AS UNDER:- S.NO. ADDITION MADE BY AO AMOUNT 1. ADDITIONS U/S 69A 20,29,000.00 2. ADDITION U/S 41(1)(A) 2,14,309.00 3. INTEREST INCOME 1,913.00 TOTAL 22,45,222.00 ON APPEAL THE LD. CIT(A) VIDE ORDER DATED 02.12.201 0 RESTRICTED THE ADDITION IN RESPECT OF THE CASH DEPOSITS IN THE BAN K ACCOUNT OF RS. 20,29,000/- BY ESTIMATING THE PROFIT ON THE SAID TU RNOVER @ 10% AND THEREBY SUSTAINED THE ADDITION OF RS. 2,02,900/-. T HE LD. CIT(A) HAS ALSO ALLOWED CREDIT OF RS. 1,04,110/- BEING THE ADD ITIONAL INCOME OFFERED IN THE REVISED RETURN. THUS, THE NET ADDITION SUSTA INED BY THE LD. CIT(A) ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 4 IN RESPECT OF THE DEPOSITS IN THE BANK ACCOUNT OF R S. 98,790/-. THE REMAINING TWO ADDITION WERE SUSTAINED BY THE LD. CI T(A) THOUGH THE ASSESSEE DID NOT CHALLENGED THE ADDITION MADE ON AC COUNT OF INTEREST INCOME. ON FURTHER APPEAL THIS TRIBUNAL SUSTAINED T HE ADDITIONS WHICH WERE CONFIRMED BY THE LD. CIT(A) TOTAL AMOUNTING TO RS. 3,15,012/-. THE AO INITIATED THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT IN RESPECT OF THE ADDITIONS SUSTAINED BY THE LD. CIT(A) AND LE VY OF PENALTY OF RS. 1,17,818/- BEING 100% OF THE TAX EVADED ON THE AMOU NT OF RS. 4,17,209/-. THE ASSESSEE CHALLENGED THE ACTION OF T HE AO LEVYING THE PENALTY U/S 271(1)(C) BEFORE THE LD. CIT(A) BUT COU LD NOT SUCCEED. 3. BEFORE US, LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THE FIRST ADDITION WAS MADE BY THE AO U/S 69A OF THE ACT IN R ESPECT OF THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE MAINTA INED WITH THE IDBI BANK TO THE TUNE OF RS. 20,30,913/-. THE SAID DEPOS IT WAS MADE OUT OF THE SALE PROCEEDS HOWEVER, DUE TO BONA-FIDE MISTAKE /IGNORANCE ON THE PART OF THE ASSESSEE, THE SAME COULD NOT BE DISCLOS ED IN THE RETURN OF INCOME. ON BEING POINTED OUT DURING THE COURSE OF A SSESSMENT PROCEEDINGS, THE ASSESSEE EXPLAINED THE DEPOSITS MA DE IN THE BANK ACCOUNT OUT OF THE SALE PROCEEDS AND THE BANK ACCOU NT COULD NOT BE DISCLOSED DUE TO BONA-FIDE MISTAKE. HOWEVER, THE AO ADDED THE ENTIRE ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 5 AMOUNT OF RS. 20,29,000/-TO THE INCOME OF THE ASSES SEE WHICH WAS RESTRICTED BY THE LD. CIT(A) TO THE EXTENT OF 10% O F THE SAID DEPOSIT BY ESTIMATING THE PROFIT ON THE SAID TURNOVER FUND DEP OSITED IN THE BANK. THUS, THE LD. CIT(A) DELETED THE ADDITION TO THE EX TENT OF 18,26,100/- AND SUSTAINED THE BALANCE AMOUNT OF RS. 2,02,900/-. THE ADDITION SUSTAINED BY THE LD. CIT(A) IN THE QUANTUM APPEAL I S BASED ON ESTIMATION OF INCOME OF THE ASSESSEE AND THEREFORE, THE PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE LEVIED ON THE ADDIT ION MADE ON THE BASIS OF ESTIMATION. WHEN THE ADDITION WAS SUSTAINE D MERELY ON ESTIMATE BASIS WITHOUT ANY ADVERSE VIEW OR OBSERVAT ION AND WITHOUT PROVIDING ANY BASIS FOR ADOPTING THE PROFIT OF 10% THE PENALTY CANNOT BE IMPOSED ON SUCH ADDITION. IN SUPPORT OF HIS CONT ENTION HE HAS RELIED UPON THE DECISION OF HONBLE JURISDICTION HIGH COUR T IN CASE OF CIT VS. KRISHI TYRE RETREADING & RUBBER INDUSTRIES 360 ITR 580. THUS, LD. AR HAS SUBMITTED THAT WHERE THE ADDITION HAS BEEN SUST AINED PRIMARY ON ESTIMATED BASIS NO PENALTY WAS LEVIABLE U/S 271(1)( C) OF THE ACT. 4. AS REGARDS THE PENALTY LEVIED ON ACCOUNT OF ADDI TION OF RS. 2,14,309/- MADE U/S 41(1)(A) OF THE ACT THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THERE WAS AN OPENING BALANCE AS ON 0 1.04.2004 OF RS. 5,14,409/- AS PAYABLE TO A FIRM NAMED M/S SHREE GUR UKRIPA STONES PVT. ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 6 LTD. DURING THE YEAR, THE LIABILITY TOWARDS THE AFO RESAID FIRM STOOD SATISFIED BY THE ASSESSEE AND THE ENTIRE AMOUNT OF RS. 5,14,409/- STOOD PAID BY THE ASSESSEE. HOWEVER, WHILE FILING THE ORI GINAL RETURN OF INCOME, THE AFORESAID AMOUNT OF RS. 2,14,309/- WAS INADVERTENTLY SHOWN AS OUTSTANDING LIABILITY TOWARDS THE SAID FIR M AND THE SAID MISTAKE WAS RECTIFIED BY THE ASSESSEE WHEN THIS POI NTED DURING THE ASSESSMENT PROCEEDINGS. THE AO MADE AN ADDITION OF THE SAID AMOUNT OF RS. 2,14,309/- U/S 41(1)(A) OF THE ACT BY TREATI NG THE SAME AS CESSATION OF LIABILITY. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT THOUGH THE ADDITION WAS SUSTAINED BY THIS TRIBUNAL HOWEVER, THIS LIABILITY WAS SHOWN IN THE ORIGINAL RETURN OF INCOME BUT NOT IN REVISED RETURN OF INCOME. THE LD. AR HAS FURTHER CONTENDED THAT THE S AID LIABILITY WAS INADVERTENTLY SHOWN IN THE ORIGINAL RETURN OF INCOM E FILED IN RESPONSE TO NOTICE U/S 148 OF THE ACT BUT THE MISTAKE WAS RECTI FIED IN THE REVISED RETURN AND THEREFORE, IT CANNOT BE HELD AS CONCEALM ENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. AR HAS SUBMITTED THAT THE PENALTY PROCEEDINGS ARE DISTINCT AND SEPAR ATE FROM ASSESSMENT PROCEEDINGS AND FRESH ENQUIRIES MUST BE MADE BEFORE ARRIVING AT THE CONCLUSION OF THE CONCEALED INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. HE HAS ASSERTED THAT IT AN E STABLISHED LAW THAT ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 7 THOUGH THE FINDING RECORDED IN THE ASSESSMENT ORDER S ARE RELEVANT FOR PENALTY PROCEEDINGS, BUT THESE CANNOT BE THE FOUNDA TION FOR HOLDING THE ASSESSEE GUILTY OF CONCEALMENT OF PARTICULARS OF IN COME. PENALTY IS NOT AN AUTOMATIC OR MANDATORY FALLOUT OF ADDITION MADE DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THE ADDITION IN THE ASSESSMENT WOULD NOT IPSO FACTO CONSTITUTE DEFAULT OF CONCEALM ENT ON THE PART OF THE ASSESSEE. THE LD. AR HAS ALSO RELIED UPON THE D ECISION OF COORDINATE BENCH OF THIS TRIBUNAL DATED 31.10.2014 IN CASE OF SMT. DURGA DEVI SOMANI VS. ITO IN ITA NO. 672/JP/2011 AS WELL AS T HE DECISION DATED 17.10.2014 IN CASE OF SH. ASHISH GUPTA VS. ITO IN ITA NO. 671/JP/2011. THE LD. AR HAS ALSO RELIED UPON THE DE CISION OF HONBLE GUJARAT HIGH COURT IN CASEOF NATIONAL TEXTILES VS. CIT 249 ITR 125 AND SUBMITTED THAT IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DIS-PROVED AND CIRCUMSTANCES DO NOT LEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALS E, THE EXPLANATION CANNOT HELP THE DEPARTMENT BECAUSE THERE WILL BE NO MATERIAL TO SHOW THAT THE AMOUNT IN QUESTION WAS THE INCOME OF THE A SSESSEE. THE LD AR HAS ALSO PLACED RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. RELIANCE PETROPRODUCTS (P) LTD. 322 ITR 158. ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 8 5. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT IT IS A CLEAR CASE OF CONCEALMENT OF PARTICULARS OF INCOME WHEN THE ASSES SEE HAS NOT DISCLOSED THE SALES IN THE BOOKS OF ACCOUNTS WHICH WAS DETECTED DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, WHEN THE ASS ESSEE HAS COMMITTED DEFAULT OF NOT DISCLOSING THE CORRECT PAR TICULARS OF INCOME THEN, THE INCOME IN RESPECT OF THE UNDISCLOSED TURN OVER MAY BE COMPUTED ON THE BASIS OF APPLYING NET PROFIT RATE. THE PRIMARY FACT REMAINS UNDISTURBED TO THE EXTENT OF THE ADDITION S USTAINED BY THE LD. CIT(A) AND THEN BY THIS TRIBUNAL ON ACCOUNT OF CONC EALMENT OF PARTICULARS OF INCOME. FURTHER, THE ASSESSEE HAS SH OWN THE OUTSTANDING LIABILITY OF RS. 2,14,309/- WHICH WAS DENIED BY THE CREDITOR AND THEREFORE, TO THAT EXTENT THE ASSESSEE HAS AGAIN CO NCEALED THE PARTICULARS OF INCOME AND THE ADDITION MADE BY THE AO WAS SUSTAINED BY THIS TRIBUNAL. THE LD. DR HAS RELIED UPON THE OR DERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS AS UNDER:- CIT VS. SMT. CHANDRAKANTA 205 ITR 607 SHUSHIL KUMAR SARAD KUMAR VS. CIT 232 ITR 588 A.M. SHAH & CO. VS. CIT 238 ITR 415 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. IN THE REASSESSMENT ORDER PASSE D U/S 143(3) R.W.S. ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 9 147 OF THE ACT THE AO MADE A TOTAL ADDITION OF RS. 22,45,222/- ON ACCOUNT OF THREE ISSUES. THE LD. CIT(A) HAS GRANTED RELIEF TO THE ASSESSEE IN RESPECT OF THE ADDITION MADE U/S 69A OF THE ACT BY RESTRICTING THE SAME TO THE EXTENT OF 10% OF THE UN DISCLOSED SALES TREATING THE SAME AS THE PROFIT ON THE SAID TURNOVE R. THE REST OF THE ADDITIONS MADE BY THE AO WERE SUSTAINED BY THE LD. CIT(A). THOUGH THE REVENUE AS WELL AS ASSESSEE CHALLENGED THE ORDER OF THE LD. CIT(A) HOWEVER, THE TRIBUNAL HAS CONFIRMED THE QUANTUM APP EAL ORDER PASSED BY THE LD. CIT(A). THE DETAILS OF THE ADDITION MADE BY THE AO AND SUSTAINED BY THE LD. CIT(A) AND THEN BY THIS TRIBUN AL ARE AS UNDER:- S.NO. PARTICULARS ADDITION DISALLOWANCE MADE BY AO ADDITION SUSTAINED BY CIT(A) ADDITION SUSTAINED BY ITAT 1. ADDITIONS U/S 69A 20,29,000.00 98,790.00 ( AFTER ALLOWING CREDIT OF RS. 1,04,110/- BEING ADDITIONAL INCOME OFFERED BY ASSESSEE IN REVISED RETURN 98,790.00 2. ADDITION U/S 41(1)(A) 2,14,309.00 2,14,309.00 2,14,309.00 3. INTEREST INCOME 1,913.00 1,913.0 0 (NOT CHALLENGED) 1,913.00 22,45,222.00 3,15,012.00 3,15,012.00 THE FIRST ADDITION MADE BY THE AO WAS IN RESPECT O F THE CASH DEPOSITS IN THE BANK ACCOUNT OF THE ASSESSEE TO THE TUNE OF RS. 20,30,913/-WHICH WAS NOT DISCLOSED BY THE ASSESSEE IN THE RETURN OF INCOME. WHEN IT WAS POINTED OUT BY THE AO THE ASSESSEE CAME OUT WITH EX PLANATION THAT DUE ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 10 TO BONA-FIDE MISTAKE THE ASSESSEE COULD NOT DISCLOS E THE SAID BANK ACCOUNT AND INCOME ON THE SALE PROCEEDS DEPOSITED I N THE BANK ACCOUNT IN THE RETURN OF INCOME. THE AO MADE THE ADDITION O F THE ENTIRE AMOUNT OF DEPOSIT IN THE BANK ACCOUNT HOWEVER, THE LD. CIT (A) RESTRICTED THE SAID ADDITION BY TAKING THE PROFIT ELEMENT IN THE S ALES AT 10%. THUS, THE INCOME THOUGH ESTIMATED BY THE LD. CIT(A) BY APPLYI NG THE PROFIT @ 10% HOWEVER, THE PRIMARY REASON FOR ADDITION IS NON DISCLOSER OF THE SALES BY THE ASSESSEE EITHER IN THE BOOKS OF ACCOU NTS OR IN THE RETURN OF INCOME. ONLY WHEN THE AO DETECTED THE DEPOSIT MADE IN THE BANK ACCOUNT THROUGH AIR INFORMATION THE ASSESSEE ACCEPT ED THE SAID DEPOSIT MADE IN THE BANK ACCOUNT REPRESENTING THE SALES OF THE ASSESSEE. THEREFORE, IT IS A CLEAR CASE OF CONCEALMENT OF PAR TICULARS OF INCOME BY THE ASSESSEE. WE FIND THAT THE EXPLANATION OF THE A SSESSEE BEING BONA- FIDE MISTAKE IS WITHOUT ANY BASIS BECAUSE OF THE RE ASONS THAT THIS IS NOT A CASE OF NOT RECORDING THESE SALES IN THE BOOKS OF ACCOUNT BUT THE ASSESSEE HAS NOT DISCLOSED EVEN THE BANK ACCOUNT IN WHICH THE SAID DEPOSITS WERE MADE BY THE ASSESSEE. THEREFORE, WE D O NOT FIND THAT THE EXPLANATION FURNISHED BY THE ASSESSEE IN RESPECT OF THE NON DISCLOSER OF THIS TURNOVER IS A BONA-FIDE SO AS TO AVAIL THE BEN EFIT OF SECTION 273B OF THE INCOME TAX ACT OR EXPLANATION 1(B) TO SECTION 271(1)(1) OF THE ACT. ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 11 IT IS NOT A CASE WHEN THE ASSESSEE CLAIMED A DEDUC TION BUT COULD NOT SUBSTANTIATE BY THE ASSESSEE OR A CASE WHERE DURING THE ASSESSMENT PROCEEDING THE AO HAS MADE AN ADHOC/ESTIMATED DISAL LOWANCE OR A CASE WHERE THE ASSESSEE COULD NOT SATISFIED THE AO ABOUT THE CLAIM AND CONSEQUENTIALLY THE AO ASSESS THE INCOME OF THE ASS ESSEE ON THE BASIS OF ESTIMATION AND SUCH AN ADDITION MADE BY THE AO A S ESTIMATED BASIS WOULD NOT CONSTITUTE CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME SO AS TO ATTRACT T HE PROVISIONS OF SECTION 271(1)(C) OF THE ACT. IN THE CASE IN HAND T HE ASSESSEE HAS NOT DISCLOSED THE TURNOVER EITHER IN THE BOOKS OF ACCOU NTS OR THE IN THE RETURN OF INCOME AND THE BANK ACCOUNT IN WHICH THE SALES WAS DEPOSITED WAS ALSO NOT DISCLOSED THEREFORE, THE ADD ITION MADE DUE TO NON DISCLOSER OF THE SALES CANNOT BE EQUATED WITH T HE CASE WHERE ALL THE PARTICULARS WERE DISCLOSED BY THE ASSESSEE BUT BECA USE OF FAILURE ON THE PART OF THE ASSESSEE TO SATISFY THE AO THE ADDITION S WERE MADE BY THE AO. HENCE, WE DO NOT FIND ANY MERIT OR SUBSTANCE IN THE CONTENTION OF LD. AR OF THE ASSESSEE. THE DECISION RELIED UPON TH E LD. AR IN CASE OF CIT VS. KRISHI TYRE RETREADING & RUBBER INDUSTRIES (SUPRA) CANNOT BE APPLIED IN THE FACTS OF THE PRESENT CASE. ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 12 7. AS REGARDS THE ADDITIONS MADE U/S 41(1)(A) AND C ONSEQUENTLY PENALTY LEVIED BY THE AO U/S 271(1)(C) OF THE ACT W E FIND THAT THE ASSESSEE HAS SHOWN AN OUTSTANDING LIABILITY OF RS. 2,14,309/- TOWARDS M/S SHREE GURUKRIPA STONES PVT. LTD. THE AO VERIFIE D THIS OUTSTANDING LIABILITY FROM THE CREDITOR WHO HAS CONFIRMED THE R ECEIPT OF RS. 3 LACS ONLY AS AGAINST THE LIABILITY OF RS. 5,14,409/-. WH EN THIS WAS POINTED OUT TO THE ASSESSEE, THE ASSESSEE REVISED ITS RETURN OF INCOME AND SHOWN NIL LIABILITY TOWARDS M/S SHREE GURUKRIPA STONES PVT. LTD. THE AO MADE AN ADDITION OF THIS AMOUNT ON THE GROUND THAT THE ASSE SSEE IN THE ORIGINAL RETURN OF INCOME SHOWN BOGUS LIABILITY OF RS. 2,14, 309/-. THE ASSESSEE CLAIMED IN THE REVISED RETURN OF INCOME THAT THE BA LANCE OF RS. 2,14,309/- WAS REPAID BY THE ASSESSEE IN CASH APART FROM A SUM OF RS. 3 LACS PAID THROUGH CHEQUES TO M/S SHREE GURUKRIPA STONES PVT. LTD. WHO HAS CONFIRMED THE RECEIPT OF RS. 3 LACS WHICH W AS REPAID BY THE ASSESSEE THROUGH CHEQUES. HOWEVER, THE SAID CREDITO R HAS NOT ADMITTED RECEIPT OF REMAINING AMOUNT OF RS. 2,14,309/-. THUS , IT IS A CLEAR THAT BECAUSE OF THIS DISCREPANCY IN THE ACCOUNTS OF THE ASSESSEE AND THE CREDITOR THE AO HAS MADE THE ADDITION. THE LD. AR O F THE ASSESSEE HAS RELIED UPON THE DECISION OF COORDINATE BENCH OF THI S TRIBUNAL WHILE IN CASE OF SMT. DURGA DEVI SOMANI VS. ITO (SUPRA) WHER EIN THE COORDINATE ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 13 BENCH OF THIS TRIBUNAL DEALING WITH AN IDENTICAL IS SUE OF LEVY OF PENALTY AS HELD IN PARA 2.11 AS UNDER:- 2.11 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. WE ARE INCLINED TO DE LETE THE PENALTY ON FOLLOWING REASONS:- I. IT CLEARLY EMERGES THAT THE AMOUNTS IN QUESTION WERE 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 E NTRIES EXIST IN BOOKS AND IF THEY ARE HELD AS BOGUS THEN THEY BELON G TO EARLIER YEARS. BESIDES RELEVANT INFORMATION IS FURNISHED AL ONG WITH RETURN OF INCOME. II. THOUGH SURRENDERED IN ASSESSMENT THE ASSESSEE CAN TAKE FRESH PLEAS IN THE PENALTY PROCEEDINGS WHICH BY SET TLED LAW ARE DISTINCT AND SEPARATE. ASSESSEE CAN MAKE FRESH SUBM ISSIONS AND LEAD FRESH EVIDENCE. AO CAN TAKE FRESH INVESTIGATIO NS ON THE BASIS OF NEW PLEAS AND MATERIAL. THUS WHEN SURRENDERED IS TECHNICALLY REJECTED AND ASSESSEE GIVES REASONABLE EXPLANATION, PENALTY CAN BE ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. IT O, KISHANGARH 18 IMPOSED NOT ON THE SOLE BASIS OF ALLE GED REFUSED SURRENDER. AO HAS A DUTY TO CONSIDER THE MATERIAL A ND SUBMISSION OF THE ASSESSEE AND DECIDE WHETHER INCOME ON THE BA SIS OF THESE PLEAS WAS ASSESSABLE IN THE YEAR IN QUESTION. III. AO HAS HELD THAT THE SURRENDER IS NOT ACCEPTAB LE AND CHOSE TO ADD IT U/S 41(1) OF THE ACT. THUS TECHNICALLY EVEN THE SURRENDER IS NOT ACCEPTED AND UNILATERAL CESSATION OF LIABLE IS ASSUMED IGNORING THE PLEA THAT IN SUBSEQUENT YEARS TRADING LIABILITY AMOUNTS WERE PAID. IV. THE MAK DATA JUDGMENT RELIED BY LD DR ALSO HOL DS THAT 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 CONSIDERE D FOR PENALTY. IN THAT CASE ASSESSEE DID NOT OFFER ANY EXPLANATION EXCEPT A ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 14 SPECIOUS PLEA OF VOLUNTARY SURRENDER, WHICH ALSO ON FACTS WAS FOUND TO BE NOT VOLUNTARY. THUS IN MAK DATA CASE AL SO HONBLE SUPREME COURT DID NOT DISPENSE WITH THE CONSIDERATI ON OF EXPLANATION OF THE ASSESSE AND DERMINATION OF IMPOS ITION ON MERITS. V. THE DETAILS ABOUT TRADING LIABILITIES AND TRANS ACTIONS WERE REFLECTED IN THE ACCOUNTING STATEMENTS WHICH WERE P ART 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 VA RIATION IN THE CLAIMS OF THE ASSESSEE WILL NOT ENTAIL PENALTY. THI S JUDGMENT ALSO SUPPORTS THE CASE OF THE ASSESSEE, IN VIEW THEREOF ALSO THE PENALTY IN THIS CASE CAN NOT BE IMPOSED BY MERELY R EFERRING TO THE ALLEGED SURRENDER AND WITHOUT CONSIDERING THE EXPLA NATION. VI. ASSUMING WORST AGAINST ASSESSEE, PENALTY PROCEE DINGS BEING SEPARATE AND DISTINCT THE YEAR OF TAXABILITY CAN BE ITA NO.672/JP/2011 SMT. DURGA DEVI SOMANI VS. ITO, KISH ANGARH 19 DETERMINED DURING PENALTY PROCEEDINGS. LOOKING FROM THIS ANGLE THE AMOUNT WHICH AT ALL MAY BE CONSIDERED FOR PENAL TY ARE TRANSACTIONS OF THIS YEAR WHICH ARE RS. 2,45,000/- AND RS. 3,58,141/-. THESE ALSO IN OUR VIEW ARE NOT LIABLE F OR PENALTY AS ALL THE RELEVANT PARTICULARS ARE FILED ALONG WITH THE R ETURN. THUS, IN CONSIDERATION OF ENTIRETY OF FACTS, CIRCUM STANCES AND CASE LAWS AS RELIED ON BY ASSESSEE, WE ARE OF THE VIEW T HAT IT IS NOT A FIT CASE OF IMPOSITION OF PENALTY U/S 271(1) OF TH E ACT . THEREFORE, WE DIRECT TO DELETE THE PENALTY. IN CASE IN HAND THE FACT THAT THE ADDITION WAS MADE BY THE AO BECAUSE THE DIFFERENCE OF THE OUTSTANDING LIABILITY SHOWN I N THE ORIGINAL RETURN OF INCOME AND IN THE REVISED RETURN OF INCOME. HOWEVER , THE ASSESSEE HAS DISCLOSED THE RELEVANT FACTS WHICH WAS SUBJECTED TO THE VERIFICATION OF THE AO AND IT WAS ALSO BROUGHT ON RECORD THAT OUT O F THE OPENING ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 15 BALANCE OF THE LIABILITY OF RS. 5,14,409/- THE CRED ITOR HAS CONFIRMED THE RECEIPT OF RS. 3 LACS BUT DENY THE BALANCE AMOUNT O F RS. 2,14,309/-. THEREFORE, THE EXPLANATION OF THE ASSESSEE MAY NOT BE ACCEPTABLE HOWEVER, THE SAME IS BONAFIDE EXPLANATION THEN THE PENALTY ON SUCH ADDITION MADE BY THE AO IS NOT LEVIABLE. FOLLOWING THE ORDER OF THE COORDINATE BENCH OF THIS TRIBUNAL WE DELETE THE PEN ALTY IN RESPECT OF ADDITION MADE U/S 41(1)(A) OF THE ACT. 8. AS REGARDS THE PENALTY IN RESPECT OF THE ADDITIO N ON ACCOUNT OF INTEREST INCOME SINCE THE ASSESSEE HAS NOT CONTESTE D THIS ADDITION IN THE QUANTUM APPEAL AND ALSO HAS NOT FURNISHED ANY EXPLA NATION FOR NOT OFFERING THE SAID INCOME TO TAX, THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW LEVYING THE PENALTY AGAINST THE SAID ADDITION MADE BY THE AO. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26/02/2018 SD/- SD/- HKKXPAN FOT; IKY JKO (BHAGCHAND) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 26/02/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: ITA NO. 682/JP/2014 SHRI GIRDHAR GOPAL LAHOTI VS. ITO 16 1. VIHYKFKHZ@ THE APPELLANT- SHRI GIRDHAR GOPAL LAHOTI, KISHANGAR H. 2. IZR;FKHZ@ THE RESPONDENT - ITO, WARD, KISHANGARH. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 682/JP/2014} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR