BOBBY MUKHERJI, MUMBAI V. ACIT 11(2), MUMBAI

ITA 8395/MUM/2010

• Counselvise Citation: 839519914 RSA 2010
• Duration Of Justice: 3 year(s) 1 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-01-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 02-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: DR K SHIVARAM MR PITAMBER DAS
• Keywords: Wrong claim
• Section: 131

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , , , BEFORE SHRI P.M. JAGTAP , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEM BER . / ITA NO. 8395 / MUM./ 2010 ( / ASSESSMENT YEAR : 20 0 4 05 ) MR. BOBBY MUKHERJI 9/70 OLD ANAND NAGAR SAHAYOG CO OPERATIVE HSG. SOCIETY NEHRU ROAD, SANTACRUZ (E) MUMBAI 400 055 .. / APPELLANT V/S ASSTT. COMMISSIONER OF INCOME TAX CIRCLE 11(2) , MUMBAI .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER A A HPM2304C / ASSESSEE BY : DR. K. SHIVARAM / REVENUE BY : MR . PITAMBER DAS / DATE OF HEARING 06 . 01 .201 4 / DATE OF ORDER 15.01.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGAINST THE I MPUGNED ORDER DATED 27 TH SEPTEMBER 2010 , PASSED BY THE COMMISSIONER (APPEALS) III , MUMBAI, IN RELATION TO THE PENALTY PROCEEDINGS US/ 271(1)(C) OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ) FOR THE ASSESSMENT YEAR 200 4 0 5 . THE SOLE GROUND RAISED BY THE MR. BOBBY MUKHERJI 2 ASSESSEE IS, WHETHER OR NOT THE LEARNED COMMISSIONER (APPEALS) WAS JUSTIFIED IN CONFIRMING THE PENALTY OF ` 8,41,500 LEVIED UNDER SECTION 271(1)(C) BY THE ASSESSING OFFICER. 2 . FACTS IN BRIEF : THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN THE PROFESSION OF ARC HITECT AND INTERIOR DESIGNER AND HAS UNDERTAKEN VARIOUS PROJECTS IN ALL OVER THE COUNTRY. THE ASSESSEE HAS FILED HIS RETURN OF INCOME AT ` 28,07,762 ON 1 ST NOVEMBER 2004. THE ASSESSEE, IN THE BOOKS OF ACCOUNT, HAS SHOWN PROFESSIONAL FEES OF ` 12.50 LAKHS P AYABLE TO MR. BABULAL DOSHI AND COMMISSION OF ` 13.00 LAKHS PAYABLE TO M/S. SUJIT BRO THER S, WHICH IS A PROPRIETARY CONCERN OF MR. BABULAL DOSHI. THESE AMOUNTS REMAINED OUTSTANDING AS ON 31 ST MARCH 2004 AND WERE SHOWN UNDER THE HEAD SUNDRY CREDITORS . IN A SSESSEES CASE, A SURVEY ACTION WAS CONDUCTED ON 26 TH SEPTEMBER 2006 BY THE I.T. DEPARTMENT AND STATEMENT OF THE ASSESSEE WAS RECORDED UNDER SECTION 131 . IN THE COURSE OF THE SCRUTINY PROCEEDINGS, THE ASSESSEE IN SUPPORT OF HIS CLAIM SUBMITTED THAT MR. BAB ULAL DOSHI, WAS APPOINTED TO CO ORDINATE VARIOUS ACTIVITIES CONCERNING THE ASSESSEES BUSINESS. AN APPOINTMENT LETTER DATED 1 ST APRIL 2003 TO MR. BABULAL DOSHI WAS ALSO FILED WHICH GIVES THE DETAILS OF THE WORK TO BE DONE BY HIM. SIMILARLY, FOR THE PAYMENT OF COMMISSION, APPOINTMENT LETTER WAS ALSO FILED WHEREIN D UTIES WHICH WERE TO BE DONE BY THE SAID PERSON WERE ELABORATED. THE ASSESSEE ALSO FILED A COPY OF THE ACCEPTANCE LETTER BY MR. BABULAL DOSHI AND ALSO A DEBIT NOTE RAISED BY HIM. HOWEVER, TO VERIFY THE SAME, T HE ASSESSING OFFICER ISSUED SUMMONS UNDER SECTION 131 TO MR. BABULAL DOSHI, TO APPEAR IN PERSON, HOWEVER, HE COULD NOT APPEAR BEFORE THE ASSESSING OFFICER. ON THE APPOINTED DATE, MR. BABULAL DOSHI SUBMITTED A LETTER BEFORE THE ASSESSING OFFICER , ACCEPTING THE PAYMENT WHICH WAS TO BE PAID TO HIM IN TERMS OF THE APPOINTMENT LETTER ALONG WITH THE DEBIT NOTE . THE ASSESSING OFFICER MR. BOBBY MUKHERJI 3 HELD THAT THE ASSESSEE HAS NOT GIVEN ANY PROOF OF RENDERING OF SERVICES BY MR. BABULAL DOSHI, AND ACCORDINGLY, TREATED TH E SAID CLAIM OF THE ASSESSEE AS NON GENUINE. THE ASSESSING OFFICER ALSO BROUGHT ON RECORD THE STATEMENT RECORDED ON OATH OF THE ASSESSEE AT THE TIME OF SURVEY , WHEREIN THE ASSESSEE WAS UNABLE TO PROVIDE THE PROPER DETAILS AND THE RELEVANT EVIDENCES. THE AS SESSEE , LATER ON, OFFERED TO TAX THE SAID AMOUNT IN THE ASSESSMENT YEAR 2007 08 UNDER SECTION 41(1). AFTER GIVING DETAIL REASONS IN THE ASSESSMENT ORDER , THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE ASSESSEE. DURING THE FIRST APPELLATE PROCEEDINGS, TH E LEARNED COMMISSIONER (APPEALS) TOO CONFIRMED THE ASSESSING OFFICERS FINDINGS. BEFORE THE TRIBUNAL, THE ASSESSEES CLAIM FOR ALLOWING THE SAID EXPENDITURE WAS ALSO NOT ACCEPTED ON THE FOLLOWING REASONS: 7. AGGRIEVED ASSESSEE IN RESPECT OF DISALLOWAN CE OF FEES PAYABLE TO SHRI BABULAL DOSHI AND SUJIT BROTHERS, THE ASSESSEE IS ON APPEAL BEFORE US. THE ASSESSEE POINTED OUT THAT THE REMUNERATION PAYABLE TO SHRI BABULAL DOSHI AND SUJIT BROTHERS HAVE BEEN ANSWERED IN THE COURSE OF SURVEY IN REPLY TO QUESTIO N NO.23, THERE THEY HAVE EXPLAINED THE SCOPE OF WORK AND THE REMUNERATION PAYABLE TO THE PARTIES AND THE REASON FOR NON PAYMENT, IF NOT PAID. IN RESPECT OF SHRI BABULAL DOSHI AND SUJIT BROTHERS THE SCOPE OF WORK HAS BEEN STATED AS TO CO ORDINATE BETWEEN TH E ASSESSEE AND THE CLIENT TO ENSURE SMOOTH RUNNING OF THE PROJECT AND TIMELY RELEASE OF PAYMENTS AND CLAIM. EVEN ASSUMING THAT THE TWO PERSONS HAVE BEEN APPOINTED TO RENDER THE SERVICES MENTIONED IN REPLY TO THE QUESTION NO.23 OF THE SURVEY, WE FIND THAT B OTH THE PROJECTS HAVE NOT TAKEN OFF SERIOUSLY. WHILE THIS BEING SO, THERE IS NO QUESTION OF SHRI BABULAL DOSH AND SUJIT BROTHERS RENDERING ANY SERVICE IN CONNECTION WITH SMOOTH RUNNING OF THE PROJECT AND TIMELY RELEASE OF PAYMENTS AND CLAIM. IT IS FOR THIS REASON THAT ASSESSEE DID NOT PUT ANY REMUNERATION TO THE TWO PARTIES AND REVERSED THE CLAIM OF EXPENDITURE AND OFFERED AS INCOME IN THE SUBSEQUENT ASSESSMENT YEAR. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT EVEN IF THE AGREEMEN T TO THE PARTIES ARE GENUINE, AS THE PARTIES HAVE NOT RENDERED ANY SERVICES DUE TO THE PROJECTS AND NOT TAKING OFF, THERE IS NO QUESTION OF ANY PAYMENT ACCRUING DUE TO THEM FOR THE SERVICES RENDERED BY THEM. WE THEREFORE UPHOLD THE ORDER OF LOWER AUTHORITI ES DISALLOWING THE CLAIM AMOUNT PAYABLE TO SHRI BABULAL DOSHI ( ` 12,50,000) AND SUJIT BROTHERS ( ` 13,00,000), AS THE CLAIM OF EXPENDITURE BY THE ASSESSEE IS BEING DISALLOWED FOR THIS YEAR NATURALLY REVERSAL OF THE SAME IN THE SUBSEQUENT YEAR CANNOT BE MR. BOBBY MUKHERJI 4 ASSE SSED AS INCOME UNDER SEC.41(1). WITH THE RESULT THE ASSESSEES APPEAL ON THIS ISSUE IS DISMISSED. 3 . DURING THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSING OFFICER, AFTER RECORDING THE REASONS GIVEN BY THE ASSESSING OFFICER AS WELL AS BY THE LEARNED COMMIS SIONER (APPEALS) IN THE QUANTUM PROCEEDINGS HA S LEVIED THE PENALTY. THE REASONING GIVEN BY THE ASSESSING OFFICER TO LEVY THE PENALTY HAS BEEN DISCUSSED FROM PAGE 7 TO 11 OF THE PENALTY ORDER , WHEREIN DETAIL REASONS HAVE BEEN GIVEN TO JUSTIFY THE LEVY OF P ENALTY. 4 . THE LEARNED COMMISSIONER (APPEALS) TOO HAS CONFIRMED THE ELABORATED REASONING GIVEN BY THE ASSESSING OFFICER AND HAS ALSO TOOK NOTE OF THE FACT THAT THE TRIBUNAL HAS ALSO CONFIRMED THE SAID ADDITION. 5 . BEFORE US, THE LEARNED COUNSEL, DR. K. SHIVARA M, ON BEHALF OF THE ASSESSEE, SUBMITTED THAT THE ASSESSEES CLAIM FOR THE EXPENDITURE WAS SUPPORTED BY VARIOUS EVIDENCE WHICH WERE IN THE FORM OF APPOINTMENT LETTER TO MR. BABULAL DOSHI WHICH PROVIDES THE DETAILS OF THE WORK / DUTIES WHICH WERE TO BE PERFO RMED BY HIM, ACCEPTANCE LETTER OF MR. BABULAL DOSHI, AND DEBIT NOTE RAISED BY HIM. ALL THESE DOCUMENTS GO TO SHOW THAT THE ASSESSEES CLAIM FOR EXPENDITURE IS GENUINE. BESIDES THIS, IN RESPONSE TO THE SUMMONS ISSUED UNDER SECTION 131, THE SAID PERSON HAS C ONFIRMED THE SAID APPOINTMENT AND THE DEBIT NOTE RAISED BY HIM WITH REGARD TO THE PAYMENT OF PROFESSIONAL FEES AND COMMISSION INCOME , EVEN THOUGH HE DID NOT PERSONALLY APPEAR. THE REASON FOR NOT ACTUALLY PASSING OF THE AMOUNT TO HIM WAS ALSO CATEGORICALLY GIVEN BEFORE THE ASSESSING OFFICER , WHICH WAS MAINLY ON THE GROUND THAT THE NUMBER OF PROJECTS WHICH WERE PROMISED BY MR. BABULAL DOSHI, DID NOT MATERIALIZE AND IT WAS FOR THIS REASON THAT THE ASSESSEE HAD OFFERED TO TAX THE SAID AMOUNT IN THE ASSESSMENT Y EAR MR. BOBBY MUKHERJI 5 2007 08 UNDER SECTION 41(1). IN SUPPORT OF THIS CONTENTION, HE DREW OUR ATTENTION TO VARIOUS DOCUMENTS FILED IN THE PAPER BOOK GIVEN IN PAGE 40 TO 47. HE FURTHER SUBMITTED THAT THE TRIBUNAL HAS CONFIRMED THE SAID DISALLOWANCE MAINLY ON THE GROUND THAT THE PURCHASE AND THE PROJECTS FOR WHICH THE PERSONS WERE APPOINTED HAVE NOT TAKEN OFF AND, THEREFORE, THERE IS NO QUESTION OF RENDERI NG ANY SERVICE BY THESE PERSONS. T HE TRIBUNAL HAS EVEN ACKNOWLEDGED THIS FACT THAT IN THE SUBSEQUENT YEAR, THIS AMOUNT HAS BEEN ASSESSED UNDER SECTION 41(1). UNDER THESE CIRCUMSTANCES, IT CANNOT BE HELD THAT THE ASSESSEES CLAIM IS NOT BONAFIDE OR THERE IS ANY INTENTION TO EVADE ANY TAX. ONCE THE AMOUNT HAS BEEN TAXED IN THE SUBSEQUENT YEAR, THERE IS NO QUESTION OF LEVYING THE PENALTY. IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF HON'BLE JURISDICTIONAL HIGH COURT IN CIT V/S NALIN P. SHAH (HUF), ITA NO.49 OF 2013, ORDER DATED 4 TH MARCH 2013 AND THE DECISION OF THE DELHI HIGH COURT IN KARAN RAGHAV EXPORTS PVT. LTD . V/S CIT, [2012] 349 ITR 112 (DEL.), WHEREIN IT WAS HELD THAT IF THE CLAIM FOR DEDUCTION IS DEBATABLE, PENALTY COULD NOT BE LEVIED. 6 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, AFTER REFERRING TO THE DETAIL REASONING GIVEN BY THE ASSESSING OFFICER, SUBMITTED THAT THE ASSESSEE COULD NOT PROVE THE GENUINE NESS OF THE CLAIM OF THE EXPENDITURE AND EVEN THE CONCERNED PERSON COULD NOT BE EXAMINED AS HE DID NOT APPEAR BEFORE THE ASSESSING OFFICER IN RESPONSE TO SUMMONS ISSUED UNDER SECTION 131. THE ASSESSING OFFICER HAVE MADE DETAIL ENQUIRY AND FOUND THAT MR. BABULAL DOSHI, WAS A CLOTH TRADER AND NOT AN ARCHITECT AND MERE CONFIRMATION WILL NOT PROVE THE GENUINENESS OF THE EXPENDITURE. IT WAS ONLY WHEN THE ASSESSEE COULD NOT PROVE THE GENUINENESS OF THE CLAIM THAT THE CLAIM THAT THE ASSESSEE BEFORE THE ASSESSING OFFICER OFFERED TO TAX THE SAID AMOUNT AGGREGATING TO ` 25.50 LAKHS UNDER SECTION 41(1) IN THE ASSESSMENT MR. BOBBY MUKHERJI 6 YEAR 2007 08. MERELY BECAUSE THE ASSESSEE HAS OFFERED THE AMOUNT FOR TAX IN THE SUBSEQ UENT ASSESSMENT YEAR , IT WILL NOT ABSOLVE THE ASSESSEE FROM THE PENALTY PROCEEDINGS. HE DREW OUR ATTENTION TO THE VARIOUS REASONING GIVEN BY THE ASSESSING OFFICER IN THE PENALTY ORDER AS WELL AS IN THE ASSESSMENT ORDER AND SUBMITTED THAT THE PENALTY HAS RI GHTLY BEEN LEVIED ON ACCOUNT OF FALSE CLAIM OF THE EXPENDITURE WHICH REMAIN UNSUBSTANTI ATED . IN SUPPORT OF HIS CONTENTION, HE RELIED UPON THE DECISION OF THE DELHI HIGH COURT IN CIT V/S ZOOM COMMUNICATIONS PVT. LTD., [2010] 327 ITR 510 (DEL.). LASTLY, HE S UBMITTED THAT IF THE SURRENDER HAS BEEN MADE AFTER ENQUIRY BY THE ASSESSING OFFICER, THEN ALSO LEVY OF PENALTY IS JUSTIFIED. IN SUPPORT OF HIS CONTENTION, HE STRONGLY RELIED ON THE DECISION OF LUCKNOW BENCH OF ALLAHABAD HIGH COURT IN CIT V/S RAKESH SURI, [ 2011] 331 ITR 458 ( LUCK. ) 7 . WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. THE ASSESSEE, IN THE PRESENT CASE, IS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING AND IN HIS BOOKS OF ACCOUNT HAS SHOWN PROFESSIONAL FEES PAYABLE TO MR. BABULAL DOSHI OF ` 12.50 CRORES AND COMMISSION CHARGES PAYABLE TO M/S. SURJIT BRO THER S FOR ` 13 LAKHS WHICH IS ALSO A PROPRIETARY CONCERN OF MR. BABULAL DOSHI , FOR PROVIDING SERVICES WITH RESPECT OF VARIOU S PROJECTS OF THE ASSESSEE. THE SAID AMOUNT HAS BEEN SHOWN IN THE BALANCE SHEET UNDER THE HEAD SUNDRY CREDITOR AS ON 31 ST MARCH 2004. IN SUPPORT OF SUCH A CLAIM, THE ASSESSEE HAS FILED APPOINTMENT LETTER GIVING DETAILS OF THE ACTIVITIES WHICH ARE TO BE C ARRIED OUT BY THE SAID PERSON ALONG WITH ACCEPTANCE OF LETTER AND DEBIT NOTE FOR THE AMOUNT PAYABLE AS PROFESSIONAL FEES AND COMMISSION. HOWEVER, IN THE COURSE OF ASSESSMENT PROCEEDINGS, THE SAID PERSON COULD NOT APPEAR BEFORE THE ASSESSING OFFICER IN RESP ONSE TO THE SUMMONS ISSUED UNDER SECTION 131 , INSTEAD A CONFIRMATION LETTER WAS MR. BOBBY MUKHERJI 7 FILED ALONG WITH THE DOCUMENT OF APPOINTMENT LETTER AND DEBIT NOTE. THE ASSESSING OFFICER DISALLOWED THE SAID AMOUNT MAINLY ON THE GROUND THAT (I) THERE IS NO EVIDENCE OF ACTUA L SERVICES RENDERED BY THESE PARTIES; (II) NO PRUDENT BUSINESSMAN WILL PERFORM THE DUTIES WITHOUT RECEIVING ANY AMOUNT; (III) MR. BABULAL DOSHI, IS A CLOTH TRADER NOT CONNECTED WITH THE ASSESSEES BUSINESS; AND (IV) DURING THE COURSE OF SURVEY, THE ASSESSE E COULD NOT GIVE PROPER DETAILS OF THE VARIOUS OUTSTANDING SHOWN IN THE BALANCE SHEET. SUCH A FINDING OF THE ASSESSING OFFICER HAS ALSO BEEN CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS). HOWEVER, THE TRIBUNAL HAS CONFIRMED THE SAID FINDINGS MAINLY ON TH E GROUND THAT THE PROJECTS FOR WHICH THE SAID PARTIES WERE REQUIRED TO RENDER THE SERVICES COULD NOT TAKE OFF AND, THEREFORE, THERE IS NO QUESTION OF PAYMENT ACCRUING TO THEM. THE TRIBUNAL ALSO OBSERVED THAT EVEN IF THE AGREEMENT TO THE PARTIES ARE GENUINE , HOWEVER, THEY HAVE NOT RENDERED ANY SERVICE AND MORE SO WHEN THE SAID AMOUNT HAS BEEN OFFERED FOR TAX IN THE SUBS EQUENT YEAR UNDER SECTION 41(1), THEREFORE, THE ASSESSING OFFICER HAS RIGHTLY DISALLOWED IN THIS YEAR. IN THE PENALTY PROCEEDINGS, THE ASSESS ING OFFICER HAS MAINLY RELIED UPON THE OBSERVATIONS AND THE REASONING GIVEN BY THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER (APPEALS) IN THE QUANTUM PROCEEDINGS THAT THE EVIDENCE OF ACTUAL SERVICE S RENDERED AND OTHER DETAILS HAVE NOT BEEN PROV IDED. 8 . IT IS NOW ALMOST A SETTLED PREPOSITION OF LAW THAT T HE FINDINGS GIVEN IN THE QUANTUM PROCEEDINGS MAY NOT BE A CONCLUSIVE OR FINAL VERDICT INSOFAR AS THE PENALTY PROCEEDINGS ARE CONCERNED, BECAUSE AT THE PENALTY STAGE, PLEA CAN BE TAKEN RELYING UPON THE EXISTING MATERIAL OR EXPLANATION TO PROVE THAT THE ASSESSEE IS NOT GUILTY OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. EVEN THOUGH THE ASSESSEES CLAIM FOR THE EXPENDITURE HAS BEEN DISALLOWED, MR. BOBBY MUKHERJI 8 HOWEVER, THE EVIDENCE WHICH HAVE BEEN FILED BY THE ASSESSEE IN SUPPORT OF SUCH A CLAIM HAVE NOT BEEN FOUND TO BE BOGUS OR FALSE. THE MAIN CASE OF THE ASSESSING OFFICER IS THAT SUCH EVIDENCE S HAVE NOT BEEN CORROBORATED BY THE SAID PERSON THROUGH PERSONAL APPEARANCE EVEN THOUGH HE HAS DIRECTLY FILED THE CONFIRMATION BEFORE HIM. THE ASSESSEES EXPLANATION AND THESE EVIDENCES IN THE PENALTY PROCEEDINGS HAVE NOT BEEN REBUTTED BUT HAS BEEN DISBELIEVED ON THE GROUND THAT THE SAME COULD NOT BE CORROBORATED FURTHER OR REMAIN UNSUBSTANTIATED. THE DEGREE OF PROOF UNDER THE E XPLANATION 1 TO SECTION 271(1)(C) IS THAT OF A CIVIL SUIT VIZ. PREPONDERANCE OF PROBABILITY. THE EXPLANATION RAISES A REBUTABLE PRESUMPTION WHICH COULD BE DISCHARGED IN A GIVEN CASE BY POINTING OUT THE FACTORS AND THE MATERIA L IN FAVOUR OF THE ASSESSEE. IN THE PRESENT CASE, NONE OF THE MATERIAL ADDUCED BY THE ASSESSEE HAS BEEN FOUND TO BE FALSE AND SO MUCH SO MR. BABULAL DOSHI, HAS CONFIRMED THE TRANSACTION BEFORE THE ASSESSING OFFICER WHICH GOES TO SHOW THAT HE WAS NOT A BOGU S PERSON, ATLEAST THIS IS NOT THE CHA R GE OF THE REVENUE AND HE HAS ALSO ACCEPTED THE PAYMENT DUE TO HIM. THIS ITSELF POINTS OUT A PROBABLE SITUATION , WHEREIN , THE ASSESSEE WAS LIABLE TO PAY THE AMOUNT IN TERMS OF AGREEMENT TO THE SAID PARTY. HOWEVER, THE S AID PAYMENTS HAVE NOT BEEN MADE H AS ALSO BEING BROUGHT ON RECORD AS THE SAID PARTY COULD NOT FULFILL THE OBLIGATIONS ENUMERATED IN TERMS OF THE AGREEMENT. THE SAID AMOUNT HAS ULTIMATELY BEEN OFFERED TO TAX IN THE ASSESSMENT YEAR 2007 08 AND TO THIS EXTENT, THERE IS NO LOSS TO THE REVENUE ON THE SAID AMOUNT AS THE TAX HAS BEEN PAID IN SUBSEQUENT YEAR AND ALSO DISALLOWANCE HAS BEEN MADE IN THIS YEAR . ALL THESE FACTORS CAN LEAD TO THE INFERENCE THAT BALANCE OF PROBABILITIES IS IN FAVOUR OF THE ASSESSEE INSOFAR AS THE EXPLANATION IS CONCERNED IN THE PENALTY PROCEEDINGS. THUS, ON THE FACTS OF THE CASE AND AS PER THE DISCUSSION MADE ABOVE, WE ARE OF THE OPINION THAT LEVY OF PENALTY MR. BOBBY MUKHERJI 9 UNDER SECTION 271(1)(C) ON THE AFORESAID AMOUNT IS NOT JUSTIFIED. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND DELETE THE PENALTY. THUS, THE GROUND RAISED BY THE ASSESSEE IS ALLOWED. 9 . 9. IN THE RESULT, ASSESSEES APPEAL IS TREATED AS ALLOWED. 15 TH JANUARY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JANUARY 2014 SD / - . . P.M. JAGTAP AC COUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 15 TH JANUARY 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CI T(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI