RKHS FOOD ALLIED SERVICES P.LTD ( FORMELRY KNWON A SHRM FOOD AND ALLIED SERVICES P.LTD), MUMBAI V. ITO 8(3)(1), MUMBAI

ITA 887/MUM/2013

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3758 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2000-2001
• Appeal Filed On: 01-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIYA
• Keywords: Question of law; Capital receipt
• Section: 147; 271(1)(c); 143(3)

Judgement Text

IN THE INC OME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE HONBLE SH. SHAMIM YAHYA , AM & HONBLE SH. SANDEEP GOSAIN, JM ./ I.T.A. NO . 887/MUM/2013 ( / ASSESSMENT YEAR: 2000 - 01 ) RKHS FOOD ALLIED SERVICES PVT. LTD. (FORMERLY KNOWN A SHRM FOOD AND ALLIED SERVICES PVT. LTD.), KOLSITE HOUSE, 1 ST FLOOR 31 - 1, SHAH INDUSTRIAL ESTATE, OFF VEERA DESAI ROAD, ANDHERI(W), MUMBAI 400 053 / VS. ITO WARD - 8(3)(1 ) , AAYAKAR BHAVAN, M. K. ROAD, MUMBAI - 400 020 ./ ./ PAN NO. A A ACT2529E ( / APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : NONE / RESPONDENTBY : SHRI CHAITANYA ANJARIYA , D R / DATE OF HEARING : 05.12 .2018 / DATE OF PRONOUNCEMENT : 11.02.2019 / O R D E R PER SANDEEP GOSAIN, J UDICIAL MEMBER : THE P RESENT APPE AL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF LD. CIT (APPEAL) 18 , MUMBAI DATED 07.11.2012 F OR AY 2000 - 01 ON THE GROUNDS MENTIONED HEREIN BELOW: - 2 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. I. PENALTY LEVIED UNDER SECTION 271(1)(C) OF THE ACT RS. 25,02,500: 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT(A)J ERRED IN CONFIRMING PENALTY IMPOSED UNDER SECTION 271(L)(C) OF THE ACT AT RS. 25,02,500 FOR ALLEGED FURNISHING OF INACCURATE PARTICULARS OF INCOME OF THE APPELLANT. 1.2 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) FAILED TO APPRECIATE THE EXPLANATION OFFERED BY THE APPELLANT I N ITS PROPER CONTEXT. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE APPELLANT IS NOT GUILTY OF FURNISHING ANY INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME AND HENCE, THE LEVY OF PENALTY UNDER SECTION 271(L)(C) OF THE ACT IS UNJUSTIFIED AND UNREASONABLE. 1.3 THE APPELLANT HAS DISCLOSED ALL THE RELEVANT FACTS ACCURATELY AND IN A TRANSPARENT MANNER IN SUPPORT OF ITS CLAIMS AND CONTENTIONS AND HENCE, THE PROVISIONS OF SECTION 271(L)(C) OF THE ACT ARE NOT AT ALL APPLICABLE. IN VIEW OF THE AB OVE, THE APPELLANT PRAYS THAT THE PENALTY LEVIED UNDER SECTION 271(L)(C) OF THE ACT, BY THE LEARNED ASSESSING OFFICER AND CONFIRMED BY THE 3 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. CIT(A), MAY KINDLY BE CANCELLED AS THE SAME IS UNWARRANTED AND UNJUSTIFIED. THE APPELLANT HEREBY CRAVES THE LEAVE TO ADD TO, ALTER OR AMPLIFY THE ABOVE GROUNDS OF APPEAL WHICH ARE WITHOUT PREJUDICE TO EACH OTHER, AS AND WHEN AN OCCASION MAY ARISE AT THE TIME OF HEARING. I, STEPHAN KONIG, THE DIRECTOR OF RKHS FOOD AND ALLIED SERVICES PVT. LTD., THE APPELLANT, DO HEREBY DE CLARE THAT WHAT IS STATED ABOVE IS TRUE TO THE BEST OF MY INFORMATION AND KNOWLEDGE. 2. AT THE VERY OUTSET, IT IS NOTICED THAT NONE HAS APPEARED ON BEHALF OF ASSESSEE IN SPITE OF CALLS AND EVEN NO APPLICATION FOR ADJOURNMENT WAS MOVED. FROM THE RECORD, WE NOTICED THAT INITIALLY THE ASSESSEE HAD APPEARED THROUGH REPRESENTATIVE AND MOVED AN APPLICATION FOR SEEKING ADJOURNMENT ON SEVERAL DATES, BUT LATER ON, NONE APPEARED ON BEHALF OF THE ASSESSEE. THE NOTICE THROUGH RPAD WAS SENT UPON THE ADDRESS SUPPLIED BY THE ASSESSEE. HOWEVER THE SAME WAS RETURNED BACK WITH THE REMARKS LEFT BY POSTAL AUTHORITIES. IN SUCH CIRCUMSTANCES, ASSESSEE WAS UNDER OBLIGATION TO PROVIDE NEW ADDRESS BUT THE SAME HAS NOT 4 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. BEEN DONE. SINCE THE APPEAL PERTAINS TO THE YEAR 2013, THERE FORE WE HAVE NO OTHER OPTION EXCEPT TO PROCEED THE ASSESSEE EX - PARTE. ON THE OTHER HAND L D. DR IS PRESENT IN THE COURT AND IS READY WITH ARGUMENTS. THEREFORE WE HAVE DECIDED TO PROCEED WITH THE HEARING OF THE CASE EX - PA RTE WITH THE ASSISTANCE OF THE L D. DR AND THE MATERIAL PLACED ON RECORD. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSMENT WAS COMPLETED U/S 147 R/W SEC. 143(3) ON 28.12.2007 BY TREATING THE AMOUNT OF RS. 65,00,0007 - AS INCOME ON ACCOUNT OF RECEIPT NOT COVERED UNDER EXEMPT CATEGORY U/S 10(3) OF THE IT. ACT. THE TOTAL INCOME WAS ASSESSED AT RS. 7,39,748/ - AND PENALTY PROCEEDINGS U/S 271(1)(C) WERE INITIATED. AGAINST THIS ORDER, THE ASSESSEE COMPANY PREFERRED AN APPEAL BEFORE LD. CIT(A ). THE ADDITION OF RS. 65,00,000 / - MADE BY THE A.O. W AS UPHELD. SUBSEQUENTLY, THE A.O. HAS ISSUED SHOW - CAUSE NOTICE TO THE ASSESSEE TO EXPLAIN AS TO WHY THE PENALTY MAY NOT BE LEVIED U/S 271(1)(C). IN R ESPONSE, THE AR OF THE ASSESSEE HAS SUBMITTED ITS REPLY WHICH IS REPRODUCED AT PAGE 2 OF THE PENALTY ORDER. A FTER CONSID ERING THE REPLY OF THE ASSESSEE , THE A.O. HAS HELD THAT THE ASSESSEE BEING A COMPANY IS 5 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. REQUIRED TO MAINTAIN ITS BOOKS OF ACCOUNTS WHICH REFLECT TRUE PICTURE OF TRANSACTIONS. AS HELD IN THE CASE OF L.K. SHEIKH MOHAMMED BROS. VS. CIT (1977) 110 I TR 808 (MADRAS) THAT IF DURING THE COURSE OF ASSESSMENT PROCEEDINGS SUFFICIENT MATERIAL IS GATHERED TO CONCLUDE THAT THE ASSESSEE'S ACT WAS OF CONSCIOUS CONCEALMENT, PENALTY IS LEVIABLE. THE A.O. HAS ALSO RELIED ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF UNION OF INDIA VS. DHERMENDRA TEXTILE PROCESSOR 306 ITR 277. IN VIEW OF THESE FACTS, THE A.O. HAS CONCLUDED THAT THE ASSESSEE COMPANY HAD MADE CONSCIOUS ATTEMPT TO EVADE TAXES ON ITS BUSINESS PROFITS. THUS, THE APPELLANT HAS SUBMITTED INACCURAT E PARTICULARS OF INCOME WHICH HAS RESULTED INTO CONCEALMENT OF INCOME AND LEVIED PENALTY OF RS. 25,02,500/ - . AGGRIEVED BY THE ORDER OF AO, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) AND LD. CIT(A) AFTER CONSIDERING THE CASE OF BOTH THE PARTIES, DISMISSED THE APPEAL OF THE ASSESS EE . NOW BEFORE US, THE ASSESSEE HAS PREFERRED THE PRESENT APP EAL BY RAISING THE ABOVE GROUND . 6 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. 4 . THE SOLITARY GROUND S RAISED BY THE ASSESSEE RELATES TO CHA LLENGING THE ORDER OF LD. CIT(A) IN CONFIRMING THE PENALTY IMPOSED UNDER SECTION 271(L)(C) OF THE ACT AT RS. 25,02,500 FOR ALLEGED FURNISHING OF INACCURATE PARTIC ULARS OF INCOME OF THE ASSESSEE . 5 . WE HAVE HEARD LD. DR AND WE HAVE ALSO PERUSED THE MATERIAL PLACED ON RECORD AS WELL AS THE ORDERS PASSED BY REVENUE AUTHORITIES. BEFORE WE DECIDE THE MERITS OF THE CASE, IT IS NECESSARY TO EVALUATE THE ORDERS PASSED BY LD. CIT(A). THE LD. CIT(A) HAS DEALT WITH THE ABOVE GROUND RAISED BY THE ASSESSEE IN PARA NO. 1.3 OF ITS ORDER AND THE SAME IS REPRODUCED BELOW: - 1.3. I HAVE CONSIDERED THE SUBMISSIONS OF APPELLANT, ORDER OF THE A.O. AND FACTS OF THE CASE CAREFULLY. THE BRIEF FACTS OF THE CASE ARE THAT - THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF PROVIDING CATERING, HOUSEKE EPING AND ALLIED SERVICES. THE ASSESSEE COMPANY WAS A JOINT VENTURE BETWEEN SHRM GROUP OF FRANCE AND TAJ GROUP IN THE LINE OF INTUITIONAL FOOD SERVICES. 7 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. HOWEVER, LATER ON, SHARE HOLDING OF TA] GROUP WAS ACQUIRED BY RADHAKRISHNA GROUP AND SHRM GROUP REMAINE D CONTINUED IN THE JOINT VENTURE. GROUP SHRM - FRANCE ONE OF THE SHARE HOLDERS HAD PAID TO BANQUE NATIONALE DE PARIS, FRANCE, AN AMOUNT OF RS. 73,33,834.70 PURSUANT - A INVOCATION OF A GUARANTEE PROVIDED IN CONNECTION WITH OVERDRAFT FACILITIES EXTENDED TO T HE ASSESSEE COMPANY BY BANQUE ANONALE DE PARIS. INDIA THE AMOUNT SO PAID HAD BEEN WAIVED BY GROUPE SHRM. THE ASSESSEE COMPANY WRITTEN BACK AN AMOUNT OF RS. 8,33.834.70 REPRESENTING THE INTEREST COMPONENT TO THE PROFIT & LOSS ACCOUNT UNDER THE HEAD OTHER IN COME HOWEVER, THE BALANCE AMOUNT OF RS 65.00,000/ - RECEIVED FROM GROUP - SHRM AND WAIVED OFF WAS TAKEN DIRECTLY TO THE CAPITAL RESERVE ACCOUNT WITHOUT ENTERING THE PROFIT & LOSS ACCOUNT. DURING THE ASSESSMENT PROCEEDINGS, THE A.O. HAS NOTICED THAT THE AS SESSEE COMPANY HAS TAKEN WAIVED LOAN OF RS. 65,00,000/ - TO THE CAPITAL RESERVE ACCOUNT IN PLACE OF ROUTING THROUGH THE PROFIT & LOSS ACCOUNT. WHEN ENQUIRED, THE AR OF THE APPELLANT HAS SUBMITTED THAT IT IS A CAPITAL RECEIPT AND NOT TAXABLE, THEREFORE, IT W AS DIRECTLY TAKEN TO THE CAPITAL RESERVE ACCOUNT. THE 8 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. A.O. HAS NOT ACCEPTED THE ARGUMENT .OF THE APPELLANT AND MADE ADDITION U/S 41(1) OF THE IT. ACT AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). ACTION OF THE A.O. WAS CONFIRMED BY CIT(A). SUBSEQUE NTLY, THE A.O. HAS ISSUED SHOW - CAUSE NOTICE AND ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE PENALTY U/S 271(1)(C) MAY NOT BE LEVIED. AFTER CONSIDERING THE REPLY OF THE APPELLANT, THE A.O. HAS HELD THAT THE ASSESSEE COMPANY HAS MADE A CONSCIOUS ATTEMPT TO E VADE TAX ON ITS BUSINESS PROFITS, THEREFORE, COVERED U/S 271(1)(C) OF THE IT. ACT AND LEVIED MINIMUM PENALTY OF RS. 25,02,500/ - . ON THE OTHER HAND, THE AR OF THE APPELLANT HAS SUBMITTED THAT NEITHER ASSESSMENT ORDER NOR THE PENALTY ORDER ISSUED HAD PROVED OF OMISSION IN RESPECT OF WHICH THE PENALTY U/S 271(1)(C) IS ATTRACTED. THE ASSESSEE ARGUED THAT THE ORDER OF LD.CIT(A) IS PENDING BEFORE THE ITAT IN QUANTUM APPEAL AND ALSO SUBMITTED AS UNDER: - WH ILE COMPLETING THE ASSESSMENT FOR THE ABOVE YEAR, ADDITIONS HAVE BEEN MADE UNDER SECTION 41(1) OF THE ACT READ WITH SECTION 28(IV) OF THE ACT AT RS. 65,00,000 IN RESPECT OF THE AMOUNT OF A LOAN OBTAINED FROM THE BANK AND PAID BY ONE OF THE SHAREHOLDERS, OF THE ASSESSEE COMPANY. IT IS TO BE NOTED THAT ALL THE RELEV ANT FACTS IN RESPECT OF 9 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. THE CLAIM THAT SUCH PAYMENT OF LOAN BY THE SHAREHOLDER AND SUBSEQUENT WAIVER THEREOF DOES NOT GIVE RISE TO ANY INCOME CHARGEABLE TO TAX, HAVE BEEN FULLY AND ACCURATELY DISCLOSED. IT WAS FURTHER ARGUED THAT MERE REJECTION OF A BONAFI DE CLAIM DOES NOT AMOUNT TO FURNISH OF INACCURATE PARTICULARS OF INCOME NOR IT CAN BE TREATED AS CONCEALMENT OF INCOME. IT CAN ONLY BE CONSIDERED AS A DEBATABLE QUESTION OF LAW BECAUSE TWO VIEWS ARE POSSIBLE. THE AR OF THE APPELLANT HAS ALSO RELIED ON THE DECISION OF HON'BIE COURTS CITED ABOVE. THUS, IT WAS ARGUED THAT PENALTY U/S 271(1)(C) IS NOT LEVIABLE. FROM THE PERUSAL OF THE SUBMISSIONS AND THE FACTS OF THE CASE, IT IS UNDISPUTED THAT THE ASSESSEE COMPANY HAS TAKEN LOAN FOR ITS BUSINESS PURPOSE WHICH WAS LATER ON WAIVED OFF. SINCE THE ASSESSEE COMPANY HAS NOT PAID BACK ANY AMOUNT, THEREFORE, IT IS A CLEAR CASE OF CESSATION OF LIABILITY COVERED U/S 41(1) OF THE IT. ACT. AS PER ACCOUNTING PRINCIPLES, THE ASSESSEE COMPANY HAS TO CREDIT THIS AMOUNT TO PROF IT & LOSS ACCOUNT. HOWEVER, IN THE PRESENT CASE, THE ASSESSEE COMPANY HAS NOT CREDITED THIS AMOUNT TO THE PROFIT & LOSS ACCOUNT, BUT WILLFULLY IT HAS DIRECTLY TAKEN TO THE CAPITAL RESERVE ACCOUNT TO EVADE THE PAYMENT OF TAXES BY TREATING THIS AMOUNT AS CAP ITAL RECEIPT. SINCE THIS LOAN 10 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. WAS TAKEN FOR THE BUSINESS PURPOSES OF THE APPELLANT COMPANY, THEREFORE, IT CANNOT BE TREATED AS A CAPITAL RECEIPT. IN THE QUANTUM APPEAL, LD.CIT(A) HAS CLEARLY HELD THAT THE FACTS OF THE PRESENT CASE ARE SQUARELY COVERED BY T HE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF T.V.SUNDARAM LYENGAR & SONS LTD. 222 ITR 344 WHERE IT IS HELD 'IN THE PRESENT CASE, THE MONEY WAS RECEIVED BY THE ASSESSEE IN THE COURSE OF CARRYING ON HIS BUSINESS. ALTHOUGH IT WAS TREATED AS DEPOSIT AND WAS A CAPITAL NATURE AT THE POINT OF TIME IT WAS RECEIVED, BY EFFLUX OF TIME THE MONEY HAS BECOME THE ASSESSEE'S OWN MONEY'. SIMILARLY, THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF RAMESH NARAIN SAKSENA VS. CIT 220 ITR 19 IS ALSO APPLICABLE TO THE FACTS OF THE PRESENT CASE WHERE IT IS HELD AS UNDER: - 'THE HIGH COURT HAS CLEARLY HELD THAT EVEN APART FROM SECTION 41(1), THE SAID AMOUNT IS LIABLE TO BE INCLUDED IN THE ASSESSMENT RELATING TO THE ASSESSMENT YEAR 1961 - 62 FOR THE REASON THAT THE AMOUNT SO RECEIVED REPRESENTED COMPENSATION IN RESPECT OF HIS ST OCK - IN - TRADE AND THEREFORE, IT CONSTITUTES A TRADING RECEIPT AND IS ACCORDINGLY ASSESSABLE TO TAX IRRESPECTIVE OF THE FACT WHETHER THE ASSESSEE HAD OR HAD NOT CLAIMED THE LOSS OF 11 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. DAMAGE TO STOCK - IN - TRADE, AS AND WHEN IT OCCURRED.' THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF PADMARAJE R KADAMBANDE VS. CIT 121 ITR 493 HAS HELD THAT INCOME U/S 2(24) IS AN INCONCLUSIVE DEFINITION. IT WAS FURTHER HELD THAT EVEN PAYMENT WHICH ARE VOLUNTARILY MADE MAY CONSTITUTE THE INCOME OF THE PERSON R ECEIVING THEM. IN THE PRESENT CASE, THE APPELLANT HAS RECEIVED LOAN FOR ITS BUSINESS PURPOSES. LATER ON WAIVED OFF AND THE COMPANY HAS GOT PROFIT TO THIS EXTENT WHICH IS CLEARLY AN INCOME AS DEFINED IN THE PROVISIONS OF SECTION 2(24) OF THE IT. ACT. MOREOV ER, HON'BLE SUPREME COURT HAS DECIDED THIS ISSUE IN CASE OF T.V.SUNDRAM LYANGAR & SONS (SUPRA), THEREFORE, THERE IS NO QUESTION OF DEBATE. ONCE THE SUPREME COURT HAS DECIDED AN ISSUE THEN THE CONTROVERSY ENDS THERE AND CANNOT BE SAID THAT TWO VIEWS ARE POS SIBLE. DECISIONS RELIED ON BY THE APPELLANT ARE DISTINGUISHABLE TO THE FACTS OF THE PRESENT CASE, THEREFORE, NOT HELPFUL. IN THE PENALTY PROCEEDINGS, THE A.O. HAS GIVEN SHOW - CAUSE NOTICE TO THE ASSESSEE COMPANY TO EXPLAIN WHY THE PENALTY MAY NOT BE LEVIED. AFTER CONSIDERING THE REPLY, THE A.O. HAS HELD THAT THE ASSESSEE COMPANY HAS CONSCIOUSLY TAKEN WAIVED AMOUNT TO THE CAPITAL RESERVE IN PLACE OF ROUTING IT 12 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. THROUGH THE PROFIT & LOSS ACCOUNT. IT IS CERTAINLY AGAINST THE ACCOUNTING PRINCIPLES BECAUSE THE PRO FIT EARNED SHOULD BE CREDITED TO THE PROFIT & LOSS ACCOUNT. THE APPELLANT COMPANY HAS SMARTLY PLAYED ITS CARDS AND IN PLACE OF CREDITING THE AMOUNT OF WAIVED OFF LOAN TO THE PROFIT & LOSS ACCOUNT HAS DIRECTLY TAKEN TO THE CAPITAL RESERVE ACCOUNT. THUS, IT IS A CLEAR CASE OF SUBMITTING INACCURATE PARTICULARS OF INCOME TO CONCEAL THE PROFIT TO EVADE TAX WILLFULLY. TO STRENGTHEN THIS VIEW, RELIANCE IS PLACED ON THE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF HINDUSTAN TOOLS MFG. CO. VS. CIT 102 ITR 174 AND CIT VS. AYA SINGH TSHAR SINGH 92 ITR 182, WHERE IT IS HELD THAT IF ANY ASSESSEE CONSCIOUSLY CONCEALS INCOME ARISING U/S 41, PENALTY LEVIABLE. HON'BLE DELHI TRIBUNAL IN THE CASE OF TRINITY TOUCH (P) LTD. VS. ITO 132 ITD 88 HAS HELD THAT ONCE THE ISSUE WAS SETTLED BY THE SUPREME COURT LONG BACK, THEN CLAIM MADE BY ASSESSEE IS PRIMA - FACIE WRONG AND PENALTY IS LEVIABLE. THESE DECISIONS ARE DIRECTLY APPLICABLE TO THE FACTS OF THE PRESENT CASE. RATIO OF THE DECISIONS IN CASE OF PASWARA PETROCHEMIC AL LTD. VS. ACIT 49 DTR 491 AND IN CASE OF CIT VS. ZOOM COMMUNICATIONS (P) LTD. 327 ITR 510 IS ALSO APPLICABLE. THEREFORE, THE CASE OF THEAPPELLANT COMPANY IS COVERED UNDER THE EXPLANATION 1 OF THE SECTION 271(1)(C) BECAUSE THE ASSESSEE COMPANY HAS 13 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. FAILED TO JUSTIFY ITS CLAIM WITH ANY DOCUMENTARY EVIDENCE, THEREFORE, THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) IS UPHELD AND THE GROUND OF APPEAL IS DISMISSED. 6. AFTER HAVING GONE THROUGH THE ORDERS PASSED BY REVENUE AUTHORITIES AND CONSIDERING THE FACTS A S DISCUSSED ABOVE, WE FIND THAT THE ASSESSEE COMPANY HAD CONSCIOUSLY TAKEN WAIVED AMOUNT TO THE CAPITAL RESERVE IN PLACE OF ROUTING IT THROUGH THE PROFIT & LOSS ACCOUNT. IN SUCH CIRCUMSTANCES, LD. CIT(A ) HAD RIGHTLY CONCLUDED THAT THE ACT OF THE ASSESSEE I S AGAINST THE ACCOUNTING PRINCIPLES BECAUSE THE PROFIT EARNED SHOULD BE CREDITED TO THE PROFIT & LOSS ACCOUNT. THE ASSESSEE COMPANY HAD SMARTLY PLAYED ITS CARDS AND IN PLACE OF CREDITING THE AMOUNT OF WAIVED OFF LOAN TO THE PROFIT & LOSS ACCOUNT HAD DIRECT LY TAKEN TO THE CAPITAL RESERVE ACCOUNT. THUS, IT IS A CLEAR CASE OF SUBMITTING INACCURATE PARTICULARS OF INCOME TO CONCEAL THE PROFIT TO EVADE TAX WILLFULLY. 14 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. 7. EVEN BEFORE US, N O NEW FACTS O R CONTRARY JUDGMENTS HAVE BEEN BROUGHT ON RECORD BEFORE US I N ORDER TO CONTROVERT OR REBUT THE FINDINGS SO RECORDED BY LD. CIT(A). THEREFORE, THERE ARE NO REASON S FOR US TO INTERFERE INTO OR DEVIATE FROM THE FINDINGS SO RECORDED BY THE LD.CIT(A). HENCE , WE ARE OF THE CONSIDERED VIEW THAT THE FINDINGS SO RECORDED BY THE LD. CIT (A) ARE JUDICIOUS AND ARE WE LL REASONED. RESULTANTLY, THESE GROUND RAISED BY THE ASSESSEE STANDS DISMISSED . 8 . IN THE NET RESULT , THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED WITH NO ORDER AS TO COST. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH FEB , 2019. SD/ - SD/ - ( SHAMIM YAHYA ) (SANDEEP GOSAIN) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI ; DATED : 11 . 02 .201 9 SR.PS . DHANANJAY 15 I.T.A. NO. 887 /MUM/201 3 RKHS FOOD ALLIED SERVICES PVT. LTD. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD F I LE / BY ORDER, . / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI