Asit Tarafdar, Burdwan v. ITO, Ward - 2(2), Durgapur

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI JM & HONBLE SRI B . C. MEENA AM] I.T.A. NOS. 1860 & 1861/KOL/2009 ASSESSMENT YEAR :2004-05 ASIT TARAFDAR -VS- INCOME-TAX OFFICER WD-2(2) DURGAPUR (PA NO.ACJPT 8101 E) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI T. P. KAR RESPONDENT BY : MRS. JYOTI KUMARI O R D E R PER D. K. TYAGI JM : BOTH THESE APPEALS PREFERRED BY THE ASSESSEE ARE DI RECTED AGAINST THE SEPARATE ORDERS OF THE LD. CIT(A) DURGAPUR BOTH DATED 04.03 .2009 FOR ASSESSMENT YEAR 2004-05. FOR THE SAKE OF CONVENIENCE WE DISPOSE OF BOTH THE SE APPEALS BY THIS CONSOLIDATED ORDER. ITA NO. 1860/KOL/2009 2. THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE ORDER OF THE LD. CIT(A) IN CONFIRMING THE PENALTY OF RS.20 000/- U/S. 271(1)(B ) OF THE ACT FOR NON-COMPLIANCE OF NOTICE U/S. 143(2) AND 142(1) OF THE ACT. 3. THE FACTS OF THE CASE AS REVEALED FROM THE PENAL TY ORDER ARE THAT THE CASE WAS FIXED FOR HEARING ON SEVERAL TIMES AND NOTICES WERE ISSUED BUT ON BEHALF OF THE ASSESSEE THERE WAS NO COMPLIANCE. THE AO THEREFORE STATED THAT THE ASSESSEE HAD DELIBERATELY NOT COMPLIED WITH THE NOTICES AND HE WAS OF THE OPI NION THAT THIS WAS A FIT CASE FOR IMPOSITION OF PENALTY U/S. 271(1)(B) OF THE ACT. T HE ASSESSEE DURING THE COURSE OF PENALTY PROCEEDINGS STATED THAT THE NON-COMPLIANCE WAS NOT INTENTIONAL. HOWEVER THE AO DID NOT FIND THIS EXPLANATION ACCEPTABLE AND IMP OSED PENALTY U/S. 271(1)(B) OF THE ACT OF RS.10 000/- FOR NON COMPLIANCE WITH NOTICE U /S. 143(2) AND RS.10 000/- FOR NON COMPLIANCE WITH NOTICE U/S. 142(1) TOTALING RS.20 0 00/-. IN APPEAL THE LD. CIT(A) CONFIRMED THIS ACTION OF THE AO BY OBSERVING AS UND ER : I HAVE CONSIDERED THE MATTER. THE LEARNED A/R STA TED THAT THE EARLIER A/R SHRI D.ROY DID NOT ATTEND THE CASE PROPERLY AND THEREFORE THE ASSESSEE HAD TO ENGAGE MR. H. GHOSH A/R. IT WAS STATED THAT IT WAS DUE TO THIS THAT THERE WAS NON-COMPLIANCE. A PERUSAL OF THE FACTS AS STATED IN THE PRECEDING PAR AGRAPH WOULD SHOW THAT THE CASE WAS FIXED ON MORE THAN SEVEN OCCASIONS BUT THERE WAS SU STAINED NON-COMPLIANCE ON PART OF THE ASSESSEE. THE EXCUSE THAT THE A/R WAS NOT ATTE NDING THE CASE PROPERLY CAN BE TAKEN 2 INTO ACCOUNT FOR ONE OR TWO OCCASIONS BUT NOT FOR A PERIOD SPANNING ALMOST A YEAR. MOREOVER THE PRIMARY ONUS OF COMPLYING WITH THE DE PARTMENTAL NOTICES IS THAT OF THE ASSESSEE. I THEREFORE DO NOT FIND THIS EXPLANATI ON TO BE ACCEPTABLE AND CONFIRM THE ACTION OF THE A.O. BEING FURTHER AGGRIEVED THE ASSESSEE IS NOW IN APP EAL BEFORE US. 4. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT(A) AND URGED BE FORE THE BENCH TO DELETE THE PENALTY SO CONFIRMED BY THE LD. CIT(A). 5. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES AND URGED BEFORE THE BENCH TO CONFIRM THE ACTION OF THE LD. CIT(A). 6. AFTER HEARING BOTH THE PARTIES PERUSING THE MAT ERIAL AVAILABLE ON RECORD AND THE ORDERS OF THE LOWER AUTHORITIES WE FIND THAT THE A SSESSEE HAD SUFFICIENT CAUSE FOR NON- COMPLIANCE AS THE AUTHORISED REPRESENTATIVE OF THE ASSESSEE MR. D. ROY DID NOT REPRESENT THE CASE PROPERLY. THEREFORE THE ASSESSE E WENT TO THE EXTENT OF CHANGING HIS COUNSEL AND ENGAGED ANOTHER PERSON NAMELY MR. H. GH OSH. THIS SHOWS THAT ASSESSEE WAS AWARE OF HIS RESPONSIBILITY TO MAKE COMPLIANCE BEFORE THE I. T. AUTHORITIES AND THERE WAS BONAFIDE REASONS FOR NOT DOING SO DUE TO THE FAILURE OF HIS EARLIER AUTHORISED REPRESENTATIVE. SINCE THE ASSESSEE CHANGED HIS COU NSEL AND THEN MADE COMPLIANCE BEFORE THE AO WE ARE OF THE CONSIDERED OPINION THA T IT IS NOT A FIT CASE FOR LEVYING PENALTY FOR NON-COMPLIANCE AND THE PENALTY IMPOSED BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS THEREFORE DELETED. THE APPEAL OF TH E ASSESSEE IS THEREFORE ALLOWED. ITA NO. 1861/KOL/2009 7. THE ASSESSEE HAS FILED THIS APPEAL AGAINST THE O RDER OF THE LD. CIT(A) IN CONFIRMING THE PENALTY OF RS.91 365/- U/S. 271(1)(C ) OF THE ACT. 8. FACTS OF THE CASE ARE THAT THE ASSESSEE HAD CLA IMED EXPENDITURE OF RS.2 66 700/- UNDER THE HEAD MARUTI GIFT. DURING COURSE OF THE ASSESSMENT PROCEEDINGS IT WAS FOUND THAT THE ASSESSEE HAS RECEIVED A MARUTI CAR IN LIEU OF COMMISSION FROM ONE M/S. GOLDEN TRUST FINANCIAL SERVICES. THE SAID FIRM HAD ALSO EF FECTED TDS ON THE VALUE OF THE CAR AS IT WAS PAYMENT OF COMMISSION IN KIND. THE ASSESSEE HAD INCLUDED THE VALUE OF THE CAR AS INCOME AND AT THE SAME TIME DEBITED THE VALUE AS EX PENDITURE. THE A.O. DISALLOWED THE CLAIM OF EXPENDITURE. IN THE APPEAL PROCEEDINGS TH E ASSESSEE DID NOT DISPUTE THIS ADDITION AS STATED BY THE THEN CIT(APPEALS) IN HIS ORDER DATED 19.01.2007. FURTHER THERE WAS AN ADDITION ON ACCOUNT OF WRONG CLAIM OF DEPREC IATION AMOUNTING TO RS. 1 847/- 3 WHICH WAS ALSO ACCEPTED AS A WRONG CLAIM BY THE ASS ESSEE. ANOTHER ADDITION OF RS.36 000/- WAS MADE BY THE A.O. ON ACCOUNT OF AN A RITHMETICAL ERROR IN TOTALING OF THE DEBIT SIDE OF THE INCOME & EXPENDITURE A/C. DURING COURSE OF THE PENALTY PROCEEDINGS THE A.O. HELD THAT ALL THE THREE DISALLOWANCES/ADDI TIONS AMOUNTED TO CONCEALMENT OF INCOME AND FURNISHING OF WRONG PARTICULARS OF INCOM E. THE A.O. RELIED UPON THE DECISION IN THE CASE OF CIT VS. GATES FOAM AND RUBB ER CO. 91 ITR 467 WHERE IT WAS HELD THAT A FALSE ENTRY IN THE BOOKS WOULD ATTRACT PENALTY. THE A.O. ALSO RELIED UPON THE KARNATAKA HIGH COURTS DECISION IN THE CASE OF UMA SHANKAR HALL VS. CIT 117 ITR 497 WHICH STATES THAT A CASE OF UNDER-TOTALING OF CASH AND CREDIT SALES IN DAY BOOK AND LEDGER WAS A FIT CASE FOR LEVY OF CONCEALMENT PENALTY. UND ER THESE CIRCUMSTANCES THE AO BEING SATISFIED THAT THE ASSESSEE HAD FURNISHED INACCURAT E PARTICULARS ON EACH OF THE ABOVE THREE ITEMS AND CAUGHT THE ASSESSEE WITHIN THE MISC HIEF OF SECTION 271(1)(C) AND IMPOSED A PENALTY OF U/S. 91 365/-. IN APPEAL THE LD. CIT(A) CONFIRMED THIS ACTION OF THE AO. BEING FURTHER AGGRIEVED THE ASSESSEE IS N OW IN APPEAL BEFORE US. 9. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER ERRED IN IMPOSING PENALTY U/S . 271(1)(C) ON THE INADVERTENT MISTAKES IN THREE CASES I.E. (1) MARUTI CAR VALUED RS. 2 66 700/- DEBITED IN THE STATEMENT OF INCOME & EXPENDITURE ACCOUNT THOUGH TA KEN AS INCOME ON COMMISSION AND PAID THE TAX (2) EXCESS DEPRECIATION CLAIMED R S.1840/- OVER THE DEPRECIATION ACTUALLY ALLOWABLE AS PER INCOME TAX ACT AND (3) TH E MISTAKES OF SUMMATION ON THE DEBIT SIDE OF THAT INCOME & EXPENDITURE ACCOUNT BY RS. 36 000/- RESULTED THE UNDER STATEMENT OF NET SURPLUS BY RS. 3 04 547/-. HE ALSO CONTENDED THAT BOTH THE LOWER AUTHORITIES HAVE ADMITTED THAT THE ASSESSEE HAS TAK EN THE VALUE OF MARUTI CAR RS. 2 66 700/- AS COMMISSION AND HAS OFFERED FOR TAXATI ON . THE ASSESSEE DEBITED THE MARUTI CAR BEING ON CONSIDERING IT AS CAPITAL ASSETS AND A S SUCH HE HAS SHOWN IN THE BALANCE SHEET AND CALCULATED THE DEPRECIATION THEREON AS HE DEBITED THE VALUE IN THE DEBIT SIDE OF THE INCOME & EXPENDITURE ACCOUNT BECAUSE OF HIS LAC K OF KNOWLEDGE IN ACCOUNTING TECHNIQUE WHICH THE A.O. HAS RECTIFIED IT AND ASCER TAINED THE CORRECT INCOME. THE ASSESSEE HAS NOT OBJECTED IT RATHER PAID THE TAX AC CORDINGLY. AS REGARDS DEPRECIATION THE A.O. HAS TO ADD THE SUM WITH THE INCOME AND SHOULD ALLOW THE DEDUCTION FROM TOTAL INCOME WHICH IS ACTUALLY ALLOWABLE AS PER LAW. THIS IS SPECIFICALLY MENTIONED IN THE FORMAT DESIGNED FOR ASCERTAINING THE CORRECT INCOME FROM BUSINESS. SO THERE IS NO QUESTION OF CONCEALMENT NOR FURNISHING OF INACCURAT E PARTICULARS. HE ALSO CONTENDED 4 THAT THE A.O. HAS FURNISHED THAT THERE IS A MISTAKE IN TOTALLING BY RS.36 000/-. THE ASSESSEE IS FULLY DEPENDANT ON HIS ACCOUNTANT AND H E IS UNAWARE OF THAT MISTAKE BUT THE A.O. BEING DUTY BOUND HAS TO CALCULATE THE CORRECT INCOME FOR TAX PURPOSE. THE ACCOUNTS ARE NOT UNDER AUDIT AND HENCE AUDIT REPORT S ARE NOT FILED. HE FURTHER CONTENDED THAT THE MEANING OF THE WORD CONCEALMENT AS FOUND IN DICTIONARY AND THE COURT DECISIONS MENTIONED HERE IN BELOW- THE MEANING OF THE WORDS CONCEALMENT AS FOUND IN SHORTER OXFORD DICTIONARY 3RD EDITION VOL. (1) IS AS FOLLOWS : IN LAW THE INTENTIONAL SUPPRESSION OF TRUTH OR FA CT KNOWN TO THE INJURY OR PREJUDICE OF ANOTHER. REFERENCE- K.M. BHATIA VS. CIT (1992) 193 1TR 379 (GUJ.) THE DICTIONARY MEANING OF CONCEALMENT IS TO HIDE KEEP SECRET. REFERENCE- MOHD. IBRAHIM AZIMULLA VS. CLT- 131 1TR 680 (ALL). THE WO RD CONCEAL IS DERIVED FROM THE LATIN CONCELARE WHICH IMPLIES CONCELARE TO HIDE. WE BSTER IN HIS NEW INTERNATIONAL DICTIONARY EQUATES ITS MEANING TO HIDE OR WITHDRAW FROM OBSERVATION TO COVER OR KEEP FROM SIGHT: TO PREVENT THE DISCOVERY OF: TO WITHHOL D KNOWLEDGE OF THE OFFENCE CONCEALMENT IS THUS A DIRECT ATTEMPT TO HIDE AN ITEM OF INCOME OR A PORTION THEREOF FROM THE KNOWLEDGE OF THE INCOME TAX AUTHORITIES- C.I.T VS. PAWAN KUMAR DALMIA - 168 ITR 1 (KER). CONCEALMENT CAN BE SAID TO BE IN LAW THE INTEN TIONAL SUPPRESSION OF TRUTH OR FACT KNOWN TO THE INJURY OR PREJUDICE OF ANOTHER. P.C J OSEPH & BROTHERS VS. C.LT 243 ITR (KAR).. IN K.C BUILDERS VS. C.T.T- (265-1TR 562) TH E SUPREME COURT POINT OUT THAT CONCEALMENT INHERENTLY CARRIES WITH IT THE ELEMEN T OF MENS REA. THEREFORE THE MERE FACT THAT SOME FIGURE OR SOME PARTICULARS HAVE BEEN DISC LOSED BY ITSELF EVEN IF IT TAKES OUT THE CASE FROM THE PURVIEW OF NON-DISCLOSURE IT CAN BY ITSELF TAKE OUT THE CASE FROM THE PURVIEW OF FURNISHING INACCURATE PARTICULARS. MERE OMISSION FROM THE RETURN OF AN ITEM OF RECEIPT DOES NEITHER AMOUNT TO CONCEALMENT NOR DELIBERATE F URNISHING OF INACCURATE PARTICULARS OF INCOME UNLESS AND UNTIL THERE IS SOME EVIDENCE TO S HOW OR SOME CIRCUMSTANCES FOUND FROM WHICH IT CAN BE GATHERED THAT THE OMISSION WAS ATTR IBUTABLE TO AN INTENTION OR DESIRE ON THE PART OF THE ASSESSEE TO HIDE OR CONCEAL THE INCOME SO AS TO AVOID THE IMPOSITION OF TAX THEREON. .IN ORDER THAT A PENALTY UNDER SEC.. 271 ( 1) (III) MAY BE IMPOSED IT HAS TO PROVE THAT THE ASSESSEE HAS CONSCIOUSLY MADE THE CONCEALMENT O R FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN THE ABOVE VIEW OF THE MATTER THERE IS NO CONCEAL MENT OF INCOME WHERE THE TRANSACTION GIVING RISE TO THE INCOME IS DISCLOSED THAT EXEMPTI ON IS ERRONEOUSLY CLAIMED- CHANDRAPAL BAGGA VS. ITAT 261 ITR 67(RAJ) OR WHERE MISTAKE WERE COMMITTED IN TOTALLING AND THE MOMENT OF THE ASSESSEE CAME TO KN OW ABOUT THE MISTAKES COMMITTED IN THE BOOKS OF ACCOUNTS WHILE PREPARING THE ACCOUNTS FOR THE YEAR THE ASSESSEE INFORMED THE ASSESSING OFFICER ABOUT IT AND THE A.O. BEING D UTY BOUND HAS ASCERTAINED THE CORRECT INCOME AND TAX ACCORDINGLY. HE ALSO SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THE INFORMATION TO ASSESSING OFFICER FOR ASCERTAINMENT OF CORRECT INCOME AND THE A.O. BEING DUTY BOUND HAS CALCULATED THE SAME FOR TAX PU RPOSE FROM THOSE MATERIALS AND NOT DERIVED FROM ANY EXTRANEOUS SOURCE AND THEREFORE TH ERE IS NO INTENTIONAL SUPPRESSION OF 5 FACTS NOR THERE IS ANY FURNISHING OF INACCURATE PAR TICULARS. HE ALSO SUBMITTED THAT THE RECENT DECISION OF I.T.A.T. MUMBAI IN MIMOSA INVEST MENT CO. (P) LTD. VS. I.T.O. (I.T.A.NO.2983/MUM/2007 DATED 15.01.2009) . WHERE I T IS HELD THAT WHEN THE ASSESSEE HAS FURNISHED ALL THE MATERIAL FACTS FOR THE PURPOS E OF COMPUTATION OF TOTAL INCOME THE ASSESSING OFFICER IS DUTY BOUND TO CALCULATE CORREC T TOTAL INCOME IN ACCORDANCE WITH LAW WHICH MAY BE DIFFERENT THAN THE TOTAL INCOME CALCUL ATED BY THE ASSESSEE MERE FACT THAT THE ASSESSING OFFICER WHILE DISCHARGING HIS DUTY HA S RECALCULATED THE TOTAL INCOME IN ACCORDANCE WITH LAW WHICH IS NOT THE SAME AS CALCUL ATED BY THE ASSESSEE IT CAN NOT BE HELD THAT THE ASSESSEE HAS CONCEALED THE PARTICULAR S OF HIS INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME OR THERE IS A DEEMED CONCEALMENT IN ACCORDANCE WITH EXPLANATION 1 OF THE 271(1 )(C). HE FURTHER S UBMITS ANOTHER DECISION OF THE I.T.A.L MUMBAI IN NILTON VALVE INDUSTRIES (P) LTD. VS. ASST . C.I.T. (ITA NO.115O/MUM/07 DT.19.03.2009). WHERE IT IS HELD THAT WHERE THE ASS ESSING OFFICER COMPUTED THE DIFFERENT TOTAL INCOME THAN THE TOTAL INCOME DECLARED BY THE ASSESSEE THE SAME WOULD NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME O R CONCEALMENT OF PARTICULARS OF INCOME AS CONTEMPLATED BY SECTION 271 (1) (C). HE FURTHER SUBMITS THE DECISION OF THE SUPREME COURT IN C.I.T. VS. RELIANCE PETRO PRODUCTS (P) LTD. (2010) AS REPORTED I.E 322 ITR 158 (SC) WHERE IT IS DECIDED THAT THE PENALTY CONCEALMENT OF PARTICULARS OF INCOME NO INFORMATION GIVEN IN RETURN FOUND TO BE INCORRECT MAKING INCORRECT CLAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULAR S INCOME TAX ACT. 1961 271(1)(C). THE COURT HELD THAT- A GLANCE OF THE PROVISION OF SECTION 271 (1)(C) OF THE INCOME TAX ACT. 1961 SUGGESTS IN ORDER TO BE COVERED BY IT THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(L)(C) WOULD EMBRACE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS FOUND TO BE INCORRECT OR INACCURATE THE ASSESSEE C AN NOT BE HELD GUILTY OF FURNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSE SSEE TO PENALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOCUMENT WHER E THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHERE SUCH PARTICULARS F OUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRACT PENALTY THE DETAILS SUPPL IED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERR ONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIED BY THE ASSESSEC IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MERE MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE I N LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INC OME OF THE ASSESSEE. SUCH A CLAIM MADE IN THE RETURN CAN NOT AMOUNT TO FURNISHING INA CCURATE PARTICULARS. 6 HE FURTHER SUBMITS THE DECISION OF SUPREME COURT IN ANOTHER CASE IN T. ASHOK PAI VS. CIT. (292 ITR 11) WHERE IN THE APEX COURT D ECIDED THE MEANING OF THE WORDS AND PHRASE- INACCURATE THE APEX COURT DECIDES THAT-IF AN EXPLANATION GIVEN BY THE ASSESSEE WITH REGARD TO THE MISTAKE COMMITTED BY HIM HAS BEEN TREATED TO BE BON AFIDE AND IT IS FOUND AS A FACT THAT HE HAD ACTED ON THE BASIS OF WRONG LEGAL ADVICE TH E QUESTION OF HIS FAILURE TO DISCHARGE HIS BURDEN IN TERMS OF THE EXPLANATION TO SECTION 2 71(1)(C) OF THE INCOME TAX ACT.1961 SHOULD NOT ARISE. THE WORD INACCURATE IN THE CONT EXT OF LEVYING PENALTY UNDER SECTION 271(L)(C) SIGNIFIES A DELIBERATE OMISSION ON THE PA RT OF THE ASSESSEE. SUCH DELIBERATE ACT MUST BE EITHER FOR THE PURPOSE OF CONCEALMENT OF IN COME OR FURNISHING OF INACCURATE PARTICULARS. THEREFORE HE SUBMITS THAT ON THE BASIS OF THE AFORE SAID DECISIONS THE ASSESSEE IS NOT BE PENALIZED U/S. 271(1)(C) AND AS SUCH THE DECISION O F THE LOWER AUTHORITIES FOR PENALTY BE DELETED IN FULL. 10. ON THE OTHER HAND THE LD. DR RELIED ON THE ORD ERS OF THE LOWER AUTHORITIES AND SUBMITTED THAT THE LD. COUNSEL FOR THE ASSESSEE WAS UNABLE TO FILE ANY SATISFACTORY EXPLANATION WITH REGARD TO THE WRONG CLAIM OF DEPRE CIATION AND THE UNDERSTATEMENT OF INCOME ON ACCOUNT OF WRONG TOTALING. HE ALSO SUBMI TTED THAT THE ARGUMENT ADVANCED BY THE ASSESSEES COUNSEL BEFORE THE LD. CIT(A) THAT T HE THEN TAX CONSULTANT HAD WRONGLY ADVISED THE ASSESSEE IN RESPECT OF THE DEBIT ON AC COUNT OF THE MARUTI CAR GIFT BUT THERE WAS NO EVIDENCE TO SUBSTANTIATE THIS CLAIM AND MOR EOVER THE PRIMARY ONUS OF FILING A CORRECT AND TRUE RETURN OF INCOME IS UPON THE ASSES SEE HIMSELF. HE ALSO CITED THE FOLLOWING CASE LAWS : I) CIT VS- SREE VALLIAPPA TEXTILES (2007) 294 ITR 322 (KARN) II) CIT VS- HINDUSTAN COMPUTERS LTD. (2010) 322 IT R 88 (ALL) HE LASTLY URGED BEFORE THE BENCH TO CONFIRM THE ACT IONS OF THE LOWER AUTHORITIES. 11. AFTER HEARING THE RIVAL SUBMISSIONS PERUSING T HE MATERIAL AVAILABLE ON RECORD AND THE CASE LAWS CITED BY BOTH THE PARTIES WE FIND TH AT THE ASSESSEE CLAIMED EXPENDITURE OF RS.2 66 700/- UNDER THE HEAD MARUTI GIFT. DURING T HE ASSESSMENT PROCEEDINGS THE AO FOUND THAT THE ASSESSEE HAS RECEIVED A MARUTI CAR I N LIEU OF COMMISSION FROM M/S. GOLDEN TRUST FINANCIAL SERVICES. THE TDS ON THE V ALUE OF THE CAR WAS ALSO DEDUCTED BY THE FIRM AS IT WAS PAYMENT OF COMMISSION IN KIND . DESPITE THIS THE ASSESSEE DEBITED THE VALUE OF THE CAR AS EXPENDITURE. THUS THERE W AS A DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO UNDERSTATE HIS INCOME TO THE TUNE OF RS.2 66 700/-. WHEN THIS FACT WAS DETECTED BY THE AO AND THE ASSESSEE WAS CONFRONTED THE ASSESSEES EXPLANATION THAT HE WAS WRONGLY ADVISED BY THE TAX CONSULTANT DOES NOT APPEAR TO BE A BONA FIDE 7 EXPLANATION. THUS THE LOWER AUTHORITIES HAVE RIGH TLY HELD THAT THE ASSESSEE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. IN VIEW OF T HE ABOVEMENTIONED PECULIAR FACTS OF THIS CASE THE RATIO OF THE CASE LAWS RELIED ON BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT APPLICABLE. THEREFORE THE PENALTY IMPOSED ON THIS ADDITION BY THE AO AND SUSTAINED BY THE LD. CIT(A) IS HEREBY UPHELD. HOWEVER WE FEEL THAT THE PENALTY IMPOSED IN RESPECT OF ADDITION OF EXCESS DEPRECIATION AMOUNTING TO RS. 1840/- AND ADDITION OF RS.36 000/- MADE BY THE AO ON ACCOUNT OF ARITHMETICAL ERROR IN TOTALING DEBIT SIDE OF INCOME AND EXPENDITURE ACCOUNT IS NOT WARRANTED AS THE LAW IS SETTLED THAT THE PENALTY PROCEEDINGS AND ASSESSMENT PROCEEDING BEING TWO SEPARATE INDEPE NDENT PROCEEDINGS MERE ADDITION CANNOT ATTRACT PENALTY U/S. 271(1)(C) AUTOMATICALLY UNLESS THERE IS CONCEALMENT ON THE PART OF THE ASSESSEE OR FILING OF INACCURATE PARTIC ULARS OF INCOME. THEREFORE THE PENALTY IS CONFIRMED ON ACCOUNT OF FURNISHING OF INACCURATE PARTICULARS OF INCOME IN RESPECT OF CLAIMING OF EXPENDITURE OF RS.2 66 700/- AND PENALT Y IS DELETED IN RESPECT OF CLAIM OF DEPRECIATION AMOUNTING TO RS.1847/- AND ANOTHER ADD ITION OF RS.36 000/- ON ACCOUNT OF AN ARITHMETICAL ERROR. 12. IN THE RESULT THE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. 13. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30.4.2 010 SD/- SD/- (B. C. MEENA) ( D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 30TH APRIL 2010 COPY FORWARDED TO THE :- 1) SRI ASIT TARAFDAR MANJU VILLA 54 MAMC COLONY P.O. PANAGARH DIST. BURDWAN. 2) ITO WARD-2(2) DURGAPUR 3) CIT(A) DURGAPUR 4) CIT 5) D. R. ITAT KOLKATA. (TRUE COPY) BY ORDER DEPUTY REGISTRAR JD. (SR. P.S.) I.T.A.T. KOLKATA