Marson Constructions Pvt.Ltd., Hyd, Hyderabad v. DCIT, Central Circle-2, Hyderabad

ITA 283/HYD/2011 | 2007-2008
Pronouncement Date: 30-03-2012 | Result: Allowed

Appeal Details

RSA Number 28322514 RSA 2011
Assessee PAN AADCM0185C
Bench Hyderabad
Appeal Number ITA 283/HYD/2011
Duration Of Justice 1 year(s) 1 month(s) 4 day(s)
Appellant Marson Constructions Pvt.Ltd., Hyd, Hyderabad
Respondent DCIT, Central Circle-2, Hyderabad
Appeal Type Income Tax Appeal
Pronouncement Date 30-03-2012
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted A
Tribunal Order Date 30-03-2012
Assessment Year 2007-2008
Appeal Filed On 24-02-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A' HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN JUDICIAL MEMBER I.T.A. NO. 283/HYD/2011 (ASSESSMENT YEAR : 2007-08) M/S. MARSON CONSTRUCTIONS PVT. LTD. HYDERABAD PAN: AADCM0185C VS. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE-2 HYDERABAD APPELLANT RESPONDENT APPELLANT BY: MR. S. RAMA RAO RESPONDENT BY: MR. K. VISHWANATHAM DATE OF HEARING: 22 .03.2012 DATE OF PRONOUNCEMENT: 30 .03.2012 O R D E R PER CHANDRA POOJARI AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A)-V HYDERABAD DATED 3 RD JANUARY 2011. 2. THE ASSESSEE RAISED THE GROUND WITH REGARD TO CONFI RMATION OF PENALTY BY CIT(A) U/S. 271(1)(C) OF THE INCOME-T AX ACT 1961 AMOUNTING TO RS. 45 84 896. 3. BRIEF FACTS OF THE ISSUE ARE THAT FOR A.Y. 2007-08 THE ASSESSEE FILED ITS RETURN OF INCOME ON 23.11.2007 A DMITTING TOTAL INCOME OF RS. 1 18 27 239. ASSESSMENT WAS COMPLETE D U/S. 143(3) OF THE ACT AT RS. 2 55 01 731. THE ASSESSIN G OFFICER MADE AN ADDITION OF RS. 1 00 58 795 ON ACCOUNT OF DIFFER ENCE IN SALE CONSIDERATION OF SALE OF LAND AND ALSO AN ADDITION OF RS. 36 15 97 ON ACCOUNT OF DISALLOWANCE OF LAND DEVELOPMENT EXPE NDITURE. 4. THE ASSESSEE IS IN THE BUSINESS OF REAL ESTATE DEVE LOPMENT. SEARCH AND SEIZURE OPERATION U/S. 132 OF THE ACT WA S CARRIED ON THE ASSESSEE AND ITS ASSOCIATED COMPANIES ON 27.6.2 006. IT WAS I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 2 FOUND THAT THE ASSESSEE HAD DEVELOPED 31.08 GUNTAS OF LAND INTO 489 PLOTS AND SOLD 35 ACRES ONLY AS LAND. THE ASSE SSING OFFICER WAS OF THE OPINION THAT THE ASSESSEE HAD SUPPRESSED ITS SALE VALUE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D CLAIMED AN AMOUNT OF RS. 36 15 697 AS LAND DEVELOPMENT EXPENDI TURE WHEREAS IT COULD NOT PRODUCE ANY EVIDENCE TO SUPPOR T SUCH DEBITS. THE ASSESSEE-COMPANY OFFERED AN AMOUNT OF RS. 6 62 48 048 ON ACCOUNT OF SALE OF LAND AND PLOTS IN A.Y. 2007-08. THIS INCLUDES ACRES 35.05 GUNTAS OF SALE OF LAND FOR A CONSIDERAT ION OF RS. 6 09 91 205. THE BALANCE AMOUNT WAS ON ACCOUNT OF SALE OF PLOTS. THE ASSESSING OFFICER ESTIMATED THE SALE OF LAND AT RS. 7 10 50 000. THE DIFFERENCE BETWEEN THE ESTIMATED RECEIPT AND SALE VALUE ADMITTED BY THE ASSESSEE-COMPANY OF RS. 1 00 58 795 IS ADDED BY THE ASSESSING OFFICER TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE CL AIMED LAND DEVELOPMENT EXPENDITURE AT RS. 36 15 697 BUT THE AS SESSEE SOLD ONLY UNDEVELOPED LANDS. SINCE THERE IS ONLY SALE O F LAND THERE CANNOT BE ANY DEVELOPMENT EXPENSES AGAINST THE SALE . SINCE THE ASSESSEE-COMPANY DID NOT FILE ANY OBJECTIONS ON THI S COUNT THE SAME WAS DISALLOWED AND ADDED BACK TO THE TOTAL INC OME OF THE ASSESSEE. 5. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER ALSO INITIATED THE PENALTY PROCEEDINGS U/S. 271(1)( C) OF THE INCOME- TAX ACT 1961 AND ULTIMATELY LEVIED PENALTY OF RS. 12 65 494 IE.. 100% OF TAX SOUGHT TO HAVE BEEN EVADED ON THE CONCE ALED INCOME OF RS.36 15 697 VIDE ORDER OF PENALTY DATED 25.6.2 009. 6. ON APPEAL THE CIT(A) DURING THE COURSE OF APPEAL PROCEEDINGS ISSUED AN ENHANCEMENT NOTICE ON 15.12. 2010 FOR ENHANCING THE PENALTY BY AN AMOUNT OF RS. 33 19 402 AS THE NOTICE OF DEMAND WAS ISSUED ONLY ON THE AMOUNT OF R S. 12 65 494. BEFORE THE CIT(A) THE ASSESSEE CONTENDED THAT THE A DDITION OF RS. I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 3 1 00 58 795 WAS MADE BY ESTIMATING THE SALE PRICE O F LAND AT RS. 20.3 LAKHS PER ACRE. THE ENTIRE SALE CONSIDERATION IS AN ESTIMATE BY THE ASSESSING OFFICER. THEREFORE PENALTY COULD NOT BE LEVIED IN RELATION TO ADDITIONS MADE ON ESTIMATE BASIS. IT W AS ALSO CONTENDED BY THE ASSESSEE THAT IT HAD INCURRED DEVE LOPMENT EXPENDITURE AND THE OBSERVATION OF THE ASSESSING OF FICER TO THE CONTRARY IS NOT CORRECT. 7. THE CIT(A) OBSERVED THAT THE ASSESSEE HAD DELIBERAT ELY NOT GIVEN THE INCORRECT SALE VALUE OF THE LAND AND PLOT S SOLD IN ORDER TO HIDE ITS CORRECT INCOME. THE ASSESSING OFFICER HAS CALCULATED THE INCOME ON THE BASIS OF SALE DEEDS AND OTHER DOCUMEN TS FOUND DURING THE COURSE OF SEARCH. ACCORDINGLY HE CONFI RMED THE PENALTY OF RS. 33 19 402 @ 100% OF TAX SOUGHT TO BE EVADED. REGARDING THE SECOND ISSUE HE DID NOT ACCEPT THE E XPLANATION OF THE ASSESSEE. ACCORDINGLY HE ENHANCED THE PENALTY LEVIED BY THE ASSESSING OFFICER TO RS. 45 84 896 AND DISMISSED T HE APPEAL OF THE ASSESSEE. AGAINST THIS THE ASSESSEE IS IN APPEAL BEFORE US. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATE RIAL ON RECORD. REGARDING THE DIFFERENCE IN SALE VALUE OF T HE PLOTS ACCORDING TO AR THE ENTIRE INCOME FROM THE PROJEC T WAS OFFERED FOR AY 2003-04 THOUGH ONLY 261 PLOTS WERE BOOKED AS AGA INST 489 PLOTS. THE ASSESSEE ALSO PROVIDED FOR PROBABLE EXP ENDITURE TO BE INCURRED IN THE PROCESS OF COMPLETION OF THE PROJEC T. THEREAFTER FROM THE AY 2004-05 AND ONWARDS THE AMOUNT OF SALES WERE REDUCED FROM THE AMOUNT OF SALES WERE REDUCED FROM THE AMOUNT RECEIVABLE FROM THE PLOT OWNERS AND THE EXPENDITURE INCURRED IS REDUCED FROM THE PROVISION FOR EXPENSES MADE. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION THE TOTAL SALE S ACCOUNTED FOR WERE RS.6 62 48 048/-. THE ASSESSING OFFICER COMPAR ED THE PURCHASE CONSIDERATION OF THE SAID LANDS AND IS OF THE VIEW THAT THE SALE CONSIDERATION SHOWN IS LESS AND ACCORDINGL Y HE INCREASED I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 4 THE SALE PRICE PROPORTIONATELY BASED ON THE INCREAS E IN THE PURCHASE PRICE. IT IS SUBMITTED THAT IN SO FAR AS SALES ARE CONCERNED THE SALE PRICE IS AS PER THE SALE DEEDS AND EVEN THE PURCHASE OF THE PROPERTY IS AS PER THE DOCUMENTS. DURING THE COURSE OF SEARCH AND SEIZURE OPERATIONS THE AUTHORI TIES DID NOT FIND THAT THE SALE OF THE PROPERTY WAS MADE AT A HI GHER PRICE THAN WHAT WAS RECORDED. THERE IS ALSO NO EVIDENCE WITH THE ASSESSING OFFICER THAT THE ASSESSEE DERIVED ANY AMOUNT MORE T HAN THE SALE PRICE RECORDED IN THE BOOKS OF ACCOUNT. THE ASSESS EE TO AVOID PROTRACTED LITIGATION ACCEPTED THE QUANTUM ADDITION IN THE ASSESSMENT ORDER. THAT ITSELF CANNOT BE REASON FOR LEVY OF PENALTY. PENALTY PROCEEDING IS INDEPENDENT FROM ASSESSMENT P ROCEEDINGS. THE FURNISHING OF INACCURATE PARTICULARS OF INCOME OR CONCEALMENT OF INCOME SHALL BE PROVED BY THE DEPARTMENT. IN TH E PRESENT CASE THE ADDITION WAS MADE ON ESTIMATE BASIS. WHEN THE ADDITION IS MADE ON ESTIMATE BASIS NO PENALTY UNDER SECTION 27 1(1)(C) CAN BE IMPOSED. IT IS ONLY A DIFFERENCE OPINION BETWEEN T HE ASSESSEE AND THE DEPARTMENT AS REGARDS THE QUANTUM OF INCOME AND THE NATURE OF DEFAULT IS NOT PROVED BY THE REVENUE AUTHORITIES . IN THE CIRCUMSTANCES THE PENALTY LEVIED IS NOT JUSTIFIABL E. 9. FURTHER REGARDING THE DISALLOWANCE OF EXPENDITURE ON DEVELOPMENT OF LAND THERE IS NO BASIS FOR SUCH EST IMATION WITH THE ASSESSING OFFICER. THE ASSESSING OFFICER DISALLOWE D THE SAME ON THE REASON THAT THE ASSESSEE HAS ALREADY CLAIMED THE EX PENDITURE IN THE AY: 2003-04 AND IT IS WRONG TO CLAIM THE DEVELO PMENT EXPENDITURE IN THE AY UNDER CONSIDERATION AS THE AS SESSEE ONLY SOLD THE LAND THERE CANNOT BE ANY DEVELOPMENT EXPE NDITURE AGAINST SALE OF LAND. THE ASSESSING OFFICER CALLED FOR THE OBJECTIONS FOR DISALLOWANCE OF THIS EXPENDITURE FROM THE ASSES SEE. THEY HAVE NOT FILED ANY OBJECTION AND ACCEPTED THE DISALLOWAN CES. THE ACCEPTANCE GIVEN BY THE ASSESSEE TOWARDS THE ADDITI ON ITSELF I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 5 CANNOT BE REASON FOR LEVY OF PENALTY. IN OUR OPINI ON LEVY OF PENALTY IS UNWARRANTED. FURTHER IT WAS HELD THAT ADDITION MADE ON ESTIMATE BASIS NO PENALTY IS LEVIABLE IN THE FO LLOWING CASES AS RELIED BY AR. I) CIT VS. K.R. CHINNIKRISHNA CHETTY (246 ITR 121 MAD. ) II) TPK RAMALINGAM VS. CIT (211 ITR 520 SC) 10. FURTHER WE CAME ACROSS ORDER OF THIS TRIBUNAL IN THE CASE OF SMR BUILDERS PVT. LTD. VS. DCIT IN IT(SS)A NOS. 50 & 52/HYD/2009 DTD. 3 RD FEB-2012. IN THAT CASE ALSO THERE WERE SEARCH AND SEIZURE OPERATIONS ON THE RESIDENTIAL AS WELL PREMISES OF THE DIRECTOR OF THE ASSESSEE-COMPANY ON 5.9.2001 . IN THE COURSE OF SEARCH VARIOUS INCRIMINATING MATERIALS WE RE FOUND AND SEIZED AND CONSEQUENT TO SEARCH ASSESSEE FILED RET URN OF INCOME DECLARING UNDISCLOSED INCOME OF RS.32 61 630/-. HO WEVER CONSIDERING THE UNDISCLOSED INCOME OF RS.1 CRORE FR OM THE UNACCOUNTED RECEIPTS AND THE PROFIT FROM RECEIPTS RECORDED IN THE BOOKS OF ACCOUNT AS UNDISCLOSED INCOME AT RS.2 02 5 0 960 THE ASSESSING OFFICER ARRIVED AT THE TOTAL INCOME OF TH E ASSESSEE FOR THE BLOCK PERIOD AT RS.3 04 13 960. CONSEQUENT UPON T HE ORDERS OF THE TRIBUNAL IN THE QUANTUM PROCEEDINGS THE INCOME OF THE ASSESSEE WAS DETERMINED AT RS.2 13 27 070. WITH RE FERENCE TO THE FINAL AMOUNT OF UNDISCLOSED INCOME AS DETERMINED I N CONSEQUENCE OF THE ORDER OF THE TRIBUNAL THE ASSES SING OFFICER IMPOSED PENALTY ON THE CONCEALED INCOME OF RS.1 80 65 440. ON APPEAL THE CIT(A) HAS REDUCED THE INCOME IN RELATIO N TO WHICH PENALTY IS LEVIABLE BY EXCLUDING THE AMOUNT OF RS. 67 38 370 IN RESPECT OF UNDISCLOSED INCOME AS ADMITTED BY MANAGI NG DIRECTOR AND ANOTHER AMOUNT OF RS.1 63 000 TOWARDS ACCRUED INCOME. WHEN THE MATTER REACHED IN FURTHER APPEAL BEFORE T HE TRIBUNAL I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 6 AFTER ELABORATE CONSIDERATION OF THE MATTER THE TR IBUNAL OBSERVED IN PARA 8.5 OF ITS ORDER AS FOLLOWS- 8.5 IN OUR OPINION IN THE PRESENT CASE THE PENALT Y HAS BEEN LEVIED ONLY ON THE BASIS OF ESTIMATED INCOME. THE INCOME OF THE ASSESSEE HAS BEEN ESTIMATED IN RESPEC T OF VARIOUS TRANSACTIONS CARRIED ON BY THE ASSESSEE AS SEEN FROM THE ABOVE FACTS. THE OTHER INCOME IS CONSIDERED AS UNDISCLOSED INCOME IS ON ACCOUNT OF ADMISSION BY THE MANAGING DIRECTOR. FURTHER RS. 1 63 000 HAS BEEN CONSIDERED AS UNDISCLOSED INCOME ONLY ON ACCOUNT OF THE ACCRUAL OF INTEREST ON FDR. THE INCOME ON FDR THOUGH ACCRUED TO THE ASSESSEE NOT A T ALL RECEIVED BY THE ASSESSEE. IT IS VERY PREMATUR E TO SAY THAT THE ASSESSEE WOULD NOT HAVE OFFERED THIS INTEREST INCOME TO TAX. BEING ON THIS COUNT ALSO P ENALTY CANNOT BE LEVIED. IN ENTIRETY IN THIS CASE THE IN COME OF THE ASSESSEE HAS BEEN DETERMINED ON ESTIMATE BASIS. THERE IS NO CONCLUSIVE MATERIAL TO SHOW THAT THERE IS ACTUAL CONCEALMENT OF INCOME. THOUGH THE ADDITION IS CONFIRMED BY THE TRIBUNAL IT DOES NOT PROVE THAT T HE ASSESSING OFFICER HAS THE MATERIAL TO SUGGEST THAT THE ASSESSEE EARNED EXACT AMOUNT OF PROFIT AS DETERMINE D BY THE ASSESSING OFFICER OUT OF THESE UNACCOUNTED TRANSACTIONS. IN OUR OPINION THE PENALTY U/S. 158BFA(2) IS NOT MANDATORY IF THE ASSESSEE OFFERS CONVINCING REASONS OR IF ANY REASONABLE CAUSE DEMONSTRATED FOR NON-INCLUSION OF SUCH INCOME PENA LTY IS NOT ATTRACTED. IN THE CASE OF SMT. MALA DAYANID HI VS. CIT (92 TTJ 270) (BANG.) IT WAS HELD THAT ADDITION NOT BASED ON MATERIAL FOUND DURING THE SEARCH OR MATERI AL IN POSSESSION OF ASSESSING OFFICER BUT BASED ON DIFFERENCE IN VALUATION OF PROPERTY AS DISCLOSED B Y THE ASSESSEE AND AS ESTIMATED BY THE DVO THERE WAS NO CONCEALMENT ATTRACTING PENALTY U/S. 158BFA(2) OF TH E ACT. IN THE INSTANT CASE THERE WAS A ESTIMATE AT T HE LEVEL OF ASSESSING OFFICER AS WELL AS AT THE LEVEL OF CIT(A) IN RESPECT OF THE UNDISCLOSED INCOME. FROM THE ENTIRE FACTS OF THE PRESENT CASE IT WOULD BE CLEAR THAT THE INCOME OF THE ASSESSEE WAS ESTIMATED AND MATERI AL ON RECORD BY THE ASSESSING OFFICER IS NOT ENOUGH TO LEVY PENALTY FOR CONCEALMENT OF INCOME. IN OUR OPINION UNLESS THERE IS CONCLUSIVE MATERIAL SHOWING THE EXA CT AMOUNT OF CONCEALMENT OF INCOME NO PENALTY IS LEVIA BLE ON THE ADDITION IF MADE ON ESTIMATE BASIS. WHILE T AKING SUCH A VIEW WE ARE FORTIFIED BY THE JUDGEMENT OF I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 7 PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. PREM DAS (248 ITR 234) (P&H)........ THE TRIBUNAL THEREAFTER IN PARA 8.6 OF ITS ORDER D ATED 3 RD FEBRUARY 2012 HELD AS FOLLOWS- 8.6 FROM THE ABOVE JUDGEMENT IT IS CLEAR THAT WHEN THE ASSESSING OFFICER AND THE CIT(A) ADOPTED DIFFERENT FIGURES OF INCOME ON ESTIMATE BASIS AND IT IS A CAS E OF DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AS WELL AS THE DEPARTMENT AND THAT REASON CANNOT BE A BASIS FO R LEVY OF PENALTY. FURTHER THE PROVISIONS OF SECTIO N 158BFA(2) IS ALMOST IN PARI MATERIA TO SECTION 271( 1)(C) OF THE INCOME-TAX ACT WHICH RELATES TO LEVY OF PEN ALTY FOR CONCEALMENT. BEING SO WHATEVER SAID BY THE PUNJAB & HARYANA HIGH COURT IN THE CASE CITED SUPRA WITH REGARD TO PROVISIONS OF SECTION 271(1)(C) OF T HE INCOME-TAX ACT IS ALSO APPLICABLE IN RESPECT OF PROVISIONS OF SECTION 158BFA(2) OF THE ACT. FURTHE R AS NOTED FROM THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE VARIOUS TRIBUNALS HAVE HELD THAT UNLESS AN Y POSITIVE CONCEALMENT IS FOUND NO PENALTY IS LEVIAB LE ON THE ADDITIONS MADE ON ESTIMATE BASIS. IN THE CASE OF HARI GOPAL SINGH VS. CIT (258 ITR 85) (P&H) IT WAS HELD THAT WHERE THE ASSESSMENT IS MADE ON ESTIMATE BASIS NO PENALTY U/S. 271(1)(C) OF THE ACT CAN BE IMPOSED . IN THAT CASE IT WAS OBSERVED THAT ON ACCOUNT OF MERE DIFFERENCE OF OPINION AS REGARDS THE ESTIMATION OF INCOME PENALTY CANNOT BE LEVIED. SINCE THE ASSESSI NG OFFICER AND THE TRIBUNAL ADOPTED DIFFERENT ASSESSME NTS FOR ASCERTAINING THE INCOME OF THE ASSESSEE IT COU LD NOT BE SAID THAT THE ASSESSEE HAD CONCEALED THE PARTICU LARS OF HIS INCOME SO AS TO ATTRACT PENALTY U/S. 271(1)( C) OF THE ACT. IN THE PRESENT CASE THERE IS A DIFFERENCE IN ESTIMATING THE INCOME OF THE ASSESSEE BY THE ASSESS EE ITSELF AND BY THE DEPARTMENT AS WELL AS BY THE TRIBUNAL. BEING SO THE DIFFERENCE IS ONLY ON ACCO UNT OF DIFFERENCE IN OPINION IN DETERMINING THE INCOME. T HAT DIFFERENCE IN OPINION AMONG THE PARTIES CANNOT RESU LT IN LEVY OF PENALTY. 11. THE TRIBUNAL THEREAFTER REFERRED TO THE RATIO LAID DOWN BY THE APEX COURT IN THE CASES OF HINDUSTAN STEEL L TD. V/S. STATE OF ORISSA (83 ITR 26) CIT V/S. SURESH CHADNR A MITTAL(251 ITR 9); IN CIT V/S. KHODAY ESWARA & SONS (83 I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 8 ITR 369) AND CONCLUDED IN PARA 8.11 OF ITS ORDER DATED 3.2.2012 AS FOLLOWS- 8.11 IN OUR OPINION THE EXPLANATION GIVEN IN THE PRESENT CASE FOR NON-RETURNING OF INCOME AS EXPECTE D BY THE DEPARTMENT IS BONA FIDE. THE ASSESSEE HAS ACCEPTED THE ADDITION ONLY WITH THE SOLE INTENTION TO AVOID LITIGATION AND BECAUSE THE ASSESSEE HAS NOT G ONE IN APPEAL AGAINST THE QUANTUM ADDITION IT DOES NOT AUTOMATICALLY QUALIFY FOR LEVY OF PENALTY AND IT DO ES NOT ENTAIL THE DEPARTMENT TO LEVY PENALTY. PENALTY PROCEEDINGS ARE NOT AUTOMATIC AND THE ASSESSMENT PROCEEDINGS AND THE PENALTY PROCEEDINGS ARE TWO DIFFERENT PROCEEDINGS. THE REVENUE AUTHORITIES ARE REQUIRED TO EXAMINE THE PENALTY PROCEEDINGS INDEPENDENTLY AND ON THE BASIS OF MATERIAL AVAILABL E ON RECORD. AS SEEN FROM THE ARGUMENTS OF THE ASSESSEE IT IS AMPLY CLEAR THAT THE ASSESSEE HAD ACCEPTED THE ADDITION ONLY TO AVOID LITIGATION AND TO BUY PEACE WITH THE DEPARTMENT. THE PROVISIONS OF SECTION 158BFA(2 ) GIVE DISCRETIONARY POWER TO THE ASSESSING OFFICER T O LEVY PENALTY. THIS DISCRETION SHOULD HAVE BEEN USED BY THE ASSESSING OFFICER IN FAVOUR OF THE ASSESSEE BECAUSE THE ADDITIONS ARE CONFIRMED EITHER BY THE CIT(A) OR BY THE TRIBUNAL ON ESTIMATED BASIS. BEING SO WHERE THE PROVISIONS BEGIN WITH THE WORD 'MAY' AND NOT 'SHALL ' AND THE WORD 'MAY DIRECT' IN SECTION 158BFA(2) DO INDICATE THAT A DISCRETIONARY POWER IS AVAILABLE WI TH THE ASSESSING OFFICER AND THE CIT(A) TO LEVY PENALTY EV EN WHERE TECHNICALLY THE PROVISIONS ARE ATTRACTED. BE ING SO IN THE LIGHT OF THE JUDGEMENT OF SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. POSTULATES THE SITUAT ION THAT PENALTY SHOULD NOT BE LEVIED IN THE PRESENT CA SE. 12. IN THE LIGHT OF THE ABOVE DISCUSSION THE TRIBU NAL IN THAT CASE DELETED THE ENTIRE PENALTY LEVIED BY THE ASSE SSING OFFICER AND SUSTAINED BY THE CIT(A). FACTS AND CIRCUMSTANCES OF THE CASE BEFORE US BEING SIMILAR INASMUCH AS IN THE PRESENT CASE ALSO ADDITIONS WHICH LED TO THE IMPUGNED PENALTY ARE MAD E ON ESTIMATE BASIS HAVING NOT BEEN SATISFIED WITH THE SALE VALU ES OF THE LAND AND PLOTS SOLD BY THE ASSESSEE AND THE DEVELOPMENT EXPENSES CLAIMED TO HAVE BEEN INCURRED BY THE ASSESSEE FOR THE DETAILED REASONS DISCUSSED IN THAT ORDER DATED 3 RD FEBRUARY 2012 TO I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 9 WHICH BOTH OF US ARE PARTIES WE FIND THAT THIS IS NOT A FIT CASE FOR THE LEVY OF PENALTY FOR CONCEALMENT. WE ARE ALSO SUPPORTED IN THIS BEHALF BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF N A RECENT JUDGMENT OF THE HONBLE APEX COU RT IN CIT VS. RELIANCE PETRO-PRODUCTS PVT. LTD. (2010) 322 ITR 15 8(SC) WHEREIN IT HAS BEEN HELD THAT S. 271 (1) (C) APPLIES WHERE THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FURNISHE D INACCURATE PARTICULARS OF SUCH INCOME AND THE CASE BEFORE IT WAS NOT A CASE OF CONCEALMENT OF THE INCOME. AS REGARDS THE FURNIS HING OF INACCURATE PARTICULARS IT WAS HELD THAT NO INFORMA TION GIVEN IN THE RETURN WAS FOUND TO BE INCORRECT OR INACCURATE. THE WORDS INACCURATE PARTICULARS MEAN THAT THE DETAILS SUPP LIED IN THE RETURN ARE NOT ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO TRUTH OR ERRONEOUS . IN THE ABSENCE OF A FINDING BY THE AO THAT ANY DETAILS SUPPLIED BY THE ASSESSEE IN ITS RETURN WERE FOUND TO BE INCORRECT OR ERRONEOUS OR FALSE THERE WOULD BE NO QUESTION OF INVITING PENALTY U/S 271(1)(C). HONBLE SUPREME CO URT FURTHER HELD THAT THE ARGUMENT OF THE REVENUE THAT SUBMITTING AN INCORRECT CLAIM FOR EXPENDITURE WOULD AMOUNT TO GIVING INACCU RATE PARTICULARS OF SUCH INCOME IS NOT CORRECT. IT OBSERVED THAT BY NO STRETCH O F IMAGINATION CAN THE MAKING OF AN INCORRECT CLAIM IN LAW TANTAMOUNT TO FURNISHING INACCURATE PARTICULARS. A MERE MAKING OF THE CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY I TSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDI NG THE INCOME OF THE ASSESSEE . IF THE CONTENTION OF THE REVENUE IS ACCEPTED IT WAS HELD THAT IN CASE OF EVERY RETURN WHERE THE CLA IM MADE IS NOT ACCEPTED BY THE AO FOR ANY REASON THE ASSESSEE WIL L INVITE PENALTY U/S 271(1)(C) WHICH IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 13. IN THE LIGHT OF THE ABOVE DISCUSSION WE ACCORD INGLY CANCEL THE LEVY OF PENALTY FOR CONCEALMENT OF RS.45 84 896 ALLOWING THE GROUNDS OF THE ASSESSEE IN THIS APPEAL. I.T.A. NO. 283/HYD/2011 M/S. MARSON CONSTRUCTIONS PVT. LTD. =========================== 10 14. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH MARCH 2012. SD/ - (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/ - (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD DATED THE 30 TH MARCH 2012 COPY FORWARDED TO: 1. M/S. MARSON CONSTRUCTIONS PVT. LTD. C/O. SHRI S. R AMA RAO ADVOCATE FLAT NO. 102 DOOR NO. 3-6-643 SHRI YA'S ELEGANCE ST. NO. 9 HIMAYATNAGAR HYDERABAD-500 02 9. 2. DY. COMMISSIONER OF INCOME - TAX CENTRAL CIRCLE - 2 HYDERABAD. 3. THE CIT(A) - V HYDERABAD 4. THE CIT - I V HYDERABAD. 5. THE DR A BENCH ITAT HYDERABAD. TPRAO