The ACIT, 2(1), v. Shri Rajendra Kumar Vijayvargiya,

PAGE 1 OF 5 - I.T.A.NO. 452/IND/2008 M/S. RAJENDRA KUMAR KAUSHALYABAI RAJGARH IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH : INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI V.K. GUPTA ACCOUNTANT MEMBER PAN NO. : ACDPN1181B I.T.A.NO. 452/IND/2008 A.Y. : 2005-06 ACIT M/S.RAJENDRA KUMAR KAUSHALYABAI 2(1) VS RAJGARH. UJJAN APPELLANT RESPONDENT APPELLANT BY : SMT.APARNA KARAN SR.DR RESPONDENT BY : SHRI S.C.GOYAL ADV. DATE OF HEARING : 15.04.2010 O R D E R PER V.K. GUPTA A.M. THIS APPEAL FILED BY THE REVENUE ARISES OUT OF ORDE R OF THE LD. CIT(A) UJJAIN DATED 21.08.2008 FOR THE ASSESSME NT YEAR 2005-06. 2. WE HAVE HEARD BOTH THE PARTIES AND HAVE ALSO PERUSE D THE MATERIAL AVAILABLE ON RECORD. 3. IN THIS APPEAL THE REVENUE IS AGGRIEVED BY THE DE CISION OF THE LD. CIT(A) IN CANCELLING THE PENALTY OF RS. 13 66 3 00/- LEVIED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME-TAX A CT 1961. PAGE 2 OF 5 - I.T.A.NO. 452/IND/2008 M/S. RAJENDRA KUMAR KAUSHALYABAI RAJGARH 4. THE FACTS IN BRIEF ARE THAT THERE WAS A SURVEY AC TION U/S 133A OF THE ACT WHEREIN THE ASSESSEE DECLARED ITS INCOM E OF RS. 43 12 235/- ON THE BASIS OF LOOSE PAPERS FOUND DURING THE COURSE O F SURVEY. 5. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESS EE WAS DENIED EXEMPTION U/S 54 TO THE TUNE OF RS. 2 02 990 /- AND AN ADDITION WAS ALSO MADE ON ACCOUNT OF LOW WITHDRAWAL BY A SUM OF RS. 50 000/-. THE ASSESSEE DID NOT FILE ANY APPEAL AGAINST THIS ADDIT ION. THE A.O. THEREAFTER INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) WHEREI N IT WAS CONTENDED THAT ADDITION ON ACCOUNT OF LOW WITHDRAWALS WAS MADE ON ESTIMATE BASIS HENCE PENALTY U/S 271(1)(C) OF THE ACT COULD NOT B E LEVIED THEREON. THE ASSESSEE ALSO CONTENDED THAT DUE TO UNAVOIDABLE CIR CUMSTANCES THE ASSESSEE COULD NOT CONSTRUCT RESIDENTIAL HOUSE HEN CE DENIAL OF EXEMPTION U/S 54F WAS ALSO NOT A CASE OF CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF ITS INCOME. THE ASSESSEE ALSO PLACED RELIANCE ON VARIOUS JUDICIAL DECISIONS. THE A.O. HOWEVER HELD THAT BUT FOR SURVEY THE ASSESSEE WOULD NOT HAVE DISCLOSED INCOME IN THE RETURN HENCE IT WAS NOT A CASE OF VOLUNTARY DISCLOSURE. THE A.O. ALSO R ELIED ON VARIOUS JUDICIAL DECISIONS TO HOLD THAT THE ASSESSEE WAS LI ABLE TO BE VISITED WITH THE PENALTY U/S 271(1)(C) OF THE ACT AND THE A.O. W ORKED OUT THE SAME AT RS. 123 66 300/-. AGGRIEVED BY THIS THE ASSESSEE C ARRIED THE MATTER INTO APPEAL BEFORE THE LD. CIT(A) WHEREIN IT WAS CONTEN DED THAT EXEMPTION PAGE 3 OF 5 - I.T.A.NO. 452/IND/2008 M/S. RAJENDRA KUMAR KAUSHALYABAI RAJGARH U/S 54F HAD BEEN WITHDRAWN SUO MOTU AND INCOME OFFE RED DURING THE SURVEY HAD BEEN DISCLOSED IN THE RETURN OF INCOME F ILED BY THE ASSESSEE HENCE THERE WAS NOTHING CONCEALED IN SUCH RETURN N OR ANY INACCURATE PARTICULARS WERE FILED. HENCE THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT WAS NOT LEVIABLE. THE ASSESSEE ALSO RELIED ON THE S EVERAL JUDICIAL DECISIONS FOR THIS PROPOSITION. THE LD. CIT(A) HELD THAT THER E WERE SEVERAL JUDICIAL DECISIONS INCLUDING THE DECISION OF THE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. S. V. ELECTRICALS PVT. LIMITED AS R EPORTED IN 274 ITR 334 HELD THAT WHERE THERE WAS A FULL DISCLOSURE OF INCO ME SURRENDERED BY THE ASSESSEE IN THE COURSE OF SURVEY HENCE THERE WAS NO CONCEALMENT OF INCOME. THE LD. CIT(A) ALSO FOUND FROM ANOTHER DECI SION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BE TANETHAL LIMITED AS REPORTED IN 272 ITR 323 WHEREIN THE HON'BLE COURT HAD HELD THAT WHEN THE ASSESSEE SURRENDERED DISPUTED ITEM AND PAID TAX THEREON HENCE THERE WAS NO CONCEALMENT OF INCOME AND CONSEQUENTLY PENA LTY COULD NOT BE IMPOSED. THE LD. CIT(A) ALSO TOOK NOTE OF THE FACT THAT THE ASSESSEE HAD OFFERED A SUM OF RS. 36 34 784/- TO AVOID LITIGATIO N AND TO BUY PEACE. HENCE THE SURRENDER MADE BY THE ASSESSEE WAS A ADD ITIONAL ONE AND SHOULD HAVE BEEN ACCEPTED IN TOTO. FOR THIS PROPOSI TION THE LD. CIT(A) FOUND SUPPORT FROM THE DECISION OF THE HON'BLE BOMB AY HIGH COURT IN PAGE 4 OF 5 - I.T.A.NO. 452/IND/2008 M/S. RAJENDRA KUMAR KAUSHALYABAI RAJGARH THE CASE OF CIT VS.KIRAN & CO. AS REPORTED I 271 I TR 326. ACCORDINGLY THE LD. CIT(A) CANCELLED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 6. AGGRIEVED BY THIS THE REVENUE IS IN APPEAL BEFORE US. 7. THE LD. DR NARRATED THE FACTS AND PLACED RELIANCE O N THE ORDER OF THE AO. THE LD. COUNSEL FOR THE ASSESSEE ON THE OT HER HAND PLACED STRONG RELIANCE ON THE ORDER OF THE LD. CIT(A). 8. THE LEARNED COUNSEL BESIDES PLACING RELIANCE ON THE ORDER OF THE LD. CIT(A) ALSO PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL IN THE CASE OF ACIT VS. MALU ELECTRODE PRIVATE LIMITED AS REPORTED IN 14 ITJ 398 FOR THE PROPOSITION THAT IN CASE OF AGREED ADD ITION PENALTY COULD NOT BE LEVIED. 9. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY BOTH THE SIDES MATERIAL ON RECORD AND THE ORDERS OF THE AUTHORITIE S BELOW. 10. IT IS NOTED THAT IT IS A CASE OF ADDITIONAL SURREND ER OF INCOME TO AVOID LITIGATION AND TO BUY PEACE AND INCOME SO SUR RENDERED HAS DULY BEEN DISCLOSED IN THE RETURN OF INCOME. HENCE IN V IEW OF JUDICIAL DECISION RELIED ON BY THE ASSESSEE AND LD. CIT(A) I N THE APPELLATE ORDER THIS IN OUR OPINION IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. WE ALSO ADD THAT IN CASE OF ADDITION ON AC COUNT OF LOW WITHDRAWALS WHICH IS PURELY ON ESTIMATE BASIS HEN CE THE SAME CANNOT BE PAGE 5 OF 5 - I.T.A.NO. 452/IND/2008 M/S. RAJENDRA KUMAR KAUSHALYABAI RAJGARH IN OUR OPINION SUBJECTED TO PENALTY U/S 271(1)(C ) OF THE ACT. THUS THIS GROUND OF THE REVENUE IS DISMISSED. 11. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 15 TH APRIL 2010. SD/- SD/- (JOGINDER SINGH) (V. K. GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 15 TH APRIL 2010. CPU* 16194