GOLANI BROTHERS, MUMBAI v. DCIT CEN CIR 7(2), MUMBAI

ITA 4594/MUM/2016 | 2008-2009
Pronouncement Date: 21-10-2016

Appeal Details

RSA Number 459419914 RSA 2016
Assessee PAN AACFG5348R
Bench Mumbai
Appeal Number ITA 4594/MUM/2016
Duration Of Justice 3 month(s) 17 day(s)
Appellant GOLANI BROTHERS, MUMBAI
Respondent DCIT CEN CIR 7(2), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 21-10-2016
Appeal Filed By Assessee
Bench Allotted Not Allotted
Tribunal Order Date 21-10-2016
Assessment Year 2008-2009
Appeal Filed On 04-07-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH MUMBAI BEFORE: SHRI R.C.SHARMA AM & SHRI PAWAN SINGH JM ITA NO.4593 4594 4595 & 4596 /MUM/2016 ( ASSESSMENT YEAR : 2007 - 2008 TO 2010 - 2011 ) M/S. GOLANI BROTHERS 303 DALAMAL CHAMBERS 29 NEW MA RINE LINES MUMBAI 400020 VS. DY. CIT CC - 7(2) MUMBAI PAN/GIR NO. : AACFG5348R ( APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI. VIMAL PUNMIYA REVENUE BY : SHRI JEEVANLAL LAVEDIA DATE OF HEARING : 05/10 /2016 DATE OF PRONOUNCEMENT 21/10 /2016 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) FOR THE ASSESSMENT YEAR 2007 - 2008 TO 2010 - 2011 IN THE MATTER OF IMPOSITION OF PENALTY UNDER SECTION 27 1(1)(C) IN RESPECT OF INCOME SURRENDER DURING COURSE OF SURVEY ON ACCOUNT OF PURCHASES. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. 3. FACTS IN BRIEF ARE THAT ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. RETURNS FOR THE RE LEVANT ASSESSMENT YEARS UNDER CONSIDERATION WAS FILED WELL WITHIN THE STIPULATED TIME LIMIT AND ASSESSMENT WAS FRAMED UNDER SECTION 143(3). THERE WAS SURVEY AT ASSESSEES BUSINESS PREMISES ON 19/03/2013. DURING SURVEY A STATEMENT OF SHRI KISHORE GOLANI P ARTNER WAS 2 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI RECORDED. LLEGATION OF THE DEPARTMENT IS THAT THE PURCHASES FROM M/S. THANE STEEL PVT. LTD. MANISH & BARKHA & PARSHVA & CO. ARE NOT GENUINE. DURING SU RVEY PROCEEDING ONE OF THE PARTNERS SHRI KISHORE GOLANI OFFERED 50% OF PURCHASE AS ADDITIONAL INCOME TO BUY PEACE AND AVOID LITIGATION. 4. AFTER THE SURVEY ASSESSEE VOLUNTARILY REVISED ITS RETURN OF INCOME DULY INCORPORATING THE INCOME OFFERED. THE REVISED RETURN INCORPORATING THE INCOME OFFERED DURING SURVEY WAS FILED ON 31/03/2013. ON 05/02/201 4 AO ISSUED NOTICE UNDER SECTION 148 AND THE RE - ASSESSMENT ORDER WAS FRAMED ON 30/03/2015. IN THE RE - ASSESSMENT ORDER INCOME WAS ASSESSED AS OFFERED BY THE ASSESSEE IN THE REVISED RETURN. IN THE RE - ASSESSMENT ORDER SO FRAMED AO HAS INDEPENDENTLY VERIFIED T HE DETAILS AND FOUND THE SAME IN ORDER AND ACCORDINGLY ACCEPTED THE ADDITIONAL INCOME OFFERED BY THE ASSESSEE. THEREAFTER AO LEVIED PENALTY UNDER SECTION 271(1)( C) ON THE PLEA THAT ASSESSEE HA S CONCEALED PARTICULARS OF INCOME. 5. BY THE IMPUGNED ORDER CIT(A) CONFIRMED THE ORDER OF AO BY OBSERVING THAT ADDITIONAL INCOME OFFERED BY THE ASSESSEE IS OVER AND ABOVE THE ORIGINAL RETURN INCOME. THEREFORE THE ASSESSEE CONCEAL THE INCOME AND LIABLE FOR PENALTY AGAINST THE ORDER OF CIT(A) ASSESSEE IS IN FURTHER APPEAL BEFORE US . 6. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND ALSO DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY LEARN ED 3 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI AR AND DR DURING COURSE OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. FROM THE RECORD WE FOUND THAT ASSESSEE HAD PURCHASED MATERIAL FROM M/S. THANE STEELS PVT. LTD. AND MANISH & BARKHA IN EARLIER YEARS. AT THE TIME OF SURVEY PROCEE DING THERE WAS SOME LAPS OF SUPPORTING DOCUMENT DU E TO DEMISES OF EARLIER PARTNER HENCE ASSESSEE OFFERED 50% OF PURCHASES FROM THESE PARTIES AS ADDITIONAL INCOME AND ACCORDINGLY VOLUNTARILY FILE D REVISE D RETURN. ASSESSEE HAD NEVER STATED THAT THE PURCHASES ARE BOGUS. ONLY THE SOME SUPPORTING EVIDENCE LIKE DELIVERY CHALLAN TEST CERTIFICATE PURCHASE ORDER ARE NOT ATTACH WITH THE BILLS. PURCHASE WAS NOT GENUINE. HOWEVER IN ORDER TO AVOID LITIGATION AND TO BUY PEACE OF MIND MR. KISHORE GOLANI (PARTNER) HAD O FFERED 50% OF PURCHASE AS INCOME. NOWHERE HE HAD STA TED THAT PURCHASES ARE BOGUS. HE OFFERED INCOME DUE TO DEMISE OF EARLIER PARTNER WHO WAS HANDLING THE PURCHASE. R ELEVANT QUESTION & ANSWER OF STATEMENT OF MR. KISHORE GOLANI IS PRODUCE D BELO W WHICH GIVE C LEAR PICTURE OF THE CIRCUMSTANCES: 'Q.11 WHAT IS YOUR NATURE OF DUTIES IN M/ S GOLANI BROTHERS AND WHAT IS THE MODUS OPERANDI OF BUSINESS OF YOUR FIRM. ANS. SIR I AM BASICALLY AN ENGINEER AND WAS LOOKING AFTER THE TECHNICAL ASPECTS OF CONSTRUCTION CONTR ACT UNDERTAKEN BY M/ S GOLANI BROTHERS. AS CAN BE SEEN FROM THE ANSWER TO Q.NO.6 OUR PARTNERSHIP FIRM HAS SUFFERED SEVERAL CHANGES IN ITS CONSTITUTION SINCE PAST FEW YEARS. THERE HAVE BEEN FEW DEATHS IN THE FAMILY AND ACCORDINGLY ONLY TWO OF US I.E. MYSE LF AND MY BROTHER ARE THE PRESENT PARTNERS OF THE SAID FIRM. PRESENTLY I AM LOOKING AFTER ALL THE AFFAIRS OF M/ S GOLANI BROTHERS. THE SAID FIRM IS ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORKS WITH GOVERNMENT AGENCIES LIKE MMRDA MCGM AND MIDC LIT MUMBAI ETC. OUR FIRM BIDS FOR THE TENDERS OF THE ABOVE MENTIONED GOVERNMENT AGENCIES PUBLISHED 4 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI IN NEWSPAPERS. WHEN THE TENDER IS AWARDED TO US WE EXECUTE THE WORK AND RECEIVE PAYMENT AGAINST THE SAME. Q.13 PLEASE STATE AS TO WHO LOOKS AFTER THE PURCHAS E REQUIREMENTS OF M/ S GOLANI BROTHERS. ANS. SIR AS MENTIONED EARLIER THE PARTNERSHIP FIRM HAS UNDERGONE SEVERAL CHANGES IN ITS CONSTITUTION. MR. N D GOLANI MY UNCLE AND THE F OUNDER PARTNER HAVING 36% STAKE WAS IN CHARGE OF PURCHASE REQUIREMENTS AND PR OCUREMENTS THEREOF. AFTER HIS DEMISE ON 17.02.2011 MR. B D GOLANI. MY OTHER UNCLE WHO WAS ASSISTING HIM EARLIER HAD BEEN LOOKING AFTER OF THE PURCHASE & PROCUREMENT WORK. HE ALSO PASSED AWAY ON 18.09.2011. SUBSEQUENTLY. I WAS LEFT WITH NO CHOICE BUT MANAG E THE PURCHASE ALONG WITH PROJECT EXECUTION WORKS OF THIS FIRM. Q.14 PLEASE STATE THE MODUS OPERANDI OF PURCHASE OF MATERIAL BY M/ S GOLANI BROTHERS. ANS. SIR AS STATED EARLIER I WAS NOT HANDLING THE PURCHASES AND HENCE AM NOT AWARE OF THE EXACT MODUS OPERANDI FOLLOWED BY EARLIER PERSONS WHO LOOKS AFTER THE PURCHASES. AFTER I HAVE TAKEN OVER THE REIGNS OF PURCHASE FROM 18.09.2011 (AFTER DEATH OF MR. BD GOLANI) I AM TRYING TO FOLLOW A STREAMLINE THE PURCH ASE PROCEDURES WHICH IS A UNDER: - AS PER THE RE QUIREMENT WE MAKE LOCAL ENQUIRES AND AFTER NEGOTIATION WE PLACE ORDER THROUGH PHONE EMAIL ETC. THE MATERIAL IS DIRECTLY SUPPLIED BY THE SUPPLIER TO THE CONCERNED SITE ALONGWITH A DELIVERY CHALLAN WEIGHTMENT SLIP LP ETC. THE DELIVERY CHALLAN. IS DULY SIG NED BY THE CONCERNED PERSON AT SITE AND SAME IS RETURNED TO THE SUPPLIER. THE SUPPLIER RAISE THE TAX INVOICE AND SAME IS FORWARDED TO US ALONGWITH THE SAID DELIVERY CHALLAN. EVEN OTHERWISE AT THE TIME OF RECEIPT OF MAT ERIAL A COPY OF DELIVER CHALLAN WEIGH TMENT SLIP LR ETC IS MAINTAINED AT OUT SITE OFFICE. UPON RECEIPT OF THE TAX INVOICE THE PAYMENT IS RELEASED TO THE SUPPLIER AFTER CONFIRMING THE DELIVERY OF THE MATERIAL AND THE DOCUMENTS MENTIONED ABOVE. THE PAYMENT IS MOSTLY MADE THROUGH ACCOUNT PAYEE CHEQUE RTGS ETC. IN THIS CONTEXT I WOULD LIKE TO MENTION THAT BEING A TECHNICAL PERSON I AM FACING DIFFICULTIES IN HANDLING THE CONDUCT OF BUSINESS AND DEVELOPMENT THEREOF AND I AM IN PROCESS IF LIMITING MY BUSINESS SO THAT I CAN HANDLE IT BETTER WITH THE LIMITED AVAILABLE RESOURCES. THIS CAN BE 5 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI ILLUSTRATED BY THE FACT THAT OUR TURNOVER HAS BEEN CONSISTENTLY FALLING SINCE FY 2010 - 11. THE DETAILS ARE AS UNDER: - FY2010 - 11 RS.42.53 CRORES FY 2011 - 12 RS. 33.66 CRORES FY 2012 - 13 RS. 20.77 CRORES (TILL TODAY - 19.03.2013) Q.2 2 KINDLY PERSUE YOUR BOOKS OF ACCOUNT AND GIVE DETAILS OF PURCHASE AFFECTED FROM M / S . M AINSH & BARKHA AND MI S THANE STEEL PVT. LTD FOR LAST SIX YEARS. ANS. THE DETAILS OF PURCHASE AFFECTED FROM MI S MANISH &BARKHA AND MI S THANE STEEL PVT LTD AND MI S PARSHVA& CO. FOR THE LAST SIX YEARS ARE AS UNDER: - NAME OF PURCHASE PARTIES FY 2006 - 07 FY 2007 - 08 FY 2008 - 09 FY 2009 - 10 FY 2010 - 11 FY 2011 - 12 FY 2012 - 13 GRAND TOTAL M/S. THANE STEEL PVT. LTD. 80 62 640 17 37 075 1 02 98 048 1 86 85 097 81 92 315 0 0 4 69 75 175 M/S. MANISH & BARKHA 43 60 189 8 68 342 38 95 619 0 0 0 0 91 24 150 M/S. PARSHVA & CO. 0 0 7 21 966 0 0 0 0 7 21 966 TOTAL 1 24 22 829 26 05 417 1 49 15 633 1 8 6 85 097 81 92 315 0 0 5 68 21 291 Q.24 AFTER E XAMINATION OF THE BILLS OF MI S MANISH &BARKHA AND MI S THANE STEEL IT IS OBSERVED THAT THE SAME ARE NOT SUPPORTED BY TEST CERTIFICATE DELIVERY CHALLAN AND PURCHASE ORDERS. HOWEVER IT IS OBSERVED THAT PURCHASES FROM OTHER PARTIES INCLUDED TEST CERTIFIC ATE DELIVERY CHALLAN PURCHASE ORDER ETC KINDLY REFER TO THE STANDARDIZED PURCHASE PROCEDURE ADOPTED BY YOUR COMPANY AND ALSO PERUSE THE STATEMENT OF SHRI ASHOK ASRANI (PROP. MANISH &BARKHA) AND OFFER YOUR COMMENTS REGARDING THE GENUINENESS OF THE PURCHA SE CLAIMED FROM MI S MANISH &BARKHA AND MI S THANE STEEL PRIVATE LIMITED. 6 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI ANS. SIR I HAVE PERUSED THE SAID DOCUMENTS AND STATEMENT OF SHRI ASHOK ASRANI. I AM OF VIEW THAT PURCHASE WERE MADE. BUT I AGREE THAT THERE ARE CERTAIN DISCREPANCIES AND PROCEDURA L LAPSES REGARDING THE DOCUMENTATION INVOLVED IN THE PURCHASES SHOWN FROM MI S MANISH & BARKHA AND M/ S THANE STEEL PRIVATE. LIMITED. AS I WAS NOT INVOLVED IN THE P URCHASE P ROCESS EARLIER 1 AM NOT IN P OSITION TO ESTABLISH THE GENUINE NE SS OF THE PURCHASES CL AIMED FROM THE SAI D CONCERNS. HENCE I TAKE TH IS OPPORTUNITY TO OFFER ADHOC AMOUNT OF 50% OF THE PURCHASES DEBITED ON ACCOUNT OF ABOVE SAID TWO PARTIES AND ALSO IN RESPECT OF M / S PARSHVA& CO. AS MY ADDITIONAL INCOME AND PROMISE TO REVISE MY RETURNS AND P AY TAX ACCORDINGLY. Q.25 PLEASE REFER TO YOUR ANSWER TO Q.NO.24 ABOVE WHEREIN YOU HAVE ADMITTED TO WITHDRAW THE CLAIM OF 50% OF THE PURCHASES MADE FROM MI S MANISH & BARKHA MI S THANE STEELS PRIVATE LIMITED AND MI S PARSHVA& CO. PLEASE STATE THE BASIS OF SUCH WORKING PARTICULARLY SINCE THE ENTIRE PURCHASES SHOWN F ROM THE SAID TWO PARTIES ARE NOT HAVING THE REQUISITE SUPPORTING DOCUMENTS AND ALSO IT IS SEEN FROM THE STATE MENT OF SHRI ASHOK ASRANI PROP: MI S MANISH & BARKHA THAT THE ENTIRE PURCHASES WERE WITHOUT ANY ACTUAL DELIVERY OF MATERIAL. FURTHER M / S PARSHVA& CO. HAS BEEN DECLARED HAWALA OPERATED BY THE SALES TAX DEPARTMENT . IN VIEW OF THE ABOVE PLEASE WHY ENTIRE PURCHASES FROM M/ S MANISH & BARKHA M/S. THANE STEELS PRIVATE LIMITED & M / S PARSHVA& CO . SHOULD NOT BE TREATED AS NON - GENUINE. ANS. SIR I AM TECHNICAL PERSON HANDLING THE CONSTRUCTION CONTRACT WORKS AT THE SITE. I DISTINCTLY REMEMBER TO HAVE RECEIVED MATERIAL FROM THE SAID TWO PARTIES AND ALSO I WOULD LIKE TO STATE THAT STEEL TMT BARS WER E PURCHASED FROM THESE TWO PARTIES. AS A TECHNICAL PERSON AND QUALIFIED CIVIL ENGINEER I WOULD LIKE TO CATEGORICALLY STATE THAT THE CONSTRUCTION CONTRACT WORKS COMPLETED BY US DURING THE RELEVANT PERIOD WOULD NOT HAVE BEEN POSSIBLE WITHOUT DELIVERY AND CO NSUMPTION OF QUANTITY OF TMT BARS REPRESENTED BY THE PURCHASES BILLS OF THE SAID TWO PARTIES. HOWEVER SINCE WE ARE UNABLE TO PRODUCE THE COMPLETE DOCUMENTATION AND WITH A VIEW TO AVOID LITIGATION AND TO BUT PEACE OF OFFERING A SUM OF RS.2 84 10 644/ - AS UNDER WHICH REPRESENTS 50% OF THE PURCHASES FROM THE SAID TWO PARTIES IN RESPECTIVE ASSESSMENT YEARS AS ADDITIONAL INCOME OVER AND ABOVE THE REGULAR INCOME OF 7 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI M/S GOLANI BROTHERS. I ALSO PROMISE TO REVISE MY RETURNS AND PAY TAXES ACCORDINGLY. NAME OF P URCHASE PARTIES FY 2006 - 07 FY 2007 - 08 FY 2008 - 09 FY 2009 - 10 FY 2010 - 11 FY 2011 - 12 FY 2012 - 13 GRAND TOTAL M/S. THANE STEEL PVT. LTD. 40 31 320 8 68 537 51 49 024 93 42 548 40 96 157 0 0 2 34 87 586 M/S. MANISH & BARKHA 21 80 094 4 34 171 19 47 809 0 0 0 0 45 62 075 M/S. PARSHVA & CO. 0 0 3 60 983 (7 21 966/2) 0 0 0 0 3 60 983 TOTAL 62 11 414 13 02 708 74 57 816 93 4 2 548 40 96 157 0 0 2 84 10 644 7. WE HAVE CAREFULLY GONE THROUGH THE STATEMENTS SO RECORDED WHEREIN WE FOUND THAT T HE KISHORE GOLANI WHO SE STATEMENT WAS RECORDED IS BASICALLY AN ENGINEER AND WAS LOOKING AFTER THE TECHNICAL ASPECTS OF CONSTRUCTION CONTRACT UNDERTAKEN BY M/S GOLANI BROTHERS. FOR RELEVANT ASSESSMENT YEAR MR. N D GOLANI THE FOUNDER PARTNER WAS IN CHARGE OF PURCHASE REQUIREMEN TS AND PROCUREMENTS THEREOF. AFTER HIS DEMISE ON 17.02.2011 MR. B D GOLANI WHO WAS ASSISTING HIM EARLIER HAD BEEN LOOKING AFTER OF THE PURCHASE & PROCUREMENT WORK. HE ALSO PASSED AWAY ON 18.09.2011. THEREAFTER MR. KISHORGOLANI MANAGE THE PURCHASE ALONG WITH PROJECT EXECUTION WORKS OF THIS FIRM. MR.KISHOREGOLANI AGREED THAT THERE ARE CERTAIN DISCREPANCIES AND PROCEDURAL LAPSES REGARDING THE 8 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI DOCUMENTATION. BUT SINCE HE WAS NOT INVOLVED IN THE PURCHASE PROCESS EARLIER HE WAS NOT IN POSITION TO ESTABLISH TH E GENUINENESS OF THE PURCHASES CLAIMED FROM THE SAID CONCERNS. HENCE HE OFFERED AD - HOC AMOUNT OF 50% OF THE PURCHASES AND REVISED HIS RETURNS AND PAID TAX ACCORDINGLY TO BUY THE PEACE OF MIND. EVEN M/S. THANE STEELS PVT. LTD. HAD CONFIRMED THE TRANSACTI ON AND ALSO PROVIDED CONFIRMATION OF TRANSACTIONS ALONGWITH CERTIFIED BILLS. 8. IT IS ALSO CLEAR FROM THE STATEMENT THAT INCOME WAS OFFERED JUST BECAUSE OF IMPROPER DOCUMENTATION EVEN PAR TIES CONFIRMED THE TRANSACTIONS A ND NOT OFFERED BECAUSE OF BOGUS PUR CHASE. THEREFORE THE TAKING THE SAME FACTS AND GIVING NAME TO TRANSACTION AS 'BOGUS' AND INITIATING THE PENALTY PROCEEDING IS BAD - IN - LAW FURTHER THE ASSESSEE HAS OFFERED THE INCOME ON AGREED BASIS JUST TO BUY PEACE AND SAME IS ACCEPTED BY LD. AO AFTER IN DEPENDENT VERIFICATION. 9. THE ISSUE UNDER CONSIDERATION IS SQUARELY COVERED BY THE DECISION OF BOMBAY HIGH COURT IN CASE OF HIRALAL DOSHI ITA NO.2231 OF 2013 ORDER DATED 09/02/2016 WHEREIN THE HONBLE HIGH COURT HAS HELD AS UNDER: - (I) THE RELIANCE BY T HE REVENUE UPON THE DECISION OF THE APEX COURT IN MAK DATA P. LTD 358 ITR 593 (SC) TO CONTEND THAT THE JUSTIFICATION OF HAVING DELETED AND ACCEPTED THE AMOUNT OF RS.1.62 CRORES AS BUSINESS INCOME TO BUY PEACE IS NOT AVAILABLE. WE FIND THAT THE FACTS IN TH AT CASE ARE COMPLETELY DISTINGUISHABLE AND THE OBSERVATIONS MADE THEREIN WOULD NOT BE UNIVERSALLY APPLICABLE. IN THAT CASE A SUM OF RS.40.74 LAKHS HAD NEVER BEEN DISCLOSED TO THE REVENUE. DURING THE COURSE OF SURVEY THE ASSESSEE THEREIN HAD SURRENDERED T HAT AMOUNT WITH A COVERING LETTER THAT THIS SURRENDER HAS BEEN MADE TO AVOID 9 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI LITIGATION AND BUY PEACE WITH THE REVENUE. IN THE AFORESAID CIRCUMSTANCES THE APEX COURT HELD THAT THE WORDS LIKE TO AVOID LITIGATION AND BUY PEACE IS NOT SUFFICIENT EXPLANATIO N OF AN ASSESSEES CONDUCT. IT HELD THAT THE ASSESSEE HAD TO OFFER AN EXPLANATION FOR THE CONCEALMENT OF INCOME AND/OR FURNISHING OF INACCURATE PARTICULARS OF INCOME BY LEADING COGENT AND RELIABLE EVIDENCE. THE APEX COURT FURTHER RECORDS THAT IN THE FACTS OF THE CASE BEFORE IT THE SURRENDER OF INCOME WAS NOT VOLUNTARY BUT WAS MADE ONLY ON THE ACCOUNT OF DETECTION BY THE ASSESSING OFFICER DURING THE COURSE OF SURVEY. FURTHER THE APEX COURT ALSO RECORDS THE FACT THAT THE SURVEY WAS CONDUCTED MORE THAN 10 MON THS BEFORE THE ASSESSEE FILED ITS RETURN OF INCOME. HOWEVER THE ASSESSEE THEREIN HAD NOT DECLARED THIS INCOME IN ITS RETURN OF INCOME FILED SUBSEQUENT TO THE SURVEY WHICH AGAIN INDICATED THE FACT THAT HE HAD NO INTENTION TO DECLARE ITS TRUE INCOME. IN ANY EVENT THE FACTS IN THE PRESENT CASE AS FOUND BY THE CIT(A) AND THE TRIBUNAL IS THAT THE RESPONDENT ASSESSEE HAD DISCLOSED AN AMOUNT OF RS.1.62 CRORES IN THE ORIGINAL RETURN BY CREDITING THE SAME TO ITS CAPITAL ACCOUNT BEING LONG TERM CAPITAL GAIN ON THE SALE OF SHARE. THUS THE APPELLANT WAS UNDER BONAFIDE BELIEF THAT THE INCOME FROM LONG TERM CAPITAL GAIN WAS EXEMPT FROM TAX. THUS THE DECISION OF THE APEX COURT WOULD NOT APPLY TO THE FAC TS ARISING IN THE PRESENT CASE (II) THE CONTENTION ON BEHALF OF TH E REVENUE THAT IN CASE THERE IS A TAX IMPACT BY VIRTUE OF CHANGE OF HEAD DURING THE ASSESSMENT PROCEEDINGS THEN PENALTY IS IMPOSABLE AND THE DECISION OF THIS COURT IN M/S. BENNETT COLEMAN (SUPRA) WOULD NOT APPLY. IN SUCH A CASE MR. MALHOTRA FOR THE REVEN UE EMPHASIZED THE FACT THAT IN M/S BENNETT COLEMAN (SUPRA) THE COURT WAS DEALING WITH THE CHANGE OF HEAD OF INCOME BUT NOT WITH REGARD TO A CLAIM FOR FULL EXEMPTION FROM PAYMENT OF TAX AS IN THIS CASE. WE ARE UNABLE TO ACCEPT THE AFORESAID SUBMISSION. ACCO RDING TO US THE DISTINCTION SOUGHT TO MADE ON BEHALF OF THE REVENUE IS NOT ACCEPTABLE AS THE RATIO OF THE DECISION IN M/S BENNETT COLEMAN (SUPRA) IS WHERE COMPLETE DISCLOSURE OF INCOME HAD BEEN MADE IN THE RETURN OF INCOME AND HEAD OF THE INCOME UNDERGOES 10 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI A CHANGE AT THE HANDS OF THE ASSESSING OFFICER WOULD NOT BY ITSELF JUSTIFY THE IMPOSITION OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. (III) WE FIND THAT THE COMMISSIONER OF INCOME TAX(A) DURING THE PENALTY PROCEEDINGS HAD AGAIN EXAMINED THE ISSUE WHETH ER THE CLAIM OF CAPITAL GAIN MADE IN THE REGULAR RETURN OF INCOME TO THE EXTENT OF RS.1.62 CRORES WITH THE PARTICULARS IN SUPPORT OF THE SAME. ON EXAMINATION THE CIT(A) REACHES A PRIMA FACIE CONCLUSION THAT THE INCOME COULD BE REGARDED AS LONG TERM CAPITA L GAIN. ONCE THE AFORESAID CONCLUSION HAS BEEN REACHED COUPLED WITH TWO FURTHER FACTS VIZ. THE AUTHORITIES HAVE RENDERED A FINDING OF FACT THAT THE RESPONDENT - ASSESSEE HAD NOT CONCEALED ITS INCOME NOR FILED INACCURATE PARTICULARS ATTRIBUTABLE TO CAPITAL GA INS IN ITS REGULAR RETURN OF INCOME THE VIEW TAKEN TO DELETE THE PENALTY IS A POSSIBLE VIEW. (IV) IN THE PRESENT FACT THE VIEW TAKEN BY THE CIT(A) AS WELL AS THE TRIBUNAL IS A REASONABLE AND POSSIBLE VIEW. NOTHING HAS BEEN SHOWN TO US TO HOLD THAT THE FI NDINGS OF THE CIT(A) AND TRIBUNAL WAS PERVERSE AND/OR ARBITRARY WARRANTING ANY INTERFERENCE BY THIS COURT. IT MAY BE POINTED OUT THAT EVEN IN THE MEMO OF APPEAL IT IS NOT URGED BY THE REVENUE THAT THE FINDING OF THE CIT(A) AND TRIBUNAL ARE IN ANY MANNER P ERVERSE. IN THE ABOVE VIEW WE SEE NO REASON TO ENTERTAIN THE QUESTION AS PROPOSED AS IT DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. ACCORDINGLY THE APPEAL IS DISMISSED. NO ORDER AS TO COSTS. 10. LEARNED AR ALSO RELIED ON THE DECISION OF CO - O RDINATE BENCH IN THE CASE OF VIPUL LIFE SCIENCES LTD. 57 TAXMANN.COM 25 IN SUPPORT OF THE PROPOSITION THAT WHERE ASSESSEE HAS FILED ITS RETURN OF INCOME DECLARING THE AMOUNT SURRENDER AND WHICH INCOME WAS ACCEPTED BY THE AO BY NO STRETCH OF LOGIC THIS S ITUATION 11 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI COULD BE TREATED AS SITUATION IN WHICH ANY INCOME WAS CONCEALED BY THE ASSESSEE. THE PRECISE OBSERVATION OF THE TRIBUNAL WAS AS UNDER: - 37. WE ARE ALSO SUPPORTED BY THE ORDER OF THE COORDINATE BENCH OF PUNE IN THE CASE OF KANBOY SOFTWARE INDIA(P) L TD. VS. DY. CIT (2009) 31 SOT 153 (PUNE) IT WAS HELD IT IS NOT FOR AO TO PONDER OVER WHAT SHOULD HAVE HAPPENED IN IDEAL CIRCUMSTANCES AND REJECT EXPLANATION BUT HE IS TO CONSIDER EXPLANATION OBJECTIVELY AND UNLESS HE FINDS SOME AGAINST HUMAN PROBABIL ITIES OR UNLESS THERE ARE ANY REAL INCONSISTENCIES OR FACTUAL ERRORS IN SUCH AN EXPLANATION AO OUGHT TO ACCEPT THE SAME. IN THE INSTANT CASES BEFORE US WE HAVE FOUND THAT THE REVENUE AUTHORITIES HAVE ACCEPTED THAT THE PURCHASES HAD BEEN MADE AND RIGHTLY RECORDED IN STOCK BOOK AND BOOKS OF ACCOUNT AND GIVING OUT CORRECT RESULT. THE AO DID NOT DISTURB ANYTHING BUT WENT ON TO LEVY THE PENALTY WHICH EVEN HE COULD NOT SUBSTANTIATE UNDER THE PHRASE INACCURATE PARTICULARS OF INCOME. WE ARE IN ACCEPTANCE WI TH THE ARGUMENT OF THE AR THAT IF THE REVENUE AUTHORITIES WERE HOLDING THE PURCHASE OF RS.3 18 55 857/ - IN 2009 - 10 AND RS.2 44 98 719/ - AS BOGUS IN ASSESSMENT YEAR 2010 - 11 WHY ACCEPT ASESSEES DECLARATION OF PEAK AMOUNTS AND NOT ADD BACK THE PURCHASE TAKE N TO BE BOGUS BY REJECTING THE BOOKS. 38.THE FACT THAT THE REVENUE AUTHORITIES ACCEPTED THE BOOKS OF ACCOUNTS GO TO PROVE THAT ACCEPT FOR THE RELIANCE ON ASSESSEES STATEMENT AND THE STATEMENTS OF 18 PERSONS WHOSE STATEMENTS WERE TAKEN AT THE BACK OF TH E ASSESSEE AND WITHOUT AFFORDING AN OPPORTUNITY FOR CROSS EXAMINATION THE REVENUE AUTHORITIES DID NOT HAVE ANYTHING TO SHOW AND PROVE THAT HERE IS THE CONCEALMENT OF INCOME RESULTING FROM FURNISHING OF INACCURATE PARTICULARS OF INCOME. THIS IS SO BECAUSE THERE HAS BEEN NOTHING WITH THE REVENUE AUTHORITIES TO PROVE AND SHOW THAT ANY INCOME HAS BEEN CONCEALED. THE ASSESSEE FILED ITS ROI DECLARING THE AMOUNT SURRENDERED. THIS INCOME WAS ACCEPTED BY THE AO. BY NO STRETCH OF LOGIC THIS SITUATION COULD BE TRE ATED AS A SITUATION IN WHICH ANY INCOME WAS CONCEALED BY THE ASSESSEE. WE THEREFORE SET ASIDE THE ORDERS OF THE CIT(A) AND CANCEL THE ORDERS PASSED BY THE AO LEVYING PENALTY U/S 271(1)(C) IN ASSESSMENT YEARS 2009 - 10 AND 2010 - 11. 12 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI 11. RELIANCE WAS ALSO PLACED BY LEARNED AR ON THE DECISION OF BANKGALORE TRIBUNAL IN THE CASE OF MUNINAGA REDDY VS. ACIT 37 TAXMANN.COM 440 IN SUPPORT OF THE PROPOSITION THAT WHERE ASSESSEE CONSEQUENT TO SURVEY CONDUCTED UNDER SECTION 133A HAD DECLARED INCOME FROM BUSINESS AT R S.81 LAKHS AND FURTHER IN RETURN OF INCOME FILED AND DECLARED SAID INCOME WHICH WAS ACCEPTED AND BROUGHT TO TAX ASSESSING OFFICER WAS WRONG IN IMPOSING PENALTY UNDER SECTION 271 (1) ( C). 12. RELIANCE WAS ALSO PLACED BY LEARNED AR ON THE DECISION OF GUJ ARAT HIGH COURT IN THE CASE OF SHANKERLAL NEBHUMAL UTTAMCHANDANI WHEREIN HIGH COURT HAS HELD AS UNDER: IN THE CIRCUMSTANCES IT IS APPARENT THAT THE SAME INCOME NAMELY THE AMOUNTS IN THE BANK ACCOUNTS ALONGWITH INTEREST THEREON HAVE BEEN ASSESSED IN THE HANDS OF THE ASSESSEE AS WELL AS DIFFERENT FAMILY MEMBERS. HENCE EVEN THE DEPARTMENT IS NOT CERTAIN AS TO THE RIGHT PERSON WHO IS AMENABLE TO TAX QUE THE SAID INCOME IN THE CIRCUMSTANCES THE TRIBUNAL RIGHTLY CAME TO THE CONCLUSION THAT NO PENALTY IS EXI GIBLE UNDER THE PROVISIONS OF SECTION 271(1) ( C) OF THE ACT WHEN THE TRIBUNAL HAS FOUND THAT ADMITTEDLY THE FAMILY MEMBERS HAVE NOT BEEN TREATED AS BENAMIDARS OF THE ASSESSEE NOR HAVE THE FAMILY MEMBERS STATED THAT THEY ARE THE BENAMIDARS OF THE ASSESSE E. 13. IN THE VIEW THAT THE COURT HAS TAKEN IT HAS NOT BEEN FOUND NECESSARY TO ENUMERATE AND DEAL WITH MORE THAN A DOZEN AUTHORITIES CITED BY BOTH THE SIDES. THE QUESTION REFERRED FOR OPINION OF THIS COURT IS THEREFORE ANSWERED IN THE AFFIRMATIVE I.E. I N FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE REFERENCE STANDS DISPOSED OF ACCORDINGLY WITH NO ORDER AS TO COSTS. 13 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI 13. WE FOUND THAT CIT(A) HAS WRONGLY APPLIED EXPLANATION 1 TO SECTION 271(1) (C) IN SO FAR AS EXPLANATION 1 TO SECTION 271(1)(C) APPL IES WHEN THE ASSESSEE FAILED TO GIVE AN EXPLANATION WHICH IS NOT ACCEPTABLE TO THE A O . HOWEVER IN PRESENT CASE THE ASSESSEE OFFERED THE EXPLANATION THAT ADDITIONAL INCOME WAS OFFERED DUE TO SOME PROCEDURAL LAPS AND DEMISE S OF EARLIER PARTNERS. EVEN A O HAS INDEPENDENTLY VERIFI ED THE DETAILS SO FILED OF M/ S THANE STEEL PVT LTD. TO THE EFFECT THAT IT IS GENUINE PARTY AND ALL THE DETAILS ARE IN ORDER. THEREFORE LD. AO ACCEPTED THE EXPLANATION OF THE ASSESSEE AND ASSESSED THE INCOME AS OFFERED BY THE ASSESSEE . IF THE DETAILS WERE NOT IN ORDER OR PURCHASES ARE BOGUS THEN THE LD. AO WOULD HAVE MADE THE ENTIRE ADDITION AND NOT HAD RESTRICT ED THE SAME TO 50% AS OFFERED BY THE ASSESSEE . THIS FACTS SHOWS THAT DEPARTMENT ALSO ACCEPT THE GENUINENESS OF THE PURCHASES B Y NOT MAKING THE ADDITION OF PURCHASES. THIS IS EVIDENT FROM ASSESS MENT ORDER ITSELF WHERE THE LD. AO MENTIONED THAT: - THE ASSESSEE COMPANY SUBMITTED COPIES OF INVOICE LEDGER ACCOUNT PAYMENT DETAILS AND RECONCILIATION OF THE SAME WITH THE BANK STATEMENT . THE ASSESSEE ALSO FILED DETAILS OF THANE STEEL P LTD FROM THE MAHARASHTRA GOVERNMENT SALES TAX WEBSITE IN WHICH THE COMPANIES STATUS IS SHOWN AS ACTIVE. THIS FACT WAS INDEPENDENTLY VERIFIED AND WAS FOUND IN ORDER. IT IS PERTINENT TO MENTION HERE THAT M/ S THANE STEEL PRIVATE LIMITED IS ALSO A REGISTERED COMPANY UNDER COMPANIES ACT 1956 AND IS ALSO EXCISE REGISTERED AND ISO CERTIFIED COMPANY. IN ADDITION TO THIS THE ASSESSEE SUBMITTED VAT AUDIT REPORT FOR THE FINANCIAL YEAR. 14 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI IN THE LIGHT OF THE ABOVE DI SCUSSION 50% OF THE PURCHASES MADE DURING THE YEAR AS OFFERED BY THE ASSESSEE IS HEREBY ADDED TO THE INCOME ASSESSED VIDE ORDER U/S 143(3) OF THE IT ACT DATED 15.12.2009 AT AN INCOME OFRS.1 34 62 840/ - . 14. WHEN THE EXPLANATION WAS ACCEPTED BY THE LD. AO THEN THERE IS NO QUESTION OF INVOKING EXPLANATION 1 TO SECTION 271(1)(C). 15. WE ALSO FOUND THAT CIT(A) HAS WRONGLY DISTINGUISH ED THE FACTS IN THE CASE OF HIRALAL DOSHI(SUPRA) OF BOMBAY HIGH COURT IN SO FAR AS THE LD. CIT(A) FAILED TO CONSIDER THAT IN P RESENT CASE THE LD. AO HIMSELF STATED THAT DETAILS ARE IN ORDER AND EVEN ALLOWED THE 50% OF PURCHASES. THUS LD. AO ACCEPTED GENUINENESS OF THE PURCHASE. THEREFORE THE FACTS OF THE INSTANT CASE IS MUCH STRONGER THAN FACTS O F THE HIRALAL DOSHI WHERE APPELL A T E AUTHORITY (I.E. CIT(A)) ACCEPTED THE GENUINENESS OF TRANSACTION BUT IN THE INSTANT CASE THE ASSESSING AUTHORITY HIMSELF HAD ACCEPTED THE GENUINENESS THEREFORE FINDING OF HON'BLE BOMBAY HIGH COURT IS SQUARELY APPL I ES IN ASSESSEE CASE. 16. THE CIT(A) HAS ALSO DISTINGUISHED THE DECISION OF HON BLE JURISDICTIONAL MUMBAI TRIBUNAL IN CASE OF VIPUL LIFE. SCIENCES LTD. VIS DCIT [2015J 57 TAXMANN.COM 25 (MUMBAI - TRIB.) ON GROUND THAT IN THAT CASE ADDITIONAL INCOME SURRENDERED BY THE ASSESS E E WAS ACCEPTED BY THE LD. AO AND NO ADDITION WAS MADE BUT IN PRESENT CASE THE LD. AO MENTION THAT' 50% OF THE PURCHASES MADE DURING THE YEAR AS OFFERED BY THE ASSESSE E IS HEREBY ADDED TO TOTAL INCOME '. HENCE THERE IS ADDITION THEREFORE FACTS OF THE CASE IS DIFFERENT. BUT THE LD. 15 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI CIT(A) FAILED TO CONSIDER THAT IN THAT CASE ALSO SURVEY OPERATION CONDUCTED ON 22.11.2012 WHEREIN THE ASSESSEE DECLARED RS. 34 73 047/ - IN AY 2009 - 10 AND BASED ON THE SURRENDER THE AO INITIATED REASSESSMENT PROCEEDINGS U/S. 148. IN RESPONSE TO THAT THE ASSESSEE FILED ITS RETURN OF INCOME ADOPTING THE FIGURE OF NORMAL RETURN AND THE AMOUNT SURRENDERED AT RS. 34 73 047/ - AT RS. 1 19 10 300/ - AND NO SEPARATE ADDITION WAS MADE. IN PRESENT CASE ALSO DURING SURVEY PROCEEDING ASSESSEE OFFERED ADDI TIONAL INCOME AND VOLUNTARILY FILED RETURN OF INCOME SHOWN REGULAR INCOME AND ADDITIONAL INCOME. WHEN NOTICE U/S 148 WAS ISSUED THAT TIME ALSO ENHANCED INCOME WAS OFFERED. HENCE THE FACTS OF THE ASSESSEE ARE STRONGER THAT THE FACTS OF VIPUL LIFE SCIENCE. AND IN THE INSTANT CASE ALSO NO ADDITION WAS MADE THE AO MENTION ED THAT INCOME OFFERED BY THE ASSESSEE IS ACCEPTED AND ADDED. THERE IS NO SEPARATE ADDITION IT IS JUST ACCEPTANCE OF THE INCOME OFFERED BY THE ASSESSEE. 17. IT IS CLEAR FROM THE ABOVE DISCU SSION THAT DECISION OF VIPUL LIFE SCIENCES LTD.V /S DCIT [2015] 57 TAXMANN.COM 25 (MUMBAI - TRIB.) SQUARELY APPLIES TO THE ASSESSEE S CASE AND PENALTY DESERVES TO BE DELETED . 18. IT WAS ALSO ARGUED BY LEARNED AR THAT ASSESSEE HAD OFFERED THE INCOME EVEN BEF ORE THE ISSUE OF NOTICE U/S 148 AND SAME IS ACCEPTED AND ASSESSED VIDE ORDER DATED 30/03/2015. HENCE THERE IS NO CONCEALMENT OF INCOME . 16 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI 19. FURTHERMORE PENALTY UNDER SECTION 271(1)(C) CANNOT BE LEVIED ON ESTIMATED ADDITION. SINCE AO HAS MADE ADDITION ON 50% OF THE ALLEGED PURCHASE THE SAME WAS ON ESTIMATION WITHOUT POINTING OUT WHICH PART OF PURCHASE WAS GENUINE AND WHICH PART WAS NON - GENUINE. 20. AS PER LEARNED AR NO PENALTY CAN BE IMPOSED IF THE FACTS AND CIRCUMSTANCES ARE EQUALLY CONSISTENT WITH THE HYPOTHESIS THAT THE AMOUNT DOES NOT REPRESENT THE CONCEALED INCOME AS WITH THE HYPOTHESIS THAT IT DOES. IF THE ASSESSEE GIVES AN EXPLANATION WHICH IS UNPROVED BUT NOT DISPROVED I.E. IT IS NOT ACCEPTED BUT CIRCUMSTANCES DOES NOT HEAD TO THE REASONABLE AND POSITIVE INFERENCE THAT THE ASSESSEES CASE IS FALSE AND THEN THE SAME AMOUNT CANNOT BE DISALLOWED. 21. WE HAVE DELIBERATED ON THE JUDICIAL PRONOUNCEMENTS CITED BY LEARNED AR AND ALSO DECISION RECORDED BY CIT(A) IN ITS APPELLATE ORDER. AFTER GOING THROUG H THE STATEMENT SO RECORDED DURING SURVEY THE REVISED RETURN FILED BY THE ASSESSEE OFFERING THE INCOME TO STOP THE LITIGATION AND TO PURCHASE PIECE OF MIND AND THE FINDINGS GIVEN BY THE AO WHILE FRAMING ASSESSMENT UNDER SECTION 143(3) READ WITH SECTION 14 7 WHEREIN HE HAS ACCEPTED THE PURCHASES SO MADE. WE FOUND THAT I N PRESENT CASE ALSO ASSESSEE EXPLAIN THE GENUINENESS OF PURCHASES. BUT ASSESSEE VOLUNTARILY OFFERED @50% OF PURCHASES AS ADDITIONAL INCOME JUST TO BUY PE ACE AND AVOID LITIGATION. THE SAME ACCE PTED BY AO . THE RELEVANT PARA OF AO ORDER (A.Y. 2007 - 08) ARE REPRODUCING BELOW. - 17 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI 'IN THIS REPLY THE ASSESSEE SUBMITTED THAT TO BUY PEACE OF MIND HE HAS ALREADY ADMITTED TO WITHDRAWN 50% OF PURCHASES CLAIM AMOUNTING TO RS.62 11 414/ - ) 50% OF AMOUNT OF PU RCHASE DURING THE FINANCIAL YEAR I.E. RS.1 24 22 829/ - ) AND OFFER IT AS INCOME. FOR THE YEAR UNDER CONSIDERATION ASSESSEE FILED REVISED RETURN OF INCOME AT RS.1 96 74 259/ - WHICH IS INCLUSIVE OF RS.62 11 4 14 (50% OF AMOUNT OF PURCHASES DURING THE FI NANCIAL YEAR I.E. 1 24 22 829/ - ). THE ASSESSEE COMPANY SUBMITTED COPIES OF INVOICE LEDGER ACCOUNT PAYMENT DETAILS RECONCILIATION OF THE SAME WITH THE BANK STATEMENT. THE ASSESSEE ALSO FILED DETAILS OF THANE LTD FROM THE MAHARASHTRA GOVERNMENT SALES TAX WEBSITE IN WH ICH THE COMPANIES STATUS IS SHOWN AS ACTIVE. THIS FACT WAS INDEPENDENTLY VERIFIED AND WAS FOUND IN ORDER. IT IS PERTINENT TO MENTION THAT M/ S THANE STEEL PRIVATE LIMITED IS ALSO A REGISTERED COMPANY UNDER COMPANIES ACT 1956 AND IS ALSO EXCIS E REGISTERED AND ISO CERTIFIED COMPANY. IN AD DITION TO THIS THE ASSESSEE SUBMITTED VAT AUDIT REPORT FOR THE FINANCIAL YEAR. IN THE LIGHT OF THE ABOVE DISCUSSION 50% OF THE PURCHASES MAD E DURING THE YEAR AS OFFERED BY THE ASSESSEE IS HEREBY ADDED TO THE INCOME ASSESSED VIDE ORDER U/ S 143(3) OF THE IT ACT D ATED 15.12.2009 AT AN INCOME OF RS.1 34 62 840/ - . 22. IT IS CLEAR FROM THE ABOVE ORDER OF THE AO THAT THERE WAS NEITHER CONCEALMENT OF INCOME NOR FURNISHING OF INA CCURAT E PARTICULARS OF INCOME. 23. F OLL OWING JUDICIAL PRONOUNCEMENTS CAN BE RELIED ON IN SUPPORT OF THE PROPOSITION THAT VOLUNTARY SURRENDER OF INCOME DOES NOT ATTRACT PENALTY UNDER SECTION 271(1)(C). SN CASE LAWS OBSERVATIONS 1 CIT V/S. JAYARAJ TALKIES (1999) 239 ITR 914 (MAD HC) MERE AGREEME NT TO ADDITION OF INCOME OR SURRENDER OF INCOME DID NOT IMPLY CONCEALMENT OF INCOME 2 CIT V/S M GEORGE & BROTHERS (1987)59 CTR (KER HC) 298 WHERE THE ASSESSEE FOR ONE REASON OR THE OTHER AGREES OR SURRENDERS CERTAIN AMOUNTS FOR ASSESSMENT THE IMPOSITION OF PENALTY 18 ITA NO. 4593 4594 4595 4596/M/16 (A.Y.200 7 - 200 8 TO 2011 - 12) M/S. GOLANI BROT HERS MUMBAI SOLELY ON THE BASIS OF ASSESSEES SURRENDER WILL NOT BE WELL FOUNDED. 3 CIT V/S. SUARAJBHAN (2007) 294 ITR 481 (P&H HC) CIT V/S. SURESH CHANDRA MITTALS (2001) 251 ITR 9 (SC) PENALTY CANNOT BE IMPOSED MERELY ON ACCOUNT OF HIGHER INCOME HAVING BE EN SUBSEQUENTLY DECLARED. 4 CIT VS MANJUNATHA COTTON AND GINNING FACTORY (KER HC) SEC. 271(1)( C) PENALTY NOT LEVIABLE WHERE ASSESSEE AGREE TO ADDITIONS TO BUY PEACE. 24. SINCE IN THE INSTANT CASE THE ASSESSEE HAS NOT CONCEALED ANY PARTICULARS OF THE IN COME NOR HAS FURNISHED INACCURATE PARTICULARS OF SUCH INCOME AND HAS EVEN DISCLOSED AND SUBMITTED ALL THE PARTICULARS CORRECTLY. THEREFORE LEVY OF PENALTY WAS NOT JUSTIFIED IN ALL THE YEARS UNDER CONSIDERATION. 25. IN THE RESULT APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 21/10/ 2016. S D/ - ( PAWAN SINGH ) S D/ - (R.C.SHARMA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 21/10/2016 KARUNA SR. PS / COPY OF THE ORDER FORWARDED TO : / BY ORDER / ( ASSTT. REGISTRAR) / ITAT MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT . 3. ( ) / THE CIT(A) MUMBAI. 4. / CIT 5. / DR ITAT MUMBAI 6. / GUARD FILE. //TRUE COPY//