Thakkers Developers Ltd., Nashik v. ACIT Cent. Cir,

ITA 488/PUN/2006 | misc
Pronouncement Date: 22-12-2010 | Result: Allowed

Appeal Details

RSA Number 48824514 RSA 2006
Assessee PAN AAACT1513E
Bench Pune
Appeal Number ITA 488/PUN/2006
Appellant Thakkers Developers Ltd., Nashik
Respondent ACIT Cent. Cir,
Appeal Type Income Tax Appeal
Pronouncement Date 22-12-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted Not Allotted
Tribunal Order Date 22-12-2010
Date Of Final Hearing 03-08-2012
Next Hearing Date 03-08-2012
Assessment Year misc
Appeal Filed On 24-12-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV JUDICIAL MEMBER AND SHRI G.S. PANNU ACCOUNTANT MEMBER I.T.A. NO. 488/PN/2006 : A.Y. 2001-02 THAKKAR DEVELOPERS LTD. 7 THAKKARS NEAR NEHRU GARDEN NASIK 422 001 PAN AAACT 1513 E APPELLANT VS. ASSTT. CIT CENT. CIR. NASIK RESPONDENT APPELLANT BY: SHRI S.U. PATHAK AND SHRI NIKHIL PATHAK RESPONDENT BY: SHRI SANTOSH KUMAR ORDER PER SHAILENDRA KUMAR YADAV JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)-I NAGPUR DATED 30-1-2006 FOR A. Y. 2001-02 ON THE POINT OF PENALTY LEVIED U/S 271(1)(C ) AMOUNTING TO RS. 2 31 237/- WITH REGARDS TO THE DISALLOWANCE OF LAND COST OF RS. 5 84 668/- PAID TO JALARAM FAMILY TRUST (HEREINAFTER REFERRED AS JFT FOR SHORT ) AS PER ASSESSMENT ORDER U/S 143(3). 2. THE ASSESSEE HAS PROMOTED A PROJECT UNDER THE NA ME OF MANOHAR NAGAR ON A LAND AT SURVEY NO. 798 OF N ASIK. PART OF THE LAND ADMEASURING 22000 SQ. MTRS WAS ACQ UIRED PAGE 2 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 FROM THE MEMBERS OF SUMANGAL SOCIETY (OWNERS) AT TH E CONSIDERATION OF RS. 11 11 000/- UNDER A DEVELOPMEN T AGREEMENT DATED 23-12-1993. THUS THE ASSESSEE ACQU IRED THE DEVELOPMENT RIGHTS RELATING TO THE SAID LAND. THEREAFTER THE ASSESSEE ENTERED INTO AGREEMENTS DA TED 24-4-1996 FOR 7000 SQ MTRS AND DATED 4-7-1997 FOR 3000 SQ. MTRS OUT OF SAID 22000 SQ. MTRS WITH THE SAID J FT TO ACQUIRE ITS RIGHTS IN THE SAID LAND AND POSSESSION OF IT FOR RS. 26 00 000/- (RS 371.43 PER SQ. MTRS) RS. 14 00 000/- (RS. 466.67 PER SQ. MTRS) RESPECTIVELY. THUS THE C OST OF 7000 SQ. MTRS OF LAND AGGREGATED TO RS. 29 53 500/- (RS. 3 53 500/- TO OWNERS AND RS. 26 00 000/- TO JFT) AN D FOR 3000 SQ. MRS AGGREGATED TO RS. 15 51 500/- (RS. 1 51 500/- TO OWNERS AND RS. 14 00 000/- TO JFT). THUS THE PER SQ. MTR RATE OF COST OF ACQUISITION TO THE ASSESSEE WORKED OUT TO RS. 421.93 FOR THE AREA OF 7000 SQ. M TR AND RS. 517.17 FOR THE AREA OF 3000 SQ. MTRS. AT THIS STAGE IT WAS OBSERVED THAT PER SQ. MTR RATE OF VALUATION FOR THE STAMP DUTY PURPOSE OF THE SAID LAND WAS RS. 350/- O N 23-12-1993 RS. 685/- ON 24-4-1996 AND RS. 848/- ON 4-7-1997. THUS THE COST INCURRED BY THE ASSESSEE T O ACQUIRE THE SAID LAND BY WAY OF PAYMENTS TO OWNERS AS WELL AS JFT WAS VERY MUCH COMPARED TO THE PREVAIL ING PAGE 3 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 MARKET RATES. IN FACT THE RATE PAID BY THE ASSESSE E WAS LOWER THAN THE RATE ADOPTED BY THE STAMP AUTHORITIE S. 3. DURING THE ASSESSMENT PROCEEDINGS OF JFT U/S 143 (3) R.W.S. 147 FOR A.Y. 1997-98 AND 1998-99 THE ASSESSI NG OFFICER OF JFT HELD THAT AGREEMENT BETWEEN THE MEM BERS OF SUMANGAL SOCIETY AND JFT CREATING ENCUMBRANCE AN D POSSESSION OF JFT ON THE PROPERTY IS A SHAM DOCUME NT FOR VARIOUS REASONS. THE SAID TRANSACTION WITH JFT AND OWNERS WAS HELD NOT GENUINE. CONSEQUENTLY PENALTY WAS LEVIED UNDER THE PROVISIONS OF SECTION 271(1)(C) OF THE ACT WHICH WAS CONFIRMED BY THE CIT(A). THE SAME HAS B EEN OPPOSED BEFORE US. 4. WE FIND THAT THE SUBJECT MATTER OF PENALTY IS OF RS. 2 31 237/- AGAINST WHICH THE ASSESSEE HAS FILED AN APPEAL. AS DISCUSSED EARLIER THE ASSESSEE ENTERED INTO THE DEVELOPMENT AGREEMENT WITH SUMANGAL CO-OPERATIVE SOCIETY FOR THE LAND AT S.N. 798/5 NASIK ON 23-12- 1993. BEFORE THIS DATE IN 1988 THE SAID SOCIETY GIVEN TH IS LAND ON LEASE TO JFT AS PER AGREEMENT DATED 26-10-1988. TH E ENGLISH TRANSLATION OF THE SAID AGREEMENT IS PLACED AT PAGES 24 TO 43 OF THE PAPER BOOK. THE ASSESSEE REAL IZING THAT THE SAID TRUST HAD A RIGHT IN THIS LAND PAID PAGE 4 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 COMPENSATION TO THE TRUST BY AGREEMENTS IN A.Y. 199 6-97. THE ASSESSING OFFICER DOUBTED THE GENUINENESS OF TH E AGREEMENT OF THE SOCIETY WITH JFT IN 1988. HE FOUN D THAT THE AGREEMENT MENTIONED THE ADDRESSES OF THE MEMBER S OF THE SOCIETY ON WHICH THESE MEMBERS WERE NOT STAYING IN 1988. THEREFORE HE HELD THAT THIS AGREEMENT OF TH E SOCIETY WITH JFT IS BOGUS AND THUS JFT HAD NO RIGHT IN THE LAND AND THEREFORE HE DISALLOWED THE PAYMENT CLAIMED BY THE ASSESSEE TO JFT IN A.Y. 1999-00 TO 2002-03. SUBSEQUENTLY THE PENALTY WAS LEVIED FOR THE ABOVE ADDITION ONLY FOR A.Y. 2001-02 AND NOT FOR ANY OF THE OTHER YEARS ALTHOUGH THE FACTS LEADING TO THE ADDITIONS IN ALL THESE YEARS WERE THE SAME AS STATED ON BEHALF OF THE ASS ESSEE. THE ASSESSEE PLACED RELIANCE ON THE DECISION OF I.T .A.T. IN THE CASE OF DYNAMIC LOGISTICS PVT. LTD. VS. DY. CIT (ITA NO. 7/PN/2006 FOR A.Y. 2001-02 DATED 29-2-2008 WHEREIN ON IDENTICAL FACTS THE ASSESSING OFFICER HAS NOT LEVI ED THE PENALTY FOR OTHER YEARS. IN THAT EVENT PENALTY LEV IED WAS HELD NOT JUSTIFIED. RELEVANT PORTION OF THE SAID D ECISION IS REPRODUCED AS UNDER: 5. WE FIND FORCE IN THE SUBMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT WHEN THE SIMILAR NOTE S ENCLOSED WITH THE RETURNS FOR THE A.Y. 2001-01 200 2- 03 AND 2003-04 THE A.O HAD DROPPED PENALTY PROCEEDINGS IT WAS NOT OPEN TO THE A.O TO IMPOSE PENALTY ON THE ADMITTEDLY IDENTICAL FACTS FOR THI S ASSESSMENT YEAR. A CO-ORDINATE BENCH OF THIS TRIBUN AL IN THE CASE OF ORIENT PRESS LTD. (99 TTJ 1091) HAS HELD PAGE 5 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 THAT IF THE A.O HAS DROPPED PENALTY ON SIMILAR SET OF FACTS IN THE OTHER YEARS THE PENALTY NEEDS TO BE DROPPED ON THAT GROUND ALONE. IN THE SAID CASE TH E TRIBUNAL HAS OBSERVED AS FOLLOWS: 4. IT IS DIFFICULT TO UNDERSTAND AS TO HOW CAN REVENUE DEFEND IMPOSITION OF PENALTIES FOR A.Y. 1993094 AND 1994-95 WHEN ON THE MATERIALLY SIMILAR SET OF FACTS NO PENALTY IS IMPOSED FOR THE ASSESSMENT YEAR 1995-96. THE DROPPING OF PENALTY PROCEEDINGS FOR THE A.Y. 1995-96 IS A CONSCIOUS ACT BY THE A.O AS EVIDENT FROM THE SPECIFIC ORDER DROPPING THE PENALTY PROCEEDINGS FOR THAT YEAR. DURING THE COURSE OF HEARING BEFORE US WE DID ASK THE DEPARTMENTAL REPRESENTATIVE TO EXPLAIN THIS CONTRADICTION IN THE STAND BUT HE WAS NOT ABLE TO EXPLAIN THE SAME AND HE MADE A VAGUE STATEMENT TO THE EFFECT THAT THE FACTS OF THAT YEAR MAY BE DIFFERENT. THIS IS UNACCEPTABLE. IN ANY CASE THE MATERIAL FACTS AS EVIDENT FROM THE DOCUMENTS BEFORE US WERE CLEARLY THE SAME SO FAR AS THE QUESTION OF DECLARATION WAS CONCERNED. ON ONE SET OF FACTS IN ONE YEAR THE PENALTY IS DROPPED AND FOR THE REMAINING YEARS THE PENALTIES ARE IMPOSED ARE POINTED OUT FOR THIS REASON ALONE PENALTIES IMPOSED ARE NOT SUSTAINABLE IN LAW 6. WE HAVE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY A CO-ORDINATE BENC H. THE MATERIAL FACTS BEING IDENTICAL INASMUCH AS ON SIMILAR SET OF FACTS AS WERE BEFORE THE A.O IN THI S YEAR THE PENALTY PROCEEDINGS HAVE BEEN DROPPED FOR OTHER YEARS WE HOLD THAT IT WAS NOT A FIT CASE FOR IMPOSITION OF PENALTY. THE CIT(A) OUGHT TO HAVE DELETED THE SAME. IN ANY EVENT EVEN ON MERITS SI NCE ASSESSEE HAD DISCLOSED ALL MATERIAL FACTS BY WAY OF A NOTE ATTACHED TO THE INCOME-TAX RETURN IT CANNOT B E SAID TO BE A CASE OF CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS. BEARING IN M IND THESE FACTS AS ALSO ENTIRETY OF THE CASE WE DEEM IT FIT AND PROPER TO DELETE THE IMPUGNED PENALTY OF RS. 95 39 005. THE ASSESSEE GETS THE RELIEF ACCORDINGL Y. REFERENCE WAS ALSO PLACED TO THE DECISION OF CO- ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF ORIEN T PRESS PAGE 6 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 LTD. (99 TTJ 1091) WHICH HAS BEEN FOLLOWED BY PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DYNAMIC LOGISTICS PV T. LTD. (SUPRA). IN VIEW OF THIS THE STAND OF THE ASSESSEE IS THAT IN THIS CASE ALSO THE ASSESSING OFFICER HAS NOT LEVIE D PENALTY FOR OTHER YEARS PENALTY FOR A.Y. 2001-02 IS NOT JU STIFIED AND SHOULD BE CANCELLED. 5. WE FIND IT UNDISPUTED THAT THE ASSESSING OFFICER HAS DISALLOWED THE PAYMENTS MADE BY THE ASSESSEE TO JFT FOR A.Y. 1999-00 TO 2002-03 BUT THERE IS NOTHING ON REC ORD TO SUGGEST THAT ANY PENALTY HAS BEEN LEVIED FOR THE YE ARS OTHER THAN A.Y. 2001-02. FOR THE SAKE OF CONSISTEN CY AND FOLLOWING THE REASONING GIVEN IN THE CASE OF DYNAMI C LOGISTICS PVT. LTD. (SUPRA) AND ORIENT PRESS LTD. ( SUPRA) WE HAVE NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY A CO-ORDINATE BENCH. THE MATE RIAL FACTS BEING SIMILAR INASMUCH AS ON SIMILAR SET OF F ATS BEFORE THE ASSESSING OFFICER IN THIS YEAR THE PENA LTY FOR THE YEAR UNDER CONSIDERATION SHOULD NOT BE LEVIED BECAU SE THE SAME HAS NOT BEEN LEVIED IN OTHER YEARS ON THE SAID FACTS AND CIRCUMSTANCES. ACCORDINGLY KEEPING IN MIND TH E PRINCIPLE OF CONSISTENCY THE PENALTY IS NOT JUSTIF IED. PAGE 7 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 6. WITHOUT PREJUDICE TO THE ABOVE ON MERITS WE FI ND THAT THE ADDITIONS HAVE BEEN CONFIRMED BY THE TRIBUNAL O N THE GROUND THAT THE AGREEMENT OF THE SOCIETY WITH JFT W AS NOT GENUINE DOCUMENT. IT IS SETTLED LEGAL POSITION THAT PENALTY PROCEEDINGS ARE SEPARATE PROCEEDINGS FROM THE ASSES SMENT PROCEEDINGS. THE ASSESSEE CAN AGITATE THE PENALTY PROCEEDINGS IN ITS OWN DIMENSION. IN THIS REGARD THE ASSESSEE HAS RELIED UPON THE FOLLOWING DECISIONS WH EREIN RESPECTIVE COURTS HAVE HELD THAT THE ASSESSMENT PROCEEDINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT AND THE FINDING GIVEN IN ASSESSMENT PROCEEDINGS WOULD N OT BE A CONCLUSIVE PIECE OF EVIDENCE IN PENALTY PROCEEDINGS . RELIANCE HAS BEEN PLACED ON FOLLOWING DECISIONS : A) KHODAY ESWARA & SONS (83 ITR 639 (SC) B) RAJA MOHD AMIR AHMAD KHAN (100 ITR 433 (ALL) C) B. MUNIAPPA GOUNDER (102 ITR 787 (MAD) D) ARETIC INVESTMENT (P) LTD. (39 DTR 243 (DEL). IN THIS BACKGROUND THE STAND OF THE ASSESSEE THAT THE PAYMENT TO JFT WAS GENUINE BUSINESS EXPENDITURE AND WAS NOT AN AFTER THOUGHT OR A BOGUS EXPENDITURE CLAIMED FOR REDUCING THE TAX BURDEN. STAND OF ON BEHALF OF ASS ESSEE HAS HAS BEEN AS UNDER : A) IT NEEDS TO BE APPRECIATED FIRST OF ALL THAT JF T WAS A PRIVATE TRUST WHICH WAS LIABLE TO PAY THE TAX AND HENCE THE PAYMENTS MADE BY THE ASSESSEE TO JFT CONSTITUTED ITS INCOME. THUS THESE PAYMENTS TO JFT WERE NOT FOR THE PURPOSES OF ANY TAX AVOIDANCE. PAGE 8 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 B) THE DEDUCTION OF THE PAYMENT TO JFT IS CLAIMED BY THE ASSESSEE IN A.Y. 1999-00 TO 2002-03. IN THE YEAR 1990 AFTER MAKING THE AGREEMENT WITH THE SOCIETY JFT MADE AN APPLICATION TO THE TEHSILDAR NASIK PLACED AT PAGE 87 FOR REGISTRY ITS NAME IN THE RECORD OF RIGHTS. AT THAT TIME THE ASSESSEE HAD NOT EVEN ENTERED INTO ANY AGREEMENT WITH THE SOCIETY. THE ASSESSEE HAS NO CONTROL OVER THE GOVT. RECORDS. HENCE THE TEHSILDARS LETTER CLEARLY SHOWS THAT THE AGREEMENT OF JFT WITH THE SOCIETY WAS ENTERED INTO ON 26-10-1988 AS OTHERWISE THIS REPLY OF THE TEHSLDAR WOULD NOT HAVE BEEN RECEIVED BY UJFT. C) THE ASSESSEE PAID THE CONSIDERATION OF RS. 50.25 PER SQ. MTR TO THE SOCIETY FOR ACQUISITION OF THE DEVELOPMENT RIGHTS FROM THEM IN 1993 AT THAT TIME THE STAMP DUTY RATE WAS RS. 350/- PER SQ. MTR (PAGE 166). THUS THE CONSIDERATION PAID TO THE SOCIETY COULD NOT BE SO LITTLE THAN THE MARKET VALUE AND THIS WAS POSSIBLE ONLY BECAUSE THE ASSESSEE HAD TO PAY THE ADDITIONAL AMOUNT TO JFT. THERE WAS NO REASON FOR THE SOCIETY TO SELL THE LAND AT SUCH A LOW RATE TO THE ASSESSEE. THUS THE TRANSACTION WITH JFT WAS A GENUINE ONE. D) IN THE YEAR 1993 THE ASSESSEE ENTERED INTO AN AGREEMENT WITH THE SOCIETY PAGE 144 AND THIS AGREEMENT ON PAGE 47 IN CLAUSE 2 REFERS TO THE TRANSACTION OF THE SOCIETY WITH JFT. NOW IN THAT YEAR THERE WAS NO TAX AVOIDANCE MOTIVE WHICH COULD BE ATTRIBUTED TO THE ASSESSEE. THE TAX BURDEN STARTED FROM A.Y. 1999-00. HENCE TO HOLD A VIEW THAT IN 1993 THE ASSESSEE CREATED THIS CHARGE WITH A VIEW TO AVOID ANY TAX IS NOT POSSIBLE AT ALL. E) ON PAGE 73 THE ASSESSEE HAS GIVEN THE AFFIDAVIT OF THE CHAIRMAN OF THE SOCIETY CONFIRMING THE ASSESSEES VERSION AND THAT THE TRANSACTION OF THE SOCIETY WITH JFT WAS GENUINE. F) THE ABOVE FACTS CLEARLY INDICATE THAT THE PAYMENT TO JFT BY THE ASSESSEE WAS NOT A BOGUS TRANSACTION FOR AVOIDING ANY TAX AND IT WAS A GENUINE ONE. SIMPLY BECAUSE THE A.O DOUBTED THE GENUINENESS OF THE AGREEMENT OF THE SOCIETY WITH JFT THE DISALLOWANCE IS NOT JUSTIFIED AND THE PENALTY IS CERTAINLY NOT LEVIABLE. THUS LD. A.R. REQUESTED TO QUASH PENALTY IN QUESTI ON. PAGE 9 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 7. ON THE OTHER HAND LEARNED THE LEARNED DR SUBMIT TED THAT THE OBSERVATIONS OF THE TRIBUNAL IN QUANTUM PROCEEDINGS HAVE BEARING ON THE PENALTY PROCEEDINGS AND PENALTY IS JUSTIFIED. 8. AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND PERUSING THE MATERIAL ON RECORD WE FIND THAT THE A DDITION HAS BEEN MADE WITH REGARDS TO DISALLOWANCE OF PAYME NT CLAIMED BY THE ASSESSEE TO JFT FOR A.Y. 1999-00 TO 2002- 03. AS DISCUSSED EARLIER PENALTY HAS BEEN LEVIED O NLY FOR A.Y. 2001-02 WHICH IS NOT JUSTIFIED AS OBSERVED BY US IN THE PRECEDING PARAGRAPHS. ON MERITS WE FIND THAT THE ASSESSEE GAVE CERTAIN EXPLANATION WITH REGARDS TO GENUINENESS OF THE PAYMENT WHICH WAS REJECTED. THER E IS NOTHING ON RECORD TO SUGGEST THAT THE PAYMENT WAS M ADE TO JFT TO AVOID TAX BECAUSE JFT IS INDEPENDENT ENTITY AND LIABLE TO TAX IN ITS OWN CAPACITY. THE DEDUCTION O F PAYMENT TO JFT CLAIMED BY THE ASSESSEE IN A.Y. 1999-00 TO 2 002-03 WAS MUCH PRIOR TO A.Y. 1999-00 AFTER MAKING AN AGRE EMENT WITH JFT. AFTER THAT AN APPLICATION TO TEHSILDAR NA SIK WAS MADE WHICH IS PLACED AT PAGE 87 OF THE PAPER BOOK FOR REGISTERING ITS NAME IN THE RECORDS OF RIGHTS. AT THE SAME TIME THE ASSESSEE HAD NOT EVEN ENTERED INTO ANY AG REEMENT WITH THE SOCIETY. THE TEHSILDAR IN A WAY ACKNOWLED GED THE EXISTENCE OF THE AGREEMENT OF JFT WITH SOCIETY. AP ART FROM PAGE 10 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 THIS WE FIND THAT THE ASSESSEE PAID CONSIDERATION A T THE RATE OF RS. 350/- PER SQ. MTR WHICH IS EVIDENT FROM THE ENTRIES IN READY RECKONER PLACED AT PAGE 166 OF TH E PAPER BOOK. THUS THE CONSIDERATION PAID TO THE SOCIETY W OULD NOT BE SO SMALL THAN THE MARKET VALUE AND IT WAS ONLY P OSSIBLE BECAUSE THE ASSESSEE HAD TO PAY ADDITIONAL AMOUNT T O JFT. THERE WAS NO TAX AVOIDANCE MOTIVE OF ASSESSEE AT TH E RELEVANT POINT OF TIME I.E. IN THE YEAR 1993. WE AR E CONSCIOUS THAT IN THE QUANTUM PROCEEDINGS THE AGRE EMENT ENTERED BY JFT WITH THE SOCIETY HAS NOT BEEN FOUND TO BE AUTHENTIC OR RELIABLE AND IT HAS RESULTED IN A DIS ALLOWANCE. HOWEVER IN THE PENALTY PROCEEDINGS WE HAVE NOTICE D THE AFORESAID ASPECTS ONLY TO EVALUATE WHETHER ANY OF T HE ATTRIBUTES REQUIRED U/S. 271(1)(C) OF THE ACT HAVE BEEN MET OR NOT ? IT IS WELL SETTLED THAT ASSESSMENT PROCEE DINGS AND PENALTY PROCEEDINGS ARE INDEPENDENT PROCEEDINGS AND THE FINDINGS IN THE ASSESSMENT PROCEEDINGS ARE NOT CONC LUSIVE FOR THE PURPOSES OF THE PENALTY PROCEEDINGS THOUGH THEY MAY CONSTITUTE A RELEVANT PIECE OF EVIDENCE. ALTHO UGH THE AGREEMENT HAS BEEN DISREGARDED IN THE QUANTUM PROCEEDINGS BUT IN OUR VIEW NO DELIBERATENESS STA NDS PROVED SO AS TO JUSTIFY IMPOSITION OF PENALTY U/S. 271(1)(C ) OF THE ACT. AS WE HAVE MENTIONED ABOVE THE PENALTY PROCEEDINGS ARE INDEPENDENT OF QUANTUM PROCEEDINGS PAGE 11 OF 11 ITA NO. 488/PN/2006 THAKKAR DEVELOPERS A.Y. 2001-02 PENALTY CANNOT BE LEVIED AUTOMATICALLY IN CASE THE ASSESSEE IS ABLE TO MAKE OUT ITS CASE OF CANCELLATION OF PEN ALTY IN PENALTY PROCEEDINGS. UNDER THE FACTS AND CIRCUMSTAN CES OF THE CASE PENALTY IS NOT JUSTIFIED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. DECISION PRONOUNCED IN THE OPEN COURT ON _22ND DEC EMBER 2010. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (SHAILENDRA KUMAR YADAV) JUDICIAL MEMBER PUNE DATED THE _22 ND DECEMBER 2010 ANKAM COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-I NAGPUR 4. THE CIT- (CENTRAL) NAGPUR 5. THE D.R B BENCH PUNE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL PUNE