CENTRAL OIL KENDRA, MUMBAI v. ITO WD 24(1)(4), MUMBAI

ITA 5314/MUM/2009 | 2001-2002
Pronouncement Date: 20-08-2010 | Result: Allowed

Appeal Details

RSA Number 531419914 RSA 2009
Bench Mumbai
Appeal Number ITA 5314/MUM/2009
Duration Of Justice 11 month(s) 3 day(s)
Appellant CENTRAL OIL KENDRA, MUMBAI
Respondent ITO WD 24(1)(4), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 20-08-2010
Assessment Year 2001-2002
Appeal Filed On 16-09-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH MUMBAI. BEFORE SHRI R.V.EASWAR PRESIDENT AND SHRI PRAMOD KUMAR AM I.T.A.NOS.5311 TO 5316/MUM/2009 (ASSESSMENT YEARS:1998-99 TO 2003-04 ) CENTRAL OIL KENDRA PLOT NO.E PUSHPA PARK DUFFTARY ROAD MALAD(E) MUMBAI-400 097. PAN:AACG5077B VS. THE INCOME TAX OFFICER-WARD 24(1)(4) C-13 PRATYAKSHAKAR BHAVAN BANDRA KURLA COMPLEX BANDRA(E) MUMBAI-400 050. (APPELLANT) (RESPONDENT) APPELLANT BY : MR. SUDHIR SHAH RESPONDENT BY : MR.JITENDRA YADAV O R D E R PER BENCH: THESE ARE APPEALS BY THE ASSESSEE RELATING TO ASSESSMENT YEARS 1998-99 TO 2003-04 AND THEY ARE DI RECTED AGAINST THE PENALTIES LEVIED UNDER SECTION 271(1)(C ) OF THE INCOME TAX ACT AS FOLLOWS:- ASSESSMENT YEAR PENALTY AMT. ` 1998-99 64 551 1999-2000 69 209 2000-01 2 60 352 2001-02 99 941 2002-03 1 25 094 2003-04 1 14 264 2. THE BRIEF FACTS GIVING RISE TO THE APPEALS ARE A S FOLLOWS:- THE ASSESSEE IS A PARTNERSHIP FIRM DEALING IN EDIB LE OILS. THERE WAS A SURVEY OPERATION UNDER SECTION 133A CO NDUCTED IN ITS PREMISES ON 1 ST OCTOBER 2002 DURING WHICH IT WAS FOUND THAT THE ASSESSEE WAS RECORDING ACTUAL SALE IN A DI ARY BUT IN THE REGULAR BOOKS OF ACCOUNT THOSE SALES WERE NOT FULLY REFLECTED. THE SURVEY AUTHORITIES FOUND THAT THE DIARY HAD BEE N WRITTEN UP FOR THE PERIOD FROM 16.11.2001 TO 30.09.2002 FOR 3 19 DAYS ITA NO.5311 TO 5316/M/09 2 SPREAD OVER TWO ACCOUNTING PERIODS. ACCORDING TO TH E DIARY WHICH WAS IMPOUNDED THE SALES AMOUNTED TO ` 43 24 422/- WHEREAS AS PER THE REGULAR BOOKS OF ACCOUNT THE SAL ES AMOUNTED ONLY TO ` 4 13 302/-. ON THE BASIS OF THE DIARIES THE ASSESS ING OFFICER ESTIMATED THE SALES NOT ONLY FOR ASSESSMENT YEARS 2002- 03 AND 2003-04 BUT ALSO ESTIMATED THE SALES FOR TH E EARLIER FOUR YEARS NAMELY 1998-99 TO 2001-02. THE GROSS PROFIT O F THE ASSESSEE FOR ALL THE SIX YEARS WAS ACCORDINGLY ESTI MATED ON THE BASIS OF THE ESTIMATED SALES AND ADDITIONS WERE MAD E IN THE ASSESSMENTS. THE ADDITIONS WERE CHALLENGED BY THE A SSESSEE UPTO THE TRIBUNAL. BY ORDER PRONOUNCED ON 29.10.200 8 IN ITA NOS. 4365 TO 4368/MUM/2006 AND 894 & 895/MUM/2007 THE TRIBUNAL CONFIRMED THE DECISION OF THE INCOME T AX AUTHORITIES IN PRINCIPLE BUT DIRECTED THE ASSESSING OFFICER TO RECALCULATE THE RETAIL SALES WHICH THE ASSESSING OF FICER HAD TAKEN AT RS.13 500/- PER DAY FOR THE FULL YEAR AFTE R EXCLUDING SUNDAYS AND THE THREE NATIONAL HOLIDAYS. THE ASSESS ING OFFICER WAS ALSO DIRECTED TO WORK OUT OTHER EXPENSES RELATA BLE TO UNDISCLOSED INCOME AND REWORK THE PROFIT ACCORDINGL Y. 3. AFTER THE ORDER OF THE CIT(A) THE ASSESSING OFFI CER INITIATED PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT AND ISSUED NOTICES TO THE ASSESSEE. THE ASSESSEE REPLIE D STATING THAT PENALTY PROCEEDINGS ARE INDEPENDENT OF THE ASSESSME NT PROCEEDINGS AND ADDITIONS MADE IN THE ASSESSMENT PR OCEEDINGS DO NOT AUTOMATICALLY LEAD TO THE CHARGE OF CONCEALM ENT AND THAT THE ADDITIONS WERE MADE ON THE BASIS OF EXTRAPOLATI ON OF THE ENTRIES FOUND IN THE DIARY TO OTHER DAYS OF THE ACC OUNTING YEARS RELEVANT TO THE ASSESSMENT YEARS 2002-03 AND 2003-0 4 AND ON THE SAME BASIS SALES WERE ESTIMATED FOR THE EARLIE R FOUR YEARS AS WELL AND THESE ARE ONLY PRESUMPTIONS AND SURMISE S WHICH CANNOT FORM THE BASIS OF LEVYING PENALTY FOR CONCEA LMENT OF INCOME. A PLEA WAS THUS MADE FOR DROPPING OF THE PE NALTY ITA NO.5311 TO 5316/M/09 3 PROCEEDINGS. THE ASSESSING OFFICER DID NOT ACCEPT T HE ASSESSEES SUBMISSION. ACCORDING TO HIM THE IMPOUNDED DIARY W AS EVIDENCE SHOWING SUPPRESSION OF THE SALES WHICH WAS ALSO ADMITTED BY THE PARTNER MR. S.V.SHAH IN HIS SWORN S TATEMENT RECORDED DURING THE SURVEY. HE ALSO NOTED THAT MR. HARISH RAGHUNATH ACCOUNTANT HAD ALSO STATED ON OATH THAT HE WAS RECORDING THE DAILY RETAIL SALES IN THE REGULAR ACC OUNT BOOKS AT RS.2 500/- TO RS.3 000/- ON ESTIMATE BASIS UNDER TH E INSTRUCTIONS OF THE PARTNERS. ONE MR. S.PRAJAPATI WHO WAS ASSISTING MR. G.B. MISTRY IN THE RETAIL COUNTER HA D STATED ON OATH THAT THE ENTRIES IN THE IMPOUNDED DIARY REPRES ENTED ACTUAL SALES OF THE RETAIL UNIT AND THAT SUCH DIARIES RELA TING TO THE EARLIER PERIODS WERE DESTROYED. REFERRING TO THESE FACTS THE ASSESSING OFFICER CONCLUDED THAT THE ASSESSEE HAD C ONCEALED ITS INCOME AND ACCORDINGLY LEVIED THE IMPUGNED PENALTIE S. 4. ON APPEAL THE CIT(A) DECIDED THE MATTER AS UNDE R:- 4. I HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIONS OF LD A/R CAREFULLY. THERE IS NO DISPUT E ON THE FACT THAT THE ACTUAL SALES MADE BY THE APPELLANT WE RE MUCH MORE THAN THE SALES SHOWN BY IT IN THE REGULAR BOO KS OF ACCOUNTS. THE DOCUMENTS FOUND DURING THE COURSE OF SURVEY AND THE STATEMENTS OF THE PARTNER AND EMPLOYEES CORROBORATED THIS FACT. THERE WAS UNDISCLOSED INCOM E ON ACCOUNT OF UNEXPLAINED STOCK ALSO. THE UNDISCLOSED INCOME ON THE BASIS OF THESE EVIDENCES WAS UPHELD BY HONB LE ITAT. ONLY THE QUANTUM OF SUCH UNDISCLOSED INCOMES WERE CHANGED AS PER THE DIRECTION OF HONBLE ITAT. THIS WAS A DEFINITE CASE OF CONCEALMENT OF INCOME BY THE APPEL LANT. THE ASSESSING OFFICER WAS THEREFORE FULLY JUSTIFIED IN IMPOSING CONCEALMENT PENALTY U/S.271(1)(C) IN ALL THE SIX ASSESSMENT YEARS. HOWEVER THE QUANTUM OF PENALTY H AVE TO BE REVISED IN ACCORDANCE WITH THE AMOUNTS OF UNDISCLOSED/CONCEALED INCOME FINALLY DETERMINED BY THE ASSESSING OFFICER IN ACCORDANCE WITH THE DIRECTION OF HONBLE ITAT. THE ASSESSING OFFICER IS THEREFORE DI RECTED TO MODIFY THE QUANTUM OF PENALTY U/S.271(1)(C) IN ALL THE SIX ASSESSMENT YEARS.' ITA NO.5311 TO 5316/M/09 4 5. IT IS AGAINST THE AFORESAID ORDER OF THE CIT(A) THAT THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. IN THE COURSE OF THE ARGUMENTS THE LEARNED REPRESENTATIVE FOR TH E ASSESSEE FAIRLY STATED THAT THE PENALTY IMPOSED FOR THE ASSE SSMENT YEARS 2002-03 AND 2003-04 TO THE EXTENT OF THE ENTRIES MA DE IN THE IMPOUNDED DIARY MAY BE CONFIRMED BUT SUBMITTED THAT FOR THE OTHER FOUR EARLIER YEARS I.E. 1998-99 TO 2001-02 NO DIARIES HAVE BEEN FOUND AND THEREFORE NO PENALTY CAN BE IMPOSED FOR CONCEALMENT OF INCOME. HE POINTED OUT THAT FOR PART OF THE ACCOUNTING YEARS RELEVANT TO THE ASSESSMENT YEARS 2 002-03 AND 2003-04 AND FOR THE ENTIRE ACCOUNTING PERIODS RELEV ANT TO THE ASSESSMENT YEARS 1998-99 TO 2001-02 NO EVIDENCE HAD BEEN FOUND SHOWING SUPPRESSION OF SALES AND ALL THAT THE ASSESSING OFFICER HAS DONE WAS TO ESTIMATE THE SALES FOR THES E PERIODS ON THE ASSUMPTION THAT THE ASSESSEE MUST HAVE SUPPRES SED THE SALES FOR THESE PERIODS ALSO. ACCORDING TO THE LEAR NED REPRESENTATIVE FOR THE ASSESSEE THIS ASSUMPTION OR SURMISE MAY BE SUFFICIENT FOR ASSESSMENT PURPOSES BUT DO NOT CO NSTITUTE EVIDENCE TO IMPOSE PENALTY FOR CONCEALMENT OF INCOM E. OUR ATTENTION WAS DRAWN IN THIS CONNECTION TO THE ANSWE R OF MR. SHAH PARTNER TO QUESTION NO.26 AND QUESTION NO.32 IN THE STATEMENT GIVEN BY HIM IN THE COURSE OF THE SURVEY PROCEEDINGS. THE GIST OF THE ARGUMENT WAS THAT IN THE ABSENCE OF ANY DIRECT EVIDENCE SHOWING SUPPRESSION OF SALES OR PROFITS FO R PART OF THE ACCOUNTING PERIODS RELATING TO THE ASSESSMENT YEARS 2002-03 AND 2003-04 AND FOR THE ENTIRE ACCOUNTING PERIODS R ELEVANT TO THE ASSESSMENT YEARS 1998-99 TO 2001-02 NO PENALTY WAS IMPOSABLE. 6. ON THE OTHER HAND THE LEARNED SENIOR DR MR. JI TENDRA YADAV POINTED OUT THAT THE IMPOUNDED DIARY WHICH CO NTAIN ENTRIES FOR ACTUAL SALES FOR A PERIOD OF 319 DAYS R EVEAL THAT THE ASSESSEE WAS ACCOUNTING FOR ONLY 10% OF THE ACTUAL SALES IN ITS ITA NO.5311 TO 5316/M/09 5 REGULAR BOOKS OF ACCOUNT AND IT WAS A FAIR INFERENC E THAT THE ASSESSEE WOULD HAVE FOLLOWED THE SAME PRACTICE FOR THE REST OF THE ACCOUNTING PERIODS RELEVANT FOR THE ASSESSMENT YEARS 2002- 03 AND 2003-04 AS WELL AS FOR THE ENTIRE ACCOUNTING YEARS RELEVANT TO THE EARLIER FOUR ASSESSMENT YEARS AND THERE WAS NO REASON TO THINK THAT THE ASSESSEE WOULD HAVE ACTED OTHERWISE. HE DREW OUR ATTENTION TO THE STATEMENT OF THE PARTN ER MR. S.V.SHAH IN ANSWER TO QUESTION NO.9 IN WHICH HE STA TED THAT THE RETAIL SALES WERE TAKEN IN THE REGULAR BOOKS OF ACC OUNT ON ESTIMATE BASIS. HE FURTHER POINTED OUT FROM THE ANS WER TO QUESTION NOS. 12 AND 13 IN THE COURSE OF WHICH THE PARTNER ADMITTED THAT MR. G.B. MISTRY WAS AN EMPLOYEE LOOKI NG AFTER THE RETAIL UNIT FOR THE PAST 7 OR 8 YEARS AND WAS REPOR TING TO HIM. ACCORDING TO THE LEARNED SENIOR DR THIS ESTABLISHED THE LINK BETWEEN THE ASSESSEE AND MR. G.B.MISTRY. ATTENTION WAS DRAWN TO THE ANSWER TO QUESTION NO.18 IN WHICH THE PARTNE R HAD CONFIRMED THAT THE SALES OF THE RETAIL COUNTER WERE RECORDED BY THE ACCOUNTANT ON HIS INSTRUCTIONS AND THEY WERE RE CORDED ON ESTIMATE BASIS ONLY. ANSWER TO QUESTION NO.21 WAS T HAT FIRM WILL BE ENTERING THE FIGURES OF SALES IN THE REGULAR BOO KS OF ACCOUNT ON THE BASIS OF GUESS WORK IF THEY HAVE NOT BEEN E NTERED IN THE REGULAR BOOKS OF ACCOUNT FOR A LONG PERIOD. THE LE ARNED SENIOR DR ALSO DREW OUR ATTENTION TO THE ANSWER OF THE PAR TNER TO QUESTION NO.32. HE WAS CONFRONTED WITH THE STATEMEN T OF MR. K.K. PRAJAPATHI UNDER SECTION 131 WHEREIN HE HAD RE VEALED THAT DIARIES SIMILAR TO THE IMPOUNDED DIARY WERE MAINTAI NED BY A STAFF MEMBER EVEN FOR THE PERIOD PRIOR TO 16.11.200 1 AND THAT THEY HAD BEEN DESTROYED. THE PARTNER WAS SPECIFICA LLY ASKED AS TO UNDER WHOSE INSTRUCTIONS THOSE DIARIES WERE DEST ROYED. MR. SHAH REPLIED THAT HE WAS NOT AWARE OF THE INCIDENT. THE LEARNED SENIOR DR FURTHER DREW OUR ATTENTION TO THE STATEME NT OF MR. PRAJAPATHI WHERE IN ANSWER TO QUESTION NO.5 HE STA TED THAT THE DIARIES FOR THE PERIOD PRIOR TO 16.11.2001 WERE DE STROYED. TO A ITA NO.5311 TO 5316/M/09 6 SPECIFIC QUESTION AS TO ON WHOSE INSTRUCTIONS THEY WERE DESTROYED HE REPLIED THAT THEY WERE DESTROYED ON MY OWN AS THEY WERE FULLY USED. FROM THESE REPLIES THE LEA RNED SENIOR DR SUBMITTED THAT EVEN THE LINK BETWEEN THE DIARIES WRITTEN FOR THE PERIOD BEFORE 16.11.2001 AND THE ASSESSEE FIRM WAS ESTABLISHED. HE CONTENDED THAT THE INCOME HAD TO BE ESTIMATED IN RESPECT OF THE PERIOD FOR WHICH THE DIARY ENTRIE S WERE NOT AVAILABLE BUT THAT WAS BECAUSE NO DIRECT EVIDENCE A S TO THE QUANTUM OF INCOME WAS AVAILABLE THOUGH THE FACT THA T THE ASSESSEE HAD CONCEALED THE REAL SALES EVEN IN RESPE CT OF THOSE PERIODS WAS ESTABLISHED. HE ACCORDINGLY SUBMITTED T HAT THE MERE FACT THAT THE INCOME WAS ESTIMATED CANNOT STAN D IN THE WAY OF LEVY OF PENALTY SINCE CONCEALMENT HAD BEEN E STABLISHED. 7. IN HIS BRIEF REPLY THE LEARNED REPRESENTATIVE F OR THE ASSESSEE SUBMITTED THAT THE INCOME-TAX AUTHORITIES HAVE NOT RECORDED THE STATEMENT OF THE WRITER OF THE DIARY ( G.B.MISTRY) . IT WAS POINTED OUT THAT EVEN MR. PRAJAPATHI HAS IN HIS STATEMENT STATED THAT HE HAD NOT WRITTEN THE DIARIES BUT THEY WERE WRITTEN BY MR. G.B.MISTRY. THE CONTENTION IS THAT WHEN THE ALLEGED WRITER OF THE DIARIES WAS NOT EXAMINED THE CONTENT S OF THE DIARY WERE A MATTER OF SPECULATION ON THE BASIS OF WHICH NO PENALTY CAN BE IMPOSED. 8. WE HAVE CAREFULLY CONSIDERED THE MATTER. THOUGH THE CONDUCT OF THE ASSESSEE VIS-A-VIS ITS BUSINESS HAS NOT BEEN EXEMPLARY FOR THE PURPOSE OF LEVY OF PENALTY FOR C ONCEALMENT OF INCOME DIRECT EVIDENCE OF CONCEALMENT IS REQUIRED. IT IS TRUE THAT THE SURVEY AUTHORITIES FOUND AND IMPOUNDED A D IARY WHICH CONTAINED ENTRIES FOR A PERIOD OF 319 DAYS FROM 16. 11.2001 TO 30.09.2002. A COMPARISON OF THE ENTRIES IN THIS DIA RY WITH THE ENTRIES MADE IN THE REGULAR BOOKS OF ACCOUNT ON THE BASIS OF WHICH THE PROFIT AND LOSS ACCOUNT WAS PREPARED SHOW ED THAT ONLY 10% APPROXIMATELY OF THE ACTUAL SALES WAS BEIN G ACCOUNTED ITA NO.5311 TO 5316/M/09 7 FOR. THUS THERE IS UNIMPEACHABLE EVIDENCE FOR THE P ERIOD OF 319 DAYS TO SHOW THAT THE ASSESSEE HAS CONCEALED ITS I NCOME FOR THAT PERIOD. THE IMPOUNDED DIARY COVERS TWO ACCOUN TING YEARS I.E. 16.11.2001 TO 31.03.2002 RELEVANT FOR THE ASSE SSMENT YEAR 2002-03 AND 01.04.2002 TO 30.09.2002 RELEVANT TO T HE ASSESSMENT YEAR 2003-04. THERE CAN BE NO DOUBT THAT THE ASSESSEE IS LIABLE FOR PENALTY FOR CONCEALMENT OF I NCOME IN RESPECT OF THESE TWO PERIODS. 9. HOWEVER SO FAR AS THE OTHER PERIODS FOR THE AFO RESAID TWO ASSESSMENT YEARS ARE CONCERNED AND FOR THE ENTIRE A CCOUNTING PERIODS RELEVANT TO THE ASSESSMENT YEARS 1998-99 TO 2001-02 THERE IS NO DIARY WHICH DISCLOSES THE ACTUAL SALES. IT IS PERFECTLY JUSTIFIED FOR THE INCOME TAX AUTHORITIES TO DRAW TH E INFERENCE THAT THE ASSESSEE WOULD HAVE MADE MORE SALES THAN W HAT WAS DISCLOSED IN THE REGULAR ACCOUNTS EVEN IN RESPECT O F THE AFORESAID PERIODS BUT THAT WOULD REMAIN AN INFERENC E NOT AN ESTABLISHED FACT WHICH WOULD BE SUFFICIENT FOR ASS ESSMENT PURPOSES. FOR THE PURPOSE OF LEVYING PENALTY THERE IS ALWAYS THE POSSIBILITY THAT THE ASSESSEE DID NOT INDULGE IN SU PPRESSION OF SALES DURING THE AFORESAID PERIOD. BUT THEN IN THE PRESENT CASE THERE ARE STATEMENTS MADE BY MR. PRAJAPATHI THAT SI MILAR DIARIES WERE BEING MAINTAINED BY MR. G.B.MISTRY IN RESPECT OF THE RETAIL SALES AND THAT THEY WERE DESTROYED AFTER BEING FULL Y USED. WHEN THIS WAS PUT TO ASSESSEES PARTNER HE DENIED ANY KN OWLEDGE OF THE INCIDENT IN ANSWER TO QUESTION NO.32 IN HIS STA TEMENT. HIS ANSWER TO QUESTION NO.21 TO THE EFFECT THAT THE FIG URES OF SALES WERE ENTERED IN THE REGULAR ACCOUNT BOOKS ON GUESS WORK IS TO BE APPRECIATED IN THE LIGHT OF THE QUESTION ASKED. HE WAS ASKED AS TO HOW ENTRIES WOULD BE MADE IN THE DAILY CASH R EGISTER IF THE CASH SALES OF THE RETAIL COUNTER HAVE NOT BEEN ENT ERED IN THE REGULAR CASH BOOK FOR A LONG PERIOD. OBVIOUSLY THE QUESTION WAS ASKED ON THE BASIS OF THE IMPOUNDED DIARY AND IT WA S IN THIS ITA NO.5311 TO 5316/M/09 8 CONTEXT THAT THE PARTNER REPLIED THAT ENTRIES WILL BE MADE IN THE REGULAR BOOKS ON GUESS WORK. THE REPLY SHOULD BE CO NFINED TO THE IMPOUNDED DIARY VIS-A-VIS THE REGULAR ACCOUNT B OOKS. EVEN THE ANSWER TO QUESTION NO.18 CONFIRMING THAT THE SA LES OF THE RETAIL COUNTER WERE RECORDED BY THE ACCOUNTANT ON T HE PARTNERS INSTRUCTION AND ON ESTIMATE BASIS IS THUS TO BE CON FINED ONLY TO THE COMPARISON OF THE ENTRIES MADE IN THE IMPOUNDED DIARY AND THE REGULAR ACCOUNT BOOKS. THE PARTNER NO DOUBT STA TED IN ANSWER TO QUESTION NOS. 12 & 13 THAT MR. G.B. MISTR Y WAS AN EMPLOYEE FOR THE LAST 7 TO 8 YEARS AND WAS MAINTAIN ING THE IMPOUNDED DIARY AND THAT HE WAS ALSO REPORTING TO H IM BUT HERE AGAIN THE QUESTION AND THE ANSWER ARE CONFINED TO THE IMPOUNDED DIARY AND THE ENTRIES MADE IN THE REGULAR CASH BOOK. IT IS ALSO NOTEWORTHY THAT MR. G.B.MISTRY WHO IS S TATED TO HAVE WRITTEN THE DIARIES WAS NOT EXAMINED. HE SHOULD HA VE BEEN EXAMINED IN AN ATTEMPT TO ESTABLISH THE FACT THAT T HERE WERE DIARIES FOR THE PERIOD PRIOR TO 16.11.2001 ALSO AND THAT HE HAD WRITTEN THEM. THE STATEMENT OF MR. PRAJAPATHI THAT MR. G.B.MISTRY WAS WRITING SUCH DIARIES OF THE EARLIER PERIOD THUS REMAINS AN UNVERIFIED STATEMENT. TO REITERATE FROM THESE ANSWERS IN THE STATEMENTS OF THE PARTNER AND MR. PR AJAPATHI IT IS CERTAINLY POSSIBLE TO DRAW AN INFERENCE THAT THE ASSESSEE WOULD HAVE RESORTED TO SUPPRESSION OF SALES EVEN IN RESPECT OF THE PERIOD PRIOR TO 16.11.2001 BUT SUCH INFERENCE SHOULD BE CONFINED TO THE ASSESSMENT PURPOSES AND CANNOT BE E XTENDED TO PENALTY PROCEEDINGS. 10. FOR THE ABOVE REASONS WE ARE OF THE VIEW THAT FOR THE PURPOSE OF LEVY OF PENALTY IN RESPECT OF THE PERIOD S WHICH ARE NOT COVERED BY THE IMPOUNDED DIARY THERE IS NO DIR ECT EVIDENCE AND THE FINDINGS IN THE ASSESSMENT PROCEEDINGS THO UGH THEY CONSTITUTE GOOD EVIDENCE ITA NO.5311 TO 5316/M/09 9 ARE NOT CONCLUSIVE IN THE PENALTY PROCEEDINGS. WE THEREFORE HOLD THAT THE ASSESSEE IS LIABLE TO PENALTY FOR CON CEALMENT OF INCOME ONLY IN RESPECT OF 319 DAYS FOR WHICH A DIAR Y WAS FOUND DURING THE SURVEY PROCEEDINGS AND IN RESPECT OF THE OTHER PERIODS THE CONCEALMENT OF INCOME HAS NOT BEEN PRO VED. WE HOLD ACCORDINGLY AND ALLOW THE APPEALS FOR THE ASSE SSMENT YEARS 2002-03 AND 2003-04 IN PART AND THE APPEALS FOR THE ASSESSMENT YEARS 1998-99 TO 2001-02 IN FULL. NO COS TS. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 20 TH DAY OF AUGUST 2010. SD/- ( PRAMOD KUMAR ) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER PRESIDENT MUMBAI DATED 20 TH AUGUST 2010. SOMU COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-24 MUMBAI. 4. THE CIT(A)-XXIV MUMBAI 5. THE DR C BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR I.T.A.T MUMBAI