Sri Harilal M Patel, Bangalore v. ITO, Bangalore

ITA 685/BANG/2009 | 2004-2005
Pronouncement Date: 30-09-2010 | Result: Dismissed

Appeal Details

RSA Number 68521114 RSA 2009
Bench Bangalore
Appeal Number ITA 685/BANG/2009
Duration Of Justice 1 year(s) 2 month(s) 24 day(s)
Appellant Sri Harilal M Patel, Bangalore
Respondent ITO, Bangalore
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 30-09-2010
Date Of Final Hearing 07-09-2010
Next Hearing Date 07-09-2010
Assessment Year 2004-2005
Appeal Filed On 06-07-2009
Judgment Text
ITA NO.685/BANG/09 PAGE 11 OF 11 HONBLE KERALA HIGH COURT HELD THAT EVEN IN CASE OF AGREED ADDITION THERE COULD BE LEVY OF PENALTY. THE QUESTION OF PE NALTY HAS TO BE CONSIDERED IN THE LIGHT OF RELEVANT EXPLANATION TO SECTION 271(1)(C) AND THE ONUS IS ON THE ASSESSEE TO PROVE THAT THERE IS NO CONCEALMENT OF INCOME. THE ASSESSEE ON FACTS OF THIS CASE HAS N OT MADE ANY ATTEMPT TO DISCHARGE ONUS THAT LAID ON HIM EXCEPT SUBMITTI NG THAT THE ADDITIONS WERE MADE IN THE ASSESSMENT ON AGREED BAS IS. IN THE LIGHT OF THE ABOVE WE FIND NO REASON TO INTERFERE WITH THE REASONING AND CONCLUSION OF THE AUTHORITIES BELOW. HENCE THE GR OUNDS RAISED HEREIN ARE DISMISSED 17. IN THE RESULT THE APPEAL FILED BY THE ASSESSE E IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THURSDAY THE 30 TH DAY OF SEPTEMBER 2010. SD/- SD/- (A. MOHAN ALANKAMONY) (GEORGE GEORGE ) ACCOUNTANT MEMBER JUDICIAL M EMBER COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. C IT(A) 5. DR ITAT BANGALORE. 6. GUARD FILE MSP/23.9./30.9. BY ORDER ASSISTANT REGISTRAR ITAT BANGALO RE. ITA NO.685/BANG/09 PAGE 10 OF 11 UNACCOUNTED CASH SALES OF RS.8 34 451/- 16.4 THE ASSESSING OFFICER IN THE COURSE OF ASSESS MENT PROCEEDINGS ON THE BASIS OF INFORMATION RECEIVED F ROM THE CENTRAL EXCISE DEPARTMENT HAD CONCLUDED THAT THE ASSESSEE HAD SOLD FLUSH DOORS OUTSIDE THE BOOKS OF ACCOUNT TO THE TUNE OF R S.8 34 451/-. THE ASSESSING OFFICER AFTER EXAMINING THE PURCHASES OF THESE FLUSH DOORS ADDED GP OF RS.1 92 424/- (BEING 23.6% ON RS .8 34 451/-). BEFORE THE ADDITION WAS MADE ON ACCOUNT OF GROSS PR OFIT THE ASSESSEE WAS CONFRONTED WITH THE STATEMENT RECORDED FROM THE PURCHASERS. THE ASSESSEE INSTEAD OF ADDUCING ANY EVIDENCE OR EXPLA NATION OFFERED THE GROSS PROFIT OF RS.1 92 424/- FOR TAXATION. THESE FACTS CLEARLY ESTABLISH THAT THE SALES TO THE EXTENT OF RS.8 34 4 51/- WERE MADE OUTSIDE THE BOOKS OF ACCOUNT AND THE LEVY OF PENALT Y FOR THE ADDITION OF THE GP IS JUSTIFIED ON THE FACTS AND CIRCUMSTANC ES OF THE CASE. 16.5 THE MAIN GROUND OF THE ASSESSEE WAS THAT THE PENALTY IS NOT EXIGIBLE SINCE THE ADDITION WAS OFFERED ON AG REED BASIS. ACCORDING TO US THIS HAS TO BE REPELLED IN THE LIG HT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF UNION OF I NDIA AND ANOTHER V BANWARI LAL AGARWAL WHEREIN THE HONBLE SUPREME CO URT OPINED THAT THERE IS NO COMPROMISED ASSESSMENT CONTEMPLATED IN THE INCOME TAX ACT. FURTHER THE DECISION OF THE HONBLE SUPREME COURT REPORTED IN 251 ITR 99 IS ALSO THE CASE WHERE THE INCOME WAS O FFERED BY THE ASSESSEE AND STILL THE HONBLE SUPREME COURT UPHEL D THE LEVY OF PENALTY. THE DECISION OF THE HONBLE KERALA HIGH C OURT REPORTED IN 243 ITR 618 WAS A CASE WHERE THE ASSESSEE HAD AGREED TO THE ADDITION ON THE CONDITION THAT NO PENALTY PROCEEDINGS ARE TO BE INITIATED. THE ITA NO.685/BANG/09 PAGE 9 OF 11 THEM AS GIFT WAS MADE AS ON 1.4.2003. THIS FACT IS EVIDENT FROM THE STATEMENT OF THE ERSTWHILE PARTNERS RECORDED U/S 13 1 DATED 27.9.2005 WHO HAD DEPOSED THAT IT IS AS PER THE DI RECTION AND REQUEST OF THE ASSESSEE THE BOOK ENTRIES HAVE BEEN MADE AS IF THE GIFT WAS GIVEN ON 1.4.2003. THE DOCUMENTARY EVIDENCES REFERR ED TO ABOVE CLEARLY ESTABLISH THE FACT THAT GIFTS ARE NOT GENUI NE. THAT IS WHY WHEN THE ASSESSEE WAS CONFRONTED WITH THE DISPOSITION OF THE ERSTWHILE PARTNERS HE SURRENDERED AND CONSENTED VIDE LETTER DATED 22.11.06 THAT THE SAID AMOUNTS SHOWN AS GIFTS RECEIVED DURIN G THE YEAR BE ADDED TO THE TOTAL INCOME AND BE BROUGHT TO TAX. 16.2 UNDER THE GIVEN CIRCUMSTANCES THE ASSESSEE W AS UNABLE TO DEFEND HIMSELF AT THE STAGE OF PENALTY PROCEEDIN GS ALSO AND APART FROM SUBMITTING A MERE REQUEST VIDE LETTER DATED 25 .5.2007 FOR DROPPING THE PENALTY PROCEEDINGS NO OTHER EVIDENCE WAS PRODUCED TO REFUTE THE FINDING OF THE AO IN THE COURSE OF ASSES SMENT PROCEEDINGS. BEFORE THE LEARNED CIT(A) ALSO THE ASSESSEE HAS FA ILED TO FILE/FURNISH ANY CONVINCING EVIDENCE AND THE LEARNED CIT(A) HAD TO UPHOLD THE PENALTY LEVIED BY THE AO. 16.3 THE HONBLE HIGH COURT OF MADRAS IN THE CASE OF R SRINIVASAN & CO. V CIT 97 ITR 431 HAS HELD THAT FI NDINGS GIVEN IN ASSESSMENT PROCEEDINGS THOUGH NOT CONCLUSIVE STIL L CONSTITUTE GOOD AND RELEVANT EVIDENCE IN PENALTY PROCEEDINGS. IN THE ABSENCE OF ANY EXPLANATION IN THE COURSE OF PENALTY PROCEEDINGS O NE HAS TO TAKE A CONCLUSIVE VIEW OF THE FINDINGS IN THE ASSESSMENT P ROCEEDINGS. ITA NO.685/BANG/09 PAGE 8 OF 11 15. THE LD. DR SUPPORTED THE FINDING OF THE AUTHORITI ES BELOW. THE LD. DR CONTENDED THAT BUT FOR THE INVESTIGATION CARRIED OUT BY THE AO THE ADDITIONS WOULD NEVER HAVE BEEN MADE. IT WA S SUBMITTED EXPLANATION 1 TO SECTION 271(1)(C) IS CLEARLY ATTRA CTED TO THE FACTS AND CIRCUMSTANCES OF THE CASE. SHE RELIED ON THE DECIS ION OF K.P. MADHUSUDHANAN V. CIT 251 ITR 99 (SC) AND JURISDICTIONAL HIGH COURT DECISION IN THE CASE OF CIT V. K.P. SAMPATH REDDY 197 ITR 232 (KAR) . 16. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. PERUSAL OF THE BALANCE SHEET F ILED FOR THE YEAR ENDING31.3.2003 IT IS SEEN THAT INTERESTS HAVE BEE N CREDITED TO THE ERSTWHILE PARTNERS BRINGING THE BALANCE OUTSTANDING AS ON 31.3.2003 TO THE FOLLOWING FIGURES:- NAME INTEREST IN RS. CLOSING BALANCE IN RS. JAGADISH M PATEL 72 696.00 12 77 031.75 JASODABEN K PATEL 33 003.00 5 79 758.25 JAYABEN H PATEL 14 256.00 2 50 435.00 VARSHABEN J PATEL 20 020.00 3 51 699.00 TOTAL 1 39 975.00 24 58 924.00 16.1 THE ABOVE FIGURES SHOW THAT THE LOANS WAS PAY ABLE TO THE SAID PERSONS AS ON 31.3.2003 SINCE INTEREST WAS ALS O COMPUTED FOR THE SAID PERIOD. THE ASSESSEE THEREFORE CANNOT TAKE THE PLEA THAT MONEY WAS PAID TO THE SAID PERSONS AS ON EARLIER DATE PRI OR TO 1.4.2003. THIS GOES TO SHOW THAT PAYMENT WAS MADE TO THE SAID PERS ONS DURING THE PERIOD 1.4.2003 TO 31.3.2004 RELEVANT TO AY 2004-05 ; HOWEVER THE BOOK ENTRY ADJUSTMENTS SQUARING UP THE OUTSTANDING LOANS BY SHOWING ITA NO.685/BANG/09 PAGE 7 OF 11 WHO ARE CLOSE RELATIVES. IT IS SUBMITTED THAT THE ASSESSEE HAS NOT CROSS-EXAMINED THE DONEES BASED ON THEIR INCORRECT STATEMENT IN THE ASSESSMENT PROCEEDINGS. IF THE ASSESSEE HAD CROSS- EXAMINED THEM IT IS SUBMITTED HE COULD HAVE ELICITED FROM THEM AS TO THE INVESTMENT/EXPENSES THEY HAD MADE OUT OF THE SO-CAL LED CASH RECEIVED AND SHOWED THAT THEIR CLAIM WAS NOT PROPER. 14. AS REGARDS PENALTY ON THE ADDITION OF RS.1 92 492 THE LD. AR SUBMITTED THAT THE AO HAS NOT MENTIONED AS TO HO W HE ARRIVED AT THE SALES OUTSIDES THE BOOKS OF ACCOUNTS AT RS.8 34 451 IN THE ASSESSMENT ORDER. WHEN THIS ISSUE WAS PUT TO THE A SSESSEE IN THE ASSESSMENT PROCEEDINGS HE AGREED FOR THE ADDITION OF THE GROSS PROFIT ON THE ALLEGED UNACCOUNTED SALES WITH A VIEW TO PUR CHASE PEACE WITH THE DEPARTMENT AND TO AVOID PROTRACTED LITIGATION. THE ASSESSEE DID NOT WANT TO EMBARRASS HIS CUSTOMERS BY SUMMONING TH EM FOR CROSS- EXAMINATION TO PROVE THAT THERE WERE NO SUCH SALES MADE BY THE ASSESSEE. IT WAS SUBMITTED THAT THERE WAS NO OCCAS ION FOR THE ASSESSEE TO MAKE SALES OUTSIDE THE BOOKS AND THERE IS NO EVIDENCE TO SUBSTANTIATE THE SAME EXCEPT THE STATEMENTS RECORD ED FROM A FEW CUSTOMERS REPRODUCED BY THE AO IN HIS ORDER. APART FROM THE UNSUBSTANTIATED STATEMENTS RECORDED FROM THE CUSTOM ERS THERE IS NO MATERIAL TO SHOW THAT THE ASSESSEE HAD IN FACT MADE ANY SALES OUTSIDE THE BOOKS. IT WAS SUBMITTED EVEN THE BASIS FOR ARR IVING AT THE SALES OUTSIDE THE BOOKS IS NOT GIVEN BY THE AO AND THE AS SESSEE HAS NOT BEEN FAULTED WITH REGARD TO EXPLANATION TENDERED. IN OT HER WORDS ACCORDING TO THE LD. AR NO CASE OF CONCEALMENT WAS MADE OUT BY THE AO AND THEREFORE THE PENALTY IMPOSED WAS UNWARRANTE D AND DESERVES TO BE CANCELLED. ITA NO.685/BANG/09 PAGE 6 OF 11 12. AS REGARDS THE PENALTY LEVIED ON ADDITION OF RS.1 5 08 449 THE LD. AR SUBMITTED THAT THE AO ASSESSED THE GIFTS AS INCOME BASED ON THE SURRENDER MADE BY THE ASSESSEE. HAVING REGA RD TO THE VERSION PUT FORTH BY THE DONEES OF HAVING RECEIVED CASH FRO M THE ASSESSEE IN THE EARLIER FINANCIAL YEAR THE AO COULD NOT HAVE M ADE THE AFORESAID ADDITION IN RESPECT OF THE GIFTS FOR THE YEAR UNDER APPEAL AT ALL. IT WAS SUBMITTED THAT HOWEVER SINCE THE ASSESSEE DID NOT WANT TO ENTER INTO ANY PROTRACTED LITIGATION WITH THE DEPARTMENT AND H E WANTED TO FINALISE HIS ASSESSMENT PROCEEDINGS AS HIS HEALTH W AS DETERIORATING HE AGREED TO OFFER NON-EXISTENT INCOME TO TAX IN HIS H ANDS FOR THE YEAR UNDER APPEAL. THE LD. AR SUBMITTED THAT SINCE NO A DDITION IN RESPECT OF GIFTS COULD HAVE ACTUALLY BEEN MADE EXCEPT BY VIRT UE OF THE OFFER MADE BY THE ASSESSEE IT CANNOT BE SAID THAT THE AS SESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCU RATE PARTICULARS THEREOF. IT IS SUBMITTED THAT THE FACT THAT THE ASS ESSEE HAS AGREED FOR ASSESSMENT OF THE GIFTS FOR THE YEAR UNDER APPE AL GOES TO SHOW THE BONAFIDES OF THE ASSESSEE IN SETTLING THE ISSUE WIT H THE DEPARTMENT AND CONSIDERING THE TOTALITY OF FACTS THE AO OUGHT NOT TO HAVE IMPOSED PENALTY ON THIS SCORE. 13. WITHOUT PREJUDICE TO THE ABOVE AND ASSUMING FOR ARGUMENTS SAKE THAT THE ADDITION MADE BY THE AO IS JUSTIFIED IT WAS SUBMITTED THAT THE AO HAS NOT NOTICED THE EXPLANATI ON TENDERED BY THE ASSESSEE IN THE PENALTY PROCEEDINGS. THE ASSES SEE HAS EXPLAINED IN THE PENALTY PROCEEDINGS THAT THE GIFT ENTRIES WERE PROPERLY REFLECTED IN THE BOOKS AND THAT THE STATEMENT GIVEN BY THE DO NEES OF HAVING RECEIVED THE CASH COULD NOT BE TAKEN AT FACE VALUE AND THE ASSESSEE ONLY AGREED WITH A VIEW TO KEEP PROPER RELATIONS WI TH THESE DONEES ITA NO.685/BANG/09 PAGE 5 OF 11 (1) SRI JAGADISH KUMAR M. PATEL RS. 7 77 000 (2) SMT. VARSHABEN J. PATEL RS. 3 51 699 (3) SMT. JASHODABEN PATEL RS. 5 79 758 ------------------ RS.15 08 499 ------------------ 10. ACCORDING TO THE ASSESSEE THE AFORESAID DONEES H AD EXECUTED GIFT DEEDS ON 1.4.2003 AND THE SAME WERE F URNISHED BEFORE THE AO IN SUPPORT OF THE CLAIM OF THE ASSESSEE. TH E AO EXAMINED THE AFORESAID PARTIES PRODUCED BY THE ASSESSEE BEFORE T HE AO. THESE PERSONS CONFIRMED THE FACT OF HAVING GIVEN THE GIFT S TO THE ASSESSEE AS CAN BE SEEN FROM THE RELEVANT PORTIONS OF THE STATE MENTS RECORDED THAT HAS BEEN REPRODUCED BY THE AO IN THE ASSESSMEN T ORDER. AFTER HAVING CONFIRMED THE FACT OF HAVING GIVEN THE GIFT THE AO ELICITED SOME INFORMATION FROM THESE PERSONS TO THE EFFECT T HAT THE ASSESSEE HAD PAID CASH TO THESE PERSONS IN LIEU OF THE LIABI LITIES SHOWN IN THE BOOKS OF ACCOUNTS AND THE SAME WAS SHOWN AS GIFT AS ON 1.4.2003. IN OTHER WORDS THE DONORS OF THE ALLEGED GIFT HAD CON CEDED THE FACT THAT CASH WAS RECEIVED FROM THE ASSESSEE AND THE SAME WA S ADJUSTED TOWARDS THE LOAN AMOUNT DUE TO THE ASSESSEE AS AN A CCOMMODATION ENTRY. II) ADDITION OF GROSS PROFIT ON SALE OUTSIDE THE BO OKS RS.1 92 492 11. IN THE COURSE OF ASSESSMENT PROCEEDINGS THE AO RECORDED STATEMENTS FROM CERTAIN CUSTOMERS OF THE A SSESSEE AND HELD THAT THE ASSESSEE USED TO MAKE SALES IN CASH AND TH E SAME WAS NOT RECORDED IN THE BOOKS OF ACCOUNTS. THE SALES MADE O UTSIDE THE BOOKS OF ACCOUNTS WAS TAKEN AT RS.8 34 451 AND THE GROSS PROFIT THEREON AT 23.06% AMOUNTING TO RS.1 92 424 WAS ADDED TO THE BU SINESS INCOME. ITA NO.685/BANG/09 PAGE 4 OF 11 THE NECESSARY FACTS IN RESPECT OF THE ADDITION OF R S. 15 08 449 AND RS.1 92 424 IN THE QUANTUM ASSESSMENT ARE AS FOLLOW S: I) ADDITION OF GIFT RECEIVED CONSIDERED AS TAX RS .15 08 449 8. THE ASSESSEE WAS EARLIER CARRYING ON BUSINESS AS A PARTNER OF THE FIRM M/S. NEW SHARADA SAW MILLS. THE EX-PAR TNERS OF THE FIRM HAD INVESTED SOME FUNDS IN THE BUSINESS AND AFTER D ISSOLUTION OF THE BUSINESS OF THE FIRM THE ASSESSEE HAD TAKEN OVER T HE BUSINESS INCLUDING THE LIABILITIES PAYABLE TO THE EX-PARTNER S. ACCORDINGLY THE ASSESSEE HAD SHOWN THE FOLLOWING LOANS OUTSTANDING AS ON 1.4.2003 BEING THE FIRST DAY OF THE PREVIOUS YEAR IN RESPECT OF THE FOLLOWING PERSONS: (1) SRI JAGADISH KUMAR M. PATEL RS.12 77 031 (2) SMT. VARSHABEN J. PATEL RS. 3 51 699 (3) SMT. JASHODABEN PATEL RS. 5 79 758 9. AS MENTIONED ABOVE SRI JAGADISH KUMAR M. PATEL A ND SMT. JASHODABEN PATEL WERE THE EARLIER PARTNERS OF A FIR M M/S. NEW SHARADA SAW MILL ALONG WITH THE ASSESSEE AND THIS F IRM CAME TO BE DISSOLVED ON 1.4.2010 WHEN THE ASSESSEE TOOK OVER T HE BUSINESS OF THE FIRM. THE LIABILITY SHOWN AS PAYABLE TO THESE PERSO NS WERE RECORDED IN THE BOOKS OF ACCOUNT. DURING THE YEAR UNDER APPEAL THE ASSESSEE CLAIMED THAT THE ABOVE PERSONS HAD GIVEN A GIFT OF THE FOLLOWING AMOUNTS WHICH WERE CREDITED TO THE CAPITAL ACCOUNT OF THE ASSESSEE WHILE SQUARING UP OF THE LIABILITIES TO THE SAID EX TENT IN THE BOOKS OF ACCOUNTS AS ON 1.4.2003: ITA NO.685/BANG/09 PAGE 3 OF 11 (A) GIFTS RECEIVED CONSIDERED BOGUS RS.15 08449 (B) GROSS PROFIT ON SALES OUTSIDE BOOKS RS. 1 92 424 (C) SURVEY DECLARATION OF STOCK RS. 3 48 700 ------------------ RS.20 49 573 ------------------ 5. AFTER CONCLUSION OF THE ASSESSMENT PROCEEDINGS T HE AO CALLED UPON THE ASSESSEE TO STATE AS TO WHY PENALTY U/S. 271(1)(C) OF THE ACT SHOULD NOT BE IMPOSED. THE ASSESSEE EXPLAI NED VIDE LETTER DATED 25.5.2007 THAT THERE WAS NO CASE OF CONCEALME NT OR FURNISHING OF INACCURATE PARTICULARS IN RESPECT OF THE VARIOUS ADDITIONS MADE. IT WAS FURTHER EXPLAINED THAT THE ASSESSEE HAD AGREED TO THE VARIOUS ADDITIONS WITH A VIEW TO PURCHASE PEACE WITH THE DE PARTMENT AND TO AVOID LITIGATION AND REQUESTED FOR DROPPING OF THE PROCEEDINGS. THE AO DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE A ND HE PROCEEDED TO PASS THE IMPUGNED ORDER IMPOSING A PENALTY OF RS .5 88 886 BEING THE MINIMUM PENALTY ON THE ALLEGED CONCEALED INCOME. 6. AGGRIEVED BY THE ORDER OF PENALTY THE ASSESSEE F ILED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY FOR RED RESSAL. THE CIT(APPEALS) VIDE HIS ORDER DATED 17.4.09 PARTLY AL LOWED THE APPEAL BY DELETING THE PENALTY LEVIED ON THE ADDITION OF RS.3 48 700 VIZ. SURVEY DECLARATION OF STOCK. THE CIT(APPEALS) HOWEVER S USTAINED THE PENALTY LEVIED FOR ADDITIONS OF RS.15 08 449 AND RS .1 92 424. 7. THE ASSESSEE BEING AGGRIEVED BY THE CONFIRMATION OF PENALTY IN RESPECT OF THE ABOVE TWO ADDITIONS IS IN APPEAL BEFORE US. ITA NO.685/BANG/09 PAGE 2 OF 11 2. THE ASSESSEE HAS RAISED 6 GROUNDS OF APPEAL GROUN D NOS.1 4 5 & 6 ARE GENERAL IN NATURE AND NO SPECIFIC ADJUDICAT ION IS CALLED FOR. IN THE COURSE OF THE HEARING THE LD. AR SUBMITTED THA T HE IS NOT PRESSING GROUND NO.2 AND HENCE THE SAME IS DISMISSED AS NOT PRESSED. 3. THE REMAINING GROUNDS VIZ. GROUND 3A & 3B READ AS FOLLOWS: 3A. WITHOUT PREJUDICE TO THE ABOVE THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOLDING THE PENALTY U/ S 271(1)(C) OF THE ACT IN RESPECT OF THE ADDITION OF RS.15 08 449/- CONSIDERED AS BOGUS GIFT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APPELLANTS C ASE. 3B. THE LEARNED CIT(A) IS NOT JUSTIFIED IN UPHOLDIN G THE PENALTY ON THE GROSS PROFIT ADDITION OF RS.1 92 424/- IN RESPECT OF THE ALLEGED UNACCOUNTED SALES UNDER THE FACTS AND IN THE CIRCUMSTANCES OF T HE APPELLANTS CASE. 4. THE ASSESSEE CARRIES ON THE BUSINESS OF MANUFACTU RE AND SALE OF FLUSH DOORS THROUGH HIS PROPRIETARY CONCERN M/S. SHARADA INDUSTRIES AT NELAMANGALA. FOR THE A.Y. 2004-05 T HE ASSESSEE FILED HIS RETURN OF INCOME ON 27.08.2004 REPORTING A TOTA L INCOME OF RS.6 28 347. A SURVEY U/S. 133A OF THE ACT WAS CON DUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 19.11.2003 AND IN THE COURSE OF SURVEY THE ASSESSEE HAD AGREED TO OFFER A SUM OF R S.5 00 000/- AS ADDITIONAL INCOME FOR THE A.Y. 2004-05 IN RESPECT O F THE ALLEGED UNDERVALUATION IN STOCK. WHILE COMPLETING THE ASSE SSMENT PROCEEDINGS U/S. 143(3) OF THE ACT BY ORDER DATED 30.11.06 THE ASSESSING OFFICER MADE CERTAIN FURTHER ADDITIONS TO THE INCOME RETURN ED BY THE ASSESSEE IN RESPECT OF THE FOLLOWING: IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K. JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY ACCOUNTANT MEMBER ITA NO.685/BANG/2009 ASSESSMENT YEAR : 2004-05 SHRI HARILAL M. PATEL PROP. NEW SHARADA INDUSTRIES # 5876 BYE PASS ROAD NELAMANGALA BANGALORE RURAL DISTRICT. : APPELLANT VS. THE INCOME TAX OFFICER CIRCLE 8(4) BANGALORE. : RESPONDENT APPELLANT BY : SHRI V. SRINIVASAN C.A. RESPONDENT BY : SMT. JACINTA ZIMIK VASHAI ADDL.CIT (DR) O R D E R PER GEORGE GEORGE K. JUDICIAL MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE CIT(APPEALS) DATED 17.4.2009. THE ORDER OF THE CIT(APPEALS) EMANATES FROM THE ORDER OF ITO WARD 8(4) LEVYING P ENALTY U/S. 271(1)(C) OF THE I.T. ACT.