M.Kanthimathinathan, Legal Heir of K.Muthusamy Pillai, Tuticorin v. ITO, Tuticorin

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENNAI BEFORE SHRI ABRAHAM P. GEORGE ACCOUNTANT MEMBER AN D SHRI GEORGE MATHAN JUDICIAL MEMBER .. I.T.A. NOS. 748 & 749/MDS/1990 AND 2454 2455 2456 & 2457/MDS/1993 ASSESSMENT YEARS : 1982-83 & 1983-84 SHRI M. KANTHIMATHINATHAN LEGAL HEIR OF K. MUTHUSAMY PILLAI 105-D PALAYONKOTYTAI ROAD TUTICORIN-628008. V. THE INCOME TAX OFFICER CITY WARD-I(1) TUTICORIN. (PAN/GIR NO.:47-019/PN-3380) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI V. S. KANDASAMY RESPONDENT BY : SHRI B. SRINIVAS O R D E R PER GEORGE MATHAN JUDICIAL MEMBER : ITA NO. 748/MDS/1990 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-I MADURAI IN APPEAL NO . 169/89-90 DATED 14-12- 1989 FOR THE ASSESSMENT YEAR 1982-83. ITA NO. 749/ MDS/1990 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CI T(APPEALS)-I MADURAI IN APPEAL NO. 170/89-90 DATED 14-12-1989 FOR THE ASSES SMENT YEAR 1983-84. ITA NO. 2454/MDS/1993 IS AN APPEAL FILED BY THE ASSESSE E AGAINST THE ORDER OF THE LEARNED CIT(APPEALS)-I MADURAI IN APPEAL NO. 239/9 0-91 DATED 30-06-1993 CONFIRMING THE PENALTY LEVIED U/S. 271(1)(A) OF THE INCOME TAX ACT 1961 FOR THE I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 2 ASSESSMENT YEAR 1982-83. ITA NO. 2456/MDS/1993 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(APPEA LS)-I MADURAI IN APPEAL NO. 240/90-91 DATED 30-06-1993 FOR THE ASSESSMENT YEAR 1983-84 CONFIRMING THE LEVY OF PENALTY U/S 2871(1)(A) OF THE ACT. ITA NO. 2455/MDS/1993 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEAR NED CIT(APPEALS)-I MADURAI IN APPEAL NO. 237/90-91 DATED 30-06-1993 FOR THE ASSES SMENT YEAR 1982-83 CONFIRMING THE PENALTY LEVIED U/S. 271(1)(C) OF THE ACT. ITA NO. 2457/MDS/1993 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE R OF THE LEARNED CIT(APPEALS)- I MADURAI IN APPEAL NO. 238/90-91 DATED 30-06-1993 FOR THE ASSESSMENT YEAR 1983-84 CONFIRMING THE LEVY OF PENALTY U/S. 271(1)( C) OF THE ACT. AS THESE APPEALS RELATE TO THE SAME ASSESSEE AND ARE INTER-C ONNECTED THEY ARE DISPOSED OF BY THIS COMMON ORDER. 2. SHRI V.S. KANDASAMY ADVOCATE REPRESENTED ON BEH ALF OF THE ASSESSEE AND SHRI B. SRINIVAS LEARNED SR. DR REPRESENTED ON BEH ALF OF THE REVENUE. 3. ITA NOS. 748 & 749/MDS/1990 : IN THESE TWO APPEALS IT WAS SUBMITTED BY THE LEARNED AUTHORISED REPRESENTAT IVE THAT FOR THE ASSESSMENT YEAR 1982-83 AND 1983-84 NOTICE U/S 148 OF THE INCO ME TAX ACT 1961 HAD BEEN ISSUED ON THE ASSESSEE AND THE ASSESSEE HAD FILED L OSS RETURNS. THE RETURNS FILED BY THE ASSESSEE CAME TO BE PROCESSED AND THE ASSESS MENTS WERE COMPLETED ON 30-03-1989.WHEREIN THE ASSESSING OFFICER HAD REJECT ED THE ASSESSEES BOOKS OF ACCOUNT AND HAD MADE AN ESTIMATED ADDITION OF GROSS PROFIT BY COMPARING THE I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 3 GROSS PROFIT OF THE ASSESSEE WHICH WAS ADMITTED BY THE ASSESSEE AT 13.8% WITH THAT OF ONE M/S. P.S. SANKARALINGA NADAR WHO HAD DE CLARED THE GROSS PROFIT AT 17.15%. IT WAS THE FURTHER SUBMISSION THAT THE ASS ESSING OFFICER HAD ALSO DISALLOWED THE INTEREST PAYMENTS TO THE BANK ALLEGI NG DIVERSION OF FUNDS FOR THE CONSTRUCTION OF A THEATRE. IT WAS THE SUBMISSION T HAT THE ASSESSING OFFICER HAD ALSO DISALLOWED THE SUNDRY CREDITORS IN THE ASSESSE ES BOOKS OF ACCOUNT TO AN EXTENT OF ` 1 85 000/- ON THE GROUND THAT IN THE CONFIRMATION LETTERS THERE WAS NO EVIDENCE OF THE SOURCE FROM WHICH THE CREDITORS HAD ADVANCED THE MONIES TO THE ASSESSEE AND THE CREDITORS HAD NOT RESPONDED TO THE SUMMONS ISSUED U/S. 131. IT WAS FURTHER SUBMITTED BY THE LEARNED AUTH ORISED REPRESENTATIVE THAT THE COMPARATIVE CASE WHICH WAS TAKEN BY THE ASSESSING O FFICER FOR ESTIMATING THE GROSS PROFIT OF THE ASSESSEE WAS NOT GIVEN TO THE A SSESSEE FOR HIS REBUTTAL. IT WAS THE FURTHER SUBMISSION THAT THE ASSESSEE HAD EX PIRED ON 5.8.1995 AND AT PRESENT THE APPEAL WAS BEING PROSECUTED BY THE ASSE SSEES WIFE AND CHILDREN. IT WAS THE SUBMISSION THAT THE ASSESSEES BUSINESS HAD ALSO BEEN WOUND UP IN 1985-86. IT WAS THE SUBMISSION THAT THE ASSESSEE W AS A DEALER IN SENNA LEAVES AND PODS. IT WAS THE SUBMISSION THAT THE COMPARATI VE CASE DETAILS REPRESENTING THE BALANCE SHEET AND PROFIT & LOSS ACCOUNT HAD NOT BEEN GIVEN TO THE ASSESSEE AND CONSEQUENTLY THE ASSESSEE WAS NOT ABLE TO SHOW HOW THE COMPARATIVE CASE WAS NOT COMPARABLE WITH THE ASSESSEE. IT WAS THE F URTHER SUBMISSION THAT IN REGARD TO THE DISALLOWANCE OF INTEREST THE ASSESSIN G OFFICER HAD HELD THAT THE I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 4 ASSESSEE HAD DIVERTED FUNDS FOR CONSTRUCTION OF A T HEATRE. IT WAS THE SUBMISSION THAT THE LOANS WERE FROM THE BANKS AND THERE WAS NO WAY THE ASSESSEE COULD HAVE DIVERTED ANY MONEY FOR THE CONSTRUCTION OF THE THEATRE. IT WAS THE SUBMISSION THAT IN ANY CASE THE BOOKS OF ACCOUNT HA VING BEEN REJECTED THERE COULD BE NO FURTHER DISALLOWANCE OUT OF THE INTERES T PAID TO THE BANKS. 4. IN REGARD TO THE ADDITION REPRESENTING THE SUNDR Y CREDITORS IT WAS THE SUBMISSION THAT THE ASSESSEE HAD PRODUCED THE CONFI RMATION LETTERS FROM ALL THE CREDITORS AND THIS WAS ALSO ADMITTED BY THE ASSESSI NG OFFICER. THE NAMES AND ADDRESSES AND THE BUSINESS DETAILS WERE AVAILABLE I N THE AFFIDAVITS FILED. THE LEARNED AUTHORISED REPRESENTATIVE FURTHER DREW OUR ATTENTION TO THE AFFIDAVITS WHEREIN THE NATURE OF BUSINESS AND THE SOURCE OF FU NDS OF EACH OF THE CREDITORS WERE MENTIONED. IT WAS THE SUBMISSION THAT THE ASS ESSING OFFICER HAD MISREAD THE CONFIRMATION LETTERS. IT WAS THE FURTHER SUBMI SSION THAT THE ASSESSEE COULD NOT PRODUCE THE CREDITORS BEFORE THE ASSESSING OFFI CER DUE TO THE LAPSE OF TIME INSOFAR AS THE ASSESSMENTS RELATED TO THE YEARS END ED 31-3-1982 AND 31-3-1983 AND THE ASSESSMENT PROCEEDINGS WERE OF 1989 AND NON E OF THE CREDITORS WERE TO APPEAR BEFORE THE ASSESSING AUTHORITY. IT WAS THE SUBMISSION THAT THE SUNDRY CREDITORS WERE ALL LOCAL PEOPLE AS WAS EVIDENT FROM THE ASSESSMENT ORDER ITSELF WHEREIN AGAINST THE NAME THE PLACE HAS ALSO BEEN ME NTIONED. IT WAS THE FURTHER SUBMISSION THAT BEFORE THE LEARNED CIT(A) DUE TO T HE HEALTH PROBLEMS AND BRAKE DOWN OF THE ASSESSEES BUSINESS THE ASSESSEE WAS UN ABLE TO REPRESENT HIS CASE I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 5 AND THE APPEALS HAD BEEN DECIDED EX PARTE . IT WAS THE SUBMISSION THAT THE ADDITIONS AS MADE WERE LIABLE TO BE DELETED. 5. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED TH E ORDER OF THE LEARNED CIT(A) AND THE ASSESSING OFFICER. IT WAS THE SUBMI SSION THAT HE HAD NO OBJECTION IF THE ISSUES ARE RESTORED TO THE FILE OF THE ASSESSING OFFICER FOR RE- ADJUDICATION. IT WAS THE SUBMISSION THAT THE ASSES SEE HAD NOT PRODUCED THE CREDITORS FOR EXAMINATION. IT WAS THE SUBMISSION T HAT THE ASSESSING OFFICER MAY BE DIRECTED TO GIVE THE ASSESSEE THE DETAILS OF THE COMPARATIVE CASE. 6. IN REPLY THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED THAT THE CREDITS WERE MORE THAN 28 YEARS THE BUSINESS OF THE ASSESS EE WAS STOPPED IN 1985-86 AND THE ASSESSEE HAD ALSO EXPIRED MORE THAN 15 YEAR S AGO. IT WAS THE SUBMISSION NO PURPOSE WOULD BE SERVED BY SETTING AS IDE THE ASSESSMENT. IT WAS ALSO THE SUBMISSION THAT THE FAMILY OF THE ASSESSEE WAS IN DIRE STRAITS OF THE ATTACHMENT OF THE PROPERTIES OF THE ASSESSEE ON ACC OUNT OF THE DEMAND RAISED. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. AT TH E OUTSET WE MAY MENTION HERE THAT IN GROUND NO.5 OF THE ASSESSEES APPEAL T HE ASSESSEE HAS CHALLENGED THE ACTION OF THE ASSESSING OFFICER IN REJECTING TH E ASSESSEES BOOKS AND THE ACTION OF THE LEARNED CIT(A) IN CONFIRMING THE SAME . AS NO SERIOUS ARGUMENTS HAVE BEEN PLACED IN REGARD TO THIS GROUND THE REJE CTION OF THE BOOKS OF ACCOUNTS STANDS UPHELD. ONCE THE BOOKS OF ACCOUNTS ARE REJE CTED THEN THE NEXT ALTERNATIVE IS TO ESTIMATE THE INCOME OF THE ASSESS EE. FOR ESTIMATING THE INCOME I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 6 OF THE ASSESSEE COMPARABLE CASES ARE TO BE USED. W HEN COMPARABLE CASES ARE USED OBVIOUSLY THE DETAILS OF THE COMPARABLE CASE S SHOULD BE GIVEN TO THE ASSESSEE INCLUDING THEIR P& L ACCOUNT AND THE FINAN CIAL STATEMENTS IN FULL. AS THIS IS A VERY DIFFICULT PROPOSITION NORMALLY THE COMPARISON IS DONE WITH THE ASSESSEES OWN BOOKS FOR THE EARLIER AND SUBSEQUENT YEARS. IN THE PRESENT CASE IT IS NOTICED THAT THE ASSESSING OFFICER HAS USED A COMPARATIVE CASE OF ANOTHER ASSESSEE WITHOUT GRANTING THE DETAILS TO THE ASSESS EE. DIFFERENT ASSESSEES WOULD HAVE DIFFERENT MODUS OPERANDI OF FUNCTIONING LEADIN G TO VARIATION OF GROSS PROFIT. GROSS PROFIT CAN VARY ON ACCOUNT OF THE LOANS TAKEN THE INTEREST BURDEN THE CAPITAL USED THE TURNOVER THE EMPLOYEES AND THEIR SALARIES QUALITY OF PRODUCTS DEALT WITH SO ON SO FORTH. NONE OF THESE DETAILS I S SEEMED TO HAVE BEEN GIVEN TO THE ASSESSEE FOR HIS REBUTTAL. IN THE CIRCUMSTANCE S WE ARE OF THE VIEW THAT THE ESTIMATION DONE BY USING THE COMPARISON OF M/S. P.S . SANKARALINGA NADAR IS NOT SUSTAINABLE. FURTHER IT IS ALSO NOTICED THAT M/S. P.S. SANKARALINGA NADAR IS A PARTNERSHIP FIRM WHEREAS THE ASSESSEE IS A HINDU UN DIVIDED FAMILY. IN THE CIRCUMSTANCES THE ADDITION MADE BY THE ASSESSING OF FICER BY ESTIMATING THE ASSESSEES GROSS PROFIT BY APPLYING COMPARATIVE MET HOD AND THE CONFIRMATION OF THE SAME BY THE LEARNED CIT(A) STANDS DELETED IN TO TO. 8. ONCE THE ASSESSEES BOOKS OF ACCOUNTS ARE REJECT ED NO FURTHER TINKERING TO THE P& L ACCOUNT IS PERMISSIBLE AS THE P & L ACC OUNT ITSELF NO MORE SURVIVES ON ACCOUNT OF THE REJECTION OF THE BOOKS OF ACCOUNT S. ON THIS GROUND THE I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 7 ADDITION MADE BY THE ASSESSING OFFICER AND AS CONFI RMED BY THE LEARNED CIT(A) ON ACCOUNT OF THE DISALLOWANCE OF INTEREST PAID TO THE BANKS STANDS DELETED. 9. IN REGARD TO THE SUNDRY CREDITORS IT IS NOTICED THAT MANY OF THE SUNDRY CREDITORS FOR THE ASSESSMENT YEAR 1983-84 ARE THE C ARRY FORWARD SUNDRY CREDITORS OF 1982-83 WHICH HAD ALREADY BEEN DISALLOWED. FURT HER A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSEE HA D FILED THE CONFIRMATION LETTERS. FURTHER A PERUSAL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE CREDITORS ARE LOCAL CREDITORS WHOSE WHEREABOUTS COU LD VERY WELL HAVE BEEN EXAMINED BY THE ASSESSING OFFICER INSTEAD OF DIRECT ING THE ASSESSEE TO PRODUCE THE CREDITORS FOR EXAMINATION. FURTHER IT IS NOTIC ED THAT THE YEAR ENDING WAS 31 ST MARCH 1982 AND 31 ST MARCH 1983 WHEREAS THE ASSESSMENTS HAVE BEEN DONE IN 1989 MORE THAN 5 YEARS AFTER THE CLOSURE OF THE FI NANCIAL YEAR. THE HON'BLES JURISDICTIONAL HIGH COURT OF MADRAS IN THE VERY EAR LY CASE OF S. HASTIMAL V. CIT REPORTED IN 49 ITR 273 HAS CATEGORICALLY HELD THAT AFTER A LONG LAPSE OF TIME THE ASSESSEE COULD NOT BE PLACED UPON THE RACK AND CALL ED UPON TO EXPLAIN THE ORIGIN AND THE SOURCE OF THE CAPITAL CONTRIBUTION OR THE O RIGIN AND SOURCE OF THE SOURCE AS WELL. A PERUSAL OF THE CONFIRMATION LETTERS WHI CH ARE IN THE FORM OF AFFIDAVITS CLEARLY SHOWS THAT THE CREDITORS HAVE CATEGORICALLY GIVEN THEIR NAMES ADDRESSES NATURE OF BUSINESS THE SOURCE FROM WHICH THE MONEY HAS BEEN GIVEN AND THE YEAR TO WHICH THE AMOUNTS RELATE. THE PRIMARY DETA ILS HAVING BEEN GIVEN THE BURDEN LIES ON THE ASSESSING OFFICER TO DISPROVE TH E EVIDENCE. THIS HAS NOT BEEN I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 8 DONE BY THE ASSESSING OFFICER. AN EVIDENCE CANNOT BE MADE TO BE NO EVIDENCE BY A SIMPLE FLICK OF THE PEN. THE EVIDENCE IS PRO DUCED BY THE ASSESSEE MUST BE REBUTTED. IN THE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE DISALLOWANCE OF THE SUNDRY CREDITORS IS LIABLE TO BE DELETED AND WE DO SO. HERE WE MAY SPECIFICALLY MENTION THAT WE ARE NOT RESTORING THE ISSUES TO THE FILE OF THE ASSESSING OFFICER AS PRAYED FOR BY THE LEARNED DR AS THE APPEAL ITSEL F IS VERY OLD AND THE ASSESSEE IS NO MORE AND AS PER THE STATEMENT OF THE LEARNED AUTHORISED REPRESENTATIVE AT THE BAR MANY OF THE CREDITORS ARE ALSO NO MORE AND THE TRANSACTION RELATES TO MORE THAN 28 YEARS OLD FOR WHICH IT WOULD BE PRACTI CALLY IMPOSSIBLE TO OBTAIN THE RECORDS. IN THE CIRCUMSTANCES THE APPEAL OF THE A SSESSEE IN ITA NOS. 748/MDS/1990 FOR THE ASSESSMENT YEAR 1982-83 AND 74 9/MDS/1990 FOR THE ASSESSMENT YEAR 1983-84 STAND PARTLY ALLOWED. 10. ITA NOS. 2454 & 2456/MDS/1993: IN REGARD TO THE PENALTIES LEVIED BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARN ED CIT(A) U/S. 271(1)(A) OF THE ACT THE LEARNED AUTHORISED REPRESENTATIVE SUBM ITTED THAT THE ASSESSEE WAS UNDER THE BONA FIDE BELIEF THAT HE HAD NO TAXABLE INCOME AND THEREFORE HAD NOT FILED THE RETURNS. IT WAS THE SUBMISSION THAT IN A NY CASE THE RETURN HAVING BEEN FILED IN RESPONSE TO THE NOTICE U/S. 148 AND THE SA ME HAVING BEEN TREATED AS A RETURN U/S. 139(1) NO PENALTY WAS LIABLE TO BE LEVI ED ON THE ASSESSEE. IT WAS THE SUBMISSION THAT AS THE ASSESSEE HAS REASONABLE CAUS E PENALTY SHOULD NOT BE LEVIED. I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 9 11. IN REPLY THE LEARNED DR SUBMITTED THAT NO REAS ONABLE CAUSE HAD BEEN SHOWN BY THE ASSESSEE AND THE PENALTY AS LEVIED BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED CIT(A) U/S. 271(1)(A) OF T HE ACT WAS LIABLE TO BE CONFIRMED. 12. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PE RUSAL OF THE PROVISIONS OF SEC. 271(1)(A) CLEARLY SHOWS THAT PENALTY IS LEVIED FOR THE DELAY IN FILING THE RETURNS. FOR THE ASSESSMENT YEARS 1982-83 AND 1983 -84 THE RETURNS HAVE BEEN FILED BY THE ASSESSEE ON 26-10-1987. THE ASSESSEE S PRAYER THAT HE WAS UNDER THE BONA FIDE BELIEF THAT HE DID NOT HAVE TAXABLE INCOME HAS NOT BEEN PROVED. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT FOR THE ASSESSMENT YEAR 1982-83 THE ASSESSEE HAS NOT PROVIDED ANY REASONABLE EXPLAN ATION FOR THE CANCELLATION OF PENALTY U/S 271(1)(A). IN THE CIRCUMSTANCES THE L EVY OF PENALTY AND THE CONFIRMATION OF THE SAME BY THE LEARNED CIT(A) FOR THE ASSESSMENT YEAR 1982-83 STANDS CONFIRMED. HOWEVER AS WE HAVE ALREADY DECI DED THE ISSUE ON QUANTUM ADDITIONS WHICH WOULD AFFECT THE QUANTIFICATION OF THE PENALTY U/S 271(1)(A) OF THE ACT THE LEVY OF PENALTY U/S. 271(1)(A) WOULD S TAND REDUCED AND ONLY FOR THE PURPOSE OF RE-QUANTIFICATION THIS ISSUE IS RESTORED TO THE FILE OF THE ASSESSING OFFICER. 13. IN REGARD TO THE PENALTY U/S. 271(1)(A) FOR THE ASSESSMENT YEAR 1983-84 IT IS NOTICED THAT THE RETURN FOR THE ASSESSMENT YE ARS 1982-83 AND 1983-84 HAVE BEEN FILED ON THE SAME DATE I.E. ON 26-10-1987 AN D IT IS ALSO NOTICED THAT I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 10 WITHOUT PREPARING THE RETURN FOR THE ASSESSMENT YEA R 19822-83 THE RETURN FOR THE ASSESSMENT YEAR 1983-84 CANNOT BE FILED OR PREP ARED. THIS IS BECAUSE THE TRIAL BALANCE BALANCE SHEET AND P& L ACCOUNT FOR T HE ASSESSMENT YEAR 1982-83 WOULD HAVE TO BE FIRST FINALIZED. IN THESE CIRCUMS TANCES AS THE RETURN FOR THE ASSESSMENT YEAR 1982-283 HAS BEEN DELAYED THE DELA Y IN FILING THE RETURN FOR THE ASSESSMENT YEAR 1983-84 GETS SUPPORTED BY THE R EASONABLE CAUSE THAT THE RETURN FOR THE ASSESSMENT YEAR 1982-83 ITSELF WAS B ELATED. IN THE CIRCUMSTANCES THE PENALTY LEVIED AND CONFIRMED BY THE LEARNED CIT (A) U/S. 271(1)(A) FOR THE ASSESSMENT YEAR 1983-84 STANDS CANCELLED. IN THE C IRCUMSTANCES THE APPEAL OF THE ASSESSEE IN ITA NO. 2454/MDS/1993 STANDS DISMIS SED AND THE APPEAL FILED BY THE ASSESSEE IN ITA NO. 2456/MDS/1993 STANDS ALLOWE D. 14. ITA NOS. 2455 & 2457/MDS/1993: THESE APPEALS RELATE TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AND THE CONFIRMATION OF THE SAME BY THE LEARNED CIT(A). IT WAS SUBMITTED BY TH E LEARNED AUTHORISED REPRESENTATIVE THAT THE ADDITIONS BASICALLY WERE ES TIMATED ADDITIONS ON WHICH NO PENALTY U/S. 271(1)(C) OUGHT TO BE LEVIED. 15. IN REPLY THE LEARNED DR VEHEMENTLY SUPPORTED T HE ORDER OF THE ASSESSING OFFICER AND THE LEARNED CIT(A). 16. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN R EGARD TO THE LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT A PERUS AL OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ADDITIONS HAVE BEEN MADE ON ACCOUNT OF THE REJECTION OF I.T.A. NOS.748 & 749/MDS/90 AND 2454-2457/MDS/93 11 THE ASSESSEES BOOKS AND THE CONSEQUENTIAL ESTIMATI ON OF THE INCOME AS ALSO ON ACCOUNT OF THE DISBELIEVING OF THE CLAIM OF THE ASS ESSEE IN REGARD TO THE SUNDRY CREDITORS. THIS CANNOT BE SAID TO BE A DELIBERATE ATTEMPT ON THE PART OF THE ASSESSEE TO CONCEAL HIS INCOME. ON THIS GROUND ITS ELF THE PENALTY AS LEVIED U/S 271(1)(C) FOR BOTH THE ASSESSMENT YEARS IS LIABLE T O BE CANCELLED AND WE DO SO. IN ANY CASE AS WE HAVE ALREADY DELETED THE ADDITION S MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY THE LEARNED CIT(A) WE ARE OF THE VIEW THAT THE PENALTY LEVIED UNDER SECTION 271(1) (C) FOR THE ASS ESSMENT YEARS 1982-83 AND 1983-84 STANDS CANCELLED. IN THE CIRCUMSTANCES TH E APPEALS OF THE ASSESSEE IN ITA NOS. 2455 AND 2457/MDS/1993 FOR THE ASSESSMENT YEARS 1982-83 AND 1983- 84 RESPECTIVELY STAND ALLOWED. 17. IN THE RESULT ITA NOS. 748 & 749/MDS/1990 ARE PARTLY ALLOWED ITA NO. 2454/MDS/1993 IS DISMISSED AND ITA NOS. 2455 2456 & 2457/MDS/1993 ARE ALLOWED. 18. THE ORDER WAS PRONOUNCED IN THE COURT ON 04/02/ 2011. SD/- SD/- (ABRAHAM P. GEORGE) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER CHENNAI DATED THE 04 TH FEBRUARY 2011. H. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE