M/S PLATINUM HORAZINE PVT. LTD.,INDORE vs. THE ACIT CIRCLE 3(1), INDORE

आदेश /O R D E R PER O.P. MEENA, ACCOUNTANT MEMBER.

This appeal filed by the assessee is directed against the order of ld. Commissioner of Income tax (Appeals)-II, Indore [hereinafter referred to as the CIT (A)] dated 31.12.2015. This appeal pertains to Assessment Year 2009-10. Which arose out of the penalty order passed

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 2 of 25 under section 271(1) (c) of Income Tax Act, 1961(herein

after referred to as “the Act”) by the ACIT 1(2) Bhopal dtd.

27.06.2012 (hereinafter referred as the AO).

of 106 days in filing of appeal. The Ld. A.R. submitted that

the order of the CIT(A) was served upon Shri Banwarilal

Parsai, Accountant of the assessee company probably on

15.01.2016. Shri Banwarilal Parsai has kept the said order

in the income-tax file of 2009-10 and same file misplaced

during the month of January 2016 by virtue of shifting of

office record at one place to another due to renovation work

of the company was going on. After completion of renovation

work, the file was traced out on 28th June 2016 and the

director of the company contacted the counsel for preparing

the appeal. Therefore, it was contended that the delay was

caused due to negligence of the Accountant Shri Banwarilal

Parsai . An affidavit to that effect is also filed from Shri

Banwarilal as well as Shri Pramathu Choksey, director of the

company. The Ld. A.R. also relied on in the case of Collector,

Land Acquisition, v. Mst. Katiji & Of Rs.[1987] 167 ITR 471

(SC)/ [1987] 2SCC 107 , Auto Center v. State of Uttar

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 3 of 25 Pradesh [2005] 278 ITR 0291 (All) / 148 Taxman 0573 (All),

Dr. V. V. Devsthale v. ITO [1995] 214 ITR 0315 (MP)/ [1996]

84 Taxman 0143 (MP) in support of his claim that delay was

not intentional and there was reasonable cause for the same.

condonation of delay.

and perused the material available on record. As far as the

issue of condonation of delay is concerned, it is settled law

that the Court quasi-judicial bodies are empowered to

condone the delay if the litigant satisfies the Court that there

were sufficient reasons for the availing the remedy after the

expiry of the limitation. Such a reasoning should be to the

satisfaction of the Court. The expression sufficient cause or

reason as provided in subsection (5) of section 253,

subsection (3) of section 249 of the Income Tax Act 1961

used in identical terms in the Limitation Act and the CPC.

Such expression has also been used under section 4 of the

Income Tax Act 1961 such as sections 273, 274 etc. The

expression “’sufficient cause” within the meaning of Section

5 of Limitation Act as well as a similar other provisions and

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 4 of 25 the ambit of exercise of powers thereunder have been subject

matter of consideration before the Honourable Apex Court on

various occasions. In the case of the State of West Bengal vs.

Administrator , Howrah Municipality, AIR 1972 SC 749, the

Hon`ble the Supreme Court, while considering the scope of

the expression sufficient cause for condonation of delay, has

held that the said expression should receive a liberal

construction so as to advance substantial justice when no

negligence or inaction or want of bonafide is imputable to the

party. In the case of N. Balakrishnan vs. M. Krishnamurthy

AIR 1998SC3222, there was a delay of 883 days in filing of

application in setting-aside the ex-parte decree for which

application for condonation of delay was filed. The trial Court

having found that sufficient cause was made out for

condonation of delay condoned the delay. The Hon`ble

Supreme Court while restoring the order of the trial Court

has of observed in paragraphs 8, 9 and 10 as under:

“8. The appellant’s conduct does not on the whole warrant to castigate him as an irresponsible litigant. We are he did in defending the suit was not very much far from what a litigant would broadly do. Of course, it may be said that he should have been more vigilant by visiting

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 5 of 25 his advocate at short intervals to check up the progress of the litigation. But during these days when every body is fully occupied with his avocation of life, an omission to adopt such extra vigilance need not be used as a ground to depict him as litigant not aware of his responsibilities, and to visit him with the drastic consequences. 9. It is axiomatic that condonation of delay is a matter of discretion of the Court. Section 5 of the Limitation Act does not say that such a discretion can be exercised only if the delay is within a certain limit. Length of delay is no matter, and acceptability of the explanation is the only criterion. Sometimes delay of the shortest the range may be un-condonable due to want of acceptable explanation, whereas in certain other cases, delay of very long-range can be condoned as the explanation thereof is satisfactory. Once the Court accepts the explanation as sufficient, it is the result of positive exercise of discretion and normally the Superior Court should not disturb such finding, much less in revisional jurisdiction , unless the exercise of discretion was wholly on untenable grounds or arbitrary or perverse. But it is a different matter when the first Court refuses to condone the delay. In such cases, the Superior Court would be free to consider the cause shown for the delay afresh and in its own finding even untrammeled by the conclusion of the lower Court. 10…… ** The primary function of a Court to adjudicate the dispute between the parties and to advance substantial justice.

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 6 of 25 This time-limit fixed for the approaching the Court in different situation is not because on the expiry of such time a bad cause would transform in to a good cause.”” N. Balakrishnan vs. Krishnamurthy (1998) 7 SC 124 (SC) wherein it was observed that condonation of delay is matter of discretion of the court. Section 5 of Limitation Act says that discretion can be exercised only if the delay is within reasonable limit. Length of delay is no matter; acceptability of the explanation is the only criterion. ….. There is no presumption that delay is approaching the court is always deliberate. The words “sufficient cause” under section 5 of the Limitation Act should receive a liberal construction to advance substantial justice. The Hon`ble Supreme Court further observed that rules of limitation are not meant to destroy the rights of the parties. They are meant to see that the parties do not resort to dilatory tactics but seek the remedy promptly. The Hon`ble Apex Court further observed that the refusal to condone the delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that the delay in approaching the Court is always deliberate. The Hon`ble Supreme Court in SLP Civil No. 12980 of 1986, decided on 19th feb. 1987, in the case of Collector, Land Acquisition, v. Mst. Katiji & Of Rs.[1987] 167 ITR 471 (SC)/ [1987] / 2SCC 107 has laid down the following guidelines: 1. Ordinarily a litigant does not stand to benefit by lodging an appellate.

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 7 of 25 2. Refusing to condone the delay can result in meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest than can happen is that a cause would be decided on merits after hearing the parties sale 3. “Everyday delay must be explained “” does not mean that a pedantic approach should be made, why not every hours delay, every seconds delay. The doctrine must applied an rationale common sense pragmatic manner. 4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserve to be preferred, for the other side cannot claim to have vested right in injustice being done the cause of her nondeliberate delay. 5. There is no presumption that the lady occasions had deliberately, or on account of culpable negligence, or on account of malafides . A litigant does not extent to benefit by resorting to delay. In fact he runs a serious risk. 6. It must be grasped that the judiciary’s is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so.

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 8 of 25

the facts of the present case, it is apparent that the assessee

has been vigilant in its approach and has not neglected the

Income tax proceedings. The Hon`ble Supreme Court in the

case of N. Balakrishnan (supra) has observed that the length

of the delay is immaterial. The acceptability of the

explanation is the only criteria for condoning the delay. In a

given case, a delay of the shortest period may be un-

condonable due to unacceptable explanation, whereas in

certain other cases, delay of a long period can be condoned,

if the explanation is satisfactory. In every case of delay, there

might be some omissions of negligence on the part of the

assessee, and then such omissions/negligence has to be

weighed in the light of existing circumstances of each case. It

would the negligence of commission if it is a by product of a

deliberate attempt with mala-fide intention for delay, the

process of the litigation which could give some benefit to the

litigant, then probably process of litigation which would view

some benefit with the litigant then probably that delay would

not deserved to be condoned. However, if no mala-fide can be

attributed to the delay, that delay will be condonable.

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 9 of 25 Therefore, on the facts of the present case, we are of the

considered opinion that the assessee has been able to

demonstrate sufficient reasons in the shape of having

misplaced the income-tax papers by his Accountant due

inadvertent mistake on account of renovation of office was

being carried on for filing an appeal before the Tribunal.

Therefore, we deem it fit to condone the delay of 106 days and

admit the appeal and allow the appeal proceeded with for

adjudication.

assessee which reads as us under:-

1.That on the facts and in the circumstances of the case, the learned CIT(A)-II Indore has erred in confirming penalty of Rs. 6,49,630/- levied by the AO . 2.That on the facts and in the circumstances of the case, the learned CIT(A) Indore has erred in confirming penalty after wrongly applying to the judgement whose facts entire different from the appellant`s case. 3. That on the facts and in the circumstances of the case, the learned CIT(A) Indore has erred in confirming to the penalty which was levied due to agreed addition to income after offering loss on share of Rs. 21,02,353/- to purchase peace of mind or for other similar reason.

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 10 of 25 4. That on the facts and in the circumstances of the case and in law, the order of penalty is invalid and unlawful because making such order , the assessee has not been heard nor has been given a reasonable and meaningful opportunity of being heard as contemplated u/s. 274 (1). Hence, the order be cancelled. 5. That on the facts and in the circumstances of the case and in law, it be held that neither the assessee has concealed the particulars of its income nor furnished inaccurate particulars of such income and therefore, the levy of penalty is unjustified and unlawful and , therefore, be cancelled. 6. That on the facts and in the circumstances of the case and in law, the findings of the learned CIT(A) in his order are wholly wrong and injudicious and are opposed to facts and , therefore, , there is no justification in sustaining the levy of penalty holding that the assessee has concealed income.

appeal, however in substance , these relates to confirming of

penalty of Rs. 6,49,630/- levied under section 271(1)(c) of the

Act. Ergo, these are being considered and disposed-of

together.

authorities are that the assessee is a Private Limited

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 11 of 25 Company engaged in providing consultancy in the field of

marketing, product range , management consultancy market

survey and business procurement. The assessee has filed

return of income on 30-09-2009 declaring total income of Rs.

68,47,260/-. During the course of assessment proceedings,

it was noticed that the assessee has shown loss of Rs.

21,02,353/- on purchase and sale of shares effected through

M/s. Mahasagar Securities Pvt. Ltd. An information received

from Addl. DIT (Inv) Mumbai, in the case of M/s. Swift

Intermedia Convergence Ltd.; that the said company M/s.

Mahasagar Securities Pvt. Ltd was floated by Mr. Mukesh

Choukse, CA, for arranging profit/loss, capital gains/loss etc.

On being asked the transaction with M/s. Mahasagar

Securities Pvt. Ltd., the assessee filed its reply vide letter

dated 13.12.2011 stating that their transaction with M/s.

Mahasagar Securities Pvt. Ltd are bonafide and as per SEBI,

rules and they do not know anything about true nature of

activities done by M/s. Mahasagar Securities Pvt. Ltd., and

knowing about investigation done by the Income-tax

Department. Therefore, the company do not want to involve

in litigation. therefore, to buy peace of mind, they offered this

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 12 of 25 loss of Rs. 21,02,353/- for taxation purpose and assure to

pay due taxes thereon with a request that no penalty under

section 271(1)(c) or any other provision of Income Tax

Act,1961 will be imposed in the matter. However, the AO

found, that except the copy of Sauda Summary Report from

NSE and options of Angle Capital Debt Market no details of

purchase and sale of share done through M/s. Mahasagar

Securities Pvt. Ltd was furnished. The copy of account with

bills of purchase and sale of shares with M/s. Mahasagar

Securities Pvt. Ltd was furnished, but who has signed the

confirmation and no PAN was furnished. It was further

noticed that Shri Mukesh Choukse CA, in his statement

recorded during the course of search and seizure operation

stated that ……if a party wants to carry out to a big

transaction to claim bogus profits they deposit the

amount in cash or cheques in our account and they get

their cheques cleared. We get an intimation from

franchises agents regarding the amounts a bogus profits

which party wants to generate……

proceeding under section 271(1) (c) of which the assessee

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 13 of 25 company filed its reply. The AO noted that the explanation of

the assessee that they were not aware of the facts about

accommodation transaction done by M/s. Mahasagar

Securities Pvt. Ltd cannot be bought for simple reason that

the act of providing / taking accommodation entries involves

creation/adjustment of several forged documents. This

requires active involvement of the person taking

accommodation entries. Therefore, this argument of the

assessee was not found acceptable. Moreover, the assessee

has failed to furnish any relevant supporting evidence during

the assessment proceedings. Accordingly, the AO concluded

that the assessee company did not disclose true and correct

income in its return of income and it was due to scrutiny

assessment in which it was found that the assessee has

concealed the true income. Accordingly, the AO levied penalty

of Rs. 6,49,630/- being 100% of tax sought to be evaded.

Ld. CIT (A). The CIT (A) relying on the decision in the case of

Mak Data P. Ltd. vs. CIT [2013] 358 ITR 593(SC) observed

that penalty under section 271(1)(c) cannot be avoided simply

for the reason that the amount has been surrendered to buy

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 14 of 25 peace of mind. According to Ld. CIT (A), the facts of the case

are similar to the case of Mak Data P. Ltd. vs. CIT [2013] 358

ITR 593(SC). In this case also the assessee company has

surrender loss on account of share transaction only, which

was found after search and seizure operation carried out in

some other case. When detailed enquiries conducted by the

Investigation Wing and the AO, the appellant came out with

the proposal of settlement as the appellant was unable to

prove the genuine of share transaction and to prove that

income was not concealed income. Moreover, the surrender

in this case is not voluntary. Had there been no investigation

or enquiry under relevant provision of the Act; the appellant

would not have come out with the surrender of the amount

of loss under reference. Had there been bonafide on the part

of the appellant, these amounts would have been included in

the return of income for the relevant assessment year.

Therefore, considering the direct decision of Hon`ble Supreme

Court on the issue the Ld. CIT (A) had confirmed the levy of

penalty under section 271(1) (c) of the Act.

Tribunal. The learned counsel for the assessee, submitted

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 15 of 25 that the company filed confirmed copy of account of M/s.

Mahasagar Securities Pvt. Ltd with their PAN: AABCR 1593B

during assessment proceedings (Refer Paper Book Page No -

108). The assessee had paid all payment through Account

Payee Cheques. The assessee is also involved in share trading

and done their business with M/s. Angles Broking Ltd. The

intention of the assessee company was to trade in short term.

The final payment due to M/s. Mahasagar Securities Pvt. Ltd

delayed due to some dispute with them. However, the

assessee is innocent about the transaction done by M/s.

Mahasagar Securities Pvt. Ltd. Therefore, to buy peace of

mind, the assessee surrendered the loss of Rs. 21,02,353/-

on delivery based share transaction, though genuine, for

taxation purposes, with a request for not levy any penalty

under section 271(1)(c) of the Act. However, the AO levied

penalty ignoring the submissions of the assessee. The learned

counsel has placed reliance on number of case laws as per

his written submissions, which are allowable on record. the

learned counsel further claimed that decision of Mak Data

(P.) Ltd. vs. CIT [2013] 358 ITR 593(SC) as relied by the Ld.

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 16 of 25 CIT (A) is not applicable to the facts of the case of the

assessee.

the order of lower authorities and argued that the disclosure

made by the assessee in the return was not voluntary. It was

admitted after the deep investigation carried on by the

Investigation Wing of Mumbai in the case of M/s. Mahasagar

Securities Pvt. Ltd. The ld. D.R. further cited decision in the

case of Ajit B. Zota vs. ACIT (2010) 40 SOT 543 (Mum) to

contend that explanation 1 to section 271(1) (c) could be

invoked where no bonafide explanation is given by the

assessee for not disclosing the claim in original return of

income.

on record and gone through the assessment order and find

that the assessee has not filed any revised return of income

disclosing the bogus loss on share transaction done through

M/s. Mahasagar Securities Pvt. Ltd. The Department has

come to know this transaction only after the Investigation

Wing of Mumbai has carried out investigation in the case of

M/s. Swift Intermedia Convergence Ltd. and its director Shri

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 17 of 25 Mukesh Choukse; CA, has categorically admitted that he has

provided loss entries through sale and purchase of shares

and transaction done through Mahasagar Securities Pvt.

Ltd., which were not genuine. Thus, the transaction of buying

bogus loss in shares by the assessee is very much amounts

to furnishing of inaccurate particulars of income as well as

concealing the particulars of income. We further find that the

claim of loss was patently wrong and, it was made with

conscious mind and with a deliberate attempt to evade due

taxes by reducing tax liability. It was only when the

transaction of buying such artificial loss generated by

manipulating transaction was unearthed by the Income-tax

Department. The assessee has come out with withdrawing

such loss during the course of assessment proceedings.

Therefore, the disclosure made during the course of

assessment proceedings, cannot be, considered as voluntary.

Nor it could be said that the claim of loss was bonafide one.

Therefore, in view of these circumstances, the claim of the

assessee cannot be said as bonafide more particularly when

disclosure was not voluntary nor it was filed by revising the

return of income. Therefore, we are of the considered view

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 18 of 25 that the assessee has concealed the income chargeable to tax

for assessment year under consideration attracting the

penalty u/s 271(1) (c) of the Act. Therefore, according to us,

there was conscious and deliberate attempt on the part of the

assessee to evade tax by claiming false and bogus loss in

shares without a view to avoid payment of due taxes. Had

there been no search and seizure operation in the case of

M/s. Swift Intermedia Convergence and investigation in the

case of M/s. Mahasagar Securities Pvt. Ltd, the Department

could have lose the due revenue.

Act provides that the penalty would be deemed to attract

where in respect of a fact material to the computation of

income either no explanation is offered, or explanation offered

is found to be false. The assessee, although, has submitted

an explanation claiming that they were ignorant about the

transaction carried on by the M/s. Mahasagar Securities Pvt.

Ltd. and they only carried on legitimate transaction through

them, but this explanation is not found to be bonafide and it

was found to be false as it was not in accordance with law

and accordingly, its case is covered by Clause (A) of

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 19 of 25 Explanation 1 to section 271(1)(c) of the Act. Further, Clause

(B) of Explanation 1 to section 271(1)(c)of the Act, provides

that where the assessee is not able to substantiate its

explanation and fails to prove that such explanation is

bonafide and all the facts relating to the same have been

disclosed, penalty is leviable. We find that the assessee did

make disclosure of loss and offered it taxation during

assessment proceeding, but that was not voluntary as it was

outcome of investigation carried on by Investigation Wing of

Revenue. Therefore, the assessee`s explanation was not

found to be acceptable by the AO, and thus it follows that the

Assessee was unable to substantiate his explanation by

providing various evidences and judicial opinions. The Ld.

CIT (A) has placed reliance on the decision of Hon`ble

Supreme Court in the case of Mak Data (P.) Ltd. vs. CIT (2013)

358 ITR 593 (SC) wherein the Hon`ble Supreme Court has

held that the Assessing Officer should not be carried away by

the plea of the assessee such as “ voluntary disclosure” “buy

peace” “avoid litigation” “amicable settlement” to explain

away it’s conduct. The question is whether the assessee has

offered any explanation for concealment of particulars of

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 20 of 25 income concealment or furnishing of inaccurate particulars of

income.

above case, we are, therefore, of the considered opinion that

the case of the assessee, is covered by Explanation 1 to

section 271(1) (c) of the Act. Based on the facts of the case,

we note that the Assessee had not made full and true with

necessary facts in the return of income and therefore

furnished inaccurate particulars of income and concealed the

material facts necessary for the assessment. Therefore, we

hold that the AO has rightly levied penalty under section

271(1) (c) of the Act and same has been rightly sustained by

the Commissioner of Income-tax (Appeals). Accordingly, the

action of the AO and ld. CIT (A) is upheld.

criminal in nature or not, has been brought to an end by the

judgment of three member bench, of Hon`ble Supreme Court

in the case of M/s. Dharmendra Textile Processors and others

166 Taxman 65 (SC), wherein Hon’ble Supreme Court has

said that liability imposed under section 271(1) (c) is purely

a civil liability and there is no requirement to establish “men-

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 21 of 25 s-rea” before levying penalty. We further note that the

Hon`ble Allahabad High Court in the case of Raj Kumar

Chaurasia v CIT (288 ITR 329(All) has held that the finding

recorded in quantum of appeal are relevant for imposing

penalty. Further reliance is placed on CIT v Chemiequipment

Ltd (2004) 265 ITR 265 (Bom) wherein the Hon`ble High Court

has held that where assessee having fully enhanced losses by

not offering an amount to tax and by claiming wrong

deduction under section 80HHC and offered these amounts

to tax only in response to notice under section, penalty is

liable. These decisions supports the case of the AO.

Supreme Court in the case of Mak Data (P.) Ltd. vs. CIT

(2013) 358 ITR 593 (SC) wherein the Hon`ble Supreme Court

has observed that the Assessing Officer should not be carried

away by the plea of the assessee such as “voluntary

disclosure” “buy peace” “avoid litigation” “amicable

settlement” to explain away it’s conduct. The question is

whether the assessee has offered any explanation for

concealment of particulars of income concealment or furnishing

of inaccurate particulars of income. In this case the disclosure

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 22 of 25 of loss during the assessment, proceeding is not voluntary.

Hence, the ratio of decision of Hon`ble Supreme Court is

squarely applicable to the facts of the case.

by the learned counsel for the assessee. In the case of Suresh

Chand Mittal [2001] 251 ITR 9 (SC)/ 119 Taxman 429, a

revised return was filed which was regularized by the

Revenue, therefore, the explanation of the assessee was

treated as bonafide whereas in the instant case the assessee

has not filed any revised return and it was only during the

course of assessment proceedings, he has admitted bogus

loss. Therefore, the facts of the said case are distinguishable.

Further, the decision of Mak Data P. Ltd. vs. CIT [2013] 358

ITR 593(SC) is later decision of the Hon`ble Supreme Court

wherein it has been laid down that to the AO should not be

carried away by the plea of the assessee such as “voluntary

disclosure” “buy peace” “avoid litigation” “amicable

settlement” to explain away it’s conduct. Further, the

assessee has failed to furnish complete detail of shares along

with bills and confirmed copy of account of M/s. Mahasagar

Securities Pvt. Ltd. It was, also noticed that the assessee was

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 23 of 25 not dealing in share trade as its main business was in the

field of marketing and management consultancy etc. The

share were non-delivery based though it mentioned to be

delivery based in disclosure. The decision in the case of

Punjab Tyres [1986]162 ITR 517 (MP) of Hon`ble Madhya

Pradesh High Court as relied by the assessee is also not

applicable as in said case the Hon`ble High Court held that

agreed addition cannot constitute evidence of concealment

unless the assessee had consciously concealed the

particulars of income. In the case of the assessee, there is no

agreed addition as such and rather conscious indulgence in

scrupulous transaction to with Shri Mukesh Choukse CA,

director of M/s. Mahasagar Securities Pvt. Ltd. with a view

to buy loss to reduce the tax liability. In statement recorded

from Mukesh Choukse, CA, on 24.11.2006 in which it was

clearly admitted by him that they have been providing bogus

profits and losses to the parties who wants to buy loss,

against the deposit of amounts taken cash and cheques in

their accounts. The assessee has not taken delivery of shares

it means that he has in connivance with M/s. Mahasagar

Securities Pvt. Ltd., had purchased a huge loss to reduce

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 24 of 25 the profits. Similarly, other decisions as relied by the learned

counsel were considered, and found as distinguishable on

facts. The question whether in a particular case penalty

under section 271(1) (c) of the Act is imposable or not is to be

decided after taking into consideration all the facts and

circumstances of each case. There cannot be any precedent

on facts. Precedent can be only on the point of law. Every

decision has to be understood in the light of the facts of that

particular case. As rightly said by the Hon’ble Supreme Court

in Willie (William) Slaney v. State of M. P. [AIR 1956 SC 116]

[1955] [2 SCR 1140], that "there is no such thing as a

judicial precedent on facts that counsel and even judges,

are sometimes, prone to argue and to act as if they

were". A decision is available as precedent only if it decides a

question of law. In other words, the principles laid down for

arriving at a decision alone will bind as a precedent.

Therefore, it is not necessary to refer to all judgments relied

upon by the learned counsel for the assessee made in the

written submissions.

are satisfied that the conditions laid down in Explanation-1

M/s. Platinum Horazine Pvt. Ltd. v. ACIT 3(1) Indore /I.T.A. No. 713/Ind/2016/AY09-10 Page 25 of 25 to section 271 (1) (c) are satisfied. Thus, the assessee is

deemed to have concealed the particulars of income and

thereby has furnished inaccurate particulars of his income

and concealed the income chargeable to tax. Therefore, we

are of the considered opinion that ld. CIT (A) was right in

confirming the levy of concealment penalty of Rs.6,49,630/-

under section 271(1)(c) of the Act in respect of loss of shares

amounting to Rs.21,02,353/-. In view of these facts and

circumstances, ground no. 1 to 6 as taken by the assessee,

as mentioned above are dismissed.

dismissed.

Sd/- Sd/-

( C.M. GARG) ( O. P. MEENA) JUDICIAL MEMBER ACCOUNTANT MEMBER िदनांक /Dated :16-05-2017 /OPM