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Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
आयकरअपीलीयअिधकरण, अहमदाबाद�यायपीठ‘ए’अहमदाबाद। IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORESHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.1379/Ahd/2012 िनधार्रणवषर्/Assessment Year: 2008-09 ACIT, Vs. M/s. Varia Engineering Works Circle-8, Private Limited, Ahmedabad 2005, Phase-IV, GIDC, Vatva, Ahmedabad PAN : AABCV 0398 G [ अपीलाथीर्/ (Appellant) प्र� यथीर्/ (Respondent) Revenue by : Shri K. Madhusudan, Sr DR Assessee by : Shri GyanPipara, AR सुनवाई की तारीख/Date of Hearing : 09/08/2017 घोषणा की तारीख /Date of Pronouncement: 06/10/2017 आदेश/O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER: This appeal of the Revenue for Assessment Year 2008-09 is directed against the order of the learned CIT(A)-XIV, Ahmedabad vide appeal No.CIT(A) XIV/AC.Cir.8/46/11-12, dated 13.04.2012, arising out of order under Section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), framed on 29.06.2011 by the ACIT, Circle-8, Ahmedabad.
The sole grievanceof the Revenue is against the order of the ld. CIT(A) in deleting the penalty of Rs.56,08,350/- imposed by the Assessing Officer under Section 271(1)(c) of the Act.
The brief facts of the case are that, for the year under consideration, the assessee has filed return of income on 29.09.2008 declaring total income of Rs.1,88,43,160/-. Thereafter, Assessing Officer framed assessment under
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Section 143(3) of the Act on 28.12.2010, determining total income at Rs.4,05,36,160/- after making an addition of Rs.1,65,00,000/- on account of unaccounted income of the assessee in the form of share application money. Subsequently, the Assessing Officer initiated penalty proceedings under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income and levied penalty of Rs.56,08,350/- being the 100% of the amount of tax sought to be evaded vide order dated 29.06.2011.
Aggrieved by the aforesaid order of the Assessing Officer, the assessee went in appeal before the ld. CIT(A), who, after considering the submissions of the assessee, deleted the penalty in question by following observations;-
“2.3 I have carefully considered the penalty order and the submission made by the appellantduring the course of appellate proceedings. The appellant has submitted that the amount of Rs.1,65,00,000/- for which the penalty has been imposed was received by the appellant in the past and the appellant offered the said sum for addition to its total income for the current assessment year to buy peace of mind and avoid long drawn litigation. The appellant had duly explained the source, identity and capacity of all the parties from whom the said sum were received. Due confirmations from those parties have also been filed. It is noted from the factual information submitted by the appellant that all the payments for share application money were received through cheque. The appellant had also given photo copy of the acknowledgement of the IT return of the parties who have given the share application money. The amounts have come through banking channel. Further, it is also noted from the statement of the director of the appellant recorded during the course of survey that the appellant has himself made the disclosure before the survey party. There is no fact which show that the department has detected the concealment prior to the disclosure by the appellant. It is further noted that the AO has also not pointed out any contrary fact to prove that the share application money received by the appellant was not genuine except for the disclosure made by the appellant, there is no evidence to show that the share application money received are not genuine. In view of the above mentioned facts, I am of the considered opinion that no penalty u/s 271(1)(c) can be imposed on the appellant company. The same is, therefore, directed to be deleted and the appeal is allowed.”
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Aggrieved by the order of the ld. CIT(A), the Revenue is now in appeal before us.
At the time of hearing before us, learned Counsel for the assessee filed before us a paper-book containing the break-up of share application money received alongwith copies of confirmation letters/accounts, bank statements, copy of IT returns etc.. Apart from above, copy of revised statement of total income for assessment year 2008-09 along with a letter addressed to ACIT regarding the revised statement of income disclosing the additional income suo-moto disclosed by the assessee were also placed on record. He thus pleaded that the share application money of Rs.1,65,00,000/-, though explained as genuine, has been offered as income voluntarily and suo-mototo buy peace and to avoid costly long drawn litigation.
Learned Departmental Representative, on the other hand supported the order of the Assessing Officer and reliance is placed on the judgment of Hon’ble Supreme Court in the case of MAK Data P. Ltd. vs. CIT, reported (2013) 358 ITR 593, for the proposition that penalty is civil liability and assessee’s own admission constitutes admission of liability.
We have heard the rival contentions and perused the record placed before us. The only ground of appeal raised by the Revenue is with regard to the deletion of penalty of Rs.56,08,350/- under Section 271(1)(c) of the Act, which was imposed by the Assessing Officer for furnishing inaccurate particulars of income for the income offered by the assessee at Rs.1,65,00,000/-. We observe that the return of income for the year was filed on 29.09.2008. Subsequently, survey proceedings under Section 133A of the Act were carried out on 08.08.2010. During the course of survey, the assessee accepted a sum of
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Rs.1.65 crores as unaccounted income with regard to introduction of share capital from various parties. During the course of assessment proceedings, a revised statement of income was filed disclosing additional income of Rs.1.65 crores. Impugned penalty has been levied on the alleged unaccounted income of Rs.1.65 crores. We further observe that the assessee was in possession of all necessary evidences to prove the identity, genuineness and creditworthiness of the companies investing into the share capital of the company. These documents included contra confirmation of all the share application money received by the applicant, copies of latest income-tax returns, balance-sheets of the applicants showing investment in their books, all the share application money received by account payee cheques etc... During the course of assessment proceedings, none of these details has been found to be wrong by the Assessing Officer, except in the case of Ken Securities Ltd which made the payment of Rs.25 lacs. In the case of Ken Securities Ltd, director Shri Deepak R. Patel, in his statement recorded under Section 131 of the Act stated to have provided accommodation entry, but subsequently Ken Securities Limited confirmed in writing that it has advanced an amount of Rs.25 lacs towards share application money to the appellant. From above discussion relating to the alleged unaccounted income voluntarily accepted by the assessee and offered to tax at Rs.1.65 crores, we find that the particulars furnished by the assessee cannot be categorized as inaccurate particulars, because the details entered in the books of accounts were duly supported by documentary evidences which have not been controverted at any stage by the Revenue authorities.
Now coming to the question as to whether the assessee is liable to pay penalty under Section 271(1)(c) of the Act for furnishing inaccurate particulars of income, we find force in the arguments of learned Counsel that the assessee
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had furnished full particulars of income and nothing has been hidden or concealed. All the details have been filed along with return of income and in due course of assessment proceedings. We further find that in the case of CIT vs. Reliance Petroproduct (P) Ltd, reported in 322 ITR 158, Hon’ble Supreme Court has held that in the absence of a finding by the AO that any details supplied by the assessee in its return were found to be incorrect or erroneous or false, there would be no question of inviting penalty under Section 271(1)(c) of the Act. It has further held that “a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee". Further, during the course of hearing, learned Departmental Representative heavily relied upon the judgement of the Hon’ble Apex Court in the case of MAK Data P. Ltd. (supra), wherein the Hon’ble Apex Court confirmed the levy of penalty under Section 271(1)(c) of the Act with regard to surrender made in the course of search about the alleged receipt of share application money. We, however, observe that facts of MAK Data P. Ltd (supra) vary with the facts of the assessee. In the case of MAK Data P. Ltd, the survey was conducted more than 10 months before the date of filing the return of income. In the return of income, the assessee had not declared the income surrendered nor it was surrendered during the course of assessment proceedings; whereas in the case of the assessee, survey proceedings were initiated after the date of filing the return of income by the assessee.The assessee suo-moto surrendered the income during the course of assessment proceedings and paid taxes thereon. No incriminating material has been unearthed by the Revenue Authorities. We, therefore, are of the view that judgment of the Hon’ble Apex Court in the case of MAK Data P. Ltd. is not applicable on the assessee. We, therefore, respectfully following the judgment of Hon’ble Apex Court in the case of Reliance Petroproduct (P) Ltd (supra) and in the given facts and circumstances of the case, are of the view that merely because the assessee has offered the
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sum, which was received by it in the past, for addition to its total income for the current assessment year to buy peace of mind and to avoid long litigation, it cannot be automatically held that the case is liable for penalty under Section 271(1)(c) of the Act. In view of the above, as also bearing in mind entirety of the case, we see no reasons to interfere in the lucid findings of the ld. CIT(A). We accordingly confirm the order of the ld. CIT(A) and dismiss the appeal of the Revenue.
In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the Court on 6th October2017 at Ahmedabad.
Sd/- Sd/- (S.S. GODARA) (MANISH BORAD) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated, 06/10/2017 आदेश की प्रितिलिप अग्रेिषत/Copy of the Order forwarded to : अपीलाथीर् / The Appellant 1. प्र�यथीर् / The Respondent. 2. 3. संबंिधत आयकर आयुक्त / Concerned CIT आयकर आयुक्त ( अपील ) 4. / The CIT(A)- िवभागीय प्रितिनिध , आयकर अपीलीय अिधकरण , राजोकट/DR,ITAT, Ahmedabad, 5. गाडर् फाईल /Guard file. 6. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt.Registrar) आयकर अपीलीय अिधकरण ITAT, Ahmedabad