DCIT-2(2), MUMBAI vs. N.W. EXPORTS LIMITED, MUMBAI

Rival contentions have been heard and record perused. Facts in brief are that the assessee is a company engaged in the business of trading and exports of textile goods. The assessee filed its return of income declaring total income at Nil. The AO asked the assessee to furnish various details. Being not convinced with the explanation of assessee, the AO made addition of Rs.40 lakhs towards services charges received by the assessee as unexplained cash credit u/s.68 of the Act 2 and levied penalty on the same. In appeal, the CIT(A) deleted the penalty after having following observation :- 3.3 The facts of the case have been considered: • The appellant has stated that the figure of net profit after tax amounting to Rs.1,38,18,629/- as per P&L a/c includes the figure of Rs. 40 lacs under the head "Other income". The AO has again added back the said figure of Rs. 40 lacs as unexplained cash credit u/s 68. • No penalty can be levied in the event of change of head by the assessing authority ACIT V/s Niraj Birla Mumbai Tribunal ITA No 3259/97 AY. 92-93 order dated 09.07.2003/Krishna N. Bhojwani ITAT Mumbai Alfa Associates Mumbai Tribunal 66 TT J 758. • Where the assessee has furnished everything and the AO differs from the assessee's stand, the same won't amount to concealment of income/furnishing inaccurate particulars of income. Himmat Ballanji Karia (Ahmedabad Tribunal) 36 ITD 76 Burma Shell Oil Storage and Distribution Company of India Lld 112 ITR 592 (Calcutta High Court) Reliance Petro Products Since the appellant has already offered the amount of Rs.40 lacs as income, there is no tax sought to be evaded. Under the aforesaid facts and circumstances, no penalty u/s.271(1)(c) is leviable. The penalty of Rs.14,00,000/- levied by the AO is deleted.” Against the aforesaid order of CIT(A), the revenue is in appeal before us.

We have considered rival contentions and found that the assessee has himself offered the amount of Rs.40 lacs as income on account of services rendered. Where the assessee has furnished everything with respect to the nature of services offered, the AO differs from the assessee's stand and treated the receipt as unsecured loans, the income received for such services and which is duly offered in the return of income, merely because same won't amount to concealment of income/furnishing inaccurate particulars of income. Finding recorded to 3 ITA No.4456/13 this effect by CIT(A) had not been controverted by Department. Accordingly, we do not find any infirmity in the findings of the CIT(A) in deleting the penalty. Hence, we dismiss the appeal of the revenue.