ACIT 15(2), MUMBAI vs. SKYWAY CONSTRUCITON CO.), MUMBAI

The present appeal has been preferred by the Revenue against the order dated 17.08.2010 of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] agitating the action of the Ld. CIT(A) in deleting the penalty of Rs.47,96,920/- levied by the Assessing Officer (hereinafter referred to as the AO) under section 271(1)(c) of the Act.

The brief facts of the case are that a survey action under section 133 was conducted at the premises of the assessee. During the course of survey, it was observed that the assessee had made bogus purchases. During the survey, the statement of partner of the assessee firm namely Shri Nirmalkumar Madhani was recorded wherein he refuted the allegation that the firm had booked bogus purchases. Again the statement of Shri Nirmalkumar Madhani was recorded on 24.12.07 wherein he was again asked to own up the bogus purchases but he again refused to accept. Thereafter, the assessee filed return wherein the assessee declared Rs.1,42,51,098/- as additional income and paid the taxes

Before the Ld. CIT(A), the assessee explained that neither any incriminating material was found nor the assessee ever admitted about the allegation of bogus purchases. However, since the assessee was under constant pressure from the AO, hence the assessee to buy the peace of mind filed revised return of income wherein the assessee declared the additional income. Neither the assessee had furnished any inaccurate particulars of income nor had concealed the income in any way and even no concealed income was found during the search action. The Ld. CIT(A), considering the submissions of the assessee, observed that in this case after filing of original return of income within the stipulated time on 27.10.07 the assessee had revised its return of income within 2 months voluntarily which was filed on 18.12.07. In his statement, during the survey action, the partner of the assessee firm had never admitted about the bogus purchases. The AO had not carried out any independent investigation to find out that the assessee had made any bogus purchases. No concealed income was found neither during the survey nor during the assessment proceedings. The income offered by the assessee in the revised return was voluntary and as such it is not the case of concealment of income. The Ld. CIT(A), relying upon the various case laws in this respect, has deleted the penalty levied by the AO.

We do not find any infirmity in the well reasoned order of the Ld. CIT(A) and the same is upheld.