TMI Blog2016 (4) TMI 959X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 1. On the facts and in the circumstances of the case the ld CIT(A) has grossly erred in confirming the penalty of ₹ 13,77,028/- levied U/s 271(1)(c) of the Income Tax Act, 1961. 1.1 That the ld CIT(A) has erred in upholding the penalty levied U/s 271(1)(c) of the Income /Tax Act, 1961 without appreciating the fact that the income was surrendered by the assessee during the course of assessment proceedings and the income was offered suo moto, to buy the peace of mind and to avoid prolonged limitation. Thus upholding the penalty so levied deserves to be deleted. 1.2 That the penalty U/s 271(1)(c) has been imposed and confirmed by the ld CIT(A) without making any independent enquiry in penalty proceedings and simply relying upon the conclusion drawn in assessment order thus the penalty deserves to be deleted. 1.3 That the assessee has voluntarily surrendered the income and paid the due tax thereon thus there remained no income on which tax sought to be evaded could be calculated which fact was not appreciated by the ld CIT(A). 2. The assessee is engaged in the business of purchase of sale of marble and granite, tiles and slabs. The return of income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer held that the claim of the assessee that he surrendered voluntarily was fond totally false and baseless to him. The ld Assessing Officer since beginning was asking to the assessee to provide complete addresses of all the parties. The assessee has sought adjournment every time. The outcome of the enquiry were made available to the assessee by supplying the copy of reply received from the various parties. It is then the assessee came forward with the surrender letter and not suo moto. If the assessee s intention was bonafide, why he made surrender in last. The case laws relied upon by the assessee are also not squarely applicable, which was applicable on surrender voluntarily with bonafide belief. In assessee s case, the investigation of department as compelled the assessee to surrender amount for taxation as no other option was left. In assessee s case, there was no agreed addition. The mens rea need not be proved by the Assessing Officer as held by the Hon'ble Supreme Court in the case of Dharmendra Textile Processors Vs UOI (2008) 306 ITR 0277. He further relied on the following decisions: (i) CIT Vs Dass Trading holding (P) Ltd. (2009) 226 CTR (Delhi) 533. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his income, in the return filed by him. It cannot be held that the surrender of income by appellant was voluntary, because the surrender was made only after detection of the same by AO. In this case it is not established that the conduct and explanation of appellant was bonafide, therefore the case falls in category (b) of para 4.19 of CIT(A) s order. The levy of penalty u/s 271 (l)(c) is therefore justified in this case pursuant to the decision of Dharmendra Textiles. The ld Assessing Officer has rightly placed reliance on the following decisions for coming to the conclusion that penalty is leviable in this case. (a) [2009] 226 CTR (Delhi) 533 - CIT V/s Dass Trading holding (P)Ltd. (b) [2008] 305 ITR 0029 (MP) - DDIT U/s Chirag Metal Rolling Mills Ltd. (c) [2008] 302 ITR 0239 (Kev) - CIT V/s Guruvijay Kuri Co. Ltd. (d) [2009] 316ITR 0058 (Mad) - Komal Basha V/s DCIT. The ld CIT(A), therefore hold that AO is justified in imposing penalty of ₹ 13,77,028/- in this case and the same is confirmed. Ground No. 2 is thus dismissed. 4. Now the assessee is in appeal before us. The ld AR of the assessee has submitted that in balance sheet, the assessee had shown uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easonable conclusion that the amount does represent the assessee s income. Therefore, no penalty can be imposed on voluntarily surrender of ₹ 1,48,500/- and ₹ 19,13,007. It is further submitted that the penalty imposed on account of voluntarily surrender at ₹ 20,21,895/- that these credit entries were outstanding as on 01/4/2006, which was not received during the year under consideration. During the year under consideration, the assessee had paid back to M/s JK Marbles Industry ₹ 6,08,000/-, M/s Rajhans Marble House ₹ 3,43,000/- and M/s Venketesh Marble ₹ 1,00,350/- and remaining amount outstanding as on 31/3/2007. These creditors were related to purchase made to the earlier year. The balance amount was received as advance money for purchase of goods by the parties. Most of these parties, the assessee had sold marble to them and sale bills were submitted during the course of assessment proceedings before the Assessing Officer. He has drawn our attention on page Nos. 13 to 30 of paper book. The outstanding was due to some parties, the terms and rates could not be agreed upon despite of the long negotiation. Thus, the amounts were refunded to the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eard the rival contentions of both the parties and perused the material available on the record. It is undisputed fact that these cash creditors are opening as on 01/4/2006 and not pertained to year under consideration. The ld Assessing Officer issued notice in quantum proceeding U/s 133(6) of the Act. The parties concerned filed confirmations in some of the cases. It is also fact that the assessee paid the outstanding during the year and in subsequent year but could not prove beyond doubt before the Assessing Officer. It is well settled law that opening balance of cash creditor cannot be added in the year under consideration U/s 68 of the Act. The Coordinate Bench in the case of Durga Devi Somani Vs. ITO, ITA No. 672/JP/2011 for A.Y. 2007-08 order dated 31/10/2014, in the case of Ashish Gupta Vs. ITO ITA No. 671/JP/2011 A.Y. 2007-08 order dated 17/10/2014, in the case of Ashok Kumar Kamdar Vs. ITO in ITA No. 684/JP/2011 A.Y. 2007-08 order dated 18/11/2011, in the case of Sumitra Devi Agarwal Vs. ITO ITA No. 687/JP/2011 A.Y. 2007-08 order dated 01/10/2015 and in the case of Jugal Kishore Sharma Vs. ITO in ITA No. 686/JP/2011 A.Y. 2007-08 order dated 09/10/2015 have considered the i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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