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TMI Blog2017 (8) TMI 648X X X X Extracts X X X X X X X X Extracts X X X X ..... ng survey?" 3. Brief facts giving rise to this appeal are that the respondent - Assessee is running Steel Rolling Mill at Nagpur. On 20th September, 2006, a survey operation under Section 133A of the Act was conducted at the premises of the respondent - Assessee. During course of survey, stock in the hands of the respondent - Assessee was verified and it was worked out to be valued at Rs. 2.29 crores. However, the stock shown in the books of the respondent - Assessee was Rs. 89.12 crores. Thus, there was a difference of Rs. 1.40 crores in the stock found as on verification to that recorded in the books of accounts of respondent-Assessee. 4. On 23rd September, 2006, a statement of Mr. Shriramswarup Sarda, overall in-charge of the respondent-Assessee was recorded during the course of survey. In his statement, Mr. Sarda disputed that there was excess stock of Rs. 1.40 crores. During the course of recording the statement, a specific query as under with regard to excess stock was made by the Revenue and Mr. Sarda on behalf of respondent - Assessee responded to the query in the following manner:- "Question No.2:- During the course of survey proceeding under Section 133A in the factor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed return was filed on the understanding that no penalty would be levied upon it as it was being offered only to buy peace of mind and avoid unnecessary litigation. 6. The Assessing Officer on 31st December, 2008, completed the assessment under Section 143(3) of the Act by accepting the revised return filed on 26th November, 2008. Further, Assessing Officer in the above order also initiated penalty proceeding under Section 271(1)(c) of the Act. This was followed by show cause notice dated 31st December, 2008 wherein the respondent was called upon to show cause why penalty should not be imposed on the basis that it had concealed particular of income or furnished inaccurate particulars of such income. 7. The respondent - Assessee replied to the penalty notice and pointed out that there was no excess stock at all and the stock taking was not done in a proper manner. The Assessing Officer did not accept the contention of the respondent - Assessee and imposed penalty under Section 271(1)(c) of the Act on the ground of furnishing "inaccurate particulars of such income". As a consequence, this led to penalty of Rs. 48 lakhs under Section 271(1)(c) of the Act by an order dated 22nd June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income would not by itself lead to imposition of penalty, in the absence of Revenue being able to establish that respondent - Assessee had filed inaccurate particular of income. In the above view, the impugned order of the Tribunal dismissed the Revenue's appeal. 10. Mr. Parchure, learned senior counsel appearing for the appellant - Revenue in support of appeal submits that impugned order of the CIT(A) and the Tribunal setting aside the penalty was contrary to the the binding decision of the Apex Court in case of Mak Data P. Ltd. Vs. Commissioner of Income Tax, (2013) 358 ITR 593. Consequently, voluntary disclosure of income made by the respondent - Assessee of Rs. 1.40 crores in the revised return of income being an attempt to buy peace of mind and avoid unnecessary litigation would not by itself exempt/absolve the Assessee from the imposition of penalty. Moreover, it is submitted that the facts in the above decision, and in the present case are identical. In the above case also, it was during the course of survey proceedings that the respondent - Assessee had surrendered further income voluntarily only with a view to buy peace of mind and avoid unnecessary litigation. Thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional income of Rs. 1.40 crores. The Assessing Officer did not independently either in the Assessment proceedings or even in the penalty proceedings examine the contention of the respondent - Assessee that there was no excess stock as found by the Income Tax Officer during the survey proceedings. Neither any exercise was done independently to find out whether the excess stock alleged was supported by any other evidence. This particularly in the face of the respondent - Assessee asserting that the stock taking was not properly done. In-fact, at the very first instance, the respondent - Assessee did point out that no exercise was done to weigh the stock to determine the the shortage if any. In-fact, the shortage was arrived at on basis of estimate and the respondent - Assessee had itself surrendered additional income to buy peace of mind and avoid unnecessary litigation. It did not accept that actual stock was more than that recorded in its books and during the proceedings also submitted a chart showing no excess stock. 15. It is now a settled position of law after the Apex Court order in Mak Data (supra) that an Assessee is not absolved of penalty because the additional income has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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