TaxTMI 
TaxTMI 
2013 (9) TMI 15
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....rse observations. However, it was observed that most of the payments made to farmers for purchase of earth/ soil were in cash and not verifiable. Queries were raised in this behalf on 21-12-2011, assessee filed reply vide letter dated 29-12-2011, which is reproduced in the assessment order. The relevant para of the letter, qua the voluntary surrender of income to be assessed at a net profit figure of Rs. 75,00,000/- in this regard is reproduced as under: "That for the year under consideration the assessee has already produced complete books of account, bills and vouchers and evidence of making payment to the farmers for the purchase of earth soil besides complete evidence of purchase and sale of shares. There is gross profit rate of 0.20% on the consolidated turnover of Rs. 41,95,37,130/-. The assess e has made hard labor to achieve the sale targets during the year. The profit during the year as declared by the assessee deserves to be accepted. It is not out of place to mention here that by applying higher profit rate the assessee would not be able to deposit higher taxes since the margin is not to that extent and it is only what the assessee has declared though the assess....
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.... officer's order that the offer made by assessee was not voluntary as not acceptable to him or some further investigations against assessee were carried on. Thus, the nature of the offer of the assessee remained admittedly voluntary made in the spirit of cooperation to avoid litigation and with a clear condition that no penalty would be levied on voluntarily surrendered income. (vi) Assessing officer has not got any material on record to demonstrate that any inaccurate particulars were filed or income was concealed. 2.3. Assessee relied on following judgments: - ITO Vs. Smt. Purnima Devi Gupta 83 TTJ 586 (JD); - ITO Vs. Smt. Purnima Devi Gupta 83 TTJ 628 (Del 'F'); - Kamalchand Surana Vs. ITO 88 TTJ 629 (JD); - Jt. CIT Vs. VXL (India) Ltd. 94 TTJ 513 (ASR); - New Sorathia Engg. Co. Vs. CIT 282 ITR 614 (Guj.); - Mukesh Chandra A. Lakadwala Vs. ITO 4 ITR (Trib) 307 (Ahd.); - Mehanga Ram Sharma v ITO 26 DTR 386 (Asr)(Trib); - DCIT Vs. B.J.D. Paper Products 141 TTJ 108 (Luck) 2.4. CIT(A) referred the reply of the assessee to the assessing officer and called for a remand report, which was submitted on 7-12-2012, contending: (i) The assesse....
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....by assessee is not found acceptable. (iii) CIT Vs. Dr. R.C. Gupta & Co. - During the course of assessment the assessee himself admitted that he had derived income from the sale of imported cycle parts and the income from the same was not recorded in his books of accounts. The amount was not shown in the return of income. The assessee agreed to the inclusion of this amount in his total income. As the assessee admitted that such amount represented his income, no further evidence was necessary to show that it was the amount which represented his income and concealed income. (iv) Apart from plethora of case laws cited by CIT(A), reliance was also placed on - CIT Vs. O.B. Shah & Co. (P) Ltd.; and CIT Vs. Zoom Communication 327 ITR 510 (Del.). (v) In the present case, the books of accounts have been maintained in a manner to declare a much lesser gross and net profit, than the actual and to that extent it is a case of concealment of particulars of income. At the same time, any inaccuracy made in the books of accounts or bills and vouchers, which resulted in keeping off or hiding a portion of its return is "furnishing inaccurate particulars" by the appellant. ....
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.... cut short the litigation offered to be assessed at the net amount of Rs. 75 lacs. The offer was accepted by assessing officer without disputing any contents or condition of the surrender. (iii) In the assessment order the assessing officer has no where mentioned that the offer is not acceptable and assessed the income as offered by assessee. There is no mention of any inquiry or procurement of any adverse material or statement of even a single farmer that the amount was not paid to them. (iv) In para 3.2 of the assessment order the assessing officer has recorded that the income is being assessed as per the declaration of the assessee. From the assessment order it is clear that assessee's offer was accepted unconditionally. The income was assessed accordingly and no further inquiry was made by the assessing officer. (v) In para 3 of the remand report also assessing officer has accepted the fact that assessee voluntarily offered to be assessed at the net income of Rs. 75 lacs. (vi) In para 5 of the remand report the assessing officer has wrongly reported that during the course of assessment proceedings assesse offered Rs. 75 lacs as concealed her ....
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....alty while surrendering in these cases. Whereas in this case the assessee has not only offered a satisfactory explanation but has corroborated it by proper facts and contentions. 3.1. Ld. counsel then referred to following case laws in assessee's support: (i) CIT Vs. Upendra V. Mithani [ITA (L) No. 1860 of 2009 dated 5-8-2009 (Bom.)]: The issue involved in the appeal relates to deletion of penalty under section 271(1)(c) of the I.T. Act. The Commissioner of Income Tax (A) held that no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income as with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e. it is not accepted, but circumstances do not lead to the reasonable and positive inference that the assessee's case is false. The ITAT concurred with the view taken by the Commissioner of Income Tax (A). Hon'ble Bombay High Court held that the view taken by the Tribunal is a reasonable and possible view. The revenue's appeal was dismissed as without any substance. (ii) CIT Vs. M/s Careers Education & Infotech Pvt. Ltd. [....
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.... (iv) National Textile Vs. CIT 249 ITR 125 (Guj.): In order to justify the levy of penalty, two factors must co-exist, (i) there must be some material or circumstance leading to the reasonable conclusion that the amount does represent the assessee's income. It is not enough for the purpose of penalty that the amount has been assessed as income and (ii) the circumstances must show that there was animus, i.e. conscious concealment or act of furnishing of inaccurate particulars on the part of the assessee. The Explanation has no bearing on factor No. (i) but it has bearing on Factor no. (ii) The explanation does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. No penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee's case is false, the explanation cannot help the department because there will be no m....
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....uliar facts which exist in those cases and are way apart from assessee's facts. CIT(A) has wrongly mentioned that no decision as New Sorathia Engg. Co. Vs. CIT 282 ITR 614 (Guj.) is not available, whereas the fact of the matter is that the judgment is available at 282 ITR 642 and it deals with the issue of penalty and supports the assessee's case to the effect that a positive finding about the surrendered income being concealed or inaccurate particulars having been furnished, should be given by the assessing officer. 3.3. In this case on one hand it has been admitted that it is a voluntary surrender and on the other hand in the remand report without appreciating the contradictions on the part of assessing officer, it is erroneously presumed by the CIT(A) to be a case of surrender after investigation, although no independent investigation is mentioned anywhere by assessing officer. It is pleaded that the penalty has been wrongly levied. 4. Ld. DR, on the other hand, supports the order of CIT(A) and relied on following judgments: - Dayabhai Girdharbhai Vs. CIT 32 ITR 677 (Bom); - CIT Vs. Haji P. Mohammad 132 ITR 623 (Ker.); - Mahabir Metal Works Vs. CIT 92 ITR 513 (P&H....
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....out income offered or the other contents. The sole basis of assessing the income is only this surrender offer without relying any adverse material. 6.1. During the assessment, the assessing officer asked the query about cash payments to farmers as late as 21-12-2012 and called on the assessee to furnish the information in this behalf within two days which the assesse complied after seven days and as contended, finding it nearly impossible to gather the information, offered a high figure of net income to end the inquiries, litigation, with a view to cooperate with the department and with a condition that no penalty should be imposed on the surrendered income. Assessing officer's acceptance of these conditions is implied inasmuch as not a word has been adversely written against the assessee's offer. 6.2. In para 3 of the remand report also, the assessing officer has referred the surrender to be a voluntary offer however, in subsequent paras it is projected as if assessee offered it as her concealed income which is contrary to the findings in assessment order. The CIT(A) has accepted the contradictory version of the remand report without appreciating the entirety of facts. In th....