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TMI Blog2015 (3) TMI 638X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the return to buy peace of mind. We have also noted that merely on the basis of a third party statement the impugned action was taken against the assessee. There was no incriminating material recovered from the factory premises of the Assessee so as to establish that the particular income was deliberately concealed by the Assessee; hence under the totality of all those circumstances as discussed in detail hereinabove, we hereby confirm the findings of learned CIT(A), both legal as well as factual and dismiss the grounds of the Revenue. - Decided in favour of assessee. - ITA Nos.3118, 3119 &3127/Ahd/2008 - - - Dated:- 26-2-2015 - Shri Mukul Kr. Shrawat And Shri Anil Chaturvedi JJ. For the Appellant : Shri Dinesh Singh, Sr.D.R. For the Respondent : Shri S.N. Divetia, A.R. ORDER PER MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER All these three Appeals are connected Appeals; hence consolidated and hereby decided by this common order. We have also found that in the case of Sonata Ceramics and M/s. Crystal Glazes both the orders of learned CIT(A)-X, Ahmedabad were dated 18th June, 2008. In the case of Regent Granito India Limited the order of learned CIT(A) order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Dinesh Singh appeared and placed on record a compilation to demonstrate that the notices were issued prior to the filing of the revised return by the Assessee. Facts of the case as found from the file of Sonata Ceramics were that the assessee had filed a return of loss of ₹ 19,62,259/- on October, 2005. Thereafter a search of Central Excise Department was conducted at the factory premises of the Assessee and the statement of one Sri Mahendra Kumar Girdhar Lal Patel was recorded on 15.02.2005. In the said statement he has confirmed that corrugated boxes 94553 in number were received without bill from M/s. Cromption Industries. It was admitted that the purchase of corrugated boxes was not entered in the books of accounts. It was also admitted that Ceramic Tiles were sold illicitly in those boxes. The value of the goods so cleared was stated to be at ₹ 31,47,392/-. On the said unaccounted sale the company has paid Central Excise duty of ₹ 2,56,827/-. Likewise in the case of M/s. Cromption Industries which was also searched by Central Excise Department they have admitted that there was illicit sale of corrugated boxes to the Assessee. It was admitted that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the detection of unaccounted purchases of boxes. The impugned penalty of ₹ 8,11,463/- u/s.271(1)(c) was imposed vide an order dated 29.04.2008 in respect of G.P. of unaccounted sales and unaccounted purchases of boxes. By recording those very reasons as already discussed above, learned CIT(A) has deleted the penalty. 4.2 In respect of Regent Granito India Ltd. a return of income was filed on 27.10.2005 declaring ₹ 28,28,850/- which was revised on 30th of October, 2006 declaring an income of ₹ 51,45,120/-. The assessment was completed u/s.143(3) on 27.12.2005 according to which the income as per the revised return was not disturbed which was assessed at ₹ 50,61,305/-, however an addition of ₹ 60,376/- was made pertaining to unaccounted purchases of boxes. 5. In the light of the above background, learned Sr.D.R., Shri Dinesh Singh has pleaded that the return was revised only after the detection of concealment by the Central Excise Department as well as after issuance of the notice dated 10th August, 2006. Learned Sr.D.R. has also pleaded that the Hon ble High Court has accepted the ground of the Revenue that the Tribunal was not correct in hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice, because no specific mention was made in respect of the Central Excise search. A general inquiry was made by the AO; hence this notice was not a warning for concealment of income. All these assessees have decided to file a revised return on their own. Therefore, it was rightly held in the past that the return being revised suo motu prior to the issue of any notice or any intimation from the Revenue Department no penalty for concealment should be levied. Learned AR has also informed that the case laws as cited from the side of the Revenue were distinguishable on facts as well as on law. Finally, he has concluded that the view already taken by the Tribunal should be repeated and the deletion of penalty deserves to be upheld. 8. We have heard both the sides at some length. In respect of these three cases we have also narrated the relevant facts separately. We have noted that almost in identical manner returns were respectively revised by all the three assessees; in two cases on 19.10.2006 and in one case on 30.10.2006. One more aspect is common in all these three appeals were that the AO has not disturbed the quantum of revised return. As is evident from the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndent will not apply to the facts of the present case. 16. In view of the aforesaid facts of the case and also the principle laid down in the decisions relied upon by the learned senior counsel for the appellant more particularly the principle laid down in the case of assistant Commissioner of Income Tax Vs. Gebilal Kanhailal (supra) and Commissioner of Income Tax Vs. Abdul Rashid (supra), we are of the considered opinion that the penalty under Section 271(1) (C) of the income Tax Act cannot be levied on the income shown in the return filed under Section 153 of the I. T. Act. 9. We have also noted that learned CIT(A) has taken into account certain facts of these Appeals and came to conclusion in favour of the Assessee by following Suraj Bhan, 294 ITR 481 (P H), Suresh Chandra Mittal, (2001) 251 ITR 9 (SC), Cheap Cycle Store, 281 ITR 166 (Alld.) and Deepak Construction Company, 293 ITR 285 (Guj.). Relevant portion of the order of CIT(A) reproduced below: 6. I have considered the submissions of the A.R. carefully. The appellant had returned huge loss in the original return of income. In the revised return also huge loss was declared because of unabsorbed depreciation. The r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of concealment of income by IT. Department before the assessee filed a return even though there might be a prima facie belief about existence of such income. In the case of Deepak Construction Co. v. CIT reported in 293 ITR 285, the Hon'ble Gujarat High Court observed that one could not be sure that seized materials would lead any detection of undisclosed income and as nothing could be detected before scrutiny of seized materials, there was no detection. 6.1 In the case of the appellant no incriminating papers were found from the appellant at the time of Central Excise search and the addition has been made on the basis of third party statement i.e. statement of partner of Crompton Industries. During search by the Excise Department at the premises of the appellant, no omission or defect was found in purchases or stock or packing materials. Thus, in the facts of the case the appellant had filed a revised return before detection by the A.O. Even though no specific documents showing unaccounted purchases of corrugated boxes or unaccounted sales by the appellant were found from the appellant's premises, the appellant offered additional income on the basis of statement of ..... 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