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TMI Blog2015 (10) TMI 528X X X X Extracts X X X X X X X X Extracts X X X X ..... ise. The assessee has made voluntary surrender on account of sundry creditors and returned the additional income in the return of income filed and paid tax thereon. We have also carefully examined the judgment referred to by the parties and we find that it is a case of voluntary surrender by the assessee during the course of survey. Therefore, penalty under section 271(1)(c) of the Act cannot be levied. We have carefully perused the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the issue judiciously in the light of various judicial pronouncements referred to before him. Since no infirmity has been pointed out in the order of the ld. CIT(A), we confirm the same. - Decided in favour of assessee. - ITA No. 195/LKW/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted under section 143(3) of the Act. The Assessing Officer initiated penalty on the surrendered amount in respect of sundry creditors. In response to show cause, it was contended before the Assessing Officer that the assessee has made a voluntary surrender during the course of survey proceedings in order to buy peace and filed the return accordingly and paid tax. Therefore, there is no positive detection by the Department either before or at the time of surrender or subsequently. Therefore, penalty under section 271(1)(c) of the Act should not be levied on the surrendered amount. The Assessing Officer was not convinced with the explanations of the assessee and he levied the penalty having observed that the assessee has filed appeal agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having been made without any compulsion off constraint of exposure to adverse action by the department. It is also seen that even though the appellant during the relevant year had made (combined) purchases of ₹ 47,68,670/- from these 3 creditors, the A.O has nowhere doubted the purchases made from these 3 persons. This fact fortifies the conclusion that the department had found no incriminating material in respect of Transactions with these 3 creditors. Thus, the A.O is factually wrong when in the penalty order, he observed:-.................... On the contrary, the creditors appearing in its balance sheet were never creditors in the first place since no transactions of any sort had been carried out with them, actually they were t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal that the assessee agreed to the inclusion of additional amount in the income disclosed by it in the return to purchase peace, in such a case, unless there is evidence showing that the assessee had consciously concealed the particulars of his income, an admission made by the assessee surrendering a particular amount as his income will not by itself justify the imposition of penalty. Learned counsel for the Revenue referred to the decisions in CIT v. P.B. Shah Co. (Pvt.) Ltd. [1978] 113 ITR 587 (Cal) and CIT V. Krishna Co. [1979] 120 ITR 144 (Mad). However, in view of the decision of this court in Addl.CIT v. Bhartiya Bhandar [1980] 122 ITR 622 (MP), it must be held that when a surrender is made to purchase peace or for other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder these facts and circumstances of the case, various judicial pronouncements and for the reason that grounds of surrender of such additional income amount to bona-fide explanation of the assessee, I hold that it is not a fit case for levy of penalty u/s 271(1)(c) of the Act. 4. Aggrieved, the Revenue has preferred an appeal before the Tribunal and has placed heavy reliance upon the order of the Assessing Officer. The ld. D.R. has contended that it is wrong to say that assessee has made a voluntary surrender. He came out with the surrender proposal when he was cornered by the Assessing Officer during the course of assessment proceedings. It was further contended by the ld. D.R. that the assessee has filed appeal against the additions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ld. CIT(A), but the facts are otherwise. The assessee has made voluntary surrender on account of sundry creditors and returned the additional income in the return of income filed and paid tax thereon. We have also carefully examined the judgment referred to by the parties and we find that it is a case of voluntary surrender by the assessee during the course of survey. Therefore, penalty under section 271(1)(c) of the Act cannot be levied. We have carefully perused the order of the ld. CIT(A) and we find that the ld. CIT(A) has adjudicated the issue judiciously in the light of various judicial pronouncements referred to before him. Since no infirmity has been pointed out in the order of the ld. CIT(A), we confirm the same. 7. In the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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