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TMI Blog2016 (12) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... t be levied in estimate basis, cannot be applied to the facts of the present case as no addition was made on estimate basis and the CIT(A) has allowed appeal on wrong premise. - Decided against assessee Maintainability of the present cross-objections - Held that:- Having regard to plain provisions of statute, in absence of nonadjudication of ground by the CIT(A), assessee can come only by way of appeal before the Tribunal, not by way of cross objections. In the present case, the CIT(A) had no occasion to deal with the issue raised by way of cross objections, as the assessee never contested this issue either before the AO or before the CIT(A). The cross objections do not widen the scope of subject matter of appeal. Therefore, the cross objections are not maintainable and dismissed as such. - ITA No.1180/Bang/2015, Cross Objn.No.12/Bang/2016 - - - Dated:- 19-10-2016 - SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER and SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER For The Revenue : Shri V.Sridhar, CA For The Assessee : Smt.Meera Srivastava, Addl.CIT(DR) ORDER Per INTURI RAMA RAO, AM : This is an appeal filed by the revenue directed against the order of the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. During the course of survey proceedings the assessee made a declaration of additional income of ₹ 38,19,474/- on account of under-valuation of the closing stock. The respondent-assessee also undertaken to file revised return offering additional income but failed to do so. Further, a sum of ₹ 7,60,800/- was detected on account of undervaluation during the course of assessment proceedings. Thus, the Assessing Officer [AO] made addition of ₹ 45,80,274/- to the returned income. However, additions have not been agitated before the appellate authorities. Thus, assessment reached finality. 4. Subsequently, the AO issued show cause notice calling upon the assessee to show cause why an order imposing penalty for concealment of particulars of income. In response to show cause, it was submitted that the assessee had not concealed any particulars of income and the addition was made only on account of disallowance of expenditure on estimate basis and therefore penalty should not be levied. The above explanation was not accepted by the AO by holding that the addition was not made on estimate basis but the addition was made on the ground of undervaluation of stock. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n account of change in the method of closing stock from LIFO and FIFO at the insistence of the AO, is not borne out of record. Therefore, it follows that the difference in valuation arisen on account of adopting wrong method of valuation of closing stock which amounts to concealment of particulars of income. Therefore, in our considered opinion, the AO was justified in levying penalty u/s 271(1)(c) of the Act. The reasoning of the CIT(A) that penalty cannot be levied in estimate basis, cannot be applied to the facts of the present case as no addition was made on estimate basis and the CIT(A) has allowed appeal on wrong premise. We reverse the finding of the CIT(A) and in this context ratio of the decision of the Hon ble Supreme Court in the case of MAK Data (P) Ltd. vs. CIT (2013) 358 ITR 598 is squarely applicable wherein, it has been held that addition made on voluntary disclosure does not absolve the assessee from penal provisions of the Act. The relevant paras. are reproduced below: 6. We have heard counsel on either side. We fully concur with the view of the High Court that the Tribunal has not properly understood or appreciated the scope of Explanation 1 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sense that the offer of surrender was made in view of detection made by the AO in the search conducted in the sister concern of the assessee. In that situation, it cannot be said that the surrender of income was voluntary. AO during the course of assessment proceedings has noticed that certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of Income Tax Returns and assessment orders and blank share transfer deeds duly signed, have been impounded in the course of survey proceedings under Section 133A conducted on 16.12.2003, in the case of a sister concern of the assessee. The survey was conducted more than 10 months before the assessee filed its return of income. Had it been the intention of the assessee to make full and true disclosure of its income, it would have filed the return declaring an income inclusive of the amount which was surrendered later during the course of the assessment proceedings. Consequently, it is clear that the assessee had no intention to declare its true income. It is the statutory duty of the assessee to record all its transactions in the books of account, to explain the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsuance of the directions of the Dispute Resolution Panel has been preferred under sub-section (1) or sub-section (2) or sub-section (2A) by the other party, may, notwithstanding that he may not have appealed against such order or any part thereof ; within thirty days of the receipt of the notice, file a memorandum of cross-objections, verified in the prescribed manner, against any part of the order of the Assessing Officer (in pursuance of the directions of the Dispute Resolution Panel) or Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), and such memorandum shall be disposed of by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (3) or subsection (3A). 16. From a bare perusal of the above provision, it is clear that the legislature has chosen to use the expression against such order or any part thereof which means that cross-objections can be filed with reference to same ground of appeal which is adversely decided against the respondent in appeal. If, there has been no adjudication on any of the grounds of appeal raised before the CIT(A), the cross objections cannot be filed on such a gr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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