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TMI Blog2018 (3) TMI 2040X X X X Extracts X X X X X X X X Extracts X X X X ..... t putting it to notice as regards the default for which it was called upon to explain as to why no such penalty was liable to be imposed in its hands, therefore, on the said count itself quash the penalty imposed in the hands of the assessee. Disallowance of expenses voluntarily - We may herein observe that as the genuineness and veracity of the expenses claimed by the assessee in respect of the payments made to Tuticorin Trexim Pvt. Ltd. had not been disproved by the revenue, therefore, simply on the basis of the unsubstantiated statement of Mr. Praveen Agarwal, which as observed by us hereinabove had not seen the light of the day and fructified into a concrete evidence on the basis of which the claim of the assessee as regards the veracity of the aforesaid expenses could safely be dislodged, no penalty under Sec. 271(1)(c) could have been validly imposed in the hands of the assessee As the contention of the assessee that its claim of expense was in respect of genuine transactions with M/s Tuticorin Trexim Pvt. Ltd and had been disallowed only with the intent to avoid protracted litigation on the said issue, had not been disproved by the revenue on the basis of any concrete materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l insurance had e-filed its return of income for A.Y 2007-08, declaring loss of Rs. 2,88,23,400/- (after claiming set off of short term capital gain of Rs. 4,02,16,787/-). The case of the assessee was taken up for scrutiny assessment under Sec. 143(2) and its total income was determined under the normal provisions at Rs. 2,53,22,500/- and the book profit under Sec. 115JB at Rs. 26,68,976/-. Subsequently, the A.O while giving effect to the order of the CIT (A) revised the total assessed loss of the assessee at Rs. 6,60,10,398/- vide his order dated 22.11.2010. 3. That after the culmination of the assessment proceedings in the case of the assessee the A.O was in receipt of information from the DIT(Inv.), Kolkata, as had emerged in context of the assessee during the course of the Search and seizure action conducted on one Shri Praveen Agarwal, an infamous entry operator of Kolkata. The information revealed that Shri Praveen Agarwal had in his statement recorded during the course of the Search and seizure proceedings admitted that he had provided entries of bogus expenses like commission, contractual expenses, professional charges etc through his group company, viz. Tuticorin Trexim Pv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e concluded that the aforesaid company had not provided/rendered any services to the assessee company, but rather, had only provided accommodation entries on the basis of which the assessee had suppressed its income. The A.O in the backdrop of his aforesaid conviction concluded that as the transactions of the assessee with Tuticorin Trexim Pvt. Ltd. (now known as Makesworth Project Developers Pvt. Ltd.), a group company of Mr. Praveen Agarwal, were proved to be non-genuine, therefore, the assessee could safely be held to have deflated its income by booking bogus expenses to the said extent. The A.O further taking cognizance of the fact that the assessee had voluntarily disallowed the payments made to Tuticorin Trexim Pvt. Ltd. (now known as Makesworth Project Developers Pvt. Ltd.) in its return of income filed on 22.04.2014 in compliance to notice issued under Sec. 148, observed that the said fact in itself sufficiently proved that the assessee was well conversant of the said non-genuine expenditure debited in its books of account for the year under consideration. The A.O in the backdrop of the fact that the assessee had already disallowed and offered the entire amount paid to Tuti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een provided as to whether statement has been retracted by Mr. Pravin Aggarwal. However, the A.O not persuaded to be in agreement with the aforesaid contentions of the assessee, therefore, declined to accept the same. The A.O observed that Shri Praveen Agarwal had in his statement categorically admitted that he had floated number of companies to carry out the activity of issuing accommodation bills to various parties, for which he was in receipt of commission etc. The A.O further observed that not only the assessee had failed to substantiate the veracity of its claim, but rather, the admission by the issuer of the bogus bills, viz. Shri Praveen Agarwal that he had only provided bogus/accommodation entries also could not be dislodged by the assessee by placing on record any evidence which could go to suggest that the amount was paid in lieu of any services rendered by the aforesaid company, viz. Tuticorin Trexim Pvt. Ltd. The A.O after culling out the facts, which as per him conclusively proved to the hilt that number of bogus companies were floated by Mr. Praveen Agarwal to facilitate issuing of bogus/accommodation bills to various parties, in lieu whereof he was in receipt of comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d distinct from the assessment proceedings, therefore, the parameters considered for the disallowance of an expenditure were substantially different from those relevant for levy of penalty. The assessee in the backdrop of the aforesaid facts submitted that as it had voluntarily disallowed the amount of Rs. 93,22,558/- paid to M/s Tuticorin Trexim Pvt. Ltd. (now known as Makesworth Project Developers Pvt. Ltd.), therefore, it could safely be gathered that it had neither furnished inaccurate particulars nor concealed its income. Thus, it was submitted by the assessee that as it had neither hidden any income/facts, therefore, it could not be held to have concealed any income. The assessee further in order to drive home its contention that no penalty under Sec. 271(1)(c) of the Act was called for in its hands, raised multiple contentions in support thereof before the CIT(A), viz. (i) that the aforesaid amount of Rs. 93,22,558/- was voluntarily disallowed by the assessee with a view to avoid protracted litigation on the matter; (ii) that the fact that the assessee during the year under consideration had assessed business loss of Rs. 5.67 crores in itself proved that there was no reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, observed that the sole basis for characterising the transactions between the assessee and Tuticorin Trexim Pvt. Ltd. as bogus transactions by the A.O was the stand alone statement of Shri Praveen Agarwal which was shared by the DIT (Inv.), Kolkata with him. The CIT (A) further observed that it remained as a matter of fact that no evidence was placed on record by the revenue which would irrefutably prove that the amount paid by the assessee company to M/s Tuticorin Trexim Pvt. Ltd. had thereafter found its way back to the pocket of the assessee by way of a refund from the said company. The CIT (A) observed that while for the information received by the A.O from the DIT(Inv.), Kolkata was in context of an alleged bogus commission of Rs. 17,63,705/- which was claimed by the assessee company to have been paid to Tuticorin Trexim Pvt. Ltd, but however, the assessee company in its return of income filed under Sec. 148 had disallowed the total payments of Rs. 93,22,558/- made to the said company, which was accepted by the A.O, as such. The CIT (A) further took note of the fact that the A.O while framing the assessment under Sec. 143(3) r.w.s 147 neither made any new addition/disallowan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment or non-disclosure, as the assessee had made a complete disclosure in the return and offered the surrendered amount for the purposes of tax and, therefore, no penalty under section 271(1)(c) could be levied. The words 'in the course of any proceedings under this Act in section 271(1) are prefaced by the satisfaction of the Assessing Officer or the Commissioner (Appeals). When a survey is conducted by a survey team, the question of satisfaction of Assessing Officer or the Commissioner (Appeals) or the Commissioner does not arise. One has to keep in mind that it/s the Assessing Officer who initiates penalty Vipul Life Sciences Ltd. proceedings and directs the payment of penalty. He cannot record any satisfaction during the course of survey. Decision to initiate penalty proceedings is taken while making assessment order. It is thus obvious that the expression 'in the course of any proceedings under this Act' cannot have the reference to survey proceedings. It necessarily follows that concealment of particulars of income or furnishing of inaccurate particular of income by the assessee has to be in the return filed by him. The assessee can furnish the particulars of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised return by the assessee, levy of penalty on the additional income included in the return based only on the sworn statement of the assessee cannot be sustained. Accordingly the penalty levied upon the assessees deserved to be deleted. 38. The fact that the revenue authorities accepted the books of accounts go to prove that accept for the reliance on assessee's statement, and the statements of 18 persons, whose statements were taken at the back of the assessee and without affording an opportunity for cross examination, the revenue authorities did not have anything to show and prove that here is the concealment of income, resulting from furnishing of inaccurate particulars of income. This is so because there has been nothing with the revenue authorities to prove and show that any income has been concealed. 41. The expression 'concealment of income' has not been defined in the Act but the natural meanings of the expression 'concealment' are 'to keep from being seen, found, observed, or discovered'. It would, therefore, follow that the expression 'concealment of income', in its natural sense and grammatical meaning, implies that an income is being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shing inaccurate particulars of income in the hands of the assessee. The CIT (A) while concluding as hereinabove relied on the following judicial pronouncements:- 1) Prem Arora Vs. DCIT-24 Taxmann.com 260 (Delhi Tribunal) 2) Purti Sakhar Karkhana Vs. DCIT 35 Taxmann.com 594 (Nag. Tri) 3) Vrajlal T. Gala Vs. ACIT 33 Taxmann.com 620 (Mum. Tribunal). 4) M/s Unimark Remedies Ltd. Vs. ACIT dated 26.09.2012 in ITA No. 3817/Mum/2009 5) Smt. Pramila D. Ashtekar Vs. ITO-39 Taxmann.com 103 (Pune) 6) Yogesh Parekh Vs. ACIT ITA No. 6750, 6051/Mum/2008 The CIT (A) on the basis of his aforesaid observations deleted the penalty of Rs. 31,37,972/- imposed by the A.O under Sec. 271(1)(c) of the Act. 8. Aggrieved, the revenue had assailed the order passed by the CIT (A) before us. The ld. Departmental Representative (for short D.R ) taking us through the order of the A.O passed under Sec. 271(1)(c) of the Act, submitted that as the assessee had consciously booked bogus expenses in respect of ingenuine transactions with Tuticorin Trexim Pvt. Ltd, therefore, the A.O had rightly imposed penalty under Sec. 271(1)(c) in the hands of the assessee. It was submitted by the ld. D.R that as the assessee had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 02.02.2015 (Page 1) of his Paper book (for short APB ), wherein the A.O had failed to strike off the irrelevant default in the notice, and thus had failed to put the assessee to notice as regards the default for which it was being called upon to show cause as to why penalty under Sec. 271(1)(c) may not be imposed on it. The ld. A.R submitted that the aforesaid default on the part of the A.O was allowed by him to perpetuate as such, and even in the SCN dated 13.08.2015, (Page 2 of APB ) the A.O had once again failed to point out the default for which the assessee was called upon to explain as to why penalty under Sec. 271(1)(c) may not be imposed in its hands. It was thus the contention of the ld. A.R that as the assessee was kept in dark as regards the default for which penalty proceedings under Sec. 271(1)(c) was initiated in its hands, therefore, it remained divested of any opportunity to defend its case and substantiate before the A.O as to why no penalty under Sec. 271(1)(c) was called for in its hands. The ld. A.R submitted that as the aforesaid default did go to the very root of valid assumption of jurisdiction by the A.O for imposing penalty under Sec. 271(1)(c), there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad voluntarily disallowed the aforesaid amount in its return of income filed in compliance to notice issued under Sec. 148 of the Act. The ld. A.R submitted that the fact that the assessee was suffering huge losses for the last many years, and even during the year consideration had an assessed business loss of Rs. 5.67 crores, itself proved that there was no need on the part of the assessee to have booked bogus expenses with the purpose of facilitating any tax evasion. The ld. A.R further submitted that as the statement of Mr. Praveen Agarwal on which heavy reliance was placed by the revenue for drawing of adverse inferences in the hands of the assessee was an unverified statement of a person who was not even a director of the aforesaid company, viz. Tutocorin Trexim Pvt. Ltd.(now known as Makeswork Projects Developer Pvt. Ltd.), therefore, the same had no evidentiary value and could not have been accepted on the very face of it for dislodging the genuineness and veracity of the claim of the assessee. It was further submitted by the ld. A.R that even till date the department had failed to place on record any clinching material which could irrefutably prove to the hilt that the tran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O had failed to strike off the irrelevant default in the Show cause notice issued to the assessee. We are unable to persuade ourselves to be in agreement with the objection advanced by the ld. D.R. We are of the considered view that as the objection as regards the validity of the penalty proceedings raised by the assessee before us involves purely a question of law based on the facts available on record, therefore, the same after giving both the parties to the appeal an opportunity of being heard can be adjudicated upon. We find that our aforesaid view of proceeding with and adjudicating upon the validity of the penalty proceedings as assailed before us by the respondent assessee in the backdrop of the facts already available on record is fortified by the judgment of the Hon ble High Court of Bombay in the case of Commissioner of Income-tax Vs. Hazarimal Nagji Co. (1962) 46 ITR 1168 (Bom), wherein the High court deliberating on the scope and gamut of similarly worded Rule 27, as was then available on the statute, had observed as under: On the facts as stated by the Tribunal, the contention raised in the present case was one purely, in law, on the facts as they existed all al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. is vested with the powers to levy penalty under Sec. 271(1)(c) of the Act, if in the course of the proceedings he is satisfied that the assessee had either concealed his income or furnished inaccurate particulars of his income . We are of the considered view that both of the defaults contemplated in Sec. 271(1)(c) operate in their exclusive independent fields and are neither interchangeable nor overlapping in nature. We are of a strong conviction that as penalty proceedings are in the nature of quasi criminal proceedings, therefore, the assessee as a matter of a statutory right is supposed to know the exact charge he had to face. The non striking off the irrelevant charge in the Show cause notice not only reflects the non application of mind by the A.O, but rather, the same seriously defeats the very purpose of giving reasonable opportunity of hearing to the assessee as contemplated under Sec. 274. We find that the fine distinction between the said two defaults contemplated in Sec. 271(1)(c), viz. concealment of income and furnishing of inaccurate particulars of income had been appreciated at length by the Hon ble Supreme Court in its judgments passed in the case of Dilip Shroff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for short SLP ) filed by the revenue against the aforesaid order of the Hon ble Karnataka High Court had been dismissed by the Hon ble Supreme Court in CIT Vs. SSA s Emerald Meadows (2016) 73 taxmann.com 248 (SC). We further find that a similar view had been taken by the Hon ble High Court of Bombay in the case of CIT Vs. Samson Perinchery (ITA No. 1154 of 2014; Dt. 05.01.2017)(Bom). 14. We find that as averred by the ld. A.R., the issue involved in the present case is squarely covered by the order of a coordinate bench of the Tribunal, i.e ITAT B Bench, Mumbai in the case of Meherjee Cassinath Holdings Private Limited Vs. ACIT, Circle -4(2), Mumbai [ITA No. 2555/Mum/2012; dated. 28.04.2017, wherein the Tribunal after deliberating at length on the issue under consideration in the backdrop of various judicial pronouncements had concluded that the non striking off the irrelevant charge in the notice clearly reflects the non application of mind by the A.O and would resultantly render the order passed under Sec. 271(1)(c) in the backdrop of the said serious infirmity as invalid and void ab initio. The Tribunal in its aforesaid order in the case of Meherjee Cassinath Holdimgs Pvt. Ltd.( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice has been sought to be demonstrated as a reflection of non-application of mind by the Assessing Officer, and in support, reference has been made to the following specific discussion in the order of Hon'ble Supreme Court in the case of Dilip N. Shroff (supra):- 83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the some postulates that inappropriate words and paragraphs were to be deleted, but the some had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from nonapplication of mind. It was also bound to comply with the principles of natural justice. (See Malabar Industrial Co. Ltd. v. CIT [2000] 2 SCC 718] 9. Factually speaking, the aforesaid plea of assessee is borne out of record and having regard to the parity of reasoning laid down by the Hon ble S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, after considering the judgment of the Honble Bombay High Court in the case of Smt. Kaushalya Ors., (supra) as also the judgments of the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) and Dharnendra Textile Processors, 306 ITR 277 (SC) deduced as under:- 12 A combined reading of the decision rendered by Hon ble Bombay High Court in the case of Smt. Kaushalya and Others (supra) and the decision rendered by Hon ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AG at the time of issuing notice. In the case of Lakhdir Laiji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon 'ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon'ble Kerala High Court has struck down the penalty imposed in the case of N.N.Subramania lyer Vs. Union of India (supra), when there is no indication in the notice for what contravention the petitioner was called upon to show cause why ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use has not been struckoff. Quite clearly, the observation of the Assessing Officer in the assessment order and non-striking off of the irrelevant clause in the notice clearly brings out the diffidence on the part of Assessing Officer and there is no clear and crystallised charge being conveyed to the assessee u/s 271(1)(c), which has to be met by him. As noted by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the quasi-criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice, and in the present case, considering the observations of the Assessing Officer in the assessment order alongside his action of nonstriking off of the irrelevant clause in the notice shows that the charge being made against the assessee qua Sec. 271(1)(c) of the Act is not firm and, therefore, the proceedings suffer from non-compliance with principles of natural justice inasmuch as the Assessing Officer is himself unsure and assessee is not made aware as to which of the two limbs of Sec. 271(1)(c) of the Act he has to respond. 14. Therefore, in view of the aforesaid discussion, in our view, the notice issued by the Assessing Officer u/s 274 r.w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n compliance to the notice issued under Sec. 148 (subject to certain modifications which were made while framing the original assessment) and framed the reassessment vide his order passed under Sec. 143(3) r.w.s 147, dated 02.02.2015. We find that the A.O observing that as the person who had issued the bills, viz. Shri Praveen Agarwal had in his statement recorded during the course of Search seizure proceedings conducted on him by the investigation wing of the Income Tax department, Kolkata, admitted that he had provided accommodation entries to various parties as well as to the assessee company, therefore, concluded that the transactions of the assessee with Tuticorin Trexim Pvt. Ltd. could safely be held to be bogus transactions which were backed by accommodation entries. We find that the A.O in the backdrop of the aforesaid facts held a conviction that as the assessee had inflated its expenses with the intent to suppress its profit, therefore, penalty under Sec. 271(1)(c) was clearly attracted in respect of the expenses of Rs. 93,22,558/-, despite the fact that the same were disallowed by assessee in its return of income filed in compliance to notice issued under Sec. 148. The A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely a beneficiary of the accommodation entries provided by Tuticorin Trexim Pvt. Ltd and had not carried out any genuine transactions with it, but however, it had failed to substantiate its allegation by placing on record any irrefutable and clinching evidence on the basis of which the veracity of the claim of the assessee could be safely dislodged. We further find that the multiple contentions raised by the assessee in rebuttal of the allegation raised by the revenue as regards the genuineness of its claim, viz. (i) that as Mr. Praveen Agarwal was not a director of the aforesaid company, i.e. Tuticorin Trexim Pvt. Ltd, therefore, his unsubstantiated statement on the basis of which adverse inferences had been drawn by the revenue in the hands of the assessee had no evidentiary value; (ii) that as the claim of Mr. Praveen Agarwal that Mr. Pramod Sharma was a dummy director in Tuticorin Trexim Pvt. Ltd. was not backed by any documentary evidence, therefore, no cognizance of the same could be taken; (iii) that no evidence was placed on record by the revenue which could prove that as alleged by Mr. Praveen Agarwal, the amount paid by the assessee company to Tuticorin Trexim Pvt. Ltd. w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sec. 271(1)(c) in the hands of the assessee is distinguishable on facts. We find that in the case before the Hon ble Apex Court certain documents comprising of share application forms, bank statements, memorandum of association of companies, affidavits, copies of income-tax returns and blank share transfer deeds duly signed were impounded during the course of the survey operation conducted on 16.12.2003 in the case of its sister concern . The assessee only during the course of the assessment proceedings in its case, on being confronted with the aforesaid documents pertaining to the share applications found in the course of survey proceedings, particularly, blank transfer deeds duly signed, had as per its reply filed on 22.11.2006 came up with a disclosure of Rs. 40.74 lakhs with a view to avoid litigation, buy peace and to make an amicable settlement of the dispute. That it was in the backdrop of the aforesaid facts that the Hon ble Supreme Court deliberating on the facts involved in the said case observed, viz. (i). the Explanation to section 271(1) raises a presumption of concealment, when a difference is noted by the Assessing Officer between reported and assessed income; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered view that unlike the facts as were involved in the case before the Hon ble Apex Court, as in the case of the assessee before us the revenue till date had not only failed to place on record any material which would irrefutably evidence that the assessee had booked bogus expenses, but rather, as a matter of fact, except for placing reliance on the unsubstantiated statement of Mr. Praveen Agarwal, which as observed by us hereinabove is itself not free from doubts, or taking cognizance of the fact that the assessee in its return of income filed in compliance to notice under Sec. 148 had disallowed the expenses, had clearly failed to dislodge the genuineness and veracity of the expenses, as claimed by the assessee . We further find that as the assessee in the case before us had disallowed the payments of Rs. 93,22,558/- made to M/s Tuticorin Trexim Pvt Ltd. in its return of income filed in compliance to notice issued under Sec. 148, which was accepted as such, therefore, unlike the facts involved in the case before the Hon ble Apex Court, in the case before us there remained no difference between the reported and the assessed income, thus, on the said count also the facts of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess and veracity of the expenses claimed by the assessee in respect of the payments of Rs. 93,22,558/-made to Tuticorin Trexim Pvt. Ltd. had not been disproved by the revenue, therefore, simply on the basis of the unsubstantiated statement of Mr. Praveen Agarwal, which as observed by us hereinabove had not seen the light of the day and fructified into a concrete evidence on the basis of which the claim of the assessee as regards the veracity of the aforesaid expenses could safely be dislodged, no penalty under Sec. 271(1)(c) could have been validly imposed in the hands of the assessee. We find that our aforesaid observations are fortified by the judgment of the Hon ble High Court of Bombay in the case of CIT Vs. Upendra V. Mithani (ITA (L) No. 1860 of 2009), dated 05.08.2009, wherein the Hon ble High Court being of the view that unless the claim of the assessee is disproved, no penalty under Sec. 271(1)(c) could be imposed, had held as under: The issue involved in the appeal revolves around deletion of penalty under Section 271(1)(c) of the I.T. Act. The Tribunal has concurred with the view taken by the Commissioner of Income Tax (A). The Commissioner of Income Tax (A) has rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised before us the following grounds of appeal: 1. Whether on the facts and circumstances of the case and in law, the Id. CIT (A) was right in deleting the penalty of Rs. 65,80,394/- levied u/s. 271(1)(c) of the I.T. Act, 1961 without appreciating the facts that had made the disallowance only after the receipt of notice u/s. 148 and had the notice not been issued, the assessee would not have disclosed/ revised its return of income. 2. The appellant prays that the order of CIT (A) on the above ground be set aside and that of the Assessing Officer be restored. 3. The appellant craves leave to amend or alter any ground or add a new ground which may be necessary. 18. Briefly stated, the facts of the case are that the assessee had filed its return of income for A.Y. 2008-09, declaring loss of Rs. 162,23,95,876/- (after set off of Short term Capital gain of Rs. 26,35,41,770/-). The assessment was framed under Sec. 143(3), vide order dated 27.12.2010 and the total loss under the normal provisions was determined at Rs. 188,07,56,850/- and the book loss under Sec. 115JB at Rs. 165,74,14,226/-. That on the basis of information received from the DIT(Inv.), Kolkata that the assessee had taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal of the revenue remain the same, as against those which were involved in its appeal for A.Y 2007-08, viz. ITA No. 7249/Mum/2016, that had been adjudicated by us hereinabove, therefore, our order passed while disposing off the appeal of the revenue for A.Y 2007-08, viz. ITA No. 7249/Mum/2016 shall apply mutatis mutandis to the present appeal of the revenue for A.Y. 2008-09 in ITA No. 7248/Mum/2016. The Grounds of appeal Nos. 1 to 3 are dismissed in terms of our observations recorded while disposing off the Grounds of appeal No. 1 to 3 in the appeal of the revenue for A.Y 2007-08. 23. The appeal of the revenue is dismissed in terms of our aforesaid observations. ITA No. 7247/Mum/2016 AY: 2009-10 24. We shall now advert to the appeal of the revenue for A.Y 200910. The revenue assailing the order of the CIT (A) had raised before us the following grounds of appeal: 1. Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) was right in deleting the penalty of Rs. 34,63,963/- levied u/s. 271(1)(c) of the I.T. Act, 1961 without appreciating the facts that had made the disallowance only after the receipt of notice u/s. 148 and had the notice not been issued, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... posed on it under Sec. 271(1)(c). The explanation furnished by the assessee did not find favour with the A.O, who being of the view that the assessee had furnished inaccurate particulars of its income as envisaged in Sec. 271(1)(c) in respect of the aforesaid amount of Rs. 1,01,91,127/-, therefore, imposed a penalty of Rs. 34,63,963/-. 28. Aggrieved, the assessee assailed the order of the A.O imposing penalty under Sec. 271(1)(c) before the CIT(A). The CIT (A) after deliberating on the facts of the case did find favour with the contentions of the assessee and deleted the penalty of Rs. 34,63,963/- imposed by the A.O. 29. The revenue being aggrieved with the order of the CIT (A) deleting the penalty of Rs. 34,63,963/- imposed by the A.O had carried the matter in appeal before us. We find that as the facts and the issue involved in the present appeal of the revenue remain the same, as against those which were involved in its appeal for A.Y 2007-08, viz. ITA No. 7249/Mum/2016 that had been adjudicated by us hereinabove, therefore, our order passed while disposing off the appeal of the revenue for A.Y 2007-08, viz. ITA No. 7249/Mum/2016 shall apply mutatis mutandis to the present appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roject Developers Pvt. Ltd) in the return of income filed under Sec. 148 of the Act, therefore, accepted the same and did not make any further disallowance in its hands. The A.O while culminating the reassessment proceedings initiated penalty under Sec. 271(1)(c) of the Act for furnishing of inaccurate particulars of income by the assessee in respect of the aforesaid amount of Rs. 55,53,555/- that was earlier claimed by the assessee as an expenditure in its books of account . 33. That as the assessee had voluntarily disallowed the amount of Rs. 55,53,555/- and revised the returned loss to Rs. 111,47,71,430/- under the normal provisions and book loss under Sec. 115JB at Rs. 80,62,45,754/-, therefore, no appeal against the order passed by the A.O was filed by the assessee before the CIT(A). 34. The A.O after the culmination of the assessment proceedings issued a Show Cause notice (for short SCN ) under Sec. 274 r.w. Sec. 271(1)(c) of the Act, dated 02.02.2015, calling upon the assessee to explain as to why penalty may not be imposed on it under Sec. 271(1)(c). The explanation furnished by the assessee did not find favour with the A.O, who being of the view that as the assessee had fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income on 22.09.2012, declaring current year loss of Rs. 297,97,65,379/-. The assessee again revised the return of income on 23.03.2013 at a loss of Rs. 289,82,41,809/- under the normal provisions and book loss under Sec. 115JB at Rs. 296,59,10,016/-. The assessment in the case of the assessee was framed under Sec. 143(3), vide order dated 28.03.2013 and the total loss under the normal provisions was determined at Rs. 289,82,41,809/- and the book loss under Sec. 115JB at Rs. 296,59,10,016/-. That on the basis of information received from the DIT(Inv.), Kolkata, that the assessee had taken accommodation entries from M/s Tuticorin Trexim Pvt. Ltd. for Rs. 60,13,406/-, the case of the assessee was reopened by the A.O under Sec. 147 of the Act. The assessee in the return of income filed in compliance to notice issued under Sec. 148, voluntarily disallowed the payment of Rs. 60,13,406/- made to Tuticorin Trexim Pvt. Ltd. and revised the loss to Rs. 289,22,28,400/- under the normal provisions and book loss under Sec. 115JB at Rs. 296,59,10,017/-. The A.O in the backdrop of the fact that the assessee had already disallowed the entire amount paid to Tuticorin Trexim Pvt. Ltd. (no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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