9911796707
TMI Blog1987 (5) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... 'VDIW Act') the firm filed a declaration under s. 3 of VDIW Act on 31st Dec., 1975 disclosing an income of Rs. 1,10,000 which according to it was earned in the last many years upto asst. yr. 1975-76 and now stood invested in stock not accounted in the books of accounts. After making the disclosure the assessee brought in book of accounts maintained by it, stock worth Rs. 1,10,000 and credited a sum of Rs. 36,666.67 to each of the three partners of firm with remarks "by 1/3 rd share in Voluntary Disclosure Act." The firm, however, paid only Rs. 4,000 out of total amount of Rs. 52,250, which was tax payable on the disclosed income as per the VDIW Act. The assessee in the circumstances was not issued certificate under s. 8 of the VDIW Act by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ived has gone out of business and, therefore, direct evidence in the shape of certificate from that Chit Fund Company cannot be produced, did not find favour with ITO. In the absence of direct evidence, the above addition of Rs. 10,800 was made in the hands of the assessee-firm. 2. In the penalty order, the ITO merely on the basis of the reasoning given in the assessment order, namely that disclosure of Rs. 1,10,000 was not in accordance with the VDIW Act and also that evidence in respect of credit of Rs. 10,800 has not been furnished, levied penalty of Rs. 93,016 vide order dt. 26th March, 1982. 3. On appeal, the ld CIT(A) cancelled the penalty levied on the assessee. In respect of addition of Rs. 10,800 the ld. CIT(A) took into acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised inaccurate particulars. It is an admitted fact that the assessee filed a disclosure under the Voluntary Disclosure Scheme on 31st Dec., 1975 and disclosed stock worth Rs. 1 lakh. This has been credited to its books of account. Necessary details regarding this disclosure and the entries made in the books of account are reflected in the accounts accompanying the return. The assessee did not include Rs. 1 lakh in its declared income for the asst. yr. 1976-77 for the reason that this amount had been disclosed under the Voluntary Disclosure Scheme and it was hopeful of obtaining a certificate from the CIT after making payment of the taxes due. The failure of the assessee to obtain a certificate from the CIT as envisaged under the Volunta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ld. departmental representative placed reliance on the Full Bench decision of the Hon'ble Punjab and Haryana High Court in the case of Vishwakarma Industries vs. CIT (1982) 29 CTR (P H) 243 (FB) : (1982) 135 ITR 652 (P H) (FB) and submitted that the assessee failed to discharge the burden placed on him under the statutory provisions. Shri Sudershan Kapoor, Advocate, ld. representative of ther assessee on the other hand emphasised that the conduct of the assessee had throughout been bona fide and, therefore, no penalty in this case was exigible, He drew our attention to the quantum orders passed in this case and also to the copies of accounts of the partners filed with the return. He further argued supporting the order of the CIT(A) can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id. It was also submitted that the assessee had received the demand notice from the ITO and, therefore, the voluntary disclosure of income had to bear tax on the basis of the disclosure itself. Our attention was drawn to a similar case of M/s Saraswati Steel Rolling Mills, Jalandhar, ITA Nos. 426 and 450 (Asr)/1980 where similar disclosure had been made and the credit had not been given. The Tribunal had held that the provisions of s. 8 had to be kept in view for the purpose of not including any income, which is disclosed in the voluntary disclosure scheme. The Tribunal further observed that the ITO could act only on the basis of a certificate issued by the Commissioner and, therefore, the Tribunal directed that in case such a certificate w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was not bona fide. In the above circumstances, we are of the opinion that assessee bona fide believed that the above income was not taxable in the hands of the assessee for the asst. yr. 1976-77 and, therefore, did not disclose the above amount in the return submitted by it and as such there is no case for levy of penalty under s. 271(1)(c) of IT Act. 6. As regards levy of penalty in respect of addition of Rs. 10,800 representing amount claimed to have been received from Chit Fund Company, we entirely agree with the reasoning given by the ld. CIT(A). The amount as stated earlier stood credited in the account of each of the partners and there is no dispute that partners all along admitted having brought the above amount to the chest of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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