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Mr. Pradeep Kumar Gupta,A-179, Naya Bans,New Delhi-110006. Vs. Income-tax Officer,Ward 28(1), New Delhi.
December, 15th 2012
             DELHI BENCH `F': NEW DELHI


                          I.T.A. No.263/Del/2012
                          Assessment Year : 2006-07

Mr. Pradeep Kumar Gupta,                     Income-tax Officer,
A-179, Naya Bans,               Vs.          Ward 28(1), New Delhi.
New Delhi-110006.                             PAN : AHTPG8488L

  (Appellant)                                (Respondent)

                 Appellant by : Shri Manu Giri, Advocate.
                 Respondent by : Shri Rajesh Kumar Kadia, Sr. DR.

                           Date of hearing      : 13-12-2012
                           Date of Pronouncement : 13-12-2012



      The assessee is aggrieved by the impugned order dated 30-11-2011

passed by the learned First Appellate Authority, New Delhi. The only

ground raised by the assessee is that on the facts and in the circumstances of

the case, the learned CIT(A) was not justified in confirming the penalty of

Rs.29,918/- imposed under sec. 271(1)(c) of the Income-tax Act, 1961 (the

Act), particularly when the necessary evidences were adduced by the

assessee and the payment made to old sundry creditors was added in the

assessment, being the amount surrendered by the assessee for taxation,
                                     2                   ITA No.263/Del/2012

subject to no penalty and also to buy peace with the Department as the

amount was not confirmed with the credit.

2.    During hearing we have heard Shri Manu Giri, learned counsel for the

assessee and Shri Rajesh Kumar Kadia, learned Sr.DR.           The crux of

arguments on behalf of the assessee is identical to the ground raised by

further submitting that due to some dispute with M/s. Ramjilal & Sons, they

did not cooperate with the assessee and the surrender was made with a

condition that no penalty will be imposed upon the assessee, whereas the

learned Sr. DR defended the imposition as well as confirmation of penalty.

3.    We have considered the rival submissions and perused the material

available on record. The facts in brief are that the assessee was doing

business of trading in sugar and food-grains, declared income of

Rs.1,21,226/- in his return filed on 30th October, 2006.      The case was

selected for scrutiny on random basis in CASS. Pursuance to notices issued

by the Department the assessee appeared from time to time and filed

necessary details.   The assessee also produced books of accounts and

vouchers which were test-checked by the Assessing Officer. The assessee

declared turnover of Rs.54,22,137/- and showed the gross profit at

Rs.1,55,551/-. The books of accounts of the assessee are also audited.

During verification of books it was noted that in the account of the assessee
                                     3                    ITA No.263/Del/2012

in the case of M/s. Ramjilal & Sons, the correct position was not reflected.

As per the Revenue there was no opening balance of the assessee in the

books of M/s. Ramjilal & Sons, whereas the assessee debited sum of

Rs.75,000/- by cheque No.61487 and another amount of Rs.74,999/- by

cheque No.61488. As per the Bank Statement, the assessee withdrew these

amounts in cash. When the assessee was confronted as the figure is not

reflected in the books of M/s. Ramjilal & Sons, the assessee agreed for the

disallowance and surrendered the same for taxation. The Assessing Officer

initiated penalty proceedings under sec. 271(1)(c) of the Act. As per the

version of the assessee the surrender was made simply to buy peace with the

Department and consequently, did not prefer any further appeal. It was also

pleaded that the surrender was made on the assurance of the Department that

no penalty will be levied.     We find that the assessee in his written

submissions has also specifically mentioned that the addition was agreed

simply to buy peace and to avoid litigation (Page 4 of the Paper Book). At

Page 5 also (Para 3.3 of the written submissions) of the Paper Book it has

specifically been mentioned that the concurrence of addition was made with

the condition that no penalty will be imposed on the assessee and thus, the

imposition is (as per the assessee) is breach of trust. The assessee has also

placed reliance on various judicial pronouncements in his written
                                          4                  ITA No.263/Del/2012

submissions. Under the peculiar facts of the case, the assertion made by the

learned counsel for the assessee, and also keeping in view the small amount

of penalty involved, we direct to delete the same.

4.        Finally, the appeal of the assessee is allowed.

5.        This order was pronounced in the Open Court in the presence of the

learned representatives from both sides at the conclusion of the hearing on

13th December, 2012.

             Sd/-                                     Sd/-
       ( B.C. MEENA)                             (JOGINDER SINGH)
     ACCOUNTANT MEMBER                           JUDICIAL MEMBER

Dated: 13th December, 2012.

Copy of the order forwarded to:-

     1.   Appellant
     2.   Respondent
     3.   CIT
     4.   CIT(A)
     5.   DR
                                                 By Order

*mg                                        Deputy Registrar, ITAT.
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