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2019 (3) TMI 1301 - ITAT AHMEDABADAddition based on 26AS & Penalty u/s 271(1)(c) - wrong grouping of expenses in return form by CA - Receipt appearing in 26AS - non verification by AO - non application of mind - Revised P/L A/C placed before AO - HELD THAT:- A perusal of the assessment order would indicate that the AO failed to apply his mind and appreciate the contention of the assessee. He simply disbelieved the contentions and rejected them. The assessee has pleaded that; I have received gross-receipts from these two concerns, on which TDS was ₹ 36,504/-, but as explained, such as raw material purchases for carrying out embroidery work. It was a mistake in the balance sheet and other details uploaded by the tax consultant. AO should have verified these documents and should have arrived at a conclusion whether there could be a profit of ₹ 32,00,791/- out of gross receipts. To our mind, it is totally illogical at the end of the Revenue authorities to draw such inference, without examining the case of the assessee and his prayer. We have extracted the finding of the AO. No reasons are discernible in para 3.5. AO did not want to go through the details. He simply observed that the assessee should have revised the return. It is to be seen that he is not taking the figure of ₹ 36,49,230/- from the return; he is taking figure from external sources. If he takes cognizance of such figures, then why not take other details. We are of the view that orders of the Revenue authorities on this aspect are not sustainable. We set aside both the orders and remit this issue to the file of the AO for investigation and re-adjudication. AO shall take into consideration revised balance sheet, profit & loss account and any other details submitted by the assessee for explaining the expenditure incurred by him qua the gross receipts received from those two concerns. AO shall re-determine income of the assessee after providing due opportunity of hearing to the assessee, and take into consideration all the details. Penalty u/s 271(1)(c) - As already set aside the quantum addition. We find that sub-clause (iii) of section 271(1)(c) provides mechanism for quantification of penalty. It contemplates that the assessee would be directed to pay a sum in addition to taxes, if any, payable him, which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of income and furnishing of inaccurate particulars of income. - decided in favour of assessee.
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