TMI Blog2008 (11) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the Assessing Officer has recorded requisite satisfaction for initiating penalty proceedings under section 271(1)( c ) and whether such satisfaction is discernible from the assessment order. 2. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in accepting the claim of the assessee with regard to valuation of stock at Rs. 3,76,969 and in giving relief to the assessee in relation to the said amount. 3. Whether on the facts and circumstances of the case and in law, the ld. CIT(A) was justified in sustaining the imposition of penalty in relation to the addition of Rs. 3,14,867." 2. On question No. 1, referred to me, though there are serious differences between the learned Members, le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey proceedings, which took place on 20-11-1996, wherein detailed inventories were drawn by the department. Amongst other things, firstly it was claimed that the stock belonged to the sister concern M/s. Appliances India Sales (a proprietary concern of one of the partners of the assessee-firm). The other claim was for rebate 40 per cent on the MRP/tag price of the stock and that the addition should be based upon the cost price which should be lower than the marked price. The stock belonging to the sister concern was found at basement of A-22, Green Park, New Delhi at the time of survey. The assessee s explanation was supported by the sale bills in respect of the sale made to M/s. Appliances India Sales and the assessee s ledger account. Purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed merely on estimate which could not be the basis for imposing penalty for an act of concealment. 3.1 The learned JM relied upon the ratio of decision of the Hon ble Supreme Court in the case of T. Ashok Pai v. CIT [2007] 292 ITR 11 and justified the order of the CIT(A) in deleting the penalty to the extent the stock belonging to sister concern. In relation to the other addition also the learned JM opined that the addition was based upon estimate and as such no penalty could be levied in the light of the law laid down by the Hon ble Supreme Court in the case of T. Ashok Pai ( supra ). According to him, the explanation that was offered by the assessee before Assessing Officer was not found to be false and merely rejection of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed, it could have easily substantiated by producing invoices and since the evidences were not filed, no rebate should have been allowed. The penalty levied with reference to the balance stock, according to him needs to be sustained. 5. I have heard both sides. The learned counsel for the assessee relied upon the order of the learned JM in support of his submissions and the learned DR on the other hand, strongly supported the views of the learned AM. I have also gone through the detailed reasoning given by both the Members. I have also had the benefit of going through the paper book filed before the Division Bench. Different orders passed from time to time in the assessee s case in the quantum proceedings have also been gone throug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rket, Hauz Khas, New Delhi. Shri Anand Gupta, one of the partners, was also engaged in the identical trading business in his individual capacity which was being carried on under the name and style of M/s. Appliances India Sales at A-22, Green Park, New Delhi from July, 1996 onwards. The stock of the partnership firm was being stored at A-22, Green Park, New Delhi before the start of such proprietary business. From this premises, sales bills were raised by the partnership firm against the proprietorship concern in respect of the entire goods belonging to the partnership firm which were lying stored at A-22, Green Park and thereafter the practice of storing their goods at this place appears to have discontinued and the premises was made avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ree with the reasoning given by the learned JM while he affirmed the order of CIT(A) deleting the penalty in respect of said stock which was claimed to be belonging to the sister concern. According to me, the evidences produced before the revenue authorities are sufficient to justify the claims made in this regard. The ratio of the decision of Hon ble Supreme Court in the case of T. Ashok Pai ( supra ) clearly supports the deletion of penalty. I agree with the reasoning given by the learned JM in confirming the deletion of penalty. 5.3 Now, as regards the other addition, I entirely agree with the view expressed by the learned AM, according to whom the claim that there was 40 per cent mark up in the prices of stock is not proved by any ..... X X X X Extracts X X X X X X X X Extracts X X X X
|