TMI Blog2015 (1) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... Decision of the Apex Court in CIT VS. KHODAY ESWARSA & SONS (1971 (9) TMI 19 - SUPREME Court) and AMRUT TUBEWELL COMPANY VS. ASST. CIT (2015 (1) TMI 1149 - GUJARAT HIGH COURT), penalty being proceedings being penal in character, the department must establish that the receipt of the amount in dispute constitutes income of assessee. Apart from falsity of explanation given by the assessee department must have before it before levying penalty cogent material or evidence from which it could be inferred that assessee has consciously concealed particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. No doubt the original assessment proceedings, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35,63,792/- and gross profit disclosed was ₹ 80,597/- which was 2.26%. During the course of assessment proceedings, the assessee had submitted the details of monthwise sales and purchases and details of closing stock. After verification of the purchase register with bill files and value of closing stock declared by the assessee, certain defects were noticed. UNDER VALUATION OF CLOSING STOCK:- A show cause notice was issued wherein the assessee was asked to state as to why under valuation of closing stock to the tune of ₹ 32,140/- in cement bags and ₹ 19,600/- in cement mix should not be added to the total income on account of under valuation of closing stock declared by the assessee. The assessee was required to give w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 27.10.2000, ₹ 1,00,000/- on 08.11.2000 and ₹ 30,000/- on 30.11.2000. The assessee was asked to submit the source of introduction of new capital amounting to ₹ 1,70,000/- to the capital account of the assessee. The assessee did not submit any written submission in this behalf nor attended personally to argue the case. It was presumed that the assessee had nothing to say in the matter. Since the assessee had never disclosed any agricultural income in the return of income filed by him, therefore the source as claimed by the assessee that the said amount was introduced out of his past savings of agricultural income was not acceptable, and amount introduced to the tune of ₹ 1,70,000/- was treated as income from undiscl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t before levying penalty cogent material or evidence from which it could be inferred that assessee has consciously concealed particulars of his income or had deliberately furnished inaccurate particulars in respect of the same and that the disputed amount is a revenue receipt. No doubt the original assessment proceedings, for computing the tax may be a good item of evidence in the penalty proceeding s but the penalty cannot be levied solely on the basis of the reasons given in the original order of assessment. 6. In the case on hand, there is no material to show that that the assessee has consciously concealed certain particulars pertaining to his income or has supplied inaccurate particulars, deliberately. Further, it is the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... details pertaining to advance tax which was untrue. On the contrary, the additions were of such nature that the assessee could not have foreseen. We are, therefore, of the opinion that the order of the Tribunal cannot be sustained and deserves to be quashed and set aside. 7. In above view of the matter, the decision of the Apex Court in CIT VS. KHODAY ESWARSA SONS (supra) and of this Court in AMRUT TUBEWELL COMPANY VS. ASST. CIT (supra), would apply to the facts of the present case. Hence, the appeal deserves to be allowed. 8. In the result, this appeal is ALLOWED. The question of law raised in this appeal is answered in favour of the appellantassessee and against the respondent- Revenue, accordingly. - - TaxTMI - TMITax - In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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