TMI Blog2012 (2) TMI 467X X X X Extracts X X X X X X X X Extracts X X X X ..... at the facts of the case may justify the confirmation of the addition made on this count by the Revenue authorities, but are not sufficient for sustaining the penalty imposed under section 271(1)(c) of the Act. We find that no evidence or material was brought on record by the Department to suggest that the assessee has retained 3 per cent. or part thereof on account of sales tax with it. The assessee has filed an explanation, which could not be termed as not bona fide. In the absence of any corroborative evidence to prove the charge that any part of 3 per cent. being sales tax on the transaction remained with assessee, we are unable to sustain the penalty imposed under section 271(1)(c) of the Act on the assessee, which is cancelled. Unexplained cash credits under section 68 - Held that:- We find that there was sufficient reason for the assessee for its filing the necessary evidences before the Commissioner of Income-tax (Appeals). In the facts of the case, we consider that it shall be in the interest of justice to set aside the issue of addition of ₹ 8,09,100 under section 68 to the file of the AO with direction to decide the same afresh in accordance with law after allo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was called for. The Commissioner of Income-tax (Appeals) again made the addition and further appeal of the assessee before the Tribunal was dismissed by the Tribunal vide its order dated November 16, 2011. He submitted that the addition has been made merely on presumption as the Tribunal has found that the transaction with SC was not real transaction but was merely a paper transaction. The learned Departmental representative has opposed the submissions of learned counsel for the assessee. He submitted that it is a survey case and the assessee has surrendered ₹ 40 lakhs at the time of survey. He submitted that in order to neutralise the effect of survey and surrender of ₹ 40 lakhs, the assessee has reduced its gross profit rate and therefore it is a fit case for imposition of penalty under section 271(1)(c) of the Act. He submitted that on the second issue pertaining to SC , the penalty was imposable since the partner of the assessee-firm has admitted that the transactions with SC was merely a paper transaction. He relied on the orders of the AO and the Commissioner of Income- tax (Appeals). 4. We have considered rival submissions carefully. We find that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reof on account of sales tax with it. The assessee has filed an explanation, which could not be termed as not bona fide. In the absence of any corroborative evidence to prove the charge that any part of 3 per cent. being sales tax on the transaction remained with assessee, we are unable to sustain the penalty imposed under section 271(1)(c) of the Act on the assessee, which is cancelled. Accordingly, this appeal of the assessee is allowed. I. T. A. No. 629/Ahd/2009 : A.Y 2004-05 6. There is a delay of 475 days in filing the present appeal by the assessee before the Tribunal. The assessee has filed condonation petition along with affidavit of Shri K.L. Bhakta, managing partner with medical certificate and also affidavit of Shri M. S. Sarvaiya, clerk of the assessee-firm explaining the circumstances resulting in delay in filing the appeal before the Tribunal. 7. We have heard the parties on this issue. In the facts of the case and particularly in view of fact that the managing partner, Shri K.L. Bhakta was 82 years of age with illness, we condone the delay in filing the present appeal before the Tribunal. 8. Ground No. 1(i) of the assessee's appeal reads as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not given any comparable figures of job work rate prevailing in the market with regard to other parties in similar line of the trade for the relevant period. The assessee has given job work only to M/s. Krishna Organics and M/s. Jyoti Industries and both these firms are admittedly the sister-concerns of the assessee. The comparison of job work rate with the earlier year is not relevant. What is more relevant is the prevailing market rate of similar service rendered by the parties to the unrelated business firm. In the facts of the case, we hold that the pre-dominance of probabilities is against the assessee and accordingly the disallowance of ₹ 3,75,823 made by the AO under section 40A(2)(b) of the Act is confirmed and ground No. 1(ii) is dismissed. 14. Ground No. 1(iii) of the assessee's appeal reads as under : 1(iii) The learned Commissioner of Income-tax (Appeals) has erred in law as well as on the facts while confirming the ad hoc disallowance of dalali/commission expenses. To the extent of ₹ 1,81,587. addition of ₹ 8,09,100 on account of alleged unexplained cash credits under section 68 of the Act by the AO. 15. Learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd (vii) are reproduced hereunder : (v) The learned Commissioner of Income-tax (Appeals) has erred in law as well as on the facts while confirming the disallowance of ₹ 8,700 on account of late deposit of provident fund. (vi) The learned Commissioner of Income-tax (Appeals) has erred in law as well as on the facts while confirming the ad hoc disallowance of telephone expenses. To the extent of ₹ 15,746. (vii) The learned Commissioner of Income-tax (Appeals) has erred in law as well as on the facts while confirming ad hoc disallowance of vehicle expenses and depreciation thereon to the extent of ₹ 852 and ₹ 5,177. 21. These grounds are not pressed by learned counsel for the assessee, which are accordingly dismissed. 22. Ground No. 1(viii) of the assessee's appeal reads as under : 1(viii) The learned Commissioner of Income-tax (Appeals) has erred in law as well as on the facts while confirming the addition of ₹ 1,26,581 under section 14A of the Act. 23. Before us, learned counsel for the assessee fairly admitted that no such ground was taken before the Commissioner of Income-tax (Appeals). In these fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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