Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2010 (4) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (4) TMI 872 - AT - Income TaxPenalty u/s 271(1)(c) - unproved cash purchases - assessee’s books of account had not been properly maintained and he has not discovered any specific amount of concealed income - HELD THAT:- The assessee has honestly produced the relevant materials and evidence available with it to prove the correctness of the books of account. AO not accepted the genuineness of the transactions since the AO wanted inward Register and stock registers and the AO not discovered any positive material of inflating of purchases. There were certain insertion of entries in the cash book and also correction in the cash balance made by the assessee in its books of account and according to AO these books of account of the assessee are not reliable. This finding is enough to make additions in the assessment proceedings but that itself is not enough to sustain the penalty. It is to be true that even in cases of estimation or in case of best judgment penalty is leviable. But there should be finding has to be recorded that the difference in the income return and the income assessed is due to the fraud or gross or wilful neglect on the part of the assessee. In the instant case, the lower authorities have not recorded any such findings. The books of account of the assessee not wholly amenable to verification. That at best can only lead to inference that the result shown by the assessee are inconclusive. But that is far from saying that there is any fraud or gross or wilful neglect on the part of the assessee. There may be justification for making addition to the assessment; there was no justification for imposing penalty because the department had not established that what was added by them in the assessment represented the income of the assessee. The penalty order should be self-contained one, the findings that there has been concealment or furnishing of inaccurate particulars of income recorded in the assessment proceedings cannot automatically transferred to the penalty order and the concealment or furnishing of inaccurate particulars as specifically required to be recorded in the penalty order. Failure in this regard vitiates the validity of the penalty order itself. Appeal of the assessee is allowed.
|