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2016 (7) TMI 618 - AT - Income TaxPenalty u/s. 271(1)(c) - addition towards the film Annaya Attachar - Held that:- Trial Balance prepared up to 10.02.2005 admittedly contained substantial balance towards sundry creditors advance received from sundry debtors which are admittedly not revenue receipts unless proved otherwise. It is not the case of the Ld. AO that the sundry creditors reflected thereon and advance received from the customers (sundry debtors) are non-existent liabilities and bogus in nature. This can be proved from the very fact that the Ld. AO had not made any separate addition thereon in respect of those two items. Moreover, we find that the Balance Sheet has been prepared up to 31.03.2005 which has been completely ignored by the Ld. AO and also by the Ld. CIT(A) wherein all the deficiencies pointed out by the Ld. AO have been properly rectified and there is no need to make any addition towards film of Annaya Attachar in the assessment. However, the assessee is not in appeal before us on the quantum addition. We also find that the total cost of production including the printing cost and publicity cost of the film Annaya Attachar has been accepted by the Ld. AO without making any addition thereon. We are also in agreement with the argument of Ld. AR that just because no explanation has been offered by the assessee during the penalty proceedings the Ld. AO cannot automatically proceed to levy penalty as admittedly penalty proceeding is independent of assessment proceedings. Under these circumstances, we have no hesitation in directing the Ld. AO to cancel the penalty levied in respect of the addition towards the film Annaya Attachar. Apropos the film Cheeta, we find that an addition has been made only on estimate basis. Hence, we have no hesitation in cancelling the penalty levied on the same and we direct the AO accordingly. Penalty levied on the addition made towards cash balance, we find that the assessee has filed Balance Sheet up to 31.03.2005 which has not been properly considered by the Ld. AO and the cash balance found on the date of survey have been duly explained in the said Balance Sheet filed before the Ld. AO up to 31.03.2005. Hence, there is no case of any concealment of income or furnishing of inaccurate particulars of income on the part of the assessee. Accordingly, we have no hesitation in deleting the penalty levied in respect of the said addition. - Decided in favour of assessee.
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