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2021 (9) TMI 243 - AT - Income TaxPenalty u/s 271(1)(c) - addition towards unexplained cash credit - Penalty for furnishing inaccurate particulars of income - as argued assessee has shown purchases of stock-in-trade from the sister concern and passed necessary journal entries by debiting purchases into opening stock and crediting to party account under the head ‘sundry creditors’ - HELD THAT:- On perusal of reasons given by the AO we understood is the AO has completely mis-stated the facts without understanding the principles of accountancy, which is evident from the fact that although the assessee has passed entries for purchase in its books of accounts by debiting to purchase account and crediting to sundry creditors account, the AO has stated that the assessee has purchased the goods in the earlier financial year and has not recorded the same in the books of accounts of the assessee. Assessee has explained the transactions with necessary evidences and has also furnished necessary details before the AO to determine its taxable income - there is no effect on the profit / loss or taxable income for the impugned assessment year - when the assessee has explained the entries with necessary evidences and said explanation is not found to be false, then merely for the reason that assessee had accepted addition made towards particular income is not a ground to hold that the assessee has furnished inaccurate particulars of income, which warrants levy of penalty u/s.271(1)(c) of the Act. The ld.CIT(A) without appreciating facts, has simply confirmed penalty levied by the AO. - Decided in favour of assessee.
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