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2015 (8) TMI 1554 - AT - Income TaxPenalty u/s 271(1)(c) - Addition u/s 68 - assessee has booked cash sales of Rs. 3 Crores in the month of September,2006 to different parties - HELD THAT:- Merely because addition on merit have been confirmed by itself is no ground to sustain the penalty automatically. It is an admitted fact that cash sales of Rs. 3.12 Cr were out of the total sales of Rs. 94.54 Cr. The assessee maintained complete books of account and the accounts are audited. The assessee produced books of account, purchase bills, sales bills and stock register before the authorities below and disclosed complete facts with regard to the sales made to different parties. Therefore, nothing was concealed to the revenue department in filing of the return as well as at the time of assessment framed by the AO. The sale bills were supported by sales tax paid challans and sales tax return filed by the assessee with Commercial Tax Department of Una and as well as shown by the assessee in the books of account have been accepted by the sales tax authorities (VAT authorities). Thus, the sales made by the assessee including the cash sales have been accepted by the sales tax authorities. The authorities below dis-believed the explanation of the assessee with regard to cash sales made to different parties because their complete details are not noted in the bills. It was also noted that since no complete particulars of the purchasers are mentioned in the sale bills, therefore, cash sales are not subjected to verification. This was the sole reason for making the addition as well as levying the penalty under section 271(1)(c) of the Act against the assessee - As in the case of R.B. Jessa Ram Fateh Chand [1969 (7) TMI 10 - BOMBAY HIGH COURT] and similarly M. Durai Raj [1971 (3) TMI 11 - KERALA HIGH COURT] held that the books of account cannot be rejected if in cash sales, names and address of the purchasers are not mentioned. There is no need to mention name and address in the cash sales. These judgements support the version of the assessee that mere dis-believing the explanation of the assessee would not be enough to levy the penalty under section 271(1)(c) The facts and circumstances of the case shall have to be considered because levy of the penalty is discretionary in nature. The Hon'ble Supreme Court in the case of M/s Rajasthan Spinning & Weaving Mills [2009 (5) TMI 15 - SUPREME COURT] held that on every demand, penalty is not automatic. We are of the view that even if addition on quantum have been sustained, however assessee has been able to make out an arguable and debatable case to prove that penalty need not be imposed in this case. We, therefore, do not subscribe to the views of the authorities below in levying and sustaining the penalty under section 271(1)(c) of the Act. We, accordingly, set aside the orders of the authorities below and delete the penalty. - Decided in favour of assessee.
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