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2017 (2) TMI 1080 - ITAT AHMEDABADPenalty u/s 271(1)(c) - inflation of expenses - addition on the bass of survey - Held that:- There can hardly be any dispute that quantum and penalty are two distinct and independent proceedings wherein each and every disallowance or addition does not necessarily result in penal action under the provisions of the Act. It has already come on record that the impugned additional income is in fact on account of alleged inflation of various heads of expenses in assessee’s construction activity. The department has very much seen assessee’s books in the course of assessment completed after its disclosure in question. It however does not even refer to a single evidence to support its prima facie opinion of inflation of expenses. Something further surprises us is that all the above heads of inflated expenses involve precise round figures which have nowhere been tallied with the actual ones in books of accounts. The Revenue strongly rests its case on assessee’s partners survey disclosure of ₹ 1.3crores and payment of taxes thereupon. It however fails to rebut Board’s circular itself dated 10.03.2003 that no significance is attached to such survey statement in absence of any corresponding evidence being collected. - Decided in favour of assessee
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