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2019 (1) TMI 1460 - ITAT CHENNAILevy of penalty u/s.271(1)(c) - Addition towards working capital - Held that:- We find that assessee is not in appeal against estimation of 8% on its receipts of ₹ 1,42,54,512/-, as income from civil construction business. Once an addition on estimate basis is made, in our opinion a further estimate for investments in working capital will be superfluous. There is nothing on record to show that assessee had any working capital or work in progress. Estimation of ₹ 24,00,000/- , as net receivables of the assessee was purely an assumption. We have no hesitation in deleting this addition. Ground No.2 of the assessee is allowed. Initiating levy of penalty u/s.271(1) (c) of the Act, which is consequential in nature, needing no specific adjudication. Unexplained investment in business - Assessee seeks telescoping of such investment against the income estimated at 8% on contract receipts - Held that:- It is clear that assessee itself had admitted a sum of ₹ 4,00,000/- as peak investment in bank account which was not disclosed. Having done so, assessee cannot turn around and say that such addition ought not have been made by the ld. CIT(A). Assessee cannot plead for telescoping of admitted income with what is found by the Assessing authority to be undisclosed income. We thus do not find any reason to interfere with the order of the ld. CIT(A). Grounds 4 and 5 of the assessee stand dismissed. Penalty u/s 271(1)(c) - income arrived at estimated basis - assessee in its original return of income had shown only income from salary and income from house property and never revealed that it was doing any business, much less a civil contract business - Held that:- Question of concealment and furnishing of inaccurate particulars has to be answered with reference to the original return filed by the assessee, and not based subsequent computations or revised return filed when assessee became aware that Assessing Officer was having information on income not disclosed in the original returns. Thus, in our opinion there was clear furnishing of inaccurate particulars as well as concealment of income. Even in the revised computation filed, during the course of assessment proceedings, assessee had admitted income of only ₹ 1,24,400/- that too, on estimate basis. Lower authorities were justified in levying penalty under Section 271(1)(c). Nevertheless, since we have deleted the addition of ₹ 24,00,000/- considered as unexplained investment in working capital, the penalty levied also requires to be reduced proportionately. Appeal of the assessee are partly allowed.
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