TMI Blog2001 (7) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... ways on contract basis. During the course of assessment proceedings the assessee was required to file the month-wise details of purchase and sales. After verifying the purchases and sales, the Assessing Officer noted that purchases between January to March have been made more than Rs. 2 lakhs. However, the sales were shown in the months of January and February at Rs. 1,450 and Rs. 2,750 respectively. The closing stock was shown only at Rs. 8,208. The assessee was required to file the explanation regarding the closing stock, because the purchases were more than Rs. 2 lakhs and sales were only of about Rs. 4,000. In this way the closing stock should have been more than Rs. two lakhs; whereas the assessee have shown Rs. 8,208. It was replied t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated as were made during the course of assessment proceedings. The Assessing Officer was not satisfied. In his view, the assessee furnished inaccurate particulars. Accordingly the closing stock was not shown properly, by further observing that it is a clear case of concealment of income by resorting to suppression of the closing stock. Accordingly a penalty of Rs. two lakh was imposed by the Assessing Officer under section 271(1)(c) vide his order dated 30-9-1992. 4. The assessee preferred appeal before the CIT(A) who after considering the material and various case laws relied upon by the assessee, was of the view that this is not a case of concealment. It was further observed by the CIT(A) that assessee has successfully explained t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orities. The material was supplied on 4th January, 1991 after preparing final bill, as the assessee received approval along with cheque from the Railway authorities on 3-1-1991 and accordingly the material was supplied to them on 4-1-1991. The Accountant of the assessee not being conversant with the proper entries in this regard and the entries were made in sale register on 29-10-1990, with should have been made in the month of January, 1991, i.e., on 4-1-1991. Similarly, there were three-four bills and those were prepared in the months of October, November and December and the approvals were received in the month of January 1991 and accordingly the material was supplied to the Railway authorities in the month of January 1991. From this tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted that assessee had made any sales outside the books of account. In my considered view, it cannot be held as a inflexible rule that when an assessee agrees to an addition to his total income, he makes an admission which would by itself warrant the imposition of penalty. Even in such cases the department has to prove by independent evidence, in addition to the evidence already brought on record from various sources during the assessment proceedings, that the amount represented the concealed income of the assessee. 7. In the case of Sir Shadilal Sugar General Mills Ltd v. CIT [1987] 168 ITR 705, the Hon'ble Supreme Court has held that, 'From assessee agreeing to, additions to his income, it does not follow that amount agreed to be adde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars or has concealed any income. There is a complete stock tally and all the purchases made, including the opening stock, were fully accounted for in the sales and closing stock. Therefore, I am of the firm view that assessee has not concealed any income on which penalty can be imposed under section 271(1)(c). 11. In the case of Pannalal R. Shivhare v. Second ITO [1993] 47 TTJ (Bom.) 577, the Bombay Bench has held as under:-- "What transpires is that the assessee, with a view to buy peace, agreed to additions on which basis the assessment was completed by the Assessing Officer within hours of the filing of the revised statement. Assessee also offered detailed Explanation in respect of the different items constituting the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X
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