TMI Blog2007 (10) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... rom business after claiming expenses for Rs. 67,780. In the absence of bills and vouchers as the books were not produced before him, the AO disallowed the gross loss and the expenses and determined the total income at Rs. 2,63,685. The assessee had also shown loans taken at Rs. 3,62,300 which were treated by AO as income under s. 68 in the absence of any details and evidence. The total income was thus determined at Rs. 6,25,925. Though the assessee had disputed the additions in appeal but CIT(A) confirmed the additions again in an ex parte order. The AO had initiated penalty proceedings under s. 271(1)(c) and accordingly imposed penalty at the rate of 100 per cent of tax sought to be evaded i.e. Rs. 2,23,396. The penalty order had also been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h is necessary for imposing the penalty for concealment. The AO only at the end of the assessment order had mentioned that penalty proceedings under s. 271(1)(c) were initiated separately. This did not amount to recording of satisfaction as held by the Hon'ble Delhi High Court in case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del) and several other cases. He also placed reliance on the recent judgment of Hon'ble Supreme Court in case of Dilip N. Shroff vs. Jt. CIT (2007) 210 CTR (SC) 228 : (2007) 291 ITR 519 (SC). Even on merit, it was pointed out that there was no case for imposition of concealment penalty, as the additions had been made on account of deemed income under s. 68 and on the basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re different from those arising in the assessment proceedings. Though the finding given in the assessment is a good evidence the same is not conclusive in penalty proceedings. What is required to be seen is whether additions have been made based on material from which definite inference can be drawn that the assessee had concealed income. In this case, additions have been made purely on estimate without any basis and without any material to support that the assessee had income more than that declared in the audited accounts. In respect of such estimated additions/disallowances, expenses, imposition of concealment penalty will not be justified. As regards the loans taken, though the assessee did not file any confirmations before the AO, duri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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