TMI Blog2002 (2) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... nies Act on 24th March, 1986. The said company had taken over the entire running business of the erstwhile dissolved firm of M/s. Vijay Oil Mills w.e.f. 1st April, 1990, along with its assets and liabilities. The company is engaged in the business of producing edible oils. As per para. 3 of the assessment order, the assessee-company carried out the following production activities during the year under consideration: (1) Groundnut seeds from groundnut. (2) Groundnut oil and oil cake from groundnut seeds. (3) Solvent extraction groundnut oil from groundnut oil cake. (4) Rapeseed oil and oil cake from rapeseed. (5) Solvent extracted rapeseed oil from rapeseed oil cake. (6) Soya-bean oil and oil cake from soya-bean. (7) Solvent extracted soya-bean oil from soya-bean oil cake. While framing the assessment order, the learned Asstt. CIT had made the following additions: Rs. (a) Addition of Rs. 39,25,071 towards suppressed oil production, comprising of : (i) low oil recovery in respect of rapeseeds purchased from outside Gujarat State 1,89,982 (ii) low oil recovery in respect of rapeseeds purchased from within the St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re the learned CIT(A). The assessee reiterated its contention before the learned first appellate authority. It was contended that the assessee-company maintains elaborate day-to-day stage-wise, quantitative record and no defects have been observed in these records. The yield is within the range certified by various associations. The difference between the out of Gujarat State purchases and local purchases is due to price difference. It was further contended that when the yield in OGS purchases have been accepted, there is no justification for not accepting the yield in local purchases. The assessee submitted before the learned CIT(A) that the explanation offered by the assessee-company may not have been found satisfactory for the purpose of additions but the same has not been found to be false either. Hence, keeping in view the penalty proceedings as of quasi-criminal in nature, the finding of the assessment proceedings have no bearing over imposing the penalty. The learned CIT(A) considered the submissions of the assessee in detail. However, he has not agreed with the submissions made by the assessee and dismissed the appeal. The learned first appellate authority has also taken a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the yield in the preceding year and in the succeeding year and has confirmed the addition on this basis which is quite different with which the AO has made the addition. (D) Addition on account of purchases: (a) The Tribunal has granted reference and has stayed the recovery of demand. (b) In asst. yr. 1992-93, Tribunal has set aside entire addition. (c) In asst. yrs. 1993-94 and 1994-95, the CIT(A) have set aside the entire addition. (d) It was shown that the price paid for the purchase of cakes from all non-genuine sources are compared with price paid for genuine purchase. Therefore, the lump sum disallowance of 25 per cent is without basis. This argument of appellant having been accepted in the succeeding year, there is no basis for levy of penalty in the year under appeal." 9. While controverting the argument of the learned counsel for the assessee, the learned Departmental Representative relied upon the orders of the Revenue authorities below and submitted that the learned Asstt. CIT has elaborately discussed the evidence pertaining to addition of bogus purchases from 33 bogus suppliers. He submitted that the penalty has rightly been imposed by the AO. Since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in cases of concealment and inaccuracy, the phrase "particulars of income" is used. It will be noted that as regards concealment the expression in cl. (c) is "has concealed the particulars of his income" and not "has concealed his income". It is obvious that the penal provisions would operate when there is a failure of duty to disclose fully and truly particulars of income, imposed under the Act and the rules thereunder. The duty is enjoined upon a person to make a correct and complete disclosure of his income and it is only when he fails in his duty by not disclosing his income or part thereof, he conceals the particulars of his income. The duty is enjoined upon him to make a complete disclosure of his income as well as correct disclosure. Therefore, if the disclosure made of the particulars of income is incorrect, then also be commits breach of his duty. Such defaults entail the penal consequences contemplated by s. 271(1)(c)(iii) of the Act. 11. Under s 139(1) of the Act as it stood at the relevant time, it was inter alia, provided that every person, if his total income in respect of which he is assessable under the Act during the previous year, exceeded the maximum amount wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and complete and that the amount of total income and other particulars shown were truly stated and related to the previous year relevant to the assessment year. 14. Now, if we look at the facts of the present case, then it will reveal that the assessee claimed deduction of the expenditure amounting to Rs. 93,06,320 pertaining to purchase of raw material. It is settled law that the onus lies on the assessee to prove the genuineness of any expenditure, which is claimed as deduction in computing its taxable income. The assessee has purchased oil cakes from the 33 parties. AO has held these parties as bogus one. Sufficient time was given to the assessee to prove the purchases as genuine. Not only the AO even by the Tribunal while hearing the appeal vide order, dt. 20th July, 1995, the Tribunal gave the final opportunity to the assessee to produce before the AO all the suppliers, transporters, etc. in support of its claim to show the purchase as genuine one. In para 16.3 the Tribunal has taken note of the details of the transactions and the reply of the suppliers from whom the assessee claimed to have purchased the raw material. The contents of reply sent by the suppliers as reprod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r freight payments in respect of purchases in question are fictitious ones are absolutely justified on the facts and circumstances of the present case." On the basis of the above finding the Tribunal has applied provisions of sub-s. (2) of s. 145 and rejected the books of accounts and made additions as indicated in Para. 5 of this order. The contention of the learned counsel with regard to non-genuine purchases in asst. yr. 1992-93 that the Tribunal has set aside the entire addition in asst. yrs. 1993-94 and 1994-95 and CIT(A) has set aside the entire addition, has no bearing on the decision of this penalty matter. The granting of reference and staying of recovery of demand have also no bearing on the question, whether the penalty is required to be levied or not. 16. The Tribunal had confirmed the addition of Rs. 30,00,000 on account of lower yield deliberately shown by the assessee. The learned CIT(A) as well as the AO have reproduced the finding of the Tribunal with regard to addition on account of low yield in their orders at para. 4 and para. 10.2 respectively. The Tribunal has considered the contentions of the assessee in detail before making the addition under this head. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
