TMI Blog2007 (12) TMI 322X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act, 1961 (hereinafter referred to as the Act ) and the assessee has also challenged the conclusion of the authorities for imposing special audit under section 142(2A) of the Act on the plea that the accounts of the assessee are superficial and simple with no complexity involved. Further, the assessee has also challenged that the Assessing Officer had not arrived at any satisfaction for initiation of proceedings for penalty for concealment of income. 2. The learned counsel for assessee, Shri G. Lakshminarasimhan, submitted that consequent to the assessment having been selected for scrutiny, the CIT vide his order dated 20-3-2003 directed that the accounts of the assessee be audited with reference to the provisions of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accounts had resulted in some of these items being remained not adjusted. The Assessing Officer concluded that because these were charged to P L a/c there was deliberate intention on the part of the assessee to show lower income. However, when it comes to imposing of penalty all that the Assessing Officer states is that penalty proceedings have been initiated in a mechanical manner without pointing out what are those specific items with reference to which he intends or feels that resulted in concealment of income. He submitted that the assessee, finding that the project account contained certain mistakes did not hesitate to surrender the same before the authorities and this was so done with the good intention that the authorities would a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... what is the concealment or what is it that the assessee has furnished inaccurate particulars. He submitted that the items that the Assessing Officer considered are deposits with BWSSB, sales-tax deposit, certain electricity charges and valuation of stock all coming from earlier years. These were apparently brought forward because additional cost could not be recovered from the various flats buyers. The Assessing Officer claims that the assessee had inflated the expenses. This is because though the expenses were incurred, the assessee could not recover them from various flat buyers because the assessee had already agreed to certain price with the flat buyers and thus was held back from imposing further burden on the flat buyers. He drew our ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gayathri Textiles v. CIT [2000] 243 ITR 674 (Kar.) and G. Manoharan v. Asstt. CIT [2007] 292 ITR 281 5 (Ker.) and Delhi High Court decision in the case of Sahara India Financial Corpn. Ltd. v. CIT [2007] 289 ITR 397 (Delhi). 3. Rival contentions in regard to the above have been very carefully considered. The audit report shows that deposit with BWSSB was charged on the basis of project having been concluded. With regard to the amount shown as recoverable from M/s. Titan Industries, the report was that the party had refused to pay the amount. Valuation of stock was only method of approximation and the salaries and wages were so debited to square off the cost as there was no further construction activity involved. Electrici ..... X X X X Extracts X X X X X X X X Extracts X X X X
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