TMI Blog2013 (5) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... computing income as assessee had not disclosed a full fact, therefore, the Assessing Officer, in such a situation, has no alternate but to estimate the income. Against assessee. - ITA Nos.164 to 168/Del./2010 - - - Dated:- 30-4-2013 - U. B. S. Bedi And B. C. Meena,JJ. For the Petitioner : Shri K. Sampath, Advocate For the Respondent : Shri Vijay B. Vasanta, DR ORDER Per B. C. Meena, Accountant Member :- All these five appeals filed by the assessee emanate from the five orders of CIT (Appeals)-XXVIII, New Delhi dated 30.10.2009. In all these appeals, the issue involved is upholding the penalty u/s 271(1)(c) of the Income-tax Act, 1961 levied by the Assessing Officer. The grounds of appeal are common and read as under :- "(1) On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in dismissing the appeal of the assessee. (2) On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and unjustified in holding that the penalty u/s 271(1)(c) has been rightly levied by the AO. (3) On the facts and in the circumstances of the case and in law, the Ld. CIT (A) was incorrect and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The addition was partly sustained by the CIT (A) @ 0.40% of the value of bogus entries. The addition was finally upheld by the ITAT @ 0.50% of the total value of bogus entries given by the various concerns run for this by the assessee. The ITAT in its order dated 12.11.2008 has sustained the addition in the hands of the assessee by holding as under :- "8. We have heard both the sides. As the facts emerge the transaction in question have not been denied by the assessee. At the same time, a valid argument is made that the department is taxing the same commission in the hands of the assessee as well as in the hands of respective companies. We find the proposition of Ld. Counsel of the assessee as reasonable in nature inasmuch as the income as a matter of principle has to be taxed in one hand. In view thereof, we find merit in the assessee's proposition and held that the rate of 0.50% should be applied in the hands of the assessee for estimating income as done by the AO and we give a direction that the turnover for which the assessee is assessed the same amount of commission shall not be assessed in the hands of any of the company floated by the assessee. Ld. DR has expressed his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speak for which default the penalty was initiated. The penalty order also does not speak about this fact. Further the ld. AR submitted that penalty u/s 271(1)(c) was levied on the estimated addition. Ld. AR also submitted that no material was brought on record to justify the estimate of income. He relied on the decision of Hon'ble Lucknow ITAT in the case of Sahyog Sahkari Shyaam Samvida Ltd. - 111 TTJ 540 for the proposition that merely books of account rejected then it cannot be a case for levy of penalty. 4. On the other hand, the ld. DR relied on the orders of the authorities below and submitted that the order of the Assessing Officer clearly records the satisfaction for initiation of penalty u/s 271(1)(c). From the order itself, the satisfaction for initiation of penalty is discernible. The reading of the whole order itself shows that satisfaction was existed and was recorded while making the assessment. Ld. DR also submitted that as per provisions of section 271(1B) even when the order contains direction for initiation of penalty proceedings under clause (c) of sub-section (1) of section 271, such an order of assessment or reassessment shall be deemed to constitute satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer has recorded satisfaction for initiating penalty u/s 271(1)(c). Moreover, this argument of assessee becomes irrelevant in view of the provisions of section 271(1B) of the Income-tax Act, 1961 wherein the order containing direction for initiating of penalty shall be sufficient to constitute satisfaction of the Assessing Officer for initiating penalty. Therefore, this aspect of assessee's pleadings has no merits. The income has been finally estimated @ 0.50% of the total value of bogus/accommodation transactions entered into by the assessee. It has been conclusively settled by the decision of ITAT. Further, assessee's plea that penalty cannot be levied on estimated income has no merits. The estimation of taxable income by way of estimate is one of the established method for computing income. In this case, assessee had not disclosed a full fact, therefore, the Assessing Officer, in such a situation, has no alternate but to estimate the income. The estimation of income has been upheld by the ITAT. Assessment by estimate is one of the known process in the taxation law. Where the assessee conceals relevant material/evidences then the revenue has no alternate but to make a best judgm ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
