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TMI Blog2013 (12) TMI 1258X X X X Extracts X X X X X X X X Extracts X X X X ..... s justified in upholding the order of Commissioner of Income-tax (Appeals), confirming the penalty of Rs. 1, 28, 000/- levied by the Assessing Officer u/s 271 (1) (c) of the Income-tax Act, 1961?" 3. The facts giving rise to this reference, and the findings of the Tribunal, on which the question of law has been referred, is summarised as follows:- "The original assessment was completed under section 143 (1) on an income of Rs. 27, 520/-. Search was conducted by the Department under sec. 132 (1) of the Act. On the basis of seized material and other investigation, additions were made in the assessment. Rs. 1, 72, 749/- was added on the basis of seized material under the caption 'extra income'. Rs. 48, 424/- was added under the caption 'unex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was related out of the books. This amount was added in the assessment. No appeal was preferred against that order. In the scrutiny of the accounts, the transactions did not find place in the regular books of accounts, which were appearing in the seized note-books. Some of the day-to-day sales recorded in the account books also found place in the note-books seized. It was explained to the Assessing Officer that debit and credit entries relating to purchase and sale had been recorded in the symbolic name of Shri Ram Babu and Shri Shanti Prasad. This practice was adopted by the assessee to avoid detection. It was also found by the assessing officer that each entry had been noted down in the abbreviated form and the actual amount of each tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tary proof as to the payment of goodwill. If it was goodwill what was the basis for its calculation is also not shown. Dehors evidence, the Tribunal found it difficult to believe the version of the assessee. The Tribunal observed:- "Penalty for concealment is a deterrent measure. It is levied to ensure the proper compliance of law. The material gathered during the search proceedings was adequate to attract the provisions of section 271 (1) (c). Explanation offered by the assessee was not sufficient. Learned counsel for the assessee also pleaded the principles of promissory estoppel, but there is no material on record to indicate that Revenue made any promise to the assessee, hence we do not find any merit in this argument. The cases relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in this case had filed return, which was accepted and the assessment was completed. The additional income offered to buy peace with the department and to avoid litigation, was held, following Sir Shadilal Sugar and General Mills Ltd v. CIT (supra), not to call for penalty proceedings under Section 271 (1) (c) of the Act. The Supreme Court upheld the judgment. 7. In Additional Commissioner of Income-Tax, Lucknow v. Kishan Singh Chand (supra) the Assessing Officer found the books to be defective and added an amount to the amount of return by applying a flat rate of profit at 12.5% in place of 7.5%. In the said case, this Court held that the explanation to Section 171 (1) (c) of the Act was not attracted. 8. In the present case, the entrie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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