TMI Blog2014 (11) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of penal provisions was not justified as the assessee's explanation could not be branded with any mala fide – relying upon COMMISSIONER OF INCOME-TAX Versus RELIANCE PETROPRODUCTS PVT. LTD. [2010 (3) TMI 80 - SUPREME COURT] – the order of the CIT(A) is set aside. Confirmation of penalty u/s 271(1)(c) - Genuineness of assessee’s explanation - Held that:- The bill is dated 23-9-2006 and that is also one of the reasons given by the AO for making disallowance, observing that GR is pre-dated - This cannot be a basis for arriving at any adverse conclusion - Thus, there is overwhelming evidence to come to the conclusion that the supply to the assessee was made on 23-9-2006 - it cannot be lost sight of that the goods were supplied from Delhi to Karnal, which is not very far so as to take a period of one month for delivery of goods - on account of non-furnishing of evidence of installation of transformer, a vie could be taken against the assessee in assessment proceedings but when it comes to levy of penalty, there has to be a concrete evidence on record, establishing that assessee made a false claim, to saddle the assessee with penalty, demonstrating that the explanation furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... losing stock. The assessee pointed out that it used to purchase all varieties of paddy basmati i.e. Pusa Basmati and pure basmati, which was verifiable from value of paddy as appearing in Form 'I' of any single day on the same shop as per the quality of that particular paddy which could also be verified from I Form produced. The assessee further submitted that valuation of paddy had been made on the market price and the market price of Pusa basmati came to about ₹ 1500/- on the basis of the sale bills of M/s Panna Lal Rakesh Kumar at the end of the year and that of pure basmati came to ₹ 2040/- per qtl. On the other hand, the assessee had valued the closing stock of Pusa basmati at ₹ 2133/- per qtl., which was even more than the value as was allegedly adopted by assessing officer. The original Form 'I' was also produced for verification. 2.2. However, assessing officer did not accept the assessee's contention and pointed out that though assessee claimed to have made purchases of all varieties of paddy basmati, but there was only one trading a/c of paddy basmati and not separate accounts of different types of basmati. Further, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT(A) confirmed the penalty. Being aggrieved with the order of ld. CIT(A), the assessee is in appeal before us and has taken following effective ground of appeal. On the facts and in the circumstances of the case the Worthy CIT(A), Karnal has erred in law in confirming the penalty of ₹ 13,79,680/- u/s 271(1)(c) of the Income Tax Act, 1961 imposed by the Ld. AO on account of alleged under valuation of closing stock of paddy basmati and alleged excess claim of depreciation. Hence, the penalty confirmed by the Worthy CIT(A) be kindly remitted . 3. Apropos the penalty levied on account of addition made to closing stock, ld. Counsel referred to page 25 of the PB wherein Form 'I' in respect of purchase from M/s Panna Lal Rakesh Kumar are contained and pointed out that assessee had purchased 117.05 kg. of basmati @ ₹ 2000/- on 30-3- 2007. Ld. Counsel referred to form no. 'I' to demonstrate the market rate prevailing in March 2007 in respect of different types of basmati. 3.1. Ld. Counsel referred to page 26 of the PB wherein the computation made by assessee in regard to closing stock is contained. 3.2. Ld. Counsel submitted that assessee had adopte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court in Union of India Vs. Dharamendra Textile Processors [2008(13) SCC 369], as also, the decision in Union of India Vs. Rajasthan Spg. Wvg. Mills [2009(13) SCC 448] and reiterated in para 13 that:- 13. It goes without saying that for applicability of Section 271(1)(c), conditions stated therein must exist. .. . 9. We are not concerned in the present case with the mens rea. However, we have to only see as to whether in this case, as a matter of fact, the assessee has given inaccurate particulars. In Webster's Dictionary, the word inaccurate has been defined as:- not accurate, not exact or correct; not according to truth; erroneous; as an inaccurate statement, copy or transcript . We have already seen the meaning of the word particulars in the earlier part of this judgment. Reading the words in conjunction, they must mean the details supplied in the Return, which are not accurate, not exact or correct, not according to truth or erroneous. We must hasten to add here that in this case, there is no finding that any details supplied by the assessee in its Return were found to be incorrect or erroneous or false. Such not being the case, there would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation could not be branded with any mala fide. Relying on the decision of Hon'ble Supreme Court in the case of Reliance Petro Products (supra), we, therefore, set aside the order of ld. CIT(A) on this count. 5.1. Apropos the penalty levied on account of disallowance of depreciation, we find that the main reason for disallowance was that in Form no. ST 38-Inward, submitted to the Sales-tax department, contained at page 43 of the PB, there was allegedly over-writing in regard to the receipt of goods, which, as per assessing officer was 23-10-2006 but was altered to 23-9-2006. Accordingly, it was concluded that the assessee was not able to demonstrate that the transformer was actually installed and put to use. In this regard we find that there is no dispute that GR no. 2278 (contained at page 38 of the PB), was issued by Shanki Road Carriers on 22-9-2006. The consigner's name was Nand Kishore Co., but in the description 750 KVA Transformer was mentioned whereas the purchase was for 1000 KV as per bill. We do not think that this can be a basis for arriving at any adverse conclusion, because all other details are not disputed. Further, the bill is dated 23-9-2006 and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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