TMI Blog2015 (5) TMI 819X X X X Extracts X X X X X X X X Extracts X X X X ..... he wall leaving no choice except to reject the book result and estimate the income, then, probably this argument may not be available with the assessee that income has been determined on an estimate basis, therefore, no penalty is imposable on it. But in the present case, the Assessing Officer has not brought on record the facts with this angle. It has not been established that even basic records and the books of accounts were not maintained according to the notified standard of accounting. The Assessing Officer did not point out factual inaccuracy in the details submitted by the assessee. - Decided in favour of assesse. - ITA No. 2643/Ahd/2011 - - - Dated:- 22-5-2015 - Shri G.D. Agrawal and Shri Rajpal Yadav, JJ. For the Appellant : Shri B.L. Yadav, Sr. D.R. For the Respondent: Shri R.N. Vepari, A.R. ORDER PER : RAJPAL YADAV, JUDICIAL MEMBER:- The revenue is in appeal before us against the order of Ld. CIT(A)-V dated 13th June, 2011 passed for assessment year 2006-07. 2. The solitary grievance of the revenue is that Ld. CIT(A) has erred in deleting the penalty of ₹ 14,61,959/- which was imposed by the Assessing Officer u/s. 271(1)(c) for fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was not possible to ascertain which rough diamond was finally converted into polished diamonds, which quality and size was ultimately achieved out of a particular rough diamonds. Similarly, the assesse could not produce primary records in connection with various processes involved in the manufacturing of diamonds like assortment, rejection, boiling, sawing ghat etc. He was of the opinion, that on the basis of these details, yield cannot be worked out. Accordingly, Assessing Officer has imposed a penalty of ₹ 14,61,959/-. 5. On appeal, Ld. First Appellate Authority re-appreciated the facts and circumstances. It reproduced their detailed written submission of the assesse from pages 2 to o11 of the impugned order. Ld. CIT(A) has recorded following finding. 6. I have carefully considered the penalty order as well as the submissions of the appellant. I have also gone through the various documentary evidences furnished by the AR and also the assessment order and appellate order. A combined reading of the assessment order and the penalty order show that the addition was made by the Assessing Officer on the rejection of claim of the assessee regarding low yiel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epresent the income in respect of which particulars have been concealed. 7. A bare perusal of this section would reveal that for visiting any assessee with the penalty, the Assessing Officer or the Learned CIT(Appeals) during the course of any proceedings before them should be satisfied, that the assessee has; (i) concealed his income or furnished inaccurate particulars of income. As far as the quantification of the penalty is concerned, the penalty imposed under this section can range in between 100% to 300% of the tax sought to be evaded by the assessee, as a result of such concealment of income or furnishing inaccurate particulars. The other most important features of this section is deeming provisions regarding concealment of income. The section not only covered the situation in which the assessee has concealed the income or furnished inaccurate particulars, in certain situation, even without there being anything to indicate so, statutory deeming fiction for concealment of income comes into play. This deeming fiction, by way of Explanation I to section 271(1)(c) postulates two situations; (a) first whether in respect of any facts material to the computation of the total inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h diamond, the extent of cutting would vary on account of several factors viz. shape of the rough diamond, the talent of the artisans and more importantly inclusions therein. Many a times, the rough diamonds have inclusion of other materials. That has to be taken out before polished diamonds take place. Depending upon how deep inclusion is, the cutting proportion varies. There is another factor. Diamond being an item of fashion, the fancy of the people changes and while at some point of time the round shape has more value or sometimes the prince or the fancy cutting fetches more value. At the time of beginning of polishing itself, artisans take a decision as to the manner of cutting to bring out the shape which would fetch maximum value. Therefore, even cutting diamond to a great extent may bring out diamond with less weight (carat) and less yield but more value. These considerations weigh in determining what would be the yield. Therefore, the percentage of yield would not remain the same not only between various diamond manufacturers but also even in case of the same manufacture between different lots and even different pieces of diamonds. Yield cannot be constant. 9. On du ..... X X X X Extracts X X X X X X X X Extracts X X X X
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