TMI Blog2015 (8) TMI 1196X X X X Extracts X X X X X X X X Extracts X X X X ..... y the correctness of the explanation given by the assessee, he has simply rejected the explanation given by the assessee and imposed the statement given by the Managing Partner of the company during the course of survey. Keeping in view the facts and circumstances of the case and also following the above said judicial precedence, we are of the opinion that this is not a fit case to levy penalty under Section 271(1)(c) - See CIT v. S. Khader Khan Son (2013 (6) TMI 305 - SUPREME COURT ) - Decided in favour of assessee. - ITA No.1729/Mds/2014 - - - Dated:- 20-2-2015 - Shri A. Mohan Alankamony And Shri V. Durga Rao JJ. For the Appellant : Sh. T. Banusekar, CA For the Respondent : Shri A.V. Sreekanth, JCIT ORDER Per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act and in response to that notice, the assessee has filed a detailed reply dated 11.06.2012. The relevant portion of the letter filed by the assessee before the A.O., during the course of penalty proceedings, is extracted as under:- Page-1 para 1.3 On the date of survey itself, we have submitted that a) the nature of the trade was such that we would not always be in the position of purchasing the entire lot of goods from organized sectors. b) In some emergency cases, the circumstances would demand us to purchase the items from local unorganized vendors who would not maintain any details. c) Even though we have really transacted with the concerned parties, we would not be able to get co-operation from those vendors in the un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions were accepted during the course of assessment and the income was assessed by making addition of the said sum only. The A.O. after considering the explanation of the assessee, has come to a conclusion that the assessee has recorded a fictitious purchases in the books of account to reduce the income of the business with the purpose of evading the tax. The A.O. held that it is a clear case of concealment warranting penalty under Section 271(1)(c) of the Act. Accordingly, penalty was levied under Section 271(1)(c) of the Act. 3. On appeal, the Ld. CIT(Appeals) has confirmed the penalty levied by the A.O. 4. The assessee carried the matter in appeal before the Tribunal. 5. The Ld.counsel for the assessee has submitted that the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n credited in the books of accounts of both the concerns. Please produce your explanation for the same. In reply, he submitted that the purchase bills were obtained by us for 1% commission and the purchase invoices were obtained to reduce the profit of our business concern. As per our books of accounts, we have made entries as payments made for those purchases to parties. But, the amount has been drawn by our staff and brought back and credited into business books as cash. The above amounts has been utilised by us for investments in our individual name and family member s name. The assessee has offered an amount of ` 67,00,780/- as initial income for the relevant assessment year. Accordingly, the assessment was completed under Section 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted a detailed representation, the A.O. simply rejected without examining the same. In this connection, the Hon'ble Gujarat High Court in the case of National Textiles v. CIT (2001) (249 ITR 125) (Guj.) held that in order to justify the levy of penalty, there must be some material or circumstances leading to reasonable conclusion that the amount does represent the assessee s income and the circumstances must show that there was conscious concealment or act of furnishing of inaccurate particulars. The Explanation 1 to Section 271(1)(c) of the Act does not make the assessment order conclusive evidence that the amount assessed was in fact the income of the assessee. 8. In the present case, the assessment was based on the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
