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M/s Cera Sanitaryware Ltd. Versus Dy. Commissioner of Income Tax (OSD)

2015 (12) TMI 30 - ITAT AHMEDABAD

Penalty under section 271(1)(c) - Difference in stock as per bank statement vis-a-vis books of the assessee - Held that:- Revenue proceeds on the basis that difference between these two figures represents concealed income. That view is not entirely free from doubt as it is a ground reality that bank statements at times reflect inflated value of stocks so as to avail higher credit limits. There is nothing more than bank statement figure which is put against the assessee. Whatever be the merits of .....

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at "the resolution also passed after the financial year by the appellant and no copy of MOU dated 15.11.2003 has been furnished before any of the authorities below". The aspect regarding joint venture having been aborted was rejected on technical grounds. Such a loss, if it is indeed found to be on aborted joint venture, is generally allowable. It is also important to bear in mind that the AO did not even bother to given an opportunity of hearing because, as it appears from his observations extr .....

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t : Urvashi Sodhan For the Respondent : Shiva Sevak ORDER Per Pramod Kumar, AM 1. By way of this appeal, the assessee appellant has challenged correctness of learned CIT(A) s order dated 3rd February 2010, upholding penalty of ₹ 15,22,969/- imposed on the assessee under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2005-06. Grievance of the assessee, in substance, is that learned CIT(A), on the facts and in the circumstances of the case, erred in confirming the imp .....

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d by treating the above income as concealed income and the income for which inaccurate particulars are filed in respect of which no explanation has been given by the assessee. It was submitted by the assessee that the penalty proceedings be kept in abeyance till the disposal of related appeal by the Tribunal. This plea was rejected by the Assessing Officer. He thus proceeded to impose the penalty, and, while doing so, he also observed as follows:- "The submission of the assessee in respect .....

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own less value of stocks than the value stated in the accounts, and since the correct facts were in his knowledge, he ought to have set out the same in the income tax return. He further noted that the assessee had claimed write off of capital advances which were patently inadmissible. This claim of deduction was thus treated as furnishing of inaccurate particulars. As for the depreciation claim on display unit in Bangalore, since related penalty stands deleted, it is not really necessary to deal .....

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count of value or quantity. Appellant s counsel could not explain the difference on account of higher valuation of stock given to the bank. There are several decisions in which it is held that if the quantity disclosed to the bank is more, it amounts to unexplained stock and addition on account of the same is justified. Since appellant was not able to explain the difference in stock with proper explanation, the addition is deemed to be concealed income as per explanation 1 to section 271(1)(c) o .....

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sting business. In view of this, such loss can never be considered as business loss. Despite the fact that such loss had nothing to do with appellant's business, appellant still claimed this loss. This is nothing but furnishing of inaccurate particulars of income. Appellant is not able to justify its claim of business loss by any explanation and therefore this is also deemed concealment. The decisions relied upon by the appellant are not applicable to the facts of this case. Appellant claime .....

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n also. In the final result appeal is dismissed." 5. The assessee is aggrieved and is in further appeal before us. 6. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. 7. We find that so far as addition in respect of difference in value of stock in stock statement vis-a-vis accounts of the assessee is concerned, it proceeds on the basis that difference between these two figures represents .....

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