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TMI Blog2015 (12) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 24.3.2014, Annexure A.9 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B' in ITA No.1062/CHD/2012, for the assessment year 2002-03, claiming following substantial question of law:- "Whether on the facts and circumstances of the case, the Tribunal order is unreasonable, while justifying the levy of penalty under section 271(1)(c) on estimated brokerage income and qua non discharge of burden under section 271(1)(c) Explanation 1 w.e.f 1.4.1976 in accordance with National Textiles vs. CIT (2001) ITR 125 (Gujarat)?" 3. A few facts relevant for the decision of the controversy involved as narrated in ITA No.386 of 2014 may be noticed. The appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(c) of the Act was issued to the appellant on 3.3.2010 and in response to the notice, the appellant on 22.3.2010 prayed to keep the penalty proceedings pending till the decision of the Tribunal. On 31.3.2010, Annexure A.5, the Assessing Officer imposed penalty of Rs. 27,95,170/- under section 271(1)(c) of the Act for concealment and furnishing inaccurate particulars of income. Vide quantum order dated 29.4.2010, Annexure A.6, the Tribunal partly allowed the appellant's appeal and dismissed the revenue's appeal. Aggrieved by the quantum order of the Tribunal dated 29.4.2010, the revenue filed appeal before this court as ITA No.36 of 2011 and against the same quantum order of the Tribunal, the appellant filed cross appeal i.e. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration within the time allowed under section 139 of the Act. Survey operations were carried out under Section 133A of the Act at the office premises of the appellant who was engaged in giving accommodation/book entries on account of long/short term capital gains/gifts/loans by charging commission. The modus operandi was that cash received from different beneficiaries was deposited in various bank accounts of the appellant, his family members and other share brokers from where cheques were issued in favour of clients for bogus capital gains/share profits/gifts etc. The appellant in his statement recorded during the course of survey operation on 15.6.2004 admitted to have issued cheques/drafts for bogus profits in return of the cash p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of each case. In this regard let us consider the case laws relied on by the learned counsel for the assessee. We may observe that the learned counsel for the assessee has relied on many judgments, therefore,we are discussing them in short. Firstly we consider the decisions of Tribunal relied on by the learned counsel for the assessee. i) First decision relied on is in case of Aggarwal Construction Co. vs. ACIT, ITA No.843/Chd/2009. In this case the assessee has declared net profit at 10% which was ultimately estimated at 12%. Penalty was levied under section 271(1)(c) and the matter travelled to the Tribunal which observed that it was mainly a case of substitution of one estimate by another, therefore penalty consequences were not attrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (supra). In that case also a survey was conducted and certain business income was unearthed during survey for various years. Ultimately profit was estimated at 1.5%. Ultimately even the Tribunal confirmed the penalty in respect of assessment year 1988-89 and 2001-02. However, penalty was deleted for assessment year 2003-04 to 2005-06 because the assessee still had not filed the return. Other decisions relied on by the learned counsel for the assessee are of similar pattern. 18. Now let us consider the decisions of various Hon'ble High Courts relied on by the learned counsel for the assessee. i) CIT vs. Metal Products of India (supra). The assessee filed return of income for Rs. 52416/- on the basis of books of account maintained. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that concealment was not proved, therefore penalty could not be imposed. iv)Next case relied on by the learned counsel for the assessee is that of CIT vs. Valimkbhai H.Patel (supra). In this case the assessee has filed return of income declaring loss of Rs. 337414/-. Income was assessed at Rs. 294480/-. The addition was mainly on account of loss of salt for which a certificate from Deputy Commissioner was filed. However, the Assessing Officer accepted the loss but reduced the value of the salt from Rs. 118 to Rs. 80. Penalty was deleted mainly by following the earlier decision of Hon'ble Punjab and Haryana High Court in case of CIT vs. Prithipal Singh and co. 183 ITR 69 wherein it was observed that mere reduction in loss would not lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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