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M/s. Meta Tiles Private Limited Versus Income Tax Officer 1 (2) 3, Mumbai

2016 (2) TMI 166 - ITAT MUMBAI

Penalty u/s 271(1)(c) - addition made u/s 41(1)(a) - Held that:- There was no cessation of trading liability during the year and the assessee had even denied the difference in its books of accounts and the reasons of difference were explained through reconciliation and also filed the copies of the bills of the said party and details of vouchers qua payments made. In our opinion the case of the assessee is squarely covered by decision of COMMISSIONER OF INCOME TAX Versus BHOGILAL RAMJIBHAI ATARA .....

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of Commissioner of Income Tax (Appeals)-2, Mumbai (hereinafter called as the CIT(A) ) for assessment year 2003-04.The assessee has raised following grounds of appeal: ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW 1. The learned CIT (A) erred in confirming the Penalty u/s 271(1)(c) of ₹ 45633/- on the facts and circumstances of the case. 2. The learned CIT (A) erred in not appreciating the fact that addition of ₹ 124170/- made by the AO u/s.41(1)(a) was solely on account of di .....

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. The only issue raised in all the grounds of appeal relates to confirmation of penalty u/s 271(1)(c) of ₹ 45,633/- by CIT(A) for the addition made u/s 41(1)(a) to the tune of ₹ 1,24,170/-. The brief facts of the case are that the assessment was framed at a loss of ₹ 1,06,890/- vide order dated 08.02.2006 against returned loss of ₹ 3,85,938/- by making various additions inter alia of ₹ 1,24,170/- on account of unexplained expenses/cessation of liability. The penalty .....

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31.03.2003 and not ₹ 1,53,119/- as claimed by the assessee and added ₹ 1,24,170/- u/s 41(1)(a) of the Act by holding that difference between the confirmation from M/s. Punit Agency and in the books of assessee represented the cessation of liability and hence considered as the income in the hands of the assessee. The ld. AO imposed the penalty of ₹ 45,633/- on the ground that the assessee had concealed particulars of its income by overstating its liability. 3. The ld. CIT(A) co .....

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ment of the Authorized Representative that this income has been subsequently, offered for taxation in the A.Y. 2006-07 is without any merit and the same is not acceptable. Since the appellant company has furnished inaccurate particulars of income, therefore, it is liable to pay penalty u/s 271(1)(c) of the Income-Tax Act. I find no reason to interfere with the penalty order passed by the Assessing Officer in this case and accordingly, penalty imposed by the Assessing Officer is confirmed. 4. The .....

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pect of remission or cessation of liability and further argued that the penalty could not even be imposed in that case. The ld. AR defended the case of the assessee while relying on the decision of the Gujrat High Court in case of CIT Vs. Bhogilal Ramjibhai Atara 43 taxmann.com55(Gujrat). The ld. DR relied on the order of the authorities below. 5. We have heard the rival submissions and perused the material on record. On the basis of the facts before us, we find that there was a difference of &# .....

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d difference was only because of wrong entries in the book of M/S Punit Agency Pvt Ltd and tried to explain the same through a reconciliation statement listing out various reasons of differences which was filed before the AO as well as before the CIT(A) which is placed on page no.20 of the paper book in which the entire difference was explained. The assessee also filed the copies of the bills issued by of M/s. Punit Agency Private Ltd. which is placed at pg no. 21-23 of the paper book. The asses .....

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also find support from the case of CIT Vs. Bhogilal Ramjibhai Atara(supra) wherein the Hon ble Gujrat High Court has held as under:- Section 41(1) would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statue being fulfilled. Additionally such cessation or remission has to be during the previous year relevant to the assessment year under consideration. In the instant case, both elements are mis .....

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