TMI Blog2012 (5) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ation:- 1(a) On the facts, in the circumstances of the case and law, the learned CIT(A) erred in law and on facts in deleting penalty U/s. 271 (1) ( c ) amounting to ₹ 8,84,000/- without considering the decision of the Hon. Supreme Court in the case of Dharmendra Textiles 306 ITR 277 (SC), according to which, there is no onus upon the Department to establish mens rea . 3. Brief facts:- The assessee is a Private Limited Company engaged in the business of providing design, engineering, project management, installation, commissioning and after sales services. During the course of assessment proceedings the learned AO noted that the gross profit margin of the assessee Company had fallen drastically from 41.87% to 23.96%. Since i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgin of 3 other companies which were considered by the assessee has been ignored on the ground that the same are not comparable. Judicial opinion is quite categorical that for the purpose of imposing penalty u/s 27 (1) (c) it is necessary that either the assessee should have withheld information from the department or furnished inaccurate particulars of its income. Where all the facts were disclosed and addition has resulted due to different views being taken by the tax authority and the assessee on the same facts, it could not be said to amount to concealment of income/furnishing inaccurate particulars of income. Accordingly, I am of the opinion that the AO was not justified in imposing the penalty of ₹ 8,84,000/-. In this view of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he method of computing arms length price as per the provisions of the Act. The basic reason for the short fall of profit was due to increase in cost of raw materials purchased. The assessee had purchased raw materials from associated enterprises only to the extent of ₹ 4.60 Crores out of total purchases of ₹ 16.24 Crores. Thus, the assessee had purchased from the associated enterprises to the extent of 28.3% out of its total purchases of raw materials. From these facts it is apparent that the assessees has not concealed any particulars of income or have furnished inaccurate particulars. Therefore we do not have any hesitation to uphold the decision of the Ld.CIT(A). It is ordered accordingly. 7. In the result, appeal of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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