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M/s. Om Muruga Earth Movers Versus The Income Tax Officer, Ward I (1) , Pollachi.

Penalty levied under section 271(1)(c) - Held that:- It is a clear case of concealment of income. The assessee has admitted an income of ₹.1,46,232/- in the return filed on 15.09.2009 for the assessment year 2007-08. But the profit and loss account shows the income at ₹.2,17,794/-. In view of the above, the submission of the ld. Counsel for the assessee that the assessee has filed the return in time for the assessment year 2007-08 and no penalty should be levied is not acceptable sin .....

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in time or not does not arise and moreover, penalty under section 271(1)(c) of the Act was levied by the Assessing Officer for a clear case of concealment of income and furnishing of inaccurate particulars of income. Under the above facts and circumstances, the penalty levied under section 271(1)(c) and restricted to the extent of 100% by the ld. CIT(A) for the assessment year 2007-08 stands confirmed - Decided against assessee. - I.T.A.Nos.545 and 546/Mds/2014 - Dated:- 29-2-2016 - Shri Chandr .....

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only effective ground raised in both the appeals of the assessee is with regard to confirmation of penalty levied under section 271(1)(c) of the Act. 2. Brief facts of the case are that the assessee AOP has filed its return of income for the assessment year 2006-07 belatedly on 15.09.2009 admitting a total income of ₹.1,46,232/-. Since this is a survey related case, a notice under section 148 was issued on 15.12.2009, in response to which, Shri S.V. Natarajan, one of the AOPs appeared on .....

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vey, some diaries containing noting by Shri S.V. Natarajan for having let out JCB on hire and vouchers relating to receipts of JCB hire charges for the months of November 2006 and December 2006, an expenditure statement for the respective months, etc. were inter alia found and impounded. A sworn statement was also recorded from Shri S. V. Natarajan based on the findings in the above dairies and documents. In the statement, Shri S.V. Natarajan had admitted inter alia that the business of letting .....

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come. However, Shri S.V. Natarajan did not file his 'Individual' return. Instead, Shri S.V. Natarajan has filed a return in the status of AOP in the name and style of ' Om Muruga Earth Movers'. 4. During the course of assessment proceedings, the assessee AOP furnished a statement of profit & loss account, Balance Sheet and submitted a letter requesting to consider its claim for depreciation and bank interest and other additional expenses. It was observed in return of income f .....

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his regard, the assessee has filed the original purchase bill in respect of JCB in the name of one Shri Ramasamy, one of the AOPs. The assessee has also furnished copy of Corporation Bank account statement in support of its claim for payment of interest towards the loan obtained for the purchase of JCB. Considering the above and also that the payment of interest towards bank loan and the claim of depreciation was not taken into account at the time of survey while arriving at ₹.7,50.000/- p .....

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filed any reply/ submission to the penalty notice. However, the assessee appeared for the hearing on 13.06.2011 and simply requested to drop the penalty proceedings without offering any explanation or written submission and the assessee was also asked to do so. Inspite of the above, the assessee has not furnished any explanation/submission. Therefore, the Assessing Officer levied penalty @ 200% of tax sought to be evaded. Similarly, for the assessment year 2007-08 also the Assessing Officer lev .....

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termined the business income on the basis of estimates and therefore, penalty under section 271(1)(c) of the Act is not warranted. 9. On the other hand, the ld. DR strongly supported the order passed by the ld. CIT(A). 10. We have heard both sides, perused the materials on record and gone through the orders of authorities below. In this case, the assessee M/s. Om Muruga Earth Movers was neither a registered firm nor return of income has been filed voluntarily or one of the assessee AOP Shri S.V. .....

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M/s. Raj & Co. on 12.01.2007 in which Shri S.V. Natarajan [one of the assessee AOPs] is the Managing Director, some diaries containing noting by Shri S.V. Natarajan for having let out the JCB on hire and vouchers relating to receipts of JCB hire charges for the months of November 2006 and December 2006, an expenditure statement for the respective months, etc. were inter alia found and impounded. A sworn statement was also recorded from Shri S. V. Natarajan based on the findings in the above .....

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o file the return in his individual capacity, he has not filed the return of income instead, he filed the return in the status of AOP on 15.09.2009 for the assessment years 2006-07 and 2007-08 admitting income of ₹.1,46,232/-, whereas, in the profit and loss account filed at the time of scrutiny, the income was offered at ₹.1,67,396/- for the assessment year 2006-07 and ₹ 2,17,794/- for the assessment year 2007- 08. Even after survey, the assessee has not immediately filed its .....

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ssessee on 31.12.2010. The assessee has not filed any reply to the penalty notice, but appeared on 13.06.2011 and simply requested to drop the penalty proceedings, without offering any explanation. Accordingly, the Assessing Officer levied penalty under section 271(1)(c) of the Act @ 200% and on appeal, the ld. CIT(A) restricted the penalty @ 100%. 12. In this case, though the assessee was engaged in the JCB hire business, no return of income was filed until a survey was conducted in the busines .....

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dividual capacity. However, he has not filed the return, but filed the return in the status of AOP on 15.09.2009. If the survey under section 133A of the Act was not conducted, the business of the assessee and his income would not have come into light. In the return filed on 15.09.2009 for both the assessment years, the assessee has admitted income of ₹.1,46,232/- but at the time of scrutiny, in the profit and loss account, the assessee has offered income at ₹.1,67,396/- for the asse .....

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o penalty can be levied is not acceptable. Because, first of all, the assessee has not discharged its duty to file its return of income within the due date for filing under Income Tax Act and secondly, based on the invoices found for the months of November and December, 2006 and corresponding expenditure impounded during the course of survey, a net income of ₹.7,50,000/- per annum was worked out from the JCB business. We are not in a position to hold that the estimation of income is not co .....

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ncealed income. Under the above facts and circumstances, we find that the ld. CIT(A) has rightly restricted the penalty under section 271(1)(c) of the Act at 100% against 200% levied by the Assessing Officer. Thus, we find no infirmity in the order passed by the ld. CIT(A). Accordingly, the appeal filed by the assessee for the assessment year 2006-07 is dismissed. 14. For the assessment year 2007-08, the ld. Counsel for the assessee has submitted that the return of income has been filed in time .....

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.12.2009. Shri S.V. Natarajan, one of the AOPs appeared on 18.01.2010 and requested to treat the return filed on 15.09.2009 as proper compliance to the notice issued under section 148 of the Act. Subsequently, a notice under section 143(2) of the Act was issued on 14.10.2010. In the return of income, the assessee has admitted an income of ₹.1,46,232/-, whereas, on perusal of the Profit and Loss account, at the time of scrutiny, the Assessing Officer found that the assessee has shown the in .....

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