TMI Blog2016 (4) TMI 859X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 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 Chandra Poojari, Accountant Member AND Shri Duvvuru RL Reddy, Judicial Member For The Appellant : Shri T. Banusekar, C.A. For The Respondent : Dr. B. Nischal, JCIT ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: Both the appeals filed by the same assessee are directed against the separate orders of the ld. Commissioner of Income Tax (Appeals) I, Coimbatore, dated 16.01.2014 relevant to the assessment years 2006-07 and 2007-08 passed under section 271(1)(c) of the Income Tax Act, 1961 [ Act in short]. The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was offered at ₹.1,67,396/-. However, as the assessee was not able to prove the expenses claimed in the Profit Loss Account, the net JCB income estimated at the time of survey, i.e. ₹.7,50,000/- per annum was adopted in the assessment. In the Profit Loss Account filed, the assessee had claimed depreciation at the rate of 30%. In this 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/- per annum, the same was considered in the assessment and the taxable income was worked out at ₹.5,14,640/-. Accordingly, the assessment was completed under section 143(3) r.w.s. 147 of the Act on 31.12.2010 and a total demand of ₹.2,07,559/- was raised. 5. Subsequently, penalty Proceedings under section 271(1)(c) Act were initiated at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 JCB was done along with 2 others in the name and style of M/s Om Muruga Earth Movers. Based on the invoices found for the months of November 2006 and December 2006 and corresponding expenditure, a net income of ₹.7,50,000/- per annum was worked out from the JCB business in the absence of filing return of income admitting taxable income voluntarily. When the assessee was asked to 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 271(1)(c) of the Act. 13. The contention of the ld. Counsel for the assessee that since the income of the assessee was determined on the basis of estimates, no 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 correct and it could be fit for levy of penalty as held by the Hon ble Gujarat High Court in the case of A.M. Shah Vs. CIT [1999] 238 ITR 415, wherein it was held that income was estimated on the basis of gross profit, the penalty could not be deleted. Further the Hon ble Madras High Court in the case of CIT Vs. S. Krishnaswamy Sons [1996] 219 ITR 157, wherein it was held that it cannot be said that whenever there is an estimated income, there is no scope for holding that the assessee has concealed income. Under the above fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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