TMI Blog2016 (5) TMI 922X X X X Extracts X X X X X X X X Extracts X X X X ..... dom vanish and the same is indicated in terms of discrepancies pointed out by the AO in the books of accounts and the Excise Department has also reported evasion of tax.” These observations of the AO are based upon conjecture and surmises without having any cogent material on record which have been confirmed by the CIT (A) in mechanical manner and then the said order has been blindly adopted by the AO to pass the penalty order. Merely on the basis of the fact that the Excise Department has conducted raid on the business premises of the assessee and detected tax evasion, the assessment order cannot be passed that too on the basis of estimated turnover and estimated gross profit in the face of books of accounts which have never been rejected by the revenue authorities - Decided in favour of assessee - ITA No.1146/Del./2015 - - - Dated:- 12-4-2016 - SHRI S.V. MEHROTRA, ACCOUNTANT MEMBER and SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assessee : Shri Prem Prakash and Aasish Agarwal, Advocates For The Revenue : Shri V.R. Sonbhadra, Senior DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, M/s. Tayal Concast (P.) Ltd. (hereinafter referred to as the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (iv) On account of late payment of UPFC interest ₹ 2,59,152/- Then, the assessee carried the matter before the ld. CIT (A) who has extended the relief of ₹ 2,03,481/- on account of unexplained unsecured loans and sundry creditors, however, affirmed the remaining addition and directed to initiate the penalty proceedings u/s 271(1)(c) of the Act for the AY 2005-06. On the basis of evidence which has come on record during the assessment proceedings, the AO came to the conclusion that assessee has furnished inaccurate particulars of income and thereby imposed a penalty of ₹ 6,00,000/- u/s 271(1)(c) of the Act. 4. The assessee carried the matter before the ld. CIT (A) who has affirmed the penalty order. Feeling aggrieved, the assessee has come up before the Tribunal. 5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 6. The ld. AR for the assessee challenging the impugned order contended inter alia that no findings have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o impose penalty of ₹ 6,00,000/- without any explanation; (v) that the AO as well as ld. CIT (A) are not clear enough as to whether the penalty has been imposed/ affirmed for furnishing inaccurate particulars of income or for having concealed the particulars of income, particularly when the entire exercise is on the basis of estimated turnover and estimated gross profit, that too without rejecting the books of accounts. One cannot be assumed to have furnished inaccurate particulars, when he has already concealed the particulars of income; (vi) that the AO as well as the ld. CIT (A) proceeded to impose the penalty on the ground that there are glaring discrepancies in the books of accounts of the assessee. But we are of the considered view that again on the basis of mere discrepancies in the account books, particularly when books of accounts have not been rejected the penalty cannot be imposed; (vii) that when the books of accounts have been maintained, produced before AO who has simply found the discrepancies but he has not found sufficient reason to reject the books of accounts, the estimated turnover and estimate gross profit cannot be taken into consideration to im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (xii) that when the penalty has been imposed merely on the basis of estimated turnover as well as estimated gross profit, necessary ingredients of section 271(1)(c) that, concealment of particulars of income and furnishing of inaccurate particulars of income are missing and as such, the AO is precluded from imposing penalty; (xiii) that CIT (A) in its order dated 07.01.2013 has not made any independent enquiry or called any remand report if the assessee has actually indulged in making sales and purchases outside the books of accounts but blindly followed the assessment order passed by the AO; (xiv) that the AO has also proceeded to pass the assessment order with biased mind that the raid was conducted on the premises of the assessee on1 2.09.2004 and FIR was registered regarding seizure of three trucks of spurious cement. But, merely on the basis of registration of FIR, no order to the prejudice to the assessee can be passed that he had been making sales and purchases outside the books of accounts. Undisputedly, no such material has been brought on record by the AO nor called upon by the CIT (A) during appellate proceedings, if the allegations levelled in the said FIR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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