TMI Blog2016 (12) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... for payment thereof. No satisfactory explanation is given by the assessee for not making the payment of goods claimed to have been purchased from M/s Unifoil Enterprises. The only explanation given is that the goods supplied were of inferior quality but no evidence in this regard is produced by the assessee. On the other hand, the assessee claimed that the goods supplied by the assessee were exported by it and, therefore, the genuineness of the purchases cannot be doubted. Once the assessee claimed that the goods supplied by M/s Unifoil Enterprises are exported by it, it itself disproves the assessee’s contention that the goods were of inferior quality.On these facts, the only inference that can be drawn is that no goods were supplied by M/s Unifoil Enterprises because if the goods had actually been supplied, no creditor would forego his claim merely because the other party is disputing the quality of the goods supplied. Thus we uphold the levy of penalty under section 271(1)(c) of the Act. - Decided against assessee. - ITA No.5401/Del/2011 - - - Dated:- 8-11-2016 - SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER For The Appellant : Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eleted. 3. At the time of hearing before us, no arguments were advanced with reference to ground No.2. Learned counsel for the assessee as well as learned DR only argued with reference to the merit of the levy of the penalty levied u/s 271(1)(c) of the Act. Therefore, ground No.2 is treated as not pressed and rejected as such. 4. The facts relating to ground No.1 are that the assessee has claimed the purchase of goods of the value of ₹ 66,15,000/- from M/s Unifoil Enterprises. The bill of purchases was filed before the Assessing Officer but no other evidence regarding the genuineness of the transaction was filed before him. In the original assessment proceedings, the Assessing Officer made enquiries from M/s Unifoil Enterprises and, in reply dated 23rd January, 1998, M/s Unifoil Enterprises informed that it had not made any sales to the assessee. Therefore, the amount was added to the total income of the assessee. On appeal, learned CIT(A) sustained the addition and the assessee filed second appeal before the ITAT. The ITAT, in ITA No.2488/Del/2004 vide order dated 28th July, 2006, set aside the matter to the file of the Assessing Officer. In the set aside proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of fresh assessment, the AO got enquiries made at Mumbai where the creditor is located. Statement of Shri Prafful Parikh the proprietor, was recorded by the Assistant Director of Income-tax (Investigation) on oath on 26.12.2007. The sale bills furnished by the assessee were shown to him and he was added to confirm whether the bills were issued by him and whether any sale was made to the assessee in the period 1.4.1994 to 31.3.1995. It was deposed that the answer had already been given in letter dated 23.1.1998. It was reiterated again that no sale had been made to the assessee. On the basis of these facts, the AO concluded that the assessee did not make any purchase from M/s Unifoil Enterprises but made purchases from some other party, to whom the payment was made in cash. Therefore, the addition was made in respect of unexplained cash u/s 69. The ld.CIT(A) modified the findings of the AO. It was mentioned that during the appellate proceedings on being asked regarding the seizure of one of the consignments by the DRI, value of which was shown at ₹ 81,30,200/- but its actual value was put at ₹ 40,581/- only. In view of this fact, it was held that the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditor. This automatically leads to a conclusion that either the purchase was made from some other party in cash or the sale amount was inflated. Thus, the amount received by way of foreign exchange was not in respect of sale of goods. Accordingly, it is held that the AO was right in making addition of ₹ 66.15 lakhs u/s 69 and denying enhanced deduction u/s 80HHC of the Act. 5. The Assessing Officer, vide order dated 22nd March, 2010, levied penalty u/s 271(1)(c) of the Act amounting to ₹ 30,43,900/-. On appeal, learned CIT(A), vide order dated 30th September, 2011, sustained the penalty. Hence, this appeal by the assessee. 6. At the time of hearing before us, learned counsel for the assessee argued at length. At the outset, he stated that the issue is covered in favour of the assessee by the decision of ITAT in the case of Ruchi Developers in ITA No.3348/Ahd/2010. Copy of the order is produced before us. He further stated that the assessee made the sales of the goods purchased from M/s Unifoil Enterprises. The sales have been accepted by the Revenue and, therefore, there cannot be bogus purchases. Unless there is a genuine purchase, there cannot be any resultan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He also relied upon Explanation (1) clause (B) of Section 271(1)(c). He further relied upon the following decisions :- (i) CIT Vs. Harparshad and Company Ltd. [2010] 328 ITR 53 (Delhi). (ii) Mak Data P.Ltd. Vs. CIT [2013] 358 ITR 593 (SC). 8. Learned DR, therefore, stated that learned CIT(A) has rightly sustained the penalty. His order may be upheld. 9. We have carefully considered the arguments of both the sides and perused the material placed before us. The first contention of the learned counsel for the assessee was that the issue is squarely covered in assessee s favour by the decision of ITAT in the case of Ruchi Developers (supra). We have perused the order of the ITAT in the case of Ruchi Developers (supra) and we find that the facts in the case of the assessee and Ruchi Developers (supra) are different. In the case of Ruchi Developers (supra), the purchases from five parties were in dispute. However, in response to summons issued u/s 133(6) in the case of two parties, the same were returned unserved with the remark left . Other parties did not furnish any information. On these facts, the ITAT, though sustained the addition, but, cancelled the penalty. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - and the other ground was for claiming higher deduction u/s 80HHC. The ITAT rejected both the grounds. While rejecting the ground of higher deduction u/s 80HHC, the ITAT noticed that the assessee was even inflating the value of exported goods. In paragraph 5 at page 10, the ITAT has noticed that one export consignment of the assessee was seized by the DRI and it was found that the value of consignment was shown at ₹ 81,31,200/- but its actual value was only ₹ 40,581/-. Therefore, the contention of the learned counsel that it is entitled to higher deduction u/s 80HHC is without any merit and is already stood rejected by the ITAT. 12. Learned counsel for the assessee has also contended that this income has already been disclosed by the assessee in assessment year 2007-08 and therefore, no penalty can be levied in assessment year 1995-96. That in assessment year 1995-96, the addition is made by the Assessing Officer for unexplained cash u/s 69. It was the case of the Revenue that the assessee did not make any purchases from M/s Unifoil Enterprises but made the purchases in cash from some other party and therefore, for such unexplained cash, the addition was made u/s 69 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rroneous or false there is no question of inviting the penalty under section 271(1)(c). A mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. 15. That the facts of the assessee s case are altogether different. In this case, the details of purchases supplied by the assessee in its return are found to be incorrect, erroneous and false. Therefore, the above decision of Hon ble Apex Court would not support the case of the assessee. 16. The learned counsel has also relied upon the decision of ITAT, Jaipur Bench in the case of Chambal Fertilisers Chemicals Ltd. (supra). In that case, the penalty was levied in respect of the addition to the book profit. Such addition was sustained by the ITAT due to retrospective amendment in the Income-tax Act. On these facts, ITAT cancelled the penalty holding that The Tribunal upheld the additions keeping in view the retrospective amendment. In these facts and circumstances, the assessee cannot be penalized for claims which were not disallowable by any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal in the quantum proceedings that she did not render any services at all. The assessee had failed to offer any explanation in respect of the addition of ₹ 1,83,078 and it could be deemed to have concealed the particulars of income or furnished inaccurate particulars thereof, by virtue of this explanation. The Tribunal was not justified in deleting the penalty imposed by the Income-tax Officer under section 271(1)(c) of the Act. The findings given in assessment proceedings are relevant and have probative value. Where the assessee produces no fresh evidence or presents any additional or fresh circumstance in penalty proceedings, he would be deemed to have failed to discharge the onus placed on him and the levy of penalty could be justified. Even if there is no concealment of income or furnishing of inaccurate particulars, but on the basis thereof the claim which is made is ex facie bogus, it may still attract penalty provision. The Explanations appended to section 271(1)(c) of the Act entirely indicate the element of strict liability on the assessee for concealment or for giving inaccurate particulars while filing return. The object behind enactment of sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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