TMI Blog2017 (7) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... case laws relied upon by the Ld. CIT(A) while upholding the levy of penalty are mainly related to the attraction of the Explanation to section 271(1)(c), which we find is not applicable in the present case, since there is no finding of concealment of income or furnishing of inaccurate particulars of income in the first place for which the assessee was required to give any explanation. The assessee had on the first occasion admitted that it had estimated the income of its ahatas, even before the AO could discover anything adverse to this effect, which in any case, we find he did not, even after aforesaid admittance by the assessee and surrender of income on this account or for that matter on account of expenses. In view of the above, we set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned year, return declaring total income of ₹ 53,55,480/- was filed by the assessee. The assessee is a wine contractor and had opened 122 liquor vends out of which only 41 ahatas had been maintained on which ahata income of ₹ 23,96,647/- had been credited to the trading account. During the course of assessment proceedings, the assessee admitted that the ahata income had been shown on estimate basis. The Assessing Officer further noted that the cash memos had not been issued by the salesman of the ahatas. On being asked to explain these discrepancies, the assessee offered an addition of ₹ 3 lacs on account of ahata income. Further, the Assessing Officer examined books of account alongwith original vouchers and noted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to be evaded. 5. The matter was carried in appeal before the Ld. CIT (Appeals) who upheld the penalty levied by stating that it was an admitted fact that the income shown by the assessee in his return was not correct and the additional income offered was not voluntary but based on specific findings of the Assessing Officer. The Ld. CIT (Appeals) held that evidently the assessee had tried to understate his taxable income to avoid payment of taxes. Further the Ld. CIT (Appeals) held that no justification or explanation was also offered by the assessee and, therefore, Explanation-1 to section 271(1)(c) of the Act was attracted. Thereafter relying on a number of case laws, the Ld. CIT (Appeals) held that it was a fit case for levy of pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pinpointing any defect and, therefore, there was no question of inviting any penalty under section 271(1)(c) of the Act. Reliance was placed on a number of case laws in this regard also. Thereafter Ld. counsel for the assessee pleaded that the additions made in quantum proceedings do not automatically lead to the levy of penalty. The Ld. counsel for the assessee also distinguished each and every case law relied upon by the Ld. CIT (Appeals) while upholding the levy of penalty. 8. The Ld. D.R., on the other hand, relied upon the order of the Ld. CIT (Appeals). 9. We have heard the rival contentions and perused the orders of the authorities below as also documents placed before us. 10. The undisputed facts of the present case, we fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the extent of ₹ 3 lacs which resulted in concealment of income to this extent. There is no iota of evidence on record to show that the income returned by the assessee was on the lower side. The addition also was made on adhoc basis without any shred of evidence in support of concealment of income to that extent. Clearly, the Assessing Officer accepted the contention of the assessee without making any further investigation either with regard to the income estimated or the income surrendered. Similar is the circumstance in the case of addition made on account of expenses disallowed amounting to ₹ 1,50,000/-. No specific defect has been pointed out in the vouchers of the assessee except for a general observation and as in the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer was highly excessive and it fixed the total income of the assessee at ₹ 1,50,000 for the year under appeal. It is, thus, clear that there was a difference of opinion as regards the estimate of the income of the assessee. Since the Assessing Officer and the Tribunal adopted different estimates in assessing the income of the assessee, it cannot be said that the assessee had concealed the particulars of his income so as to attract Clause (c) of Section 271(1) of the Act. There is not even an iota of evidence on the record to show that the income of the assessee during the year under appeal was more than the income returned by him. Additions in his income were made, as already observed, on estimate basis and that by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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