TMI Blog2020 (2) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... was accounted for in the books of account accordingly there can be no addition on account of unexplained investments. - Decided against revenue Penalty proceedings u/s.271 (1)(c) - Defective notice - HELD THAT:- AO should be clear as to which of the two limbs under which penalty is imposable, has been contravened or indicate that both have been contravened while initiating penalty proceedings. It cannot be that the initiation of penalty proceedings would be on both the limbs i.e. for furnishing inaccurate particulars of income or concealment of income or without any limbs of Section 271(1)(c) of the Act. AO has to mention specific limbs while imposing penalty u/s.271(1)(c) of the Act. The sanctity in terms of natural justice wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, the Ld. CIT(A) is right in holding that since an addition of ₹ 6,51,107/- has already been made in the original assessment order, no further addition is required to be made with respect to the shortage of stock. 3. Any other ground that may be raised at the time of hearing. 3. The brief facts of the case are that the assessment has been completed u/s.144 r.w.s.147 of the Income Tax Act, 1961 (hereinafter referred to as the Act‟). Survey u/s.133A of the Act was conducted at the premises of the assessee on 09.01. 2008. During the course of survey proceedings, it was found that the stock of the assessee was short by an amount of ₹ 54,25,897/-. It was noticed by the Assessing Officer that the assessee had s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls)‟s order are relevant for extraction and the same are as follows: 4.3. I have gone through the assessment order, grounds of appeal, submissions of the appellant and the remand report of the AO. I find that detailed inventory of stock was prepared during the course of survey proceedings. There was a shortage in the stock found at the premises to the tune of ₹ 54,25,897/-. The appellant was not able to explain the shortage in stock and accordingly, the AO came to the conclusion that the appellant must have sold this stock out of regular books of accounts. The AO accordingly, added 12% of the shortage of stock as profit earned outside the books of account during the course of original assessment. I find that where physica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed sale. 4.5. Considering the fact that during the course of original assessment addition of ₹ 6,61,107/- has already been made on account of gross profit earned on account of shortage of stock. Therefore, no further addition is required to be made by the AO with respect to this shortage of stock. Accordingly, the AO is directed to delete the addition on account of unexplained investment u/s.69 amounting to ₹ 60,77,044/-. As a result this ground of appeal is allowed. On perusal of the findings of the Ld. CIT(Appeals), it is found, the Ld. CIT(Appeals) observed that where physical stock found is less than what is reflected in the books of account, than there cannot any addition on account of unexplained investme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the fact that the Ld. CIT(A) order deleting the original addition has not been accepted by the Revenue and therefore, it is necessary to file appeal to keep the issue alive. 3. Any other ground that may be raised at the time of hearing. 8. The crux of the grievance of the Revenue in this appeal is against the deletion of penalty levied u/s.271(1)(c) of the Act by the Ld. CIT(Appeals). 9. The Ld. AR of the assessee submitted that in the assessment order at Para 3 while initiating penalty proceedings, no limb was specified by the Assessing Officer u/s.271(1)(c) of the Act and therefore, there was ambiguity in the mind of Assessing Officer with regard to the specific charge for which penalty has to be levied u/s.271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs u/s.271(1)(c) initiated separately. We have also perused the penalty order dated 29.09.2014 wherein the Assessing Officer imposed penalty u/s.271(1)(c) of the Act by mentioning that ..Therefore, considering the facts and circumstances, this is a fit case for levy of penalty u/s.271(1)(c) of the I.T. Act, 1961 . . The Assessing Officer has not mentioned any specific limb/charge for which he wishes to levy the penalty u/s.271(1)(c) of the Act. 11.1 From the above, it is evident that so far as assessment order as well as penalty order are concerned, no specific limb/charge has been mentioned by the Assessing Officer u/s.271(1)(c) of the Act i.e. concealment of income or furnishing of inaccurate particulars of income . T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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