TMI Blog2018 (9) TMI 2061X X X X Extracts X X X X X X X X Extracts X X X X ..... uent levy of penalty. Therefore, quantification of suppressed turnover is not based on mere estimation. It is only based on Form 26AS related to the assessee. Consequent to the quantification of the suppressed turnover, profit on it was estimated. The assessee has not been able to substantiate the reason for not disclosing the correct turnover to the Department - there was actual suppression of turnover by the assessee which resulted in concealment of income of the assessee - estimation of income was not challenged by the assessee before the higher forum which means that the assessee has admitted concealment of income. Hence, levy of penalty under section 271(1)(c) of the Act is justified. However, in our opinion, levy of penalty at 200% ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal turnover despite repeated requests. Moreover, the assessee did not furnish one bank account statement relating to the business where the business receipts were credited. Thus, the total income of the assessee was assessed at 12% of the total turnover at ₹ 27,38,409/- and after giving credit for unclaimed TDS of ₹ 4,63,824/- worked out the balance tax payable at ₹ 5,88,800/-. The assessee paid the tax and did not file any appeal against the department. Subsequently, penalty proceedings were also initiated u/s. 271(1)(c) r.w.s. 274 of the Act. However, the assessee failed to furnish any explanation even during the penalty proceedings. Hence, the tax sought to be evaded was determined at ₹ 10,25,850/- and the amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the assessee had not offered the correct contract receipts for the year. The Ld. DR submitted that as per ITS details and Form 26AS, it was found that the assessee was in receipt of ₹ 2,26,39,040/- as contract receipt and there was an omission of income to the tune of ₹ 1,40,49,048/- Further, it was submitted that the provision of Explanation 1 to section 271(1)(c) is applicable to the assessee s case since the assessee had furnished inaccurate particulars of its income for which the assessee had no satisfactory explanation. 6. The Ld. AR submitted that the CIT(A) s findings showed that the assessment was based on a estimate basis. According to the Ld. AR when the proposal to estimate income at 12%, which is 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... against returned 31/2% which was accepted by the assessee. It was submitted that the Kerala High court opined that in the case of estimate income, there is no positive income even in a case of suppression noticed by the Department and this view taken by the Kerala High Court is echoed in following decisions of the other High Courts and Tribunal: i) Navjivan Oilk Mills vs. CIT reported in 252 ITR 417 (Gujarat) ii) CIT vs. P. Rojes reported in 31 taxman.com 253 (Madras) iii) California Design Construction INC India vs. ITO reported in 156 ITD 919 (ITAT, Chandigarh Bench) . 6.1 In view of the facts and circumstances of the case, the Ld. AR prayed that the order of the CIT(A) should not be disturbed. 7. We have heard the rival ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of income of the assessee. The estimation of income was not challenged by the assessee before the higher forum which means that the assessee has admitted concealment of income. Hence, levy of penalty under section 271(1)(c) of the Act is justified. However, in our opinion, levy of penalty at 200% of the tax sought to be evaded is not proper and not reasonable. It is very excessive. Accordingly, we modify the penalty order of the Assessing Officer and sustain the penalty at 100% of the tax sought to be evaded which works out to ₹ 10,25,850/-. This ground of appeal of the Revenue is partly allowed. 8. In the result, the appeal filed by the Revenue is partly allowed. Order pronounced in the open Court on this 25th September, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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