1995 (6) TMI 69

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....th Oct., 1981 to 15th Nov., 1982, the assessee filed return on 27th July, 1983 declaring income of Rs. 83,049. The assessee had disclosed yield of Dal at 78.15%, which was considered low by the Assessing Officer and an addition of Rs. 5,000 was made to the income returned in the assessment order dt. 15th Feb., 1985 under s. 143(3) of the Act. In first appeal, however, the assessment was set aside by the AAC to be framed de novo after making proper scrutiny in respect of yield of Dal. In the fresh assessment order dt. 8th March, 1988, the Assessing Officer made an addition of Rs. 34,070 on account of low yield and initiated penalty proceedings by issue of show cause notice. 3. Meanwhile the assessee challenged the addition which was susta....

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.... depends on various factors, like, the time of purchase and sale, age of machines, water moisture in Dal, etc. It was further submitted that in the year of account, the assessee had obtained a higher quality output of Dal by getting lesser yield as compared to the earlier years on account of the fact that lesser amount of water was sprinkled during the processing of Dal. The contention of the assessee did not find favour with the CIT(A), who sustained the minimum penalty leviable at Rs. 21,967 and allowed a relief of Rs. 3,033. Dissatisfied, the assessee is in further appeal before us. 5. Shri S.C. Goyal, the learned advocate for the assessee invited our attention to the explanation submitted during the penalty proceedings, a copy of whi....

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....se and, therefore, the imposition of penalty is not justified at all. In support of his argument, Shri Goyal, the learned advocate for the assessee, referred to the following decisions: (i) Nuchem Ltd. vs. Dy. CIT (1994) 49 ITD 441 (Del); (ii) V. Ramachandra Rao vs. ITO (1990) 36 TTJ (Hyd) 300 : (1990) 33 ITD 650 (Hyd). Shri Susheel Khandelwal, the learned Departmental Representative, on the other hand, strongly supported the order of the CIT(A). He highlighted the point that the assessee's explanation for declaring low yield has not been accepted and finally addition to the extent of Rs. 19,038 stands confirmed at the level of the Tribunal. The Revenue was, therefore, justified in imposing penalty and the order of the CIT(A) does ....