TaxTMI 
TaxTMI 
2006 (8) TMI 442
X X X X Extracts X X X X
X X X X Extracts X X X X
....ar. The assessee had declared her income for the impugned assessment year at Rs. 19,33,730. The assessment was completed under section 143(3) on a total income of Rs. 71,04,790. The Assessing Officer had made the following additions in the course of assessment : 1.Advance received Rs. 39,75,000 2.50% of expenditure on apparels & dresses Rs. 3,30,750 3.Depreciation on one premises Rs. 4,66,569 4.Office Repairs Rs. 75,515 5.Interest on Loan Rs. 1,35,630 6.Salary to mother and brother Rs. 1,13,000 7.Loss on sale of Car Rs. 74,600 3. In the light of the additions made in the course of assessment proceedings, the Assessing Officer initiated penalty proceedings under section 271(1)(c) on the ground tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Tribunal had granted only partial relief in respect of disallowance relating to apparels and dresses and salary paid to brother. He accordingly formed an opinion that the additions made by the Assessing Officer amounted to concealment vis-à-vis furnishing of inaccurate particulars and attracted penal provisions of law. He accordingly levied a penalty of Rs. 13 lakhs. 5. In first appeal, the CIT(A) found that there was no case of furnishing of inaccurate particulars as far as the advance amounts recorded by the assessee in her accounts were concerned. He found that even the Assessing Officer has admitted for the impugned assessment year 1998-99 that the assessee was following mercantile system of accounting. In mercantile system of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee had not accomplished her contractual obligations thereto. Therefore, the assessee thought that it was premature to treat certain receipts from producers as income. It was on the basis of the above proposition that certain amount of professional receipts were treated as advances. Even though the assessee has not offered those advances as income, there is no question of furnishing any inaccurate particulars as far as this issue is concerned. Neither was there any question of concealment. The Assessing Officer has no dispute on the details furnished by the assessee regarding the professional receipts she had earned during the previous year. There is no dispute on the question of receipts. The assessee has accounted the receipts in a proper ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....culars furnished by the assessee. An earlier view of the assessee was changed to a more popular view. This change of view cannot be the basis for imposing penalty under section 271(1)(c). If every addition made in the course of an assessment under section 143(3) is mechanically treated as the basis for imposing penalty, then there is no meaning for an assessment under section 143(3). An assessment under section 143(3) presupposes an assessment after enquiries. It is quite natural that there will be a number of adjustments either by way of additions or by way of disallowances. In certain cases, the assessee himself may come forward and offer some additional amount for assessment on the basis of the impression gathered at the time of assessme....