TaxTMI 
TaxTMI 
2010 (2) TMI 993
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....ed his return of income declaring the total income at Rs. 79,990. The Assessing Officer noted that gross profit declared by the assessee is better than that of the last year and, hence, book results were accepted. The assessee was asked to furnish ledger copy of account of some of the creditors. The Assessing Officer also called for information from M/s. Daya Synthetics (hereinafter referred to as "DS") and M/s. Daya Rayons Pvt. Ltd. (hereinafter referred to as "DRPL"). On receiving replies from these parties, the Assessing Officer noted the difference in the closing stock balance in accounts of these parties which is tabulated below: S. No. Name of the supplier As per copy of ledger accounts as maintained and f....
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.... made by the assessee. The assessee could not prove with material evidence that the amount of Rs. 3,24,832 was not the purchases/payment made by the assessee from/to M/s. Daya Rayons Pvt. Ltd. In view of the above, referred facts, and also keeping the assessee's inability to explain the same by not reflecting the purchases and payments in the regular books of account, the amount of Rs. 3,24,832 being the difference of unaccounted purchase/payment made to M/s. Daya Rayons Pvt. Ltd. during the year under review is made to the total income of the assessee by treating the same as unexplained expenditure under section 69C of the Income-tax Act. Penalty proceedings under section 271(1)(c) of the Act is initiated for furnishing inaccurate particul....
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....ealed. Given the prevailing provisions of the Act in section 271(1)(c) read with Explanation 1 below the said section, there was clearly a burden on the assessee to establish the genuineness of the explanation. The assessee failed to discharge this burden. Consequently, the presumption that he had concealed his income to such extent, was clearly available to be drawn by the Assessing Officer." The assessee is in further appeal before us. Learned counsel for the assessee submitted that the assessee has filed all the particulars of income correctly. The addition was made on account of sales shown by DRPL but there is no finding that corresponding purchases were made by the assessee or that the payment has been made by the assessee. The ....
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....ty is sustainable. Since the assessee surrendered the amount, the Assessing Officer was precluded from conducting any further enquiry to find out whether the explanation of the assessee is false or not. Therefore, in terms of Explanation 1 to section 271(1)(c) of the Income-tax Act, 1961, the penalty needs to be confirmed. We have carefully considered the relevant facts, arguments advanced by the parties and the case law cited. During the assessment proceedings, when the assessee was asked to explain the difference in accounts, the assessee clearly stated that he has not purchased goods from M/s. DRPL. The assessee also stated that the payment is also not made by the assessee. However, only to avoid the litigation, the assessee surren....