TaxTMI 
TaxTMI 
2010 (3) TMI 804
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.... as March 22, 2005. The books of account could not be produced due to some problems faced by his auditors, but the balance-sheet was filed. On the basis of this balance-sheet a cash flow statement was prepared for the relevant year. It was noticed from the cash flow statement that there was out flow of Rs. 8,707. Further inquiries revealed that most of the credits were in cash, and there were many other discrepancies. A sum of Rs. 15 lakhs was received otherwise than by a cheque or draft. A difference of Rs. 2,62,094 was noticed between the sales of Rs. 13,99,000 and debtors shown for the period ended March 31, 2002. A perusal of account copies of M/s. FHT revealed that the closing debit balance as on March 31, 2002 differed with the purported balance-sheet as on March 31, 2002. The account copies of FHT showed no sales during the year but an amount of Rs. 13,99,000 has been shown in the purported profit and loss account. Therefore, the assessee was show caused to explain as to when the sales were effected and was asked to reconcile cash debit vis-a-vis non-realisation of any debts. In reply, after explaining the reasons called for, he has made a surrender of Rs. 16,08,122 in the a....
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....come for which only penalty under section 271(1)(c) of the Act can be imposed. Now, the Revenue is aggrieved. 3. We have considered the rival submissions and the material available on record. It was argued by the learned Departmental representative that the assessee did not voluntarily offer the additional income because the offer was made only when he was cornered to explain various discrepancies which were actually detected by the Assessing Officer and that the offer was step by step when the assessee was confronted with the discrepancies one after the other. According to him, the assessee was forced to accept the addition as the evidence gathered was based on facts. The learned Departmental representative also placed reliance on the decision of K.C. Builders v. Asstt. CIT [2004] 265 ITR 562 (SC) in support of his contention and also on the decision of the hon'ble Supreme Court in the case of Union of India v. Dharamendra Textile Processors [2008] 306 ITR 277 (SC). 4. Per contra, the learned authorised representative, after fully relying on the appellate order, has further strengthened his arguments with the support of the decisions relied on by the learned Commissioner of Inco....
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....ubstantiate the same and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him ; then in any of the above circumstances, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of section 271(1) be deemed to represent the income of which particulars have been concealed. 7. This section is very clear. The presumption is regarding concealment of facts of the given case. But before we examine that we may also mention that any addition to declared income would not automatically entail levy of penalty. A penalty under this section is not automatic. The proceedings under section 271(1)(c) of the Act are entirely different to the one of assessment proceedings. The Assessing Officer is bound to show cause the assessee separately for this purpose and after calling for and considering the explanations so tendered in the light of the provisions of section 271(1)(c) of the Act only he can levy a penalty, otherwise not. In this case, the assessee, after explaining the queries raised by the Assessing ....
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....a, whom the assessee had left and lived separately throughout the previous year relevant to the assessment year 2002-03 were in a position to give details in support of the return of income filed. In fact the assessee met with an accident with head injury in May 2002 and was hospitalised for more than 3 months and again just before the assessment proceedings had met with an accident that has really affected his recollecting abilities. But soon on realising that there could be some mistake in the return of income filed, he volunteered to co-operate with the Department in collecting necessary details from banks and other institutions. A revised balance-sheet and profit and loss account was also filed covering all credits in the bank account. The deficit that arose as a result was offered voluntarily for taxation on March 8, 2005 to the extent of Rs. 16,08,122. This again was revised on March 17, 2005 to accommodate the chit contribution made to M/s. Shriram Chits Tamilnadu P. Ltd. of Rs. 2,46,642 and finally an amount of Rs.18,54,764 was offered for taxation by the assessee agreeing to pay the tax thereof. Thus the assessee amidst all problems like non-availability of books of acc....