TaxTMI 
TaxTMI 
TaxTMI 
2010 (2) TMI 868
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....ances, completed the assessment at an income of Rs.59,91,870/- vide order dated 24.3.2006 passed u/s.143(3) of the Act. On appeal, the ld. CIT(A) allowed part relief to the assessee in allowing deduction u/s.10A Rs.3,30,93,368/-. While making the assessment the Assessing Officer also initiated penalty proceeding u/s.271(1)(c) of the Act. Accordingly the assessee was asked to show cause as to why penalty should not be imposed u/s.271(1)(c) of the Act. In response, it was interalia submitted by the assessee that the difference in assessed income and returned income is mainly on account of deduction u/s.10A of the Act against which assessee's appeal is pending. It was further submitted that no inaccurate particulars have been furnished by the assessee inasmuch as the particulars regarding deduction u/s.10A with computation have already been disclosed in the audited accounts filed alongwith the return of income. It was therefore submitted that there were no inaccurate particulars filed by the assessee. However, the Assessing Officer did not accept the assessee's explanation. The Assessing Officer while relying on certain judicial pronouncements wherein, according to the Assessing Offic....
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....nder:- "2. (a) Sale proceeds of Rs.4,05,130/- from residue being dust collected containing precious metals like gold etc. be considered as income from business and thus part of total turnover instead of income from other sources and deduction under section 10A be allowed thereon." 23. The facts of the case in brief are that the Assessing Officer during the course of assessment proceedings observed that the assessee in its return of income has shown to have received other income of Rs.9,18,088/- which is on account of sale of residue and miscellaneous income. On being questioned by the Assessing Officer it was submitted that these income are necessarily forming part of the business income. However, the Assessing Officer was of the opinion that this income from residue cannot be said to be derived from the export activity of the assessee for the purpose of claiming deduction under section 10A of the Act and treated the same as 'income from other sources'. In appeal, the CIT(A) upheld the action of the Assessing Officer. Aggrieved with such order of the CIT(A), the assessee is in appeal before us. 24. The learned counsel for the assessee submitted that sale of ....
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....ources, be treated as income from business and deduction u/s.10A be allowed thereon." 28. The facts of the case in brief are that miscellaneous income of Rs.9,18,088/- contained an amount of Rs.5,75,958/- which was received on account of cancellation of foreign exchange contract. The Assessing Officer treated the same as 'income from other sources' and did not allow benefit of deduction under section 10A of the I.T.Act. In appeal, the CIT(A) upheld the action of the Assessing Officer. Aggrieved with such order of the CIT(A), the assessee is in appeal before us. 29. The learned counsel for the assessee submitted that the assessee in order to hedge against any losses entered into these transactions and therefore, it cannot be treated as speculation transaction. Referring to the decision of the Tribunal in the case of ACIT vs. Mahendra Brothers in ITA Nos.1880/Mum/05 and 948/Mum/06 vide order dated 29.4.2009 for the assessment years 2001-02 and 2003-04 respectively, she submitted that the Tribunal in the said decision, following the decision of the Hon'ble High Court of Kolkata in the case of CIT vs. Soorajmull Nagarmull reported in 129 ITR 169(Bom) and the decision of....
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....009) 31 SOT 361(Mum.) She, therefore, submits that the penalty imposed by the Assessing Officer and sustained by the CIT(A) be deleted. 5. On the other hand the ld. DR while relying on the order of the Assessing Officer, the order of the CIT(A) also relied on the decision cited in the order of the Assessing Officer namely CIT vs. India Sea Foods (1976)105 ITR 708(Ker.), Nagin Chand Shiv Sahai vs. CIT 61 ITR 534, CIT vs. Gates Foam and Rubber Company (1973) 91 ITR 467(Ker.), and Union of India vs. Dharmendra Textile Processors(2008) 306 ITR 277(SC). She, therefore, submits that the penalty imposed by the Assessing Officer and sustained by the CIT(A) be upheld. 6. We have carefully considered the submissions of the rival parties and perused the material available on record. Penalty under section 271(1)(c) is a civil liability and the revenue is not required to prove willful concealment as held by the Hon'ble Supreme Court in case the of Union of India vs. Dharmendra Textiles and Processors (2008) 306 ITR 277(SC). However, each and every addition made in the assessment cannot automatically lead to levy of penalty for concealment of income. A case for imposition....
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....he firm agreed that a sum of Rs.7.00 lacs may be added as income derived from them from undisclosed sources subject to spread over between the Assessment Years 1964-65 to 1968-69 in proportionate to the turnover. The assessee also agreed under that settlement that minimum penalty prescribed under the Act may be levied against it for all those years. Pursuant to the said settlement the Assessing Officer finalised the assessment after adding a proportionate amount of Rs.2,84,727/- and disallowance of certain expenses. The net result of these additions was that in the place of loss of Rs.3,29,304/- shown in the return the assessee was found to have made a profit of Rs.18,460/-. On penalty proceeding, Inspecting Astt. Commissioner (the IAC) after over-ruling the objections of the assessee held that the minimum penalty leviable was Rs.2,84,727/- which amount in his view, represented the concealed income and accordingly imposed the said penalty. On appeal, the Tribunal set aside the order of the IAC imposing penalty. On reference following questions were referred to the Hon'ble High Court: "Whether, on the facts and in the circumstances of the case, the Income tax Appellate Tribu....
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....he facts of the case and penalty had to be imposed. Whereas in the case before us it is not the case of the Revenue that the assessee is a bogus concern or the claim of deduction u/s.10A made by assessee was found to be false or untrue or the assessee is not entitled to such deduction, therefore, the decision relied on by the ld. DR is distinguishable and not applicable to the facts of the present case. 11. In CIT vs. Haryana Warehousing Corporation (2009) 25 DTR 194 (PandH), relied on by the ld. Counsel for the assessee, it has been held that revenue having all along accepted assessee's claim of exemption under section 10(29) in respect of its entire income, similar claim for exemption made by the assessee was legitimate and bona fide and, therefore, penalty under section 271(1)(c) cannot be levied simply because the claim for exemption under section 10(29) has been disallowed in the relevant year on the income earned by the assessee from other sources except income derived by letting out of godowns and warehouses, more so when legal position at that time was still in flux and clear finding has been recorded by the Tribunal that the assessee has disclosed the entir....