2012 (7) TMI 489

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....ture do not survive for adjudication. The lone surviving ground No.1 is reproduced herein below for adjudication: "1. The Ld. CIT(A) has erred in law and on facts in deleting the penalty of Rs.3,79,340/- levied u/s. 271 (1) (c) of the Act."   3. The assessee is a Private Limited Company engaged in the business of hotels and resorts, filed its return of income declaring income to be nil. The case was selected for scrutiny under CASS and subsequently assessment order u/s 143(3) of the IT Act was passed on 01-12-2008 by the learned AO. During the assessment proceedings the learned AO observed that for the year under consideration the assessee had disclosed the following income from operation of hotel and resort business and other so....

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....expenses claimed by the appellant are disallowed and the addition made is confirmed by the first appellate authority does not automatically lead to levy of penalty. The finding given in the assessment proceedings for determining or computing the tax is conclusive and may be good evidence for assessment proceedings but for penalty proceedings it has to be proved that the disputed amount represented income and that the appellant has consciously and deliberately concealed its particulars of income. Penalty proceedings are separate and distinct from assessment proceedings and therefore the matter has to be considered afresh with a different angle in a case of penalty. In this case, the explanation offered by the appellant has not been proved to....

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....) (b) of the Act: The assessee had shown payment of interest on unsecured loan to Diptiben R. Patel for Rs.1,30,775/- @ 12%, Valvantbhai P. Patel for Rs.1,46,159/- @ 10.25% and Ramprasad P. Patel for Rs.5,78,437/- @ 9%. The assessee could not substantiate with proper explanation for payment of interest to Diptiben R. Patel and Valvantbhai P. Patel at higher rate than that of Ramprasad P. Patel. The learned AO accordingly disallowed the difference in interest payment of Rs.69,234/- u/s 40A(2) (b) of the Act. When the matter cropped up before the learned CIT(A), the learned AO was directed to delete the penalty. The learned CIT(A) observed as under: "As regards penalty on addition made on account of disallowance u/s 40A (2) (b) at Rs.69....

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.... accounts found that the assessee had made payment of Rs.10,000/- vide cheques No.163011 dated 24-11-2005 to Ramprasad P. Patel which was claimed as expenditure. The learned AO required Shri Ramprasad P. Patel to furnish his books of accounts u/s 133(6) of the Act. On examining his books it was found that this amount was not correspondingly disclosed. Therefore, the learned AO treated the payment to be unexplained expenditure and added to the income of the assessee. Subsequently, penalty proceedings were initiated and penalty was levied. The learned CIT(A) deleted the penalty since in the quantum appeal before the learned CIT(A) in order No.CIT(A)/AC-4/266/08-09 dated 18-01-2010 the addition of Rs.10,000/- made u/s 69 C of the Act was delet....