2013 (7) TMI 67

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.... the Income Tax Appellate Tribunal was right in upholding the order of the Commissioner of Income Tax (Appeals), cancelling the penalty levied under Section 271(1)(c)? " The Revenue seeks to support the levy of penalty, particularly on the issue relating to the addition towards foreman's commission and dividend received by the company, that by keeping the foreman's commission and foreman's dividend under suspense account, the assessee had furnished inaccurate particulars of income, leading to concealment of income. 2. It is seen from the order of the first Appellate Authority that it cancelled the penalty by observing that the assessee had disclosed all the materials relating to the computation of income of the assessee in the returns....

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....ompleted contract method alone could be the basis for assessing the income. This Court pointed out that while there might be a certainty as to the dividend received every month for considering the same for assessment and on accrual basis at the hands of the subscriber, yet, as far as a company running chit business is concerned, the dividend and the discount could properly be ascertained only at the completion of the transaction and not in the midway. Thus, while upholding the contention of the assessee that it was following the mercantile system of accounting and adopting the completed contract method to arrive at the real income, this Court held that the dividend income was assessable in the year of accrual itself. In the background of th....