TaxTMI 
TaxTMI 
2013 (8) TMI 741
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....of the government departments. The assessee has shown gross receipts of Rs. 35,29,86,493/- and net profit was declared at Rs. 74,71,629/-, which is approximately 2.1% of the gross turnover. The assessee filed required details before the AO at the assessment stage. The AO, however, found that the assessee has made all payments, approximately 90% in cash, for which no documentary evidences were available. Therefore, the payments of expenses in cash were not verifiable. Certain liabilities were also not verifiable, therefore, book results were rejected u/s. 145 of the IT Act and net profit was increased by 1% and the AO adopted N.P. rate of 3.1% against turnover and made addition of Rs. 35,29,870/- to cover all the discrepancies in the expenses debited to the trading and Profit & Loss accounts. Total income was, thus, computed at Rs. 1,10,01,500/- and penalty proceedings were initiated on account of concealment of income. The assessee at the penalty stage submitted before the AO that the additions were made purely on estimate basis. Therefore, it is not a case of concealment of income or furnishing inaccurate particulars of income. The addition is made on rejection of book results by ....
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....urther, ITAT, Agra Bench recently in the case of Shri Laxmi Narayan Ramswaroop Shivhare vs. ACIT and Shri Laxmi Narain Ram Swaroop Shivhare & Company in ITA Nos. 545 and 547/Agra/2012 vide order dated 14.08.2013 cancelled the levy of penalty on estimate of income. The findings of the Tribunal in this case are reproduced as under : "6. We have considered rival submissions and perused the findings of the authorities below. In both the cases the assessees are in the business of liquor and filed the return of income disclosing substantial income from the business. The A.O. took up the matter for assessment on the issue of net profit. The assessee could not produce certain vouchers of purchase and expenses. Therefore, A.O. directed to reject book result under Section 145(3) of the Act and also directed as to why the sales should not be enhanced and higher N.P. rate should not be applied as against sales and N.P. declared by the assessee. In ITA No. 545/Agra/2012 even the A.O. proposed to estimate the sales at the lesser turnover at 11.15 crores as against 11.44 crores disclosed by the assessee. The variation of N.P. rate declared by the assessee and proposed by the A.O. was also not si....
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....estimate of Rs. 30,25,922/-. Thus, even the A.O. accepted lesser surrender from the assessee. Similarly in ITA No.547/Agra/2012 if the proposed turn over of the A.O. and N.P. are taken into consideration income should have been computed of Rs. 2,25,00,000/- but the A.O. after accepted surrender of Rs. 55,00,000/- computed the income of the assessee at Rs. 1,87,95,773/-. Thus, in both the cases the A.O. issued proposed notice to estimate the higher income but ultimately accepted lower surrender made by the assessee. Therefore, it is clear from the above findings of fact that the proposed notice of the A.O. to enhance income of the assessee was not based upon any material or fact. The proposed notice of the A.O. thus would not disclose in any manner as to how the A.O. was satisfied by such figure to make estimate of income. The proposed estimate of income by the A.O. was found not accurate to the knowledge of the A.O. Thus, how A.O. can give finding against the assessee that assessee filed inaccurate particulars of income in the penalty order. The assessee has made surrender of the amount in question for possible leakage of income for non maintenance of some documents and vouchers in....
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....he progress of the construction as the return did not require him to do so. Therefore, the levy of penalty under Section 271(1)(c) of the Act was not valid." 7.1 Hon'ble Delhi High Court in the case of CIT Vs. Mool Chand Siri Kishan Dass (2001) 248 ITR 463 held-- "The assessee filed a return of income from salary at Rs. 1,800. Action was taken under Section 34 of the Indian Income-tax Act, 1922, and reassessment was completed on August 28, 1958, for the assessment year 1954-55, which was set aside by the Appellate Assistant Commissioner on November 6, 1959. While making a fresh assessment, the Assessing Officer made enquiries into the business activities of the assessee who ultimately agreed for assessment on a total income of Rs. 29,900 as per the endorsement in the order-sheet of the Assessing Officer dated February 7, 1973. The Income-tax Officer initiated penal proceedings and imposed penalty. On appeal, the Appellate Assisant Commissioner upheld the decision of the Assessing Officer. On further appeal, the Tribunal held that merely because there was an agreement for assessment at a particular figure that did not per se bring in the concept of concealment. The Revenue did....