TaxTMI 
TaxTMI 
2013 (9) TMI 530
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....cy with COL, Calcutta [now Kolkata]. This is the second year of his business. He has shown, sales of coal weighing 61195.96 MT at Rs. 10,75,30,359/-, and purchase of 61195.96MT coal at Rs. 10,10,60,820/- giving a gross profit of Rs. 64,69,539/-. But, after excluding administrative expenses, financial charges, etc. a profit of Rs. 40,30,228/- has been declared, which is further subject to interest, expenses etc. resulting into a net profit of Rs. 4,47,491/- only. 3. It was noticed that apart from the cost of coal shown at Rs. 5,78,62,520/- he has debited a sum of Rs. 3,73,00,654/- towards payment of freight to the Indian Railways, Rs. 22,97,480/- towards commission to M/s. Ganpat Lal Onkar Lal Agarwal & Co., Indore, against debit notes; and payment of Rs. 36,00,166/- as sales commission payable to Sh. Lokesh Jain Kota and Shri Rajesh Jain. From the explanation tendered by the assessee to explain above amounts, the A.O. was partially satisfied. Regarding payment of Rs. 36,00,166/- as Brokerage, the A.O. was not satisfied because this entry was made only on 31.03.2001 i.e., on the last day of the accounting year. In the Balance Sheet, this amount has been shown as payable to Shri Lok....
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....ve 45 creditors, totaling to Rs. 7,73,400/-, for taxation. 5. An amount of Rs. 83,772/- received as NSS refund which had been directly credited to the capital account was also treated as assessee's income of the year as per the provisions of Section 80CCA(2). This claim was stated to have been wrongly made on account of an inadvertent mistake. His claim of income of Rs. 1,06,860/- from agriculture has been accepted. 6. Aggrieved by the addition of Rs. 7,73,400/-, the assessee went before ld. CIT(A), but failed to get any relief. Being further aggrieved, this second appeal has been filed by raising the following ground:- "That on the facts and circumstances of the case as well as in the law, the ld. A.O. grossly erred in making addition of Rs. 7,73,400/- on the alleged ground that the various cash credits standing in the name of the various persons - parties remained unexplained as per the proviso of Sec. 68 which too confirmed by the CIT(Appeals) without appreciating the full facts of the case and in as much as the circumstances under which the said cash credits has been surrendered." 7. We have heard rival submissions and have carefully perused the entire evidence available on....
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....tal income of Rs. 50,01,829/-. In this assessment order, following additions were made :- (i) Bogus brokerage / sale commission surrendered by the assessee Rs. 36,00,166/- (ii) Unproved cash credits surrendered by the assessee Rs. 7,73,400/- (iii) NSC (taxable) u/s 80CCA(2) admitted by assessee to be inadvertent mistake Rs. 83,772/-. 11. The assessee is in the business of purchase and sales of coal. He has claimed to have paid a commission of Rs.18,12,134/- to Shri Lokesh Jain and Rs. 17,88.032/- to Shri Rajesh Sharma. When the assessee was asked to prove these brokerage payments the assessee mentioned that the details of the sales-commission and brokerage were not traceable ad there was no documentary evidence available with him. Due to this reason, made a surrender of total amount of Rs. 36,00,166/-. In penalty proceedings it was pleaded that the party to whom sales commission was paid was not traceable, therefore, the assessee had made the surrender. Regarding unproved cash credit of Rs. 7,73,400/- the assessee gave a detailed reply as under :- "a. That out of 45 loans assessee filed necessary affidavits in respect of 23 parties. b. The AO asked to produce all creditors fo....
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....penalty u/s 271(l)(c) on the surrender income amounting to Rs. 36,00,166/- being payment of commission made/paid on sales of steam coal which too also been confirmed by the Commissioner of Income Tax (Appeals), Udaipur Range, Udaipur, vide impugned order under appeal on the ground that A.O. was justified in imposing penalty on the said addition which is bad in law, unjustified and contrary to the fact of the case. 2. That on the fact and in the circumstances of the case as well as in the law, the Id. A.O. grossly erred in imposing penalty u/s 271(l)(c) on sum of Rs. 7,73,4007- being unexplained cash credit surrendered by the appellant which too partly confirmed by the Commissioner of Income Tax (Appeals), Udaipur Range, Udaipur by holding that out of Rs. 7,73,4007- unexplained cash credit, cash credit to the extent of Rs. 4,32,2007- is not liable for penalty and remaining amount of cash credit amounting to Rs. 3,41,2007- is required to be considered for the purpose of levy of penalty u/s 271(l)(c) of the I.T Act which is bad in law and unjustified." 15. But the A.O. was not agreeable and thus, imposed the impugned penalty u/s 271(1)(c) of the Act. This penalty was even confirmed ....
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....CC 369, as well as Union of India vs Rajasthan Spg. & Wvg. Mills [2009] 13 SCC 448, the Hon'ble Supreme Court in the case of CIT vs Reliance Petroproducts Pvt. Ltd, 322 ITR 158, has recently held as under:- "A glance at the provisions of section 271(1)(c) of the Income-tax Act, 1961, suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word "particulars" used in section 271(1)(c) would embrace the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such par....
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....ment was made by the revenue and once the assessing authority had failed to take any objection in the matter, the declaration of income made by the assessee in his revised returns and the explanation that he had done so to buy peace with the department and to come out of vexed litigation could be treated as bonafide in the facts and circumstances of the case. Accordingly, no penalty could be levied for concealment." Accordingly, we order to delete penalty on the surrendered amount of Rs. 36,00,166/-. 18. Regarding 45 cash creditors, the contention against levy of penalty is as under:- "a. That out of 45 loans assessee filed necessary affidavits in respect of 23 parties. b. The AO asked to produce all creditors for examination which the assessee could not produce and hence surrendered the above 45 creditors with request that no penalty action should be initiated. c. That no efforts independently has been made to arrive at the conclusion that whether there cash credits surrendered represent bogus,, cash credit, fake cash credit or attempt by assessee to introduce and concealed the income through these cash creditors. d. That penalty proceedings is independent and separate proce....