TaxTMI 
TaxTMI 
2014 (10) TMI 220
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....ppreciate the fact that the Assessing officer has not made any specific initiation of penalty in the assessment order, hence penalty levied may be deleted. 5. Without prejudice to above, the ld CIT(A) failed to appreciate the fact that the Assessing officer has made adhoc addition even after rejecting the books of account u/s 145, hence penalty, if any, to the extent of an estimated net profit only could have been levied and not the entire addition made. 6. The Appellant craves leave to add, amend, alter or delete any or all the above ground of appeal. Assessee firm, engaged in the business of meat exports, filed its return of income on 12. 10. 2006 declaring total income at Rs. 12, 84, 259/-. Assessing Officer(AO) finalised the assessment on 24. 11. 2008 determining the income of the assessee at Rs. 64, 84, 260/-. Vide its letter dated 30. 07. 2012 the assessee had requested to admit cash book of AY. 2009-10 as additional evidence. We have gone through the application and admit the same as additional evidence as per rule 29 of the ITAT Rules, 1963. 2. During the course of assessment proceedings, the AO found that assessee had derived income from Meat supply. He directed the ass....
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.... assessee for addition of Rs. 52 Lakhs to its income, but, he also initiated penalty u/s 271(1)(c) of the Act by way of the issue of notice u/s 274on 24. 11. 2008. The assessee filed its reply on 01. 05. 2009. After considering the written submission of the assessee, the AO held that he had failed to prove the capacity of the suppliers during the course of assessment proceedings, that the surrender of liability had been made because he could not produce any of those persons, that the rate of purchase were not open to verification, that the surrendered amount was brought into books as cash in the year 2009-10. Invoking the provisions of explanation 1(B) of section 271(1)(c) of the Act, he held that assessee had concealed his income and had furnished inaccurate particulars. Finally, he levied a penalty of Rs. 17. 50 Lakhs. 3. Aggrieved by the order of the AO, the assessee filed an appeal before the First Appellate Authority (FAA). Before him, it was argued that the assessee had surrendered the income of Rs. 52 lakhs voluntarily, that the creditors were from UP and Andhra Pradesh, that they were not willing to come to Mumbai, that confirmation letters duly signed by them were produce....
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....income or filing of inaccurate particular of income. He relied upon the judgment of Mathura Commercial Co. (101DTR371)of Hon'ble Allahabad High Court and decision of Visakhapatnam bench delivered in the case of Godavari Township (P). Ltd. (148ITD 463). Departmental Representative (DR) argued that . He relied upon the judgment of Mak Data of Hon'ble Supreme Court(358ITR593). 5. We have heard the rival submissions and perused the material before us. We find that the undisputed facts of the case are that the assessee had shown trade liabilities in the balance sheet, that the AO had directed the assessee to produce the parties in whose names liabilities were shown outstanding, that on seven occasions the assessee had made submission before the AO between 12. 02. 2008 to 28. 08. 2008, that on 15. 10. 2008 it surrendered Rs. 52 lakhs, that before that the AO had issued commission to one of the officers of Bareli to make inquiries about some of the suppliers, that the AO levied penalty after invoking the provisions of Expl. 1 B to section 271(1)(c) of the Act and the FAA had confirmed the penalty. Before proceeding further it would be useful to reproduce the provisions of the section inv....
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....m by an advocate and his name is not there though his signature are appended there. We do not know what is the sanctity of such a letter. In our opinion it is merely a piece of paper and is of not evidentiary value. It is not worthy that none of the suppliers appeared before the ACIT, Bareli. Had the AO not selected the matter for scrutiny and made deeper scrutiny the claim made by the assessee about trade liabilities would have been accepted. It is not the case of the assessee that it had offered the unproved trade liabilities for the year under consideration on its own by filing a revised return of income. The AO had rejected the books of accounts of the assessee invoking the provisions of section 145(3) of the Act and the assessee had not agitated the quantum addition made by the AO. Considering the factors like unproved genuineness of transaction, capacity of trade creditors, payment through bearer cheques, authenticity of rate of purchase of goods, we are of the opinion that the assessee failed to substantiate the explanation filed by it and that the AO had rightly invoked the provisions of section 271(1)(c)of the Act. Here, we would like to reproduce the a portion of the judg....