TaxTMI 
TaxTMI 
2015 (11) TMI 742
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.... on account of assessee's suppression of sales. The assessee's cross objection pleads that both the lower authorities have wrongly imposed penalties arising from disallowances/additions of Rs. 3,20,000/- on sale of stores and spares Rs. 3 lacs relating to repair and maintenance and short term capital gains of Rs. 54,67,547/- arising from sale of fixed assets having written down value; respectively. 3. Both parties reiterate their grounds to pray for acceptance of appeal and cross objection. They also support the CIT(A)'s order to the extent it supports their case. 4. The assessee-company is engaged in quarry business, grit manufacturing and kapachi etc. The Assessing Officer records in assessment order that it has carried out negligible production, sold its stock available. The assessee filed its return on 28-10-2002. The Assessing Officer noticed in the course of scrutiny that the assessee's turn-over was Rs. 36,72,680/- as against cost of goods to be Rs. 46,57,824/-. The assessee submitted to have entered into distress sale of goods in stock, plant and machinery, spares, stores along with finished goods. The Assessing Officer observed in assessment order dated 30-03-2005 th....
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....l gains addition before the CIT(A). Quantum proceedings accordingly appear to have attained finality. Even the assessee is fair enough in not disputing this factual position. 6. We come penalty proceedings now. The assessee does not seem to have offered any explanation. The Assessing Officer heavily relied on scrutiny development and findings therein for treating the above stated disallowances/additions as an instance of concealment and furnishing of inaccurate particulars of income as provided u/s. 271(1)(c). This resulted in the impugned penalty of Rs. 11,36,181/- vide order dated 30-03-2009. 7. The assessee an appeal. The CIT(A) in order under challenge deletes penalty sum of Rs. 3,51,191/- pertaining to suppression of sale addition of Rs. 9,83,756/- (supra) and affirms all other penalties arising from disallowances/additions of sale of stores and spares, repair maintenance and short term capital gains. In this backdrop of facts that the Revenue has filed its appeal and assessee prefers cross objection to the extent indicated in preceding paragraphs. 8. We have heard both the parties and perused the case file. The first three additions pertaining to this lis are of supp....
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....ation of assets falling in these blocks of assets which was out of the ambit of the provisions of section 50. As the assessee could not offer any explanation in this regard, the Assessing Officer computed the short term capital gain at Rs. 54,67,547/-. 6.4.1 The appellant has submitted during the course of appellant proceedings that this was a mistake while computing the short term capital gains. It is not a case of suppression of short term capital gains but a bonafide mistake which had kept in while preparing the return of income. 6.4.2 I have considered the appellant's submission. The computation made by the appellant of short term capital gain is legally unjustified and not tenable. The correct facts came to notice only after the A.O. verified the facts. The appellant on its own did nothing to bring to light this alleged mistake. The appellant had also not been able to explain as to under what circumstances and due to whose fault the short term capital game was not shown in the return of income. Under such circumstances, the levy of penalty by the AO on this amount is correct. 6.4.3 On the basis of above facts, it is evident that the appellant had not shown the cor....
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.... on the basis of selfassessment under section 143(1) of the Act and even if their case is selected for scrutiny, they can get away merely by paying the tax, which in any case, was payable by them. The consequence would be that the persons who make claims of this nature, actuated by a mala fide intention to evade tax otherwise payable by them would get away without paying the tax legally payable by them" 6.4.5 Similarly Hon'ble Ahmadabad ITTA in its decision in the case of Gujarat State Financial Corporation (Supra) has held as follows: "5.2 As is evident from the aforesaid clause (c) of sect/on 271(1) of the Act, the words used are 'has concealed the particulars of his income' or furnished jrate particulars of such income'. Thus, both in case of concealment and inaccuracy, the phrase 'particulars of income' has been used. The Legislature has not used the words 'concealed his income'. From this it would be apparent that penal provision would operate when there is a failure to disclose fully or truly all the particulars. The words 'particulars of income' refer to the facts which lead to the correct computation of income in accordance with th....
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....ty proceedings under section 271(1)(c) of the Act are no longer relevant in view of sub-section (IB) inserted in section 271 of the Act by Finance Act, 2008. The said provision purports to create a fiction by which satisfaction of the Assessing Officer is deemed to have been recorded in cases where an addition or disallowance is made by the Assessing Officer and a direction for initiation of penalty proceedings is issued. The said provision is made effective retrospectively with effect from 1-4-1989. The Id, AR on behalf of the appellant has not explained as to how the decisions relied upon by him regarding recording of satisfaction were relevant in view of the said provisions of section 271(1B) of the Act. It is well established that so long as the appellant has not concealed any material fact or the factual information given by him has not been found to be incorrect, he will not be liable to imposition of penalty under section 271(1)(c) of the Act, even if the claim made by him is not sustainable in law, provided that he either substantiates the explanation offered by him or the explanation, even 'if not substantiated, is found to be bona fide. If the explanation is neithe....
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....ances and on account of whose mistake, the amounts claimed as deductions in this case were not added back, while computing the income of the appellant company. We cannot ignore the fact that the appellant is a company which is having professional assistance in computation of its income, and its accounts are compulsorily subjected to audit. In the absence of any details/explanation from the appellant, we fail to appreciate how such deductions could have been left out computing the income of the appellant company and how it could also have escaped the attention of the auditors of, especially when the deduction for provision for bad and doubtful debts and provisions for diminution in value if investments were claimed in flagrant violation of provisions of law. In these circumstances, especially when explanation given by the appellant during the penalty proceedings has not been substantiated nor found to be bona fide and there is no material before us to take a different view in the matter, we are of the opinion that the Id, CIT(A) was justified in upholding the levy of penalty on account of furnishing of inaccurate particulars of income in relation to provision for bad and doubtful de....