2015 (2) TMI 1105

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....engaged in the business of manufacturing of bulk drugs and fine chemicals. The assessee filed its return of income for A.Y. 04-05 declaring total income at Rs. 3,17,30,999/-. The case was selected for scrutiny and thereafter the assessment was framed u/s.143(3) vide order dated 29.12.2006 and the total income was determined at Rs. 8,38,88,973/- by inter alia making addition with respect to dividend income of Rs. 27,993/-, disallowance of domestic and foreign travel of Rs. 1,33,825/- and unexplained cash credit of Rs. 15 lacs, which was also confirmed by CIT(A) and on aforesaid additions which were confirmed by CIT(A), A.O. vide penalty order dated 27.03.2009 levied penalty of Rs. 5,96,176/- u/s. 271(1)(c) of the Act. Aggrieved by the afores....

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....y further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed." 4. Before us, ld. A.R. submitted that though various grounds have been raised but the issue is only respect to levy of penalty u/s. 271(1)(c) on unexplained cash credit. 5. Before us, ld. A.R. submitted that assessee had purchased raw materials from some parties and on behalf of assessee the payments were made by Janki Shah (Rs. 7 lacs), Piyush G. Shah (Rs. 5.5 lacs) and Piyush G. Shah HUF (Rs.2.5 lacs)....

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....lity. He also relied on the decision in case of Amitabh Construction P. Ltd. vs. ACIT, 335 ITR 523 (Jharkhand), CIT vs. Pancham Dass Jain, 156 Taxman 50 (Allahabad) and the decision in case of Reliance Petroproducts Pvt. Ltd. reported in 322 ITR 158 (SC). He therefore submitted that the penalty levied u/s. 271(1)(c) be deleted. Ld. D.R. on the other hand supported the orders of A.O. and CIT(A). 6. We have heard the rival submissions and perused the material on record. It is undisputed facts that on the addition of Rs. 15 lacs made u/s. 68 by A.O. penalty u/s. 271(1)(c) has been levied by A.O., which has also been confirmed by CIT(A). It is also a fact that assessee has disclosed all the material facts before the A.O. and has also submitt....