TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 799
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....ay of estimation its an established method of computing the assessment [CIT vs Warasat Hussin 171 ITR 405, 402 (Patnal)] 3) On the facts and circumstances of the case and in law, the learned CIT(A) was not justified in carrying out an exercise of cobbling the unexplained payments (vide para 48 of his order ibid) to justify deletion of penalty by saying that such aggregate of discrepancies comes to Rs. 7,72,934/-, well within Rs. 30 lakh disclosed by the assessee, which disclosure is not entitled to immunity from penalty u/s 158BFA(2) as the conditions stated in proviso to Section 158BFA(2) were not satisfied. 4) On the facts and circumstances of the case and in law, the learned CIT(A) erred in holding that AO has not discussed as to how the assessee had been found culpable for the CIT(A)'s confirmed amount of Rs. 45,10,000/- in quantum appeal, whereas: i) the assessee failed to keep any data or books of accounts of Asst. Yrs. 1990-91, 1991-92 and 1992-93 and the assessee had submitted income on estimate basis only and this conduct of the assessee has been ignored by the CIT(A) : ii) the assessee submitted only details in respect of total receipts for the block period at....
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....oc addition to work out the undisclosed income for the block period which was worked at Rs. 57,20,788/-. Such an estimate was on the basis of examination of various evidences including the statement of the assessee that he was resorting to inflation of labour payment. During the course of the search also, the assessee had declared in his statement that he was generating cash by inflating the payments and had also declared Rs. 30 lakhs as undisclosed income. In the first appeal the Ld. CIT(A), partly sustained the computation of undisclosed income at Rs. 43,19,050/-. While sustaining the said amount, the Ld. CIT(A) had worked out the expenses on various heads and held that such inflated expenses worked out to 3.7%. The said appellate order got finalized as the appeal filed before the Tribunal was dismissed as un-admitted. 4. Now the penalty u/s 158BFA(2) has been levied by the AO on such an addition after detailed discussion and deliberation and held that the undisclosed income determined in the quantum was not merely an estimate but was based on various documents found and assessee's own admission that he was resorting to inflation of the payments of the labours. Accordingly, he l....
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...., Ld. Counsel strongly relied upon the order of the CIT(A) and submitted that CIT(A) has analysed each and every aspect dealt in the quantum proceedings and came to the conclusion that penalty cannot be levied only on amount determined at Rs. 43,19,050/-. 8. After considering the rival contentions and also on perusal of the impugned orders, we find that the CIT(A) in the impugned order has noted down various discrepancies and presumptions adopted by the AO while estimating inflated expenses over and above the amount of Rs. 30 lakhs in the quantum proceedings. Once, such presumption was that salary payment made to G. Muthiah has been inflated because he is the same person who is proprietor and owner of G.M. & Co. and also the foreman of the assessee. This presumption was incorrect because these are two different persons, Gabriel Muthaih and other Mr. Gyanmuthu Muthiah. Former is the owner of G.M. & Co. who has been supplying labour and later was working as a Foreman in the assessee's concern M/s C. Raja and was on the pay rolls of the assessee. However, the AO rejected assessee's contention without any proper material to rebut the explanation and evidence given by the assessee. Thu....
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....ich means that even the CIT(A) had considered the unconfirmed portion as genuine. Thus, only a presumption had been replaced by another presumption. I do not c such an amount partially confirmed merely by another estimated percentage would be held as deserving a penalty. 47. Besides, as I have already said the so-called-pagdi amount of Rs. 21 lacs was not a finding either from the search or from any post-search investigation. The same had been held as undisclosed income by the AO who had relied on merely a statement allegedly by made by the appellant which had been subsequently denied pleading that the appellant had been asked to sign a predesigned question-answer format in English ( a language not known to the appellant) which was subsequent to his initial denial about the pagdi payment on 2/12/1999 in a statement made in Hindi language which he had understood. 48. If one sets apart these figures of Rs. 21 lacs and the deleted amount of Rs. 12,19,885/- (Rs. 26,65,000/- of A.O. minus confirmed by the CIT(A) to the tune of Rs. 14,45,115/-) then there would be the following amounts which would easily 1e covered by the so-called Rs. 30 lacs disclosed by the appellant. (i) Pay....