2016 (2) TMI 166

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.... 1. The learned CIT (A) erred in confirming the Penalty u/s 271(1)(c) of Rs. 45633/- on the facts and circumstances of the case. 2. The learned CIT (A) erred in not appreciating the fact that addition of Rs. 124170/- made by the AO u/s.41(1)(a) was solely on account of different views taken on the same set of facts which at the best can be termed as difference of opinion and certainly not concealment of income or furnishing of inaccurate particulars of such income. 3. The learned CIT (A) further erred in appreciating the fact that the appellant company was legally bound to entertain the claim of creditor of Rs. 1,24,170/- reflected in appellant company's books of account for a period of three years during which cr....

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..... CIT(A) confirmed the order of the AO by observing as under:- " After examining the facts and circumstances of the case, I find that it was due to the efforts of the Assessing Officer the difference in the accounts of M/s. Punit Agency P. Ltd vis a vis books of accounts of the appellant was detected. The addition in the quantum of appeal has already been confirmed by my predecessor, CIT(A) due to cessation of liability amounting to income of Rs. 1,24,170/- in the hands of the appellant company. The argument of the Authorized Representative that this income has been subsequently, offered for taxation in the A.Y. 2006-07 is without any merit and the same is not acceptable. Since the appellant company has furnished inaccurate particu....

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....aid difference to the income of the assessee by holding that trading liability of the assessee had ceased and imposed the penalty of Rs. 45,633/- u/s 271(1)(c) for furnishing the in accurate particulars of income. The assessee submitted before the AO that the said difference was only because of wrong entries in the book of M/S Punit Agency Pvt Ltd and tried to explain the same through a reconciliation statement listing out various reasons of differences which was filed before the AO as well as before the CIT(A) which is placed on page no.20 of the paper book in which the entire difference was explained. The assessee also filed the copies of the bills issued by of M/s. Punit Agency Private Ltd. which is placed at pg no. 21-23 of the paper bo....

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....one or two cases, the response was that they had no dealing with the assssee, nor did they know him. Of course, these inquiries were made ex parte and in that view of the matter, the assessee would be allowed to contest such findings. Nevertheless, even if such facts were established through bi parte inquiries. The liability as it stands perhaps holds that there was no cessation or remission of liability. Therefore, the amount in question cannot be added back as deemed income under section 41(1). This is one of the strange cases where even if the debt itself is found to be non genuine from the very inception, at least in terms of section 41(1) there is no cure for it. Therefore, the appeal filed by the revenue was liable to be dism....