TaxTMI 
TaxTMI 
2016 (4) TMI 1051
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....essee is a private limited company engaged in sale and manufacture of HDPE pipes. Return declaring income of Rs. 31,26,512/- was filed on 29-09-2009. Assessment in this case was completed u/s 143(3) of the Act on 15-12-2011 wherein following additions were made:- (i) On account of difference in stock Rs.4,21,972/- (ii) On account of VAT difference Rs.1,01,922/- (iii) On account of ESI & PF not paid by due date Rs. 16,946/- (iv) On account of Charity & Donation Rs. 2,500/- Thus, total addition of Rs. 5,43,340/- was made to the returned income and income of the assessee was assessed at Rs. 36,69,852/-. A survey u/s 133 A of the Act was conducted on 16-01-2009, the value of scrap in the books of the assessee was 4.15....
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..../- was debited to SDE MS (TXP) Store, O/o DET MS(TXP), Lucknow. On verification of the journal voucher, it was gathered by the AO that the amount was reflected due to VAT discount in respect of which the assessee submitted that VAT had been paid on account of BSNL, Lucknow which had not been received back and hence, the impugned sum was debited under the head VAT discount. However, the AO rejected the submissions made by the assessee on the ground that the assessee was following mercantile system of accounting and as such the impugned sum should not have been debited to the Profit & Loss Account. It was held by the AO that the assessee deliberately debited the amount of Rs. 1,01,922/- to inflate its expenses and to reduce the profit. 4. ....
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....all heap of scrap which was only about 1500Kg but the survey team wrongly estimated the weight of scrap at 15000 Kgs. It was further submitted that the HDPE Pipe is an excisable item and the assessee had duly maintained stock register of scrap in Form No.-4 and RG-1 as prescribed by the Central Excise Department. The Stock as per Stock register was 4.155MT which included the stock of scrap in heap and scrap lying in the bags. The Ld. AO estimated the scrap at l0000 Kg and made the addition of Rs. 4,21,972/-. The above addition was made only on account of excess estimation of stock of scrap, otherwise the assessee has neither concealed the particular of his income nor filed the inaccurate particular of such income. As such, the assessee was ....
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....ival submissions and have perused the relevant material available on record. It is seen that penalty has been imposed mainly on the basis of difference in the weight of scrap shown by the assessee and as estimated by the Assessing Officer. Apart from that, there is nothing to prove that the assessee has, in fact, concealed its income or furnished inaccurate particulars of income. 11. It is an admitted position that the assessee accepted the addition and did not challenge it further. But the mere fact that an addition has been accepted or is confirmed in quantum proceedings cannot be conclusive for the imposition of penalty. Further, the only basis of addition is the estimate of weight made by the Assessing Officer in valuing the scrap. A....