2006 (8) TMI 113

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....as undisputedly concealed the particulars of his income and furnished inaccurate particulars of such income? 2. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the explanation that the stock received in March were not included in their inventory as they remained unpacked is sufficient to avoid penal action u/s 271(1)(c)?" 2.The revenue is the appellant.  The relevant assessment year is 1996-97 and the corresponding year ended on 31.3.1996.  The assessee is a firm engaged in the business of dealership in motor cycles, mopedes and spares of TVS Suzuki Ltd.  The assessee filed its return of income admitting total income as Rs.6,19,370/-.  During the course of scrutiny, the As....

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....ify the correctness of the stock inventory, as the net profit margin was higher." 4. After considering the above explanation, the Assessing Officer by order dated 23.08.1999 levied a penalty of Rs.1,00,000/-.  On appeal at the instance of the assessee, the Commissioner of Income-tax (Appeals) by order dated 22.10.2003, allowed the appeal holding that it was not a fit case for levy of penalty and therefore penalty of Rs.1,00,000/- imposed by the Assessing Officer was cancelled.  Aggrieved against the order of the first appellate authority, the Revenue preferred an appeal before the Income Tax Appellate Tribunal.  By order dated 27.01.2006, the Income Tax Appellate Tribunal dismissed the appeal preferred by the revenue and c....

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....ed due to the mistake of the Manager in not including the packed items has not been found to be false by the Assessing Officer.  The explanation offered by the assessee seems to be plausible one.  After hearing both the parties, the first appellate authority as well as the second appellate authority found that the explanation offered by the assessee was reasonable one.  The tribunal based on the materials and the evidence available on record, came to the conclusion that there was no intention to conceal the income and that it was a genuine mistake because there is no falsehood in the explanation offered by the assessee.  The above findings of the Tribunal are well founded.  We do not find any infirmity or illegality....