TaxTMI 
TaxTMI 
2016 (7) TMI 98
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....account the low drawings of the assessee. Penalty proceedings under section 271(1)(c) of the Act was simultaneously initiated by issue of notice under section 274 r.w.s. 271(1)(c) dated 23.12.2011. On appeal, the learned CIT(A) disposed off the assessee's appeal vide order dated 12.07.2012 allowing the assessee partial relief wherein the addition on account of low G.P. was restricted to Rs. 5,11,785/- as against Rs. 25,58,000/- @0.1% of turnover. 2.2 Pursuant to the order of the CIT(A)-25, Mumbai dated 12.07.2012 in the quantum proceedings, the Assessing Officer (AO) took up the penalty proceedings under section 271(1)(c) of the Act in respect of the addition of Rs. 5,11,785/- by issue of letter dated 19.12.2012 to the assessee affording him opportunity to show cause why penalty under section 271(1)(c) of the Act should not be levied in his case. In reply thereto, the learned A.R. for the assessee vide letter dated 21.12.2012 stated that the assessee's reply in the matter was filed vide letter dated 05.01.2012 and 24.05.2012. The AO after considering the assessee's reply rejected it and proceeded to levy penalty of Rs. 1,73,954/- under section 271(1)(c) of the Act @100% of tax s....
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....d D.R. emphatically supported the impugned order of the learned CIT(A) in confirming the levy of penalty of Rs. 1,73,954/- under section 271(1)(c) of the Act for A.Y. 2009-10. It was brought to the notice of the Bench that in quantum proceedings, a Coordinate Bench of this Tribunal had, in its order dated 05.11.2015, upheld the G.P. addition to the extent of 0.1% thereby confirming the order of the learned CIT(A) dated 12.07.2012 and thereby dismissed both the appeal by Revenue and the assessee's cross objection which challenged the learned CIT(A)'s order in sustaining the addition 0.1% of turnover. According to the learned D.R. the learned CIT(A), in the impugned order, upholding the levy of maximum penalty of Rs. 1,73,954/- under section 271(1)(c) of the Act, had considered the detailed submissions of the assessee, including the judicial pronouncements cited and the finding of the authorities below from the order of assessment for A.Y. 2009-10 dated 23.12.2011 upto the order of the AO levying penalty of Rs. 1,73,954/- under section 271(1)(c) of the Act. It is contended that since the assessee had failed to bring on record any material evidence to contravene the findings of the le....
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....to these items in the stock register. There is no way to identify the item of which rate is being sold to which person. Thus there is enough scope for manipulation according to the AO. 5.2 The AO has pointed out that the assessee has failed to link the purchases with corresponding sales in the case of 3 given parties namely Crown Gallant Ltd., Rich Style Ltd. and Star Grace Ltd. He has only submitted that he has filed the copy of stock register and all the transactions are explained there. 5.3 The AO has pointed out in assessment order that the assessee has failed to produce all the jangads maintained. Perusal of some of the jangads produced before him reveals that only the quantity and rate is mentioned. There is no mention of size, colour, clarity, shape etc. 5.4 The AO has made a comparative statement of two diamond traders M/s P. Ashok Kumar & Co. & M/s Deepak Diamonds, in Mumbai region during the same period showing G.P. rate of 8.30% & 8.64% respectively. Further, after giving effect to the exchange fluctuation, the G.P. margins of said traders were 7.76% & (-) 6.38%. 5.5 The AO observed that during the global economic recession in F.Y. 2008-09, the assessee's....
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....ute material for holding that income that has been added on basis of estimate was income that has been concealed, rather it is also necessary to establish the quantum of the income that had escaped assessment, on the basis of which alone it is possible to find the income-tax and super-tax which would have been avoided, had the return submitted by the assessee been accepted, and in this case it was observed that there is no such finding entered by the Tribunal regarding this. In the case of CIT vs. Sangrur Vanaspati Mills Ltd. (supra), it was held that when addition had been made on basis of estimate and not on account of any concrete evidence of concealment, then penalty under section 271(1)(c) was not leviable. In the case of CIT vs. Metal Products of India (supra), the penalty for concealment levied was cancelled by tribunal, on grounds that assessee had discharged onus cast on it by producing regular books of account, and that though there was discrepancy in value of stock as per books of account, no addition had specifically been made on this account. In the case of CIT vs. Ajay Hari Dalmia (supra), the penalty was cancelled on ground that as particulars of concealment....
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....ation 1 to section 271(1)(c) may be attracted for purpose of initiating penalty proceedings by raising presumption under Explanation 1, same by itself cannot take place of conclusive proof so as to discard evidence and attending circumstances on that basis alone. 10. It can be deduced from aforesaid judgments relied upon by the appellant that mere addition on estimate basis is not sufficient to levy penalty u/s 271(1)(c) of the Act, instead the whole facts and intention of assessee need to be looked into on case to case basis. In the present case, the AO has sufficiently shown that the stock records maintained by the assessee were grossly unsatisfactory, since it did not make any distinction based on value, size, colour, clarity, shape etc. of diamond, and that too in a situation where the rate of diamonds purchased by the assessee varied vastly from Rs. 14,000/- per carat to Rs. 1,22,677/- per carat. Further, the assessee failed to link the purchases and sales in respect of 3 parties specifically pointed out by the AO. In these circumstances, the AO has provided ample evidence to believe that the assessee has made conscious concealment of the particulars of income by understati....