TaxTMI 
TaxTMI 
2016 (8) TMI 318
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....lowing Grounds of appeal: "1. The Learned Commissioner of Income Tax Appeals erred in facts and in law in confirming the penalty u/s 271(1)(c) of the Income Tax Act aggregating to Rs. 21,77,000/- for filing of inaccurate particulars and for concealment of income. 2. The Learned Commissioner of Income Tax Appeals erred in facts and in law in confirming the penalty on the alleged difference in purchases of Rs. 38,58,300/- without considering the supporting documents placed on record and without appreciating that the same was capable of reconciliation. 3. The Learned Commissioner of Income Tax Appeals erred in confirming the penalty on the disallowance of balances written off to the extent of Rs. 25,40,362/- by stating that the appellant ....
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.... appellant is a company incorporated under the provisions of the Companies Act, 1956, which is engaged in the business of trading and manufacture of printing inks. For Assessment Year 2010-11, it filed a return of income declaring a loss of Rs. 1,62,56,988/- which was subject to a scrutiny assessment wherein the assessed loss has been scaled down to Rs. 73,82,310/-. The difference between the returned and the assessed loss is on account of disallowances made by the Assessing Officer on account of Sec. 14A, unproved purchases, balances written-off and dividend income. At the time of hearing, the learned representative for the assessee pointed out that so far as the quantum assessment proceedings are concerned, the same have become final as a....
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....00/- made on account of difference in purchases. The relevant discussion reveals that on being asked to furnish party-wise details of purchases exceeding Rs. 5 lacs, assessee furnished the details in terms of which total purchases from two parties amounted to Rs. 5,61,36,202/-, detailed as - M/s. DSV Chemicals Pvt. Ltd. - Rs. 2,81,76,701/- and M/s. United Specialty Inks Pvt. Ltd. - Rs. 2,79,59,501/-. The Assessing Officer noticed that the total purchases debited in the Profit and Loss account worked out to Rs. 5,22,77,902/- and, therefore, he held that the difference in the purchases reported by the assessee in the Profit & Loss account and in the details furnished amounting to Rs. 38,58,300/- was undisclosed investment in purchases. Accord....
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....75,302/-. It was therefore contended that the penalty, if any, be retained with respect to the difference of Rs. 75,302/- only. 7. On the other hand, the ld. DR while defending the levy of penalty has not disputed the factual matrix brought out by the learned representative for the assessee. 8. In our considered opinion, the facts brought out by the assessee clearly establish that the addition to the extent of Rs. 38,58,300/- on account of difference in purchases is misconceived as the un-reconciled difference is only Rs. 75,302/-. No doubt, the assessment of total income has been made by the Assessing Officer based on the difference of Rs. 38,58,300/- but in the impugned penalty proceedings u/s 271(1)(c) of the Act, it is open for the as....
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....(supra). The learned representative explained that the details of sundry balances written-off, which was furnished by the assessee, included write-off of capital assets to the tune of Rs. 12,70,181/- and capital work-in-progress to the tune of Rs. 1,17,815/-. The learned representative for the assessee pointed out that the Assessing Officer had intended to disallow the aforesaid two amounts which totals to Rs. 13,87,996/- only whereas the actual disallowance has been wrongly determined at Rs. 25,40,362/-. It has also been pointed out that if the aforesaid totalling error is rectified, the addition on this ground would remain at Rs. 13,87,996/- only. On the merits of the levy, the learned representative contended that it is a case where a cl....
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..... 271(1)(c) of the Act. As a consequence, we set-aside the order of CIT(A) on this aspect and direct the Assessing Officer to delete the levy of penalty with respect to the aforesaid addition. 12. The third and the last addition which has been subjected to levy of penalty is a sum of Rs. 5,000/- representing dividend earned by the assessee from Saraswat Co-op. Bank. In the return of income, assessee had declared dividend income of Rs. 5,000/-, which was claimed as exempt. So however, the Assessing Officer noted that the said income was not exempt inasmuch as it has not been subject to any Dividend Distribution Tax. This was for the reason that such dividend income was received from a co-operative bank was not exempt in terms of Sec. 10(34)....