TaxTMI 
TaxTMI 
2016 (9) TMI 804
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....ct, 1961. 3. Brief facts of the case are that the assessee has filed its return of income for the Asstt.Years 2005-06 on 30.10.2005 declaring total income at Rs. 18,759/-. An assessment order was passed under section 143(3) vide which income of the assessee was determined at Rs. 9,55,280/-. Penalty in the Asstt.Year 2005-06 has been initiated for two additions viz. (a) on account of cash credit under section 68 of Rs. 3,20,000/- and (b) on account of unaccounted stock at Rs. 1,14,188/-. The addition on account of unexplained cash credits stands deleted by the ld.CIT(A). Therefore, the ld.First Appellate Authority has confirmed the penalty qua the addition made on account of unaccounted stock of Rs. 1,14,188/-. This way penalty has been con....
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....made. 7. I find that similar addition was made in the Asstt.Year 2005-06, which is being deleted by the ld.CIT(A). The finding of the ld.CIT(A) in the Asstt.year 2005-06 on this issue reads as under: "2. First ground of appeal is regarding addition of Rs. 3,20,000/- u/s.68. The Assessing Officer found that appellant had credited Rs. 6,70,000/-, out of which Rs. 2,85,000/- was offered as income, being unexplained cash credit, for taxation. Since the appellant could not explain satisfactorily source of the balance amount, addition of Rs. 3,20,000/- u/s.68 was made. 2.1. Before me, appellant submitted that he was a partner in M/s. Manishkumar & Co. and had introduced the cash in his capital account for business by withdrawing from the firm....
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....ing stock of one year was nothing but the opening stock of immediately succeeding year. According to the assessee, the addition is ultimately revenue neutral. But this explanation was rejected by the ld.AO while visiting the assessee with penalty. 9. The ld.counsel for the assessee, while impugning the orders of the Revenue authorities, raised two fold submissions. In his first fold of contentions, he pointed out that the penalty was initiated by the AO furnishing of inaccurate particulars of income, but ultimately, it was levied for concealing the income. Therefore, it is not sustainable in the eyes of law. The ld.counsel for the assessee made reference to the decision of the Full Bench of the Hon'ble Punjab & Haryana High court and other....
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....this Act, is satisfied that any person (a) and (b) ** ** ** (c) has concealed the particulars of his income or furnished inaccurate particulars of such income. He may direct that such person shall pay by way of penalty. (i)and (Income-tax Officer,)** ** ** (iii) in the cases referred to in Clause (c) or Clause (d), in addition to tax, if any, payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or fringe benefit the furnishing of inaccurate particulars of such income or fringe benefits: Explanation 1- Where in respect of any facts material to the computation of the total income of any person under this ....
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....n, even without there being anything to indicate so, statutory deeming fiction for concealment of income comes into play. This deeming fiction, by way of Explanation-1 to section 271(1)(c) postulates two situations; (a) first whether in respect of any facts material to the computation of the total income under the provisions of the Act, the assessee fails to offer an explanation or the explanation offered by the assessee is found to be false by the Assessing Officer or Learned CIT(Appeal); and, (b) where in respect of any fact, material to the computation of total income under the provisions of the Act, the assessee is not able to substantiate the explanation and the assessee fails, to prove that such explanation is bona fide and that the a....
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.... explanation of the assessee in that year was that he had withdrawn the cash from this firm, M/s.Manishkumar & Co., which was introduced in the capital account for business. This explanation of the assessee was accepted by the ld.CIT(A). According to the ld.CIT(A), the assessee has explained the source to be from the firm, M/s.Manishkumar & Co. On similar items, the explanation was not thoroughly examined by the AO in A.Y.2006-07. Thus, the explanation of the assessee was not found to be false. The assessee has given an explanation that money was withdrawn from the firm, and it was deposited in the Vijay Bank. 15. As far as non-disclosure of certain shares in the closing stock is concerned, the stand of the assessee is that inadvertent mis....