2011 (12) TMI 651

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sessment proceedings the assessee produced the books of accounts which were not complete and not supported by necessary bill/vouchers, etc. In view of the incomplete books o f account the AO rejecte d the books u/s 145(2) of the Income Tax Act, 1961 (in short the Act). The AO proceeded to estimate the profit of the business of the assessee @ 12% of the total receipts. The assessee agitated the above estimation of the profit of business @ 12% befo re the ld. CIT(A), who reduced the estimated profits of the assessee from 12% to 5%. In appeal, before the ITAT, by the Revenue, the estimate of the profits of the assessee was increased to 8% of the gross receipts on the basis of section 44AD of the Income Tax Act. After receiving the order of the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... was within his rights to estimate the pro fits but there is no particulars suggesting any specific concealment of income and hence levy of penalty merely on the basis of estimated income as concealed income dese rves to be delete d. In the alternative, the assessee submits that the penalty may be restricted to the extent o f income at the rate of 5% of the to tal contract receipt. 6. On the other hand, the ld. DR supports the order of the AO and ld. CIT(A). 7. We have carefully co nsidered the submissions of the rival parties and perused the material available on record. We find that the re is no dispute that the AO after rejecting the books of accounts estimated the assessee' s income by applying 12% of the total contract receipt of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ce the details of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly covere d by the provision, the penalty provision cannot be invoked. By no stretch of imagination can making an incorrect claim tantamount to furnishing inaccurate particulars. There can be no dispute that everything would depend upon the return filed by the assessee, because that is the only document where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. To attract penalty, the details supplied in the r....