TaxTMI 
TaxTMI 
2016 (11) TMI 887
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....oration and Shiv Metal Corporation respectively. The AO has observed that during the course of assessment proceedings of M/s.Prakash Marbles Engineering Co., it came to the notice of the department that proprietor of M/s.Girnar Corporation, Shri Jabbarsingh Chauhan and Shri Navin Raval, proprietor of Shiv Metal Corporation were indulged in providing accommodation bills. They have filed their affidavits during the assessment proceedings of M/s.Prakash Marbles Engineering Co. deposing therein they were issuing accommodation bills. On strength of that information, the AO has made addition of Rs. 14,32,750/-. The Tribunal has restricted addition to 30% of the purchases on ground that net profit involved in such bogus purchases could not be more than 30%. The AO initiated penalty proceedings and ultimately penalty of Rs. 5,11,500/- has been computed on the addition of Rs. 14,32,750/-. After giving effect to the Tribunal order, this would be reduced. Appeal to the CIT(A) did not bring any relief to the assessee. 4. In response to the notice of haring, the ld.counsel for the assessee sought adjournment. After considering the same, we do not deem it appropriate to grant adjournment with....
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....sment order attached in the paper book your kind office would notice that the AO has used the assessment records of M/s. Prakash Marbles and Engineering Company for making addition in the case of the Appellant. There is no direct evidence found in the case of the Appellant. Regarding the issue of bogus purchases, it may be stated that the Appellant has filed the bills of purchases from M/s. Girnar Sales Corporation and from M/s. Shiv Metal Corporation. The Appellant during the course of hearing also filed the quantitative tally showing the materials used. It was stated that the material was supplied at the site of 6MDC Ltd. for fabrication contract given by GMDC Ltd. It was stated that the material purchased from others and from the above two parties was used for fabrication contract given by M/s. GMDC Ltd. a. Copies of Bills of M/s. Girnar Sales Corporation and M/s. Shiv Metal Corporation are attached in the paper book at page nos. 2 to 7. b. Evidence of making payment by cheque is attached in the paper book at page no. 8. c. Quantitative tally showing the material used for fabrication is attached in the paper book at page no. 53 to 54. ....
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....w of direct decision of ITAT, Ahd on similar facts, we submit that penalty levied by the AO may please be deleted. No material supplied to the Appellant: 7. There is yet another reason why penalty cannot be levied in the case of the Appellant. We have already mentioned that the AO has used material collected in some other case for making the addition in the case of the Appellant. The AO has made reference to the material used in the case of M/s. Prakash Marbles and Engineering Co. However, no such material has been given to the Appellant before making the addition. No evidence has been provided to the Appellant before making the addition. In fact the AO has used material collected at the back of the Appellant for making addition. 8. The AO in the assessment order has made reference to the letter dated 3-2-2005 and affidavit dated 9-2-2005 (refer page 67 para 7) of proprietor of M/s. Girnar Sales Corporation and M/s. Shiv Metal Corporation. It was been contended by the AO in the letter dated 3-2- 2005 and affidavit dated 9-2-2005 the above two parties have admitted of providing accommodative bills. It has also been stated by the AO that the letter dated 3-....
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....ffice to do so." 6. Section 271(1)(c) of the Act has a direct bearing on the controversy which reads as under: "271. Failure to furnish returns, comply with notices, concealment of income, etc.- (1) The Assessing Officer or the Commissioner (Appeals) or the CIT in the course of any proceedings under 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 Act, (A) Such person fails to offer an explanation or offers an explanation which is fou....
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....t to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT(Appeals) by giving a categorical finding to the effect that explanation given by the assessee is false. In the second situation, the deeming fiction would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in addition to this the assessee is not able to prove that such explanation was given bona fide and all the facts relating to the same and material to the computation of the total income have been disclosed by the assessee. These two situations provided in Explanation 1 appended to section 271(1)(c) makes it clear that that when this deeming fiction comes into play in the above two situations then the related addition or disallowance in computing the total income of the assessee for the purpose of section 271(1)(c) would be deemed to be representing the income in respect of which inaccurate particulars have been furnished. 8. In the light of the above, if we examine facts of the present case, then it would reveal that evidence possessed by the AO is an information trans....