2013 (5) TMI 918

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....ssment year 2005-06. 2. In this appeal, the solitary grievance of the assessee is with regard to the levy of penalty under Section 271(1)(c) of the Act amounting to Rs. 3,26,695/-. 3. In brief, the facts are as follows. The appellant is a company incorporated under the provisions of the Companies Act, 1956 and is inter-alia engaged in the business of construction. For the assessment year 2005-06, it filed a return of income declaring total income of Rs. 49,150/- which was subject to scrutiny assessment under Section 143(3) of the Act vide order dated 28.12.2007 whereby the total income was determined at Rs. 26,19,192/-. In the determination of the total income, the Assessing Officer made an addition of Rs. 8,92,790/- on account of cer....

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....dence to prove that there was any falsity in the claim of the assessee. Even with regard to the third creditor i.e. Mr. Zamal Khan, it was pointed out that the said person appeared before the Assessing Officer and admitted of having carried out the work for the assessee. The only discrepancy was that the quantum of work admitted did not correspond to the amount shown by the assessee as outstanding to the said creditor. The learned counsel pointed out that having regard to the parity of reasoning in the case of National Textiles vs. CIT (2001) 249 ITR 125 (Guj.), no penalty is leviable on additions made in terms of the deeming Sections, for the instance, Section 68 of the Act in the present case. 5. On the other hand, the learned Represen....