AI Drafter 
TaxTMI 
TaxTMI 
2016 (12) TMI 293
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.... Pvt. Ltd., Manish & Barkha & Parshva & Co. are not genuine. During survey proceeding one of the partners Shri Kishore Golani offered 50% of purchase as additional income to buy peace and avoid litigation. 4. After the survey assessee voluntarily revised its return of income duly incorporating the income offered. The revised return incorporating the income offered during survey was filed on 31/03/2013. On 05/02/2014, AO issued notice under Section 148 and the re-assessment order was framed on 30/03/2015. In the re-assessment order income was assessed as offered by the assessee in the revised return. In the re-assessment order so framed, AO has independently verified the details and found the same in order and accordingly accepted the additional income offered by the assessee. Thereafter, AO levied penalty under Section 271(1)( c) on the plea that assessee has concealed particulars of income. 5. By the impugned order CIT(A) confirmed the order of AO by observing that additional income offered by the assessee is over and above the original return income. Therefore, the assessee conceal the income and liable for penalty against the order of CIT(A) assessee is in further appeal b....
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.... the partnership firm has undergone several changes in its constitution. Mr. N D Golani, my uncle and the founder partner having 36% stake, was in charge of purchase requirements and procurements thereof. After his demise on 17.02.2011, Mr. B D Golani. my other uncle who was assisting him earlier had been looking after of the purchase & procurement work. He also passed away on 18.09.2011. Subsequently. I was left with no choice but manage the purchase along with project execution works of this firm. Q.14 Please state the modus operandi of purchase of material by M/ s Golani Brothers. Ans. Sir, as stated earlier I was not handling the purchases and hence am not aware of the exact modus operandi followed by earlier persons, who looks after the purchases. After I have taken over the reigns of purchase from 18.09.2011 (After Death of Mr. BD Golani), I am trying to follow a streamline the purchase procedures which is a under:- As per the requirement we make local enquires and after negotiation we place order through phone, email etc. The material is directly supplied by the supplier to the concerned site alongwith a delivery challan, weightment slip, LP etc. T....
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....ardized purchase procedure adopted by your company and also peruse the statement of Shri Ashok Asrani (Prop. Manish &Barkha) and offer your comments regarding the genuineness of the purchase claimed from MI s Manish &Barkha and MI s Thane Steel Private Limited. Ans. Sir, I have perused the said documents and statement of Shri Ashok Asrani. I am of view that purchase were made. But, I agree that there are certain discrepancies and procedural lapses regarding the documentation involved in the purchases shown from MI s Manish & Barkha and M/s Thane Steel Private. Limited. As I was not involved in the purchase process earlier 1 am not in position to establish the genuineness of the purchases claimed from the said concerns. Hence, I take this opportunity to offer adhoc amount of 50% of the purchases, debited on account of above said two parties and also in respect of M/s Parshva& Co., as my additional income and promise to revise my returns and pay tax accordingly. Q.25 Please refer to your answer to Q.No.24 above wherein you have admitted to withdraw the claim of 50% of the purchases made from MI s Manish & Barkha, MI s Thane Steels Private Limited and MI s Parshva& c....
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....tract undertaken by M/s Golani Brothers. For relevant assessment year Mr. N D Golani, the founder partner was in charge of purchase requirements and procurements thereof. After his demise on 17.02.2011, Mr. B D Golani, who was assisting him earlier had been looking after of the purchase & procurement work. He also passed away on 18.09.2011. Thereafter, Mr. KishorGolani manage the purchase along with project execution works of this firm. Mr.KishoreGolani agreed that there are certain discrepancies and procedural lapses regarding the documentation. But since he was not involved in the purchase process earlier, he was not in position to establish the genuineness of the purchases claimed from the said concerns. Hence, he offered ad-hoc amount of 50% of the purchases, and revised his returns and paid tax accordingly to buy the peace of mind. Even M/s. Thane Steels Pvt. Ltd., had confirmed the transaction and also provided confirmation of transactions alongwith certified bills. 8. It is also clear from the statement that income was offered just because of improper documentation, even parties confirmed the transactions and not offered because of bogus purchase. Therefore, the taking th....
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....mpt from tax. Thus, the decision of the Apex Court would not apply to the facts arising in the present case (ii) The contention on behalf of the Revenue that in case there is a tax impact by virtue of change of head during the assessment proceedings then penalty is imposable and the decision of this Court in M/s. Bennett Coleman (supra) would not apply. In such a case, Mr. Malhotra, for the Revenue emphasized the fact that in M/s Bennett Coleman (supra) the Court was dealing with the change of head of income but not with regard to a claim for full exemption from payment of tax as in this case. We are unable to accept the aforesaid submission. According to us, the distinction sought to made on behalf of the Revenue is not acceptable as the ratio of the decision in M/s Bennett Coleman (supra) is where complete disclosure of income had been made in the return of income and head of the income undergoes a change at the hands of the Assessing Officer would not by itself justify the imposition of penalty under Section 271(1)(c) of the Act. (iii) We find that the Commissioner of Income Tax(A) during the penalty proceedings had again examined the issue whether the claim of....
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....e AO did not disturb anything, but went on to levy the penalty, which even he could not substantiate under the phrase, "inaccurate particulars of income." We are in acceptance with the argument of the AR that if the revenue authorities were holding the purchase of Rs. 3,18,55,857/- in 2009-10 and Rs. 2,44,98,719/- as bogus in assessment year 2010-11, why accept asessee's declaration of peak amounts and not add back the purchase taken to be bogus, by rejecting the books. 38. The fact that the revenue authorities accepted the books of accounts go to prove that accept for the reliance on assessee's statement, and the statements of 18 persons, whose statements were taken at the back of the assessee and without affording an opportunity for cross examination, the revenue authorities did not have anything to show and prove that here is the concealment of income, resulting from furnishing of inaccurate particulars of income. This is so because there has been nothing with the revenue authorities to prove and show that any income has been concealed. The assessee filed its ROI declaring the amount surrendered. This income was accepted by the AO. By no stretch of logic, this ....
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....hane Steel Pvt Ltd. to the effect that it is genuine party and all the details are in order. Therefore, Ld. AO accepted the explanation of the assessee and assessed the income as offered by the assessee. If the details were not in order or purchases are bogus, then the Ld. AO would have made the entire addition and not had restricted the same to 50% as offered by the assessee. This facts shows that department also accept the genuineness of the purchases by not making the addition of purchases. This is evident from assessment order itself where the Ld. AO mentioned that:- The assessee company submitted copies of Invoice, ledger account, payment details and reconciliation of the same with the bank statement. The assessee also filed details of Thane Steel P Ltd from the Maharashtra Government Sales Tax website in which the companies status is shown as active. This fact was independently verified and was found in order. It is pertinent to mention here that M/ s Thane Steel Private Limited is also a registered company under companies Act, 1956 and is also Excise Registered and ISO certified company. In addition to this the assessee submitted VAT audit report for the financial y....
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....as made, the AO mentioned that income offered by the assessee is accepted and added. There is no separate addition, it is just acceptance of the income offered by the assessee. 17. It is clear from the above discussion that decision of Vipul Life Sciences Ltd.V/s DCIT [2015] 57 taxmann.com 25 (Mumbai - Trib.) squarely applies to the assessee's case and penalty deserves to be deleted. 18. It was also argued by learned AR that assessee had offered the income even before the issue of notice u/s 148 and same is accepted and assessed vide order dated 30/03/2015. Hence, there is no concealment of income. 19. Furthermore, penalty under Section 271(1)(c) cannot be levied on estimated addition. Since AO has made addition on 50% of the alleged purchase, the same was on estimation without pointing out which part of purchase was genuine and which part was non-genuine. 20. As per learned AR, no penalty can be imposed if the facts and circumstances are equally consistent with the hypothesis that the amount does not represent the concealed income as with the hypothesis that it does. If the assessee gives an explanation which is unproved but not disproved, i.e., it is not accepted but ....