2017 (3) TMI 1177

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....d the Revenue were heard together and are being disposed of by this consolidated order for the sake of convenience. 3. The assessee in ITA No.2233/PUN/2014 has raised the following grounds of appeal: "1. The learned CIT(A)-V, Pune erred in law & on facts in sustaining the concealment penalty of Rs. 15,00,000/- levied by the learned DClT, Circle-8, Pune u/s 271(1)(c) of the ITA, 1961 for furnishing of inaccurate particulars of income. 2. The learned CIT(A)-V and the learned AO ought to have appreciated that the stock related declaration of Rs. 50,00,000 made during the survey u/s 133A proceedings was duly acted upon while filing of return of income and as such, there was no any concealment of income by furnishing of inac....

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....ent in furniture and construction of office building etc. The assessee also disclosed another Rs. 50 lakhs on account of shortage in value of stock. The assessee had filed return of income declaring total income of Rs. 12,71,180/-. The case of the assessee was taken up for scrutiny. The assessee was show caused as to why the additional income of Rs. 1 crore declared during the course of survey be not included in the return of income. The Assessing Officer noted that the assessee had credited Rs. 50 lakhs being the value of additional stock declared and arrived at gross profit of Rs. 2,26,90,520/-, however, the assessee declared net loss of Rs. 40,29,891/-. The Assessing Officer further noted that in the computation of income assessee had wo....

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.... of section 69 of the Income Tax Act. Further the income disclosed on account of unexplained investment could not be adjusted against business losses of the same year, or brought forward loss and in the absence of same there was no question of adjusting the deemed income against the loss of the current year or even the brought forward losses of the earlier years. The Assessing Officer held so and considered the said income separately for the purpose of computation of assessee's total income. 7. As far as the other declaration of Rs. 50 lakhs on account of difference in the value of closing stock was concerned, the assessee had included the said amount in the closing of stock and accordingly credited to the manufacturing and trading accou....

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....he denial of set off effected by the Assessing Officer, as per the CIT(A), could not be said to be filing of inaccurate particulars of income, particularly when the same was shown in the return of income offering the amount for taxation. Accordingly, the Assessing Officer was held to be not justified in levying penalty under section 271(1)(c) of the Act in respect of set off of business loss against deemed income offered in the return of income. 9. In respect of the second issue, i.e. the declaration made on account of investment in furniture, office building etc. to the tune of Rs. 50 lakhs in the computation of income directly, the CIT(A) noted the observations of Assessing Officer in this regard that the effect of declaration was null....