TaxTMI 
TaxTMI 
2017 (8) TMI 332
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....made, disallowed in assessment proceeding does not attract penalty at all. 5. The CIT(A) has erred in holding that appellant has not furnished any explanation with regard to addition/disallowance. 6. The CIT(A) has erred in holding that "appellant has consciously made the concealment and furnished inaccurate particulars of his income with a view to avoid imposing of tax. 7. The aforesaid grounds of appeal are independent and without prejudice to one another. The appellant craves leave to add, amend, alter or vary any of the aforesaid grounds of appeal before or at the time of hearing. 2. The facts in brief of the case are that: (i) the assessee company was engaged in export of Knitwear during the relevant period; (ii) the assessee did not file return of income for the year under consideration on or before the due date of filing of return of income under section 139(1) of the Act i.e. 30/11/1996; (iii) the Assessing Officer issued notice under section 142(1) of the Act on 03/12/1996 for filing return of income for the year under consideration; (iv) the return of income was filed on 26/02/1999 declaring loss of Rs. 11,....
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....sessee to claim that what was the stock destroyed, how it was destroyed and where it was a standing in the books of account. Aggrieved with the finding of the Ld. CIT-A on the issue of penalty, the assessee is in appeal before the Tribunal raising the grounds as reproduced above. 3. Before us, the Ld. counsel of the assessee filed the paper book containing 1 to 88 pages and submitted that the assessee had disclosed full information in respect of the loss in the return of income filed. He referred to page - 6 of the paper book, which is copy of profit and loss account for the year under consideration and submitted that abnormal loss of Rs. 17,13,14,030/- was duly reported under the expenditure. He further referred to page 17 of the paper book, which is Schedule - L to the balance sheet and contained notes on accounts. In part 'B' of the said schedule, in note No. 6, it is mentioned that an amount of Rs. 17,13,14,030/- has been written off on account of damage, which took place at the 'Dichaun Kalan' (godowns) of the company due to demolition of building by the Corporation in the absence of the director or any employee. He further referred to the decision of the Tribunal and su....
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....al Corporation and stolen. The Assessing Officer observed that against export sales of Rs. 24,23,78,722/-, the cost of material utilized for export was claimed at Rs. 4,27,04,735/-, which was after taking into consideration the closing stock as under: Opening stock Rs. 38,20,25,167.00 Add : Material purchases Rs. 12,99,72,769.75 Less : Closing stock Rs. 29,79,79,171.00 Rs. 4,27,04,735.75 6. According to the Assessing Officer, when the entire stock stands accounted for, it was not understood how the claim of Rs. 17,13,14,030/- on account of abnormal loss of stock was worked out and claimed in the profit and loss account. No reasonable explanation in this regard was furnished before the Assessing Officer. We have examined this question raised by the Assessing Officer. According to us, if the assessee makes entry of loss of stock in material consumed, then also the net result of the business would be same and there will not be any impact on the net loss shown by the assessee in profit and loss account. Further, in support of the claim of theft of stock before the Assessing Officer, the assessee filed copy of first information....
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.... few small taxpayers) is aware of the fact that not all the returns are taken up for scrutiny and that only about 2% cases are scrutinized. This fact induces them to make such wrong/inadmissible claims with the intention of going scot-free, if the case is not taken up for scrutiny. Furthermore, disallowance/additions in such cases can be made only if the AO is having sufficient time & knowledge to catch hold of such deficiencies which is not practically possible/feasible in each and every case. Considering the facts of (i) non filing of return & (ii) not being able to prove correctness of its claims during proceedings spanning over a lengthy period of more than 15 years before various authorities including 03 AOs, 02 CIT(A)'s, CIT((Adm.) and ITAT; in the present case; it can be safely inferred that asses see tried to evade tax by not offering proper income to tax. Penal provisions are meant only to have deterrent effect to dissuade tax payers for making such claims and will lose its impact if not applied in cases of such violation. 6. The Hon'ble Delhi High Court in the case of Zoom Communication Pvt. Ltd. reported in (2010) 40 DTR (Del) 249, dated May 24, 2010 have ob....
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....t restored to the Assessing Officer. The findings of the Tribunal are reproduced as under: "4. With the assistance of learned representative, we have gone through the record carefully. The assessee has filed a paper book containing 29 pages. In this paper book, assessee has placed on record a note in respect of loss claimed due to demolition, copy of a letter dated 09th September, 1995 mitten by the assessee to die Manager, Indian Bank, Delhi seeking a certificate demonstrating the details of stock pledged with the bank. On page 22, assessee has placed on record certificate of lire bank. It also placed on record copy of an application moved under Right to Information Act, 2005 dated 15.11.2010. *The assessee has placed on page 28, the information received under the RTI Act. With the help of these documents, it was contended by the learned counsel for the assesses that the demolition taken place on 30.1.1996. Learned DR pointed out that these documents were not produced before the Assessing Officer. They cannot be placed in the paper book without seeking permission for leading additional evidence. On this objection, we put the learned counsel whether he wants to file applic....
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....assessment year 1996-97 the appellant could not furnish other documents" It further held "It is open to the petitioner to rely upon the said documents and point out practical difficulties as the case relates to assessment year 1996-97 before the AO/appellate authorities where penalty proceedings are pending. We also notice that return was filed belatedly and, therefore, appellant could not have claimed carried forward of loss. This is another aspect which can be raised before the said authorities." Copy of the order of Delhi High Court is filed along with the written submissions. In view of the above you are requested to kindly consider the additional evidence filed in the interest of the justice From perusal of those documents you will kindly appreciate that demolition of godown took place which resulted in loss of stock. The relevant documents are: - 1. Letter dated 19.09.1995 filed with Indian Bank for pledge of Goods. Page 26. 2. Confirmation letter dated 21.09.1995 issued by Indian Bank Page 27. 3. Copy of letter dated 13.12.2010 issued by MCD in response to application under RTI confirming demolition of b....