2005 (11) TMI 36

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.... The assessee-company is carrying on the business of manufacturing cotton yarn. The assessee filed its return of income showing its total income as Rs. 45,99,530 on November 28, 1994, which was accepted into by the Department. After scrutiny, the Deputy Commissioner of Income-tax, Special Range I, Madurai, the respondent herein, made an addition of Rs. 25,55,192 as the cotton lying was undervalued at Rs. 29.38, instead of Rs. 39.76 per kilo. Aggrieved by the said addition, the assessee filed appeal before the Commissioner of Income-tax (Appeals), who by order dated March 13, 1997 confirmed the order passed by the respondent herein. Challenging the said order, the assessee filed second appeal before the Income-tax Appellate Tribunal, which ....

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....appeal preferred before the Appellate Tribunal being dismissed by order dated March 22, 2005, the assessee has come forward with T.C. (Appeal) No. 952 of 2005 raising the following substantial questions of law: "1. Whether the Tribunal is correct in confirming the levy of penalty under section 271(1)(c) of the Act for the assessment year 1994-95 on the facts and in the circumstances of the case? 2. Whether the Tribunal is correct in concluding that the Explanation to section 271(1)(c) of the Act was correctly invoked to levy the said penalty in spite of total disclosure of facts relating to the valuation of closing stock of cotton?" In T.C. No. 951 of 2005, the question under consideration is with regard to the addition of Rs. 25,5....

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....ount. The above findings of the Tribunal are purely on the basis of facts. The appellant/assessee has not made out any case to interfere with such findings of fact. In such a view of the matter, we are not inclined to interfere with the order passed by the Tribunal in respect of addition of Rs. 25,55,192. The questions raised in T.C. No. 952 of 2005 are with regard to levy of penalty under section 271(1)(c) of the Income-tax Act. Learned counsel for the appellant contends that without considering the necessary facts, the Assessing Officer has levied a penalty of Rs. 14,69,230 holding that the company has concealed the income and furnished inaccurate particulars of income regarding valuation of closing stock. Counsel has further submitted....