TaxTMI 
TaxTMI 
2018 (4) TMI 1273
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.... of the Act. 2. The assessee has raised several grounds in its appeal however the crux of the issue is that the Ld.CIT(A) has erred in confirming the penalty of Rs. 38,84,470/- levied by the Ld.AO by invoking the provisions of Section 271(1)(c) of the Act. 3. The brief facts of the case are that the assessee is a private limited company engaged in the business of wind turbine operations, energy conservation projects and civil constructions, filed its return of income for the assessment year 2013-14 on 30.09.2013 declaring loss of Rs. 12,22,69,274/-. The case was selected for scrutiny under CASS and finally assessment was completed under Section 143(3) of the Act on 28.03.2016 wherein the Ld.AO made an addition of Rs. 1,19,72,476/- bas....
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....s unexplained cash expenditure and not to be taxed in the hands of the assessee." However the Ld.AO rejected the explanation given by the assessee because of the following reasons:- i. During the search proceedings a voucher dated 21.05.2012 for an amount of Rs. 50 lakhs of cash payment was seized which was prepared by Shri Ramakrishna, AGM (Fin) of TVH Energy, which was approved by Shri T. Selvamani, Director of TVH Energy. ii. Cash of Rs. 50 lakhs was received and acknowledged by Shri Manoj C of Leitner Shriram. For the above mentioned reasons, the Ld.AO opined, the assessee's contentions that the expenses were neither incurred nor paid by the company is not acceptable. The Ld.AO further came to the conclusion that....
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.... was a rough estimate. (v) Various financial budgeting aspects worked out by the employees which were not relevant were deleted from the computer and therefore inference cannot be made that the assessee had incurred actual expenditure. (vi) The entire addition is based on presumptions and assumptions based on certain discarded computations in the computer. It was therefore argued by the Ld.AR that though additions are sustained penalty cannot be imposed based on presumptions and assumptions. 6. The Ld.DR on the other hand relied on the orders of the Ld.Revenue Authorities and pleaded for confirming the same. 7. We have heard the rival submissions and carefully perused the materials on record. From the facts of the....
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.... additions are made merely on the basis of estimate. In the case CIT Vs. Pavankumar Dalmia reported in 168 ITR 1, the Hon'ble Kerala High Court has held that where there was nothing to show that the plea of the assessee was false or inherently impossible, penalty cannot be imposed. That being the case, we wonder how penalty can be levied in the case of the assessee where addition is made based on only presumption. Further in the case CIT Vs. Manjunatha Cotton Ginning Factory reported in 359 ITR 565, the Hon'ble Karnataka High Court had arrived at several conclusions and the most relevant ratios laid down are extracted herein below for reference:- (i) The imposition of penalty is not automatic. (ii) Imposition of penalty ev....
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....in 324 ITR 170, the Hon'ble Apex Court has held that even if the assessee had disclosed Nil income and on verification of records, it is found that certain income has been concealed or has wrongly been shown, penalty shall be leviable. In this case, it is evident that there is a concrete finding by the Revenue that certain income was concealed by the assessee, but in the case of the assessee there is no such finding. In the case CIT Vs. Chemiequip Ltd., reported in 265 ITR 265, decided by the Hon'ble Bombay High Court, the issue was with respect to willful enhancement of losses and by claiming wrong deduction U/s.80HHC of the Act, however the issue in the case of the assessee was addition made based on certain information gathered from the ....