2018 (8) TMI 1763

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....cts in sustaining the penalty of Rs. 4,70,269/- levied by the ld. AO u/s 271(1)(c) of the Income Tax Act, 1961. 2. That the assessee craves leave to add, amend, alter, delete any of the grounds of appeal before the hearing. 2. The assessee is a partnership firm and engaged in the business of civil contract work for various Government departments. In the assessment completed under section 143(3) of the IT Act, the AO inter alia made addition of Rs. 14,25,059/- on account of suppression of closing work in progress declared by the assessee in the Profit & Loss account. The said addition was confirmed upto the stage of Tribunal in the quantum appeal and hence attained the finality. The AO in the meantime initiated the penalty procee....

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....the information provided by the departments about the total contract receipts, then the addition though sustained and attained the finality would not attract the penal provisions of section 271(1)(c) of the Act. He has further contended that the AO has not confronted with the information obtained from the departments and made the addition unilaterally. Further, the addition made in the assessment proceedings would not ipso facto attract the penalty under section 271(1)(c) without considering the explanation of the assessee. The ld. A/R has pointed out that the said addition made by the AO in the closing work in progress was not considered as an opening stock of the subsequent year and, therefore, the addition so made for the year under cons....

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.... whereas the assessee declared the total receipts in its books of accounts at Rs. 4,61,66,265/-. The AO after analyzing the purchases made by the assessee during the month of March and measurement of the work by the department on 8th March, 2009 has come to the conclusion that the closing stock of the assessee should have been at Rs. 24,03,399/- as against the declared closing stock of Rs. 9,78,340/-. Therefore, the difference of Rs. 14,25,059/- was added as suppression of closing work in progress. Considering these facts along with the total receipts declared by the assessee which is more than Rs. 4.61 crores as compared to the total receipts as per the information received from the departments at Rs. 4,26,84,832/-, the difference amount c....