2018 (2) TMI 1906

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....gether and are disposed of by this common order for the sake of convenience and brevity. ITA No. 1445/Ahd/2014 Assessee's appeal for A.Y. 2008-09 3. The solitary grievance of the assessee relates to the levy of penalty u/s. 271(1)(c) of the Act on the allegation that there was under valuation of closing stock of Rs. 45,26,544/-. 4. The roots for the levy of penalty lie in the assessment order dated 07.12.2010 framed u/s. 143(3) of the Act. During the course of the scrutiny assessment proceedings, the A.O. noticed that the proprietary business of M/s. Suvarnamahal of which ShriPrakashchandra Shantilal HUF was the proprietor was converted into a partnership firm and the proprietary concern was closed on 24.02.2008. The A.O. was....

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....cess. 8. Before us, the ld. counsel for the assessee vehemently state that the assessee never filed any inaccurate particulars and the method of valuation adopted by the assessee was very much in line with the decision of the Hon'ble Supreme Court in the case of Shakti Trading Company 250 ITR 871. It is the say of the ld. counsel that the revenue authorities have erred in drawing support from the decision of the Hon'ble Supreme Court in the case of ALA Firm (supra) inasmuch as the facts of that case are clearly distinguishable from the facts of the case in hand. The ld. counsel concluded by saying that the levy of penalty is erroneous and should be deleted. Per contra, the ld. D.R. strongly supported the findings of the lower authorities....

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.... CIT(A) erred in deleting the penalty levied u/s. 271(1)(c) of the Act to the extent of Rs. 1.13 crores on the alleged ground that the assessee has not disclosed the income arising from transfer of Trademark/Goodwill amounting to Rs. 5 crores in the return of income. 11. While framing the assessment, the A.O. found that there is an entry made in the books of accounts of partnership firm for trade mark rights, the value of which was shown at Rs. 5 crores. The assessee was asked to explain the nature of entry made in the case of partnership firm of Rs. 5 crores written as "trade mark". It was explained that the partnership firm in its books of account has shown trade mark at a value of Rs. 5 crores by making corresponding credit entry in p....

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....it is a clear case of concealment and levied the penalty u/s. 271(1)(c) of the Act accordingly. 13. Assessee agitated the matter before the ld. CIT(A). It was strongly contended that though the ld. CIT(A) in quantum proceedings had confirmed the addition but the same was considered u/s. 45(3) of the Act by treating the cost of goodwill as Rs. NIL. The assessee's contention of taking the full value of consideration at Rs. 1.25 crores as the same was the amount credited to the capital account of the assessee HUF was also dismissed and the full value of consideration was taken at Rs. 5 crores. The matter travelled up to the Tribunal and the Tribunal confirmed the findings of the ld. CIT(A). 14. While giving the appeal effect, the A.O. di....