TaxTMI 
TaxTMI 
2012 (4) TMI 843
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.... business of sale of Silk Sarees on whole sale basis. For the relevant assessment year the assessee filed its return of income on 31-10-2001 reporting a total income of Rs.24,02,600/. During the assessment proceedings u/s 143(3) certain details and particulars were called for by the Assessing Officer. The details called for related to the names and addresses of various trade creditors that were shown as outstanding in the balance sheet of the assessee firm. The assessee submitted the details and stated that the assessee firm purchased Silk Sarees from various weavers on credit basis and the weavers are made payment by post dated cheques, so that the assessee firm could realise the payments from its customers and there upon the payment to th....
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....stated to have submitted its reply contending that the there is no case of concealment of income in respect of the additions. However, the AO proceeded to levy penalty u/s 271(1)(c ) of the IT Act, 1961 holding that the assessee has not offered any explanation. Aggrieved, the assessee preferred an appeal before the CIT(A)) making elaborate submissions. The CIT(A) however, confirmed the levy of penalty and the assessee is in second appeal before us. 3.1 The learned counsel for the assessee Shri V.Srinivasan, while reiterating the submissions made by the assessee before the authorities below, submitted that the amounts added were not cash credits, but trade credits at the end of the year. He submitted that it was a long standing practice in ....
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....d the copies of the same before us in the form of paper book. The case laws relied upon are as under; 1. Bhadra Advancing Pv.Ltd., Vs ACIT 219 CTR 447 2. CIT Vs Orissa Corporation 159 ITR 78 3. CIT Vs M M Gujamgadi 290 ITR 168 4. CIT Vs Jalaram Oil Mills 253 ITR192 5. CIT Vs Punjab Tyres 162 ITR 517 6. Addl.CIT Vs Burugupally Chinna Krishnamurthy 121 ITR 326 7. CIT Vs PMP Soundarya Pandian & Brothers 140 ITR 385 8. CIT Vs Nipani Tobacco Stores 145 ITR 128 9. CIT Vs Aggarwal Pipe Co. 240 ITR 880 10. Kumar Agencies (India) Vs ACIT 265 ITR 57(AT) 11. CIT Vs Reliance 322 ITR 158 12. M/s Balaji Vegetable Products Pvt.Ltd., Vs CIT 290 ITR 172 13. CIT Vs Mehta Engineers Ltd., 4. The learned DR, on the other hand, support....
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....er the provisions of Sec.271(1)(c) of the IT Act, 1961, the penalty u/s 271(1)(c) of the IT Act, 1961 is leviable for furnishing of inaccurate particulars of income or concealment of income and where the assessee does not furnish any explanation or furnishes an explanation which is found to be incorrect. Undisputedly, in the case before us, the assessee has not furnished any explanation before the AO and therefore, the AO was justified in levying the penalty. 5.1 As regards the penalty proceedings before the CIT(A), we find that the assessee has filed a detailed the explanation submitting that the details to prove the genuineness of the transaction, we find that the assessee has filed copy of the purchase note which contains the purchase b....
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....orthiness of the creditors. We find that the CIT(A) after examining the explanation of the assessee has justified the addition. In our view, the CIT(A) has failed to give any reason, as to why the penalty is justified. The assessee has filed the detailed explanation and as long as the explanation is not found to be incorrect the levy of penalty is not justified. It has been held by various High Courts that mere addition will not automatically attract penalty. There has to be some evidence to prove that the explanation of the assessee is not bonafide or is incorrect. There is no finding by the CIT(A) that the explanation of the assessee is incorrect. The finding of the CIT(A) is that the explanation is not acceptable. After considering the v....