TaxTMI 
TaxTMI 
2023 (9) TMI 1753
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....d/03, dated 29.12.2006 for the Assessment Year 1998-99. Vide impugned order, dated 29.12.2006, the Tribunal dismissed the appeal filed by the appellant by observing that the appellant failed to satisfactorily explain the income and thereby confirmed the order of the Commissioner of Income Tax (Appeals)-II, Hyderabad [for short, CIT(A)] and levied penalty under Section 271(1)(c) of the Act. 2. Heard learned counsel Ms. K.Neeraja for the appellant and the learned standing counsel Ms. B.Swapna Reddy for the respondent. 3. The brief facts leading to filing of present appeal are as under: 4. The appellant-firm is engaged in the business of exhibition and distribution of films. The appellant filed return on 31.10.1998 for the assessment ....
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....eted the assessment taking into consideration the profit and loss account from the computer at the time of survey. Thus, the A.O., made an addition of Rs. 8,86,984/-. Further, the A.O., also initiated penalty proceedings under Section 271(1)(c) of the Act. In response to the penalty notice, the appellant again contended that they were not aware as to how the accountant maintained the accounts and though all the information regarding the transactions of the business was furnished to the accountant, he admits to have forgotten to enter certain entries regarding to certain expenditure incurred by the firm. 7. The A.O. further observed that the statements of the asssessee are self-contradictory. On one hand, the appellant admits the correctn....
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....ition a presumption of concealment is an automatic. That it is for the assessee to adduce evidence to the satisfaction of the A.O. to the effect that that it is not the concealed income or the explanation given by him is a bona fide and all the facts relating to the same and material for the computation of the total income has been fully disclosed by the assessee. 11. The first appellate authority further observed that the assessee has not furnished any explanation as to how the additional income arose. Further contention of the appellant that the trial balance etc. prepared by the accountant was found to be false by the A.O. The first appellate authority held that the assessee has not discharged the burden cast upon it to prove to the s....
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....ontended that during the assessment proceedings, the A.O., wanted the appellant to reconcile the difference between the two accounts and while completing the assessment, the A.O. did not consider all the expenditure and allowed deduction in respect of partial expenditure, resulting in determination of total income at Rs. 14,63,674/- as against the returned income of Rs. 5,79,940/-. 16. The learned counsel further contended that the detailed explanation submitted by the appellant was not considered by the A.O., and that initial burden is on the revenue. However, revenue failed to prove that the difference between the income returned and income assessed as the concealed income and the A.O., has to record his satisfaction before initiating ....
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.... the Act is attracted. She further contended that the burden is on the assessee to satisfactorily explain with regard to the huge difference of gross income, which the assessee failed and therefore, the A.O., is justified in initiating the penalty proceedings and prayed for dismissal of the appeal. Consideration: 20. Perusal of the material, proceedings of the A.O., would clearly show that before initiating the penalty proceedings, A.O. had sought clarification/explanation from the assessee with regard to huge difference in gross income declared by the assessee with that of the income shown in the profit and loss account found during the survey operation. Further, the record also shows that the assessee failed to satisfactorily explai....
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.... with his accountant to notice that the print outs taken were of their concern. The dispute was only with regard to the expenditure part, which was also limited to deduction of Rs. 3,01,605/- and the assessee admitted the differential income and could not furnish valid explanation for the difference in the gross income. (iii) Once it is assumed that the A.O., was satisfied about the concealment during the course of the assessment proceedings, the presumption in Explanation (1) to Section 271(1)(c) automatically arises when there is difference between the income returned and income assessed as held by the apex Court in the case of CIT vs. K.P.Madhusudhan [251 ITR 99 (SC)], the burden is on the assessee to prove that the addition mad....