TaxTMI 
TaxTMI 
1999 (8) TMI 103
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....5, declaring net loss of Rs. 1,75,064. The assessment was completed under s. 143(3) on 12th Dec, 1996, and the total income determined in the assessment comes to Rs. nil after setting off depreciation for the current year against the income computed. The following are the details of the computation appearing at the end of the assessment order. Rs. Rs. Net loss as per audited P&L a/c &nbs....
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....bsp; -------- Total income Nil The AO initiated the penalty proceedings under s. 271(1)(c) as he was of the view that the assessee was liable to penalty in respect of disallowance made on account of shortage in cost of colour, chemicals and cloth. In the order under s. 271(1)(c) passed on 27th June, 1997, the AO considered the objections raised by the assessee to....
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....r Structures (P) Ltd. vs. Asstt. CIT (1993) 47 TTJ (Ahd) 146; (4) CIT vs. Jaora Oil Mills (1981) 129 ITR 423 (MP); (5) CIT vs. Prithpal Singh & Co. (1990) 85 CTR (P&H) 26 : (1990) 183 ITR 69 (P&H). It is further pointed out that reference applications and SLPs. filed by the Department against the decision of the Tribunal have been rejected by the Hon'ble Gujarat High Court and Hon'ble Supreme Court as reported in (1994) 212 ITR (St) 60. 3. On the other hand, the learned Departmental Representative took strong exceptions to the pleadings of the learned counsel by referring to the case laws reported in N. Venkatavaradha Reddiar vs. CWT (1995) 127 CTR (Mad) 158 : (1995) 214 ITR 76 (Mad), Laxmi Chand Bhagaji vs. Dy. CIT (199....
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....re kept in open space of the factory were also not taken in the list. Such as industrial salt which is used in water sorting plant is kept in open. Hydre is hazardous. So major quantity is kept in open field only. Limited quantity is kept in store for actual issue of hydre after weighting to the production shop. (c) That colours and chemicals duly mixed and prepared for use and lying in the different production centres, such as sprinting machines, padding mangle and colour kitchen and finishing chemicals at stanter have not been considered while noting down the stock on the date of survey. (d) That the chemicals used in the effluent treatment have not been included in the stock list, which are kept in open near the treatment plant. ....
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....re distinct and separate. The additions made in the assessment order may be relevant for penalty proceedings but such addition does not necessarily lead to levy of penalty. The question to be considered is whether the assessee concealed the particulars of income or furnished inaccurate particulars of income while filing the return of income. When there was a difference in the stock valuation according to the AO, the assessee came forward with an explanation regarding the discrepancy. Though this explanation was not found acceptable to the AO and disallowance was made in the assessment order, the assessee's explanation as quoted by us in para 4 above appears to be quite plausible one in the circumstances of the case. There is no indicati....