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2020 (2) TMI 986 - ITAT NAGPURUnexplained investment u/s.69 - physical stock found is less than what is reflected in the books of account - HELD THAT:- CIT(Appeals) observed that where physical stock found is less than what is reflected in the books of account, than there cannot any addition on account of unexplained investment. In the case of shortage of stock a valid presumptions would be that the stock has been sold outside the books of accounts and therefore, the Ld.CIT(Appeals) was of the view, the only addition that can be made is that of gross profit on estimate basis. Since the stock was accounted for in the books of account accordingly there can be no addition on account of unexplained investments. - Decided against revenue Penalty proceedings u/s.271 (1)(c) - Defective notice - HELD THAT:- AO should be clear as to which of the two limbs under which penalty is imposable, has been contravened or indicate that both have been contravened while initiating penalty proceedings. It cannot be that the initiation of penalty proceedings would be on both the limbs i.e. “for furnishing inaccurate particulars of income” or “concealment of income” or without any limbs of Section 271(1)(c) of the Act. AO has to mention specific limbs while imposing penalty u/s.271(1)(c) of the Act. The sanctity in terms of natural justice with regard to this proposition is that the assessee under the scheme of welfare legislation which is embedded in the Income Tax Act, 1961 should get an opportunity to prepare himself for the defense as regards to the exact charge on which penalty is imposed upon him u/s. 271(1)(c) of the Act. In the instant case, no limb/charge has been mentioned by the Assessing Officer and therefore, levy of penalty is not warranted. - Decided in favour of assessee.
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