TMI Blog2023 (8) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... In the case of Reliance Petro [ 2010 (3) TMI 80 - SUPREME COURT] held that merely because the claim of assessee was not accepted or not found to be acceptable by the tax authorities does not entitle the AO to impose penalty u/s 271(1)(c) - AO was imposing penalty has held that the penalty was leviable in the case of concealed income represents the returned loss. AO while imposing the penalty recorded findings that the penalty is being imposed for furnishing inaccurate particulars of income or concealed income which shows that even at the time of imposition of penalty the AO himself was not clear as to whether the assessee has furnished inaccurate particulars of income or has concealed particulars of income. CIT(A) while confirming part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... maged destroyed and mixed up with mud and were not of any use. Sales tax department accepted the accounts. And waste stock was not covered by insurance i.e. loss caused by rainfall. In assessment proceedings. The A.O. arbitrarily rejected the accounts statements of the assessee. Thus initiated penalty proceedings and imposed penalty of Rs. 332255/- and the Learned CIT(A) partly deleted partly withheld against which appeal is preferred. 4. The ld counsel of the assessee submitted that the AO has wrongly and arbitrarily imposed penalty of Rs. 3,32,225/- on the assessee and the ld CIT(A) has also erred in confirming the part penalty based on the addition of Rs. 6,95,065/- on account of wrong claim of loss of stock. The ld counsel submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts Pvt. Ltd [2010] 322 ITR 158 and judgment of Hon ble Jurisdictional High Court of Punjab and Haryana in the case of Dhillon Rice Mills reports as (2002) 256 ITR 447 P H3 the penalty may kindly be cancelled. 5. Replying to the above, the Sr. DR supported the penalty as well as first appellate order confirming the penalty and submitted that since the addition had been confirmed and there was no doubt that the income to the extent of claim of loss has been concealed by the assessee therefore, penalty u/s 271(1)(c) of the Act was rightly imposed on the assessee. 6. On careful consideration of the above submissions, first of all, we note that the AO made two additio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income or has concealed particulars of income to alleged penalty provisions of section 271(1)(c) of the Act. 8. We are unable to ignore the claim of loss of stock has not been disputed by the Sales Tax Department and no discrepancy has been pointed out by the Sales Tax Authorities to the claim of loss of stock. In the case of Reliance Petro (supra) Hon'ble Supreme Court held that merely because the claim of assessee was not accepted or not found to be acceptable by the tax authorities does not entitle the AO to impose penalty u/s 271(1)(c) of the Act. The AO was imposing penalty has held that the penalty was leviable in the case of concealed income represents the returned loss. In para 8 the AO while imposing the penalty recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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