2012 (12) TMI 117 - AT - Income Tax

Penalty u/s 271(1)(c ) alleged that assessee was indulging in suppressing the information from theme wedding parties which includes design and layout for the functions, implementation and coordination of weddings etc. - alleged that for various events the assessee as per the diary has shown that certain amounts were received which are not correctly reflected in the books of accounts the issue qua the non-reliability and non-reconciliation of the figures is already concluded in the quantum proceedings Held that - Consistently the assessee has not been able offer any explanation as to how the amounts can be reconciled and has merely chosen to take a general argument that the entries as per the books are higher than as per the diary whereas consistently the A.O. s finding has been upheld that the assessee has been in the habit of suppressing the receipts - appeals of the assessee are dismissed

Issues Involved:
1. Sustenance of penalty under Section 271(1)(c) for A.Y. 2004-05 and 2006-07.
2. Concealment of income and filing of inaccurate particulars.
3. Addition based on documents impounded during the survey.
4. Nature of expenses claimed (capital vs. revenue).
5. Suppression of receipts and estimation of income.

Detailed Analysis:

1. Sustenance of Penalty under Section 271(1)(c) for A.Y. 2004-05 and 2006-07:
The assessee, an Event Manager, filed appeals against the orders of the CIT(A) sustaining the penalty imposed by the A.O. under Section 271(1)(c) for the A.Y. 2004-05 and 2006-07. The Tribunal decided both appeals by a common order for convenience.

2. Concealment of Income and Filing of Inaccurate Particulars:
The A.O. found that the assessee had been receiving cash over and above the cheque payments, which was not reflected in the books of accounts. The modus operandi involved suppressing receipts by accepting cash, which benefited both the assessee and the clients by avoiding service tax. The CIT(A) and the Tribunal upheld the A.O.'s findings, confirming the concealment of income and filing of inaccurate particulars.

3. Addition Based on Documents Impounded During the Survey:
During a survey operation under Section 133A, certain documents were impounded, leading to additions. The A.O. made additions based on these documents, which were upheld by the CIT(A) and the Tribunal. The Tribunal directed that 54% of the total receipts, which were added by the A.O. and confirmed by the CIT(A), should be treated as the income of the assessee. The A.O. recomputed the income accordingly.

4. Nature of Expenses Claimed (Capital vs. Revenue):
The assessee claimed certain expenses as revenue, which the A.O. treated as capital expenditure. The CIT(A) allowed depreciation on these expenses, and the Tribunal did not interfere with this finding. However, the penalty was upheld as the assessee failed to produce bills/vouchers to substantiate the nature of expenses, indicating that the claim was not bonafide.

5. Suppression of Receipts and Estimation of Income:
The Tribunal found that the assessee had suppressed receipts based on the impounded documents. The A.O. added 100% of the suppressed receipts as income, but the Tribunal directed that only 54% should be treated as income, considering necessary expenses. The penalty was upheld as the suppression of receipts amounted to concealment and filing of inaccurate particulars.

Conclusion:
The Tribunal upheld the penalty under Section 271(1)(c) for both A.Y. 2004-05 and 2006-07, confirming the findings of the A.O. and CIT(A) regarding the concealment of income and filing of inaccurate particulars. The appeals of the assessee were dismissed.

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