2009 (12) TMI 57 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of penalty under u/s 271(1)(c) for addition of unexplained credits u/s 68 of IT Act.

Summary:

Issue 1: Deletion of concealment penalty by CIT(A) for unexplained sundry creditors

The appeal was filed by the Revenue against the deletion of concealment penalty by CIT(A) for the addition of Rs. 10 lakhs on account of unexplained sundry creditors. The AO accepted the offer of the assessee to surrender Rs. 10 lakhs due to inability to produce sundry creditors for verification. The AO initiated penalty proceedings under u/s 271(1)(c) for concealment of income. The CIT(A) deleted the penalty, leading to the Revenue's appeal. The Revenue argued that the addition of Rs. 10 lakhs represented concealed income, justifying the penalty. However, the assessee contended that due to lack of books of account, they offered the amount to avoid litigation, and the penalty was wrongly imposed. The Tribunal noted that the AO lacked material to support the addition as concealed income and that similar surrenders in other years did not attract penalties. Thus, the Tribunal upheld the CIT(A)'s decision to delete the penalty, dismissing the Revenue's appeal and the assessee's cross-objection.

This summary provides a detailed overview of the legal judgment, highlighting the key issues and arguments presented in the case.