2002 (2) TMI 349 - AT - Income Tax

Summary

Issues Involved:
1. Levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. Alleged low yield in production of rapeseed oil.
3. Purchases from alleged non-genuine sources.

Detailed Analysis:

Issue 1: Levy of Penalty under Section 271(1)(c) of the Income Tax Act, 1961
The assessee appealed against the order confirming the penalty of Rs. 29,51,174 under Section 271(1)(c) for the assessment year 1991-92. The penalty was imposed for furnishing inaccurate particulars and concealing income. The Tribunal noted that the penalty under Section 271(1)(c) applies when there is a failure to disclose fully and truly the particulars of income, leading to concealment or furnishing of inaccurate particulars. The Tribunal upheld the penalty, concluding that the assessee had concealed particulars of income and furnished inaccurate particulars, making it liable for the penalty.

Issue 2: Alleged Low Yield in Production of Rapeseed Oil
The assessee's return declared a total income of Rs. 2,99,270, but the assessment determined it at Rs. 1,28,22,500, including an addition of Rs. 30,00,000 for low yield in rapeseed oil production. The assessee contended that the yield was within the range certified by various associations and that no defects were observed in their records. However, the Tribunal found that the assessee's explanation was not satisfactory and that the low yield was a deliberate act to suppress income. The Tribunal confirmed the addition and the penalty, stating that the assessee had not maintained proper books of accounts and had inflated purchase prices to reduce taxable income.

Issue 3: Purchases from Alleged Non-Genuine Sources
The assessment included an addition of Rs. 27,02,752 for purchases from alleged non-genuine sources. The assessee argued that the purchases were genuine and provided detailed submissions to support their claim. However, the Tribunal found that the assessee had claimed deductions for purchases from 33 bogus suppliers, as evidenced by the suppliers' denials of any transactions with the assessee. The Tribunal concluded that the transactions were fictitious and that the assessee had consciously claimed bogus purchases to reduce taxable income. The Tribunal upheld the penalty, noting that the assessee had failed to prove the genuineness of the purchases and had furnished inaccurate particulars of income.

Conclusion
The Tribunal dismissed the appeal of the assessee, upholding the penalty imposed under Section 271(1)(c) for concealing particulars of income and furnishing inaccurate particulars. The Tribunal found that the assessee had deliberately suppressed income by showing low yield in production and claiming bogus purchases, thereby justifying the imposition of the penalty.