9911796707
TMI Blog2005 (11) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,70,436 as provisions/raw materials consumed and an amount of Rs. 1,90,954 on account of food and beverage sale. As per the assessment order, the material consumed in respect of restaurant account was disclosed at 89.77 per cent which was found on higher side. The assessee was asked to furnish menu card, day-to-day consumption of raw material, details of direct input cost to sales and details of month wise purchase and sales etc. As per the Assessing Officer, on examination of books of account, none of the figures as per the stock register tallies with the regular books of account. The assessee filed its reply in response to notice under section 145(2). The reply of the assessee is available at page 2 onwards of the assessment order. The total income of the assessee was computed at Rs. 1,72,030. The Assessing Officer initiated penalty proceedings under section 271(1)( c ) of the Act and imposed penalty of Rs. 65,004 vide order dated 28-5-2004. The penalty order was confirmed by the ld. CIT(A). The assessee is in further appeal before the Tribunal. 3. During arguments, we have heard Sh. Vineet Krishan, ld. advocate for the assessee and Mrs. Jyotsana Johri, ld. DR for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of estimate and not on concrete facts of concealment of income, penalty is not leviable under section 271(1)( c ) of the Act. In the case of CIT v. Prem Dass (No. 1) [2001] 248 ITR 234 3 (Punj. Har.) there was difference between returned and assessed income due to difference of opinion about estimated rates of income and expenditure. It was held that there is no concealment of income, and thus, Tribunal was justified in cancelling the penalty. In the case of CIT v. Ajaib Singh Co. [2002] 253 ITR 630 4 (Punj. Har.), there was an addition of income based on estimate and disallowance of expenditure. The Tribunal was found to be justified in cancelling the penalty. 6. If the aforesaid judicial pronouncements, relied upon by the ld. counsel for the assessee, are analysed with facts present before us, it is seen that the penalty has not been imposed by the Assessing Officer on the ground that the addition to the income has been estimated by rejecting the account of the assessee and applying a multiplier with reference to consumption of raw material. The Assessing Officer has examined the facts and has given its reasoning in not accepting the explanation of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded. These details were also compared with the regular books of account. However, figures noted therein did not tally with the regular books of account and the assessee has not been able to give proper explanation for the same either before the authorities below or even before us. Even if it is assumed that part of these items were consumed by employees of the assessee, yet sales noted in this register should have tallied with the sales recorded in the regular books of account. This leads to an inevitable conclusion that the assessee had not recorded correct income on the books of account. Besides, the Assessing Officer had also noticed that there was excessive consumption of raw material, inflated cost of purchases, non-production of menu cards, non-maintenance of day-to-day quantitative details etc. The very fact that same method of accounting was followed in the past does not mean that the Assessing Officer cannot reject the books of account for the assessment year under appeal when there were specific discrepancies found during the course of survey. The judgment of the Supreme Court in the case of CIT v. British Paints India Ltd. ( supra ), Punjab Haryana High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. The Tribunal while considering the quantum appeal in details reversed the order of the ld. CIT(A) and restored the assessment order. The ld. counsel for the assessee took the plea during argument that penalty cannot be imposed merely on the ground that the addition has been confirmed in the quantum appeal. The facts reveals that the transactions during the period were not recorded in the register and at the same time no explanation was extended by the assessee. This is not the case that penalty has been imposed merely on the basis of estimation of income or estimation of sales by adopting a multiplier factor. The assessee could not explain regarding the entries missing from the regular books of account during the period 21-9-1995 to 6-11-1995 as compared to duplicate stock register found by the department. In view of these facts, the judicial pronouncements relied upon by the ld. counsel for the assessee may not be of much help to the assessee. 9. I am aware that for imposition of penalty under section 271(1)( c ), definite finding about concealment is necessary. Under section 271(1) ( c ) of the Act, the authority is given the discretion to levy a penalty if there is co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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