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TMI Blog2010 (2) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the total income at Rs. 79,990. The Assessing Officer noted that gross profit declared by the assessee is better than that of the last year and, hence, book results were accepted. The assessee was asked to furnish ledger copy of account of some of the creditors. The Assessing Officer also called for information from M/s. Daya Synthetics (hereinafter referred to as "DS") and M/s. Daya Rayons Pvt. Ltd. (hereinafter referred to as "DRPL"). On receiving replies from these parties, the Assessing Officer noted the difference in the closing stock balance in accounts of these parties which is tabulated below: S. No. Name of the supplier As per copy of ledger accounts as maintained and furnished by you As per copy of ledger account from the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s inability to explain the same by not reflecting the purchases and payments in the regular books of account, the amount of Rs. 3,24,832 being the difference of unaccounted purchase/payment made to M/s. Daya Rayons Pvt. Ltd. during the year under review is made to the total income of the assessee by treating the same as unexplained expenditure under section 69C of the Income-tax Act. Penalty proceedings under section 271(1)(c) of the Act is initiated for furnishing inaccurate particulars/ concealed income." The Assessing Officer levied penalty to the extent of addition of Rs.3,24,332 being difference in the account of DRPL by observing as under: "5. The submission of the authorised representative for the assessee has been considered caref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the presumption that he had concealed his income to such extent, was clearly available to be drawn by the Assessing Officer." The assessee is in further appeal before us. Learned counsel for the assessee submitted that the assessee has filed all the particulars of income correctly. The addition was made on account of sales shown by DRPL but there is no finding that corresponding purchases were made by the assessee or that the payment has been made by the assessee. The assessee merely surrendered the same to avoid litigation. This does not mean that the assessee has either concealed the particulars of income or furnished inaccurate particulars of income. In the assessment proceedings, the Assessing Officer is also not certain whether the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Act, 1961, the penalty needs to be confirmed. We have carefully considered the relevant facts, arguments advanced by the parties and the case law cited. During the assessment proceedings, when the assessee was asked to explain the difference in accounts, the assessee clearly stated that he has not purchased goods from M/s. DRPL. The assessee also stated that the payment is also not made by the assessee. However, only to avoid the litigation, the assessee surrendered the sum. Addition to income can be justified on the basis of surrender by the asses-see, but it is settled law that penalty proceedings and assessment proceedings are separate. Though the findings in assessment proceedings are relevant in penalty proceedings, but the same ..... X X X X Extracts X X X X X X X X Extracts X X X X
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