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TMI Blog2010 (12) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... e case, the ITAT was justified in sustaining the penalty of Rs.1,70,753/- under Section 271(1) (c), even though the assessing Officer had not recorded any satisfaction about concealment of income in the assessment order or in the notice under Section 274 of the Income Tax Act? ii) Whether in the facts and circumstances of the case, the ITAT was justified in sustaining the penalty of Rs.1,70,753/- merely on the ground that the additions had been sustained in the quantum of appeal without appreciating that the penalty proceedings stands on a different footing than the initial assessment and the Assessing Officer must be satisfied that there has been concealment of income prior to initiation of penalty proceedings? 2. As regards question no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, the loss of Rs.1,81,949/- claimed by the assessee in the bardana account and debited to P&L Account is disallowed. 6. Again the scrutiny of very bardana account revealed that the assessee has claimed shortage of 15475 bags. Vide this office letter dated 7.3.94 the assessee was asked to give reasons for this shortage of 15475 bags. Vide its letter dated 29.3.94 the counsel of the assessee stated that the shortage of 15475 bags is due to wear and tear of the bags in reposted barti resulting into shortage of 15475 bags. The reasons for shortage of 15475 bags given by the assessee are untenable and have no force. A bag is generally purchased @ Rs.10/- each and the used bag generally fetch Rs.5 to 7/-. This fact is evident from the Bardana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xceptional circumstance. Therefore, the conclusion of the AO that there was no shortage and there was suppression of sales of bardana is held to be justified......" 5. The Tribunal also upheld the above finding as follows:- "15). ........The addition has made on account of suppressed sales of bardana. The purchase price forthe bardana for the assessment year under reference was to the tune of Rs.9.90 per bag and the sale price shown by the assessee for the AY under reference was Rs.12.71 per bag. Considering the cost price and the sale price, the estimate made by the lower authorities by taking the value at Rs.10 per bag appears to be fair and reasonable. Therefore, the same does not merit any interference from our side. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fact recorded by the CIT(A) and the Tribunal that the assesseeconcealed the particulars of income. The said finding has attained finality. If this is so, the reason for addition being furnishing of inaccurate particulars, the levy of penalty could not be held to be erroneous. The judgment relied upon isdistinguishable on facts. Therein, additions were made not on account of concealment of particulars of income but on account of claim of the assessee being found to be debatable. In the question formulated it has been assumed that the penalty has-been levied merely on account of addition without concealment of the particulars. This is not correct. We have noticed that levy of penalty is not based on mere addition but on satisfaction that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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