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TMI Blog2010 (12) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the impugned addition. We are in agreement with the reasoning given by the lower authorities for rejecting the explanation of the assessee. Merely based on the letter of M/s. Balaji Agro Tech dated 14.12.2006, one cannot accept the contentions and explanations of the assessee, when facts of the case like fuel consumption charges, etc. speak otherwise. Penalty - Not filing the tax audit report as required under S.44AB - merely based on the addition made in the assessment, or because the explanation of the assessee was not convincing and hence acceptable, it cannot be said that the assessee was not justified in nursing the impression that its turnover was below Rs.40 lakhs and the provisions of S.44AB are not attracted in its case - in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d receipt of job work charges of Rs.16,02,098. The Assessing Officer noticed that the amount of job work charges received by the assessee during the year under consideration should have been Rs.81,61,557. It was explained by the assessee before the Assessing Officer that during the previous year 2003-04, assessee entered into an agreement with M/s. Balaji Agro Tech for conversion of their material. As per the agreement, it was decided that a maximum of 22500 MT would be converted @ Rs.400 per tonne. It was submitted that while the assessee had undertaken job work of 13965.45 MT and was to receive total job work charges of Rs.55,86,080, the assessee had in fact received Rs.55,51,626 and even out of this, Rs.39,06,672 was adjusted towards the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 was added back. 5. Aggrieved by the above addition of Rs.39,06,672, assessee preferred appeal before the CIT(A). Since the CIT(A) confirmed the said addition, assessee preferred this second appeal before us. 6. Learned counsel for the assessee reiterating the contentions urged before the lower authorities submitted that the turnover of the assessee company was only Rs.39,06,672 and not Rs.55,86,180 as determined by the Assessing Officer. He submitted that the amount of Rs.23,04,574 was credited to power and fuel charges and debited to the parties' account instead of crediting the same to Job Work charges received. In view of the confirmation letter filed by the assessee dated 14.12.2006 from the party, M/s. Balaji Agro Tech for wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the assessee by the manufacturer itself, viz. M/s. Balaji Agro Tech and consequently, he concluded that the Assessing Officer was justified in rejecting the explanation of the assessee and making the impugned addition. We are in agreement with the reasoning given by the lower authorities for rejecting the explanation of the assessee. Merely based on the letter of M/s. Balaji Agro Tech dated 14.12.2006, one cannot accept the contentions and explanations of the assessee, when facts of the case like fuel consumption charges, etc. speak otherwise. In the case of Shoorji Vallabhdas (Supra), there was a subsequent agreement between the parties that had altered the rate of commission in such a way as to make the income which really accrued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tech dated 14.12.2006, for whom the assessee has done the job work. In any event, he submitted that the assessee was under a bona fide impression that its turnover was below Rs.40 lakhs and the provisions of S.44AB are not attracted in its case, so as to mandate filing of tax audit report by it. He therefore, submitted that there was no justification for levy of penalty under S.271B of the Act. 12. Learned Departmental Representative on the other hand, strongly relied on the orders of the Assessing Officer and the CIT(A) and submitted that there is no basis for the assessee to believe that its turnover was below Rs.40 lakhs and it is a fit case for levy of penalty under S.271B of the Act. 13. We have considered the rival submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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