9911796707
TMI Blog2010 (10) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... ls) has erred in confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961 in respect of profit computed on an estimate basis. 2. These appeals were filed on 30-4-2010. They were fixed for 1-7-2010. No one has appeared on behalf of the assessee in spite of service of notice. The hearing was adjourned to 28-9-2010 and these were listed with ITA No. 506/Delhi/08 which is a quantum appeal for other assessment year. The learned counsel for the assessee sent a letter for an adjournment on the ground that he is busy in tax audit work and, therefore, unable to attend the hearing. The last date for carrying out tax audit has been enhanced to 15-10-2010, thus 30th of September did not remain as the last date for completing the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found. On perusal of the documents, it revealed that assessee had unaccounted transactions over the period from 1-4-1984 to 19-4-1993. According to the Assessing Officer, these documents were called in the local area as "unhauti" or "No. 2 books of account". The transactions recorded in these No. 2 books of account were not available in the regular books of account maintained by the assessee. The transactions available in seized material exhibiting credit/cash sales as well as expenses for the household purposes. Assessing Officer has estimated the profit at 10 per cent on the sale transactions recorded in these No. 2 books of account. Learned CIT (Appeals) reduced this profit to 4 per cent. On further appeal, ITAT has reduced this profit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted out that the case of the assessee is that the addition has been made on an estimate basis and, therefore, no penalty is imposeable. He submitted that in the present case addition has not been made on an estimate basis. It is the best judgment of the Assessing Officer to work out the profit element in the undisclosed activities of the assessee. The transactions were not disclosed to the department. They could see the light of the day only because of the search. The income has to be computed from those transactions by the Assessing Officer and in that exercise Assessing Officer has estimated the profit because there is no other method. So it is not that simplicitor estimated addition, where in the absence of complete details or on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial to the computation of the total income of any person under this Act, (A) Such person fails to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the CIT to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of Clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he explanation and the assessee fails to prove that such explanation is bona fide and that the assessee had disclosed all the facts relating to the same and material to the computation of the total income. Under first situation, the deeming fiction would come to play if the assessee failed to give any explanation with respect to any fact material to the computation of total income or by action of the Assessing Officer or the Learned CIT (Appeals) by giving a categorical finding to the effect that explanation given by the assessee is false. In the second situation, the deeming fiction would come to play by the failure of the assessee to substantiate his explanation in respect of any fact material to the computation of total income and in add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide. Webster in his new international dictionary equates its meaning "to hide or withdraw from observation, to cover or keep from sight; to prevent the discovery; to withheld knowledge." Hon'ble Court has further observed that the offence of concealment is thus a direct attempt to hide an item of income or a portion thereof from the knowledge of income-tax authorities. In furnishing its return of income, an assessee is required to furnish particulars and accounts on which such returned income has been arrived at. These may be particulars as per its books of account, if it is maintained them or any other basis upon which it had arrived at the returned figure of income. Any inaccuracy made in such books of account or otherwise which resulted ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
