9911796707
TMI Blog2011 (5) TMI 593X X X X Extracts X X X X X X X X Extracts X X X X ..... onfronted with some stocks comprising various carpets and durris lying at the premises. It may be noted that a search was carried out at the premises of the assessee on January 16, 2004, and at the same time, stock registers were verified which showed opening stock of 3290 of various carpets and durris. However, the stock registers for the financial year 2003-04 revealed opening stock of 5417 number of carpets and durris. The assessee surrendered an amount of Rs. 1.25 crores as an unexplained investment. Taking gross profit of 16per cent. thereon which comes to Rs. 28,68,390, that amount was added as an additional income for this assessment year. At the same time, while passing the assessment orders, the Assessing Officer chose to initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was in the form of bills and vouchers, copies of accounts of suppliers/manufacturers duly acknowledging the delivery of carpets to the assessee on approval basis, the details of income-tax assessment of the parties along with the original bills in respect of carpets as and when the same were purchased along with the PAN details of the suppliers/manufacturers. The grievance of the asses-see before the Commissioner of Income-tax (Appeals) was that the explanation furnished by the assessee along with the aforesaid documentary evidence was not even adverted to and dealt with by the Assessing Officer while passing the penalty order. It was impressed upon by the assessee before the appellate authority that penalty proceedings were altogether dif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his aspect of the so-called concealment and recorded the following findings : "The above submissions of the appellant have been found to be not without merit. It is seen that the appellant had filed copies of accounts confirmed by the suppliers/manufacturers with regard to transactions on approval basis. In addition the details of income-tax assessments of the said suppliers/manufacturers including PAN had also been filed. After going through the penalty order it is seen that the Assessing Officer has not discussed any of these evidence or proven them to be false. Nor has the Assessing Officer made out a case that some vital facts were concealed by the appellant and that the Assessing Officer had detected the same. In any case, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ultimately, the issue boils down to the fact that the Assessing Officer has not elaborated on any cogent reason for being not satisfied with the explanations furnished by the appellant with regard to the necessity or justification or receiving and making deliveries on approvals. It is seen that the appellant offered this explanation in respect of the state of affairs along with all available evidence to substantiate his explanation. On the other hand, the Assessing Officer has not discussed any cogent argument for rejecting the appellant's explanation nor has he brought any thing on record to show that the appellant's explanation is false or that the appellant has concealed his income. The Assessing Officer has not made out a case that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant was found to be false. This is a case where the explanation of the appellant was rejected without establishing it to be false and penalty was levied." 3. It is clear from the above that the Commissioner of Income-tax (Appeals) also commented upon the wrong approach adopted by the Assessing Officer and further that the Assessing Officer had not made out a case that the assessee had claimed any fictitious expenses on the basis of any incriminating evidence. It was now the turn of the Revenue to feel aggrieved by the aforesaid order of the Commissioner of Income-tax (Appeals) in deleting the penalty which prompted the Revenue to challenge the said order by preferring an appeal before the Income-tax Appellate Tribunal. However, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty. The assessee might surrender an amount for taxation for various reasons best known to the assessee. The surrender of an amount to taxation in the course of assessment proceedings, no doubt is a good finding for initiation of penalty proceeding but is not strong enough for the levy of penalty especially when in the course of penalty proceedings the assessee is able to place evidence and explanation and where he is fully entitled to challenge the surrender and prove the surrender itself was not called for. If such explanation is given by the assessee along with the corroborating proof for the same and if such explanation is not dislodged by the Assessing Officer then penalty cannot be levied on the assessee. It is noticed from the or ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
