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TMI Blog2012 (8) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... tially, processed u/s 143(1) of the Act and subsequently reopened u/s 147 of the Act. The assessment was finalized u/s 143(3) r.w.s. 147 of the Act, determining the total income of the assessee at Rs.2,88,00,255/-. On verification of records, it was noticed by the AO that the two partners of the assessee firm, viz., Shri Abbasi H Tinwala and Abedin H Tinwala have withdrawn Ratnapur factory building from the assessee firm and the same was introduced in another firm, M/s. New Gujarat Tin Circle Depot on the same day i.e., on 1.4.2000 and later on the next FY the said firm was converted into a private limited company - New Gujarat Tin Circle Depot Pvt. Ltd. It was further noticed that the said Ratnapur factory building was withdrawn by the partners from the assessee at WDV i.e., Rs.34,64,745/- and the same was introduced in other firm, M/s. New Gujarat Tin Circle Depot for Rs.34,64,745/- as on 1.4.2000 as their capital. On the same date, the said asset was revalued at Rs.3,22,65,000/- as per valuation report dt.1.4.2000. It was also noticed that the firm M/s. New Gujarat Tin Circle Depot was converted into a company in the name of M/s. New Gujarat Circle Depot Pvt. Ltd on 30.9.2001 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enal proceedings u/s 271(1)(c) of the Act were launched. 3.4. During the course of penalty proceedings before the AO, it was claimed by the assessee that - (i) there was no concealment of income or furnishing of inaccurate particulars and the AO had adopted interpretation of law when conflicting decisions of High Court exist; (ii) the quantum addition was pending before the Tribunal; & (iii) proper opportunity of hearing be given to the assessee; 3.5. However, penalty of Rs.1,12,89,700/- was levied by the AO for the following reasons: (i) in spite of sufficient opportunities, the assessee had failed to produce all the documents relating to transfer of Ratnapur building; (ii) a fresh valuation was nothing but an attempt to avoid tax liability; & (iii) From Memorandum and Article of Association of the company - New Gujarat Circle Depot Pvt. Ltd, it was seen that the entire balance sheet of M/s. New Gujarat Circle Depot was transferred as on 30.9.2001 at value of factory building of Rs.3,22,65,000/- and the depreciation would also be claimed on the said building and this fact was accepted by the assessee. Further, the revaluation reserve was made on the said basis and the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e but a well thought out strategy. It is only when the facts were detected by the department that the claims were modified by the appellant. One cannot read into the mind of the appellant and the bona-fide intention has to be discerned from the accompanying facts and circumstances. On one hand, it was claimed that only factory building has been transferred and not land, but in the revaluation reserve the total amount is considered against the factory building. If the assessee was aware of the facts that only factory building has been transferred then, the valuation and transfer to capital account would have been much different. 4.3.10. In my humble view, considering the facts and circumstances, the explanation of the appellant has been found to be false and the conduct of the appellant does not appear to be bona-fide and, further, all material relating to computation of income have not been disclosed to the AO. Accordingly, the penalty of Rs.1,12,89,700/- u/s 271(1)(c) of the Act is confirmed." 5. Agitated, the assessee has come up with the present appeal. During the course of hearing, the Ld. A R reiterated more or less what has been represented before the first appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e based on which the revenue had initiated the proceedings. The learned AR also submitted that merely because of the claim of non applicability of section 45(4) of the Act was rejected, the penal provisions u/s 271(1) ( c) of the Act will not be attracted and relied on the decision in the case of Reliance Petroproducts Pvt. Ltd., 323 ITR 158 (SC). 5.1. On the other hand, the Ld. D R was very specific in his urges that the issue has been thoroughly deliberated upon by the assessing officer as well as the first appellate authority thereby a conclusion has been arrived that the assessee concealed the particulars of its income and furnished inaccurate particulars of such income which clearly attracted the provisions of s. 271(1)(c) of the Act. It was, therefore, pleaded that the findings of the Ld. CIT (A) requires to be sustained. 6. We have duly considered the rival submissions, perused the relevant case records and also the case laws on which either party have placed their unstinted confidence. At this instance, it is necessary to mention that the earlier Bench in its findings in ITA 345/Ahd/2008 dated 07-10-2010 for AY 2001-02 in the assessee's own case (quantum appeal) for the r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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