9911796707
TMI Blog2012 (9) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... s - Held that:- Brokerage is always paid as a fixed percentage agreed by the party on the value of the transaction. However, in the instant case, the payment is majorly uniform throughout the year. Though payments have been paid by account payee cheque, but the assessee has failed to substantiate as to why a fixed sum of money has been paid to a sub – broker. Genuineness of the transaction has not been proved by bringing any cogent material on record. Penalty confirmed. Payment to D&Co - cash method of accounting - dis-allowance on ground that cheque was not cleared before the end of the accounting year - Held that:- No penalty can be levied on this dis-allowance which is only based on the accounting principles. Payment to R&Co. - difference in security - Held that:- Whatever has been brought on record has only confirmed the payment but the genuineness of the transaction has not been proved. Even the bank advice and the confirmation filed do not have the details of transaction nor any contract note has been filed or brought on record. As the assessee has grossly failed to substantiate its explanantion on each account and is hit by explanation 1B of sec 271[1][c] - Decided par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the assessee has not preferred any appeal against the quantum addition will not ipso-facto result into levy of penalty u/s. 271(1)(c) of the Act as it is a settled law that penal proceedings are different from assessment proceedings. The Ld. Counsel further argued that all the necessary details/evidences were submitted before the lower authorities during various stages of assessment/remand/appellate proceedings. Per contra, Ld. Departmental Representative submitted that the assessee has failed to come out from the net of Explanation-1 to Sec. 271(1)(c) of the Act. 7. After hearing the rival submissions and perusing the orders of the lower authorities at different stages, let us first see the provisions of Sec. 271(1)(c) r.w. Explanation-1(A B) of the Act which is as under: 271. Failure to furnish returns, comply with notices, concealment of income, etc.--(1) If the Income-tax Officer or the Appellate Assistant Commissioner in the course of any proceedings under this Act, is satisfied that any person (c) has concealed the particulars of his income or deliberately furnished inaccurate particulars of such income, . Explanation -1 . (A) such person fails to offer an expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... none of the rival parties have cared to submit the statement of Shri R P Jain. At the outset, we fail to understand how the fact that certain sub-brokerage payment to this party which has been allowed in the appellate proceedings for assessment year 1989-90 can be considered as conclusive proof of payment in the subsequent year. In the immediately preceding year to which the Ld. Counsel is relying Shri R.P. Jain was paid brokerage of Rs. 2,37,720/-. The same Shri R.P. Jain became an investor/trader for the year under consideration , so much so that he entered into a contract for the purchase of one crore unit of UTI @ 13.4875 totaling to Rs. 13.48 crores on 21.7.1989 without paying a single rupee as margin money. These units were sold on 7.8.1989 @ 13.6375 amounting to Rs. 13.63 crores resulting in an amount of Rs. 15 lakhs due to Shri R.P. Jain. The claim of the assessee that he has filed the bank statement and the confirmatory letter in respect of this transaction can only confirm the transaction in the stock exchange and payment through bank. What has been doubted and questioned is the genuineness of the transaction. On the given facts, the assessee has grossly failed to substan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by bringing any cogent material on record. The assessee has failed to substantiate his explanation therefore levy of penalty on disallowance of Rs. 1,02,100/- is justified. iii ] Payment to Darashaw Co. amounting to Rs. 50,000/- 14. This amount of Rs. 50,000/- has been disallowed because as per the AO, the assessee is following cash system of accounting and as the payment of Rs. 50,000/- by cheque was not cleared before the end of the accounting year therefore the AO disallowed the same. 15. We find that this disallowance of Rs. 50,000/- is purely on technical ground following the method of accounting of the assessee , which , we find that , it was allowed in the subsequent year when the payment was actually made. In our considered view, no penalty can be levied on this disallowance of Rs. 50,000/- which is only based on the accounting principles . iv)Payment of Rs 9,88,000/- to American Express / M/s. Relan Co. 16. It is the contention of the assessee that an amount of Rs. 9,88,000/- was paid to M/s. Relan Co. New Delhi on account of difference in security which has been wrongly shown to have been made to American Express Bank. The assessee claimed that the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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