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TMI Blog2012 (10) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... be held to be guilty of concealment of income for which penalty u/s 271(1)(c) can be levied. The penalty, if any, can be levied in the hands of the person to whom the income actually belongs and not to the assessee in whose hands the department assessed the income on protective basis. Decision in favour of assessee - ITA Nos.1057/Del/2011 to 1062/Del/2011 - - - Dated:- 13-7-2012 - SHRI G.D. AGRAWAL AND SHRI RAJPAL YADAV, JJ. Appellant by : Shri A.K.Matta, CA. Respondent by : Dr. B.R.R. Kumar, Sr. DR. ORDER PER BENCH : In all these appeals by the assessee, the common ground raised is against the levy of penalty under Section 271(1)(c) of the Income-tax Act, 1961 as under:- Assessment Year Penalty levie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purchases/sales and the manner of his operations. He disclosed that in fact they were receiving only nominal commission against bogus purchase/sale vouchers issued in various names and that the transactions in various bank accounts in different names were all done just to earn commission income. 3. The Assessing Officer also accepted that Shri Atul Kumar Bansal and Shri Deepak Khandelwal were indulging in the business of issuing accommodation bills and were earning income from commission. Therefore, income is to be assessed in their hands. However, he held that so far as the business done by them in the name of the assessee, i.e., M/s Vishal Iron Works, though the income is being assessed on substantive basis in the hands of Shri Atul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the assertions made by Shri Atul Kumar Bansal and Deepak Khandelwal I consider that it would be reasonable to estimate net income from commission (after considering expenses liable to be incurred) at 1.5% on the deposits in the various bank accounts of the assessee company. The total amount of the transactions/deposits in the bank account of the assessee company have been detailed in Annexure-C, which is made part of this order. 11. However, as regards transactions in particular done in the name of M/s Vishal Iron Works (P) Ltd., though claimed to be done by Shri Atul Kumar Bansal and Shri Deepak Khandelwal and accordingly assessed on substantive basis in their hands, but since the business was done in the name of the company, to pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income has been determined in the hands of Shri Atul Kumar Bansal and Shri Deepak Khandelwal. That in the second round, in appeal before the CIT(A), the income has partly been reduced by the CIT(A) but, there is no dispute that income is to be assessed substantively in the hands of Shri Atul Kumar Bansal/Shri Deepak Khandelwal. He, therefore, stated that once the income is assessed on substantive basis in the hands of Shri Atul Kumar Bansal, no income is assessable in the hands of the assessee even on protective basis and, therefore, there is no question of levy of penalty under Section 271(1)(c). He alternatively submitted that on protective assessment of income, there cannot be any penalty under Section 271(1)(c) because, as per the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the commission income determined in his hands. However, he has not claimed that the income does not belong to him or that it is assessable in the hands of the concern in whose names the bogus bills were issued. Moreover, the issue before us is not about the assessability of income but about the justification for levy of penalty under Section 271(1)(c). Even as per the Revenue, the income is not assessable in the hands of the assessee but assessable in the hands of Shri Atul Kumar Bansal/Shri Deepak Khandelwal. He assessed the income of the assessee simply to protect the interest of the Revenue, meaning thereby, that if in the appellate proceedings a view is taken that the income does not belong to Shri Atul Kumar Bansal/Shri Deepak Khand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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