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TMI Blog2012 (10) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... s lacking in bona fides. As the assessee gave an explanation on each of the four heads, which was accepted by the CIT(A) & for inland flight charges the assessee had explained the circumstances under which the provision was sustained and further proof was produced before the CIT (Appeals) - no hesitation in confirming the order of the Tribunal, thereby rejecting the Revenue's appeal - in favour of assessee. - Tax Case (Appeal) No.1985 of 2006 - - - Dated:- 1-10-2012 - MRS. CHITRA VENKATARAMAN AND MR. K. RAVICHANDRABAABU JJ. For appellant : Mr. T. Ravikumar Standing Counsel for Income Tax For respondent : Dr. Anita Sumanth JUDGMENT (Judgment of the Court was delivered by CHITRA VENKATARAMAN, J.) The Revenue is on appeal as against the order of the Income Tax Appellate Tribunal in respect the assessment year 1991-92, raising the following substantial questions of law: (i) Whether on the facts and in the circumstances of the case, the Income Tax Tribunal is right in law in deleting penalty levied under Section 271(1)(c) of the Income Tax Act for the assessment year 1991-92? and (ii) Whether on the facts and in the circumstances of the case, the Income Tax Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 43B was concerned, the Tribunal pointed out that the same was reflected in the accounts and that the Tribunal did not reject the assessee's contention on this. The Assessing Officer, however, pointed out that the non-production of accounts at the time of inspection amounted to suppression of information. As regards the estimation made by the Tribunal, the Officer pointed out that the order of the Tribunal pointed out to the basic fact about the non-receipt of goods by the assessee company. The inflation in prices resulted in the reduction of income liable for assessment. Consequently, he found that the assessee had falsified its account and had furnished inaccurate particulars, attracting penal proceedings under Section 271(1)(c) of the Income Tax Act. 6. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals). As far as the first head of expenditure on inland flight charges is concerned, after the Income Tax Appellate Tribunal's order in the quantum appeal, the assessee produced before the Commissioner, the bank accounts reflecting the encashment of the cheque and the certificate from the Airports Authority of India, that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting the finding recorded in its order passed earlier in the quantum appeal in I.T.A.No.37 of 1995 dated 31.08.1995, the Tribunal held that it sustained 25% of the addition, taking note of the fact about the existence of the two firms and accepting the explanation offered by the assessee. 10. As regards the bottles sent for trial run without entering into the stock register, the Tribunal, in the quantum appeal, pointed out that only 2% of the entire consumption of the bottles could be taken as not having been entered in the books of accounts. Thus, it sustained 25% of the addition. Based on the findings as regards the other additions and the circumstances under which the additions were sustained therein, the Tribunal herein came to the conclusion in paragraph 3 that there was no mala fide intention or consciousness to misguide the Assessing Officer in submitting wrong particulars. Agreeing with the finding of the Commissioner of Income Tax (Appeals) that the assessee had no intention to misguide the Assessing Officer with regard to the claim, the Tribunal held that there was no ground for levying penalty and thus confirmed the order of the Commissioner of Income Tax (Appeals). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r that the bottles could not have been submitted by dealers on the ground of the capability and that the firms had replied to the Assessing Officer as to how they used to purchase bottles through dealers, as well as through the brokers. 15. As regards the discrepancy as to the use of bottles, the Tribunal further pointed out to the explanation offered by the assessee that for trial run, some bottles were sent to the factory directly without entering in the stock register and that only 2% of the entire consumption of bottles were sent directly. Pointing out that no account had been brought on record by the assessee as to the quantity of bottles sent straight to the factory, it nevertheless accepted the case of the assessee to the extent of the bottles sent to the factory and held that if at all any addition could be sustained, it could only be to the extent of 25%. It is further seen from the discussion of the Tribunal extracted in the Commissioner's order that the rate of bottles adopted by the Assessing Officer was not based on comparable cases. Taking note of the overall circumstances, the Tribunal modified the rate to Rs.1.25 per bottle in the place of Paise 69.70 per bottle, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he may direct that such person shall pay by way of penalty,-- (i) Omitted by DTL (Amend.) Act, 1989 wef 1-4-1989; (ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum which shall not be less than one thousand rupees but which may extend to twenty-five thousand rupees for each such failure ; (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income. Explanation 1.-- Where in respect of any facts material 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 Deputy Commissioner (Appeals) or the Commissioner (Appeals) 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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