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TMI Blog2012 (12) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... : Sh.Rohit Garg, D.R. ORDER PER DIVA SINGH, J.M. These are two appeals filed by the assessee against separate orders dt. 30th May, 2011 of ld.CIT(A)-XII, New Delhi pertaining to A.Y. 2004-05 and 2006-07. Both these appeals are decided by a common order for the sake of convenience as in both these appeals the penalty order u/s 271(1)(c ) imposed by the A.O. has been sustained. 2. In 2004-05 A.Y. the assessee has agitated that the penalty imposed by the A.O. has been sustained by the CIT(A) which is assailed as arbitrary, unjust and untenable on account of factual and legal reasons. 3. The assessee in the present proceedings is an Event Manager. The assessee in the year under consideration filed a return of income on 1.11.2004 declaring an income of Rs. 1,90,608/-. A Survey operation u/s 133A of the Act were conducted at the premises of the assessee company on 14.12.2004 wherein certain documents etc. were found which were impounded, as a result of which certain additions were made. The A.O. taking cognizance of the fact that the additions which stood confirmed till the Tribunal in the quantum proceedings wherein the Tribunal had upheld the reasoning of the A.O. and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 530/- in r/o the function of Chunnu International; 2. Rs. 1,96,000/- in r/o the function of Shri Ankush Saluja; 3. Rs. 3,84,000/- in r/o the function of Shri Uday Singh; 4. Rs. 1,80,000/- in r/o the function of Shri Jagota; 5. Rs.1,00,000/- in r/o the function of Shri Kamal Passi; 6. Rs. 3,63,123/- in r/o the function of Uday Park; 7. Rs. 2,30,000/- in r/o the function of Shri Raghav; 8. The addition of Rs.5,41,000/- had been made as unexplained capital expenditure (payment made outside the books), not reflected in the books of accounts and deemed to be income of the assessee u/s 69 of the I.T.Act; 9. The addition of Rs.1,61,124/- on account of unexplained capital expenditure on renovation/construction expenses on office building, as the assessee could not produce the bills/vouchers. 4.1. The A.O. observed that the assessment was concluded on an income of Rs.27,11,125/-. As a result of the issue traveling to the CIT(A) consequent to the relief allowed the income was recomputed at Rs.24,11,125/- and as a result of some further rectification order u/s 154 of the Act by the CIT(A) the income was recomputed at Rs.23,53,012/-. Consequent to the issue traveling to the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd to the cash transactions entered into by the assessee on the events in regard to which the A.O. has found the evidences in the coruse of survey and has made the addition. The A.O. is also directed to delete the addition made on account of Shri Raghav. Thus, as directed by the Hon ble ITAT, the addition on account of Shri Raghav Sharma was deleted and 54% of the total receipts was to be treated as the income of the assessee. The above contested additions at S.No. 1 to 6 (excluding the addition of ₹ 230,000/- in r/o Shri Raghav) total ₹ 12,23,123/-. 54% of these come to ₹ 6,60,487/- which is tobe treated as income of the assessee. 4.3. On ground nos. 7 and 8 he took cognizance of the findings of the ITAT as under. Regarding the grounds No. 7 8, the Hon ble ITAT, in para 13- 15, directed that it is found that the assessee is in the habit of dealing in cash, the expenditure in regard to ₹ 5,41,000/- should be deemed to have been incurred out of the said cash transactions, the GP of which has been directed to be added and directed the Assessing Officer to telescope this addition of ₹ 5,41,000/- into the GP addition on account of cash transact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital expenditure. The explanation in the penalty proceedings was found not acceptable which action stood confirmed in appeal before the CIT(A who decided the issue as under: From the facts of the case as well as submissions of AO it is evident that the assessee has willfully concealed the particulars of its income to the tune of Rs.8,61,141/- (660,487+39,530+161,124) as discussed above, for which the assessee company has failed to provide any explanation. Further assessee never voluntarily disclosed all these facts, it was only when the department did a survey all this concealment was unearthed. I, therefore, hold that the assessee has committed default within the meaning of the provisions of Sec.271(1)(c ) and it has been imposed within the limitation period therefore penalty of Rs.3,15,113/- which is 100% of tax evaded as imposed by the A.O. is upheld. The appeal of the assessee is dismissed. 10. Aggrieved by this the assessee is in appeal before the Tribunal. 11. Ld.A.R. inviting attention to the assessment order in the quantum proceedings invited attention to para 13 of the assessment order on the basis of which it was his submission that an amount of Rs. 1,35,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs.39,530/- it was her submission that though the ground was not raised before the ITAT however the assessee had sought to raise the ground by way of additional ground. However the said issue was not adjudicated upon. The ld.A.R. was required to say whether any arguments had been advanced for admission of the same or not she was unable to categorically state that arguments were advanced. On query it was accepted by her that the assessee has not filed any M.A. against the quantum order on this issue. It was her stand that the amount being very small the ground may not have been filed. However regardless of that fact inviting attention to page 39 of the paper book it was her submission that it was purely an estimate that it did not warrant any penal consequences as the said document would show that certain expenses have to be incurred by the assessee on account of gifts which amounted to Rs.30,000/-. It was pointed out by the Bench that Rs. 30,000/- has not been taken cognizance of by the A.O. for the penal consequences. The attention has entirely been focussed on the fact that in the bill raised of Rs.5,08,000/-, Rs.4,68,470/- has been paid by cheque and balance due in cash i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chunnu International findings in the order were relied upon to claim that penal action was warranted. 15. In reply the ld.A.R. submitted that there was a conflict of opinion whether the expenses are of revenue nature or capital, as such penal action is not warranted. 16. We have heard the rival submissions and perused the material available on record. On a careful consideration of the same we are of the view that the concurrent findings of the A.O. upheld by CIT(A) in the penalty proceedings cannot be faulted on account of peculiar facts and circumstances of the case which had been adequately addressed in the penalty order and the order sustaining the same. The explanation of the assessee namely that the expenditure of Rs. 1,61,000/- odd claimed as revenue expenditure was a bonafide claim is not borne out from the facts available on record as no documents in regard thereto have been placed either before any of the authorities nor have they been placed before us for our consideration. In the absence of the same we find no infirmity in the conclusion arrived at as the claim cannot be said to be bonafide. As such penal action on this account is upheld. 16.1. Coming to the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was seen that some entries/receipts were recorded. During the survey proceedings, the figures written on the diary were tallied with the books of accounts and it was seen that some entries were missing in ;the sales ledger and Shri Sarid was asked to explain the said discrepancies. It was admitted by Shri I.P.Sarid that couple of entries in the sales ledger have got missed out and he admitted some of the discrepancies between the booking made and books of accounts. He surrendered an additional income of Rs.15,00,000/- and agreed to pay taxes thereon. The assessee paid a sum of Rs. 5,00,000/- on this additional income offered for taxation as tax for the F.Y. 2005-06 relevant to the A.Y. 2006-07 in five instalments. Rs. 1,00,000/- dt. 30.12.2005 Rs. 1,00,000/- dt. 19.01.2006 Rs.1,00,000/- dt. 01.02.2006 Rs. 1,00,000/- dt. 25.2.2006 Rs.1,00,000/- dt. 20.3.2006 19. However at the time of filing the return it was observed that the assessee has not disclosed the said income. The assessee in his explanation stated that it has been able to correlate the entries in the diary with the books of accounts and in the income book as such the said surrender on facts was not warrante ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in fact finally been claimed as such the entries in the diary are estimates and not sacrosanct and what was finally received is recorded in the books of accounts. For instance it was argued as would be evident from the entry of May, 2005 in the case of function organized on behalf of Sanjivlal wherein as per the diary the amount mentioned was Rs. 12,000/-, on the other hand for the very same event as per the sales book it was Rs.16,000/-; similarly in the case of Le Meridian the dairy amount shown was Rs.7,000/- and as per the sales book it was Rs. 10,500/-. In fact the totaling it was argued as per diary is Rs.12 lacs and as per sales book abouty Rs.13 lakhs odd as such the diary is not the final word it is merely an aide memoire. On account of these facts it was submitted that penalty is too harsh a provision to be made applicable to the assessee. 25. The Ld.D.R. on the other hand relying upon the impugned order and the order of the Tribunal in the quantum proceedings submitted that simply because the accounts for certain events are booked at a lesser amount than the sales book it merely shows that the quantity of services finally obtained by a client must have been more it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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