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TMI Blog2014 (5) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... . The A.O. observed that in this case, assessment u/s. 143(3) was finalized on 30.11.2006 and various additions were made by the A.O. and income was determined at Rs. 1,11,54,040/- against return income NIL. The assessee challenged the addition before the CIT(A). The ld. CIT(A) allowed the appeal partly and had given relief of Rs.44,34,334/-. Before imposing the penalty u/s. 271(1)(c), the A.O. gave reasonable opportunity of being heard. But no reply was received from the assessee. On repeated hearing, the A.O. held that assessee had suppressed job receipts as well as suppressed production amounting to Rs.94,56,380/-, which was confirmed by the CIT(A). On which A.O. had initiated penalty proceeding u/s. 271(1)(c) for furnishing inaccurate p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee carried the matter before the CIT(A) who had allowed the appeal partly by observing as under: "6.3 The Assessed had shown a negative GP ratio or loss of 13.12% during the year as against the GP ratio of 3.68% in the immediately preceding year. The addition was on account of suppression of production to the tune of Rs.94,56,380/-. While in principle the AO's action of levying penalty u/s. 271(1)(c) of the Act on such suppression of production was justified, as the Assessed had failed to furnish a plausible and bonafide explanation in course of the penalty proceedings yet, it must be appreciated that the sum of Rs.94,56,380/- represented suppressions of production and not income. Therefore, I am of the view that it would be fair and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat A.O. had given categorically findings in quantum as well as penalty proceeding that assessee's production as well as job receipt had been suppressed. Therefore, ld. A.O. rightly imposed the penalty u/s. 271(1)(c), whereas ld. CIT(A) was wrong in applying the GP rate in penalty order on suppressed production of Rs.94,56,380/-. He further relied upon in case of A. M. Shah & Co. vs. CIT 238 ITR 415 (Guj.), wherein penalty was imposed on estimated additions made by the A.O. Thus, he requested to confirm the order of the A.O. 5. We have heard the rival submissions and perused the material on record. The A.O. made addition on the basis of comparison made between expenditure debited in the p&l account for the year under consideration with exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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