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TMI Blog2014 (9) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... " which is not permissible as decided in C.I.T. Vs. Kelvinator of India [2002 (4) TMI 37 - DELHI High Court] - the order passed by the AO is neither erroneous nor prejudicial to the interest of the revenue – thus, the order of the Tribunal is set aside – Decided in favour of assessee. Penalty u/s 271(1)(c) – Held that:- The Tribunal has cancelled the levy of the penalty as the addition in quantum appeal is being deleted, then there is no justification to levy any penalty u/s 271(1)(c) – the order of the Tribunal is upheld – Decided against revenue. - Income Tax Appeal No. - 16 of 2004, Income Tax Appeal No. 729 of 2007 - - - Dated:- 17-9-2014 - Hon'ble Tarun Agarwala And Hon'ble Dr. Satish Chandra,JJ. For the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bstance and the ratio decided of Circular No. 560 dated 18.05.1990 could be held as not applicable to the provision of Section-45(2) which happen to be sister provision of the same Chapter IV, Section E, that of Capital gain. The brief facts of the case are that during the assessment year under consideration, the assessee was engaged in the business of manufacturing and sale of jewellery items. On 03.01.2001, the A.O. has passed an assessment order under Section-143(3). But on 21.11.2002, the C.I.T. has passed an order under Section-263 of the Act and enhanced the income of the assessee while making the addition of ₹ 2,73,879/-. Being aggrieved, the assessee has filed an appeal before the Tribunal which was dismissed by impugned o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ewellery . In other words, it appears that it was a case where the assessee sought to misguide the A.O. and the said officer did not care to make any enquiry during the assessment proceedings whether it was actually a sale of jewellery or the conversion into stock in trade. We have heard both the parties at length and gone through the materials available on record. From the records, it appears that C.I.T. has valued the jewellery as per cost index, but the fact remains that jewellery always contains some impurity. In other words, no jewellery can be made from pure gold. This aspect was not examined by the C.I.T. before enhancing the addition. Had he given the benefit of impurity, perhaps there was no occasion to enhance the addition. Fur ..... X X X X Extracts X X X X X X X X Extracts X X X X
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