9911796707
TMI Blog2016 (6) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... g the course of survey, it was noticed that the assessee is not disclosing his true sale in the books of accounts. It was further noticed that the total sales as on the date of survey, is at Rs. 41,77,097/-, as against this, he had disclosed less turnover in the books of accounts. Therefore, the assessee has been asked to explain the reasons for under admission of sales and also asked to furnish the particulars of total sales for the period from 10.1.2008 to 31.3.2008. In response to the same, the assessee vide letter dated 11.11.2010 has confirmed that the total sales for the period from 1.4.2007 to 9.1.2008 was at Rs. 41,77,097/- and further stated that the total sales for the period from 10.1.2008 to 31.3.2008 was at Rs. 3,93,301/-. Thus, the total sales made for the assessment year comes to Rs. 45,70,398/-. The assessee has filed his return of income for the assessment year 2008-09 declaring total sales of Rs. 35,94,342/- with a net loss of Rs. 5,53,643/-. The assessment for the year has been completed under section 143(3) and determined total income of Rs. 4,34,364/-. 3. The Assessing Officer issued a show cause notice u/s 271B of the Act and proposed to levy penalty for fail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration as per the books of accounts is less than Rs. 40 lakhs, hence, the requirement of audit u/s 44AB of the Act does not arise. The Ld. A.R. further submitted that though the assessee has admitted unaccounted turnover which resulted in total turnover exceeds Rs. 40 lakhs as per the books of accounts, the requirement of audit is only when the turnover exceeds Rs. 40 lacs as per books of accounts. Since, the turnover is less than Rs. 40 lacs as per books, audit report is not obtained from an accountant. Therefore, the A.O. was not correct in levying penalty u/s 271B of the Act. On the other hand, the Ld. D.R. strongly supported the order of the CIT(A). 6. We have heard both the parties and perused the materials available on record. The A.O. levied penalty u/s 271B of the Act for failure to get accounts audited u/s 44AB of the Act. The A.O. was of the opinion that the turnover of the assessee for the year exceeds Rs. 40 lakhs. Despite the turnover exceeds Rs. 40 lakhs, the assessee has not submitted his audit report as required by the law. Therefore, it is a fit case for levy of penalty u/s 271B of the Act. It is the contention of the assessee that the total turnover for the perio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions of Rs. 1,22,007/- towards 12.5% gross profit on unaccounted turnover, unexplained investments of Rs. 6,66,000/- and cash gift of Rs. 2 lakhs. 9. The A.O. initiated penalty proceedings u/s 271(1)(c) of the Act r.w.s. 274 of the Act and issued a show cause notice and asked to explain why penalty shall not be levied for concealment of particulars of income and also furnishing inaccurate particulars of income. In response to show cause notice, the assessee submitted that he had admitted the additional income during the course of survey operations, therefore, no penalty can be levied u/s 271(1)(c) of the Act. The A.O. after considering the explanations furnished by the assessee levied the penalty u/s 271(1)(c) of the Act towards additions made on account of unaccounted sales and cash gift, however not levied any penalty towards unexplained investments in construction of building. 10. Aggrieved by the penalty order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee submitted that at the time of survey, there was a deficit stock of Rs. 7 lakhs and he has agreed to offer income of 7% on the deficit stock. However, the A.O. has arrived at unaccount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounted turnover and cash gift. Similarly, the CIT(A) has enhanced the penalty and directed the A.O. to levy penalty in respect of unexplained investment in construction of building. Aggrieved by the CIT(A) order, the assessee is in appeal before us. 12. The Ld. A.R. submitted that the CIT(A) was erred in enhancing the penalty u/s 271(1)(c) of the Act. The Ld. A.R. further submitted that the A.O. has made additions on estimation basis. All the 3 additions are made on estimation basis, therefore, this is not a case of concealment of income or furnishing inaccurate particulars of income. It was further submitted that the lower authorities should have telescoped the sources available from sale of deficit stock found during the course of survey towards unexplained investment in building and cash gift. On the other hand, the Ld. D.R. strongly supported the order of the CIT(A). 13. We have heard both the parties and perused the materials available on record. The A.O. levied penalty u/s 271(1)(c) of the Act for concealment of income and furnishing inaccurate particulars of income. The A.O. was of the opinion that the assessee has concealed the turnover and also made unexplained investment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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