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TMI Blog2016 (7) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... here was furnishing of inaccurate particulars, but the disallowance was made only on the ground of estimation, no case was made out for levying of penalty and therefore the Tribunal concurred with the findings of the CIT (Appeals). Tribunal has erred in confirming the penalty under section 271 (1) (c) of the Act - Decided in favour of assessee - TAX APPEAL NO. 1196 of 2007 With TAX APPEAL NO. 1782 of 2010 - - - Dated:- 14-7-2016 - MR. KS JHAVERI AND MR. G.R.UDHWANI, JJ. FOR THE APPELLANT : MRS SWATI SOPARKAR, ADVOCATE FOR THE OPPONENT : MR KM PARIKH, ADVOCATE ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. By way of Tax Appeal No.1196 of 2007, the assessee has challenged the order of the Income Tax Appellate Tribunal, Ahmedabad Bench B , Ahmedabad, (For short, the Tribunal ) in ITA No.1384/Ahd/1998 dated 12.1.2007, whereby the Tribunal has reversed the order of the CIT (A) and confirmed the order of the Assessing Officer. 2. At the time of admitting this Appeal, following question of law was framed:- (i) Whether, in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in law in upholding the action of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the consumption given by the assessee. The Assessing Officer has also verified the figures which are on page 4 of the remand report and from this analysis: the assesseee was not able to maintain the yield ratio. The assessee has also not maintained day to day quantitative record of work-in-progress. The assessee has not maintained day to day quantitative record of all the raw materials and the stock register. The assessee has also valued the raw material at average rate and annual consumption of respective raw materials and this year the assessee has changed the method of valuation. The assessee has also not followed any method as regard to finished goods. The Assessing Officer has also observed that the assessee has made pencil entries in the books and the assessee is not keeping and maintaining vouchers. Therefore, we are of the view that the Assessing Officer is justified in rejecting the book result and we uphold the action of the Assessing Officer. We find that there was difference of GP and this year the GP was low of about 6 to 10% and the Assessing Officer has made the addition of ₹ 12.25 lakhs but when the book results are rejected and the Assessing Officer has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y is paid on that basis. The stock register is not tallying with the other books of account only because some of the items were not deleted from the stock register. Taking into account the decision of this Court, not maintaining the day-today stock register is not a ground to reject the books of account. In Commissioner of Income-tax-IV v. Symphony Comfort Systems Ltd. (supra), it is observed as under:- Question No.1 pertains to the addition made by the Assessing Officer on the basis of low gross profit. The Commissioner (Appeals) as well as the Tribunal, however, deleted such addition after examining the material on record. In particular, the Tribunal while upholding the order of the Commissioner (Appeals) in this respect, made following observations: 4. On consideration of the rival submissions, we do not find any justification to interfere with the order of the learned CIT(A) in deleting the addition. The AO merely gone by the fact that there was a fall in the gross profit rate as compared to the preceding assessment year which itself is no ground to reject the books of accounts of the assessee. No specific defect in the maintenance of the books of accounts by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... record rightly deleted the addition. This ground of appeal of the revenue is accordingly dismissed. The entire issue is based on appreciation of evidence. No question of law arises. When the Commissioner (Appeals) as well as the Tribunal concurrently held that on the basis of the evidence, addition as made by the Assessing Officer was not justified, we are not inclined to interfere. 9. In Commissioner of Income-tax-XII v. Smt.Poonam Rani (supra), it is observed as under:- 10. During the course of arguments before us, it was submitted by the learned counsel for the appellant that the assessee was not maintaining the Daily Stock Register. We, however, find no such finding in the assessment order. On the other hand, we note that the Assessee had submitted before the Commissioner of Income Tax (Appeals) that Form 3CD containing all the quantitative details in respect of raw materials as well as the finished goods, duly audited by the Certified Accountant had been placed on record, but, the Assessing Officer ignored those actual figures enclosed with the return. In any case, no statutory provision under the Income Tax regime requiring the assessee to maintain the Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 417 (Gujarat), wherein it is observed as under:- For the assessment year 2004-05, the Assessing Officer after disallowing the expenditure under section 14A of the Income Tax Act, 1961, also initiated proceedings under section 271(1)(c) of the Act. CIT (Appeals), deleted such penalty and when this was challenged before the Tribunal, it confirmed the order of the CIT(Appeals). The impugned of the Tribunal is under challenge before this Court proposing aforementioned question of law. On hearing learned counsel Mrs.Mauna Bhatt and on examination of the orders of the adjudicating authorities, this appeal does not require to be entertained for the reasons to be followed hereinafter. The Tribunal extensively dealt with the factual and legal aspects presented before it. The Tribunal while concurring with the order of the CIT (Appeals), elaborately dealt with the order of the CIT (Appeals) and reiterated the settled proposition of law with regard to levying of penalty under section 271(1)(c). The Tribunal, thereafter, had noted that when disallowance was made merely on estimate basis, that would not ipso facto require imposition of penalty. The Tribunal also further relie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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