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TMI Blog2016 (9) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. has asked the assessee to reconcile the difference of ₹ 2,91,964/- being the difference between the net project turnover which is of ₹ 4,00,00,304/- and the turnover reflected in the books of accounts of ₹ 3,97,08,340/-. The assessee was not able to substantiate the difference and paid taxes accordingly. In our opinion, the difference in turnover is neither amounting to concealment nor filing of inaccurate particulars. On this count, no penalty can be levied. This ground of appeal raised by the revenue is dismissed. - Decided in favour of assessee - I.T.A.Nos.74&75/Vizag/2013 - - - Dated:- 12-8-2016 - SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For The Appellant : Shri M.N. Murthy Naik, DR For The Respondent : Shri C.V.S. Murthy, AR ORDER PER V. DURGA RAO, Judicial Member: These appeals filed by the revenue are directed against the order of CIT(A)-I, Hyderabad dated 29.11.2012 for the assessment years 2005-06 2006-07. Since the facts are identical and issues are common, they are heard together and disposed of by this common order for the sake of convenience. 2. Facts are in brief that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, confirmed the addition. Assessee accepted and paid the taxes accordingly. Thereafter, the A.O. has initiated the penalty proceedings u/s 271(1)(c) of the Act and called for the explanation from the assessee. The assessee has submitted detailed explanation before the A.O. The relevant portion of the explanation is extracted as under: 4. In view of the above in order to finalize the penalty proceedings U/s 271 (1)(c) the asssessee was asked to show cause as to why penalty u/s 271(1)(c) should not be imposed for concealment/ furnishing of inaccurate particulars of his income vide this office letter dated 03- 04-2010. In reply the asssessee flied his explanation on 25-03-2010 wherein he submitted that as under: With reference to your above letter it is hereby most respectfully submitted that the demands mentioned by your Honour in the above cited letter as payable by our Company represent disputed taxes as the relevant appeals are pending in Hon'ble Income tax Appellate Tribunal, Visakhapatnam. In this connection, we also bring to your kind notice that the demand of ₹ 6,52,214/- relating to the asst year 2004-05 has been nullified as the first appeal was allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n with regard to levy of penalty the assessee has neither made any contention nor shown any substantial ground as to why the penalty u/s 271(1)(c) should not be levied in his case. He has simply sought time to defer the penalty proceedings till the disposal of the asssessee's appeal pending before the ITAT filed against the orders of the CIT(A), Visakhapatnam. As seen from the above, the assessee has not offered any explanation on the issues or on merit as to why penalty should not be imposed. Further, the assessee's request to keep the penalty proceedings in abeyance till the disposal of assessee's appeal filed before the ITAT, Visakhapatnam cannot be considered as penalty is being levied on the portion which has been confirmed by the Commissioner of Income tax (Appeals), Visakhapatnam. 7. In light of the above facts and circumstances of the case, it is clear that the assessee had resorted to concealment of income of labour expenses, through fictitious books entry, labour expenses by cash payments and suppressed gross receipts in meridian tower project comes to ₹ 16,28,472/- [ Totalling to ₹ 13,36,508/- + Ps 2,91,964/- which were ultimately assessed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision in the case of Commissioner of Income-tax Vs. Khoday Eswara Sons (83 ITR 369) and the decision of the Hon'ble Supreme Court in the case of Anantharam Veerasinghaiah Co., Vs. Commissioner of Income-tax (123 ITR 457). The Hon'ble Jurisdictional Income-tax Appellate Tribunal in the case of HOE Leather Garments Ltd Vs DCIT (2010) (5 taxmann.com 6) have opined that the penalty order should he a self contained one and the findings regarding concealment or furnishing of inaccurate particulars of income in the assessment order cannot automatically get transferred to the penalty order. It is clear that in the instant case the Assessing Officer has not recorded any finding of concealment or furnishing of inaccurate particulars of income but has proceeded to levy the penalty on the only ground that the disallowances in the assessment order were partly upheld by the Commissioner of Income-tax (Appeals). 08.1 On the other hand, the Hon'ble Income-tax Appellate Tribunal, Ahmadabad Bench in the case of Gandhi Service Station Vs ACIT (100 TTJ 1143) have opined that the quantum and penalty proceedings are distinct and separate and that while deciding, the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Ld. CIT(A). 9. We have heard both the parties, perused the materials available on record and gone through the orders of the authorities below. The assessee is engaged in the business of construction of apartment complexes. He has constructed near about 5 apartments and he has incurred various expenditures. There is a search and seizure action carried out in the case of the assessee and they found some incriminating material. Based on the same, the A.O. is of the opinion that the assessee has booked fictitious labour expenses for A.Y. 2005-06 of ₹ 36,26,032/-, for A.Y. 2006-07 of ₹ 1,17,50,529/-, labour expenses - cash payments made for A.Y. 2005-06 of ₹ 17,20,000/- for A.Y. 2006-07 of ₹ 38,97,000/- and there is a suppressed turnover of ₹ 2,91,964/- for A.Y. 2005-06. By observing the above, the A.O. completed the assessment by making the above additions. On appeal, Ld. CIT(A) has restricted the disallowance of expenditure in respect of booked fictitious labour expenses to 25% and for cash payments also to 25%. So far as the suppression of turnover is concerned, the assessee is not able to substantiate the difference and he accepted the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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