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TMI Blog2016 (9) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in the preceding year , respectfully following the same, we set aside the order of the authorities below and delete the penalty levied in the impugned year. Decided in favour of assessee - ITA No. 254/Chd/2015 - - - Dated:- 29-7-2016 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER Appellant by : Shri Tej Mohan Singh Respondent by : Shri Manjit Singh, DR ORDER Per Annapurna Gupta, A. M. This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals), Shimla dated 29.12.2014, relating to assessment year 2008-09, challenging the levy of penalty under section 271(1) of the Income Tax Act,1961. 2. At the outset it is stated that the appeal was time barred by two days. Ld Counsel for the assessee filed an application for condonation of delay stating that the reason for the delay was that the appeal was to be filed by 08-032015, which was a Sunday, further the partners who were to sign the documents resided in Mumbai and the representative reached Chandigarh with the documents only in the late hours of 09-03-2015. Thus the appeal could only be filed the next day i.e. 10-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1) (c) of the Act. 4. The penalty order was challenged before ld. CIT(Appeals) and it was submitted that cash sales amounted to ₹ 1.94 crores only, out of the total sales of ₹ 47.17 crores and that the said cash sales were duly disclosed and accounted for in the books of account. It was argued that all the sales were backed by the sales bills, sales tax paid challans and Sales Tax Return filed by the assessee with the Commercial Tax Department of Una. It was argued that books of account alongwith inventory record were duly audited by the tax auditor and the cash sales should not have been treated as unexplained cash credits merely because the address of all the customers were not found to be complete on the cash sales bills. It was further argued that the Assessing Officer had failed to discharge the onus of proving the source of generation of such undisclosed income and had proceeded only on suspicion and assumptions while levying the penalty. It was submitted that appeal of the assessee had been admitted by the Hon'ble High Court of Himachal Pradesh which proves that addition made by the Assessing Officer is certainly debatable. The assessee relied upon deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty has been imposed because the Assessing Officer found that assessee has booked cash sales of ₹ 3 Crores in the month of September,2006 to different parties. This was the sole basis for levy of penalty against assessee because the addition on quantum had been confirmed even by the Tribunal. The Assessing Officer, after examining the record and material found that no complete details of purchasers are mentioned in the sale bills and whatever the details were submitted, were not subjected to verification. This led to the conclusion of the Assessing Officer that the assessee firm had introduced unaccounted cash in its books of account in the garb of cash sales. It is well settled law that findings given in the quantum proceedings have a probative value, however, assessee is still at liberty to explain the addition in the penalty proceedings so as to explain that levy of the penalty is not justified in the matter because the quantum and penalty proceedings are distinct and independent proceedings. Merely because addition on merit have been confirmed by itself is no ground to sustain the penalty automatically. It is an admitted fact that cash sales of ₹ 3.12 Cr were o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy the penalty. The explanation of assessee was not found to be false. No material is brought on record to hold assessee had made any false claim of cash sales. In our opinion, in the cash sales bills, there was no need to mention the complete names and addresses of the purchasers further because if some customer gave some other wrong name and address to the seller, the seller in the interest of its business would be bound to record what-so-ever address have been supplied by the purchaser. The facts and circumstances of the case, therefore, clearly show that it is not a case of furnishing inaccurate particulars of income or concealing particulars of income. The ld. DR referred to Explanation-I to Section 271(1)(c) of the Act in support of the argument but the same would not be applied in the case of the assessee because assessee has not failed to offer any explanation and that explanation of assessee was not found to be false. Further, the explanation of the assessee is substantiated by the sale bills, sales tax challans and sales tax order passed by the VAT authorities. Further, Explanation-I to Section 271(1)(c) of the Act deals with deemed concealment of income. Since the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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