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TMI Blog2017 (5) TMI 574X X X X Extracts X X X X X X X X Extracts X X X X ..... gh this common order. 2. The brief facts of the case for AY 2005-2006 are that the assessee company is engaged in the case of manufacturing of laminated pouch film and poly pouch film. On 01/09/2005, a survey operation under section 133A was carried out in the factory premises situated at B - 8, Site No. 1, Panki Industrial Estate, Kanpur and an inventory of stock was prepared. On the very same date, a search and seizure action under section 132 of the Act also took place in the Kurele group. The original return for assessment year 2005-2006 was filed on 31st of October 2005 at Kanpur declaring business loss of Rs. 4,17,123/- and shortterm capital loss of Rs. 4,812/- to be carried forward to the next year and unabsorbed depreciation of Rs. 20,11,360/-. Thereafter, the case was centralised at Delhi and subsequently notice under section 153A of the Act for assessment year 2005-2006 was issued and in compliance a return was filed declaring the same particulars as were in the original return filed on 10/05/2007. In the assessment proceedings, an addition of Rs. 10 Lacs was made on account of shares allotted to M/s Jeevandhara Waters Private Limited as the name of the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey." 3. In the appeal pertaining to assessment year 2005-2006, the Ld. Authorised Representative submitted that the assessment order specifically mentions that all the requisite information, that is confirmation, bank statement, audited accounts and income tax returns for the year under consideration of the shareholder company were furnished by the assessee company and even the shares stood allotted and as such the initial onus of the assessee stood duly discharged and the only reason for addition was that the name of the assessee company was not reflected in the annual accounts of the shareholder company. The Ld. AR submitted that no documents furnished by the assessee were found to be false and that no facts had been concealed and the assessee could not be held responsible for the errors/omissions in the balance sheet/documents of others. It was also submitted that the penalty had been imposed on the ground that no appeal was filed against the quantum proceedings but non-filing of the appeal is relevant only for the purpose of assessment of income and is not an adverse fact in penalty proceedings. The Ld. Authorised Representative submitted that this approach was wholly arbitra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not represent concealed income as with the hypothesis that it did and for this proposition the Ld. Authorised Representative placed reliance on the decision of the Hon'ble Gujarat High Court in the case of National Textiles versus CIT reported in 249 ITR 125. It was submitted that in view of the factual matrix of the case, the penalty imposed was patently wrong and the same should be deleted 3.1 In response, the Ld. Departmental Representative submitted that the addition under section 68 had attained finality as no appeal had been preferred against the quantum addition. The Ld. Departmental Representative submitted that the assessee had disguised its own money in the form of share capital which would have gone untaxed but for the addition by the revenue through the assessment and, therefore, it was a clear case of concealment of particulars of income. The Ld. Departmental Representative further submitted that as the aforesaid share capital was not appearing in the balance sheet of M/s Jeevandhara Water Private Limited, the explanation of the assessee was false and, therefore, it was covered by clause (A) of explanation 1 to section 271 (1) (c) of the Act. The Ld. Departmental ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive drew our attention to page 33 of the paper book which reflected the total excess stock and the total stock in short as on 31st of August 2005. The Ld. Authorised Representative pointed out that the total excess stock as per the 2nd last column in the chart amounted to Rs. 4,92,583.66, whereas, the total stock in short as per the last column in the chart amounted to Rs. 8,61,272.10. The Ld. Authorised Representative submitted that the figure of the total shortage in stock, that is, Rs. 13,53,855.76 was worked out by adding the total of these two columns and as such the penalty imposed was on a wrong amount. It was further submitted by the Ld. Authorised Representative that the addition had been agreed upon by the assessee to buy peace of mind and that the same was not a fit case for imposition of penalty as no concealment/furnishing of inaccurate particulars of income was made out. It was submitted that the opening stock and the closing stock during the year under consideration were accepted by the assessing officer and the valuation was not disturbed and as such any excess/shortage got neutralised during the course of the year. The Ld. AR submitted that in view of the facts of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) would embrace the meaning of the details of the claim made. It is an admitted position in the present case that no information given in the return was found to be incorrect or inaccurate. It is not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee cannot be held guilty of furnishing inaccurate particulars. The learned counsel argued that "submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income." We do not think that such can be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars." 4.01 Although, both the lower authorities have held that the assessee has furnished inaccurate particulars and concealed particulars of income, on a consideration on the facts, such a view is not tenable is the present appeal. Therefore, respectfully following the judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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